Document:

Exhibit 10.18

 Exhibit 10.18 
 SECOND AMENDMENT 
 SECOND AMENDMENT, dated as of August 8, 2006 (this “Second
Amendment”), to the Amended and Restated Credit Agreement, dated as of April 28, 2005 (as amended, supplemented or otherwise modified, the “Credit Agreement”), among EDUCATE OPERATING COMPANY, LLC, a Delaware limited
liability company (the “Borrower”), the several banks and other financial institutions or entities from time to time parties thereto (the “Lenders”), MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business
Financial Services Inc., as documentation agent (the “Documentation Agent”), and JPMORGAN CHASE BANK, N.A., as administrative agent (the “Administrative Agent”). 
 W I T N E S S E T H: 
 WHEREAS, the Borrower, the Lenders, the Documentation Agent and the Administrative Agent are parties to the Credit Agreement; 
 WHEREAS, the Administrative Agent has requested certain amendments to the Credit Agreement as set forth herein; and 
 WHEREAS, the Required Lenders have consented to the requested amendments as set forth herein; 
 NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows: 
 1. Defined Terms. Unless otherwise defined herein, capitalized terms used herein which are defined in the Credit Agreement are used herein as
therein defined. 
 2. Amendments to Section 1. Section 1.1 of the Credit Agreement is hereby amended by inserting, in
proper alphabetical order, the following new or substitute defined terms and related definitions: 
 “Applicable Margin”:
(a) with respect to Revolving Loans, from and after the Second Amendment Effective Date, the rate per annum set forth under the relevant column heading in the grid below captioned “Revolving Loans Pricing Grid” and (b) with
respect to Amended Term Loans, from and after the Second Amendment Effective Date, the rate per annum set forth under the relevant column heading in the grid below captioned “Amended Term Loans Pricing Grid.” 

 Revolving Loans Pricing Grid 
  

					
	 Consolidated Leverage Ratio
	  	ABR Loans	 	Eurodollar Loans
	 Greater than or equal to 3.75:1.00
	  	2.25%	 	3.25%
	 Greater than or equal to 2.75:1.00 and less than 3.75:1.00
	  	2.00%	 	3.00%
	 Greater than or equal to 2.25:1.00 and less than 2.75:1.00
	  	1.50%	 	2.50%
	 Less than 2.25:1.00
	  	1.25%	 	2.25%

 Amended Term Loans Pricing Grid 
  

					
	 Consolidated Leverage Ratio
	  	ABR Loans	 	Eurodollar Loans
	 Greater than or equal to 3.75:1.00
	  	2.25%	 	3.25%
	 Greater than or equal to 3.25:1.00 and less than 3.75:1.00
	  	2.00%	 	3.00%
	 Greater than or equal to 2.75:1.00 and less than 3.25:1.00
	  	1.75%	 	2.75%
	 Greater than or equal to 2.25:1.00 and less than 2.75:1.00
	  	1.25%	 	2.25%
	 Less than 2.25:1.00
	  	1.00%	 	2.00%

 For the purposes of the above pricing grids, changes to the Applicable Margin resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date that is three Business Days after the date on which financial statements are delivered to the Lenders pursuant to Section 6.1 and shall remain in effect until the
next change to be effected pursuant to this paragraph. If any financial statements referred to above are not delivered within the time periods specified in Section 6.1, then, until the date that is three Business Days after the date on which
such financial statements are delivered, the highest rate set forth in each column of the above pricing grid shall apply. In addition, at all times while an Event of Default shall have occurred and be continuing, the highest rate set forth in each
column of the above pricing grid shall apply. Each determination of the Consolidated Leverage Ratio pursuant to the above pricing grid shall be made in a manner consistent with the determination thereof pursuant to Section 7.1. 
  

 2 

 “Second Amendment”: the Second Amendment, dated as of August 8, 2006, to this
Agreement. 
 “Second Amendment Effective Date”: August 8, 2006. 
 3. Amendment to Section 7 of the Credit Agreement. (a) Section 7.1(a) of the Credit Agreement is hereby amended by deleting the
portion of the table set forth therein covering the fiscal quarters set forth below and substituting therefor the following: 
  

			
	 Fiscal Quarter
	  	              Consolidated Leverage Ratio              
	 06/30/06
 09/30/06
 12/31/06
 03/31/07
 06/30/07
 09/30/07
 12/31/07
 03/31/08 – 12/31/08
 03/31/09 and thereafter
	  	5.30:1.00
4.50:1.00
3.50:1.00
3.25:1.00
3.25:1.00
3.25:1.00
3.00:100
2.25:1.00
2.00:1.00

 (b) Section 7.1(b) of the Credit Agreement is hereby amended by deleting the portion of the
table set forth therein covering the fiscal quarters set forth below and substituting therefor the following: 
  

			
	 Fiscal Quarter
	  	      Consolidated Interest Coverage Ratio      
	 06/30/06
 09/30/06
 12/31/06
 03/31/07
 06/30/07
 09/30/07
 12/31/07
 03/31/08 and therafter
	  	3.25:1.00
3.40:1.00
3.60:1.00
3.60:1.00
3.60:1.00
3.60:1.00
3.75:1.00
4.50:1.00

 (c) Section 7.1(c) of the Credit Agreement is hereby amended by deleting the portion of the
table set forth therein covering the fiscal quarters set forth below and substituting therefor the following: 
  

			
	 Fiscal Quarter
	  	Consolidated Fixed Charge Coverage Ratio
	 06/30/06
 09/30/06
 12/31/06
 03/31/07
 06/30/07
 09/30/07
 12/31/07
 03/31/08 and thereafter
	  	1.60:1.00
1.70:1.00
1.85:1.00
1.85:1.00
1.85:1.00
1.85:1.00
1.90:1.00
2.15:1.00

  

 3 

 4. Conditions to Effectiveness of this Amendment. This Second Amendment shall become effective on
and as of the date (such date the “Second Amendment Effective Date”) of the execution and delivery of this Second Amendment by the Borrower, the Administrative Agent and the Required Lenders and satisfaction of the following
conditions precedent: 
 (a) The Administrative Agent shall have received payment, for distribution to each Lender that has signed and
delivered this Second Amendment to the Administrative Agent by not later than 12:00 Noon (New York City time) on August 8, 2006 (or such later time or date as agreed by the Borrower and the Administrative Agent), of an amendment fee equal to
0.25% of the Aggregate Exposure of such Lender then in effect immediately prior to the Second Amendment Effective Date. 
 (b) The Lenders
and the Administrative Agent shall have received all other fees required to be paid, and all expenses for which invoices have been presented (including the reasonable fees and expenses of legal counsel), in connection with the Second Amendment.

 (c) The Administrative Agent shall have received (i) a certificate of the Secretary or Assistant Secretary or similar officer of the
Borrower, dated the Second Amendment Effective Date, and certifying (A) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors (or equivalent governing body) of the Borrower (or its managing
member) authorizing the execution, delivery and performance of this Second Amendment, and that such resolutions have not been modified, rescinded or amended and are in full force and effect on the Second Amendment Effective Date, (B) as to the
incumbency and specimen signature of each officer executing this Second Amendment or any other document delivered in connection herewith on behalf of the Borrower and (C) as to the incumbency and specimen signature of the Secretary or Assistant
Secretary or similar officer executing such certificate; and (ii) a good standing certificate for the Borrower from its jurisdiction of organization. 
 (d) The Administrative Agent shall have received an Acknowledgement and Consent in the form of Exhibit A attached hereto, executed and delivered by each Loan Party other than the Borrower. 
 5. Miscellaneous. 
 (a) Applicable
Margin. Notwithstanding anything to the contrary in the Second Amendment or in any other Loan Documents, payment of interest and fees accrued during the period prior to the Second Amendment Effective Date shall be based upon the Applicable
Margin in effect prior to the Second Amendment becoming effective. 
 (b) Representation and Warranties. The Borrower hereby
represents that as of the Second Amendment Effective Date each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents is true and correct in all material respects as if made on and as of such date (it being
understood and agreed that any representation or warranty that by its terms is made as of a specific date shall be required to be true and correct in all material respects only as of such specified date), and no Default or Event of Default has
occurred and is continuing after giving effect to the amendments contemplated herein. 
 (c) Effect. Except as expressly amended
hereby, all of the representations, warranties, terms, covenants and conditions of the Loan Documents shall remain unamended and not waived and shall continue to be in full force in effect. 
 (d) Counterparts. This Second Amendment may be executed by one or more of the parties to this Second Amendment on any number of separate
counterparts, and all of said counterparts 
  

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 taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Second Amendment
signed by all the parties shall be lodged with the Borrower and the Administrative Agent. 
 (e) Severability. Any provision of this
Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 
 (f) Integration. This Second Amendment and the other Loan Documents represent the agreement of the Loan Parties, the Administrative Agent and the Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 
 (g) GOVERNING LAW. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 
 (h) Waiver. The Lenders waive any Default or
Event of Default that may have occurred prior to the Second Amendment Effective Date as a result of the violation of Section 7.1 of the Credit Agreement, to the extent that such violation would not have occurred had this Second Amendment been
effective as of June 30, 2006. 
  

 5 

 IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written. 
  
  

			
	EDUCATE OPERATING COMPANY, LLC
		
	By:	 	 /s/ Kevin E. Shaffer

	Name:	 	Kevin E. Shaffer
	Title:	 	Vice President

  
  

			
	 JPMORGAN CHASE BANK N.A., as
 Administrative
Agent and as a Lender

		
	By:	 	 /s/ Kathryn A. Duncan

	Name:	 	Kathryn A. Duncan
	Title:	 	Managing Director

  
  

			
	 MERRILL LYNCH CAPITAL, a division of
 Merrill
Lynch Business Financial Services Inc., as
 Documentation Agent and as a Lender

		
	By:	 	 /s/ D. Darby Jones

	Name:	 	D. Darby Jones
	Title:	 	AVP

  
  

			
	Allied Irish Banks Plc, as a Lender
		
	By:	 	 /s/ Joanne Gibson

	Name:	 	Joanne Gibson
	Title:	 	Assistant Vice President
		
	By:	 	 /s/ Gregory J. Wiske

	Name:	 	Gregory J. Wiske
	Title:	 	Vice President

  
  

			
	AIB Debt Management Limited, as a Lender
		
	By:	 	 /s/ Joanne Gibson

	Name:	 	Joanne Gibson
	Title:	 	 Assistant Vice President
 Investment Advisor
to
 AIB Debt Management, Limited

		
	By:	 	 /s/ Gregory J. Wiske

	Name:	 	Gregory J. Wiske
	Title:	 	 Vice President
 Investment Advisor to
 AIB Debt Management, Limited

  
  

			
	Atlas Loan Funding 1, LLC, as a Lender
	 By: Atlas Capital Funding, Ltd.

	 By: Structured Asset Investors, LLC

	 Its Investment Manager

		
	By:	 	 /s/ Diana M. Himes

	Name:	 	Diana M. Himes
	Title:	 	Associate

  
  

			
	Atlas Loan Funding 2, LLC, as a Lender
	 By: Atlas Capital Funding, Ltd.

	 By: Structured Asset Investors, LLC

	 Its Investment Manager

		
	By:	 	 /s/ Diana M. Himes

	Name:	 	Diana M. Himes
	Title:	 	Associate

  
  

			
	WB Loan Funding 4, LLC, as a Lender
		
	By:	 	 /s/ Diana M. Himes

	Name:	 	Diana M. Himes
	Title:	 	Associate

  
  

			
	Bank of America, N.A., as a Lender
		
	By:	 	 /s/ Monica Brandes

	Name:	 	Monica Brandes
	Title:	 	Senior Vice President

  
  

			
	BABSON CLO LTD 2005-I
	SUFFIELD CLO, LIMITED, as Lenders
	By: Babson Capital Management LLC
	As Collateral Manager
		
	By:	 	 /s/ Dongbing Hu

	Name:	 	Dongbing Hu
	Title:	 	Associate Director
	
	HAKONE FUND LLC, as a Lender
	By: Babson Capital Management LLC as
	Investment Manager
		
	By:	 	 /s/ Dongbing Hu

	Name:	 	Dongbing Hu
	Title:	 	Associate Director
	
	BILL & MELINDA GATES FOUNDATION, as a Lender
	By: Babson Capital Management LLC as
	Investment Adviser
		
	By:	 	 /s/ Dongbing Hu

	Name:	 	Dongbing Hu
	Title:	 	Associate Director
	
	MASSACHUSETTS MUTUAL LIFE
	INSURANCE COMPANY, as a Lender
	By: Babson Capital Management LLC as
	Investment Adviser
		
	By:	 	 /s/ Dongbing Hu

	Name:	 	Dongbing Hu
	Title:	 	Associate Director

  
  

			
	CIT Lending Services Corporation, as a Lender
		
	By:	 	 /s/ David Manheim

	Name:	 	David Manheim
	Title:	 	Vice President

  
  

			
	 Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO I, LTD., or an
 affiliate, as a Lender

		
	By:	 	 /s/ Nicole D. Kouba

	Name:	 	Nicole D. Kouba
	Title:	 	Vice President

  
  

			
	 Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO III, LTD., or an
 affiliate, as a Lender

		
	By:	 	 /s/ Nicole D. Kouba

	Name:	 	Nicole D. Kouba
	Title:	 	Vice President

  
  

			
	 Denali Capital LLC, managing member of DC Funding Partners LLC, portfolio manager for DENALI CAPITAL CLO VI, LTD., or an
 affiliate, as a Lender

		
	By:	 	 /s/ Nicole D. Kouba

	Name:	 	Nicole D. Kouba
	Title:	 	Vice President

  
  

			
	 EAGLE LOAN TRUST
 By: Stanfield Capital Partners, LLC
 as its Collateral Manager, as a Lender

		
	By:	 	 /s/ David Frey

	Name:	 	David Frey
	Title:	 	Managing Partner

  
  

			
	 Stanfield Vantage CLO, Ltd
 By: Stanfield Capital Partners, LLC
 as its Asset Manager, as a Lender

		
	By:	 	 /s/ Christopher E. Jansen

	Name:	 	Christopher E. Jansen
	Title:	 	Managing Partner

  
  

			
	 Stanfield Modena CLO, Ltd
 By: Stanfield Capital Partners, LLC
 as its Asset Manager, as a Lender

		
	By:	 	 /s/ Christopher E. Jansen

	Name:	 	Christopher E. Jansen
	Title:	 	Managing Partner

  
  

			
	General Electric Capital Corporation, as a Lender
		
	By:	 	 /s/ Rebecca Ford

	Name:	 	Rebecca Ford
	Title:	 	Duly Authorized Signatory

  
  

			
	Antares Capital Corporation, as a Lender
		
	By:	 	 /s/ Rebecca Ford

	Name:	 	Rebecca Ford
	Title:	 	Duly Authorized Signatory

  
  

			
	 GSC PARTNERS GEMINI FUND LIMITED
  
 By: GSCP (NJ), L.P., as Collateral
Monitor

	By: GSCP (NJ), INC., its General Partner, as a Lender
		
	By:	 	 /s/ Seth M. Katzenstein

	Name:	 	Seth M. Katzenstein
	Title:	 	Authorized Signatory

  
  

			
	ING Capital LLC, as a Lender
		
	By:	 	 /s/ Khursheed Sorabjee

	Name:	 	Khursheed Sorabjee
	Title:	 	Vice President

  
  

			
	LightPoint CLO 2004-1, Ltd., Marquette US/European CLO, P.L.C. as a Lender
		
	By:	 	 /s/ Colin Donlan

	Name:	 	Colin Donlan
	Title:	 	Director

  
  

			
	Manufacturers and Traders Trust Company, as a Lender
		
	By:	 	 /s/ Theodore K. Oswald

	Name:	 	Theodore K. Oswald
	Title:	 	Vice President

  
  

			
	 General Electric Capital Corporation, as
 Administrator for, Merritt CLO Holding LLC., as a Lender

		
	By:	 	 /s/ Amanda Van Heyst

	Name:	 	Amanda Van Heyst
	Title:	 	Duly Authorized Signatory

  
  

			
	OLYMPIC CLO I, LTD, as a Lender
		
	By:	 	 /s/ John M. Casparian

	Name:	 	John M. Casparian
	Title:	 	 Chief Operating Officer,
 (Manager)
 Centre Pacific, LLC

  
  

			
	SIERRA CLO I, LTD, as a Lender
		
	By:	 	 /s/ John M. Casparian

	Name:	 	John M. Casparian
	Title:	 	 Chief Operating Officer,
 (Manager)
 Centre Pacific, LLC

  
  

			
	SIERRA CLO II, LTD, as a Lender
		
	By:	 	 /s/ John M. Casparian

	Name:	 	John M. Casparian
	Title:	 	 Chief Operating Officer,
 (Manager)
 Centre Pacific, LLC

  
  

			
	WHITNEY CLO I, LTD, as a Lender
		
	By:	 	 /s/ John M. Casparian

	Name:	 	John M. Casparian
	Title:	 	 Chief Operating Officer,
 (Manager)
 Centre Pacific, LLC

  
  

			
	OSP FUNDING LLC, as a Lender
		
	By:	 	 /s/ Christina L. Ramseur

	Name:	 	Christina L. Ramseur
	Title:	 	Assistant Vice President

  
  

			
	TORONTO DOMINION (NEW YORK), LLC, as a Lender
		
	By:	 	 /s/ Masood Fiktee

	Name:	 	Masood Fiktee
	Title:	 	Authorized Signatory

  
  

			
	 VAN KAMPEN SENIOR LOAN FUND
 By: Van Kampen Asset Management, as a Lender

		
	By:	 	 /s/ Christina Jamieson

	Name:	 	Christina Jamieson
	Title:	 	Executive Director

  
  

			
	 WhiteHorse I, Ltd.
 WhiteHorse Capital
Partners, L.P., as a Lender

		
	By:	 	 /s/ Ethan Underwood

	Name:	 	Ethan Underwood
	Title:	 	Manager

  
  

			
	Confluent 3 Limited, as a Lender
	By:	 	Morgan Stanley Investment Management as Investment Manager
		
	By:	 	 /s/ Kevin Egan

	Name:	 	Kevin Egan
	Title:	 	Executive Director

  

			
	
	MSIM Croton Ltd., as a Lender
	By:	 	Morgan Stanley Investment Management as Collateral Manager
		
	By:	 	 /s/ Kevin Egan

	Name:	 	Kevin Egan
	Title:	 	Executive Director

  

			
	
	Morgan Stanley Prime Investment, as a Lender
		
	By:	 	 /s/ Jinny K. Kim

	Name:	 	Jinny K. Kim
	Title:	 	Executive Director

  

			
	
	Qualcomm Global Trading, Inc., as a Lender
	By: Morgan Stanley Investment Management as Investment Manager
		
	By:	 	 /s/ Kevin Egan

	Name:	 	Kevin Egan
	Title:	 	Executive Director

  

			
	
	 Kitty Hawk Trust, as a Lender
 By: Morgan
Stanley Investment Management as Investment Manager

		
	By:	 	 /s/ Kevin Egan

	Name:	 	Kevin Egan
	Title:	 	Executive Director

  
  

			
	WhiteHorse II, Ltd.
	WhiteHorse Capital Partners, L.P., as a Lender
		
	By:	 	 /s/ Ethan Underwood

	Name:	 	Ethan Underwood
	Title:	 	Manager

  

			
	VAN KAMPEN SENIOR INCOME TRUST
	BY: Van Kampen Asset Management, as a Lender
		
	By:	 	 /s/ Christina Jamieson

	Name:	 	Christina Jamieson
	Title:	 	Executive Director

  

			
	Stanfield Quattro CLO, Ltd.
	By: Stanfield Capital Partners, LLC
		 	as its Collateral Manager, as a Lender
		
	By:	 	 /s/ Christopher E. Jansen

	Name:	 	Christopher E. Jansen
	Title:	 	Managing Partner

  

			
	Stanfield AZURE CLO, Ltd.
	By: Stanfield Capital Partners, LLC
		 	as its Collateral Manager, as a Lender
		
	 By:
	 	 /s/ Christopher E. Jansen

	 Name:
	 	Christopher E. Jansen
	 Title:
	 	Managing Partner

  

			
	 Stanfield Arbitrage CDO, Ltd.

	 By:
	 	Stanfield Capital Partners LLC
		 	as its Collateral Manager, as a Lender
		
	 By:
	 	 /s/ Christopher E. Jansen

	 Name:
	 	Christopher E. Jansen
	 Title:
	 	Managing Partner

  

			
	 ULT CBNA Loan Funding LLC, for itself or

	as agent for ULT CFPI Loan Funding LLC , as a Lender
		
	 By:
	 	 /s/ ROY HYKAL

	 Name:
	 	ROY HYKAL
	 Title:
	 	Attorney-in-fact

 Exhibit A 
 Form of Acknowledgement and ConsentForm of Restricted Stock Agreement

 Exhibit 10.26 
 FNB UNITED CORP. 
 RESTRICTED STOCK AGREEMENT 
 THIS RESTRICTED STOCK AGREEMENT (this “Agreement”), dated as of
                    , 20    , by and between FNB United Corp., a North Carolina corporation and registered bank
holding company (the “Company”), and                      (“Participant”); 
 W I T N E S S E T H: 
 WHEREAS, the
Company recognizes the value to it of the services of Participant as a [key employee or non-employee director] of the Company or one of its subsidiaries and wishes to furnish Participant with added incentive and inducement to contribute to
the success of the Company; and 
 WHEREAS, the Board of Directors of the Company has adopted, and the shareholders of the Company have
approved, the FNB Corp. 2003 Stock Incentive Plan, a copy of which is attached hereto as Exhibit A (hereinafter called the “Plan”); and 
 WHEREAS, pursuant to the provisions of the Plan, the Compensation Committee of the Board of Directors of the Company has authorized the grant to Participant of a restricted stock award (the “Award”) on the
terms and conditions hereinafter set forth, and Participant desires to accept such Award on such terms and conditions; 
 NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, the parties hereby agree as follows: 
 Section 1. Award. The
Company hereby awards to Participant              shares of the Company’s Common Stock, par value $2.50 per share (the “Shares”), and Participant acknowledges receipt
of the Award, pursuant and subject to the terms and conditions of the Plan and this Agreement. The Shares will be issued in the name of Participant but will be held in escrow by the Company until all restrictions thereon have lapsed and the Shares
are vested. Simultaneously with the execution of this Agreement, Participant shall execute and deliver to the Company one or more assignments separate from certificate in the form of Exhibit B attached hereto with respect to the Shares. Upon
the lapse of restrictions and the vesting of any Shares, the Company shall deliver a certificate evidencing such Shares to Participant. 
 Section 2. Applicability of Plan. Participant hereby affirms that [he/she] has read and understands the Plan and this Agreement and agrees that [his/her] entitlement to and enjoyment of the Shares is in all respects
subject to the terms and provisions of the Plan and this Agreement. 
 Section 3. Tax Matters. Participant has reviewed with
[his/her] own advisor(s) the federal, state, and local tax consequences of the Award of the Shares. Participant is relying solely on such advisor(s) and not on any statements or representations of the Company or any of its agents. Participant
understands that [he/she], and not the Company, shall be responsible for 

 [his/her] own tax liability that may arise as a result of the transactions contemplated by this Agreement.
Participant further understands that Section 83 of the Internal Revenue Code of 1986 (including any amendments and successor provisions to such section and any regulations promulgated thereunder) taxes as ordinary income the difference between
the purchase price for the Shares and the fair market value of the Shares as of the date any restrictions on the Shares terminate or lapse in accordance with the terms of the Plan and this Agreement. Participant understands that [he/she] may
elect to be taxed at the time the Shares are granted, rather than as the restrictions terminate or lapse, by completing the 83(b) election form attached hereto as Exhibit C and delivering it to the Internal Revenue Service (“IRS”)
office where [he/she] regularly files [his/her] tax returns within 30 days of the date of this Agreement. Participant also understands that [he/she] must provide a copy of the 83(b) election to the Company when [he/she]
first files it with the IRS and file a copy with [his/her] tax return for the year in which the election is made. Participant acknowledges that it is [his/her] sole responsibility (and not the Company’s) to file timely the
election under Section 83(b). Participant also acknowledges that at the time [his/her] tax obligation arises with respect to the Shares, the Company may incur a withholding tax obligation, and Participant shall deliver sufficient funds
to the Company to meet any such withholding tax obligation; provided, however that if Participant does not make an election under Section 83(b), Participant may elect to authorize the Company to withhold from the Shares issued to Participant
the number of whole shares of Common Stock required to satisfy such withholding tax obligation, the number to be determined by the fair market value of the Shares on the date the restrictions on the Shares lapse and the Shares vest. If Participant
elects to authorize the Company to withhold shares of Common Stock to satisfy such withholding tax obligation, Participant shall pay in cash any such obligation that remains after the application of the whole shares that is less than the value of a
whole share. 
 Section 4. Lapse of Restrictions. The restrictions on the Shares will lapse and the Shares will vest as follows:

 (a) A number of Shares equal to 33 1/3% of the total number of Shares awarded pursuant to this Agreement, or              Shares, shall vest and the
restrictions on such Shares will lapse if Participant is continuously employed by the Company from the date hereof until                     ,
20    . 
 (b) A number of Shares equal to an additional 33 1/3% of the total number of Shares awarded pursuant to this Agreement, or
             Shares, shall vest and the restrictions on such Shares will lapse if Participant is continuously employed by the Company from the date hereof until
                    , 20    . 
 (c) A number of Shares equal to an additional 33 1/3% of the total number of Shares awarded pursuant to this Agreement, or              Shares, shall vest and the
restrictions on such Shares will lapse if Participant is continuously employed by the Company from the date hereof until                     ,
20    . 
 [Note: If the restrictions on the Shares will lapse at one time (cliff vesting), Section 4 will read as
follows: All restrictions on the Shares will lapse and the Shares shall immediately vest if Participant is continuously employed by the Company from the date hereof until
                    , 20    .] 
  

 2 

 Section 5. Forfeiture. The unvested Shares shall be forfeited to the Company if and when it is no
longer possible for the Shares to vest as provided in Section 4 above. Notwithstanding the foregoing, immediately prior to the effective time of a Change in Control, as such term is defined in the Plan, all unvested Shares outstanding under
this Agreement shall immediately vest and the restrictions thereon shall lapse. 
 Section 6. Shareholder Rights. From and after the
date hereof and until the Shares are forfeited to the Company, Participant shall be entitled to vote the Shares and to receive any dividends paid with respect thereto. Until the restrictions lapse, the Shares may not be sold, assigned, transferred,
pledged or otherwise encumbered by Participant. 
 Section 7. Compliance with Securities Laws. Participant recognizes that any
registration of the Shares under applicable federal and state securities laws, or actions to qualify for applicable exemptions from such registrations, shall be at the option of the Company. Participant acknowledge that, in the event no such
registrations are undertaken and the Company relies on exemptions from registration, there may not be an exemption from such registration requirements available for resale or transfer of any of the Shares and Participant may not be permitted to
resell or transfer any of the Shares following vesting and lapse of the restrictions thereon in the amounts or at the times proposed by Participant. Participant further acknowledges that, notwithstanding registration, if Participant is deemed an
“affiliate” of the Company, [he/she] may sell the Shares following lapse of the restrictions only in compliance with Rule 144 of the Securities and Exchange Commission, except that the two-year holding period of Rule 144 will not
apply, and that the Company may take such action as it deems necessary or appropriate to assure such compliance, including placing restrictive legends on certificates evidencing the Shares and delivering stop transfer instructions to the
Company’s stock transfer agent. For this purpose, an “affiliate” is a person who directly or through one or more intermediaries, controls, or is controlled by, or is under common control with the Company. 
 Section 8. Right to Employment. Nothing herein contained shall affect the right of the Company, subject to the terms of any existing contractual
arrangement to the contrary, to terminate Participant’s employment with the Company at any time for any reason whatsoever. 
 Section 9.
Successor and Assigns. The terms of this Agreement shall be binding upon and shall inure to the benefit of any successors or assigns of the Company and of Participant. 
 Section 10. Notices. Notices under this Agreement shall be in writing and shall be deemed to have been duly given (i) when personally
delivered, (ii) when forwarded by a recognized overnight courier service that maintains records showing delivery information, (iii) when sent via facsimile but only if a written facsimile acknowledgment of receipt is received by the
sending party, or (iv) when placed in the United States Mail and forwarded by registered or certified mail, return receipt requested, postage prepaid, addressed to the party to whom such notice is being given. Any notice to be given to the
Company shall be addressed to the Secretary of the Company at 101 Sunset Avenue, Asheboro, North Carolina 27203. 
 Section 11. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina. 
  

 3 

 Section 12. Amendments. Except as otherwise provided by the Plan, this Agreement may not be
altered, modified, changed or discharged, except by a writing signed by or on behalf of both the Company and Participant. 
 Section 13.
Multiple Counterparts. This Agreement may be signed in one or more counterparts, each of which shall be deemed to be an original. 
 IN WITNESS WHEREOF, the Company and Participant have executed this Agreement as of the day and year first above written. 
  

			
	FNB UNITED CORP.
		
	By	 	  

	
	Participant:
	
	  

	  

  

 4 

 EXHIBIT A 
 FNB Corp. 2003 Stock Incentive Plan 

 EXHIBIT B 
 Assignment Separate from Certificate 
 FOR VALUE RECEIVED, the undersigned does hereby assign and
transfer              shares of the common stock of FNB United Corp., a North Carolina corporation, represented by Certificate No.
         standing in the name of the undersigned on the books of said Corporation
to                                       
 , and does hereby irrevocably constitute and appoint
                                        
         as attorney to transfer the said stock on the books of said Corporation with full power of substitution in the premises. 
 Dated:                     ,
200   
  

							
	 IN THE PRESENCE OF
	 		  		 	
			
	  
	 		  	  

	 Witness
	 		  	Print Name:	 	  

 Notary Acknowledgement to Assignment Separate from Certificate 
                      County,
North Carolina 
 I certify that the following person(s) personally appeared before me this day, each acknowledging to me that [he/she] or she
voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated:
                                        
                                        
         
                     [List Name(s) of Person(s)] 
 ______________________________________________________________________________________________________________________________. 
  
  

					
	Date:                     , 20    	  		  	  

		  		  	Official Signature of Notary
	 (Official Seal)
	  		  	
			
		  		  	                                       
                  , Notary Public
 Printed or typed
name

	 My commission expires:
                                       
 
	  		  	

 EXHIBIT C 
 83(b) Election 
 Election to Include Value of Restricted Property in Gross Income 
 in Year of Transfer Under Code § 83(b) 
 The undersigned hereby elects pursuant to § 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder: 

 

	1.	The name, address and taxpayer identification number of the undersigned are: 

 Name:                                     
                                  
 Address:                                     
                              
 Tax ID/ SSN:
                                        
                   
  

	2.	Description of property with respect to which the election is being made: 

                      shares of restricted common stock, $2.50 per share par value, of FNB United Corp., a
North Carolina corporation (the “Restricted Stock”). 
  

	3.	The date on which property was transferred is:
                    . 

 The taxable year to which this election relates is:                    . 
  

	4.	The nature of the restriction(s) to which the property is subject is: 

 The taxpayer will forfeit (i) 100% of the Restricted Stock unless the taxpayer remains employed by the corporation until
                    , (ii) 66 2/3% of the Restricted Stock unless the taxpayer remains employed by the corporation until
                    , and (iii) 33 1/3% of the Restricted Stock unless the taxpayer remains employed by the corporation until
                    . 
  

	5.	Fair market value: 

  

	6.	Amount paid for property: $0. 

  

	7.	Furnishing statement to employer: 

 A copy of this
statement has been furnished to FNB United Corp. 
  

	Dated:	                    . 

  

	
	  
 
	Print Name:
                                        
                
	
	 SSN:

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