Exhibit (10)CC
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 25th day of August, 2006 by and
between FNB CORPORATION (hereinafter referred to as the Company), a bank
holding company, with its principal office located at 000 Xxxxx Xxxxx,
Xxxxxxxxxxxxxx, Xxxxxxxx, organized and existing under the laws of the
Commonwealth of Virginia, which owns all of the outstanding stock of First
National Bank, and Xxxxx X. XxXxxx, Market President New River
Valley/Director of Commercial Banking, (the "Employee").
RECITALS
I. The Employee currently serves as a key employee member of
management of the Company and/or its affiliates and his services and knowledge
are valuable to the Company and its affiliates.
II. The Board of Directors of the Company (as defined below) has
determined that it is in the best interests of the Company and its shareholders
to assure that the Company and its affiliates will have the continued
dedication of the Employee, notwithstanding the possibility, threat or
occurrence of a Change in Control (as defined below) of the Company. The Board
believes it is imperative to diminish the inevitable distraction or departure
of the Employee to the detriment of the Company and its shareholders by virtue
of the personal uncertainties and risks created by a pending or threatened
Change in Control and to encourage the Employee's full attention and dedication
to the Company and its affiliates currently and in the event of any threatened
or pending Change in Control. Therefore, in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Obligations of the Employee to Remain Employed. The Employee
agrees that in the event any person or group attempts a Change in Control, he
shall not, without the written agreement of the Board, voluntarily leave the
employ of the Company without Good Reason (i) until such attempted Change in
Control terminates or (ii) if a Change in Control shall occur, until 90 days
following such Change in Control. For purposes of the foregoing clause (i),
Good Reason shall be determined as if a Change in Control had occurred when
such attempted Change in Control became known to the Board and the Employee.
2. Obligations in Connection with and upon the Employee's Termination
during the Coverage Period.
(a) Notice of Termination. Any termination of the Employee's
employment during the term of this Agreement (determined pursuant to Section 5)
in connection with or after the occurrence of a Change in Control by the
Company or by the Employee, other than by reason of death, shall be
communicated by Notice of Termination to the other party hereto given. For
purposes hereof:
(i) "Notice of Termination" means a written notice given in
accordance with Section 9(c) of this Agreement which (A) states whether
such termination is for Cause, Good Reason, Disability or Mandatory
Retirement, (B) indicates the specific termination provision in this
Agreement relied upon, if any, (C) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Employee's employment under the provision so
indicated, and (D) if the Date of Termination is other than the date of
receipt of such notice, specifies the termination date. The failure by
the Employee or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason, Cause,
Disability or Mandatory Retirement shall not waive any right of the
Employee or the Company, respectively, hereunder or preclude the Employee
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Employee's or the Company's rights hereunder.
(ii) "Date of Termination" means (A) if the Employee's employment
is terminated by reason of Disability, the Date of Termination shall be
the Disability Effective Date, (B) if the Employee's employment is
terminated by the Company for any reason other than Disability, the date
of the Notice of Termination or any later date specified therein, as the
case may be, and (C) if the Employee's employment is terminated by the
Employee for any reason, the date of the Company's receipt of the Notice
of Termination or any later date specified therein, as the case may be.
(b) Obligations of the Company in a Covered Termination. If the
Employee's employment shall terminate by reason of a Covered Termination during
the Coverage Period, then:
(i) the Company shall pay or cause to be paid to the Employee in
a lump sum in cash within 30 days after the Date of Termination the sum of
(1) the Employee's annual base salary through the Date of Termination to
the extent not theretofore paid and (2) any compensation previously
deferred by the Employee (together with any accrued interest or earnings
thereon), to the extent not theretofore paid (the sum of the amounts
described in clauses (1) and (2) above shall be hereinafter referred to as
the "Accrued Obligations"); and
(ii) to the extent not theretofore paid or provided, the Company
shall timely pay or cause to be paid or provide or cause to be provided to
the Employee any other amounts or benefits required to be paid or provided
or which the Employee is eligible to receive under any plan, program,
policy or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and
(iii) the Company shall pay or cause to be paid to the Employee in
a lump sum payment equal to the Employees then current Annual Direct
Salary (as defined herein), minus applicable withholdings and taxes. Said
sum shall be paid to the Employee within thirty (30) days after the Date
of Termination:
(iv) Annual Direct Salary For purposes of this Agreement,
Annual Direct Salary shall be defined as the fixed, gross, base annual
salary paid to the Employee at such time as the Corporation customarily
pays its other employees and shall not include any benefits, bonuses,
incentives, or other compensation.
(v) For one year following the Date of Termination, the
Employee and his dependents will continue to be covered under all
Welfare Benefit Plans in which the Employee or his dependents were
participating immediately prior to the Date of Termination (the "Welfare
Continuance Benefit"). The Company will pay all or a portion of the
cost of the Welfare Continuance Benefit for the Employee and his
dependents under the Welfare Plans on the most favorable same basis as
in effect at any time during the 120-day period immediately preceding
the Change in Control Effective Date or, if more favorable to the
Employee, the basis provided generally at any time after the Change in
Control Effective Date to other peer Employees of the Company and its
affiliated companies and the Employee and/or his dependents will pay any
additional costs. If the Employee becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits
under another employer-provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility. For
purposes hereof, the term "Welfare Benefit Plan" means the welfare
benefit plans, practices, policies and programs provided by the Company
and its affiliates (including, without limitation, medical,
prescription, dental, disability, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent
applicable generally to other peer Employees of the Company and its
affiliates, but in no event shall such plans, practices, policies and
programs provide the Employee with benefits which are less favorable, in
the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Employee and/or his dependents
at any time during the 120-day period immediately preceding the Change
in Control Effective Date or, if more favorable to the Employee, those
provided generally at any time after the Change in Control Effective
Date to other peer Employees of the Company and its affiliated
companies. If participation in any one or more of the Welfare Plans
included in the Welfare Continuance Benefit is not possible under the
terms of the Welfare Plan or any provision of law would create an
adverse tax effect for the Employee or the Company due to such
participation, the Company will provide substantially identical benefits
directly or through an insurance arrangement.
Notwithstanding anything to the contrary herein, if the Employee's employment
shall terminate by reason of a Covered Termination during the Coverage Period,
the Company shall not be obligated to pay any portion of the monies and
provide benefits described above in this Section 2(b) other than his Accrued
Obligations and Other Benefits, if any, unless within 30 days after such
termination the Employee shall have executed and delivered to the Company a
written release of all claims against the Company and its affiliates and
their respective shareholders, partners, member, directors, managers,
officers, employees, agents and attorneys, arising out of or related to any
act or omission which occurred on or prior to the date on which such release
is provided, in form and substance reasonably satisfactory to the Company.
(c) Obligations of the Company in a Noncovered Termination. If the
Employee's employment shall terminate by reason of a Noncovered Termination
during the Coverage Period, this Agreement shall terminate without further
obligations to the Employee other than the obligation to pay to the Employee
(i) his Accrued Obligations (as defined in paragraph (i) of Section 2(b)) and
(ii) Other Benefits (as defined in paragraph (ii) of Section 2(b)), in each
case to the extent theretofore unpaid. If the Employee voluntarily terminates
employment during the Coverage Period, excluding a termination for Good Reason,
this Agreement shall terminate without further obligations to the Employee,
other than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Employee
in a lump sum in cash within 30 days of the Date of Termination.
3. Full Settlement.
(a) Offset, Etc. Except as provided in the next sentence, the
Company's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Employee.
(b) Employee or Others. The amount of any payment or benefit
provided for hereunder (other than the Employee's annual base salary through
the Date of Termination, the amount of any compensation previously deferred by
the Employee, and Other Benefits) shall be reduced, offset and subject to
recovery by the Company in the event and to the extent of any compensation
earned by the Employee as a result of subsequent employment by a banking
institution located within 50 miles of any location where the Company or its
affiliates has a banking, loan production or other financial services office
and earned within twelve (12) months after the Employee's Date of
Termination. In no event shall the Employee be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Employee under any of the provisions of this Agreement and, except as
provided in the preceding sentence, such amounts shall not be reduced whether
or not the Employee obtains other employment.
(c) Expenses in Dispute Resolution. In the event that either party
to this Agreement is required to file a legal action due to a breach or a
dispute over the terms and provisions of this agreement each party shall bear
its costs of such action, including but not limited to, reasonable attorney's
fees and neither shall have a cause of action or claim for the recovery
thereof against the other party.
(d) Payment prior to Dispute Resolution. If there shall be any
dispute between the Company and the Employee in the event of any termination of
Employee's employment, then, unless and until there is a final, nonappealable
judgment by a court of competent jurisdiction declaring that such termination
was a Noncovered Termination or that the Company is not otherwise obligated to
pay any amount or provide any benefit to the Employee and his dependents or
other beneficiaries, as the case may be, under Section 2(b) other than Accrued
Obligations and Other Benefits, the Company shall pay all amounts, and provide
all benefits, to the Employee and his dependents or other beneficiaries, as the
case may be, that the Company would be required to pay or provide pursuant to
Section 2(b) as though such termination were a Covered Termination.
Notwithstanding the foregoing, the Company shall not be required to pay any
disputed amounts pursuant to this Section 3(c) except upon receipt of an
adequate bond, letter of credit or undertaking by or on behalf of the Employee
to repay all such amounts to which the Employee is ultimately adjudged by such
court not to be entitled.
4. Payment Limitation.
(a) Payment Limitation. Notwithstanding anything contained in this
Agreement or any other agreement or plan to the contrary, the payments and
benefits provided to, or for the benefit of, the Employee under this Agreement
or under any other plan or agreement which become payable or are taken into
account as a result of the Change in Control (the "Payments") shall be reduced
(but not below zero) to the extent necessary so that no payment to be made, or
benefit to be provided, to the Employee or for his benefit under this Agreement
or any other plan or agreement shall be subject to the imposition of an excise
tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), (such reduced amount is hereinafter referred to as the "Limited
Payment Amount"). Unless the Employee shall have given prior written notice
specifying a different order to the Company, the Company shall reduce or
eliminate the Payments to the Employee by first reducing or eliminating those
payments or benefits which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in time from the
Determination (as hereinafter defined). Any notice given by the Employee
pursuant to the preceding sentence shall take precedence over the provisions of
any other plan, arrangement or agreement governing Employee's rights and
entitlements to any benefits or compensation.
(b) Payment Limitation Determinations. All determinations required to
be made under Section 4(a) through (c) shall be made by the Company's public
accounting firm (the "Accounting Firm"). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to the
Company and the Employee within fifteen days after the receipt of notice from
the Company that there has been a Payment (or at such earlier times as is
requested by the Company) and, with respect to any Limited Payment Amount, a
reasonable opinion to the Employee that he is not required to report any excise
tax on his federal income tax return with respect to the Limited Payment Amount
(collectively, the "Determination"). In the event that the Accounting Firm is
serving as an accountant or auditor for the individual, entity or group
effecting the Change in Control, the Employee shall appoint another nationally
recognized public accounting firm to make the determination required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees, costs and expenses (including, but not limited to, the
costs of retaining experts) of the Accounting Firm shall be borne by the
Company. The Determination by the Accounting Firm shall be binding upon the
Company and the Employee (except as provided in paragraph (c) below).
(c) Excess Payments Considered a Loan. If it is established pursuant
to a final determination of a court or an Internal Revenue Service (the "IRS")
proceeding which has been finally and conclusively resolved, that Payments have
been made to, or provided for the benefit of, the Employee by the Company,
which are in excess of the limitations provided in Section 4(a) through (c)
(hereinafter referred to as an "Excess Payment"), such Excess Payment shall be
deemed for all purposes to be a loan to the Employee made on the date the
Employee received the Excess Payment and the Employee shall repay the Excess
Payment to the Company on demand, together with interest on the Excess Payment
at the applicable federal rate (as defined in Section 1274(d) of the Code) from
the date of Employee's receipt of such Excess Payment until the date of such
repayment. As a result of the uncertainty in the application of Section 4999
of the Code at the time of the Determination, it is possible that Payments that
will not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made under
Section 4(a) through (c). In the event that it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken by the
Company, or together with its consolidated group, on its federal income tax
return) or the IRS or (ii) pursuant to a determination by a court, that an
Underpayment has occurred, the Company shall pay an amount equal to such
Underpayment to the Employee within ten days of such determination together
with interest on such amount at the applicable federal rate from the date such
amount would have been paid to the Employee until the date of payment.
(d) Banking Payment Limitation. Notwithstanding anything contained in
this Agreement or any other agreement or plan to the contrary, the payments and
benefits provided to, or for the benefit of, the Employee under this Agreement
or under any other plan or agreement shall be reduced (but not below zero) to
the extent necessary so that no payment to be made, or benefit to be provided,
to the Employee or for his benefit under this Agreement or any other plan or
agreement shall be in violation of the golden parachute and indemnification
payment limitations and prohibitions of 12 CFR Section 359.
5. Termination of Agreement.
(a) Term of Agreement. This Agreement shall be effective as of the
Agreement Effective Date and shall normally continue until the earlier of (i)
the third anniversary of the Agreement Effective Date or (ii) the date this
Agreement terminates pursuant to any provision of this Section 5; provided
however, that commencing on the date one year after the Agreement Effective
Date, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the term of this Agreement shall be automatically
extended so as to terminate three years from such Renewal Date, unless at least
60 days prior to the Renewal Date the Company shall give notice to the Employee
in accordance with Section 9(c) of this Agreement that the term of this
Agreement shall not be so extended. Notwithstanding the foregoing, if a Change
in Control has occurred during the term of this Agreement, the term of this
Agreement shall not end before the end of the Coverage Period.
(b) Automatic Termination. Notwithstanding the foregoing, the term of
this Agreement shall terminate in any event upon the first to occur of
(i) subject to the inapplicability of the last sentence of Section 10(e), the
termination of the Employee's employment with the Company prior to a Change in
Control Effective Date or (ii) the Employee's termination of employment in a
Noncovered Termination at or after a Change in Control Effective Date.
(c) Company's Right to Terminate. The Company shall have the right
prior to a Change in Control Effective Date, in its sole discretion, pursuant
to action by the Board, to approve the termination of this Agreement, which
termination shall not become effective until the date fixed by the Board for
such termination, which date shall be at least six months after notice
thereunder is given by the Company to the Employee in accordance with Section
9(c) of this Agreement. Notwithstanding the foregoing, no such action shall be
taken by the Board during any period of time when the Board has knowledge that
any person has taken steps reasonably calculated to effect a Change in Control
until, in the opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control.
6. Confidential Information.
(a) No Disclosure by Employee. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliates, and their
respective businesses, which shall have been obtained by the Employee during
the Employee's employment by the Company or any of its affiliates and which
shall not be or become public knowledge (other than by acts by the Employee or
representatives of the Employee in violation of this Agreement). After
termination of the Employee's employment with the Company and any or its
affiliates, the Employee shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it.
(b) Remedies for Breach. It is recognized that damages in the event
of breach of Section 6(a) above by the Employee would be difficult, if not
impossible, to ascertain, and it is therefore specifically agreed that the
Company, in addition to and without limiting any other remedy or right it may
have, shall have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach. The existence of
this right shall not preclude the Company from pursuing any other rights and
remedies at law or in equity that it may have.
(c) Breach Not Basis to Withhold Payment. In no event shall an
asserted violation of the provisions of this Section 6 constitute a basis for
deferring or withholding any amounts otherwise payable to the Employee under
this Agreement.
7. Benefit and Successors.
(a) Employee's Benefit. This Agreement shall inure to the benefit of
and be enforceable by the Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Employee should die and any amount remains payable hereunder
after his death, any such amount, unless otherwise agreed by the Company or
provided herein, shall be paid in accordance with the terms of this Agreement
to the Employee's devisee, legatee or other designee of such payment or, if
there is no such designee, the Employee's estate.
(b) Company's Benefit. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns.
(c) Assumption by Successor to Company. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
8. Nonqualified Deferred Compensation Plan Omnibus Provision.
(a) It is intended that any payment or benefit which is provided
pursuant to or in connection with this Agreement which is considered to be
nonqualified deferred compensation subject to Section 409A of the Code shall
be provided and paid in a manner, and at such time and in such form, as
complies with the applicable requirements of Section 409A of the Code to
avoid the unfavorable tax consequences provided therein for non-compliance.
Notwithstanding any other provision of this Agreement, the Board or its
delegate (including any compensation committee of the Board) is authorized to
amend this Agreement, to amend any election made by the Employee under this
Agreement and/or to delay the payment of any monies and/or provision of any
benefits in such manner as may be determined by it to be necessary or
appropriate to comply, or to evidence or further evidence required
compliance, with Section 409A of the Code.
(b) It is specifically intended that all elections, consents and
modifications thereto under this Agreement will comply with the requirements
of Section 409A of the Code (including any transition or grandfather rules
thereunder). The Board or its delegate (including any compensation committee
of the Board) is authorized to adopt rules or regulations deemed necessary or
appropriate in connection therewith to anticipate and/or comply the
requirements of Section 409A of the Code (including any transition or
grandfather rules thereunder).
9. Miscellaneous.
(a) Governing Law and Venue. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement
shall be governed by, and construed in accordance with, the laws of the
Commonwealth of Virginia, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the Commonwealth of Virginia
or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the Commonwealth of Virginia. In furtherance of
the foregoing, the internal law of the Commonwealth of Virginia shall control
the interpretation and construction of this Agreement, even though under the
jurisdiction's choice of law or conflict of law analysis, the substantive law
of some other jurisdiction would ordinarily apply. Should either party bring
suit to enforce the provisions hereof, the Company and the Employee expressly
consent to the exclusive jurisdiction and venue of the Circuit Court of
Xxxxxxxxxx County, Virginia to resolve such dispute.
(b) Amendment. No provision of this Agreement may be amended or
modified unless such modification, waiver, or discharge is agreed to in
writing signed by the Employee and the Chairman of the Board or Chief
Employee Officer of the Company (or highest ranking Employee officer of the
Company other than the Employee, if applicable) or their respective successors
and legal representatives.
(c) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Employee:
Xxxxx X. XxXxxx
000 0xx Xx
Xxxxxxx, Xxxxxxxx, 00000
If to the Company:
c/o Chairman of the Board
000 Xxxxx Xxxxx
X. X. Xxx 000
Xxxxxxxxxxxxxx, XX 00000-0000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(d) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(e) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such Federal, state, local or foreign taxes as
shall be required to be withheld pursuant to any applicable law or regulation.
(f) Waiver. No provision of this Agreement may be waived unless such
modification, waiver, or discharge is agreed to in writing signed by the
Employee and the Chairman of the Board or President of the Company (or
highest ranking Employee officer of the Company other than the Employee, if
applicable). No waiver by either party hereto at any time of any breach by
the other party hereto of, or of compliance with, any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.
(g) Employee's Employment. The Employee and the Company acknowledge
that, except as may otherwise be provided under any other written agreement
between the Employee and the Company, the employment of the Employee by the
Company is "at will" and, subject to the last sentence of Section 10(e) hereof
deeming a termination to have occurred on or after the occurrence of a Change
in Control Effective Date, the Employee's employment and/or this Agreement may
be terminated by either the Employee or the Company at any time prior to the
Change in Control Effective Date, in which case the Employee shall have no
further rights under this Agreement.
(h) Other Agreements Superceded. From and after the Change in Control
Effective Date, this Agreement shall supersede any other agreement between the
parties with respect to the subject matter (severance pay and benefits) hereof.
(i) Nonexclusivity of Rights. Subject to Section 9(h), nothing in
this Agreement shall prevent or limit the Employee's continuing or future
participation in any plan, program, policy or practice provided by the Company
or any of its affiliated companies and for which the Employee may qualify, nor
shall anything herein limit or otherwise affect such rights as the Employee may
have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Employee is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies
at or subsequent to the Employee's termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement. As of the Agreement Effective Date, no
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement.
(j) Statutory References. Any reference in this Agreement to a
specific statutory provision shall include that provision and any comparable
provision or provisions of future legislation amending, modifying,
supplementing or superseding the referenced provision.
(k) Nonassignability. This Agreement is personal to the Employee, and
without the prior written consent of the Company, no right, benefit or interest
hereunder shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, except by will or the laws
of descent and distribution, and any attempt thereat shall be void; and no
right, benefit or interest hereunder shall, prior to receipt of payment, be in
any manner liable for or subject to the recipient's debts, contracts,
liabilities, engagements or torts.
(l) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original and all of which
together shall constitute one agreement.
(m) Employment with Affiliates. Employment with the Company for
purposes of this Agreement shall include employment with any corporation or
other entity in which the Company has a direct or indirect ownership interest
of 50% or more of the total combined voting power of the then outstanding
securities of such corporation or other entity entitled to vote generally in
the election of directors or which has a direct or indirect ownership interest
of 50% or more of the total combined voting power of the then outstanding
securities of the Company entitled to vote generally in the election of
directors.
(n) Constructions. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Employee and the Company, and no presumption or burden of proof shall
arise in favor or disfavoring either by virtue of the authorship of any
provisions of this Agreement. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
10. Certain Definitions.
(a) "Agreement Effective Date" means the day and year first above
written.
(b) "Board" means the Board of Directors of the Company.
(c) "Cause" means:
(i) the willful or intentional failure of the Employee to
perform substantially, or the persistent negligence or misconduct in the
performance of, the Employee's duties with the Company or one of its
affiliates, after a written demand for substantial performance is
delivered to the Employee by the Board or, where the Employee is not the
Chief Employee Officer of the Company, the Chief Employee Officer of the
Company which specifically identifies the manner in which the Board or
Chief Employee Officer believes that the Employee has not substantially
performed the Employee's duties, or
(ii) the Employee's personal dishonesty, incompetence, willful
misconduct, willful breach of fiduciary duty, willful violation of any
law, rule, or regulation (other than traffic violations or similar
offenses), willful violation of a final cease and desist order or willful
engaging in other illegal conduct or gross misconduct which is materially
and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of the
Employee, shall be considered "willful" unless it is done, or omitted to be
done, by the Employee in bad faith or without reasonable belief that the
Employee's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Employee
Officer or a senior officer of the Company or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the Company.
The cessation of employment of the Employee shall not be deemed to be for Cause
unless and until there shall have been delivered to the Employee a copy of a
resolution duly adopted by the affirmative vote of not less than three quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Employee in
accordance with Section 9(c) of this Agreement and the Employee is given an
opportunity, together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Employee is guilty of the
conduct described in paragraph (i) or (ii) above, and specifying the
particulars thereof in detail.
(d) "Change in Control" means the occurrence, on or after the
Agreement Effective Date and during the term of this Agreement (determined
pursuant to Section 5), of any of the following:
(i) the closing of a corporate reorganization in which the
Company (or its successor) becomes a subsidiary of a holding company, the
majority of the common stock of which is owned by persons who did not
own the majority of the common stock of the Company (or its successor)
immediately prior to the reorganization;
(ii) individuals who constitute the Board on the Agreement
Effective Date (the "Incumbent Board") cease for any reason to constitute
at least a majority thereof; provided that any person becoming a
director subsequent to the date hereof whose nomination for election was
approved by a vote of at least three-quarters (3/4) of the directors
comprising the Incumbent Board shall be considered as though such person
were a member of the Incumbent Board for purposes of this paragraph;
(iii) the closing of the merger of the Company (or its
successor) with or into another person; or
(iv) the closing of the sale, conveyance, or other transfer of
substantially all of the assets of the Company (or its successor) to
another person.
For purposes hereof, the term "person" shall include any individual,
corporation, partnership, group, association, or other "person", as such term
is used in Section 14(d) of the Securities Exchange Act of 1934, as amended,
other than the Company (or its successor), any entity in which the Company
(or its successor) owns a majority of the voting interest, or any employee
benefit plan(s) sponsored by the Company (or its successor).
(e) The "Change in Control Effective Date" means the first date during
the term of this Agreement (determined pursuant to Section 5) on which a Change
in Control occurs. Anything in this Agreement to the contrary notwithstanding,
if a Change in Control occurs and if the Employee's employment with the Company
is terminated prior to the date on which the Change in Control occurs, and if
it is reasonably demonstrated by the Employee that such termination of
employment (i) was at the request of a third party (as defined in paragraph
(ii) of Section 10(h)) who has taken steps reasonably calculated to effect a
Change in Control or (ii) otherwise arose in connection with or anticipation of
a Change in Control, then for all purposes of this Agreement the "Change in
Control Effective Date" shall mean the date immediately prior to the date of
such termination of employment.
(f) "Coverage Period" means the period of time beginning with the
Change in Control Effective Date and ending on the earliest to occur of (i) the
Employee's death and (ii) the first anniversary of the Change in Control
Effective Date.
(g) "Disability" means that the Employee either (i) is unable to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than
twelve (12) months, or (ii) is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than twelve (12)
months, receiving income replacement benefits for a period of not less than
three months under an accident and health plan covering employees of the
Company or any of its affiliates. Any Disability shall be determined by a
physician selected by the Company or its insurers and acceptable to the
Employee or the Employee's legal representative. If the Company determines in
good faith that the Disability of the Employee has occurred during the Coverage
Period, it may give to the Employee written notice in accordance with Section
9(c) of this Agreement of its intention to terminate the Employee's employment.
In such event, the Employee's employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Employee (the
"Disability Effective Date"), provided that, within the 30 days after such
receipt, the Employee shall not have returned to full-time performance of the
Employee's duties.
(h) "Good Reason" means that any of the following has occurred:
(i) the occurrence, on or after the Agreement Effective Date
and during the Coverage Period, of any of the following:
(A) the assignment to the Employee of any duties
inconsistent in any material adverse respect with the Employee's
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities immediately
prior to the Change in Control, or any other action by the
Company which results in a diminution in such position,
authority, duties or responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Employee in accordance with Section
9(c) of this Agreement;
(B) a reduction by the Company in the Employee's rate
of annual base salary, bonus opportunity or aggregate value of
benefits and perquisites as in effect immediately prior to the
Change in Control or as the same may be increased from time to
time thereafter, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof
given by the Employee in accordance with Section 9(c) of this
Agreement;
(C) the Company's requiring the Employee to be based
at any office or location more than 50 miles from the facility
where the Employee is located at the time of the Change in Control
or the Company's requiring the Employee to travel on Company
business to a substantially greater extent than required
immediately prior to the Change in Control Effective Date (but
determined without regard to travel necessitated by reason of any
anticipated Change in Control);
(D) any purported termination during the Coverage
Period by the Company of the Employee's employment otherwise than
as expressly permitted by this Agreement;
(E) any failure by the Company to comply with and
satisfy Section 7(c) of this Agreement by obtaining satisfactory
agreement from any successor to assume and perform this Agreement;
or
(ii) any event or condition described in paragraph (i) of this
Section 10(h) which occurs on or after the Agreement Effective Date, but
prior to a Change in Control, but was at the request of a third party who
effectuates the Change in Control, notwithstanding that it occurred prior
to the Change in Control, but such event or condition shall not be
considered to actually have occurred until the Change in Control Effective
Date.
(i) "Covered Termination" means a termination of Employee's employment
during the Coverage Period (i) by the Company for any reason other than Cause
or the Employee's Disability, Mandatory Retirement, or death, or (ii) by the
Employee for Good Reason.
(j) "Mandatory Retirement" means any lawful retirement of the Employee
for a reason other than Disability that is required by the Company.
(k) "Noncovered Termination" means a termination of Employee's
employment that is not a Covered Termination.
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxxx X. XxXxxx
Employee
FNB Corporation
/s/ Xxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx, Xx.
President and CEO
