Exhibit 10.1
FOUR OAKS BANK & TRUST COMPANY
AMENDED AND RESTATED
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SEVERANCE COMPENSATION AGREEMENT
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THIS AGREEMENT is entered into as of this 22nd of February, 2008,
by
and between FOUR OAKS BANK & TRUST COMPANY, a North Carolina
banking corporation
(the "Bank"), and W. LEON HIATT, III ("Employee").
WHEREAS, the Bank and Employee are parties to a Severance
Compensation
Agreement dated October 10, 1994, which they wish to amend and
restate as
provided herein;
WHEREAS, the Bank considers the maintenance of a vital management
group
to be essential to protecting and enhancing the best interests of
the Bank and
its shareholders;
WHEREAS, the Bank recognizes that, as is the case with many
publicly
held corporations, there is a possibility of a change in control of
the Bank,
and that the uncertainty and questions which such a possibility
raise may result
in the departure or distraction of management personnel to the
detriment of the
Bank and its shareholders;
WHEREAS, the Bank's Board of Directors has determined that
appropriate
steps should be taken (1) to reinforce and encourage the continued
attention and
dedication of members of the Bank's management to their assigned
duties without
distraction arising from the possibility of a change in control of
the Bank and
(2) to dispel any concerns that Employee may have about taking an
active part in
the defense against an inappropriate attempt to bring about a
change in control
of the Bank; and
WHEREAS, the purpose of this Agreement to assure Employee that, in
the
event of termination of employment after a change of control (to
the extent set
forth this Agreement), Employee will continue to receive
compensation for a
period which should be sufficient for Employee to find other
employment.
NOW, THEREFORE, in consideration of the mutual agreements set forth
in
this Agreement, the legal sufficiency and adequacy of which are
hereby
acknowledged, the parties agree as follows:
<PAGE>
1. Employment. Employee agrees that so long as he is employed by
the
Bank, Employee shall devote his full-time efforts during normal
business hours
to the business and affairs of the Bank and shall support decisions
and
determinations of the Board of Directors and Bank policy including,
but not
limited to, any decision or determination with respect to
responding to an
approach or attempt to effect a Change in Control (as later
defined).
2.
Term.
(a) The term of this Agreement shall be for two (2) years
from the Effective Date unless sooner terminated upon:
(i) Employee's written
notice to the Bank that he
is terminating this Agreement effective upon a specified date not
less
than one month after his notice is given;
(ii) Employee's death;
(iii) Employee's illness or other disability
incapacitating Employee from performing his duties for six (6)
consecutive months as determined in good faith by Chief
Executive
Officer, the Board of Directors of the Bank or a committee of
the
Board;
(iv) A determination by the Chief Executive Officer
or the Board of Directors of the Bank that Employee is no longer a
key
executive employee and the delivery of notice to Employee of
such
determination and the termination of this Agreement. Such
termination
shall be effective upon the delivery of the notice or at a later
date
specified in the notice; provided, however, such determination
shall
not be made, and if made, shall have no effect, after a Change
in
Control;
(b) Unless this Agreement is terminated in accordance with
subparagraph 2(a), on each anniversary of the Effective Date of
this Agreement,
the term of this Agreement automatically shall be extended for an
additional
successive period of one year, unless either the Employee or the
Bank shall give
written notice to the other at least three (3) months before such
anniversary
date that the term of this Agreement shall not be extended.
<PAGE>
(c) In the event of a Change in Control of the Bank at any
time before the termination of this Agreement, the term of this
Agreement shall
be automatically extended to the earlier of (i) a date two (2)
years after the
date such Change in Control occurred and (ii) the occurrence of an
event of
termination described in clause 2(a)(ii) or (iii).
(d) In the event of a Termination (as later defined) of
Employee's employment during the term of this Agreement, the term
of this
Agreement shall be automatically extended until all obligations
under the
Agreement are fully performed.
3. Change in Control. For purposes of this Agreement, a "Change
in
Control" means one or more of the following occurrences:
(a) A corporation, person or group acting in concert as
described in Section 14(d)(2) of the Securities Exchange Act of
1934, as amended
("Exchange Act"), holds or acquires beneficial ownership within the
meaning of
Rule l3d-3 promulgated under the Exchange Act of a number of shares
of voting
capital stock of the Bank which constitutes either (i) more than
fifty percent
(50%) of the shares which voted in the election of directors of the
Bank at the
shareholders' meeting immediately preceding such determination, or
(ii) more
than thirty-three percent (33%) of the Bank's then outstanding
shares entitled
to vote.
(b) A merger or consolidation to which the Bank is a party
(other than a pro forma transaction for a purpose such as changing
the state of
incorporation or name of the Bank), if either (i) the Bank is not
the surviving
corporation, or (ii) the directors of the Bank immediately before
the merger or
consolidation constitute less than a majority of the Board of
Directors of the
surviving corporation; provided, however, the occurrence described
in clause (i)
shall not constitute a Change in Control if the holders of the
Bank's voting
capital stock immediately before the merger or consolidation have
the same
proportional ownership of voting capital stock of the survivin
