Exhibit 10.17
TERMINATION OF
CONTINUATION OF EMPLOYMENT AGREEMENT
THIS TERMINATION OF CONTINUATION OF EMPLOYMENT AGREEMENT (hereinafter
"Agreement") is made between F.N.B. CORPORATION (hereinafter the "Company") and
Xxxxx Xxxxxxxxx (hereinafter "Xxxxxxxxx").
WHEREAS, the Company and Xxxxxxxxx are parties to a Continuation of
Employment Agreement entered into as of November 24, 1998 (hereinafter the
"Employment Agreement"); and
WHEREAS, the purpose of the Employment Agreement was to secure the
services of Xxxxxxxxx as an advisor and/or as an internal consultant subsequent
to his retirement as the Company's full-time Chief Executive Officer; and
WHEREAS, the Company and Xxxxxxxxx wish to terminate the Employment
Agreement and to settle finally and completely any and all matters between them
and relating thereto;
NOW, THEREFORE, in consideration of the mutual undertakings set forth
below, this Agreement terminates the Employment Agreement and resolves, finally
and completely, any and all matters between the Company and Xxxxxxxxx arising
from the Employment Agreement and to these ends the parties agree as follows:
SECTION 1: RECITALS
The foregoing recitals are incorporated by reference as if fully set forth
herein.
SECTION 2: TERMINATION OF EMPLOYMENT
2.01 On or after January 24, 2002, but in no event later than January 31,
2002, the Company shall pay $3,166,982 to a Rabbi Trust established for
the benefit of Xxxxxxxxx (Attachment I, the F.N.B. Deferred
Compensation Trust F.B.O. Xxxxx Xxxxxxxxx (hereinafter the "Rabbi
Trust")). The date upon which payment of this amount is made shall be
referred to as the Effective Date. Upon payment of this amount to the
Rabbi Trust, Xxxxxxxxx'x obligation to serve as an advisor and/or
consultant shall terminate. Further, at the time of the Effective Date
the Company and Xxxxxxxxx hereby explicitly agree that the Employment
Agreement, including
the letter dated January 5, 2001 and addressing certain
interpretational issues arising under the Employment Agreement shall be
revoked and terminated. Xxxxxxxxx'x rights to distributions from the
Rabbi Trust are set forth in Section 3, "Xxxxxxxxx'x Rights to
Distributions from the Rabbi Trust" and in the Rabbi Trust.
2.02 Nothing herein shall preclude Xxxxxxxxx from serving as the Chairman of
the Board of Directors or as a director of the Company or any of its
subsidiaries. In that regard, Xxxxxxxxx shall be paid all usual and
customary fees for his service.
2.03 The Company shall provide the following support to Xxxxxxxxx until the
end of the month following his 72nd birthday:
(a) The Company will continue to provide to Xxxxxxxxx benefits
which include medical, dental and vision care to the extent
that the Company makes those benefits available to its
employees. Premium costs and reimbursements will be made in
accordance with existing Company practices.
(b) At the January, 2002 meeting of the Compensation Committee of
the Board of Directors, the Company will grant to Xxxxxxxxx an
award of 156,800 stock options consistent with the previously
established practices of the Compensation Committee. The award
shall be granted in connection with services rendered during
2001 and to satisfy the contractual provisions under the
Employment Agreement. The grant of the award and exercise of
the stock option agreement shall occur prior to the Effective
Date of this Agreement. It is agreed by the Company and
Xxxxxxxxx that the vesting, exercisability or term of the
award is in no way contingent upon Xxxxxxxxx providing any
future services to the Company. The award will be governed by
the standard provisions of the F.N.B. Corporation Stock Option
Plan and the related F.N.B. Corporation Stock Option Agreement
which will be executed between the Company and Xxxxxxxxx.
(c) The Company shall reimburse Xxxxxxxxx for all reasonable and
customary documented expenses incurred by Xxxxxxxxx in the
discharge of his duties as Chairman or as a director and not
otherwise reimbursed by any other person or entity. Such
reimbursement of customary expenses shall be pursuant to the
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policies of the Company in effect at the time the expenses
were incurred.
(d) The Company shall continue to pay one-half of Xxxxxxxxx'x
annual club dues in accordance with existing Company practice.
(e) Xxxxxxxxx shall be able to utilize Company aircraft in
accordance with Company practices and policies.
(f) The Company will continue to provide office space in
Pennsylvania and Florida. If that office space should not be
available as part of an executive floor or if staff growth or
other factors make it significant for the operation of the
Company, a mutually agreed upon office will be substituted.
(g) The Company will provide Xxxxxxxxx staff support in
Pennsylvania and Florida and which support will be
commensurate and reasonable for the conduct of Xxxxxxxxx'x
duties as Chairman or as a director.
SECTION 3: XXXXXXXXX'X RIGHTS TO DISTRIBUTIONS FROM THE RABBI TRUST
3.01 On the Effective Date, a deferred compensation liability account
(hereinafter the "Deferred Compensation Liability") shall be
established for Xxxxxxxxx on the Company's books and shall be credited
for the amount of $3,166,982 (hereinafter the "Initial Deferred
Compensation Liability Amount").
3.02 In accordance with Section 2.01 above, the Company shall pay an amount
equal to the Initial Deferred Compensation Liability Amount to the
Rabbi Trust to secure the Company's deferred compensation obligations
to Xxxxxxxxx under this Agreement. The funds paid to the Rabbi Trust
will be invested by the trustee as the Company's management deems
appropriate, giving due consideration to Xxxxxxxxx'x expressed desires
regarding investment of the funds. Xxxxxxxxx may express his investment
desires to the Company, no more frequently than quarterly, through the
submission of a written expression to the Company. While it is
contemplated that the Company will instruct the trustee of the Rabbi
Trust to invest the funds in accordance with Xxxxxxxxx'x express
written desires, neither the Company nor the trustee will be bound to
follow Xxxxxxxxx'x expressions.
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3.03 The Deferred Compensation Liability shall be satisfied as follows:
(a) It is contemplated that there shall be four annual installment
payments to Xxxxxxxxx as scheduled in (b), (c), (d) and (e)
immediately below. However, in no event will any annual
payment exceed $800,000. If, due to this annual limitation,
any funds remain in the Rabbi Trust subsequent to the
distribution required by (e) below, then the fair market value
of the funds/investments in the Rabbi Trust on the fourth
annual anniversary date of the Effective Date will, subject to
the $800,00 annual limitation, be paid to Xxxxxxxxx, and such
distributions shall continu on each succeeding annual
anniversary of the Effective Date until such time as the
funds/investments of the Rabbi Trust are totally exhausted.
The investment and all other provisions of the Deferred
Compensation Liability and of the Rabbi Trust shall continue
until such time as all of the funds/investments of the Rabbi
Trust have been distributed to Xxxxxxxxx.
(b) Within thirty days of the Effective Date, Xxxxxxxxx shall be
paid an amount from the Rabbi Trust equal to one-fourth of the
then fair market value of the funds/investments in the Rabbi
Trust.
(c) On the first annual anniversary date of the Effective Date,
Xxxxxxxxx shall be paid an amount from the Rabbi Trust equal
to on third of the then fair market value of the
funds/investments in the Rabbi Trust.
(d) On the second annual anniversary date of the Effective Date,
Xxxxxxxxx shall be paid an amount from the Rabbi Trust equal
to one half of the then fair market value of the
funds/investments in the Rabbi Trust.
(e) On the third annual anniversary date o the Effective Date,
Xxxxxxxxx shall be paid an amount from the Rabbi Trust equal
to the then fair market value of the funds/investments in the
Rabbi Trust.
3.04 On each annual anniversary date of the Effective Date, the Deferred
Compensation Liability shall be adjusted to the then fair market value
of the funds/investments in the Rabbi Trust. The Company's Deferred
Compensation Liability will be fully satisfied upon the making of the
final payment from the Rabbi Trust.
3.05 Xxxxxxxxx shall have the right to designate a beneficiary(ies) to
receive all or any part of the payments attributable to the Deferred
Compensation Liability which may remain unpaid at Xxxxxxxxx'x death.
Such amount(s) shall be paid to said
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beneficiary(ies) in such amounts and at such times as set forth in
Section 3.03 above. Said beneficiary designations shall be effected,
and may be changed from time to time, by Xxxxxxxxx'x giving written
notice to the Company.
3.06 Xxxxxxxxx and his beneficiary(ies), with respect to the Deferred
Compensation Liability, have the status of general unsecured creditors
of the Company. In the event that the Company is at any time considered
insolvent under the provisions of Section 4 of the Rabbi Trust and, as
a result of such insolvency, any funds/investments in the Rabbi Trust
are distributed, in accordance with Section 4 of the Rabbi Trust, to
any person or entity (including the Company) other than Xxxxxxxxx or
his beneficiary(ies), the Company's Deferred Compensation Liability to
Xxxxxxxxx will continue uninterrupted and will be measured as if the
assets distributed from trust to those persons and/or entities other
than Xxxxxxxxx and his beneficiary(ies) had not occurred.
3.07 The terms of the Rabbi Trust will conform to the terms of the model
deferred compensation grantor trust set forth in Revenue Procedure
92-64. It is the intention of the Company and Xxxxxxxxx that the
Company's Deferred Compensation Liability and the Rabbi Trust, a
grantor trust, be unfunded arrangements for tax purposes and for
purposes of Title I of ERISA.
3.08 Xxxxxxxxx'x rights to deferred compensation payments under this
Agreement are not subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of Xxxxxxxxx or of Xxxxxxxxx'x
beneficiary(ies).
SECTION 4: CONFIDENTIAL INFORMATION AND COMMUNICATIONS
4.01 From and after the date of this Agreement, Xxxxxxxxx agrees to keep
confidential and not use, or otherwise appropriate, for Xxxxxxxxx'x own
benefit, or directly or indirectly divulge to any third party,
"Confidential Information" of the Company or its affiliates.
"Confidential Information" shall include, without limitation, financial
data and marketing plans, strategies, customer information and employee
information, whether in documentary or electronic form, whether past,
present or prospective. The prohibitions against the use and disclosure
of Confidential Information are in addition to all rights and remedies
which are available to the Company under applicable Federal and State
law to prevent the use or disclosure of trade secrets and other
confidential information. The enforcement by the
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Company of its rights and remedies under this Agreement shall not be a
waiver of any other rights or remedies which Company may possess absent
this Agreement.
4.02 From and after the date of this Agreement, Xxxxxxxxx and the Company
agree not to make any oral or written communication or comment to
impugn or otherwise disparage the competency, integrity or
qualifications of Xxxxxxxxx or the Company, its affiliates, directors,
officers and employees.
SECTION 5: COOPERATION AGREEMENT
Xxxxxxxxx agrees to cooperate with the Company in resolving any matters
now existing or arising hereafter which relate to the area of
Xxxxxxxxx'x prior responsibility with the Company, including
testifying, if necessary, with reasonable out-of-pocket expenses to be
reimbursed by Company.
SECTION 6: PARTIES IN INTEREST
This Agreement shall be binding upon Xxxxxxxxx, Xxxxxxxxx'x heirs,
personal representatives and permitted assigns and upon the Company,
its affiliates and their successors and assigns. This Agreement shall
not be assignable, except the Company may assign it to any successor to
the Company, or any of its affiliates, in its discretion.
SECTION 7: ENFORCEMENT
The parties acknowledge that the conditions of this Agreement are
special, unique and extraordinary and that, in the event of a breach of
the terms and conditions of this Agreement, the Company shall be
entitled to institute proceedings to enforce the specific performance
of this Agreement and to enjoin violations of its provisions.
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SECTION 8: ARBITRATION PROVISION
Xxxxxxxxx and Company waive any right to a court (including jury)
proceeding and instead agree to submit any dispute over the application
interpretation, validity, or any other aspect of this Agreement to
final and binding arbitration consistent with the application of the
Federal Arbitration Act and the procedural rules of the American
Arbitration Association ("AAA") before an arbitrator who is a member of
the National Academy of Arbitrators ("NAA") out of xx XX panel of
eleven arbitrators to be supplied by the AAA. Only true neutrals will
be eligible for consideration as arbitrators and under no circumstances
will AAA furnish the names of individuals who represent employees,
unions or companies.
SECTION 9: SEVERABILITY
If any court, arbitrator, or other authority determines that any term,
condition, clause or provision of this Agreement is void or invalid at
law, or for another reason, then only that term, condition, clause, or
provision will be invalid, and the rest will remain in full force and
effect.
SECTION 10: GOVERNING LAW
This Agreement is governed, construed and enforced under the internal
laws of the State of Florida, except to the extent pre-empted by
federal law.
SECTION 11: INTEGRATION; MODIFICATION
This Agreement contains the entire agreement between the parties and
there are no other representations, understandings, warranties,
covenants or agreements with respect to such relationship except as
provided herein. This Agreement may not be amended or modified except
in writing and signed by the parties hereto. Any notices required or
permitted to be given hereunder shal be in writing and sent by
certified mail to the last known address of the other.
SECTION 12: COUNTERPARTS
This Agreement may be executed in more than one counterpart, or in
separate counterparts as the parties deem desirable, each of which,
when fully executed, shall constitute an original.
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SECTION 13: DRAFTSMANSHIP
This Agreement has been drafted by the Company for the convenience of
the parties and no presumption, inference or other interpretation shall
be made in favor of or against any party hereto as a result of the
identity of the draftsman hereof.
IN WITNESS WHEREOF, intending to be legally bound, the parties hereto
have executed this Agreement as of the 20th day of December 31, 2001.
ATTEST: F.N.B. CORPORATION
/s/ Xxxxxxx X. Xxxxxxxx, BY: /s/ Xxxx X. Xxxx
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Asst Sec. NAME: Xxxx X. Xxxx
TITLE: President and CEO
WITNESS:
/s/Xxxxxxx X. Xxxxxxxx /s/ Xxxxx Xxxxxxxxx
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