Exhibit 10.6
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 James C. Leventis, an
individual resident of South Carolina (the
“Executive”).
The
Employer presently employs the Executive as its Chairman of the
Board of the Bank and the Company and as an executive officer of
the Bank. 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 serve the Employer,
as Chairman of the Board of the Company and the Bank and as an
executive officer of 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 retainer of $11,000 and monthly board fees (subject to his attendance at
the monthly board meeting) of $950 for his service as Chairman of the Board
and a separate and distinct annual base salary of $82,500 for
his service as an executive officer of the Bank, all
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
compensation from time to time in accordance with
the compensation
practices of the Employer. The
Board shall review the Executive's compensation at least annually and may increase the
Executive's compensation 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 Employer. 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. For purposes of this
Agreement, a bonus shall not be deemed to be earned prior to the
date it is actually paid
2
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 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.
(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
3
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 for his activities as an executive officer of
the Bank (and not any compensation received for service as Chairman
of the Board) multiplied
by three
as well as
4
any bonus earned
or accrued through the date of the Change in Control, subject to
the provisions of Section 4(k) below.
(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
5
actions for or
on behalf of the Employer, from any other claims or obligations
arising out of or 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
6
Employer's
independent accountants acting as auditors for the Employer on
the date of a Change in Control determine that the payments
provided for herein constitute “excess parachute
payments,” then the compensation payable hereunder shall
be redu
