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Exhibit 10(DD)
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 29th day of January,
2007 by and
between FNB CORPORATION (hereinafter referred to as the
Company), a bank
holding company, with its principal office located at 105 Arbor
Drive,
Christiansburg, Virginia, organized and existing under the laws
of the
Commonwealth of Virginia, which owns all of the outstanding
stock of First
National Bank, and William B. Littreal (the "Employee").
RECITALS
I. The Employee currently serves as a key employee member of
management of the Company and/or its affiliates and his services
and knowledge
are valuable to the Company and its affiliates.
II. The Board of Directors of the Company (as defined below)
has
determined that it is in the best interests of the Company and
its shareholders
to assure that the Company and its affiliates will have the
continued
dedication of the Employee, notwithstanding the possibility,
threat or
occurrence of a Change in Control (as defined below) of the
Company. The Board
believes it is imperative to diminish the inevitable distraction
or departure
of the Employee to the detriment of the Company and its
shareholders by virtue
of the personal uncertainties and risks created by a pending or
threatened
Change in Control and to encourage the Employee's full attention
and dedication
to the Company and its affiliates currently and in the event of
any threatened
or pending Change in Control. Therefore, in order to accomplish
these
objectives, the Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. Obligations of the Employee to Remain Employed. The
Employee
agrees that in the event any person or group attempts a Change
in Control, he
shall not, without the written agreement of the Board,
voluntarily leave the
employ of the Company without Good Reason (i) until such
attempted Change in
Control terminates or (ii) if a Change in Control shall occur,
until 90 days
following such Change in Control. For purposes of the foregoing
clause (i),
Good Reason shall be determined as if a Change in Control had
occurred when
such attempted Change in Control became known to the Board and
the Employee.
2. Obligations in Connection with and upon the Employee's
Termination
during the Coverage Period.
(a) Notice of Termination. Any termination of the Employee's
employment during the term of this Agreement (determined
pursuant to Section 5)
in connection with or after the occurrence of a Change in
Control by the
<PAGE> 1
Company or by the Employee, other than by reason of death, shall
be
communicated by Notice of Termination to the other party hereto
given. For
purposes hereof:
(1) "Notice of Termination" means a written notice given in
accordance with Section 9(c) of this Agreement which (A) states
whether
such termination is for Cause, Good Reason, Disability or
Mandatory
Retirement, (B) indicates the specific termination provision in
this
Agreement relied upon, if any, (C) to the extent applicable,
sets forth
in reasonable detail the facts and circumstances claimed to
provide a
basis for termination of the Employee's employment under the
provision so
indicated, and (D) if the Date of Termination is other than the
date of
receipt of such notice, specifies the termination date. The
failure by
the Employee or the Company to set forth in the Notice of
Termination any
fact or circumstance which contributes to a showing of Good
Reason, Cause,
Disability or Mandatory Retirement shall not waive any right of
the
Employee or the Company, respectively, hereunder or preclude the
Employee
or the Company, respectively, from asserting such fact or
circumstance in
enforcing the Employee's or the Company's rights hereunder.
(ii) "Date of Termination" means (A) if the Employee's
employment
is terminated by reason of Disability, the Date of Termination
shall be
the Disability Effective Date, (B) if the Employee's employment
is
terminated by the Company for any reason other than Disability,
the date
of the Notice of Termination or any later date specified
therein, as the
case may be, and (C) if the Employee's employment is terminated
by the
Employee for any reason, the date of the Company's receipt of
the Notice
of Termination or any later date specified therein, as the case
may be.
(b) Obligations of the Company in a Covered Termination. If
the
Employee's employment shall terminate by reason of a Covered
Termination during
the Coverage Period, then:
(1) the Company shall pay or cause to be paid to the Employee
in
a lump sum in cash within 30 days after the Date of Termination
the sum of
(1) the Employee's annual base salary through the Date of
Termination to
the extent not theretofore paid and (2) any compensation
previously
deferred by the Employee (together with any accrued interest or
earnings
thereon), to the extent not theretofore paid (the sum of the
amounts
described in clauses (1) and (2) above shall be hereinafter
referred to as
the "Accrued Obligations"); and
(ii) to the extent not theretofore paid or provided, the
Company
shall timely pay or cause to be paid or provide or cause to be
provided to
the Employee any other amounts or benefits required to be paid
or provided
or which the Employee is eligible to receive under any plan,
program,
policy or practice or contract or agreement of the Company and
its
affiliated companies (such other amounts and benefits shall be
hereinafter
referred to as the "Other Benefits"); and
(iii) the Company shall pay or cause to be paid to the
Employee
in a lump sum payment equal to the Employees then current Annual
Direct
Salary (as defined herein), minus applicable withholdings and
taxes..
Said sum shall be paid to the Employee within thirty (30) days
after the
Date of Termination:
<PAGE> 2
(iv) Annual Direct Salary For purposes of this Agreement,
Annual
Direct Salary shall be defined as the fixed, gross, base annual
salary
paid to the Employee at such time as the Corporation customarily
pays its
other employees and shall not include any benefits, bonuses,
incentives,
or other compensation.
(v) For one year following the Date of Termination, the
Employee
and his dependents will continue to be covered under all Welfare
Benefit
Plans in which the Employee or his dependents were
participating
immediately prior to the Date of Termination (the "Welfare
Continuance
Benefit"). The Company will pay all or a portion of the cost of
the
Welfare Continuance Benefit for the Employee and his dependents
under the
Welfare Plans on the most favorable same basis as in effect at
any time
during the 120-day period immediately preceding the Change in
Control
Effective Date or, if more favorable to the Employee, the basis
provided
generally at any time after the Change in Control Effective Date
to other
peer Employees of the Company and its affiliated companies and
the
Employee and/or his dependents will pay any additional costs. If
the
Employee becomes reemployed with another employer and is
eligible to
receive medical or other welfare benefits under another
employer-provided
plan, the medical and other welfare benefits described herein
shall be
secondary to those provided under such other plan during such
applicable
period of eligibility. For purposes hereof, the term "Welfare
Benefit
Plan" means the welfare benefit plans, practices, policies and
programs
provided by the Company and its affiliates (including,
without
limitation, medical, prescription, dental, disability, employee
life,
group life, accidental death and travel accident insurance plans
and
programs) to the extent applicable generally to other peer
Employees of
the Company and its affiliates, but in no event shall such
plans,
practices, policies and programs provide the Employee with
benefits which
are less favorable, in the aggregate, than the most favorable of
such
plans, practices, policies and programs in effect for the
Employee and/or
his dependents at any time during the 120-day period
immediately
preceding the Change in Control Effective Date or, if more
favorable to
the Employee, those provided generally at any time after the
Change in
Control Effective Date to other peer Employees of the Company
and its
affiliated companies. If participation in any one or more of the
Welfare
Plans included in the Welfare Continuance Benefit is not
possible under
the terms of the Welfare Plan or any provision of law would
create an
adverse tax effect for the Employee or the Company due to
such
participation, the Company will provide substantially identical
benefits
directly or through an insurance arrangement.
Notwithstanding anything to the contrary herein, if the
Employee's employment
shall terminate by reason of a Covered Termination during the
Coverage Period,
the Company shall not be obligated to pay any portion of the
monies and
provide benefits described above in this Section 2(b) other than
his Accrued
Obligations and Other Benefits, if any, unless within 30 days
after such
termination the Employee shall have executed and delivered to
the Company a
written release of all claims against the Company and its
affiliates and their
respective shareholders, partners, member, directors, managers,
officers,
employees, agents and attorneys, arising out of or related to
any act or
omission which occurred on or prior to the date on which such
release is
provided, in form and substance reasonably satisfactory to the
Company.
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(c) Obligations of the Company in a Noncovered Termination. If
the
Employee's employment shall terminate by reason of a Noncovered
Termination
during the Coverage Period, this Agreement shall terminate
without further
obligations to the Employee other than the obligation to pay to
the Employee
(i) his Accrued Obligations (as defined in paragraph (i) of
Section 2(b)) and
(ii) Other Benefits (as defined in paragraph (ii) of Section
2(b)), in each
case to the extent theretofore unpaid. If the Employee
voluntarily terminates
employment during the Coverage Period, excluding a termination
for Good Reason,
this Agreement shall terminate without further obligations to
the Employee,
other than for Accrued Obligations and the timely payment or
provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to
the Employee
in a lump sum in cash within 30 days of the Date of
Termination.
3. Full Settlement.
(a) Offset, Etc. Except as provided in the next sentence,
the
Company's obligation to make the payments provided for in this
Agreement and
otherwise to perform its obligations hereunder shall not be
affected by any
set-off, counterclaim, recoupment, defense or other claim, right
or action
which the Company may have against the Employee.
(b) Employee or Others. The amount of any payment or benefit
provided for hereunder (other than the Employee's annual base
salary through
the Date of Termination, the amount of any compensation
previously deferred by
the Employee, and Other Benefits) shall be reduced, offset and
subject to
recovery by the Company in the event and to the extent of any
compensation
earned by the Employee as a result of subsequent employment by a
banking
institution located within 50 miles of any location where the
Company or its
affiliates has a banking, loan production or other financial
services office
and earned within twelve (12) months after the Employee's Date
of Termination.
In no event shall the Employee be obligated to seek other
employment or take
any other action by way of mitigation of the amounts payable to
the Employee
under any of the provisions of this Agreement and, except as
provided in the
preceding sentence, such amounts shall not be reduced whether or
not the
Employee obtains other employment.
(c) Expenses in Dispute Resolution. In the event that either
party to
this Agreement is required to file a legal action due to a
breach or a dispute
over the terms and provisions of this agreement each party shall
bear its
costs of such action, including but not limited to, reasonable
attorney's fees
and neither shall have a cause of action or claim for the
recovery thereof
against the other party.
(d) Payment prior to Dispute Resolution. If there shall be
any
dispute between the Company and the Employee in the event of any
termination of
Employee's employment, then, unless and until there is a final,
nonappealable
judgment by a court of competent jurisdiction declaring that
such termination
was a Noncovered Termination or that the Company is not
otherwise obligated to
pay any amount or provide any benefit to the Employee and his
dependents or
other beneficiaries, as the case may be, under Section 2(b)
other than Accrued
Obligations and Other Benefits, the Company shall pay all
amounts, and provide
all benefits, to the Employee and his dependents or other
beneficiaries, as the
case may be, that the Company would be required to pay or
provide pursuant to
Section 2(b) as though such termination were a Covered
Termination.
Notwithstanding the foregoing, the Company shall not be required
to pay any
disputed amounts pursuant to this Section 3(c) except upon
receipt of an
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adequate bond, letter of credit or undertaking by or on behalf
of the Employee
to repay all such amounts to which the Employee is ultimately
adjudged by such
court not to be entitled.
4. Payment Limitation.
(a) Payment Limitation. Notwithstanding anything contained in
this
Agreement or any other agreement or plan to the contrary, the
payments and
benefits provided to, or for the benefit of, the Employee under
this Agreement
or under any other plan or agreement which become payable or are
taken into
account as a result of the Change in Control (the "Payments")
shall be reduced
(but not below zero) to the extent necessary so that no payment
to be made, or
benefit to be provided, to the Employee or for his benefit under
this Agreement
or any other plan or agreement shall be subject to the
imposition of an excise
tax under Section 4999 of the Internal Revenue Code of 1986, as
amended (the
"Code"), (such reduced amount is hereinafter referred to as the
"Limited
Payment Amount"). Unless the Employee shall have given prior
written notice
specifying a different order to the Company, the Company shall
reduce or
eliminate the Payments to the Employee by first reducing or
eliminating those
payments or benefits which are not payable in cash and then by
reducing or
eliminating cash payments, in each case in reverse order
beginning with
payments or benefits which are to be paid the farthest in time
from the
Determination (as hereinafter defined). Any notice given by the
Employee
pursuant to the preceding sentence shall take precedence over
the provisions of
any other plan, arrangement or agreement governing Employee's
rights and
entitlements to any benefits or compensation.
(b) Payment Limitation Determinations. All determinations
required to
be made under Section 4(a) through (c) shall be made by the
Company's public
accounting firm (the "Accounting Firm"). The Accounting Firm
shall provide its
calculations, together with detailed supporting documentation,
both to the
Company and the Employee within fifteen days after the receipt
of notice from
the Company that there has been a Payment (or at such earlier
times as is
requested by the Company) and, with respect to any Limited
Payment Amount, a
reasonable opinion to the Employee that he is not required to
report any excise
tax on his federal income tax return with respect to the Limited
Payment Amount
(collectively, the "Determination"). In the event that the
Accounting Firm is
serving as an accountant or auditor for the individual, entity
or group
effecting the Change in Control, the Employee shall appoint
another nationally
recognized public accounting firm to make the determination
required hereunder
(which accounting firm shall then be referred to as the
Accounting Firm
hereunder). All fees, costs and expenses (including, but not
limited to, the
costs of retaining experts) of the Accounting Firm shall be
borne by the
Company. The Determination by the Accounting Firm shall be
binding upon the
Company and the Employee (except as provided in paragraph (c)
below).
(c) Excess Payments Considered a Loan. If it is established
pursuant
to a final determination of a court or an Internal Revenue
Service (the "IRS")
proceeding which has been finally and conclusively resolved,
that Payments have
been made to, or provided for the benefit of, the Employee by
the Company,
which are in excess of the limitations provided in Section 4(a)
through (c)
(hereinafter referred to as an "Excess Payment"), such Excess
Payment shall be
deemed for all purposes to be a loan to the Employee made on the
date the
Employee received the Excess Payment and the Employee shall
repay the Excess
Payment to the Company on demand, together with interest on the
Excess Payment
<PAGE> 5
at the applicable federal rate (as defined in Section 1274(d) of
the Code) from
the date of Employee's receipt of such Excess Payment until the
date of such
repayment. As a result of the uncertainty in the application of
Section 4999
of the Code at the time of the Determination, it i
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