Exhibit 10.b
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated and effective this
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15th day of January, 2003, is by and between FIRST BANCORP, a North Carolina
corporation (the "Company"), and X. Xxxxxx Xxxxx (the "Employee"). References to
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the "Company" herein shall be deemed to refer to the Company and its
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subsidiaries taken as a whole, unless the context requires or this Agreement
provides otherwise.
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company, on the terms and subject to the conditions hereinafter
set forth. Accordingly, in consideration of employment, the compensation the
Company agrees to pay the Employee, the mutual covenants contained herein, and
for other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties mutually agree as follows:
1. Employment and Term. Commencing on the date hereof, the Company (or one
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of its subsidiaries) will employ the Employee, and the Employee will be employed
by the Company, as a Senior Vice President for a term of three (3) years, unless
sooner terminated as hereinafter provided. The term of this Agreement shall
automatically be extended for an additional period of one (1) year on each
anniversary of the date of this Agreement unless either party gives the other
party written notice on or prior to such anniversary date that such extension
will not occur.
2. Duties. The Employee shall at all times faithfully and diligently
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perform the Employee's obligations under this Agreement and shall act in the
best interests of the Company and its affiliates. The Employee's duties
hereunder shall be to act in such office or capacity as the Company may direct
or change from time to time, and the Employee shall perform all duties necessary
or advisable in order to carry out such functions of such office in an efficient
manner. The Employee shall, during the term of the Employee's employment
hereunder, devote the Employee's full time, best efforts and ability, skill, and
attention exclusively to the furtherance of the business objectives and
interests of the Company and its affiliates during such hours and in such a
manner as is generally customary for the employees of the Employee's position in
businesses of the Company's type. Unless the Employee agrees otherwise, the
Employee's place of employment shall be in Xxxxxx County, South Carolina.
3. Compensation.
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(a) Salary. As compensation for the services and agreements described
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herein, the Company shall pay the Employee an annual base salary of not less
than $140,000, payable in accordance with the customary payroll practices of the
Company. The Employee's salary shall be subject to increase upon annual reviews
of the Employee's performance. The Employee will receive an annual increase that
is at least as much as any percentage increase in the U.S. Consumer Price Index
during the twelve (12) months preceding the date of the Employee's annual
review. Any such increase will be considered in determining the Employee's base
salary for all purposes hereunder. The Employee shall also be eligible for
bonuses, to be awarded from time to time in accordance with policies and
procedures established by the Company and applicable to its officers having
positions similar to that of the Employee.
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(b) Reimbursement of Expenses. The Company shall pay or reimburse the
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Employee for all reasonable and necessary travel and other expenses incurred by
the Employee in performing the Employee's obligations under this Agreement;
provided, however that the Employee shall present to the Company from time to
time an itemized account of such expenses in any form required by the Company.
The Company further agrees to furnish the Employee with such other assistance
and accommodations as shall be suitable to the character of the Employee's
position with the Company and adequate for the performance of the Employee's
duties hereunder.
(c) Fringe Benefits. The Employee shall be entitled to such insurance,
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pension, profit-sharing and other benefit plans as are or may be available
generally to the employees of the Company to the extent permitted by applicable
laws or government regulations. The Employee will also be eligible for
participation in the Company's Supplemental Executive Retirement Plan (and upon
the effectiveness of this Agreement, will be granted credit for three (3) years
of service for all purposes under such plan), the Company's Split Dollar
Insurance Plan and Stock Option Plan. The Employee will receive an initial grant
of 10,000 options to acquire shares of the Company's common stock on the date
hereof, the terms of which options shall be comparable to those granted
generally to existing senior officers of the Company.
(d) Leave. The Employee shall be entitled to reasonable time off for
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vacation, sick leave, bereavement leave, jury duty and military obligations as
are or may become available to the employees of the Company in positions similar
to those of the Employee, as provided by the Company's policies as they may be
in effect from time to time.
4. Termination. In addition to the termination of the term (or any renewal
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thereof) specified in Section 1, employment may be terminated under any of the
following provisions:
(a) The employment of the Employee under this Agreement may be terminated
immediately by the Company if the Company finds that the Employee shall have (i)
demonstrated gross negligence or willful misconduct in the execution of the
Employee's duties, (ii) committed an act of dishonesty or moral turpitude, (iii)
been convicted of a felony or (iv) violated the provisions of Section 5(c) or
Section 5(d) hereof. All future compensation and benefits not then accrued will
automatically terminate if the Employee is terminated under this Section 4(a).
(b) The employment of the Employee under this Agreement shall be
automatically terminated on the date of the Employee's death.
(c) The Company may terminate the Employee's employment hereunder for any
reason other than as provided in Sections 4(a) and 4(b), but in such case
Company shall be obligated to pay the Employee's base salary to the Employee for
the remainder of the term specified in Section 1 (the "Remaining Term").
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(d) Employment hereunder may be terminated voluntarily by the Employee on
forty-five (45) days' written notice to the Company's Chief Executive Officer or
Chairman of the Company's Board of Directors, in which case the Employee will
receive his compensation, vested rights and the employee benefits accrued
through the date of termination of employment.
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5. Other Obligations. All payments and benefits to the Employee under this
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Agreement shall be subject to the Employee's compliance with the following
provisions:
(a) Assistance in Litigation. While employed by the Company or any of its
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subsidiaries and for a period of three (3) years after termination of such
employment, the Employee shall, upon reasonable notice, furnish such information
and proper assistance to the Company as may reasonably be required by the
Company in connection with any litigation in which it or any of its subsidiaries
or affiliates is, or may become, a party. In connection with such assistance, if
substantial effort or expense is required of the Employee after the termination
of the Employee's employment hereunder, the Company will pay reasonable
compensation to the Employee and will reimburse him for reasonable out-of-pocket
expenses.
(b) Long-Term Disability. If the Employee has become disabled as
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determined under the Company's long-term disability plan or policy then in
effect and is terminated from active employment with the Company or any of its
subsidiaries, any remaining benefits of this Agreement shall be reduced by any
benefits received by the Employee under the Company's long-term disability plan
or policy. Additionally, if such a circumstance occurs, the Employee
acknowledges and agrees that the Employee is under an affirmative duty to
actively seek and accept reasonable alternative employment following
termination. Any compensation received by the Employee following such
termination or compensation earnable with reasonable diligence will be deducted
from any future compensation due the Employee under this Agreement or such
long-term disability plan or policy. In the event the Employee fails to seek
reasonable alternative employment after such termination, the Company's
obligation to pay future compensation shall cease.
(c) Confidential Information. The Employee acknowledges that in the course
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of the Employee's employment, the Employee will acquire knowledge of trade and
business secrets and other confidential data of the Company, its subsidiaries
and affiliates. Such trade and business secrets and other confidential data may
include, but are not limited to, confidential product information, methods by
which the Company proposes to compete with its business competitors, strategic
plans, confidential reports prepared by business consultant(s) and similar
information relating to the Company's, its subsidiaries' or its affiliates'
products, customers and operations. The Employee acknowledges and agrees that
any resulting restrictions on the Employee's activities are required for the
reasonable protection of the Company. The Employee agrees not to knowingly
disclose or reveal to any unauthorized person such confidential business secrets
or other confidential data while employed by the Company or any of its
subsidiaries and for a period of two (2) years after the termination of such
employment. Upon expiration or termination of the Employee's employment by the
Company, the Employee agrees to return to the Company all documents (both
originals and copies), including without limitation customer lists, books and
records, form agreements, manuals and other information (in whatever form such
information may exist, whether written, recorded, in magnetic media, or other
form) that comes into the Employee's possession during, by virtue of or in the
course of the Employee's employment and that are in any way connected with or
related to the business of the Company or any of its subsidiaries or affiliates.
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(d) Noncompetition Covenants and Other Covenants For Protection of the
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Company. During the term of the Employee's employment hereunder and during the
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Restricted Period (as defined below) the Employee separately covenants for the
benefit of the Company as follows:
(i) The Employee shall not, directly or indirectly, promote, be
employed by, participate or engage in any activity or business that is in
competition with the business of the Company, or any of its subsidiaries
or affiliates, including acting, either singly or jointly or as agent for,
or as an employee of, any person or persons, firm or corporation, whether
directly or indirectly (as a director, shareholder or investor, partner,
lessor, lessee, proprietor, principal agent, independent contractor,
representative, consultant or otherwise), in the Restricted Territory (as
defined below). Ownership by the Employee of 2% or less of the outstanding
capital stock of any corporation that is actively publicly traded will not
be a violation of this covenant;
(ii) The Employee covenants that the Employee will not employ or
assist others by active solicitation to recruit and employ the employees
of the Company or any of the Company's subsidiaries or affiliates; and
(iii) The Employee agrees that the Employee will not, directly or
indirectly, on behalf of himself or any third party, make any sales
contacts with, or actively solicit business from any customer of the
Company or its subsidiaries or affiliates, for any products or services
competitive with those offered by the Company or its subsidiaries or
affiliates within the Restricted Territory.
The "Restricted Period" following termination of employment during which
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the Employee will observe the covenants contained in this Section 5(d) shall be
(i) one (1) year following termination of employment pursuant to Section
4(a),(ii) through the end of the Remaining Term if employment is terminated
pursuant to Section 4(c), and (iii) two (2) years following termination of
employment pursuant to Section 4(d).
The "Restricted Territory" is defined as the area located within the City
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of Xxxxxx in the State of South Carolina and the 50-mile radius around such
city.
Notwithstanding the foregoing, the aforesaid limitations on the Employee
contained in this Section 5(d) shall be null and void if the Employee's
employment hereunder is terminated within one (1) year following a Change in
Control (as defined in Section 8).
(e) It is further understood and agreed that the Company's right to
require the Employee to keep confidential information secret or not to compete
against the Company for the agreed upon period shall not be in lieu of the
Company's right to monetary damages in the event the Employee is in breach of
any obligation contained in this Agreement, and that in the event of any breach
or threatened breach of any of these covenants, the Company may either, with or
without pursuing any action for damages, obtain and enforce an injunction
prohibiting the Employee from violating said covenants.
(f) The parties hereby agree that all of the above obligations in this
Section 5 are reasonable in nature and are designed to reasonably protect the
Company's interests.
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6. Source of Payment. Subject to the terms of any employee benefit plan
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established by the Company and except as otherwise provided by law, all payments
provided under this Agreement shall be paid in cash from the general funds of
the Company, and no special or separate fund shall be established, and no other
segregation of assets shall be made to assure payment. The Employee shall have
no right, title or interest whatsoever in or to any investments which the
Company may make to aid the Company in meeting its obligations hereunder.
Nothing contained in this Agreement, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind for the
benefit of the Employee. To the extent that any person acquires a right to
receive payments from the Company hereunder, such right shall be no greater than
the right of an unsecured creditor of the Company.
7. Payments by Company. If the Company shall find that any person to whom
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any amount is or was payable hereunder is unable to care for the Employee's
affairs because of illness or accident, or is a minor, or has died, then the
Company, if it so elects, may direct that any payment due him or the Employee's
estate (unless a prior claim therefor has been made by a duly appointed legal
representative) or any part thereof be paid or applied for the benefit of such
person or to or for the benefit of such person's spouse, children or other
dependents, an institution maintaining or having custody of such person, any
other person deemed by the Company to be a proper recipient on behalf of such
person otherwise entitled to payment, or any of them in such manner and
proportion as the Company may deem proper. Any such payment shall be in complete
discharge of the liability of the Company therefor.
8. Change in Control.
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(a) If a "Change in Control" occurs while the Employee is employed by the
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Company and the Employee's employment is terminated by the Company for any
reason or no reason within twelve (12) months after the Change in Control, the
Company shall pay the Severance Payment provided in Section 8(b) to the Employee
within ten (10) days of the date of termination of the Employee's employment,
provide benefits pursuant to Section 8(c) and cause the acceleration of vesting
of benefits described in Section 8(d) to occur; provided, however, that the
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termination of the Employee's employment shall not be deemed due to a Change in
Control and the Employee shall have no rights under this Section 8 if such
termination of employment is (i) pursuant to Section 4(a) or (ii) due to the
Employee's death pursuant to Section 4(b), the Employee's disability pursuant to
Section 5(b) or the Employee's retirement in accordance with the Company's then
existing retirement policies.
In the event of successive Changes of Control, the provisions of this
Agreement shall apply with respect to each Change of Control. All references to
the Company in this Section 8 shall also be to the Company's successors and
assigns of the Company, whether in connection with a Change of Control or
otherwise.
(b) The Employee's severance payment shall be an amount equal to the
lesser of (i) 2.9 times the amount of the Employee's base salary in effect on
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the date of the Change in Control and (ii) the product of 2.99 and the "base
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amount" as defined in Section 280G(b)(3) of the Internal Revenue Code of 1986,
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as amended, and applicable rules and regulations thereunder (the "Severance
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Payment").
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(c) The Company shall provide to the Employee and the Employee's spouse or
other qualified dependents, at a cost to the Employee no greater than the cost
of such benefits to the Employee at the time of the Change in Control, such
hospitalization, health, medical and dental insurance benefits as were available
to the Employee (and the Employee's spouse or qualified dependents) immediately
prior to the Change in Control until the earlier to occur of (i) two (2) years
following the date of the Change in Control or (ii) the Employee accepting
employment pursuant to which the Employee is eligible for comparable health
insurance benefits.
(d) Any non-vested option to purchase securities of the Company will vest
and become immediately exercisable upon a Change in Control.
(e) "Control" means the power, directly or indirectly, to direct the
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management or policies of the Company or to vote forty percent (40%) or more of
any class of voting securities of the Company. "Change in Control" shall mean a
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change in Control of the Company, except that any merger, consolidation or
corporate reorganization in which the owners of the capital stock entitled to
vote ("Voting Stock") in the election of directors of the Company prior to said
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combination own sixty-one percent (61%) or more of the resulting entity's Voting
Stock shall not be considered a change in control for the purpose of this
Agreement; provided, that, without limitation a Change in Control shall be
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deemed to have occurred if (i) any "person" (as that term is used in Sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company, is or becomes the beneficial owner (as that term is used in Section
13(d) of the Securities Exchange Act of 1934), directly or indirectly, of
thirty-three percent (33%) or more of the Voting Stock of the Company or its
successors; (ii) during any period of two (2) consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of the
Company or its successors (the "Incumbent Board") cease for any reason to
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constitute at least a majority thereof; provided, that any person who becomes a
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director of the Company after the beginning of such period whose election was
approved by a vote of at least three-quarters of the directors comprising the
Incumbent Board shall be considered a member of the Incumbent Board; or (iii)
there occurs the sale of all or substantially all of the assets of the Company.
Notwithstanding the foregoing, no Change in Control shall be deemed to occur by
virtue of any transaction which results in the Employee, or a group of persons
including the Employee, acquiring, directly or indirectly, thirty-three percent
(33%) or more of the combined voting power of the Company's outstanding
securities. For purposes of this Section 8(e), references to the "Company" shall
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be deemed to refer to First Bancorp only, and not to its subsidiaries.
9. Modification and Waiver.
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(a) Amendment of Agreement. This Agreement may not be modified or amended
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except by an instrument in writing signed by the parties hereto.
(b) Waiver. No term or condition of this Agreement shall be deemed to have
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been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver unless specifically stated therein, and each such waiver shall
operate only as to the specific term and condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.
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10. Severability. If, for any reason, any provision of this Agreement is
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held invalid, such invalidity shall not affect any other provision of this
Agreement not held so invalid, and each such other provision shall to the full
extent consistent with law continue in full force and effect. If any provision
of this Agreement shall be held invalid in part, such invalidity shall in no way
affect the rest of such provision not held so invalid, and the rest of such
provision, together with all other provisions of this Agreement, shall to the
full extent consistent with law continue in full force and effect.
11. General Provisions.
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(a) Assignability.
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(i) Neither this Agreement nor any right or interest hereunder shall
be assignable by the Employee, the Employee's beneficiaries, or legal
representatives without the Company's prior written consent.
(ii) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge of hypothecation or to
execution, attachment, levy or similar process or assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such
action shall be null, void and of no effect; provided, however, that
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nothing in this paragraph shall preclude the executors, administrators, or
other legal representative of the Employee or the Employee's estate from
assigning any rights to payment hereunder to the person or persons
entitled thereto.
(iii) The Company may assign this Agreement and any rights hereunder
to any wholly owned subsidiary of the Company.
(b) Binding Effect. This Agreement shall be binding upon, and inure to the
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benefit of, the Employee and the Company and their respective successors and
assigns.
(c) Headings. Headings in this Agreement are for convenience only and
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hall not be used to interpret or construe its provisions.
(d) Notice. For purposes of this Agreement, written notice shall be
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effective if personally delivered or if sent by certified mail, return receipt
requested, to the following addresses or to such other addresses as either may
designate in writing to the other party:
Employee: X. Xxxxxx Xxxxx
000 Xxxx Xxx Xxxx
X.X. Xxx 00
Xxxxx, XX 00000
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Company: 000 Xxxxx Xxxx Xxxxxx
Post Office Box 508
Xxxx, North Carolina 27371
Attention: Chief Executive Officer
For purpose of computing time, all time requirements under this Agreement will
start on the date mailed or if personally delivered, when delivered.
12. Governing Law. This Agreement has been executed and delivered in the
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State of North Carolina, and its validity, interpretation, performance and
enforcement shall be governed by the internal laws of such State.
13. Effect of Prior Agreements. This Agreement contains the entire
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understanding between the parties with reference to the employment of the
Employee, and supersedes any prior employment agreement, understanding or
arrangement between the Employee and the Company, its subsidiaries or
affiliates.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement under seal as of the day and year first above stated.
FIRST BANCORP
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title:President and CEO
EMPLOYEE:
/s/ X. Xxxxxx Xxxxx
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X. Xxxxxx Xxxxx
