Exhibit 10w.
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated and effective this 14th day of September,
2000, between FIRST BANCORP (a North Carolina corporation) (the "Company") and
JOHN F. BURNS (the "Employee"). References to the "Company" herein shall be
deemed to refer to the Company and its subsidiaries taken as a whole, unless the
context requires or the Agreement provides otherwise.
The Company desires to employ the Employee, and 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. The Company (or one of its subsidiaries)
will employ Employee, and Employee will be employed by the Company for a term of
three (3) years, initially as Executive Vice President, commencing on the date
hereof, 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 written notice on or prior to such anniversary date that such
extension will not occur.
2. Duties. Employee shall at all times faithfully and diligently
perform Employee's obligations under this Agreement and act in the best
interests of the Company and its affiliated companies. 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 Employee shall perform all duties necessary or
advisable in order to carry out such functions in an efficient manner. Employee
shall, during the term of Employee's employment hereunder, devote 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
affiliated companies during such hours and in such a manner as is generally
customary for employees of Employee's position in businesses of the Company's
type. Employee shall not be required to have his primary office location more
than 50 miles from the city limits of Southern Pines, North Carolina.
3. Compensation.
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(a) Salary. For services rendered by Employee
hereunder, the Company shall pay Employee an annual salary of not less than
$150,000 plus an amount equal to the
first year's increase in Employee's personal cost of health insurance at the
Company as compared to such cost with Employee's employer immediately prior to
the date of this Agreement payable in accordance with the customary payroll
practices of the Company. Employee's salary shall be subject to increase upon
annual reviews of the Employee's performance. 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 months preceding the date of Employee's
annual review. Any such increase will be considered in determining the
Employee's base salary for all purposes hereunder. During the time Employee
serves as a director of the Company or any of its subsidiaries, Employee shall
be paid the fees payable to non-employee directors of such entity.
(b) Reimbursement of Expenses. The Company shall
pay or reimburse Employee for all reasonable and necessary travel and other
expenses incurred by Employee in performing Employee's obligations under this
Agreement, provided that 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 Employee with such other assistance and
accommodations as shall be suitable to the character of Employee's position with
the Company and adequate for the performance of Employee's duties hereunder.
(c) Fringe Benefits. Employee shall be entitled to
such insurance, pension, profit-sharing and other benefit plans as are or may be
available generally to employees of the Company to the extent permitted by
applicable laws or government regulations. Employee will also be eligible for
participation in the Company's Supplemental Employee Retirement Plan, Split
Dollar Insurance Plan and Stock Option Plan. Employee will receive an initial
grant of 10,000 options under the Company's Stock Option Plan on the date
hereof.
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(d) Leave. Employee shall be entitled to
reasonable time off for vacation, sick leave, bereavement leave, jury duty and
military obligations as are or may become available to employees of the Company
in positions similar to those of 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 terms
specified in Section 1 hereunder, 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 Employee's duties, (ii) committed an act of dishonesty or
moral turpitude, or (iii) been convicted of a felony or other serious crime. All
future compensation and benefits, not then accrued, will automatically terminate
if Employee is terminated under this subparagraph (a).
(b) The employment of the Employee under this
Agreement shall be automatically terminated on the date of the Employee's death.
(c) Employer may terminate Employee's employment
hereunder for any reason other than as provided in subparagraphs (a) and (b),
but in such case Employer shall be obligated to pay Employee's base salary to
Employee for the remainder of the term specified in Section 1 hereof (the
"Remaining Term").
(d) Employment hereunder may be terminated
voluntarily by 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 Employee will receive his compensation, vested rights and employee
benefits accrued through the date of termination of employment.
5. Other Obligations. All payments and benefits to Employee under
this Agreement shall be subject to Employee's compliance with the following
provisions:
(a) Assistance in Litigation. During the term of
this Agreement and for three full years after the expiration or termination
hereof, 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 Employee after the termination of
Employee's employment hereunder, the Company will pay reasonable compensation to
Employee and will reimburse him for reasonable out-of-pocket expenses.
(b) Long-Term Disability. If the Employee has
become disabled as determined under the Company's long-term disability plan or
policy then in effect and is terminated from active employment, any remaining
benefits of this contract 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 is under an affirmative duty to
actively seek and accept reasonable alternative employment following
termination. Any compensation received by Employee following termination or
compensation earnable with reasonable diligence will be deducted from any future
compensation due the Employee under this Agreement. In the event the Employee
fails to seek reasonable alternative employment, the Company's obligation to pay
future compensation shall cease.
(c) Confidential Information. Employee
acknowledges that in the course of Employee's employment he will acquire
knowledge of trade and business secrets and other confidential data of the
Company, its subsidiaries and any affiliated companies. 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 affiliated companies' products, customers,
and operations. Employee recognizes that the possible restrictions on Employee's
activities are required for the reasonable protection of the Company. Employee
covenants not to knowingly disclose or reveal to any unauthorized person such
confidential business secrets or other confidential data both during the term of
this Agreement and for a period of two (2) years following termination of this
Agreement. Upon expiration or termination of Employee's employment by the
Company, 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
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form) that comes into Employee's possession during, by virtue of and in the
course of Employee's employment and which are in any way connected with or
related to the Company's business.
It is further understood and agreed that the Company's right to
require Employee to keep confidential information secret shall not be in lieu of
the Company's right to monetary damages in the event 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 Employee from violating said covenants.
(d) Noncompetition Covenants and Other Covenants
For Protection of the Company. During the term of Employee's employment
hereunder and during the period following the termination of such employment
specified below as the "Restricted Period," Employee separately covenants for
the benefit of the Company as follows:
(i) Employee shall not, directly or indirectly,
promote, be employed by, participate or engage in any activity or business which
is in competition with the business of the Company, or any of its subsidiaries
and affiliated companies, 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 Employee of 5% or less of the outstanding capital stock of any
corporation which is actively publicly traded will not be a violation of this
covenant;
(ii) Employee covenants that Employee will not
employ or assist others by active solicitation to recruit and employ employees
of the Company or any of the Company's subsidiaries or affiliate companies; and
(iii) Employee agrees that 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 affiliate companies, for any products or services
competitive with those offered by the Company or its subsidiaries or affiliated
companies within the "Restricted Territory" (as defined below).
The "Restricted Period" following termination of employment
during which Employee will observe the covenants contained in this Section 5(d)
shall be (A) one year following termination of employment under Section 4(a)
hereof or if Employee voluntarily terminates his employment hereunder and (B)
for the Remaining Term (as defined in Section 4(c) hereof) if employment is
terminated pursuant to Section 4(c) hereof.
"Restricted Territory" is defined as the area located within a
50-mile radius of Southern Pines, North Carolina.
Notwithstanding the foregoing, the aforesaid limitations on
Employee contained in this Section 5(d) shall be null and void if Employee's
employment hereunder is terminated within one year following a Change in Control
(as defined in Section 8 hereof).
(e) It is further understood and agreed that the
Company's right to require 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 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 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.
6. Source of Payment. Subject to the terms of any employee
benefit plan 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.
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.
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7. Payments by Company. If the Company shall find that any person
to whom any amount is or was payable hereunder is unable to care for 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 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 Employee
is employed by the Company, and Employee's employment is terminated by the
Company or Employee, for any reason or no reason, other than a termination
pursuant to Section 4(a) by the Company herein, within twelve months after the
Change in Control, the Company shall pay the Severance Payment provided in
Section 8(b) to Employee within ten days of Employee's date of termination of
employment, provide benefits pursuant to Section 8(c) and cause the acceleration
of vesting of benefits described in Section 8(d) to occur. Notwithstanding the
foregoing, Employee's termination of employment shall not be deemed due to a
Change in Control if such termination is due to Employee's death pursuant to
Section 4(b), Employee's disability pursuant to Section 5(b), Employee's
retirement in accordance with the Company's retirement policy, or pursuant to
Section 4(a).
In the event of successive Changes of Control, the provisions of
this Agreement shall apply with respect to each Change of Control.
(b) Employee's Severance Payment shall be an
amount equal to the lesser of (i) 2.9 times the amount of Employee's base salary
in effect on the date of the Change in Control and (ii) the product of 2.99 and
the "base amount" as defined in Section 280G(b)(3) of the Internal Revenue Code
of 1986, as amended, and applicable rules and regulations thereunder.
(c) The Company shall provide to Employee and
Employee's spouse or other qualified dependents, at a cost to Employee no
greater than the cost of such benefits to Employee at the time of the Change in
Control, such hospitalization, health, medical and dental insurance benefits as
were available to Employee (and Employee's spouse or qualified dependents)
immediately prior to the Change in Control until the earlier to occur of (i) two
years following the date of the Change in Control or (ii) Employee accepting
employment pursuant to which he 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 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 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 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 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 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 constitute at least a majority thereof; provided, that any person who
becomes a 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 Employee, or a
group of persons including 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 subparagraph (e), references to the
"Company" shall be deemed to refer to First Bancorp only, and not to its
subsidiaries.
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9. Modification and Waiver.
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(a) Amendment of Agreement. This Agreement may not
be modified or amended 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 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.
10. Severability. If, for any reason, any provision of this
Agreement is 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) Nonassignability. Neither this Agreement nor
any right or interest hereunder shall be assignable by Employee, Employee's
beneficiaries, or legal representatives without the Company's prior written
consent; provided, that nothing in this paragraph shall preclude the executors,
administrators, or other legal representative of Employee or Employee's estate
from assigning any rights hereunder to the person or persons entitled thereto.
(b) No Attachment. 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.
(c) Binding Effect. This Agreement shall be
binding upon, and inure to the benefit of, Employee and the Company and their
respective successors and assigns.
(d) Headings. Headings in this Agreement are for
convenience only and shall not be used to interpret or construe its provisions.
(e) Notice. For purposes of this Agreement,
written notice shall be 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: John F. Burns
40 Highland View Drive
Southern Pines, NC 28387
Company: 341 North Main Street
Post Office Box 508
Troy, 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 State of North Carolina, and its validity, interpretation, performance
and enforcement shall be governed by the laws of such State.
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13. Effect of Prior Agreements. This Agreement contains the
entire 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
Agreement under seal as of the day and year first above stated.
FIRST BANCORP
By: /s/ James H. Garner
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James H. Garner
Title: President and CEO
EMPLOYEE
/s/ John F. Burns (SEAL)
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John F. Burns
