Exhibit 10.17
THIRD AMENDMENT TO
EMPLOYMENT AGREEMENT
AND FIRST AMENDMENTS TO
SPLIT-DOLLAR AGREEMENTS AND
COLLATERAL ASSIGNMENTS
WHEREAS, Xxxxxx X. Xxxxxx ("Xxxxxx"), FNB Financial Services Corporation
("FNB"), and FNB Southeast ("Bank") desire to amend certain agreements to which
two or more of them are parties; and
WHEREAS, they desire to enter into one agreement effecting all such
amendments but by doing so, neither FNB nor the Bank intends to become a party
to an agreement being hereby amended to which it is not already a party.
NOW, THEREFORE, it is agreed as follows:
Section 1. Employment Agreement. Xxxxxx, FNB and Bank hereby agree that
Section 7(a) of the Employment Agreement among them, dated May 18, 1995 and
amended on May 16, 2002 and by the Second Amendment to Employment Agreement
dated May 19, 2004, and any other agreements between or among them relating to
the agreements referenced in Section 2 below are hereby amended such that the
provision of the split-dollar insurance policies referenced herein shall be
subject to the terms, provisions and conditions of this Agreement.
Section 2. Split Dollar Agreements and Collateral Assignments. Xxxxxx and
the Bank agree as follows with respect to the Split Dollar Agreement, dated
January 27, 1995 and relating to Policy [______] ("1995 Agreement"), and the
related Split Dollar Collateral Assignment between them dated January 27, 1995
("1995 Assignment"), and the Split-Dollar Agreement entered into in 1998 and
relating to Policy [______] ("1998 Agreement"), and the related Split Dollar
Collateral Assignment between them also entered into in 1998 ("1998
Assignment").
(a) The obligation of the Bank to pay premiums under the 1995 Agreement
shall be suspended until the Reversal Date (as defined in item (c) below). The
remainder of the 1995 Agreement shall remain in full force and effect. The 1995
Assignment shall remain in full force and effect.
(b) The obligation of the Bank to pay premiums under the 1998 Agreement
shall be suspended until the Reversal Date. The remainder of the 1998 Agreement
shall remain in full force and effect. The 1998 Assignment shall remain in full
force and effect.
(c) The suspensions of the Bank's obligations to pay premiums set forth in
the preceding items (a) and (b) shall continue until the earlier to occur of (i)
a definitive pronouncement or regulation promulgated by the Securities and
Exchange Commission that the payment of premiums by employers such as FNB and/or
the Bank on split-dollar, collateral assignment arrangements such as those
established in the 1995 Agreement and 1995 Assignment and the 1998 Agreement and
1998 Assignment do not constitute prohibited loans under Section 402 of the
Xxxxxxxx-Xxxxx Act of 2002 (the "Act") when entered into with an executive
officer
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or director of a public company ("Prohibited Loans"), (ii) a repeal of Section
402 of the Act, (iii) a ruling of a federal appellate court from which no appeal
exists or from which no appeal is made that such arrangements do not constitute
Prohibited Loans, (iv) the terminations of the 1995 Agreement and the 1998
Agreement, and (v) such time as Xxxxxx is neither an executive officer nor a
director of either FNB or the Bank (the "Reversal Date"). Upon the occurrence of
the Reversal Date, the Bank's obligation to pay premiums under the 1995
Agreement and the 1998 Agreement shall become effective for the calendar year in
which such Reversal Date occurs and remain effective thereafter through the term
of the 1995 Agreement and the term of the 1998 Agreement, as applicable. The
foregoing text of this Section 2(c) is intended to provide (x) that prior to a
Reversal Date, the Bank's obligations to pay premiums are suspended and (y) that
after a Reversal Date has occurred for any of the listed reasons (including
Xxxxxx ceasing to be an executive officer or director of FNB and the Bank), the
Bank's obligations to pay premiums shall again become effective as provided in
the 1995 Agreement and the 1998 Agreement.
(d) Xxxxxx and the Bank agree that if the Bank's obligations to pay
premiums are suspended and then later renewed upon a Reversal Date, the Bank's
rights under Section 7 of the 1995 Agreement, and the related provisions of the
1995 Assignment, and under Section 7 of the 1998 Agreement, and the related
provisions of the 1998 Assignment, shall have priority as to all premiums paid
by the Bank, whether paid before or after a Reversal Date, as provided in the
1995 Agreement, the 1995 Assignment, the 1998 Agreement and the 1998 Assignment.
Section 3. Special Bonus Payments. Xxxxxx, FNB and the Bank agree as
follows:
(a) The Bank shall pay to Xxxxxx special bonus payments of compensation as
set forth below (each, an "Annual Special Bonus"):
Calendar Year Amount
------------- -----------
2004 $ 29,235.94
2005 29,066.00
2006 29,080.06
2007 26,334.90
2008 26,125.99
2009 25,974.58
2010 11,309.54
2011 10,922.35
2012 11,018.42
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The Bank and Xxxxxx acknowledge that the factors underlying the
calculation of the Annual Special Bonuses (i.e. the amount of Xxxxxx'x taxable
compensation from the Bank, applicable federal and state income tax rates, and
the AFR rate established by the U.S. Department of the Treasury) may vary in the
future. Accordingly, the Bank and Xxxxxx agree that the Bank shall review these
factors in advance of each calendar year and make such modification to the
Annual Special Bonus for the coming calendar year as is necessary to reflect any
applicable such variation. The Annual Special Bonus for each calendar year shall
be paid on or before January 15th of that calendar year.
(b) Notwithstanding the provisions of the foregoing item (a), the Bank's
obligation to pay Annual Special Bonuses shall terminate as of any calendar year
in which a Reversal Date occurs (in which event the provisions of Section 2(c)
shall control for such calendar year).
(c) Xxxxxx, FNB and the Bank agree that no Annual Special Bonus shall be
deemed a part of Xxxxxx'x Base Salary (as defined in Section 4 of the Employment
Agreement) nor shall any Annual Special Bonus be deemed to be compensation (i)
in determining Xxxxxx'x right to participate in any employee benefit or
compensation plan, (ii) in calculating any bonus, incentive compensation or
other benefit under any long-term, annual or other incentive or bonus plan of
the Bank and/or FNB (or any successor to either), (iii) in calculating any
Severance Payment under Section 9(d) of the Employment Agreement, or (iv) in
calculating Xxxxxx'x annual compensation for purposes of, or for the benefits
payable under, any retirement, pension or other similar plan or arrangement
(including any SERP) of the Bank and/or FNB (or any successor to either).
This Agreement shall be deemed effective as of the first day of January,
2004.
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
FNB FINANCIAL SERVICES CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Chairman of the Board of Directors
FNB SOUTHEAST
By: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx
Chairman of the Board of Directors
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