Exhibit No. 10.21
INDEPENDENT CONTRACTOR
CONSULTING AGREEMENT
WHEREAS, Xxxxxx X. Xxxxxx ("Xxxxxx"), FNB Financial Services Corporation
("FNB"), and FNB Southeast ("Bank") are parties to the Employment Agreement
between Xxxxxx and, as the joint employer, FNB and the Bank (jointly, the
"Company"), dated May 18, 1995 and amended on May 18, 2002, amended as of
January 1, 2004, amended on May 19, 2004, and amended as of October 20, 2005;
and
WHEREAS, Xxxxxx desires to retire from employment by the Company as of
January 31, 2006; and
WHEREAS, the Company desires to continue to have the benefit of Xxxxxx'x
experience and expertise in the maintenance and development of banking
relationships after his retirement; and
WHEREAS, Xxxxxx desires to advise the Company in the maintenance and
development of banking relationships; and
WHEREAS, Xxxxxx and the Company desire to set forth the terms and
conditions of Xxxxxx'x engagement as an independent contractor consultant to the
Company.
NOW, THEREFORE, the parties agree as follows:
Section 1. Services. Xxxxxx shall be engaged by the Company for the Term
(as defined in Section 2 below) as an independent contractor to consult with and
advise the Bank concerning the maintenance of the Bank's current, and the
development of additional, banking relationships within the State of North
Carolina, including in particular, but not by way of limitation, in New Hanover
County, North Carolina and adjacent geographical areas. Xxxxxx shall dedicate
such of his time as is reasonable and necessary to provide such consulting
services. He shall be the Senior Advisor of the Company and shall consult with
the Executive Committee of the Board of Directors concerning his activities.
Section 2. Term. The term of Xxxxxx'x engagement under this Agreement
shall commence on February 1, 2006 and expire on January 31, 2011, unless
earlier terminated as provided herein (the "Term"). Xxxxxx and the Company
acknowledge that they have separately agreed that Xxxxxx shall remain an
employee of the Company through January 31, 2006 with all the rights and subject
to all of the conditions set forth in his Employment Agreement, as amended.
Section 3. Compensation. Beginning February 1, 2006 and continuing through
the remainder of the Term, Xxxxxx shall receive from the Bank a monthly
consulting fee of $5,000, payable $2,500 on each of the 15th day and 30th day of
each calendar month.
Section 4. Expense Reimbursement. Xxxxxx shall be entitled to payment of
all reasonable out-of-pocket expenses incurred by him in providing consulting
services under this Agreement upon presentation by him of itemized accounts of
such expenses and appropriate documentation therefore.
Section 5. Stock Option Grant. Xxxxxx and the Company acknowledge that the
Board of Directors of FNB and the "Committee" administering FNB's Omnibus Equity
Compensation Plan ("Option Plan") have determined to award Xxxxxx a
non-qualified option to acquire 50,000 shares of FNB's common stock on October
31, 2005, such option having an exercise price equal to the closing price of
FNB's common stock on The Nasdaq Stock Market, Inc. on the last trading day
prior to October 31, 2005 (the "Option"). The Committee has determined that the
Option shall vest and become exercisable on January 31, 2011, except as follows:
a. The Option shall terminate and be of no further force or effect upon
the termination of Xxxxxx'x engagement under this Agreement prior to
the expiration of the Term (i) by Xxxxxx voluntarily, (ii) by reason
of Xxxxxx'x Disability (as defined in Section 6 below), or (iii) by
the Company for Cause (as defined in Section 6 below);
b. The Option shall be immediately vested and be exercisable by Xxxxxx
upon the occurrence of an "Acceleration Event," as defined in the
Option Plan, and as provided in the Option Plan; and
c. Upon the death of Xxxxxx during the Term, one-fifth of the Option
(i.e. 10,000 shares) shall be deemed vested and exercisable for each
twelve (12) month period from February 1st through January 31st
occurring during the Term and prior to Xxxxxx'x death.
The Committee has additionally determined that the period of time following
Xxxxxx'x "Retirement" (as defined in the Option Plan) within which the Option
may be exercised by Xxxxxx shall be the period ending on the first anniversary
of the date the Option first becomes vested and exercisable. The award agreement
with respect to the Option shall set forth the above provisions.
Section 6. Termination.
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a. In the event of the death or Disability (as defined below) of Xxxxxx
during the Term, Xxxxxx'x engagement under this Agreement shall
terminate immediately. "Disability" shall mean the inability, by
reason of bodily injury or physical or mental disease, or any
combination thereof, of Xxxxxx to provide the consulting services
specified under this Agreement for a period of more than 90
consecutive days. In the event the parties are unable to agree as to
whether Xxxxxx is suffering a Disability, Xxxxxx and the Company
shall each select a physician and the two physicians so chosen shall
make the determination or, if they are unable to agree, they shall
select a third physician, and the determination as to whether Xxxxxx
is
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suffering a Disability shall be based upon the determination of a
majority of the three physicians.
b. The Company may terminate Xxxxxx'x engagement under this Agreement
for Cause (as defined below). Upon termination for Cause, Xxxxxx
shall receive a consulting fee as specified herein only through the
date of termination (and pro rated as applicable). Termination for
Cause shall mean termination due to (i) a willful and intentional
act of Xxxxxx which constitutes a breach of any duty he owes to FNB
and/or the Bank, (ii) any act or omission to act by Xxxxxx which is
intended to injure the reputation, business or any business
relationships of FNB or the Bank or the officers, directors,
shareholders, employees or customers of either of them; (iii) a
breach by Xxxxxx of the provisions of Section 7 of this Agreement;
(iv) the commission by Xxxxxx of any act, or any failure by Xxxxxx
to act, constituting (A) criminal conduct (other than traffic
violations or similar misdemeanor offenses), (B) personal
dishonesty, (C) moral turpitude, or (D) a violation of any law, rule
or regulation applicable to the business or affairs of FNB and/or
the Bank, or (v) the determination by a banking regulator having
jurisdiction over FNB and/or the Bank that Xxxxxx must be suspended
or prohibited from providing the consulting services specified
herein.
x. Xxxxxx may voluntarily terminate this Agreement and his engagement
hereunder at any time.
Section 7. Covenants Not To Compete And Not To Solicit.
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x. Xxxxxx hereby promises, agrees, warrants and covenants that, in
consideration of the Company's agreement to this Agreement as
provided herein and the granting of the Option by the Company in
anticipation of the commencement of the Term, among other things,
during the Term and, as applicable, (i) the period of one (1) year
following the expiration of the Term and (ii) the period of three
(3) years following the termination of this Agreement and Xxxxxx'x
engagement hereunder by Xxxxxx voluntarily or by the Company by
reason of Disability or Cause:
i. he will not, directly or indirectly, own any equity interest
in (other than up to three percent (3%) of the equity
interests of an entity traded or qualified for quotation on a
national securities exchange or a national inter-dealer
quotation system), operate, control, manage, serve as an
employee, officer or director of, render consulting or
advisory services to, serve as an independent contractor of,
or otherwise participate in the operation, control or
management of any entity or group of persons engaged in the
operation of a financial institution and/or a holding company
of a financial institution operating within the Territory (as
defined below) or of any entity or group of persons engaged
within the Territory in the provision of financial services or
products offered by FNB or any direct or indirect subsidiary
thereof (the "FNB Group");
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ii. he will not, directly or indirectly, solicit, assist in the
solicitation of, influence or attempt to influence any
customer of any member of the FNB Group to discontinue use of
any of such member's services or products or to divert such
customer's business relationship with such member of the FNB
Group to any other provider of such services or products; and
iii. he will not, directly or indirectly, solicit, assist in the
solicitation of, influence or attempt to influence any
employee or independent contractor of any member of the FNB
Group to terminate his or her employment or independent
contractor relationship with such member.
b. "Territory" shall mean each geographic area composed of a circle
having a business location of a member of the FNB Group as its
center point and a radius of twenty-five (25) miles.
x. Xxxxxx and the Company agree that their intent is that the
provisions of this Section 7 shall be enforceable to the fullest
extent permitted under the laws and public policies of each
jurisdiction in which enforcement is sought. Accordingly, if any
provision of this Section 7 shall be adjudicated to be invalid or
unenforceable in a particular jurisdiction, such adjudication shall
apply only with respect to such provision in that particular
jurisdiction, and the remainder of this Section 7 shall continue in
full force and effect in that particular jurisdiction.
d. In the event that the Company materially breaches its obligations
under the Employment Agreement and does not promptly cure such
breach, the provisions of this Section 7 shall cease to have any
further force or effect.
Section 8. Injunctive Relief. Xxxxxx and the Company acknowledge and agree
that the Company would suffer irreparable injury in the event of a breach of any
of the provisions of Section 7 set forth above and that the Company shall be
entitled to an injunction restraining Xxxxxx from any breach or threatened
breach thereof. Nothing herein shall be construed, however, as prohibiting the
Company from pursuing any other remedies at law or in equity which it may have
for any such breach or threatened breach of any provisions of Section 7,
including the recovery of damages by the Company.
Section 9. Successors and Assigns. This Agreement shall be binding upon,
and shall inure to the benefit of, Xxxxxx and his personal representatives,
estate and heirs and FNB, the Bank and their respective successors and assigns,
including without limitation any corporation or other entity to which FNB or the
Bank may transfer all or substantially all of its assets and business (by
operation of law or otherwise) and to which FNB or the Bank, as applicable, may
assign this Agreement. Xxxxxx may not assign this Agreement or any of his
rights, duties or obligations herein.
Section 10. Notices. All notices given pursuant to this Agreement shall be
in writing and either delivered personally, sent via certified or registered
U.S. Mail (postage and fees prepaid), or delivered by a nationally recognized
overnight delivery service, to applicable following address:
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a. If to Xxxxxx:
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b. If to the Company:
Chairman of the Board
FNB Financial Services Corporation
0000 Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Either party may change the address to which its or his notices are to be sent
by giving written notice to the other party as provided in this Section 10.
Notices shall be deemed effective upon receipt at the applicable address.
Section 11. Entire Agreement. This Agreement constitutes the entire
agreement between Xxxxxx and the Company with respect to the engagement of
Xxxxxx by the Company as an independent contractor consultant and supersedes and
replaces all other understandings and agreements, whether oral or in writing,
previously entered into by the parties with respect to such employment.
This Agreement is executed as of October 20, 2005, but shall not be deemed
effective until February 1, 2006.
/s/ XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
FNB Financial Services Corporation
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Chairman of the Board
FNB Southeast
By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx
Chairman of the Board
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