Exhibit (10)K
CONSULTING AND NONCOMPETITION AGREEMENT
THIS CONSULTING AND NONCOMPETITION AGREEMENT (the "Agreement") is executed by
and between FNB Corporation, a Virginia corporation and bank holding
Corporation headquartered in Christiansburg, Virginia (the "Corporation"), and
R. Xxxxx Xxxxx, who resides at 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (the
"Consultant") and is to be effective as hereinafter set forth. The parties
agree to the following:
WITNESSETH:
WHEREAS, the Consultant has for many years served as a full-time Executive
Officer of FNB Corporation, most recently holding the position of Executive
Vice-President of FNB Corporation; and
WHEREAS, with the consent of FNB Corporation, Consultant agreed to serve as
President/CEO and Director of First National Bank for an interim period ending
upon the selection and qualification of his successor; and
WHEREAS, the Consultant has announced his retirement from the Corporation
effective September 30, 2005 to coincide with the expiration of his employment
with First National Bank; and
WHEREAS, the Corporation wishes to hire the Consultant as an independent
contractor to provide the consulting services hereinafter set forth and to
perform other special projects for the benefit of the Corporation, all on an
as-needed basis, starting on the day following his retirement from First
National Bank; and
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
promises set forth in this Agreement, and other good and valuable
consideration, the Consultant and Corporation agree as follows:
1. Engagement and Retention. The Corporation hereby engages and retains
the services of the Consultant as an independent contractor to provide
consulting assistance on the duties outlined in this Agreement. The
Consultant accepts his engagement and retention on these terms.
2. Term. The term of this Agreement shall begin the day following
Consultants retirement from First National Bank and shall continue for
a period of five (5) years thereafter unless sooner terminated under
the provisions of Section 13 hereof.
3. Duties of the Consultant. The Consultant shall, upon the request of
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the Corporation's Chief Executive Officer or his designee, perform the
following duties:
(a) participate in any due diligence analysis required in connection
with a proposed merger, acquisition, branch purchase or sale, or
similar corporate transaction involving the Corporation;
(b) counsel the Corporation on strategic planning matters;
(c) assist the Corporation in promoting the stock of the Corporation
with market makers, institutional investors, and other interested
parties;
(d) provide any other aid for which the Consultant may be reasonably
expected to have the requisite knowledge and experience to assist
the Corporation; and
(e) help develop and retain business and promote the Corporation and
its affiliates; and
(f) perform such other assignments and projects as may, from time to
time, be assigned to him by the Chief Executive Officer or his
designee.
(g) The parties agree that services to be rendered hereunder are to
be as needed, and project-oriented, and provided on a schedule
that is mutually agreeable. As a general rule, requests for
services shall not involve extended periods of time. The
Corporation shall not make unreasonable demands upon the
Consultant's time and the Consultant shall not unreasonably limit
his availability to perform the services requested by the
Corporation.
In the event services are requested which would involve a long-
term or extended basis, the Consultant will be cooperative but
shall provide such consulting services only on such terms as the
parties may agree upon at the time before services are provided,
which shall include the Corporation paying additional
compensation for such extended services.
4. Compensation. For the Corporation's access to the Consultant's time,
talent, and services the Corporation shall pay the Consultant
compensation as follows:
The Corporation shall pay the Consultant an annual retainer of Six Thousand
Dollars ($6, 000). The retainer shall accrue and be payable monthly in equal
installments with the first installment being due and payable on the last day
of the month immediately following his retirement and on the last day of each
month thereafter for a period ending five (5) years thereafter unless the
contract is otherwise terminated as set forth in Paragraph 13, hereof. The
First monthly installment of Five Hundred Dollars shall be due and payable on
the 31st day of October, 2005 and a like sum on the last day of each month
thereafter for a period ending on September 30, 2010.
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Should a Change in control occur prior to Consultants retirement from First
National Bank then the Consultant shall be entitled to retain and exercise all
benefits set forth in a certain Change of control agreement heretofore entered
into between First National Bank, FNB Corporation and R. Xxxxx Xxxxx dated
August 1997. The compensation provided for therein shall be substituted for
the compensation to which the Consultant would otherwise be entitled to in
year one of this agreement.
(a) For each year the Agreement is in effect, the Corporation shall
issue an IRS Form 1099 to the Consultant for all compensation paid
to him under this Agreement. The Consultant shall be solely
responsible for the payment of any and all taxes, which may be due
on such sums.
(b) For the Consultant's agreement to refrain from assisting any
competitor of the Corporation as set forth in Paragraph 10 hereof
the Corporation shall pay the Consultant a retainer of Eighteen
Thousand ($18,000) a year. The forgoing sum shall be payable
monthly in equal monthly installments with the first installment of
One Thousand Five Hundred Dollars ($1500.00) being due and payable
on the 31st day of October, 2005 and a like such sum on the last
day of the month thereafter for a period years unless otherwise
terminated as set forth in Paragraph 13, hereof.
(c) It is expressly understood and agreed between the parties hereto
that should the consultant's death occur during the term of this
agreement then the consultant's estate shall be entitled to receive
payment for the entire month in which the death occurs but all
other benefits shall cease and any and all obligations of FNB
Corporation and/or its subsidiaries under this agreement shall
terminate.
5. Relationship of the Parties. Nothing contained in this Agreement shall
be construed to constitute the Consultant as an employee of the
Corporation or any of its subsidiaries. Furthermore, neither party
shall have the authority to bind each other in any respect beyond the
express provisions of this Agreement. The Consultant shall retain the
exclusive authority to manage the manner and means of his performance
hereunder. During any period when the Corporation has not requested
the Consultant to perform his duties under this Agreement, he shall be
free to render his services, in such manner and to such persons, firms
and corporation as he deems advisable, subject to the confidentiality
and noncompetition provisions hereof.
6. Corporation Property. Except as required to perform his duties under
this Agreement or as otherwise required by law, Consultant understands
and agrees that he will not copy, duplicate, use, access, or
disseminate to third parties any Corporation property. Consultant also
agrees to maintain and safeguard all Corporation property in his
possession and to return to the Corporation all Corporation property,
including copies of the same, in his possession, upon request by the
Corporation. The term "property" herein includes, but is not limited
to, documents, reports, files, memoranda and records, door and file
keys, computer access codes, software, and all physical and personal
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property, whether of the Corporation or a customer of the Corporation,
which Consultant has in his possession, or received, or helped to
prepare in connection with his previous employment with the Corporation
or the provision of services under this Agreement.
7. Safeguarding Confidential Information. The Corporation may provide
access to the Consultant to confidential and proprietary information
(hereinafter "confidential information") in order that he may carry out
his duties hereunder. The Consultant may also have had access to
confidential information as a result of his previous employment with
the Corporation. The Consultant understands and agrees that the
following obligations apply to any confidential information of the
Corporation which is in possession of the Consultant:
(a) that any confidential information is the exclusive property of
the Corporation and the Consultant acknowledges that he has no
ownership interest or right of any kind to said information;
(b) except as otherwise required by law, Consultant agrees that he
will not, either directly or indirectly, use, access, disclose,
or divulge to any unauthorized party (as defined below), for his
own benefit or to the detriment of the Corporation, any
confidential information; and
(c) if Consultant believes that he is required by law or otherwise
to reveal any confidential or proprietary information of the
Corporation, he or his attorney will, except as otherwise
prohibited by law, promptly contact the Corporation's CEO, at
(000) 000-0000, prior to disclosing such information in order
that the Corporation can take appropriate steps to safeguard the
disclosure of such confidential and proprietary information.
(d) For the purposes of this Section, the term confidential
information includes, without limitation, the identity of or
other facts relating to the Corporation, its customers and
accounts, its marketing strategies, financial data, trade
secrets, or any other information acquired by the Consultant as a
result of his previous employment with the Corporation or under
the terms of this Agreement, such that if such information were
disclosed such disclosure could act to the prejudice of the
Corporation. The term confidential information does not include
information that has become generally available to the public by
the act of one who has the right to disclose such information
without violating any right of the Corporation. The term
"unauthorized party" means any firm, entity, or person (whether
outsiders or employees of the Corporation) who is not
specifically authorized by the Corporation to receive such
confidential/proprietary information.
(e) Nothing in this Section or Agreement should be construed, either
expressly or by implication, as limiting the maximum protections
which may be available to the Corporation under appropriate state
and federal common law or statute concerning the obligations and
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duties of the Consultant to protect the Corporation's property
and/or confidential and proprietary information, including, but
not limited to, under the Virginia Uniform Trade Secrets Acts.
8. Non-disparagement. Consultant agrees not to disparage the Corporation,
its subsidiaries, officers, directors, employees, and representatives,
including, but not limited to, comments about any of their products,
services, business, or employment practices. The Corporation agrees
that its directors and executive officers shall not disparage the
Consultant; provided, however, nothing in this Section is intended to
prohibit the Consultant nor the Corporation from exercising those
rights either may have to speak of or concerning each other under
applicable state and federal law.
9. Cooperation in Proceedings. Consultant agrees to cooperate with the
Corporation by being available, in person if necessary, when requested
by the Corporation, including, but not limited to, for preparation and
attendance and testifying, for including, but not limited to,
conferences, depositions, trial/arbitration, or administrative law
hearings in which the Consultant is or may be a witness. The
Corporation shall reimburse the Consultant for all out of pocket
expenses he may incur in connection with providing such services.
10. Unfair Competition. Consultant understands and agrees:
(a) that during the term of this Agreement he will not, on his own
behalf or in the service of or on behalf of others - including,
but not limited to, as a consultant, independent contractor,
owner, partner, joint venturer, or employee - act in any manner
which is detrimental to be best interests of the Corporation;
provided, however, nothing in this Section is intended to
prohibit the Consultant from exercising those rights the
Consultant may have under applicable state and federal law;
(b) that for a period of two (2) years following the termination of
this Agreement, however caused, he will not, on his own behalf or
in the service of or on behalf of others - including, but not
limited to, as a consultant, independent contractor, owner,
partner, joint venturer, or employee - solicit, contact, attempt
to divert, or appropriate any "customer or account" of the
Corporation for the purpose of providing the same or similar
services as provided by the Corporation. A "customer or account"
is defined as any individual or entity who the Corporation was
providing services for at the time of the termination of this
Agreement and for the two (2) year period prior to that date;
(c) that for a period of two (2) years following the termination of
this Agreement, however caused, he will not, on his own behalf or
in the service of or on behalf of others - including, but not
limited to, as a consultant, independent contractor, owner,
partner, joint venturer, or employee - and within 50 miles of any
location where the Corporation has an office, work for or provide
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services to any competitor of the Corporation in the same or
similar capacity as the Consultant worked for the Corporation;
and
(d) that for a period of two (2) years following the termination of
this Agreement, however caused, he will not, on his own behalf or
in the service of or on behalf of others - including, but not
limited to, as a consultant, independent contractor, owner,
partner, joint venturer, or employee - solicit, recruit, entice,
or persuade any employee of the Corporation to leave the
employment of the Corporation.
(e) Consultant hereby acknowledges and agrees that the covenants
contained above are supported by independent valuable
consideration, contain reasonable limitations as to time and
scope of activity prohibited, and do not impose a greater
restraint than is necessary to protect the good will or other
legitimate business interest of the Corporation.
11. Confidentiality. The parties understand and agree that this Agreement
is confidential as set forth herein:
(a) Unless required by law or ordered to do so by a court or agency
of competent jurisdiction, Consultant shall not, without the
written consent of the Corporation's CEO or Chairman,
communicate, display, or otherwise reveal the existence or the
contents of this Agreement except to his spouse, attorney, the
Internal Revenue Service, as necessary, and tax or financial
advisors and auditors, as necessary. Prior to any such
disclosure, the Consultant will disclose the confidential nature
of the Agreement and will seek assurance from the recipient that
he/she will not divulge the existence or contents of this
Agreement. Consultant further agrees that, if he believes that
he is required by law or otherwise to reveal any information
concerning the existence or particulars of this Agreement, he or
his attorney will, except as otherwise prohibited by law,
promptly contact the Corporation's CEO, at (000) 000-0000, prior
to disclosing any information concerning this Agreement in order
that the Corporation may take appropriate steps to maintain the
confidential nature of this Agreement.
(b) The Corporation may divulge the existence or contents of this
Agreement as is required or allowed by law or as the Corporation,
in its sole discretion, deems necessary for legitimate business
purposes.
12. Breach/Remedies. Consultant acknowledges and agrees that the breach of
this Agreement, or any portion thereof, may result in irreparable harm
to the Corporation, the monetary value of which could be difficult to
establish. Consultant therefore agrees and consents that the
Corporation shall be entitled to injunctive relief or such other
equitable relief as is necessary to prevent a breach by Consultant of
any of the covenants or provisions contained in this Agreement.
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In the event of a breach by the Consultant of the covenants contained
in Sections 7 and 10 above, the Consultant consents and agrees that the
period of any injunction will correspond to the time restrictions set
forth in Section 10 above and that the restriction period will start to
commence from the date of entry of an order granting such injunction by
a court of competent jurisdiction.
Nothing contained in this Section shall be construed as prohibiting
either party from pursuing any legal remedies available to each for
such breach of this Agreement, including the recovery of damages from
the defaulting party. In addition to all other remedies, the parties
agree that in the event one party is found to be in breach of this
Agreement, then the non-defaulting party shall be entitled to a
monetary award against the breaching party in an amount equal to any
and all legal expenses incurred, including reasonable attorney's fees.
13. Termination. This Agreement may only be terminated by the Corporation
if the following conditions are found to exist:
(a) immediately, if the Consultant is found guilty of a crime
involving moral turpitude;
(b) immediately, if the Consultant is determined by a bank regulator
to be either temporarily or permanently disqualified from working
in the business of banking;
(c) immediately, if the Consultant dies; or
(d) if the Consultant persists in a knowing and willful breach of
this Agreement after first receiving written notice from the
Corporation describing the exact grounds upon which the
Corporation believes a breach has occurred, and therein providing
the Consultant 30 days within which to cure the breach. If the
breach is not cured within the 30 day period, the Agreement shall
terminate on the 31st day after notice is provided.
Any termination of this Agreement will not effect Sections 6, 7, 8, 9,
10, and 11 above, which the parties agree will survive the termination
of this Agreement irrespective of the existence of any claim or cause
of action by the Consultant against the Corporation, whether predicated
on this Agreement or otherwise.
14. Assignment or Delegation of Duties. The Consultant may not assign his
interest or delegate his duties hereunder without the express written
consent of the Corporation.
15. Stockholder Rights. The Consultant is currently a shareholder in the
common stock of the Corporation. Nothing in this Agreement is
intended, nor shall it be construed to affect the Consultant's rights
as a shareholder of the common stock of the Corporation, or to restrict
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the Consultant's right to acquire the rights to stock in any other
Corporation that provides financial services, even if this other
Corporation competes with the Corporation.
16. Miscellaneous.
(a) This Agreement shall bind the Corporation and the Consultant, and
their respective successors and assigns.
(b) This Agreement contains the entire agreement of the parties
concerning the subject matter described herein and may not be
modified except in writing signed by the party against whom
enforcement of any waiver, change, extension, modification, or
discharge is sought.
(c) The waiver by either party of a breach or a violation of any
provision of this Agreement shall not operate as or be construed
as a waiver of any subsequent breach hereof.
(d) Any notice required or permitted to be given hereunder will be
sufficient if furnished in writing, postage prepaid, to the
following addresses:
To FNB Corporation: To R. Xxxxx Xxxxx:
President and CEO R. Xxxxx Xxxxx
FNB Corporation 0000 Xxxxx Xxxxxx
XX Xxx 000 Xxxxxxx, Xx. 00000
Xxxxxxxxxxxxxx, XX 00000-0000
(e) The parties agree that this Agreement shall be governed by and
interpreted in accordance with the laws of the Commonwealth of
Virginia notwithstanding its choice of laws provisions. The
parties consent to the personal jurisdiction of the federal
and/or state courts serving the Commonwealth of Virginia and
waive any defenses of forum non-conveniens. The parties agree
that any and all initial judicial actions instituted under this
Agreement shall only be brought in the United States District
Court for the Western District of Virginia, Roanoke Division or
the appropriate state court in the Circuit Court of Xxxxxxxxxx
County, Virginia regardless of the place of residence of the
Consultant at the time of such action.
(f) Each section and sub-section of this Agreement shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any such section or sub-section of this
Agreement shall be adjudged to be invalid under applicable law,
the remainder of the Agreement is severable and shall continue in
full force and effect. Should a court of competent jurisdiction
declare any of the provisions of Section 10 invalid or
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unenforceable, the parties acknowledge and agree that the court
may revise or reconstruct such invalid or unenforceable
provisions to better effectuate the parties' intent to reasonably
restrict the activity of the Consultant to the greatest extent
afforded by law and needed to protect the business interests of
the Corporation.
(g) The language used in this Agreement is not to be construed in
favor or against any party solely because such party or their
counsel may have drafted the Agreement. Consultant warrants and
represents that he is under no contractual, judicial, or other
restraint, which impairs his right or legal ability to enter into
this Agreement and to carry out his duties and responsibilities
hereunder.
(h) This agreement shall survive any Change in Control which might
occur during the term of this agreement and all rights and
benefits as well as all duties and obligations hereunder shall
remain in full force and effect and fully binding upon all
successors, heirs or assigns.
(i) Agreement may be executed in one or more counterparts, and each
counterpart shall, for all purposes, be deemed to be an original,
and all such counterparts shall together constitute one and the
same instrument.
WITNESS the following signatures:
Witness: /s/R. Xxxxx Xxxxx
/s/Xxxxx X. Xxxx R. Xxxxx Xxxxx
9-30-05 9-30-05
Date Date
Witness: FNB Corporation, by:
/s/Xxxxx X. Xxxx /s/Xxxxxxx X. Xxxxx, Xx.
0-00-00 Xxxxxxx X. Xxxxx, Xx.
Date Chief Executive Officer
9-30-05
Date
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