EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
AGREEMENT,
dated
and effective this 24th day of January, 2006, between FIRST
BANCORP
(a North
Carolina corporation) (the “Company”) and XXXXX
X. XXXXXXXXX
(the
“Employee”). References to the “Company” herein shall be deemed to refer to the
Company and its subsidiaries taken as a whole, unless the context requires
or
the Agreement provides otherwise.
The
Company desires to employ the Employee, and Employee desires to be employed
by
the Company, on the terms and subject to the conditions hereinafter set forth.
Accordingly, in consideration of employment, the compensation the Company agrees
to pay the Employee, the mutual covenants contained herein, and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
parties mutually agree as follows:
1. Employment
and Term.
The
Company (or one of its subsidiaries) will employ Employee, and Employee will
be
employed by the Company for a term of three (3) years, initially as President
of
First Bank, commencing on the date hereof, unless sooner terminated as
hereinafter provided. The term of this Agreement shall automatically be extended
for an additional period of one (1) year on each anniversary of the date of
this
Agreement unless either party gives the other written notice on or prior to
such
anniversary date that such extension will not occur.
2. Duties.
Employee shall at all times faithfully and diligently perform Employee’s
obligations under this Agreement and act in the best interests of the Company
and its affiliated companies. Employee’s duties hereunder shall be to act in
such office or capacity as the Company may direct or change from time to time,
and Employee shall perform all duties
necessary
or advisable in order to carry out such functions in an efficient manner.
Employee shall, during the term of Employee’s employment hereunder, devote
Employee’s full time, best efforts and ability, skill, and attention exclusively
to the furtherance of the business objectives and interests of the Company
and
its affiliated companies during such hours and in such a manner as is generally
customary for employees of Employee’s position in businesses of the Company’s
type.
3. Compensation.
(a) Salary.
For
services rendered by Employee hereunder, the Company shall pay Employee an
annual salary of not less than $260,000 payable in accordance with the customary
payroll practices of the Company. Employee’s salary shall be subject to increase
upon annual reviews of the Employee’s performance. Employee will receive an
annual increase that is at least as much as any percentage increase in the
U.S.
Consumer Price Index during the twelve months preceding the date of Employee’s
annual review. Any such increase will be considered in determining the
Employee’s base salary for all purposes hereunder.
(b) Reimbursement
of Expenses.
The
Company shall pay or reimburse Employee for all reasonable and necessary travel
and other expenses incurred by Employee in performing Employee’s obligations
under this Agreement, provided that Employee shall present to the Company from
time to time an itemized account of such expenses in any form required by the
Company. The Company further agrees to furnish Employee with such other
assistance and accommodations as shall be suitable to the character of
Employee’s position with the Company and adequate for the performance of
Employee’s duties hereunder.
(c) Employee
shall be entitled to such insurance, pension, profit-sharing and other benefit
plans as are or may be available generally to employees of the Company to the
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extent
permitted by applicable laws or government regulations. Employee will also
be
eligible for participation in the Company’s Supplemental Employee Retirement
Plan, and Stock Option Plan.
(d) Employee
shall be entitled to reasonable time off for vacation, sick leave, bereavement
leave, jury duty and military obligations as are or may become available to
employees of the Company in positions similar to those of Employee, as provided
by the Company’s policies as they may be in effect from time to
time.
4. Termination.
In
addition to the termination of the terms specified in Section 1
hereunder, employment may be terminated under any of the following
provisions:
(a) The
employment of the Employee under this Agreement may be terminated immediately
by
the Company if the Company finds that the Employee shall have
(i) demonstrated gross negligence or willful misconduct in the execution of
Employee’s duties, (ii) committed an act of dishonesty or moral turpitude, or
(iii) been convicted of a felony or other serious crime. All future
compensation and benefits, not then accrued, will automatically terminate if
Employee is terminated under this subparagraph (a).
(b) The
employment of the Employee under this Agreement shall be automatically
terminated on the date of the Employee’s death.
(c) Employer
may terminate Employee’s employment hereunder for any reason other than as
provided in subparagraphs (a) and (b), but in such case Employer shall be
obligated to pay Employee’s base salary to Employee for the remainder of the
term specified in Section
1
hereof
(the “Remaining Term”).
(d) Employment
hereunder may be terminated voluntarily by Employee on forty-five (45) days’
written notice to the Company’s Chief Executive Officer or Chairman of the
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Company’s
Board of Directors, in which case Employee will receive his compensation, vested
rights and employee benefits accrued through the date of termination of
employment.
5. Other
Obligations.
All
payments and benefits to Employee under this Agreement shall be subject to
Employee’s compliance with the following provisions:
(a) Assistance
in Litigation.
During
the term of this Agreement and for three full years after
the
expiration or termination hereof, Employee shall, upon reasonable notice,
furnish such information and proper assistance to the Company as may reasonably
be required by the Company in connection with any litigation in which it or
any
of its subsidiaries or affiliates is, or may become, a party. In connection
with
such assistance, if substantial effort or expense is required of Employee after
the termination of Employee’s employment hereunder, the Company will pay
reasonable compensation to Employee and will reimburse him for reasonable
out-of-pocket expenses.
(b) Long-Term
Disability.
If the
Employee has become disabled as determined under the Company’s long-term
disability plan or policy then in effect and is terminated from active
employment, any remaining benefits of this contract shall be reduced by any
benefits received by the Employee under the Company’s long-term disability plan
or policy. Additionally, if such a circumstance occurs, the Employee is under
an
affirmative duty to actively seek and accept reasonable alternative employment
following termination. Any compensation received by Employee following
termination or compensation earnable with reasonable diligence will be deducted
from any future compensation due the Employee under this Agreement. In the
event
the Employee fails to seek reasonable alternative employment, the Company’s
obligation to pay future compensation shall cease.
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(c) Confidential
Information.
Employee acknowledges that in the course of Employee’s employment he will
acquire knowledge of trade and business secrets and other confidential data
of
the Company, its subsidiaries and any affiliated companies. Such trade and
business secrets and other confidential data may include, but are not limited
to, confidential product information, methods by which the Company proposes
to
compete with its business competitors, strategic plans, confidential reports
prepared by business consultant(s) and similar information relating to the
Company’s, its subsidiaries’ or its affiliated companies’ products, customers,
and operations. Employee recognizes that the possible restrictions on Employee’s
activities are required for the reasonable protection of the Company. Employee
covenants not to knowingly disclose or reveal to any unauthorized person such
confidential business secrets or other confidential data both during the term
of
this Agreement and for a period of two (2) years following termination of this
Agreement. Upon expiration or termination of Employee’s employment by the
Company, Employee agrees to return to the Company all documents (both originals
and copies), including without limitation, customer lists, books and records,
form agreements, manuals, and other information (in whatever form such
information may exist, whether written, recorded, in magnetic media, or other
form) that comes into Employee’s possession during, by virtue of and in the
course of Employee’s employment and which are in any way connected with or
related to the Company’s business.
It
is
further understood and agreed that the Company’s right to require Employee to
keep confidential information secret shall not be in lieu of the Company’s right
to monetary damages in the event Employee is in breach of any obligation
contained in this Agreement, and that in the event of any breach or threatened
breach of any of these covenants, the Company may either,
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with
or
without pursuing any action for damages, obtain and enforce an injunction
prohibiting Employee from violating said covenants.
(d) Noncompetition
Covenants and Other Covenants For Protection of the Company.
During
the term of Employee’s employment hereunder and during the period following the
termination of such employment specified below as the “Restricted Period,”
Employee separately covenants for the benefit of the Company as
follows:
(i) Employee
shall not, directly or indirectly, promote, be employed by, participate or
engage in any activity or business which is in competition with the business
of
the Company, or any of its subsidiaries and affiliated companies, including
acting, either singly or jointly or as agent for, or as an employee of, any
person or persons, firm or corporation whether directly or indirectly (as a
director, shareholder or investor, partner, lessor, lessee, proprietor,
principal agent, independent contractor, representative, consultant or
otherwise), in the “Restricted Territory” (as defined below). Ownership by
Employee of 5% or less of the outstanding capital stock of any corporation
which
is actively publicly traded will not be a violation of this
covenant;
(ii) Employee
covenants that Employee will not employ or assist others by active solicitation
to recruit and employ employees of the Company or any of the Company’s
subsidiaries or affiliate companies; and
(iii) Employee
agrees that Employee will not, directly or indirectly, on behalf of himself
or
any third party, make any sales contacts with, or actively solicit business
from
any customer of the Company or its subsidiaries or affiliate companies, for
any
products or services competitive with those offered by the Company or its
subsidiaries or affiliated companies within the “Restricted Territory” (as
defined below).
The
“Restricted Period” following termination of employment during which Employee
will observe the covenants contained in this Section
5(d)
shall be
(A) one year following termination of employment under Section
4(a)
hereof
or if Employee voluntarily terminates his employment hereunder and (B) for
the
Remaining Term (as defined in Section
4(c)
hereof)
if employment is terminated pursuant to Section
4(c)
hereof.
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“Restricted
Territory” is defined as i) the area within a fifty mile radius of the Company’s
headquarters and ii) each of the following counties in Virginia: Montgomery,
Pulaski, Washington, and Wythe.
Notwithstanding
the foregoing, the aforesaid limitations on Employee contained in this
Section
5(d)
shall be
null and void if Employee’s employment hereunder is terminated within one year
following a Change in Control (as defined in Section 8 hereof).
(e) It
is
further understood and agreed that the Company’s right to require Employee to
keep confidential information secret or not to compete against the Company
for
the agreed upon period shall not be in lieu of the Company’s right to monetary
damages in the event Employee is in breach of any obligation contained in this
Agreement, and that in the event of any breach or threatened breach of any
of
these covenants, the Company may either, with or without pursuing any action
for
damages, obtain and enforce an injunction prohibiting Employee from violating
said covenants.
(f) The
parties hereby agree that all of the above obligations in this Section
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reasonable in nature and are designed to reasonably protect the Company’s
interests.
6. Source
of Payment.
Subject
to the terms of any employee benefit plan established by the Company and except
as otherwise provided by law, all payments provided under this Agreement shall
be paid in cash from the general funds of the Company, and no special or
separate fund shall be established, and no other segregation of assets shall
be
made to assure payment. Employee shall have no right, title or interest
whatsoever in or to any investments which the Company may make to aid the
Company in meeting its obligations hereunder. Nothing contained in this
Agreement, and no action taken pursuant to its provisions, shall create or
be
construed to create a trust of any kind for the benefit of the Employee. To
the
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extent
that any person acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured creditor of the
Company.
7. Payments
by Company.
If the
Company shall find that any person to whom any amount is or was payable
hereunder is unable to care for Employee’s affairs because of illness or
accident, or is a minor, or has died, then the Company, if it so elects, may
direct that any payment due him or Employee’s estate (unless a prior claim
therefor has been made by a duly appointed legal representative) or any part
thereof be paid or applied for the benefit of such person or to or for the
benefit of such person’s spouse, children or other dependents, an institution
maintaining or having custody of such person, any other person deemed by the
Company to be a proper recipient on behalf of such person otherwise entitled
to
payment, or any of them in such manner and proportion as the Company may deem
proper. Any such payment shall be in complete discharge of the liability of
the
Company therefor.
8. Change
in Control.
(a) If
a
“Change in Control” occurs while Employee is employed by the Company, and
Employee’s employment is terminated by the Company or Employee, for any reason
or no reason, other than a termination pursuant to Section
4(a)
by the
Company herein, within twelve months after the Change in Control, the Company
shall pay the Severance Payment provided in Section
8(b)
to
Employee within ten days of Employee’s date of termination of employment,
provide benefits pursuant to Section
8(c)
and
cause the acceleration of vesting of benefits described in Section
8(d)
to
occur. Notwithstanding the foregoing, Employee’s termination of employment shall
not be deemed due to a Change in Control if such termination is due to
Employee’s death pursuant to Section
4(b),
Employee’s disability pursuant to Section
8
5(b),
Employee’s retirement in accordance with the Company’s retirement policy, or
pursuant to Section
4(a).
In
the
event of successive Changes of Control, the provisions of this Agreement shall
apply with respect to each Change of Control.
(b) Employee’s
Severance Payment shall be an amount equal to the lesser
of (i)
2.9 times the amount of Employee’s base salary in effect on the date of the
Change in Control and (ii) the product of 2.99 and the “base amount” as defined
in Section 280G(b)(3) of the Internal Revenue Code of 1986, as amended, and
applicable rules and regulations thereunder.
(c) The
Company shall provide to Employee and Employee’s spouse or other qualified
dependents, at a cost to Employee no greater than the cost of such benefits
to
Employee at the time of the Change in Control, such hospitalization, health,
medical and dental insurance benefits as were available to Employee (and
Employee’s spouse or qualified dependents) immediately prior to the Change in
Control until the earlier to occur of (i) two years following the date of the
Change in Control or (ii) Employee accepting employment pursuant to which he
is
eligible for comparable health insurance benefits.
(d) Any
non-vested option to purchase securities of the Company will vest and become
immediately exercisable upon a Change in Control.
(e) “Control”
means the power, directly or indirectly, to direct the management or policies
of
the Company or to vote forty percent (40%) or more of any class of voting
securities of the Company. “Change in Control” shall mean a change in Control of
the Company, except that any merger, consolidation or corporate reorganization
in which the owners of the capital stock entitled to vote (“Voting Stock”) in
the election of directors of the Company prior to said combination own sixty-one
percent (61%) or more of the resulting entity’s Voting
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Stock
shall not be considered a change in control for the purpose of this Agreement;
provided, that, without limitation, a Change in Control shall be deemed to
have
occurred if (i) any “person” (as that term is used in Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934), other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company,
is
or becomes the beneficial owner (as that term is used in Section 13(d) of the
Securities Exchange Act of 1934), directly or indirectly, of thirty-three
percent (33%) or more of the Voting Stock of the Company or its successors;
(ii)
during any period of two consecutive years, individuals who at the beginning
of
such period constituted the Board of Directors of the Company or its successors
(the “Incumbent Board”) cease for any reason to constitute at least a majority
thereof; provided, that any person who becomes a director of the Company after
the beginning of such period whose election was approved by a vote of at least
three-quarters of the directors comprising the Incumbent Board shall be
considered a member of the Incumbent Board; or (iii) there occurs the sale
of
all or substantially all of the assets of the Company. Notwithstanding the
foregoing, no Change in Control shall be deemed to occur by virtue of any
transaction which results in Employee, or a group of persons including Employee,
acquiring, directly or indirectly, thirty-three percent (33%) or more of the
combined voting power of the Company’s outstanding securities. For purposes of
this subparagraph (e), references to the “Company” shall be deemed to refer to
First Bancorp only, and not to its subsidiaries.
9. Modification
and Waiver.
(a) Amendment
of Agreement.
This
Agreement may not be modified or amended except by an instrument in writing
signed by the parties hereto.
(b) Waiver.
No term
or condition of this Agreement shall be deemed to have been waived, nor shall
there be any estoppel against the enforcement of any provision of this
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Agreement,
except by written instrument of the party charged with such waiver or estoppel.
No such written waiver shall be deemed a continuing waiver unless specifically
stated therein, and each such waiver shall operate only as to the specific
term
and condition waived and shall not constitute a waiver of such term or condition
for the future or as to any act other than that specifically
waived.
10. 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.
11.
General
Provisions.
(a) Nonassignability.
Neither
this Agreement nor any right or interest hereunder shall be assignable by
Employee, Employee’s beneficiaries, or legal representatives without the
Company’s prior written consent; provided, that nothing in this paragraph shall
preclude the executors, administrators, or other legal representative of
Employee or Employee’s estate from assigning any rights hereunder to the person
or persons entitled thereto.
(b) No
Attachment.
Except
as required by law, no right to receive payments under this Agreement shall
be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance,
charge, pledge of hypothecation or to execution, attachment, levy or similar
process or assignment by operation of law, and any attempt, voluntary or
involuntary, to effect any such action shall be null, void and of no
effect.
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(c) Binding
Effect.
This
Agreement shall be binding upon, and inure to the benefit of, Employee and
the
Company and their respective successors and assigns.
(d) Headings.
Headings
in this Agreement are for convenience only and shall not be used to interpret
or
construe its provisions.
(e) Notice.
For
purposes of this Agreement, written notice shall be effective if personally
delivered or if sent by certified mail, return receipt requested, to the
following addresses or to such other addresses as either may designate in
writing to the other party:
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Employee:
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Xxxxx
X. Xxxxxxxxx
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000
Xxxxxxx Xxxxx
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Xxxxxxxxx,
XX
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Company:
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000
Xxxxx Xxxx Xxxxxx
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Post
Office Box 508
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Xxxx,
North Carolina 27371
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Attention:
Chief Executive Officer
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For
purpose of computing time, all time requirements under this Agreement will
start
on the date mailed or if personally delivered, when delivered.
12. Governing
Law.
This
Agreement has been executed and delivered in the State of North Carolina, and
its validity, interpretation, performance and enforcement shall be governed
by
the laws of such State.
13. Effect
of Prior Agreements.
This
Agreement contains the entire understanding between the parties with reference
to the employment of the Employee, and supersedes any prior employment
agreement, understanding or arrangement between the Employee and the Company,
its subsidiaries or affiliates.
[signatures
contained on next page]
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IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement under seal as of the day and year
first above stated.
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FIRST
BANCORP
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[CORPORATE
SEAL]
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By:
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/s/
Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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Title:
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President
and Chief Executive Officer
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Attest:
/s/ Xxxxxxx Xxxxxx
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Asst.
Secretary
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EMPLOYEE
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/s/
Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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