Document:

Exhibit
10.12(a)

      

      AMENDMENT
TO THE WILLIAM L. WALL

      CHANGE
IN CONTROL PROTECTIVE AGREEMENT

      

      WHEREAS, William L. Wall (the “Executive”)
entered into a change in control protective agreement with First South Bank (the
“Bank”) and First South Bancorp, Inc. effective April 20, 2006 (the
“Agreement”); and

      

      WHEREAS, the parties to the
Agreement desire to amend the Agreement to conform with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and
guidance issued with respect to 409A of the Code; and

      

      WHEREAS, Section 9 of the
Agreement provides that the Agreement may be amended or modified at any time by
means of a written instrument signed by the parties.

      

      NOW, THEREFORE, the Bank, the
Company and the Executive agree to amend the Agreement effective December 18,
2008 as follows:

      

      FIRST
CHANGE

      

      The
following new Section 13 shall be added to the Agreement:

      

      “13.        SECTION 409A OF THE CODE.

      

      (a)           This
Agreement is intended to comply with the requirements of Section 409A of the
Code, and specifically, with the “short-term deferral exception” under Treasury
Regulation Section 1.409A-1(b)(4) and the “separation pay exception” under
Treasury Regulation Section 1.409A-1(b)(9)(iii), and shall in all respects be
administered in accordance with Section 409A of the Code.  If any
payment or benefit hereunder cannot be provided or made at the time specified
herein without incurring sanctions on Employee under Section 409A of the Code,
then such payment or benefit shall be provided in full at the earliest time
thereafter when such sanctions will not be imposed.  For purposes of
Section 409A of the Code, all payments to be made upon a termination of
employment under this Agreement may only be made upon a “separation from
service” (within the meaning of such term under Section 409A of the Code), each
payment made under this Agreement shall be treated as a separate payment, the
right to a series of installment payments under this Agreement (if any) is to be
treated as a right to a series of separate payments, and if a payment is not
made by the designated payment date under this Agreement, the payment shall be
made by December 31 of the calendar year in which the designated date
occurs.  To the extent that any payment provided for hereunder would
be subject to additional tax under Section 409A of the Code, or would cause the
administration of this Agreement to fail to satisfy the requirements of Section
409A of the Code, such provision shall be deemed null and void to the extent
permitted by applicable law, and any such amount shall be payable in accordance
with subparagraph (b) of this Agreement below.  In no event shall
Employee, directly or indirectly, designate the calendar year of
payment.

      

      (b)           If
when separation from service occurs Employee is a “specified employee” within
the meaning of Section 409A of the Code, and if the cash severance payment under
Section 3 of this Agreement would be considered deferred compensation under
Section 409A of the Code, and, finally, if an exemption from the six-month delay
requirement of Section 409A(a)(2)(B)(i) of the Code is not available (i.e., the
“short-term deferral exception” under Treasury Regulations Section
1.409A-1(b)(4) or the “separation pay exception” under Treasury Section
1.409A-1(b)(9)(iii)), the Bank or the Company will make the maximum severance
payment possible in order to comply with an exception from the six month
requirement and make any remaining severance payment under Section 3 of this
Agreement to Employee in a single lump sum without interest on the first payroll
date that occurs after the date that is six (6) months after the date on which
Employee separates from service.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (c)           If
(x) under the terms of the applicable policy or policies for the insurance or
other benefits specified in Section 3 of this Agreement it is not possible to
continue coverage for Employee and his dependents, or (y) when a separation from
service occurs Employee is a “specified employee” within the meaning of Section
409A of the Code, and if any of the continued insurance coverage or other
benefits specified in Section 3 of this Agreement would be considered deferred
compensation under Section 409A of the Code, and, finally, if an exemption from
the six-month delay requirement of Section 409A(a)(2)(B)(i) of the Code is not
available for that particular insurance or other benefit, the Bank or the
Company shall pay to Employee in a single lump sum an amount in cash equal to
the present value of the Bank’s projected cost to maintain that particular
insurance benefit had Employee’s employment not terminated.  The
lump-sum payment shall be made thirty (30) days after employment termination or,
if Section 13(b) of this Agreement applies, on the first payroll date that
occurs after the date that is six (6) months after the date on which Employee
separates from service.

      

      (d)           References
in this Agreement to Section 409A of the Code include rules, regulations, and
guidance of general application issued by the Department of the Treasury under
Internal Revenue Section 409A of the Code.”

      

      SECOND
CHANGE

      

      Section 2
of the Agreement shall be amended by adding the following
paragraph:

      

      “In the
event the Employee elects to terminate his employment for Good Reason, he must
notify the Bank or the Company within ninety (90) days after the initial
existence of an event that qualifies as Good Reason and the Bank or the Company
must be given an opportunity, not less than thirty (30) days, to effectuate a
cure for such asserted “Good Reason” by the Employee.”

      

      IN WITNESS WHEREOF, the Bank
has caused this Amendment to be executed by its duly authorized officer, and
Executive has signed this Amendment, on the 18th day of December,
2008.

      

      
        
          
            
              
                	
                        ATTEST:

                      	 	
                        FIRST SOUTH BANK

                      
	
                        /s/ Kristie W. Hawkins

                      	 	
                        /s/ Frederick N.
Holscher

                      
	 
      	 	
                        Chairman
      of the Board

                      
	 
      	 	 
      
	
                        ATTEST:

                      	 	
                        FIRST SOUTH BANCORP,
      INC.

                      
	
                        /s/ Kristie W. Hawkins

                      	 	
                        /s/ Frederick N.
Holscher

                      
	 
      	 	
                        Chairman
      of the Board

                      
	 
      	 	 
      
	
                        WITNESS:

                      	 	
                        EXECUTIVE

                      
	
                        /s/ Thomas A. Vann

                      	 	
                        /s/ William L. Wall

                      
	 
      	 	
                        William
      L. WallExhibit
10.14

    

    SUPPLEMENTAL
INCOME PLAN AGREEMENT

    

    THIS
AGREEMENT made and entered into as of the 5th day of September, 2002 (the
"Effective Date") by and between First South Bank, a commercial bank organized
and existing under the laws of the State of North Carolina (the "Bank"), and
Kristie W. Hawkins (the "Employee").

     

    WITNESSETH:

     

    WHEREAS,
the Employee is employed by the Bank;

    

    WHEREAS,
the Bank recognizes the valuable services heretofore performed for it by the
Employee and wishes to encourage his continued employment;

    

    WHEREAS,
the Employee wishes to be assured that he will be entitled to a certain amount
of additional compensation for some definite period of time from and after the
termination of his employment with the Bank and that his beneficiary will be
entitled to a death benefit from and after the Employee's death;

    

    WHEREAS,
the parties hereto wish to provide the terms and conditions upon which the Bank
shall pay such additional compensation to the Employee after the termination of
his employment with the Bank or such death benefit to his beneficiary after the
Employee's death.

    

    NOW,
THEREFORE, in consideration of the premises and of the mutual promises herein
contained, the parties hereto agree as follows:

    

    Section
1.  Retirement Benefits.
Except as otherwise specifically provided herein, if the Employee shall remain
in the employment of the Bank until he attains the age of 65 (the "Retirement
Date"), the Bank shall pay the Employee the sum of ten thousand dollars
($10,000.00) per annum for a period of ten (10) years, payable in equal monthly
installments, commencing on a date to be determined by the Bank, but in no event
later than the first day of the sixth calendar month following the calendar
month in which the Retirement Date occurs.

    

    Section
2.  Post-Retirement Death
Benefits. In the event that the Employee should die after becoming
entitled to receive payments under Section I but before all such payments have
been made, the Bank will make all remaining payments to such beneficiary or
beneficiaries as the Employee has designated to the Bank in writing (the
"Beneficiaries'). In the event of death of the last living Beneficiary before
all unpaid payments have been made, the balance of any payments which remain
unpaid at the time of the death of such Beneficiary shall be commuted on the
basis of six percent (6%) per annum compounded interest and shall be paid in a
single sum to the estate of the last Beneficiary to die. In the absence of such
beneficiary designation, any amount remaining unpaid at the Employee's death
shall be commuted on the basis of six percent (6%) per annum compounded interest
and shall be paid in a single sum to the Employee's estate.

    

    Section
3.  Pre-Retirement Death
Benefits.  In the event of the death of the Employee while
employed by the Bank and before the Retirement Date, the Bank shall make the
payments described in Section I above to the Beneficiaries, and the amount of
such payments shall be determined as if the date of death of the Employee was
his Retirement Date. The first monthly payment shall be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the month in which the Employee died. In the event of
death of the last living Beneficiary before all the payments have been made, the
balance of any payments which remain unpaid at the time of such Beneficiary's
death shall be commuted on the basis of six percent (6%) per annum compounded
interest and shall be paid in a single sum to the estate of the last Beneficiary
to die. In the absence of any beneficiary designation made by the Employee
pursuant to Section 2, above, or if no Beneficiary survives the Employee, the
payments to be made hereunder shall be commuted on the basis of six percent
(6%) per annum
compounded interest and shall be paid in a single sum to the Employee's estate.
Notwithstanding the foregoing, if the Employee dies as result of suicide on or
before the two-year anniversary of the Effective Date, no benefits of whatever
nature shall be payable to the Beneficiaries under this
Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
4.  Termination
Benefits.  Except as otherwise provided in
Section 6 with respect to termination of employment in certain circumstances, in
the event that the employment of the Employee terminates prior to the time he is
first entitled to receive payments under this Agreement for any reason other
than his death, the Employee or his Beneficiaries, as applicable, shall be
entitled, upon the occurrence of the Employee's 65th birthday or prior death, to
receive the percentage of the applicable annual payment described in Section I
above determined by Exhibit A attached hereto an incorporated herein by
reference. Such payments shall be made in equal monthly installments, with the
first monthly installment commencing on a date to be determined by the Bank, but
in no event later than the first day of the sixth calendar month following the
calendar month of the Employee's 65th birthday or death, as applicable,
occurs.

    

    Section
5.  Benefits Not
Transferable. Neither the Employee, any Beneficiary nor any other person
claiming any right or interest under this Agreement through the Employee or any
other Beneficiary shall have any right to commute, assign, transfer or otherwise
convey the right to receive any benefits hereunder.

    

    Section
6.  Binding Upon
Successors. This Agreement and the Bank's obligations hereunder shall be
binding upon the Bank's successors and permitted assigns. The Bank may not
assign its right or obligations under this Agreement without the Employee's
prior written consent. In addition, the Bank shall not enter into any agreement
proving for the merger of the Bank with and into another business entity or the
sale of more than a majority of the Bank's assets to another business entity,
person or group of persons that does not specifically provide that such
successor by merger or purchaser(s) of assets shall assume and satisfy each and
every obligation of the Bank to the Employee under this Agreement. In the case
of an asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.

    

    Except as
otherwise provided in Sections 1, 2 or 3, above, as applicable, in the event
that, on or before the occurrence of the Employee's Retirement Date, a
"Termination of Protected Employment" occurs following a "Change in Control" (as
these terms are defined below), the Employee shall be deemed to have retired as
of his Retirement Date and the provisions of Section I shall be deemed
applicable, except that the Retirement Date shall be deemed to be the date that
such Change in Control shall occur.

    

    For
purposes of this Agreement, "Change in Control" shall mean any one of the
following events: (i) the acquisition of ownership, holding, or power to vote
more than 25% of the voting stock of the Bank or First South Bancorp, Inc. (the
"Company"), (ii) the acquisition of the ability to control the election of a
majority of the Bank's or the Company's directors, (iii) the acquisition of a
controlling influence over the management or policies of the Bank or of the
Company by any person or by persons acting as a "group" (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934), or (iv) during any period
of two consecutive years, individuals (the "Continuing Directors") who at the
beginning of such period constitute the Board of Directors of the Bank or of the
Company (the "Existing Board") cease for any reason to constitute at least
two-thirds thereof, provided that any individual whose election or nomination
for election as a member of the Existing Board was approved by a vote of at
least two-thirds of the Continuing Directors then in office shall be considered
a Continuing Director. Notwithstanding the foregoing, the Company's ownership of
the Bank shall not of itself constitute a Change in Control for purposes of the
Agreement. For purposes of this paragraph only, the term "person” refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    For
purposes of this Agreement, a "Termination of Protected Employment” shall occur
if: (i) the Employee is terminated without Just Cause, with "Just Cause"
meaning, in the good faith determination of the Bank's Board of Directors, the
Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, or rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order; provided that
no act, or failure to act, on the Employee's part shall be considered "willful"
unless he has acted, or failed to act, with an absence of good faith and without
a reasonable belief that his action or failure to act was in the best interests
of the Bank or of the Company; or (ii) the Employee voluntarily terminates
employment for an event that constitutes "Good Reason," which shall mean any of
the following events, that has not been consented to in advance by the Employee
in writing: (a) the requirement that the Employee move his personal residence,
or perform his principal executive functions, more than 30 miles from his
primary office as of the later of the Effective Date and the most recent
voluntary relocation by the Employee; (b) a material reduction in the Employee's
base compensation in effect on the date of the Change in Control; (c) the
failure by the Bank to continue to provide the Employee with compensation and
benefits in effect on the date of the Change in Control, or with benefits
substantially similar to those provided to him under any of the employee benefit
plans in which the Employee now or hereafter becomes a participant, or the
taking of any action by the Bank which would directly or indirectly reduce any
of such benefits or deprive the Employee of any material fringe benefit enjoyed
by him; (d) the assignment to the Employee of duties and responsibilities
materially different from those normally associated with his position; (e) a
failure to reelect the Employee to the Board of Directors of the Bank, if the
Employee has served on such Board at any time during the term of the Agreement;
(f) a material diminution or reduction in the Employee's responsibilities or
authority (including reporting responsibilities) in connection with his
employment with the Bank; or (g) a material reduction in the secretarial or
other administrative support of the Employee.

    

    Section 7. Benefits Payable Only from
General Corporate Assets; Unsecured General Creditor Status of
Employee.

    

    The
payments to the Employee or his Beneficiaries hereunder shall be made from
assets, which shall continue for all purposes, to be a part of the general
unrestricted assets of the Bank; no person shall have nor acquire any interest
in any such assets by virtue of the provisions of this Agreement.  The
Bank's obligations hereunder shall be an unfunded and unsecured promise to pay
money in the future. To the extent that the Employee or any person acquires a
right to receive payments from the Bank under the provisions hereof, such right
shall be no greater than the right of any unsecured general creditor of the
Bank; no such person shall have nor require any legal or equitable right,
interest or claim in or to any property or assets of the Bank.

    

    In the
event that, in its discretion, the Bank purchases an insurance policy or
policies insuring the life of the Employee (or any other property) in order to
allow the Bank to recover the cost of providing the benefits, in whole, or in
part, hereunder, neither the Employee nor any beneficiary shall have the rights
whatsoever therein or in the proceeds therefrom. The Bank shall be the sole
owner and beneficiary of any such policy or policies and, as such, shall possess
and, may exercise all incidents of ownership therein.

    

    Notwithstanding
any other provision of this Agreement that may be contrary or inconsistent
herewith, not later than ten business days after a Change in Control, the Bank
shall (i) deposit in a grantor trust (the "Trust”) that is designed in
accordance with Revenue Procedure 92-64 and has a trustee independent of the
Bank, the Company and any successor to their interest, an amount equal to the
present value of all benefits that may become payable under this Agreement,
unless the Employee has previously provided a written release of any claims
under this Agreement, and (ii) provide the trustee of the Trust with a written
direction to hold said amount and any investment return thereon in a segregated
account for the benefit of the Employee, and to follow the procedures set forth
in the next paragraph as to the payment of such amounts from the
Trust.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    At any
time or from time to time following a Change in Control, the Employee may
provide the trustee of the Trust with a written schedule directing that the
trustee pay to the Employee the amounts designated in the schedule as being
payable pursuant to this Agreement. Within three business days after receiving
said notice, the trustee of the Trust shall send a copy of the notice to the
Bank via overnight and registered mail  (return receipt
requested).  On the fifth business day after mailing said notice to
the Bank, the trustee of the Trust shall pay the Employee the amount designated
therein in immediately available funds, unless prior thereto the Bank provides
the trustee with a written notice directing the trustee to withhold such
payment.  In the latter event, the trustee shall submit the dispute to
non-appealable binding arbitration for a determination of the amount payable to
the Employee pursuant to this Agreement, and the costs of such arbitration
(including any attorneys' fees incurred by the Employee) shall be paid by the
Bank. The trustee shall choose the arbitrator to settle the dispute, and such
arbitrator shall be bound by the rules of the American Arbitration Association
in making his determination. The parties and the trustee shall be bound by the
results of the arbitration and, within three days of the determination by the
arbitrator, the trustee shall pay from the Trust the amounts required to be paid
to the Employee and/or the Bank, and in no event shall the trustee be liable to
either party for making the payments as determined by the
arbitrator.

    

    Upon the
receipt of the Employee's written release of all claims under this Agreement,
the trustee of the Trust shall pay to the Bank the entire balance remaining in
the segregated account maintained for the benefit of the Employee. The Employee
shall thereafter have no further interest in the Trust pursuant to this
Agreement.

    

    Section
8.  Additional
Benefits.  The benefits and rights provided under this
Agreement are in addition to, and independent of, those rights and benefits of
the Employee provided under other agreements with the Bank, and shall not
affect, reduce or diminish the right of Employee to participate in any current
or future retirement plan or in any supplemental compensation
arrangement.

    

    Section
9.  No Contract of
Employment.  Nothing contained herein shall be construed to be
a contract of employment or as conferring upon the Employee the right to
continue to be employed by the Bank.  It is expressly understood by
the parties hereto that this Agreement relates exclusively to additional
compensation for the Employee's services, payable after termination of his
employment with the Bank, and is not intended to be an employment
agreement.

    

    Section
10.  Claims and Review
Procedures.

    

    
      	
            	
              A.

            	
              General.  For
      the purposes of implementing a claims procedure under this Agreement as
      required by the Employee Retirement Income Security Act of 1974 (“ERISA”)
      (but not for any other purpose), the Bank is hereby designated as the
      named fiduciary and Plan Administrator of this unfunded, nonqualified
      deferred compensation plan. If any person believes he is being denied any
      rights or benefits under the Agreement, such person may file a claim in writing
      with the Plan Administrator for resolution in accordance with the
      provisions of Paragraph B of this Section
10.

            

    

    

    
      	
            	
              B.

            	
              Claims
      Procedure. If any claim filed hereunder is
      wholly or partially denied, the Plan Administrator will notify the
      claimant of its decision in writing. Such notification will be written in
      a manner calculated to be understood by the claimant and will
      contain:

            

    

    

    
      	
               
      

            	
              (i)

            	
              specific
      reasons for the denial,

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (ii)

            	
              specific
      reference to pertinent provisions of the Agreement on which the Plan
      Administrator based its denial,

            

    

    

    
      	
               
      

            	
              (iii)

            	
              a
      description of any additional material or information necessary for the
      claimant to perfect such claim and an explanation of why such material or
      information is necessary, and

            

    

    

    
      (iv)  information
as to the steps to be taken if the claimant wishes to submit a request for
review.

    

    

    Such notification will be given within
ninety (90) days after the claim is received by the Plan Administrator (or
within 180 days, if special circumstances require an extension of time for
processing the claim, and if written notice of such extension and circumstances
is given to the claimant within the initial ninety (90) day period). If such
notification is not given within such period, the claim will be considered
denied as of the last day of such period and the claimant may request a review
of his claim in accordance with Section 10.C. hereof.

    

    
      	
               
      

            	
              C.

            	
              Review
      Procedure. Within sixty (60) days after the date on which a
      claimant received a written notice of a denied claim (or, if applicable,
      within sixty (60) days after the date on which such denial is considered
      to have occurred) the claimant (or his duly authorized representative)
      may:

            

    

    

    
      	
               
      

            	
              (i)

            	
              file a written request
      with the Plan Administrator for a review of his denied claim and of
      pertinent documents; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              submit
      written issues and comments to the Plan
  Administrator.

            

    

    

    
      	
               
      

            	
              The
      plan Administrator will notify the claimant of its decision in writing. Such
      notification will be written in a manner calculated to be understood by
      the claimant and will contain specific reasons for the decision as well as
      specific references to pertinent provisions of the Agreement. The decision
      on review will be made within sixty (60) days after the request for review
      is received by the Plan Administrator (or within one hundred twenty (120)
      days, if special circumstances require an extension of time for processing
      the request (such as an election by the Plan Administrator to hold a
      hearing), and if written notice of such extension and circumstances is
      given to the claimant within the initial sixty (60) day
      period.

            

    

    

    Section 11. Amendment. This
Agreement may not be amended, altered or modified, except by a written
instrument signed by the parties hereto or their respective successors, and may
not be otherwise terminated except as provided herein.

    

     Section 12. Governing Law. This
Agreement, and the rights of the parties hereunder, shall be governed by and
construed in accordance with the laws of the State of North
Carolina.

    

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

    

    
      
        
          
            
              	
                      FIRST
      SOUTH BANK

                    	 	 
      	 	 
      
	
                      By:

                    	
                      /s/ Thomas A. Vann

                    	 	
                      EMPLOYEE:

                    	 	
                      ATTEST

                    
	
                      Thomas
      A. Vann

                    	 	
                      /s/ Kristie W. Hawkins

                    	 	
                      /s/ William L. Wall

                    
	
                      President
      and

                    	 	
                      Kristie
      W. Hawkins

                    	 	
                      William
      L. Wall

                    
	
                      Chief
      Executive Officer

                    	 	 
      	 	
                      Secretary

                    
	 
      	 	 
      	 	
                      {Corporate
      Seal}

                    

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

    TO
SUPPLEMENTAL INCOME PLAN AGREEMENT FOR

    KRISTIE
W. HAWKINS

    

    
      
        
          
            	 
      	 	
                    PERCENTAGE
      OF THE ANNUAL

                  
	 
      	 	
                    INSTALLMENT
      PAYMENTS

                  
	 
      	 	
                    STATED
      IN SECTION 1 OF THIS

                  
	
                    FULL
      YEARS OF EMPLOYMENT

                  	 	
                    AGREEMENT
      TO WHICH THE

                  
	
                    AFTER EFFECTIVE DATE

                  	 	
                    EMPLOYE IS ENTILED

                  
	
                    1

                  	 	
                    10

                  
	
                    2

                  	 	
                    20

                  
	
                    3

                  	 	
                    30

                  
	
                    4

                  	 	
                    40

                  
	
                    5

                  	 	
                    50

                  
	
                    6

                  	 	
                    60

                  
	
                    7

                  	 	
                    70

                  
	
                    8

                  	 	
                    80

                  
	
                    9

                  	 	
                    90

                  
	
                    10

                  	 	
                    100

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