CONSULTING AND NONCOMPETITION AGREEMENT
WITH PUT OPTION
THIS AGREEMENT dated January 15, 1999 is by and between FNB Corporation, a
Virginia corporation and bank holding company (the "Corporation") which owns
all of the outstanding stock of First National Bank, a national banking
association headquartered in Christiansburg, Virginia (the "Bank") and
Xxxxxx X. Xxxxxxxx, who resides at 0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx,
Xxxxxxxx 00000 (the "Consultant").
W I T N E S S E T H:
WHEREAS, the Consultant has served as a full-time employee of First National
Bank and FNB Corporation, most recently holding the position of President
and Chief Executive Officer of the Corporation;
WHEREAS, the Consultant announced his retirement from Corporation effective
December 31, 1998;
WHEREAS, the Corporation desires to retain the Consultant to perform special
projects for the benefit of the Corporation and/or Bank which the Consultant
is willing to accept on the following terms.
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. Termination of Employment Agreement. By execution hereof, the Consultant
resigns his executive employment with the Corporation and the Consultant
and Corporation terminate the Consultant's Employment Agreement dated
September 11, 1997 with the Corporation on the terms set forth therein,
each act effective December 31, 1998. Notwithstanding the foregoing, the
Consultant shall remain a director of the Corporation and the Bank
through May 31, 1999 and he shall retain the titles as Chairman,
President and CEO of the Corporation until such time, unless otherwise
mutually agreed.
2. 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.
3. Term. This agreement shall take effect on January 1, 1999 and shall
terminate on December 31, 2003, if not sooner as provided hereafter.
4. Duties of the Consultant. In addition to the other duties imposed on the
Consultant in this Agreement, during the term hereof, the Consultant
shall, upon the request of the Corporation's Chief Executive Officer or
President:
a) Participate in any due diligence analysis required in connection
with a proposed merger, acquisition, branch purchase or sale, or
similar corporate transactions involving the Corporation or the
Bank.
b) Counsel the Corporation or the Bank on strategic planning matters;
c) Assist the Corporation in promoting the stock of FNB Corporation
with market makers, institutional investors and other interested
parties;
d) Any other aid for which the Consultant may be reasonable expected
to have the requisite knowledge and experience to assist the
Corporation or the Bank.
5. Noncompetion. During the term hereof, the Consultant shall not,
directly or indirectly, engage or participate in, become an officer or
director of, or render advisory or other services for, or in connection
with any entity primarily engaging in the delivery of financial services
(including any such services approved for national banks by the
Comptroller of the Currency) in the Corporation's trading area (as
constituted at any time during the Consultant's engagement with FNB).
6. Relationship of the Parties. Nothing contained in this Agreement shall
be construed to constitute the Consultant as an employee of the
Corporation or the Bank. Furthermore, neither party shall have the
authority to bind each other in any respect. The Consultant shall retain
the exclusive authority to manage the manner and means of his performance
hereunder. At such times as the Consultant is not obligated to perform
his duties consistent with the terms of this Agreement, he may render his
services, in such manner and to such persons, firms and corporations as
he deems advisable, subject to the noncompetition provisions hereof.
7. Retainer. For the Corporation's access to the Consultant's time, talent
and services, the Corporation shall pay the Consultant a retainer of
Fifty Thousand ($50,000) Dollars a year during the term of this
Agreement. For the Consultant's agreement to refrain from assisting any
competitor of the Corporation during the term of this agreement, the
Corporation shall pay the Consultant a retainer of Fifty Thousand
($50,000) Dollars a year. Each retainer shall be paid monthly in equal
installments during the term of this Agreement. In addition, the
Corporation shall reimburse the Consultant for any out-of-pocket expenses
incurred by the Consultant in carrying out his duties hereunder.
8. Benefits. The Consultant shall receive no benefits customarily paid to
employees due to his service hereunder. Nevertheless, the Consultant may
receive accrued benefits customarily paid to retired employees of the
Corporation (or Bank).
9. Automobile. The Corporation shall furnish to the Consultant an
automobile of the Consultant's choosing for his exclusive use during the
term hereof. The Corporation shall transfer title to such automobile to
the Consultant on the termination of this Agreement.
10. Facilities and Support. During the term hereof, the Corporation shall
make available to the Consultant adequate office space to perform his
services. The Corporation shall also provide equipment and staff support
for the Consultant as the Corporation deems reasonably necessary for the
Consultant to complete his duties hereunder. The Consultant may, in his
discretion, utilize his own equipment, support and supplies.
11. Bank Documentation; Confidentiality. The Corporation shall furnish
access to Consultant to confidential and proprietary documentation in
order to carry out his duties hereunder. The Consultant acknowledges the
confidential and proprietary nature of this documentation and shall not,
in any manner, divulge or communicate the substance of the confidential
and proprietary documentation shared with him. The Consultant further
acknowledges that the Corporation will be irreparably harmed by the
disclosure of confidential and proprietary information and specifically
authorizes the Corporation to obtain injunctive relief, among other
remedies, for a breach of this Agreement.
12. Put Option. Should the Consultant desire to sell more than 1000 shares
of the Corporation's stock in any calendar month, the Consultant may
require the Corporation to repurchase the Consultant's stock in the
Corporation for sale (the "put option") at a mutually agreed upon price,
but not less than the price per share for which the last executed trade
which took place as reported by the NASDAQ national market exchange.
Notwithstanding the foregoing, should the Corporation announce a merger,
sale or acquisition of the Corporation (the "Merger Announcement") within
one year after the Consultant's exercise of the put option on any of his
shares of the Corporation, the Consultant shall be entitled to additional
compensation for all shares repurchased by the Corporation within one
year period before the Merger Announcement. This additional compensation
shall equal the difference between the per share sales price of the
Corporation's stock at the end of trading on the first trading day after
the Merger Announcement and per share sales price on the date of each
exercise of the put option times the number of shares repurchased on
each such exercise date. The shares subject to the put option shall
include all shares owned by the Consultant, whether directly, indirectly
or through beneficial ownership (including the ESOP sponsored by the
Corporation).
13. Termination. This Agreement may be immediately terminated upon the
occurrence of one of the following:
a) If the Consultant is found guilty of a crime involving moral
turpitude;
b) If the Consultant is determined by a bank regulator to be either
temporarily or permanently disqualified from working in the
business of banking;
c) If the Consultant dies;
d) If either party defaults in the performance of any of its
obligations under this Agreement and notice shall be given by the
non-defaulting party to the defaulting party if such default shall
not have been cured within ten (10) days following the receipt of
such notice by the defaulting parties;
e) The mutual execution of a written agreement of the parties hereto,
which termination shall not take effect immediately but at least 30
days after the date of the agreement as the parties provide
therein.
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. Miscellaneous.
a) Benefit. This Agreement shall bind the Corporation and the
Consultant, their respective successors and assigns.
b) Entire Agreement. This Agreement contains the entire agreement of
the parties 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) Waiver Not Continuing. 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) Notice. 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:
Xxxxxx X. Xxxxx, Xx.
FNB Corporation
XX Xxx 000
Xxxxxxxxxxxxxx, XX 00000
To Xxxxxx X. Xxxxxxxx:
Xxxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx, XX 00000
e) Governing Law. This Agreement shall be interpreted, construed and
governed according to the laws of the Commonwealth of Virginia.
WITNESS the following signatures and seals:
FNB Corporation
(SEAL)
Xxxxxx X. Xxxxx, Executive Vice President
(SEAL)
Xxxxxx X. Xxxxxxxx
