EXHIBIT 10.12.1
CHANGE IN CONTROL AND TERMINATION AGREEMENT
THIS CHANGE IN CONTROL AND TERMINATION AGREEMENT (the
"Agreement"), to be effective as of the 23rd day of March, 1995,
made and entered into by and between FIRST COLONY CORPORATION,
("FCC"), FIRST COLONY LIFE INSURANCE COMPANY ("FCL") a wholly-
owned subsidiary of FCC, (collectively "First Colony"), both of
which are corporations organized and existing under the laws of
the Commonwealth of Virginia, and ______________________________,
(the "Executive").
R E C I T A L S:
First Colony acknowledges that Executive's
contributions to the past and future growth and success of First
Colony have been and will continue to be substantial. As a
publicly held corporation, First Colony recognizes that there
exists a possibility of a Change in Control of First Colony.
First Colony also recognizes that the possibility of such a
Change in Control may contribute to uncertainty on the part of
senior management and may result in the departure or distraction
of senior management from their operating responsibilities.
Outstanding management of First Colony is always
essential to advancing the best interests of First Colony and its
shareholders. In the event of a threat or occurrence of a bid to
acquire or change control of First Colony or to effect a business
combination, it is particularly important that the First Colony's
business be continued with a minimum of disruption. First Colony
believes that the objective of securing and retaining outstanding
management will be achieved if the First Colony's key management
employees are given assurances of employment security so they
will not be distracted by personal uncertainties and risks
created by such circumstances.
NOW, THEREFORE, in consideration of the mutual
covenants and obligations herein and the compensation First
Colony agrees herein to pay the Executive, and of other good and
valuable consideration, the receipt of which is hereby
acknowledged, First Colony and the Executive agree as follows:
ARTICLE 1. TERM; EMPLOYMENT PERIOD.
1.1 Term. This Agreement is effective from the date
of its execution by First Colony ("Effective Date"). The
Agreement automatically continues in effect from year to year
thereafter unless First Colony notifies Executive in writing
thirty days before any anniversary of its Effective Date that the
Agreement will terminate as of that anniversary date. After a
Change in Control of FCC (as defined in section 1.3), First
Colony may not terminate this Agreement for sixty months from the
Control Change Date (as defined in section 1.4) and the Agreement
automatically continues in effect from year to year thereafter
unless First Colony notifies Executive in writing thirty days
before the end of the initial sixty month period or thirty days
before any anniversary of the end of that period that the
Agreement will terminate as of that date.
1.2 Employment Period. If Executive is employed by
First Colony on the Control Change Date, First Colony agrees that
First Colony will continue to employ Executive and Executive
further agrees that Executive will continue as an employee of
First Colony for the Employment Period. For purposes of this
Agreement, the Employment Period begins on the Control Change
Date and ends on the earlier of the fifth anniversary of the
Control Change Date or on Executive's Normal Retirement Date (as
defined under the First Colony Life Insurance Company Pension
Plan).
1.3 Change in Control, means if: (i) after the date of
the Agreement, any person, including a "group" as defined in
section 13(d)(3) of the Securities Exchange Act of 1934, becomes,
directly or indirectly, the beneficial owner of FCC securities
having 30% or more of the combined voting power of the then
outstanding FCC securities that may be cast for the election of
FCC's directors (other than as a result of an issuance of
securities initiated by FCC, or open market purchases approved by
FCC's Board, as long as the majority of FCC's Board approving the
purchases are directors at the time the purchases are made); or
(ii) as the direct or indirect result of, or in connection with,
a cash tender or exchange offer, a merger or other business
combination, a sale of assets, a contested election of directors,
or any combination of these transactions, the persons who were
directors of FCC before any such transactions cease to constitute
a majority of FCC's Board, or any successor's board, within
[two/three] years of the last of such transactions.
1.4 Control Change Date, means the date on which an
event described in section 1.3 occurs. If a Change in Control
occurs on account of a series of transactions, the Control Change
Date is the date of the last of such transactions.
ARTICLE 2. TERMINATION OF EMPLOYMENT.
2.1 General. Executive is entitled to receive
Termination Compensation according to the remaining provisions of
this section if Executive's employment with First Colony
terminates during the Employment Period because of an event
described in section 2.2 or 2.3. If Executive's employment
terminates during the Employment Period and if an event described
in section 2.2 or 2.3 has not occurred, this Agreement
terminates.
2.2 Termination by First Colony. Executive is
entitled to receive Termination Compensation if Executive's
employment is terminated by First Colony without Cause. Cause,
means, for purposes of this Agreement, (i) willful and continued
failure by the Executive to perform his duties as established by
the Board of Directors of First Colony; (ii) a material breach
by the Executive of his fiduciary duties or loyalty of care to
First Colony; (iii) conviction of a felony; or (iv) willful,
flagrant, deliberate and repeated infractions of material
published policies and regulations of First Colony of which the
Executive has actual knowledge (the "Cause Exception"). If First
Colony desires to discharge the Executive under the Cause
Exception, it shall give notice to the Executive as provided in
section 2.6 and the Executive shall have thirty (30) days after
notice has been given to him in which to cure the reason for
First Colony's exercise of the Cause Exception. If the reason
for First Colony's exercise of the Cause Exception is timely
cured by the Executive (as determined by a majority of the
members of the Board of Directors following a hearing), First
Colony's notice shall become null and void.
2.3 Voluntary Termination. Executive is entitled to
receive Termination Compensation if Executive voluntarily
terminates employment with Good Reason. Good Reason means, for
purposes of this Agreement, the Executive's resignation from
First Colony's employment on account of
(a) the failure by the FCC or FCL Board (as
applicable) to reelect the Executive to
Executive's current position with First
Colony (as of the Control Change Date) and the
Executive then elects to leave First Colony's employment
within six (6) months of such failure to so reelect or
reappoint the Executive;
(b) a material modification by the FCC or FCL
Board (as applicable) of the duties,
functions and responsibilities of the
Executive as the _______________________________ of
FCL or __________________ of FCC without his consent
within six (6) months of such modification; or
(c) the failure of First Colony to permit the
Executive to exercise such responsibilities
as are consistent with the Executive's
position and are of such a nature as are
usually associated with such offices of a corporation
engaged in substantially the same business as First
Colony;
(d) First Colony causes the Executive to relocate
his employment more than 50 miles from
[Lynchburg/Richmond],
Virginia, without the consent of the
Executive;
(e) First Colony shall fail to make a payment
when due to the Executive; or
(f) First Colony's reduction of the Executive's
total direct compensation (base salary,
incentive bonus, and benefits).
2.4 Termination Compensation. Termination
Compensation equal to 2.99 times Executive's Base Period Income
and shall be paid in a single sum payment in cash or in common
stock of FCC, at the election of the Executive. Termination
Compensation payments to Executive shall commence on the later of
the thirtieth business day after Executive's employment
termination or the first day of the month following his
employment termination. Termination Compensation is subject to
reduction according to Article 3.
2.5 Base Period Income. Executive's Base Period
Income equals his annual base salary as of Executive's
termination date, plus the average of any incentive bonus payable
to Executive for First Colony's last two completed fiscal years.
2.6 Notice of Termination. Any termination by First
Colony under the Cause Exception or by the Executive for Good
Reason shall be communicated by Notice of Termination to the
other party hereto. For purposes of sections 2.3 and 2.4, a
"Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement
relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
if the termination date is other than the date of receipt of such
notice, specifies the effective date of termination.
ARTICLE 3. REDUCTION IN PAYMENTS. In the event that
any amount required to be paid or distributed to the Executive
pursuant to this Agreement shall constitute a parachute payment
within the meaning of section 280G of the Internal Revenue Code
of 1986, as amended (the "Code"), and the aggregate of such
parachute payments and any other amounts otherwise required to be
paid or distributed to the Executive by First Colony would cause
the Executive to be subject to the excise tax on excess parachute
payments under section 4999 of the Code (the "Excise Tax"), or
any successor or similar provision thereof, Termination
Compensation must be reduced to the largest amount that will
result in no portion of such payment being subject to the Excise
Tax. The determination of any reduction pursuant to this Article
3 must be made by First Colony in good faith, before any payment
is due and payable to Executive.
ARTICLE 4. ATTORNEYS' FEES. In the event that the
Executive incurs any attorneys' fees in protecting or enforcing
his rights under this Agreement, First Colony shall reimburse the
Executive for such reasonable attorneys' fees and for any other
reasonable expenses related thereto. Such reimbursement shall be
made within thirty (30) days following final resolution of the
dispute or occurrence giving rise to such fees and expenses.
ARTICLE 5. DECISIONS BY COMPANY; FACILITY OF PAYMENT.
Any powers granted to the FCC or FCL Board (as applicable)
hereunder may be exercised by a committee, appointed by the
Board, and such committee, if appointed, shall have general
responsibility for the administration and interpretation of this
Agreement. If the Board or the committee shall find that any
person to whom any amount is or was payable hereunder is unable
to care for his affairs because of illness or accident, or has
died, then the Board or the committee, if it so elects, may
direct that any payment due him or his estate (unless a prior
claim therefore 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 his spouse,
children or other dependents, an institution maintaining or
having custody of such person, any other person deemed by the
Board or committee 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 Board or committee may deem proper.
Any such payment shall be in complete discharge of the liability
of First Colony therefor.
ARTICLE 6. INDEMNIFICATION. First Colony shall
indemnify the Executive during his employment and thereafter to
the maximum extent permitted by applicable law for any and all
liability of the Executive arising out of, or in connection with,
his employment by First Colony or membership on the FCC or FCL
Board (as applicable); provided, that in no event shall such
indemnity of the Executive at any time during the period of his
employment by First Colony be less than the maximum indemnity
provided by First Colony at any time during such period to any
other officer or director under an indemnification insurance
policy or the bylaws or charter of First Colony or by agreement.
ARTICLE 7. SOURCE OF PAYMENTS; NO TRUST. The
obligations of First Colony to make payments hereunder shall
constitute a liability of First Colony to the Executive. Such
payments shall be from the general funds of First Colony, and
First Colony shall not be required to establish or maintain any
special or separate fund, or otherwise to segregate assets to
assure that such payments shall be made, and neither the
Executive nor his designated beneficiary shall have any interest
in any particular asset of First Colony by reason of its
obligations hereunder. Nothing contained in this Agreement shall
create or be construed as creating a trust of any kind or any
other fiduciary relationship between First Colony and the
Executive or any other person. To the extent that any person
acquires a right to receive payments from First Colony hereunder,
such right shall be no greater than the right of an unsecured
creditor of First Colony.
ARTICLE 8. SEVERABILITY. All agreements and covenants
contained herein are severable, and in the event any of them
shall be held to be invalid by any competent court, this
Agreement shall be interpreted as if such invalid agreements or
covenants were not contained herein.
ARTICLE 9. ASSIGNMENT PROHIBITED. This Agreement is
personal to each of the parties hereto, and neither party may
assign nor delegate any of his or its rights or obligations
hereunder.
ARTICLE 10. NO ATTACHMENT. Except as otherwise
provided in this Agreement or required by applicable law, no
right to receive payments under this Agreement shall be subject
to anticipation, commutation, alienation, sale, assignment,
encumbrance, charge, pledge or 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.
ARTICLE 11. HEADINGS. The headings of articles,
paragraphs and sections herein are included solely for
convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
ARTICLE 12. GOVERNING LAW. The parties intend that
this Agreement and the performance hereunder and all suits and
special proceedings hereunder shall be construed in accordance
with and under and pursuant to the laws of the Commonwealth of
Virginia and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection
with, or by reason of this Agreement, the laws of the
Commonwealth of Virginia shall be applicable and shall govern to
the exclusion of the law of any other forum, without regard to
the jurisdiction in which any action or special proceeding may be
instituted.
ARTICLE 13. BINDING EFFECT. This Agreement shall be
binding upon, and inure to the benefit of, the Executive and his
heirs, executors, administrators and legal representatives and
First Colony and its permitted successors and assigns.
ARTICLE 14. MERGER OR CONSOLIDATION. First Colony
will not consolidate or merge into or with another corporation,
or transfer all or substantially all of its assets to another
corporation (the "Successor Corporation") unless the Successor
Corporation shall assume this Agreement, and upon such
assumption, the Executive and the Successor Corporation shall
become obligated to perform the terms and conditions of this
Agreement.
ARTICLE 15. COUNTERPARTS. This Agreement may be
executed simultaneously in one or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
ARTICLE 16. ENTIRE AGREEMENT. This Agreement
expresses the whole and entire agreement between the parties with
reference to the employment of the Executive and, as of the
effective date hereof, supersedes and replaces any prior
employment agreement, understanding or arrangement (whether
written or oral) between First Colony and the Executive. Each of
the parties hereto has relied on his or its own judgment in
entering into this Agreement.
ARTICLE 17. NOTICES. All notices, requests and other
communications to any party under this Agreement shall be in
writing and shall be given to such party at its address set forth
below or such other address as such party may hereafter specify
for the purpose by notice to the other party:
(a) If to the Executive:
[Name]
[Address]
(b) If to First Colony:
First Colony Corporation
Riverfront Plaza, West Tower
901 East Byrd Street
Suite 1350
Richmond, Virginia 23219
[and, if applicable,
First Colony Life Insurance Company
700 Main Street
Lynchburg, Virginia 24504]
Each such notice, request or other communication shall be
effective (i) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means, when
delivered at the address specified in this ARTICLE 17.
ARTICLE 18. MODIFICATION OF AGREEMENT. No waiver or
modification of this Agreement or of any covenant, condition, or
limitation herein contained shall be valid unless in writing and
duly executed by the party to be charged therewith. No evidence
of any waiver or modification shall be offered or received in
evidence at any proceeding, arbitration, or litigation between
the parties hereto arising out of or affecting this Agreement, or
the rights or obligations of the parties hereunder, unless such
waiver or modification is in writing, duly executed as aforesaid.
The parties further agree that the provisions of this ARTICLE 18
may not be waived except as herein set forth.
ARTICLE 19. TAXES. To the extent required by
applicable law, First Colony shall deduct and withhold all
necessary Social Security taxes and all necessary federal and
state withholding taxes and any other similar sums required by
law to be withheld from any payments made pursuant to the terms
of this Agreement.
ARTICLE 20. RECITALS. The Recitals to this Agreement
are incorporated herein and shall constitute an integral part of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first above written.
EXECUTIVE:
By:
_______________________________
[Name of Executive]
[FIRST COLONY CORPORATION:
By:
_______________________________
Title:
_____________________________
FIRST COLONY LIFE INSURANCE
COMPANY:
By:
_______________________________
Title:
____________________________]
FIRST AMENDMENT TO THE
CHANGE IN CONTROL AND TERMINATION AGREEMENT
The Change in Control and Termination Agreement between
and First Colony Corporation, dated March 23, 1995, is amended,
as follows.
FIRST: Effective April 2, 1996, Section 2.4 is
amended to substitute "3.0" for the term "2.99" in the first
sentence of Section 2.4 of the Agreement.
SECOND: Effective April 2, 1996, Article 3 is deleted
and the following Article 3 is substituted therefor:
ARTICLE 3. EXCISE TAXES. In addition, if the
excise tax imposed under Code section 4999 on "excess
parachute payments," as defined in Code section 280G,
is provoked by (i) any amount paid or payable to or for
the benefit of the Executive under this section as
legal fees and expenses, or (ii) any payments or
benefits which the Executive receives or has the right to receive
from the Company or any affiliated entity or any
payments or benefits under any plan maintained by the
Company or any affiliated entity (the "Change in
Control Benefits"), the Company must indemnify the
Executive and hold him harmless against all claims,
losses, damages, penalties, expenses, and excise taxes. To
effect this indemnification, the Company must pay the
Executive an Additional Amount that is sufficient to
pay any excise tax imposed by Code section 4999 on the
payments and benefits to which the Executive is
entitled without the Additional Amount within 15 days
after the Executive provides a copy of his tax return
in accordance with subsection (a) below. The Additional
Amount shall be equal to the amount that is sufficient to
indemnify and hold the Executive harmless from (i) the
excise tax imposed on the Executive under section 4999
of the Code with respect to the Change of Control
Benefits and (ii) the amount required to satisfy (x)
the additional excise tax under section 4999 of the
Code, (y) the hospital insurance tax under section 3111(b) of the
Code and (z) the federal, state and local income taxes
for which the Executive is liable on account of the
payment of the amount described in item (i) and the
payment of the excise, hospital insurance and income
taxes in accordance with this item (ii).
(a) For purposes of determining the amount and
timing of the payments of the Additional Amount, the
Company and the Executive shall, as soon as practicable
after the event or series of events has occurred giving
rise to the imposition of the excise tax, seek the
advice of independent tax counsel and shall cooperate in
establishing at least tentatively the amount of the Executive's
excise tax liability for purposes of paying estimated tax.
The Executive shall thereafter furnish to the Company a
copy of each tax return which reflects a liability for
an excise tax payment under section 4999 of the Code
with respect to the Change of Control Benefits at least
20 days before the date on which such return is
required to be filed with the Internal Revenue Service. Except
as provided under subsection (b), the liability
reflected on such return shall be dispositive for
purposes of calculating the Additional Amount unless,
within 15 days after such notice is given, the Company
furnishes to the Executive an opinion from the
Company's independent auditors or a tax advisor selected by the
Company's independent auditors indicating that a different
Additional Amount is payable or to the effect that the
matter is not free from doubt under applicable laws and
regulations and the Executive may, in such auditor's or
advisor's opinion, take a different position without
risk of penalty, which shall be set forth in the
opinion with respect to the payment in question. Such
opinion shall be addressed to the Executive and shall state that
the Executive is entitled to rely thereon. If the
Company furnishes such opinion to the Executive, the
position reflected in such letter shall be dispositive
for purposes of calculating the Additional Amount,
except as provided under this subsection (a).
(b) If the Executive's liability for the excise
tax under section 4999 of the Code and the additional
excise tax and the hospital insurance tax under section
3111(b) of the Code and federal, state or local income
taxes attributable to the Company's payment of such
excise tax is subsequently determined to be less than
the amount of the Additional Amount paid to the Executive,
the Executive shall repay to the Company at the time that the
amount of such liability is finally determined the portion
of the Additional Amount payment attributable to such
reduction (plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B)
of the Code). If the Executive's liability for the
excise tax under section 4999 of the Code and the additional
excise tax and the hospital insurance tax under section
3111(b) of the Code and federal, state or local income
taxes attributable to the Company's payment of such
excise tax is subsequently determined to be more than
the amount of the Additional Amount paid to the
Executive, the Company shall make an additional payment in
respect of such excess, as well as the amount of any penalty or
interest assessed with respect thereto at the time that
the amount of such excess, penalty or interest is
finally determined.
THIRD: Effective May 15, 1996, the Agreement is
amended to add the following language as Article 4:
ARTICLE 4. MITIGATION. The Executive shall not
be required to mitigate damages or the amount of any
payment provided for under this Agreement by seeking or
accepting other employment or otherwise, and
compensation earned from such employment or otherwise
shall not reduce the amounts otherwise payable under
this Agreement.
FOURTH: Effective May 15, 1996, the Agreement is
amended to renumber current Articles 4 through 20 as
Articles 5 through 21 and to renumber all references to
such Articles accordingly.
IN WITNESS WHEREOF, the parties have executed this
First Amendment to the Change in Control and Termination
Agreement on the date set forth below:
EXECUTIVE:
By:
_______________________________
Date:
_____________________________
FIRST COLONY CORPORATION:
By:
_______________________________
Title:
_____________________________