Exhibit 10.m
SEVERANCE AGREEMENT
This AGREEMENT is made and entered into as of the 12th day of
October, 1995, by and between FIRST BANCORP, a North Carolina
corporation (the "Company"), and XXXXX X. XXXXXX ("Xxxxxx").
STATEMENT OF PURPOSE
Xxxxxx has been employed by the Company as President and Chief
Executive Officer. Xxxxxx is terminating his employment with the
Company as of October 12, 1995. In consideration for his service
to the Company and its subsidiaries (references herein to the
"Company" shall be deemed to refer to the Company and its
subsidiaries, unless the context requires otherwise), as well as
for the additional and further agreements hereunder, the Company
has agreed to provide to Xxxxxx x xxxxxxxxx package according to
the terms set forth below.
NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein and other good and valuable
consideration, the Company and Xxxxxx hereby agree as follows:
1. Date of Termination. Xxxxxx'x employment with the
Company and its subsidiaries is hereby terminated as of October 12,
1995, (the "Termination Date") and Xxxxxx hereby tenders his
resignation from any positions he now has with the Company and its
subsidiaries, including as an officer and director, all such
resignations to be effective as of the Termination Date.
2. Regular Severance Payment. The Company will pay to
Xxxxxx his regular salary at the current rate (and will reimburse
him for customary and reasonable expenses incurred on behalf of the
Company or its subsidiaries, all in accordance with the Company's
policies) through the Termination Date. In addition, the Company
will pay Xxxxxx a bonus under the Company's Incentive Bonus Plan
calculated in accordance with the terms of such Plan, for the
period beginning January 1, 1995 and ending on September 30, 1995.
Such bonus payment will be made on such date as is mutually
agreeable to the parties and after the amount owed can be
calculated based on the reported financial results of the Company,
but in no event later than January 31, 1996. All payments under
this paragraph will be subject to applicable deductions and
withholding under federal and state law.
3. Accrued Vacation Pay. No later than the first regular
payday following the Termination Date specified in paragraph 1
above, the Company shall pay to Xxxxxx the sum of $2,500 (less any
applicable tax withholding), which sum represents 5 days of accrued
vacation pay. Xxxxxx acknowledges that this sum constitutes the
total vacation pay owed to him under the Company's policies as of
the date of his termination. Xxxxxx shall not be eligible to
accrue additional vacation days after the Termination Date.
4. Additional Severance Payment. In addition to the amounts
set forth in paragraphs 2 and 3 above, but subject to paragraph 15
hereof and to Xxxxxx'x full compliance with the terms of this
Agreement including the conditions set forth below, the Company
shall continue to pay Xxxxxx his base salary at the rate of
$130,000 per year from the Termination Date until the date eighteen
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(18) months after the Termination Date. These severance payments
shall be payable at a time and in accord with the regular payroll
practices of the Company for its salaried executive employees. All
such amounts shall be subject to and reduced by any applicable
federal and state withholding taxes.
5. Life Insurance Policies. The Company will pay to Xxxxxx
the difference between (a) the premiums paid by the Company under
the Split Dollar Agreement involving life insurance on Xxxxxx'x
life and (b) the present value of Xxxxxx'x accrued benefit under
the Company's Supplemental Executive Retirement Plan. This amount
is calculated to be approximately $15,257. In addition, ownership
of the two life insurance policies covered by the Split Dollar
Agreement and all obligations relating thereto, including future
payment of premiums, will be transferred to Xxxxxx. These
transfers and payments will be accomplished within sixty (60) days
of the date hereof.
6. Benefit Plans and Fringe Benefits. Except as provided
below, as of the Termination Date provided in paragraph 1 herein,
Xxxxxx shall not have the right to participate in or receive any
benefit under any employee benefit plan of the Company or any of
its subsidiaries, any fringe benefit plan of the Company, or any
other plan, policy or arrangement of the Company providing benefits
or perquisites to employees of the Company generally or
individually; provided, however, that Xxxxxx shall be entitled (i)
to exercise his right to continued coverage under the Company's
medical benefit plan as provided by COBRA (and with respect to
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which the Company will provide Xxxxxx with a separate notice as
required by COBRA); and (ii) to elect the payment of benefits to
which he is entitled under any employee pension benefit plan of the
Company as provided under the terms of any such plan. Provided,
further, but subject to paragraph 15 hereof, if Xxxxxx elects
continued medical insurance coverage pursuant to the terms of
COBRA, the Company will pay on behalf of Xxxxxx that portion of the
COBRA payments that is equal to the greater of (i) the employer's
portion of the medical insurance premiums being paid by the Company
on Xxxxxx'x behalf immediately prior to the termination of his
employment and (ii) the amount that would have been paid as the
employer's portion of the medical insurance premiums for Xxxxxx had
Xxxxxx remained in the employment of the Company, but in no event
will the Company pay more than the full amount of the COBRA
payments necessary to provide coverage to Xxxxxx and his dependents
under the Company's medical insurance plan. The Company's
obligation to make the payments described in this paragraph will
terminate upon the earlier of (i) Xxxxxx obtaining other employment
pursuant to which Xxxxxx and his dependents are eligible for
medical insurance coverage, or (ii) the date eighteen (18) months
after the Termination Date. The payments of the COBRA amounts
described in this paragraph by the Company are conditional upon
Xxxxxx'x compliance with all conditions to receipt of severance
payments specified in paragraph 4 above.
7. Disclosure of Confidential Information. Xxxxxx
acknowledges that, during the course of his employment with the
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Company, he has been afforded access to certain confidential and
proprietary information of the Company. For purposes of this
paragraph, "confidential and proprietary information" shall mean
information not generally known or available to the public or in
the banking industry that was created by, disclosed or made
available to Xxxxxx in the course of his employment by the Company.
Xxxxxx covenants and agrees that from and after the date
hereof, for a period of three (3) years, he will not disclose any
confidential and proprietary information to any person, firm,
corporation, association or other entity for any reason or purpose
or for the benefit of any person, firm, corporation or other
entity, without the Company's prior written consent. Xxxxxx
acknowledges that a violation of this covenant is a material breach
of this Agreement.
8. Return of Company Property. Xxxxxx agrees to return
immediately to the Company keys, identification cards and security
pass cards, as well as all originals and copies of all documents,
software or any other materials or property relating to his
employment or obtained or created in the course of his employment
which constitute "confidential and proprietary information" as
defined above. Xxxxxx further represents, as a material inducement
for the Company to enter into this Agreement, that he has not
retained in his possession any such software, documents or other
materials in machine or human readable form, including on any disc,
tape or hard-drive of any computer owned or possessed by Xxxxxx.
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9. Public Statements and Reference. Xxxxxx agrees not to
make any public statements, written or oral, regarding his
departure from the Company's employment except as may be approved
by the Company in advance, and further agrees not to take any
action that would or might disrupt, impair or affect adversely the
Company, or its employees, officers or directors, or place the
Company or such individuals in any negative light. Consistent with
paragraph 17 below, the Company agrees that it will respond to all
inquiries regarding employment of Xxxxxx in a positive manner
consistent with his performance record at the Company since his
date of hire.
10. Remedies. The Company will not seek remedies against
Xxxxxx under this Agreement unless the Company's Board of Directors
or its delegate(s), acting with the advice of counsel, has
determined in good faith that Xxxxxx has breached the provisions
hereof or that such a breach is threatened. Xxxxxx hereby
acknowledges that the remedies at law for any breach of the
covenants and obligations contained in this Agreement will be
inadequate and that, in the event of a breach or a threatened
breach of any of the provisions of this Agreement, the Company
shall be entitled to preliminary restraining orders, injunctions or
such equitable remedies as may be appropriate, in addition to all
other remedies (including the recovery of all payments made to
Xxxxxx hereunder) available to the Company. In the event such
breach is proven, Xxxxxx agrees to pay any attorneys' fees
reasonably incurred by the Company for the enforcement of this
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Agreement. In addition, Xxxxxx agrees that a breach by him of any
of the covenants and agreements contained herein shall be deemed a
breach of all such covenants and agreements and shall entitle the
Company, among other things, to cease payments under paragraph 4
hereof and take such steps as may be necessary to recover payments
previously made to Xxxxxx under paragraph 4 hereof.
11. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of North
Carolina.
12. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns and
Xxxxxx and his heirs and legal representatives. This Agreement and
the rights hereunder may not be assigned by Xxxxxx.
13. Severability. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any
other provision of this Agreement not held so invalid, and each
such other provision shall to the full extent consistent with law
continue in full force and effect. If any provision of this
Agreement shall be held invalid in part, such invalidity shall in
no way affect the rest of such provision not held so invalid and
the rest of such provision, together with all other provisions of
this Agreement, shall to the full extent consistent with law
continue in full force and effect. Provided, that if Xxxxxx'x
execution of the Release and Waiver attached hereto as Exhibit A
is, for any reason, declared null and void, Xxxxxx shall reimburse,
indemnify and hold harmless the Company for any and all payments
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made to him or for his benefit under the provisions of paragraphs
4 through 6 of this Agreement.
14. Voluntary Agreement. Xxxxxx hereby represents that he
has carefully read and completely understands the provisions of
this Agreement and that he has entered into this Agreement
voluntarily and without any coercion whatsoever.
15. Further Conditions. The obligations of the Company set
forth in paragraphs 4, 5 and 6 hereof are conditional upon Xxxxxx'x
execution no later than November 2, 1995 of a Release and Waiver in
the form attached hereto as Exhibit A, as well as his failure to
revoke the same following the expiration of seven days following
such execution. In the event that Xxxxxx fails to execute such
Release and Waiver within such time or revokes the execution
thereof within seven days following such execution thereof, the
Company's obligations under paragraphs 4, 5 and 6 shall terminate,
and Xxxxxx shall be obligated to repay all payments made by the
Company to Xxxxxx under paragraphs 4, 5 and 6.
16. Litigation Assistance. Xxxxxx agrees to cooperate with
and provide assistance to the Company and its legal counsel in
connection with any litigation (including arbitration or
administrative hearings) or investigation affecting the Company, in
which -- in the reasonable judgment of the Company's counsel --
Xxxxxx'x assistance or cooperation is needed. Xxxxxx shall, when
requested by the Company, provide testimony or other assistance and
shall travel at the Company's request in order to fulfill this
obligation. Provided, however, that, in connection with such
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litigation or investigation, the Company shall attempt to
accommodate Xxxxxx'x schedule, shall provide him with reasonable
notice in advance of the times in which his cooperation or
assistance is needed, and shall reimburse Xxxxxx for any reasonable
expenses incurred in connection with such matters, as well as for
any actual lost wages suffered as a result from absence from
employment.
17. Non-Disparagement. Xxxxxx agrees that he shall not in
any way criticize or disparage the performance, competency or
ability of the Company, its subsidiaries or affiliated companies,
or the officers, directors, employees or agents of any of them at
any time after the execution of this Agreement. The Company agrees
that it will respond to all inquiries regarding employment of
Xxxxxx in a positive manner consistent with his performance record
at the Company since his date of hire.
18. Admissions. Xxxxxx acknowledges that the payment by the
Company of the severance benefits described herein is made in good
faith and shall never for any purpose be considered an admission of
liability on the part of the Company, by whom liability is
expressly denied, and no past or present wrongdoing on the part of
the Company shall be implied by such payment.
19. Entire Agreement. This Agreement contains the entire
agreement between the Company and Xxxxxx and supersedes all prior
agreements relating to the subject matter hereof, and may be
changed only by a writing signed by the parties hereto. Any and
all prior representations, statements and discussions regarding the
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subject matter of this Agreement have been merged into and/or
replaced by the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed by their
authorized representatives, under seal and with the intent that
this Agreement shall constitute a sealed instrument, as of the day
and year first above written.
FIRST BANCORP
ATTEST: [Corporate Seal] By: /s/ Xxxx X. Xxxxxx
[ of ] ------------------------
[First Bancorp ] Xxxx X. Xxxxxx, Chairman of the
Board
By: Xxxx X. Xxxxxxx
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_________ Secretary
WITNESS: /s/ Xxxxx X. Xxxxxx (SEAL)
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By: Xxxx X. Xxxxxxx Xxxxx X. Xxxxxx
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Exhibit A
RELEASE AND WAIVER OF CLAIMS
NOTE: THIS RELEASE AND WAIVER NEED NOT BE EXECUTED BY XXXXXX
UNTIL NOVEMBER 2, 1995, BUT MUST BE EXECUTED BY THE CLOSE OF
BUSINESS THAT DAY TO ACTIVATE THE OBLIGATIONS OF THE COMPANY SET
FORTH IN PARAGRAPHS 4, 5 AND 6 OF THE SEVERANCE AGREEMENT DATED
OCTOBER 12, 1995 (the "SEVERANCE AGREEMENT").
As consideration for the payments specified in the Severance
Agreement, Xxxxx X. Xxxxxx ("Xxxxxx") for himself, his heirs,
executors, administrators and assigns, releases and forever
discharges First Bancorp ("the Company"), its predecessors,
successors, affiliates and subsidiaries (including without
limitation First Bank) and their agents, officers, employees,
directors and attorneys, from and waives any and all rights with
respect to all manner of claims, actions, causes of action, suits,
judgments, rights, demands, debts, damages, or accountings of
whatever nature, legal, equitable or administrative, whether the
same are now known or unknown, which he ever had, now has or may
claim to have, upon or by reason of the occurrence of any matter,
cause or thing whatsoever up to the date of this Agreement,
including without limitation: (i) any claim whatsoever (whether
under federal or state statutory or common law) arising from or
relating to his employment or changes in his employment
relationship with the Company, including his separation,
termination or resignation therefrom, (ii) all claims and rights
for additional compensation or benefits of whatever nature,
including vacation, bonus, sick leave, severance, stock options,
deferred compensation, health or medical benefits, group life
insurance, disability or other benefits; and (iii) all claims and
rights whatsoever under any employment agreement with the Company.
THIS RELEASE AND WAIVER SPECIFICALLY INCLUDES, BUT IS NOT
LIMITED TO, XXXXXX'X WAIVER AND RELEASE OF EMPLOYMENT
DISCRIMINATION RIGHTS AND CLAIMS ARISING UNDER THE FEDERAL AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED. It also
includes any claim for breach of contract, implied or express,
impairment of economic opportunity, intentional or negligent
infliction of emotional distress, wage or benefit claim, prima
facie tort, defamation, libel, slander, negligent termination,
wrongful discharge, or any other tort, whether intentional or
negligent, or any claim or cause of action known or unknown under
Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of
1866, 1871, or 1991, the Employee Retirement Income Security Act,
the Americans With Disabilities Act of 1993, all as amended, or any
other federal, state, county or municipal statute or ordinance
relating to any condition of employment or employment
discrimination. In the event that any government or government
agency files or processes a charge or action on behalf of Xxxxxx
against the Company, Xxxxxx hereby waives any and all right that he
may have to recover in any proceeding arising therefrom. Provided,
however, this Release shall not (i) include any claims relating to
the obligations created by the Severance Agreement, (ii) operate to
release Xxxxxx'x ownership of any common stock of the Company or
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Xxxxxx'x rights to exercise any matured or vested stock options
pursuant to the terms thereof, (iii) affect Xxxxxx'x vested and
accrued rights as a participant in the Company's pension plans,
(iv) affect any rights or claims that may arise out of events
occurring after the date this Release and Waiver is signed, (v)
release the Company from, nor waive Xxxxxx'x rights with respect
to, the Company's obligation, if any, to defend and indemnify him
in accordance with the provisions of the Company's bylaws or (vi)
prevent Xxxxxx from obtaining reimbursement of business expenses
incurred prior to the date hereof which are otherwise subject to
reimbursement pursuant to the terms of the Company's policies.
CERTIFICATE
X. Xxxxxx agrees and certifies that he has read this Release
and Waiver and that he fully understands its provisions.
X. Xxxxxx agrees and certifies that he voluntarily enters
into this Release and Waiver, which is a legal and binding
contract, and that he has agreed to retire voluntarily.
X. Xxxxxx acknowledges that his waiver of rights and claims
under this Release and Waiver includes a waiver of rights and
claims under the Federal Age Discrimination in Employment Act of
1967, as amended, and that such waiver and the waiver and release
of all other rights and claims contemplated by this Release and
Waiver are made knowingly and voluntarily.
D. This Release and Waiver must be accepted by Xxxxxx no
later than November 2, 1995. Xxxxxx acknowledges that he has been
given a period of at least twenty-one (21) days to consider this
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Release and Waiver and to consult with his attorney, accountant,
tax advisor, spouse or other persons prior to making a decision to
sign this Release and Waiver. Xxxxxx acknowledges that the Company
has not pressured or coerced him to execute this Release and Waiver
prior to the expiration of 21 days from the date it was furnished
to him and that any decision to execute this Release and Waiver
prior to such time is done freely and voluntarily. Xxxxxx
certifies that the Company has advised him in writing to consult
with an attorney regarding the legal consequences of this Release
and Waiver.
X. Xxxxxx understands and acknowledges that he has seven (7)
days from the date he signs this Release and Waiver to change his
mind and revoke it by delivering a signed written statement to the
Company, notifying the Company of his wish to revoke this Release
and Waiver.
This Release and Waiver is hereby signed, under seal, by
Xxxxxx, this 2nd day of November, 1995.
WITNESS: /s/ Xxxxx X. Xxxxxx (SEAL)
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By: Xxxx X. Xxxxxx Xxxxx X. Xxxxxx
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