EXHIBIT 10.2 SUMMARY
The following directors are participants in the First Community
Bancshares, Inc. Director Supplemental Retirement Plan and as such are parties
to Director Supplemental Retirement Plan in the form attached hereto as part of
this Exhibit 10.2.
Director Name
- -------------
Sam Clark
Allen T. Hamner
B. W. Harvey
I. Norris Kantor
A. A. Modena
Robert E. Perkinson, Jr.
William P. Stafford
William P. Stafford, II
W. W. Tinder, Jr.
EXHIBIT 10.2 DIRECTOR SUPPLEMENTAL RETIREMENT PLAN
AGREEMENT
This Agreement, made and entered into this ____ day of ______________,
2001, by and between First Community Bancshares, Inc., a Holding Company
organized and existing under the laws of the United States, (hereinafter
referred to as the "Company"), and _____________________, a Director of the
Company, (hereinafter referred to as the "Director").
WHEREAS, the Director has been in the service of the Company for
several years and has now and for years faithfully served the Company. It is the
consensus of the Board of Directors of the Company (hereinafter referred to as
the "Board") that the Director's services have been of exceptional merit, in
excess of the compensation paid and an invaluable contribution to the profits
and position of the Company in its field of activity. The Board further believes
that the Director's experience, knowledge of corporate affairs, reputation and
industry contacts are of such value and his continued services are so essential
to the Company's future growth and profits that it would suffer severe financial
loss should the Director terminate the Director's services.
ACCORDINGLY, the Board has adopted the First Community Bancshares, Inc.
Director Supplemental Retirement Plan (hereinafter referred to as the "Director
Plan") and it is the desire of the Company and the Director to enter into this
Agreement under which the Company will agree to make certain payments to the
Director upon the Director's retirement or to the Director's beneficiary(ies) in
the event of the Director's death pursuant to the Director Plan;
FURTHERMORE, it is the intent of the parties hereto that this Director
Plan be considered an unfunded arrangement maintained primarily to provide
supplemental retirement benefits for the Director, and be considered a
non-qualified benefit plan for purposes of the Employee Retirement Security Act
of 1974, as amended ("ERISA"). The Director is fully advised of the Company's
financial status and has had substantial input in the design and operation of
this benefit plan; and
NOW THEREFORE, in consideration of services the Director has performed
in the past and those to be performed in the future, and based upon the mutual
promises and covenants herein contained, the Company and the Director agree as
follows:
I. DEFINITIONS
A. Effective Date:
The Effective Date of the Director Plan shall be November 2,
2001.
B. Plan Year:
Any reference to "Plan Year" shall mean a calendar year from
January 1 to December 31. In the year of implementation, the
term "Plan Year" shall mean the period from the Effective Date
to December 31 of the year of the Effective Date.
C. Retirement Date:
Retirement Date shall mean retirement from service with the
Company which becomes effective on the first day of the
calendar month following the month in which the Director
reaches the Director's seventy-fifth (75th) birthday or such
later date as the Director may actually retire.
D. Termination of Service:
Termination of Service shall mean voluntary resignation of
service by the Director or the Company's discharge of the
Director without cause, prior to the Retirement Date
(Subparagraph I [C]).
E. Index Retirement Benefit:
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The Index Retirement Benefit for the Director for each plan
year shall be equal to the excess (if any) of the Index
(Subparagraph I [F]) for that Plan Year over the Cost of Funds
Expense (Subparagraph I [G]) for that Plan Year, divided by a
factor equal to 1.06 minus the marginal tax rate.
F. Index:
The Index for any Plan Year shall be the aggregate annual
after-tax income from the life insurance contract(s) described
hereinafter as defined by FASB Technical Bulletin 85-4. This
Index shall be applied as if such insurance contracts were
purchased on the Effective Date hereof.
Insurance Company:
Policy Form:
Policy Name:
Insured's Age and Sex:
Riders:
Ratings:
Option:
Face Amount:
Premiums Paid:
Number of Premium Payments:
Assumed Purchase Date:
If such contracts of life insurance are actually purchased by
the Company, then the actual policies as of the dates they
were purchased shall be used in calculations under this
Director Plan. If such contracts of life insurance are not
purchased or are subsequently surrendered or lapsed, then the
Company shall receive annual policy illustrations that assume
the above-described policies were purchased or had not
subsequently surrendered or lapsed. Said illustrations shall
be received from the respective insurance companies and will
indicate the increase in policy values for purposes of
calculating the amount of the Index.
In either case, references to the life insurance contract are
merely for purposes of calculating a benefit. The Company has
no obligation to purchase such life insurance and, if
purchased, the Director and the Director's beneficiary(ies)
shall have no ownership interest in such policy and shall
always have no greater interest in the benefits under this
Agreement than that of an unsecured general creditor of the
Company.
G. Cost of Funds Expense:
The Cost of Funds Expense for any Plan Year shall be
calculated by taking the sum of the amount of premiums for the
life insurance policies described in the definition of "Index"
plus the amount of any after-tax benefits paid to the Director
pursuant to the Director Plan (Paragraph II hereinafter) plus
the amount of all previous years' after-tax Costs of Funds
Expense, and multiplying that sum by the Average After-Tax
Cost of Funds (Subparagraph I [K]).
H. Change of Control:
For purposes of this Supplemental Retirement Plan Agreement,
change of control shall mean the purchase or other acquisition
by any person, entity or group of persons, within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934
(the "Act"), or any comparable successor provision, of
beneficial ownership within the meaning of Rule 13d-3
promulgated under the Act, within any twelve month period, of
30 percent or more of the outstanding shares of common stock
of First Community Bancshares, Inc. (the "Holding Company");
or the approval by the stockholders of the Holding Company of
a reorganization, merger, consolidation, share exchange or
similar transaction pursuant to which persons who were
stockholders of the Holding Company immediately prior to the
effective date of such transaction do not, immediately after
such date, own more than 60 percent of the combined voting
power entitled to vote generally in the election of directors
of the surviving or successor corporation; or a liquidation or
dissolution of the Holding Company; or the sale of all or
substantially all of its assets.
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I. Normal Retirement Age:
Normal Retirement Age shall mean the date on which the
Director attains age seventy-five (75).
J. Benefit Accounting:
The Company shall account for the benefit provided herein
using the regulatory accounting principles of the Company's
primary federal regulator. The Company shall establish an
accrued liability retirement account for the Director into
which appropriate reserves shall be accrued.
K. Average After-Tax Cost of Funds:
Average After-Tax Cost of Funds means, at any particular time,
a ratio, the numerator of which is the total annualized
interest expense as set forth on Schedule RI-Income Statement
of the Company's most recently filed Consolidated Report of
Condition and Income (the "Call Report") and the denominator
of which is an amount equal to: (i) the amount of deposits in
domestic offices (sum of total of columns A and C from
Schedule RC-E of the Call Report), plus (ii) the amount of
Federal funds purchased and securities sold under agreements
to repurchase, as set forth on Schedule RC-Balance Sheet of
the Call Report, times the inverse of the Company's combined
marginal income tax rate. However, if the Company is being
taxed as an S-corporation, the ratio as set forth hereinabove,
shall be times the inverse of the highest combined personal
federal and state income tax rate as determined for the state
where the Company is located.
II. BENEFITS
A. Retirement Benefits:
Subject to Subparagraph II (D), hereinafter, should the
Director continue to serve the Company until "Normal
Retirement Age" defined in Subparagraph I (I), the Director
shall be entitled to receive an annual benefit equal to the
amount set forth in Exhibit "A-1". Said payments shall be made
monthly (1/12th of the annual benefit) and shall commence
thirty (30) days following the Director's retirement and shall
continue until the Director attains age eighty-one (81). Upon
completion of the aforestated payments and commencing
subsequent thereto and subject to Subparagraph II (A)(i)
hereinbelow, the Index Retirement Benefit (Subparagraph I [E])
shall be paid to the Director until the Director's death. Said
benefits set forth in this Subparagraph II (A) may continue
after the Director's death to the Director's beneficiary(ies)
as set forth in Subparagraph II (B) hereinafter.
(i) Index Retirement Benefit Adjustment:
The Index Retirement Benefit payment as set forth hereinabove
for the first Plan Year subsequent to the Director attaining age
eighty-one (81) shall be adjusted according to a number equal to
the aggregate of the Index Retirement Benefit (Subparagraph I [E])
for each Plan Year from the Effective Date of this agreement until
the Plan Year subsequent to the Director attaining age eighty-one
(81) over the aggregate of the benefit payments the Director
actually received under the terms of this Director Plan through
that date. For example, if the Director retires at age sixty-five
(65) and the aggregate annual benefits received by the Director
until the Plan Year the Director attains age eighty-one (81) were
$900,000.00, and the aggregate Index Retirement Benefits for each
Plan Year from the Effective Date of this agreement to the Plan
Year the Director's attains age eighty-one (81) were $1,000,000.00
then the Director's Index Retirement Benefit in the first Plan
Year said payment is payable to the Director would be increased by
$100,000.00. If said number is a deficit, then the Index
Retirement Benefit for the Plan Year when the Director attains age
eighty-one (81) and each subsequent Plan Year's benefit (if
necessary) shall be reduced until the entire deficit has been
recovered by the Company. For each year thereafter, the Index
Retirement Benefit payment shall be paid as set forth in
Subparagraph I (E). For example, if the Director retires at age
sixty-five (65) and the aggregate annual benefits to be received
by the Director until the Plan Year the Director attains age
eighty-one (81) were $1,000,000.00, and the aggregate Index
Retirement Benefits for each Plan year from the Effective Date of
this agreement to the Plan Year the Director attains age
eighty-one (81) were $900,000.00 and the Director's Index
Retirement Benefit was $90,000.00 in the first year, then the
Director would not receive any Index Retirement Benefit in the
first year, and the second years' Index Retirement benefit would
be reduced by $10,000.00.
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B. Death:
Should the Director die prior to having received a total of
ten (10) annual benefit payments as set forth in Subparagraph
II (A) (i.e. defined benefit payments solely or combined with
Index Retirement Benefit Payments for a total of ten (10)
annual benefit payments) then the Director's designated
beneficiary shall receive an amount of money equal to what the
Director's benefits would have been had the Director received
a total of ten (10) benefit plan payments. This amount of
money shall be paid at the times and in the amounts that the
Director would have received said benefit payments. In any
event, in the absence of or a failure to designate a
beneficiary, the amounts described herein shall be paid to the
personal representative of the Director's estate.
C. Termination of Service and Discharge for Cause:
Should the Director suffer a Termination of Service
(Subparagraph I [D]) or be Discharged for Cause at any time,
all benefits under this Director Plan shall be forfeited. The
term "for cause" shall mean any of the following that result
in an adverse effect on the Company: (i) gross negligence or
gross neglect; (ii) the conviction of a felony or misdemeanor
involving moral turpitude, fraud, or dishonesty; (iii) the
willful violation of any law, rule, or regulation (other than
a traffic violation or similar offense); (iv) an intentional
failure to perform stated duties; or (v) a breach of fiduciary
duty involving personal profit. If a dispute arises as to
discharge "for cause," such dispute shall be resolved by
arbitration as set forth in this Director Plan.
D. Death Benefit:
Except as set forth above, there is no death benefit provided
under this Agreement.
III. RESTRICTIONS UPON FUNDING
The Company shall have no obligation to set aside, earmark or entrust
any fund or money with which to pay its obligations under this
Agreement. The Director, the Director's beneficiary(ies) or any
successor in interest to the Director shall be and remain simply a
general creditor of the Company in the same manner as any other
creditor having a general claim for matured and unpaid compensation.
The Company reserves the absolute right, at its sole discretion, to
either fund the obligations undertaken by this Agreement or to refrain
from funding the same and to determine the exact nature and method of
such funding. Should the Company elect to fund this Agreement, in whole
or in part, through the purchase of life insurance, mutual funds,
disability policies or annuities, the Company reserves the absolute
right, in its sole discretion, to terminate such funding at any time,
in whole or in part. At no time shall the Director be deemed to have
any lien or right, title or interest in or to any specific funding
investment or to any assets of the Company.
If the Company elects to invest in a life insurance, disability or
annuity policy upon the life of the Director, then the Director shall
assist the Company by freely submitting to a physical exam and
supplying such additional information necessary to obtain such
insurance or annuities.
IV. CHANGE OF CONTROL
Upon a Change of Control (Subparagraph I [H]), if the Director
subsequently suffers a Termination of Service (Subparagraph I [D]),
then the Director shall be entitled to receive the amount in the
Director's Accrued Liability Retirement Account as of the date of
Termination of Service paid in a lump sum thirty (30) days following
said Termination of Service. The Director will also remain eligible for
all promised death benefits in this Director Plan. In addition, no
sale, merger, or consolidation of the Company shall take place unless
the new or surviving entity expressly acknowledges the obligations of
this Director Plan and agrees to abide by its terms.
V. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Director, his/her surviving spouse nor any other
beneficiary under this Agreement shall have any power or right
to transfer, assign, anticipate, hypothecate, mortgage,
commute, modify or otherwise encumber in advance any of the
benefits payable hereunder nor shall any of
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said benefits be subject to seizure for the payment of any
debts, judgments, alimony or separate maintenance owed by the
Director or the Director's beneficiary(ies), nor be
transferable by operation of law in the event of bankruptcy,
insolvency or otherwise. In the event the Director or any
beneficiary attempts assignment, commutation, hypothecation,
transfer or disposal of the benefits hereunder, the Company's
liabilities shall forthwith cease and terminate.
B. Binding Obligation of the Company and any Successor in
Interest:
The Company shall not merge or consolidate into or with
another company or sell substantially all of its assets to
another company, firm or person until such company, firm or
person expressly agree, in writing, to assume and discharge
the duties and obligations of the Company under this Director
Plan. This Director Plan shall be binding upon the parties
hereto, their successors, beneficiaries, heirs and personal
representatives.
C. Amendment or Revocation:
It is agreed by and between the parties hereto that, during
the lifetime of the Director, this Director Plan may be
amended or revoked at any time or times, in whole or in part,
by the mutual written consent of the Director and the Company.
D. Gender:
Whenever in this Director Plan words are used in the masculine
or neuter gender, they shall be read and construed as in the
masculine, feminine or neuter gender, whenever they should so
apply.
E. Effect on Other Company Benefit Plans:
Nothing contained in this Director Plan shall affect the right
of the Director to participate in or be covered by any
qualified or non-qualified pension, profit-sharing, group,
bonus or other supplemental compensation or fringe benefit
plan constituting a part of the Company's existing or future
compensation structure.
F. Headings:
Headings and subheadings in this Director Plan are inserted
for reference and convenience only and shall not be deemed a
part of this Director Plan.
G. Applicable Law:
The validity and interpretation of this Agreement shall be
governed by the laws of the Commonwealth of Virginia
notwithstanding the conflict of any other laws.
H. 12 U.S.C. Section 1828(k):
Any payments made to the Director pursuant to this Director
Plan, or otherwise, are subject to and conditioned upon their
compliance with 12 U.S.C. Section 1828(k) or any regulations
promulgated thereunder.
I. Partial Invalidity:
If any term, provision, covenant, or condition of this
Director Plan is determined by an arbitrator or a court, as
the case may be, to be invalid, void, or unenforceable, such
determination shall not render any other term, provision,
covenant, or condition invalid, void, or unenforceable, and
the Director Plan shall remain in full force and effect
notwithstanding such partial invalidity.
VI. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
The "Named Fiduciary and Plan Administrator" of this Director
Plan shall be First Community Bank, N.A., until its
resignation or removal by the Board. As Named Fiduciary and
Plan Administrator, the Company shall be responsible for the
management, control and administration of the Director Plan.
The Named Fiduciary may delegate to others certain aspects of
the
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management and operation responsibilities of the Director Plan
including the employment of advisors and the delegation of
ministerial duties to qualified individuals.
B. Claims Procedure and Arbitration:
In the event a dispute arises over benefits under this
Director Plan and benefits are not paid to the Director (or to
the Director's beneficiary(ies) in the case of the Director's
death) and such claimants feel they are entitled to receive
such benefits, then a written claim must be made to the Named
Fiduciary and Plan Administrator named above within.sixty (60)
days from the date payments are refused. The Named Fiduciary
and Plan Administrator shall review the written claim and if
the claim is denied, in whole or in part, they shall provide
in writing within sixty (60) days of receipt of such claim the
specific reasons for such denial, reference to the provisions
of this Director Plan upon which the denial is based and any
additional material or information necessary to perfect the
claim. Such written notice shall further indicate the
additional steps to be taken by claimants if a further review
of the claim denial is desired. A claim shall be deemed denied
if the Named Fiduciary and Plan Administrator fail to take any
action within the aforesaid sixty-day period.
If claimants desire a second review they shall notify the
Named Fiduciary and Plan Administrator in writing within sixty
(60) days of the first claim denial. Claimants may review this
Director Plan or any documents relating thereto and submit any
written issues and comments it may feel appropriate. In their
sole discretion, the Named Fiduciary and Plan Administrator
shall then review the second claim and provide a written
decision within sixty (60) days of receipt of such claim. This
decision shall likewise state the specific reasons for the
decision and shall include reference to specific provisions of
the Plan Agreement upon which the decision is based.
If claimants continue to dispute the benefit denial based upon
completed performance of this Director Plan or the meaning and
effect of the terms and conditions thereof, then claimants may
submit the dispute to an arbitrator for final arbitration. The
arbitrator shall be selected by mutual agreement of the
Company and the claimants. The arbitrator shall operate under
any generally recognized set of arbitration rules. The parties
hereto agree that they and their heirs, personal
representatives, successors and assigns shall be bound by the
decision of such arbitrator with respect to any controversy
properly submitted to it for determination.
Where a dispute arises as to the Company's discharge of the
Director "for cause," such dispute shall likewise be submitted
to arbitration as above described and the parties hereto agree
to be bound by the decision thereunder.
VII. TERMINATION OR MODIFICATION OF AGREEMENT BY REASON OF CHANGES IN THE
LAW, RULES OR REGULATIONS
The Company is entering into this Agreement upon the assumption that
certain existing tax laws, rules and regulations will continue in
effect in their current form. If any said assumptions should change and
said change has a detrimental effect on this Director Plan, then the
Company reserves the right to terminate or modify this Agreement
accordingly. Upon a Change of Control (Subparagraph I [J]), this
paragraph shall become null and void effective immediately upon said
Change of Control.
IN witness whereof, the parties hereto acknowledge that each has
carefully read this Agreement and executed the original thereof on the first day
set forth hereinabove, and that upon execution, each has received a conforming
copy.
FIRST COMMUNITY BANCSHARES, INC.
Bluefield, VA
By:
- ------------------------------------- -------------------------------------
Witness Title
- ------------------------------------- -------------------------------------
Witness Director
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BENEFICIARY DESIGNATION FORM
FOR THE DIRECTOR SUPPLEMENTAL
RETIREMENT PLAN AGREEMENT
PRIMARY DESIGNATION:
Name Address Relationship
---- ------- ------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECONDARY (CONTINGENT) DESIGNATION:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
All sums payable under the Director Supplemental Retirement Plan Agreement by
reason of my death shall be paid to the Primary Beneficiary, if he or she
survives me, and if no Primary Beneficiary shall survive me, then to the
Secondary (Contingent) Beneficiary.
- ------------------------------------- ------------------------------
Director Date
AMENDMENT
TO THE LIFE INSURANCE ENDORSEMENT
METHOD SPLIT DOLLAR PLAN AGREEMENT
DATED November 26, 2001
This Amendment, made and entered into this ______ day of _____________,
2002, by and between First Community Bancshares, Inc., a Bank Holding Company
organized and existing under the laws of State of Nevada, hereinafter referred
to as "Bancshares," and William P. Stafford, II, a Director of Bancshares,
hereinafter referred to as the "Director," shall effectively amend the Life
Insurance Endorsement Method Split Dollar Agreement dated November 26, 2001, as
specifically set forth herein. Said Agreement shall be amended as follows:
1.) The following "Policy Number" for Jefferson Pilot Life
Insurance Company shall be deleted in its entirety on page (1) of said
agreement, JP5145732, and replaced with the following:
Policy Number: JP5145733
This Amendment shall be effective the 26th day of November, 2001. To
the extent that any term, provision, or paragraph of said agreement is not
specifically amended herein, or in any other amendment thereto, said term,
provision, or paragraph shall remain in full force and effect as set forth in
said November 26, 2001 Agreement.
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IN WITNESS WHEREOF, the parties hereto acknowledge that each has
carefully read this Amendment and executed the original thereof on the first day
set forth hereinabove, and that, upon execution, each has received a conforming
copy.
FIRST COMMUNITY BANCSHARES, INC.
Bluefield, Virginia
By:
- ------------------------------------- -------------------------------------
Witness Title
- ------------------------------------- ----------------------------------------
Witness William P. Stafford, II
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