EXHIBIT 10.12.3
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")] (the
"Company"), a corporation organized and existing under the laws
of the Commonwealth of Virginia, and
______________________________, (the "Executive").
R E C I T A L S:
The Company acknowledges that Executive's
contributions to the past and future growth and success of the
Company have been and will continue to be substantial. As a
[wholly-owned subsidiary of a] publicly held corporation, the
Company recognizes that there exists a possibility of a Change in
Control of [the Company/its parent corporation, First Colony
Corporation ("FCC")]. The Company 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 the Company is always
essential to advancing the best interests of the Company and
FCC's shareholders. In the event of a threat or occurrence of a
bid to acquire or change control of FCC or to effect a business
combination, it is particularly important that the the Company's
business be continued with a minimum of disruption. The Company
believes that the objective of securing and retaining outstanding
management will be achieved if the Company'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 the Company
agrees herein to pay the Executive, and of other good and
valuable consideration, the receipt of which is hereby
acknowledged, the Company 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 the Company ("Effective Date"). The
Agreement automatically continues in effect from year to year
thereafter unless the Company 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), the Company
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 the Company 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
the Company on the Control Change Date, the Company agrees that
the Company will continue to employ Executive and Executive
further agrees that Executive will continue as an employee of the
Company 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 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 the Company
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 the Company. Executive is entitled
to receive Termination Compensation if Executive's employment is
terminated by the Company 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 the Company; (ii) a material breach by the
Executive of his fiduciary duties or loyalty of care to the
Company; (iii) conviction of a felony; or (iv) willful, flagrant,
deliberate and repeated infractions of material published
policies and regulations of the Company of which the Executive
has actual knowledge (the "Cause Exception"). If the Company
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 the Company's
exercise of the Cause Exception. If the reason for the Company'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), the Company'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 the
Company'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 the Company (as of the Control Change Date) and the
Executive then elects to leave the Company'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 the Company
without his consent within six (6) months of such modification;
or
(c) the failure of the Company 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 the Company;
(d) the Company causes the Executive to relocate
his employment more than 50 miles from Lynchburg, Virginia,
without the consent of the Executive;
(e) the Company shall fail to make a payment
when due to the Executive; or
(f) the Company's reduction of the Executive's
total direct compensation (base salary, incentive bonus, and
benefits).
2.4 Termination Compensation. Termination
Compensation equal to 1.00 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 the Company's last two completed fiscal years.
2.6 Notice of Termination. Any termination by the
Company 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 the
Company 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 the Company 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, the Company 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 the Company therefor.
ARTICLE 6. INDEMNIFICATION. The Company 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 the Company 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 the Company be less than the maximum indemnity
provided by the Company at any time during such period to any
other officer or director under an indemnification insurance
policy or the bylaws or charter of the Company or by agreement.
ARTICLE 7. SOURCE OF PAYMENTS; NO TRUST. The
obligations of the Company to make payments hereunder shall
constitute a liability of the Company to the Executive. Such
payments shall be from the general funds of the Company, and the
Company 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 the Company 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 the Company and the
Executive or any other person. 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.
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
the Company and its permitted successors and assigns.
ARTICLE 14. MERGER OR CONSOLIDATION. The Company
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 the Company 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 the Company:
First Colony Life Insurance Company
700 Main Street
Lynchburg, Virginia 24504
or, if applicable,
First Colony Corporation
Riverfront Plaza, West Tower
901 East Byrd Street
Suite 1350
Richmond, Virginia 23219
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, the Company 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 LIFE INSURANCE COMPANY:
By: _______________________________
Title: _____________________________
FIRST COLONY CORPORATION:
By: _______________________________
Title: _____________________________
FIRST AMENDMENT TO THE
CHANGE IN CONTROL AND TERMINATION AGREEMENT
The Change in Control and Termination Agreement between and
[First Colony Corporation/First Colony Life Insurance Company],
dated March 23, 1995, is amended, as follows.
FIRST: 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.
SECOND: 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.
THIRD: 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 LIFE INSURANCE COMPANY:
By: _______________________________
Title: _____________________________
FIRST COLONY CORPORATION:
By: _______________________________
Title: _____________________________