Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) dated as of
June 17, 2008, is made by and between First Community
Corporation, a South Carolina corporation (the
“Company”), First Community Bank, N.A., (the
“Bank”), which is a wholly owned subsidiary of the
Company (the Company and the Bank collectively referred to
herein as the “Employer”), and Joseph G. Sawyer, an
individual resident of South Carolina (the
“Executive”).
The
Employer presently employs the Executive as its Chief Financial
Officer and Senior Vice President. The Employer recognizes that
the Executive's contribution to the growth and success of the
Employer is substantial. The Employer desires to provide for the
continued employment of the Executive and to make certain
changes in the Executive's employment arrangements which the
Employer has determined will reinforce and encourage the
continued dedication of the Executive to the Employer and will
promote the best interests of the Employer and the
Company’s shareholders. The Executive is willing to
terminate his interests and rights under the existing employment
agreement with the Bank and to continue to serve the Employer on
the terms and conditions herein provided.
In
consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
1.
Employment
. The Employer shall continue to employ the
Executive, and the Executive shall continue to serve the
Employer, as Chief Financial Officer and Senior Vice President
of the Company and the Bank
upon the terms and conditions set forth herein. The Executive
shall have such authority and responsibilities consistent with
his position as are set forth in the Company's or the Bank's
Bylaws or assigned by the Company's or the Bank's board of
directors (collectively, the “Board”) from time to
time. The Executive shall devote his full business time,
attention, skill and efforts to the performance of his duties
hereunder, except during periods of illness or periods of
vacation and leaves of absence consistent with Bank policy. The
Executive may devote reasonable periods to service as a director
or advisor to other organizations, to charitable and community
activities, and to managing his personal investments, provided
that such activities do not materially interfere with the
performance of his duties hereunder and are not in conflict or
competitive with, or adverse to, the interests of the Company or
the Bank. The Executive agrees to conduct himself in accordance
with the code of ethics for officers and employees adopted by
the Employer, as
amended from time to time.
2.
Term . Unless earlier terminated as provided
herein, the Executive's employment under this Agreement shall
commence on the date hereof and be for a term of three years
(the “Term”). At the end of each day of the Term,
the Term shall be extended for an additional day so that the
remaining term shall continue to be three years; provided that
the Executive or the Employer may at any time, by written
notice, fix the Term to a finite term of three years commencing
with the date of the notice, in which case the Agreement shall
continue through its
remaining
term but shall not be extended absent written agreement by both
the Employer and the Executive.
3.
Compensation and
Benefits .
a. The Employer
shall pay the Executive an annual base salary of $140,000
which shall be paid in
accordance with the Employer’s standard payroll
procedures, which shall be no less frequently than monthly. The
Employer shall have the right to increase this salary from time
to time in accordance with the salary payment practices of the
Employer. The Board shall review the Executive's salary at least
annually and may increase the Executive's base salary if it
determines in its sole discretion that an increase is
appropriate.
b. The Executive
shall participate in the Employer’s long-term equity
incentive program and be eligible for the grant of stock
options, restricted stock, and other awards thereunder or under
any similar plan adopted by the Company. Any options or similar
awards shall be issued to Executive at an exercise price of not
less than the stock's current fair market value as of the date
of grant, and the number of shares subject to such grant shall
be fixed on the date of grant.
c. The Executive shall participate
in all retirement, health, welfare insurance and other benefit
plans or programs of the Employer now or hereafter applicable
generally to employees of the Employer or to a class of
employees that includes senior executives of the Employer.
d. The Employer shall
reimburse the Executive for reasonable travel and other
expenses, including cell phone expenses related to the
Executive's duties, which are incurred and accounted for in
accordance with the normal practices of the Employer. The
Employer shall reimburse the Executive for such expenses within
sixty days of Executive's notice to Employer of such
expense.
e. The Employer shall
provide the Executive with annual paid time off, which includes
sick leave, in accordance with the Employer’s Benefit
policy, and which shall be taken in accordance with any banking
rules or regulations governing paid time off leave. Except as
allowed in accordance with the Employer’s Benefit policy,
paid time off days may not be carried forward into following
calendar years, and any payments made by the Employer to the
Executive as compensation for paid time off days shall be paid
in accordance with the Employer’s standard payroll
procedures, which shall be no less frequently than monthly.
f. The Executive shall
be eligible to receive cash bonuses based on the Executive's
achievement of specified goals and criteria. These goals and
criteria may include both annual and long-term goals, may
provide for vesting over a specified time period, and shall be
established annually by the Human Resources Committee of the
Board of Directors. For purposes of this Agreement, a bonus
shall not be deemed to be earned prior to the date it is
actually paid to the Executive except to the extent that the
Employer specifically provides otherwise in a writing delivered
to the Executive. Any bonus payment made pursuant to this
Section 3(f) shall be made the earlier of (i) 70 days after the
previous year end for which the
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bonus was earned by the Executive and became a
payable of the Employer or (ii) the first pay period following
the Employer's press release announcing its previous year's
financial performance.
4.
Termination
.
a. The
Executive's employment under this Agreement may be
terminated prior to the end of the Term only as provided in this
Section 4.
b. The
Agreement will be terminated upon the death of the Executive. In
this event, the Employer shall pay Executive's estate any sums
due him as base salary and/or reimbursement of expenses through
the end of the month during which death occurred in accordance
with the Employer's normal payroll practices, which shall mean
no less frequently than monthly. The Employer shall also pay the
Executive's estate any bonus earned or accrued through the date
of death. Any bonus for previous years which was not yet paid
will be paid pursuant to the terms as set forth in Section 3(f).
Any bonus that is earned in the year of death will be paid on
the earlier of (i) 70 days after the year end in which the
Executive died or (ii) the first pay period following the
Employer's press release announcing its financial performance
for the year in which the Executive died. To the extent that the
bonus is performance-based, the amount of the bonus will be
calculated by taking into account the performance of the Company
for the entire year and prorated through the date of Executive's
death.
c. The
Employer may terminate the Executive's Employment upon the
Disability of the Executive for a period of 180 days. During the
period of any Disability leading up to the Executive’s
Termination of Employment under this provision, the Employer
shall continue to pay the Executive his full base salary at the
rate then in effect and all perquisites and other benefits
(other than any bonus) in accordance with the Employer's normal
payroll schedule (and in no event less frequently than monthly)
until the Executive becomes eligible for benefits under any
long-term disability plan or insurance program maintained by the
Employer, provided that the amount of any such payments to the
Executive shall be reduced by the sum of the amounts, if any,
payable to the Executive for the same period under any other
disability benefit or pension plan covering the Executive.
Furthermore, the Employer shall pay the Executive any bonus
earned or accrued through the date of Disability. Any bonus for
previous years which was not yet paid will be paid pursuant to
the terms as set forth in Section 3(f). Any bonus that is earned
in the year of Disability will be paid on the earlier of (i) 70
days after the year end in which Executive became Disabled or
(ii) the first pay period following the Employer's press release
announcing its financial performance for the year in which the
Executive became Disabled. Nothing herein shall prohibit the
Employer from hiring an acting chief financial officer prior to the expiration of this
180-day period.
d. The Employer may
terminate the Executive's Employment for Cause upon delivery of
a Notice of Termination to the Executive. If the Executive's
employment is terminated for Cause under this provision, the
Executive shall receive only any sums due him as base salary
and/or reimbursement of expenses through the date of
termination, which shall
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be paid in
accordance with the Employer’s normal payroll practices,
which shall mean no less frequently than monthly.
e. The
Employer may terminate the Executive's employment without Cause upon delivery of
a Notice of Termination to the Executive. If the Executive's employment is terminated without Cause
under this provision, subject to the possibility of a six-month
delay described below in this Section 4(e), beginning on the
first day of the month following date of the Executive's termination, and continuing on the first
day of the month for a
number of months equal to the lesser of (i) the number of
Executive's full years of service with the Employer, or (ii) 12
months, the Employer shall pay to the Executive severance compensation in an amount equal
to 100% of his then current monthly base salary. Employer shall
also pay the Executive any bonus earned or accrued through the
date of termination (including any amounts awarded for previous
years but which were not yet vested). Any bonus for previous
years which was not yet paid will be paid pursuant to the terms
as set forth in Section 3(f). Any bonus that is earned in the
year of the Executive's termination will be paid on the earlier of
(i) 70 days after the year end in which the Executive was terminated or (ii) the first pay
period following the Employer's press release announcing its
previous year's financial performance. If when
Executive's employment terminates he is a specified
employee within the meaning of Section 409A of the Internal
Revenue Code, and if the benefits under this Section 4(e) would
be considered deferred compensation under Section 409A, and
finally if an exemption from the six-month delay requirement of
Section 409A(a)(2)(B)(i) is not available, the following
benefits under this Section 4(e) shall be paid to the
Executive as follows: severance compensation in an
amount equal to the
number of months deferred times 100% of his then current monthly base salary, any
bonus for previous years which was not yet paid, and any bonus
that is earned in the year of the Executive's termination will be paid in a single lump
sum on the date that is six months and one day following date
of Executive's
termination; thereafter on the
first day of the month until such amount as determined above
shall have been paid in full, the Employer shall pay to the
Executive severance compensation in an amount equal
to 100% of his then current monthly base salary.
f. The Executive may
terminate his employment at any time by delivering a Notice of
Termination at least 14 days prior to such termination, and such
termination shall not in and of itself be, nor shall it be
deemed to be, a breach of this Agreement. If the Executive
terminates his employment under this provision, the Executive
shall receive any sums due him as base salary and/or
reimbursement of expenses through the date of such termination,
which shall be paid in accordance with the Employer’s
normal payroll practices, which shall mean no less frequently
than monthly.
g. Upon the occurrence of a
Change in Control, and regardless of whether the
Executive remains employed by the Employer or its
successor following a Change in Control, the Executive shall be entitled to the
following:
(i) within 15
days, the Employer shall pay the Executive cash compensation in an amount equal
to 100%
of his then current annual base salary
multiplied by two as well as any bonus earned or accrued
through the date of the Change in Control, subject to the
provisions of Section 4(k) below;
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(ii) for a period of two
years, the Employer shall at its expense continue, on behalf of the
Executive, the life insurance, disability, medical, dental, and
hospitalization benefits provided (x) to the Executive at any time
during the 90 day period prior to the Change in Control or at any
time thereafter or (y) to other similarly situated executives who
continue in the employ of the Employer. Such coverage and benefits
(including deductibles and costs) shall be no less favorable to the
Executive and his dependents and beneficiaries than the most
favorable of such coverages and benefits referred to above.
The Employer's obligation hereunder with respect to the foregoing
benefits shall be limited to the extent that the Executive obtains
any such benefits pursuant to a subsequent employer's benefit
plans, in which case the Employer may reduce the coverage of any
benefits it is required to provide the Executive hereunder as long
as the aggregate coverages and benefits of the combined benefit
plans is no less favorable to the Executive than the coverages and
benefits required to be provided hereunder. This subsection (ii)
shall not be interpreted so as to limit any benefits to which the
Executive or his dependents or beneficiaries may be entitled under
any of the Employer's employee benefit plans, programs or practices
following the Executive's Termination of Employment, including
without limitation, retiree medical and life insurance benefits.
Employer shall not, by virtue of this provision, be under any
obligation to continue to maintain any particular plan or program;
and
(iii) the
restrictions on any outstanding incentive awards (including
restricted stock) granted to the Executive under the Company's or the Bank’s
long-term equity incentive program or any other incentive plan
or arrangement shall lapse and such awards shall become 100%
vested, all stock options and stock appreciation rights granted
to the Executive
shall become immediately
exercisable and shall become 100% vested, and all performance
units granted to the Executive shall become 100% vested.
h. With the exceptions
of the provisions of this Section 4, and the express terms of
any benefit plan under which the Executive is a participant, it
is agreed that, upon Executive's Termination of Employment, the
Employer shall have no obligation to the Executive for, and the
Executive waives and relinquishes, any further compensation or
benefits (exclusive of COBRA benefits). Unless otherwise stated
in this Section 4, the effect of termination on any outstanding
incentive awards, stock options, stock appreciation rights,
performance units, or other incentives shall be governed by the
terms of the applicable benefit or incentive plan and/or the
agreements governing such incentives. At the time of Termination
of Employment, and as a condition to the Employer’s
obligation to pay any severance hereunder, the Employer and the
Executive shall enter into a release substantially in the form
attached hereto as Exhibit A acknowledging such remaining
obligations and discharging both parties, as well as the
Employer's officers, directors and employees with respect to
their actions for or on behalf of the Employer, from any other
claims or obligations arising out of or
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in
connection with the Executive's employment by the Employer,
including the circumstances of such termination.
i. The Company is aware
that upon the occurrence of a Change in Control, the Board or a
shareholder of the Company may then cause or attempt to cause
the Company to refuse to comply with its obligations under this
Agreement, or may cause or attempt to cause the Company to
institute, or may institute, litigation seeking to have this
Agreement declared unenforceable, or may take, or attempt to
take, other action to deny the Executive the benefits intended
under this Agreement. In these circumstances, the purpose of
this Agreement could be frustrated. It is the intent of the
parties that the Executive not be required to incur the legal
fees and expenses associated with the protection or enforcement
of the Executive’s rights under this Agreement by
litigation or other legal action because such costs would
substantially detract from the benefits intended to be extended
to the Executive hereunder, nor be bound to negotiate any
settlement of the Executive’s rights hereunder under
threat of incurring such costs. Accordingly, if at any time
after a Change in Control, it should appear to the Executive
that the Company is acting or has acted contrary to or is
failing or has failed to comply with any of its obligations
under this Agreement for the reason that it regards this
Agreement to be void or unenforceable or for any other reason,
or that the Company has purported to terminate the
Executive’s employment for Cause or is in the course of
doing so in either case contrary to this Agreement, or in the
event that the Company or any other person takes any action to
declare this Agreement void or unenforceable, or institutes any
litigation or other legal action designed to deny, diminish or
recover (other than as required by law) from the Executive the
benefits provided or intended to be provided to the Executive
hereunder, and the Executive has acted in good faith to perform
the Executive’s obligations under this Agreement, the
Company irrevocably authorizes the Executive from time to time
to retain counsel of the Executive’s choice at the expense
of the Company to represent the Executive in connection with the
protection and enforcement of the Executive’s rights
hereunder, including without limitation representation in
connection with termination of the Executive’s employment
contrary to this Agreement or with the initiation or defense of
any litigation or other legal action, whether by or against the
Executive or the Company or any director, officer, shareholder
or other person affiliated with the Company, in any
jurisdiction. The reasonable fees and expenses of counsel
selected from time to time by the Executive as hereinabove
provided shall be paid or reimbursed to the Executive by the
Company on a regular, periodic basis upon presentation by the
Executive of a statement or statements prepared by such counsel.
If other officers or key executives of the Company have retained
counsel in connection with the protection and enforcement of
their rights under similar agreements between them and the
Company, and, unless in the Executive’s sole judgment use
of common counsel could be prejudicial to the Executive or would
not be likely to reduce the fees and expenses chargeable
hereunder to the Company, the Executive agrees to use the
Executive’s best efforts to agree with such other officers
or executives to retain common counsel.
j. The parties
intend that the severance payments and other compensation
provided for herein are reasonable compensation for the
Executive's services to the Employer and shall not constitute
“excess parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986 and any
regulations thereunder. In the event that the Employer's
independent accountants acting as auditors for the Employer on
the date of a
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Change in
Control determine that the payments provided for herein
constitute “excess parachute payments,” then the
compensation payable hereunder shall be reduced to an amount the
value of which is $1.00 less than the maximum amount that could
be paid to the Executive without the compensation being treated
as “excess parachute payments” under Section 280G.
The allocations of the reduction required hereby among the
termination benefits payable to the Executive shall be
determined by the Executive.
k. If the
Executive is suspended or temporarily prohibited from
participating, in any way or to any degree, in the conduct of
the Employer's affairs by (1) a notice served under section 8(e)
or (g) of Federal Deposit Insurance Act (12 U.S.C. 1818 (e) or
(g)) or (2) as a result of any other regulatory or legal action
directed at the Executive by any regulatory or law enforcement
agency having jurisdiction over the Executive (each of the
foregoing referred to herein as a "Suspension Action"), and if
this Agreement is not terminated, the Employer's obligations
under this Agreement shall be suspended as of the earlier of the
effective date of such Suspension Action or the date on which
the Executive was provided notice of the Suspension Action,
unless stayed by appropriate proceedings. If the charges
underlying the Suspension Action are dismissed, the Bank
shall:
(i) pay on
the first day of the first month following such dismissal of
charges (or as provid
