EXHIBIT 10.3
AGREEMENT
This AGREEMENT is made effective as of February 18, 1998 by and between
FIRSTBANK, N.A. (the "BANK") and RICHARD E. MORGAN, JR. ("EXECUTIVE").
WHEREAS, the BANK desires to employ EXECUTIVE as Senior Vice President and
Chief Credit Officer and to protect his position therewith for the period
provided in this Agreement in the event of a Change in Control (as defined
herein); and
NOW, THEREFORE, in consideration of the foregoing and upon the other terms
and conditions hereinafter provided, the parties hereto agree as follows:
1. Term Of Agreement
The term of this Agreement shall be deemed to have commenced as of the date
first above written and shall continue for a period of twenty-four (24) full
calendar months thereafter. Commencing on the first annual anniversary of the
commencement date of this Agreement and continuing at each annual anniversary of
the commencement date thereafter, the Board of Directors of the BANK ("Board")
may extend the Agreement for an additional twelve (12) months. The Board will
conduct a performance evaluation of EXECUTIVE for purposes of determining
whether to extend the Agreement, and the results of the vote on any extension of
this Agreement shall be included in the minutes of the Board's meeting.
2. Payments To EXECUTIVE Upon Change In Control.
(a) Upon the occurrence of a Change in Control (as herein defined) followed
within twelve (12) months of the effective date of the Change in Control by the
voluntary or involuntary termination of EXECUTIVE's employment, other than for
Cause, as defined in Section 2(c) hereof, the provisions of Section 3 shall
apply. For purposes of this Agreement, "voluntary termination" shall be limited
to the circumstances in which EXECUTIVE elects to voluntarily terminate his
employment within twelve (12) months of the effective date of a Change in
Control following any demotion, loss of title, office or significant authority,
reduction in his annual compensation or benefits (other than a reduction
affecting the Bank's personnel generally), or relocation of his principal place
of employment by more than 35 miles from its location immediately prior to the
Change in Control.
(b) A "Change in Control" shall be deemed to occur if and when if and when
(a) an offeror other than the FirstBancorporation, Inc. (the "Holding Company"),
the parent holding company of the BANK, purchases shares of the common stock of
the Holding Company pursuant to a tender or exchange offer for such shares, (b)
any person (as such term is used in Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) is or becomes the beneficial owner, directly or
indirectly, of securities of the Holding Company representing 25% or more of the
combined voting power of the Holding Company's then outstanding securities, (c)
the membership of the board of directors of the Holding Company changes as the
result of a contested election, such that individuals who were directors at the
beginning of any twenty-four
month period (whether commencing before or after the date of adoption of this
Agreement) do not constitute a majority of the board of directors at the end of
such period, or (d) shareholders of the Holding Company approve a merger,
consolidation, sale or disposition of all or substantially all of the Holding
Company's assets, or a plan of partial or complete liquidation.
(c) EXECUTIVE shall not have the right to receive termination benefits
pursuant to Section 3 hereof upon Termination for Cause. The term "Termination
for Cause" shall mean termination because of EXECUTIVE's intentional failure to
perform stated duties, personal dishonesty, incompetence, willful misconduct,
any breach of fiduciary duty involving personal profit, willful violation of any
law, rule, regulation (other than traffic violations or similar offenses) or
final cease and desist order, or any material breach of any material provision
of this Agreement. EXECUTIVE shall not have the right to receive compensation
or other benefits for any period after Termination for Cause.
3. Termination
(a) Upon the occurrence of a Change in Control, followed within twelve (12)
months of the effective date of a Change in Control by the voluntary or
involuntary termination of EXECUTIVE's employment other than Termination for
Cause, the BANK shall be obligated to pay EXECUTIVE, or in the event of his
subsequent death, his beneficiary or beneficiaries, or his estate, as the case
may be, as severance pay, a sum equal to one and one-half (1 1/2) times
Executive's annual compensation. For purposes of this Agreement, "annual
compensation" shall mean and include all wages, salary and bonus, if any, paid
(including accrued amounts) by the BANK as consideration for the Participant's
service during the twelve (12) month period ending on the last day of the month
preceding the effective date of a Change in Control, which is or would be
includable in the gross income of the Participant receiving the same for federal
income tax purposes. Such amount shall be paid to EXECUTIVE in a lump sum no
later than thirty (30) days after the date of his termination.
(b) Upon the occurrence of a Change in Control of the BANK followed within
twelve (12) months of the effective date of a Change in Control by EXECUTIVE's
voluntary or involuntary termination of employment, other than Termination for
Cause, the BANK shall cause to be continued life, medical, dental and disability
coverage substantially identical to the coverage maintained by the BANK for
EXECUTIVE prior to his severance. Such coverage and payments shall cease upon
expiration of eighteen (18) months from the date of EXECUTIVE's termination.
(c) Notwithstanding the preceding paragraphs of this Section 3, in the
event that the aggregate payments or benefits to be made or afforded to
EXECUTIVE under this Section, together with any other payments or benefits
received or to be received by EXECUTIVE in connection with a Change in Control,
would be deemed to include an "excess parachute payment" under Section 280G of
the Internal Revenue Code of 1986, as amended, then the payments or benefits to
be provided under this Section 3 shall be reduced to the extent necessary to
avoid treatment as an excess parachute payment with the allocation of the
reduction among such payments and benefits to be determined by EXECUTIVE.
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4. Effect On Prior Agreements And Existing Benefit Plans
This Agreement contains the entire understanding between the parties hereto
and supersedes any prior agreement between the BANK and EXECUTIVE, except that
this Agreement shall not affect or operate to reduce any benefit or compensation
inuring to EXECUTIVE of a kind elsewhere provided. No provision of this
Agreement shall be interpreted to mean that EXECUTIVE is subject to receiving
fewer benefits than those available to him without reference to this Agreement.
5. No Attachment
(a) 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, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit of,
EXECUTIVE and the BANK and their respective successors and assigns.
6. Modification And Waiver
(a) This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.
(b) No term or condition of this Agreement shall be deemed to have been
waived, nor shall there by an 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 or 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.
7. Regulatory Suspension Or Removal
(a) If EXECUTIVE is suspended and/or temporarily prohibited from
participation in the conduct of the BANK's affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act or similar
statute, rule or regulations, the BANK's obligations under this Agreement shall
be suspended as of the date of service, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the BANK may, in its
discretion, (i) pay all or part of the compensation withheld while its
obligations under this Agreement were suspended and (ii) reinstate (in whole or
in part) any of its obligations which were suspended.
(b) If EXECUTIVE is removed and/or permanently prohibited from
participating in the conduct of the BANK's affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal
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Deposit Insurance Act or similar statute, rule or regulations, all obligations
of the BANK under this Agreement shall terminate as of the effective date of
that order.
8. Severability
If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.
9. Headings For Reference Only
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
10. Governing Law
The validity, interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of South Carolina, unless
preempted by Federal law as now or hereafter in effect.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the employee within fifty
(50) miles from the location of the BANK, in accordance with the rules of the
American Arbitration Association then in effect.
11. Source Of Payments
All payments provided in this Agreement shall be timely paid in cash or
check from the general funds of the BANK.
12. Payment Of Legal Fees
All reasonable legal fees paid or incurred by EXECUTIVE pursuant to any
dispute or question of interpretation relating to this Agreement shall be paid
or reimbursed by the BANK if EXECUTIVE is successful on the merits pursuant to a
legal judgment, arbitration or settlement.
13. Successor To The BANK
The BANK shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the BANK, expressly and
unconditionally to assume and agree to perform the BANK's
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obligations under this Agreement, in the same manner and to the same extent that
the BANK would be required to perform if no such succession or assignment had
taken place.
14. Signatures
IN WITNESS WHEREOF, the BANK has caused this Agreement to be executed and
its seal to be affixed hereunto by a duly authorized officer, and EXECUTIVE has
signed this Agreement, all on the 18 day of February, 1998.
ATTEST: FIRSTBANK, N.A.
/s/James L. Pate, III BY: /s/James A. Shuford, III
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[SEAL]
WITNESS:
/s/Kim H. Gentry /s/Richard E. Morgan, Jr.
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Richard E. Morgan, Jr.
NOTARY PUBLIC FOR SOUTH CAROLINA
MY COMMISSION EXPIRES 8-21-2000
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