EXHIBIT 10.3 SUMMARY
The following officers and employees are participants in the First
Community Bancshares, Inc. Executive Retention Plan and as such are parties to
Executive Retention Agreements in the form attached hereto as part of this
Exhibit 10.3.
OFFICER NAME POSITION
------------ --------
Robert L. Buzzo Vice President & Secretary
First Community Bancshares, Inc.
President
First Community Bank, N. A.
E. Stephen Lilly Chief Operating Officer
First Community Bancshares, Inc.
Senior Vice President & Chief
Operating Officer, First Community
Bank, N. A.
John M. Mendez President & Chief Executive Officer
First Community Bancshares, Inc.
Executive Vice President
First Community Bank, N. A.
Janice K. Miller Senior Vice President - Marketing
First Community Bank, N. A.
Robert L. Schumacher Chief Financial Officer
First Community Bancshares, Inc.
Senior Vice President - Finance &
Secretary, First Community Bank,
N. A.
Stephen H. Warden Senior Vice President & Senior
Lending Officer, First Community
Bank, N. A.
Ruth A. White Administrative Assistant
First Community Bank, N. A.
Exhibit 10.3
FIRST COMMUNITY BANCSHARES, INC. AND AFFILIATES
EXECUTIVE RETENTION PLAN
AND AGREEMENT
THIS PLAN AND AGREEMENT is made and entered into this 2nd day
of February, 2000, by and between First Community Bancshares, Inc., a
corporation, organized and existing under the laws of the State of
Nevada, (hereinafter, collectively with its affiliates, referred to as
the "Company"), and ____________________, an Executive of the Company
(hereinafter referred to as the "Executive").
WHEREAS, the Executive has faithfully served the Company and
it is the consensus of the Board of Directors (hereinafter referred to
as the "Board"), that the Executive'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 Executive's experience,
knowledge of corporate affairs, reputation and industry contacts are of
such value, and the Executive's continued services so essential to the
Company's future growth and profits, that it would suffer severe
financial loss should the Executive terminate his service with the
Company.
WHEREAS, the Board has adopted this First Community
Bancshares, Inc.. Executive Retention Plan and Agreement (hereinafter
referred to as the "Retention Plan and Agreement") and it is the desire
of the Company and Executive to enter into this plan and agreement by
which the Company will agree to make certain payments to the Executive
upon the Executive's retirement or disability and to the Executive's
beneficiary(ies) in the event of the Executive's death.
WHEREAS, it is the intent of the parties hereto that this
Retention Plan and Agreement be considered an unfunded arrangement
maintained primarily to provide supplemental retirement benefits for
the Executive, and to be considered a non-qualified benefit plan for
purposes of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). The Executive is fully advised of the Company's
financial status and has had substantial input in the design and
operation of this benefit plan.
NOW THEREFORE, in consideration of services the Executive 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 Executive agree as follows:
I. DEFINITIONS
A. Effective Date:
The Effective Date of the Plan shall be February 2,
2000.
B. Plan Year:
Any reference to the "Plan Year" shall mean a
calendar year from January 1st to December 31st.
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 Executive reaches age sixty two (62) or
such later date as the Executive may actually retire.
D. Termination of Service:
Termination of Service shall mean the Executive's voluntary resignation or the
Company's discharge of the Executive, in either case, prior to Normal Retirement
Age, death or disability.
51
E. Pre-Retirement Account:
A Pre-Retirement Account shall be established as a
liability reserve account on the books of the Company
for the benefit of the Executive. Prior to the
Executive's Termination of Service or the Executive's
Retirement, whichever event shall first occur, or
Prior to the Executive's Retirement Date, such
liability reserve account shall be increased or
decreased each Plan Year, until the aforestated event
occurs, by the Index Retirement Benefit. For further
reference on the definition(s) as set forth herein,
please see Exhibit "A" attached hereto. Said Exhibit
"A" is referred to herein for illustrative purposes
only. The Company does not promise any amounts as set
forth in Exhibit "A".
F. Index Retirement Benefit:
The Index Retirement Benefit for each Executive in the Retention Plan for each
Plan Year shall be equal to the excess (if any) of the Index for that Plan Year
over the Cost of Funds Expense for that Plan Year. For further reference on the
definition(s) as set forth herein, please see Exhibit "A" attached hereto. Said
Exhibit "A" is referred to herein for illustrative purposes only. The Company
does not promise any amounts as set forth in Exhibit "A".
G. 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 contract(s) were purchased on
the Effective Date of the Executive Plan.
Insurance Company:
Policy Form:
Policy Name:
Insured's Age and Sex:
Riders:
Ratings:
Option:
Face Amount:
Premiums Paid:
Number of Premium Payments:
Purchase Date
If such contracts of life insurance are not purchased
or are subsequently surrendered or lapsed, then the
Bank shall receive annual policy illustrations that
assume the above-described policies were purchased or
had not subsequently been surrendered or lapsed,
which illustration will 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
contracts are merely for purposes of calculating a
benefit. The Bank has no obligation to purchase such
life insurance and, if purchased, the Executives and
their beneficiary(ies) shall have no ownership
interest in such policy and shall never have a
greater interest in the benefits under this Retention
Plan and Agreement than that of an unsecured creditor
of the Bank.
H. Opportunity Cost :
The Opportunity Cost 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 any
Executive pursuant to the Retention Plan and Agreement (Paragraph II
hereinafter) plus the amount of all previous years after-tax Opportunity Costs,
and multiplying that sum by the Average Opportunity Cost. For further reference
on the definition(s) as set forth herein, please see Exhibit "A" attached
hereto. Said Exhibit "A" is referred to herein for illustrative purposes only.
The Company does not promise any amounts as set forth in Exhibit "A".
I. Change of Control:
For purposes of this Retention Plan and 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
52
"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.
J. Normal Retirement Age:
Normal Retirement Age shall mean the date on which the Executive attains age
sixty-two (62).
K. Average Opportunity Cost:
Average Opportunity Cost is the average annual after tax cost of
interest-bearing deposit liabilities computed on a calendar year basis.
L. For Cause:
The term for "cause" shall mean the commission of acts or omissions by the
executive which constitute fraud, dishonesty, excessive absenteeism without
approval of the employer (provided such absenteeism is not caused by
disability), a criminal act involving the person or property of others or the
public generally, gross neglect of duty resulting in substantial loss to the
employer or any affiliate, or willful failure to carry out reasonable and legal
duties and responsibilities consistent with his duties. If a dispute arises as
to discharge for "cause", such dispute shall be resolved by arbitration as set
forth in this Retention Plan and Agreement.
II. INDEX BENEFITS
A. Retirement Benefits:
An Executive who remains employed by the Company until the Normal Retirement Age
shall be entitled to receive the balance in the Pre-Retirement Account in one
hundred twenty (120) equal monthly installments commencing thirty (30) days
following the Executive's retirement. In addition to these payments and
commencing in conjunction therewith, the Index Retirement Benefit, if any, for
each Plan Year subsequent to the Executive's retirement, and including the
remaining portion of the Plan Year following said retirement, shall be paid to
the Executive until the Executive's death.
B. Termination of Employment:
No benefits will be paid to the Executive or his beneficiary(ies) in the event
of termination of employment for any reason other than the retirement,
disability or death of the Executive or pursuant to Article IV, hereinafter.
C. Death:
Should the Executive die prior to having received the balance of the
Pre-Retirement Account payable to the Executive under the terms of this
Retention Plan, the unpaid balance shall be paid in a lump sum to the individual
or individuals the Executive may have designated in writing and filed with the
Company. In the absence of any effective designation of beneficiary(ies), the
unpaid balance shall be paid as set forth herein to the duly qualified executor
or administrator of the Executive's estate. Said payment due hereunder shall be
made the first day of the second month following the death of the Executive.
D. Death Benefits:
Except as set forth above, there is no death benefit provided under this
Agreement.
III. RESTRICTION 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 Retention Plan and Agreement. The Executive,
his/her beneficiary(ies), or any successor in interest 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 Retention Plan and Agreement or
to refrain from funding the same and to determine the extent,
nature and method of such funding. Should the Company elect to
fund this Retention Plan, in whole or in part, at no time
shall any Executive be deemed to have any lien nor right,
title or interest in or to any specific funding investment or
to any assets of the Company.
53
If the Company elects to invest in a life insurance,
disability or annuity policy upon the life of the Executive,
then the Executive shall assist the Company by freely
submitting to a physical exam and supplying such additional
information necessary to obtain such insurance or annuities.
IV. TERMINATION OF SERVICE AFTER A CHANGE OF CONTROL
If the Executive suffers a Termination of Service, other than
for cause, during the twelve months prior to a Change in
Control, or at anytime thereafter, (unless the Executive
voluntarily terminates his employment within 90 days following
the effective date of the change in control), then the
Executive shall receive all benefits provided for in this
Retention Plan and Agreement upon death (if applicable),
disability or attaining Normal Retirement Age, as if the
Executive had been continuously employed by the Company until
such event.
V. COMPETITION AFTER TERMINATION OF SERVICE
No benefits shall be payable if, at anytime within three (3)
years following the Executive's Termination of Service or
Retirement, the Executive, without the prior written consent
of the Company, engages in, becomes interested in, directly or
indirectly, as a sole proprietor, as a partner in a
partnership, or as a substantial shareholder in a corporation,
or becomes associated with, in the capacity of employee,
director, officer, principal, agent, trustee or in any other
capacity whatsoever, any enterprise conducted in the trading
area (within a 50 mile radius from the Company's main office
and 25 miles from any branch office) of the business of the
Company, which enterprise is, or may be deemed to be,
competitive with any business carried on by the Company as of
the date of the Executive's Termination of Employment or
retirement.
VI. SOLICIATION AFTER TERMINATION OF EMPLOYMENT
No benefits shall be payable if, at anytime within five (5)
years following the Executive's Termination of Service or
Retirement, the Executive, without prior written consent of
the Company, solicits any employee of the Company for the
purpose of hiring such employee away from the Company.
Likewise, no benefits shall be payable if, during such five
year period, the Executive, without the prior written consent
of the Company, solicits any entity or person that was a
customer of the Company within twelve months prior to such
termination for the purpose of obtaining such customer's
business relationship. VII. MISCELLANEOUS
A. Alienability and Assignment Prohibition:
Neither the Executive, nor the Executive's surviving spouse, nor any other
beneficiary(ies) under this Retention Plan 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 said benefits be subject to seizure for the payment of any debts,
judgments, alimony or separate maintenance owed by the Executive or the
Executive's beneficiary(ies), nor be transferable by operation of law in the
event of bankruptcy, insolvency or otherwise. In the event the Executive or any
beneficiary attempts assignment, commutation, hypothecation, transfer or
disposal of the benefits hereunder, the Company's liabilities hereunder shall
forthwith cease and terminate.
B. Binding Obligation of the Bank and any Successor in
Interest:
The Company shall not merge or consolidate into or with another bank or holding
company or sell substantially all of its assets to another bank, firm or person
until such bank, firm or person expressly agrees, in writing, to assume and
discharge the duties and obligations of the Company under this Retention Plan.
This Retention 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
Executive, this Retention Plan may be amended or revoked at any time or times,
in whole or in part, by the mutual written consent of the Executive and the
Company.
D. Gender:
Whenever in this Retention Plan and Agreement words are used in the masculine or
feminine gender, they shall be read and construed as in the masculine or
feminine gender, whenever they should so apply.
54
E. Effect on Other Bank Benefit Plans:
Nothing contained in this Retention Plan and Agreement shall affect the right of
the Executive 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 Retention Plan and Agreement are inserted for
reference and convenience only and shall not be deemed a part of this Retention
Plan and Agreement.
G. Applicable Law:
The validity and interpretation of this Retention Plan and Agreement shall be
governed by the laws of the Commonwealth of Virginia.
H. 12 U.S.C.Section 1828(k):
Any payments made to the Executive pursuant to this Retention Plan and
Agreement, 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 Retention Plan and
Agreement 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
Retention Plan and Agreement shall remain in full force and effect
notwithstanding such partial invalidity.
J. Employment:
No provision of this Retention Plan and Agreement shall be deemed to restrict or
limit any existing employment agreement by and between the Company and the
Executive, nor shall any conditions herein create specific employment rights to
the Executive nor limit the right of the Employer to discharge the Executive
with or without cause. In a similar fashion, no provision shall limit the
Executive's rights to voluntarily sever the Executive's employment at any time.
K. Exhibit A:
For further reference on the definition(s) as set forth herein, please see
Exhibit "A" attached hereto. Said Exhibit "A" is referred to herein for
illustrative purposes only. The Company does not promise any amounts as set
forth in Exhibit "A".
VIII. ERISA PROVISION
A. Named Fiduciary and Plan Administrator:
The "Named Fiduciary and Plan Administrator" of this Retention Plan and
Agreement shall be First Community Bank, N.A., until its resignation or removal
by the Board. As Named Fiduciary and Plan Administrator, the Bank shall be
responsible for the management, control and administration of the Retention Plan
and Agreement. The Named Fiduciary may delegate to others certain aspects of the
management and operation responsibilities of the Retention Plan and Agreement
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 Retention Plan and
Agreement and benefits are not paid to the Executive (or to the Executive's
beneficiary(ies) in the case of the Executive'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
its specific reasons for such denial, reference to the provisions of this
Retention Plan and Agreement 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.
55
If claimants dispute the benefit denial based upon completed performance of this
Retention Plan and Agreement 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 Executive 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.
IN WITNESS WHEREOF, the parties hereto acknowledge that each
has carefully read this Retention Plan and Agreement and executed the
original thereof on the ______ day of _________, ______, and that, upon
execution, each has received a conforming copy.
FIRST COMMUNITY BANCSHARES, INC.
BLUEFIELD, VIRGINIA
BY:
-----------------------------------
CHAIRMAN OF THE BOARD OF DIRECTORS
BY:
-----------------------------------
EXECUTIVE
- -------------------------------
WITNESS
- -------------------------------
WITNESS
AMENDMENT
TO THE FIRST COMMUNITY BANCSHARES, INC.
AND AFFILIATES EXECUTIVE RETENTION PLAN AND
AGREEMENT
This Amendment made and entered into on the 11th day of May 2000, by
and between First Community Bancshares, Inc., a Bank organized and existing
under the laws of the State of Nevada, hereinafter referred to as the, "Bank",
and _______________, a Key Employee and Executive of the Bank, hereinafter
referred to as the, "Executive", shall effectively amend the First Community
Bancshares, Inc. and Affiliates Executive Retention Plan Agreement as
specifically set forth herein pursuant to Subparagraph VII(C) of said Agreement.
Subparagraph I(G) titled, "Index", of the agreement shall be amended to include
the following information:
Insurance Company Jefferson Pilot Life Insurance Company
Policy Form: Flexible Premium Adjustable Life
Policy Name: Executive Security Plan VI
Insured's Age and Sex: __/______
Riders: None
Ratings: According to the health of the proposed insured
Option: Level
Face Amount: $768,000
Premiums Paid: $300,000
Number of Premium Payments Single
Purchase Date February 2, 2000
Insurance Company Massachusetts Mutual Life Insurance Company
Policy Form: Flexible Premium Adjustable Life
Policy Name: Strategic Life Exec
Insured's Age and Sex: __/_____
Riders: None
Ratings: According to the health of the proposed insured
Option: Level
Face Amount: $804,000
Premiums Paid: $300,000
Number of Premium Payments Single
Purchase Date February 3, 2000
This Amendment shall be effective the 11th day of May, 2000, and the
information set forth hereinabove shall be inserted in Subparagraph I(G) of said
participant agreement. 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 agreement.
IN WITHNESS WHEREOF, the parties hereto acknowledge that each has
carefully read this Amendment and executed the original thereof on the 11th day
of May, 2000, and that, upon execution, each has received a conforming copy.
First Community Bancshares, Inc.
- -------------------------- ----------------------------------
Witness By
- -------------------------- ----------------------------------
Witness Executive
56
BENEFICIARY DESIGNATION FORM
FOR THE EXECUTIVE
RETENTION PLAN AND AGREEMENT
PRIMARY DESIGNATION:
NAME ADDRESS RELATIONSHIP
---- ------- ------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
SECONDARY (CONTINGENT) DESIGNATION:
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
All sums payable under the Executive Retention Plan and Agreement, by reason of
my death, shall be paid to the Primary Beneficiary, if he, she or they survive
me, and if no Primary Beneficiary shall survive me, then to the Secondary
(Contingent) Beneficiary.
- ---------------------------------- ------------------------------------
SIGNATURE OF PARTICIPANT DATE
57
FIRST COMMUNITY BANCSHARES, INC.
LIFE INSURANCE
ENDORSEMENT METHOD SPLIT DOLLAR PLAN
AND AGREEMENT
Insurer: Jefferson Pilot Life Insurance Company
Massachusetts Mutual Life Insurance
Policy Number: JP5098233
0 036 131
Company: First Community Bancshares, Inc.
and it's Affiliates
Insured:
Relationship of Insured
to Company: Executive
The respective rights and duties of the Company and the Insured in the
above-referenced policy shall be pursuant to the terms set forth below:
I. DEFINITIONS
Refer to the policy contract for the definition of all terms
in this Plan and Agreement not defined herein.
II. POLICY TITLE AND OWNERSHIP
Title and ownership shall reside in the Company for its use and for the use of
the Insured all in accordance with this Plan and Agreement. Where the Company
and the Insured (or assignee, with the consent of the Insured) mutually agree to
exercise the right to increase the coverage under the subject Split Dollar
policy, then, in such event, the rights, duties and benefits of the parties to
such increased coverage shall continue to be subject to the terms of this Plan
and Agreement.
III. BENEFICIARY DESIGNATION RIGHTS
The Insured (or assignee) shall have the right and power to designate a
beneficiary or beneficiaries to receive the Insured's share of the proceeds
payable upon the death of the Insured, and to elect and change a payment option
for such beneficiary, subject to any right or interest the Company may have in
such proceeds, as provided in this Plan and Agreement.
IV. PREMIUM PAYMENT METHOD
The Company shall pay, in a single deposit, an amount equal to the premiums
calculated under provisions of the Executive Retention Plan and Agreement.
V. TAXABLE BENEFIT
Annually the Insured will receive a taxable benefit equal to the assumed cost of
insurance as required by the Internal Revenue Service. The Company (or its
administrator) will report to the Insured the amount of imputed income each year
on Form W-2 or its equivalent.
VI. ENTITLEMENT TO THE CASH SURRENDER VALUE OF THE POLICY
The Company shall be entitled to an amount equal to the policy's cash value, as
that term is defined in the policy contract, less any applicable surrender
charges. Such cash value shall be determined and paid as of the date of death.
VII. DIVISION OF DEATH PROCEEDS
Subject to Paragraphs VI, IX, and XIV herein, the division of the death proceeds
of the policy is as follows:
A. Should the Insured be employed by the Company,
disabled or retired on the date of death, the
Insured's beneficiary(ies), designated in accordance
with Paragraph III, shall be entitled to an
58
amount equal to eighty percent (80%) of the net at
risk insurance portion of the proceeds. The net at
risk insurance portion is the total proceeds less the
cash value of the policy.
B. The Company shall be entitled to the remainder of
such proceeds.
C. Should the Insured not be employed by the Company for
reasons other than disability or retirement at the
time of his death, no benefits will be paid the
insured's beneficiary(ies).
D. The Company and the Insured (or assignees) shall
share in any interest due on the death proceeds on a
pro rata basis as the proceeds due each respectively
bears to the total proceeds, excluding any such
interest.
VIII. TERMINATION OF PLAN AND AGREEMENT
This Plan and Agreement shall terminate upon the insured leaving the employment
of the Company (voluntarily or involuntarily).
Except as provided above, this Plan and Agreement shall terminate upon
distribution of the death benefit proceeds and the cash value in accordance with
Paragraph VI and VII above.
IX. INSURED'S OR ASSIGNEE'S ASSIGNMENT RIGHTS
The Insured may not, without the written consent of the Company, assign to any
individual, trust or other organization, any right, title or interest in the
subject policy nor any rights, options, privileges or duties created under this
Plan and Agreement.
X. PLAN AND AGREEMENT BINDING UPON THE PARTIES
This Plan and Agreement shall bind the Insured and the Company, their heirs,
successors, personal representatives and assigns.
XI. ERISA PROVISIONS
The following provisions are part of this Plan and Agreement and are intended to
meet the requirements of the Employee Retirement Income Security Act of 1974
("ERISA"):
A. Named Fiduciary and Plan Administrator.
The "Named Fiduciary and Plan Administrator" of this Endorsement Method Split
Dollar Plan and Agreement shall be First Community Bank, N.A. until resignation
or removal by the Board of Directors. As Named Fiduciary and Plan Administrator,
the Bank shall be responsible for the management, control and administration of
this Split Dollar Plan and Agreement as established herein. The Named Fiduciary
may delegate to others certain aspects of the management and operation
responsibilities of the Plan, including the employment of advisors and the
delegation of any ministerial duties to qualified individuals.
B. Funding Policy.
The funding policy for this Split Dollar Plan and Agreement shall be to maintain
the subject policy in force by purchasing a single premium insurance product.
C. Basis of Payment of Benefits.
Direct payment by the Insurer is the basis of payment of benefits under this
Plan and Agreement, with those benefits in turn being based on the payment of
premiums as provided in the Executive Retention Plan and Agreement.
D. Claim Procedures.
Claim forms or claim information as to the subject policy can be obtained by
contacting Benmark, 1100 Circle 75 Parkway, Suite 300, Atlanta, Georgia 30339.
When the Named Fiduciary has a claim which may be covered under the provisions
described in the insurance policy, they should contact the office named above,
and they will either complete a claim form and forward it to an authorized
representative of the Insurer or advise the named Fiduciary what further
requirements are necessary. The Insurer will evaluate and make a decision as to
payment. If the claim is payable, a benefit check will be issued in accordance
with the terms of this Plan and Agreement.
In the event that a claim is not eligible under the policy, the Insurer will
notify the Named Fiduciary of the denial pursuant to the requirements under the
terms of the policy. If the Named Fiduciary is dissatisfied with the denial of
the claim and wishes to contest such claim denial, they should contact the
office named above and they will assist in making inquiry to the Insurer. All
objections to the Insurer's actions should be in writing and submitted to the
office named above for transmittal to the Insurer.
59
XII. GENDER
Whenever in this Plan and Agreement 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.
XIII. INSURANCE COMPANY NOT A PARTY TO THIS PLAN AND AGREEMENT
The Insurer shall not be deemed a party to this Plan and Agreement, but will
respect the rights of the parties as herein developed upon receiving an executed
copy of this Plan and Agreement. Payment or other performance in accordance with
the policy provisions shall fully discharge the Insurer for any and all
liability.
XIV. CHANGE OF CONTROL
For purposes of this Plan and 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 or series of transactions 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.
Upon a Change of Control, if the Insured's employment is subsequently
terminated, except for Cause, then the Insured shall be one hundred percent
(100%) vested in the benefits promised in this Plan and Agreement. Therefore,
upon the death of the Insured, the Insured's beneficiary(ies) (designated in
accordance with Paragraph III) shall receive the death benefit provided herein
as if the Insured had died while employed by the Company, whether or not such
Insured remains employed by the Company.
Cause for this Plan and Agreement shall mean, any of the following that result
in a material adverse effect on the Company: (i) gross negligence or gross
neglect; (ii) conviction for a felony involving fraud or dishonesty; (iii) a
breach of fiduciary duty involving personal profit; or (iv) excessive
absenteeism without approval of the employer (provided such absenteeism is not
caused by disability). If a dispute arises as to discharge for "cause", such
dispute shall be resolved by arbitration as set forth in the Executive Retention
Plan and Agreement.
XV. AMENDMENT OR REVOCATION
It is agreed by and between the parties hereto that, during the lifetime of the
Insured, this Plan and Agreement may be amended or revoked at any time or times,
in whole or in part, by the mutual written consent of the Insured and the
Company.
XVI. EFFECTIVE DATE
The Effective Date of this Plan and Agreement shall be ____________________.
XVII. SEVERABILITY AND INTERPRETATION
If a provision of this Plan and Agreement is held to be invalid or
unenforceable, the remaining provisions shall nonetheless be enforceable
according to their terms. Further, in the event that any provision is held to be
overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable according
to law and enforced as amended.
XVIII. APPLICABLE LAW
The validity and interpretation of this Plan and Agreement shall be governed by
the laws of the Commonwealth of Virginia.
Executed at ____________, ____________ this ______ day of _____________, ______.
FIRST COMMUNITY BANCSHARES, INC.
Bluefield, Virginia
By:
- --------------------------- ---------------------------------
Witness Title
- -------------------------- ------------------------------------
Witness Insured
60
BENEFICIARY DESIGNATION FORM
FOR THE INSURANCE ENDORSEMENT METHOD
SPLIT DOLLAR PLAN AND AGREEMENT
PRIMARY DESIGNATION:
NAME ADDRESS RELATIONSHIP
---- ------- ------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
SECONDARY (CONTINGENT) DESIGNATION:
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
All sums payable under the Life Insurance Endorsement Method Split Dollar Plan
and 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.
- ---------------------------------- ------------------------------------
Signature of Participant Date
61