FIRST BANCORP STOCK OPTION AND PERFORMANCE UNIT AWARD AGREEMENT
Exhibit
10
FIRST
BANCORP
2007 EQUITY
PLAN
STOCK OPTION AND
PERFORMANCE
UNIT AWARD
AGREEMENT
THIS STOCK OPTION AND PERFORMANCE
UNIT AWARD AGREEMENT (this “Agreement”), made
effective as of ____________, 2008 (the “Grant Date”), is by
and between _____________________ (the “Participant”) and
First Bancorp (the “Company”).
BACKGROUND
STATEMENT
The
Company maintains the First Bancorp 2007 Equity Plan (the “Plan”), which is
incorporated into and forms a part of this Agreement, and the Participant has
been selected by the Compensation Committee of the Company’s Board of Directors,
which administers the Plan (the “Committee”), to
receive the Awards specified in this Agreement pursuant to the
Plan. On the Grant Date, the Participant was granted the Awards
described herein under the Plan and to be evidenced by this Agreement, which may
be physically executed and delivered after the Grant Date.
NOW, THEREFORE, IT IS AGREED,
by and between the Company and the Participant, as follows:
1.Terms of
Stock Option Award.
(a) Grant of
Options. Pursuant to the Plan, the Company hereby grants to
the Participant, as of the Grant Date, options (the “Options”) to purchase
all or any part of an aggregate of _______ shares of the Company’s Common Stock
(the “Option
Shares”), subject to, and in accordance with, the terms and conditions
set forth in this Agreement and the Plan. The exercise price for the
Options (the “Exercise
Price”) is $______ per Option Share. The Options and this
Agreement are subject to all of the terms and conditions of the Plan, which
terms and conditions are hereby incorporated by reference, and, except as
otherwise expressly set forth herein, the capitalized terms used in this
Agreement shall have the same definitions as set forth in the Plan.
(b) Nonqualified Stock
Options. The Options are not intended to constitute “incentive
stock options” as that term is used in Section 422 of the Internal Revenue Code,
as amended.
(c) Period of
Exercise. Subject to the limitations of this Agreement
(including, without limitation, the vesting requirements specified in this
Agreement) and the Plan, the Options shall be exercisable for a period of ten
years beginning on the Grant Date and ending on ____________, 2018 (the “Expiration
Date”).
(d) Vesting. The
Options shall vest in accordance with the terms of paragraph 3 of this
Agreement.
(e) Exercise of
Options. Subject to the terms of this Agreement and the Plan,
the vested Options may be exercised in whole or in part by giving written notice
to the Chief Financial Officer of the Company at its corporate headquarters
prior to the Company’s close of business on the Expiration Date, or if the
Expiration Date is not a business day, on the last business day that occurs
prior to the Expiration Date. Such notice shall specify the number of
Option Shares that the Participant elects to purchase, and shall be accompanied
by payment of the Exercise Price for the Option Shares indicated by the
Participant’s election. Payment shall be by cash or by check payable
as directed by the Company, except as may otherwise be permitted in accordance
with such rules and procedures, if any, as established by the Committee for such
purpose from time to time. The Options shall not be exercisable if
and to the extent the Company determines that such exercise would violate
applicable state or federal securities laws or the rules and regulations of any
securities exchange on which the Company’s common stock is traded. If
the Company makes such a determination, it shall use all reasonable efforts to
obtain compliance with such laws, rules and regulations. In making
any determination hereunder, the Company may rely on the opinion of counsel for
the Company.
(f) No Rights as
Shareholder. The Participant shall not have any rights of a
shareholder with respect to the Option Shares until a stock certificate has been
duly issued following exercise of the Options as provided herein.
2.
Terms of
Performance Unit Award.
(a) Pursuant
to the Plan, the Company hereby grants the Participant, as of the Grant Date, an
Award of units representing of the right to acquire ____ shares of the Company’s
common stock (the “Performance Units”),
which shall be subject to the terms and conditions of the Plan and this
Agreement, including the vesting requirements specified in paragraph 3 of this
Agreement. The Performance Units may be settled only in shares of the
Company’s common stock. The period from the Grant Date until such
Performance Units (or any applicable portion thereof) has vested in accordance
with paragraph 3 of this Agreement shall be the Restriction Period
applicable to such Performance Units (or any applicable portion
thereof).
(b) Until
the expiration of the applicable Restriction Period, the Participant shall not
have any rights of a shareholder with respect to the Performance Units until a
stock certificate has been duly issued following issuance of the common stock
underlying the Performance Units upon expiration of the applicable Restriction
Period.
3. Vesting. Up
to 1/3 of the total number of Option Shares and Performance Units granted
pursuant to this Agreement may vest annually as of December 31 of each year
beginning in 2010, if and to the extent that both (1) the Company’s performance
goals with respect to earnings per share, as adjusted for FDIC Insurance (the
“EPS Goals”)
for the corresponding performance period specified in the table below has been
met and (2) as of the Date of Vesting specified in the table below, the
Participant would still be entitled, under the terms of the Plan, as modified by
the terms of this paragraph 3, in the case of Options, to exercise such Options
to receive such Option Shares and, in the case of Performance Units, to receive,
free of the restrictions imposed by this Agreement and the Plan, the underlying
shares of Company common stock represented by such Performance
Units. The table below shows the applicable performance periods, EPS
Goals, dates of vesting, and number of Option Awards and Performance Unit Awards
that would vest as of each date of vesting if conditions (1) and (2) above are
met, based on whether the Company achieves the Threshold, Target, or Maximum EPS
Goal for the applicable performance period. To the extent the Company
achieves an EPS Goal in excess
2
of
Threshold but less than Target, or in excess of Target but less than Maximum,
the number of additional awards in excess of the level of EPS Goal achieved for
which vesting condition (1) above will be deemed satisfied will be prorated to
reflect the extent to which the Company’s performance fell between the EPS Goal
achieved and the next higher EPS Goal. If the Company fails to
meet the Threshold EPS Goal for a particular performance period, all Option
Shares and Performance Units subject to potential vesting based on performance
for that performance period shall immediately terminate and be of no further
force and effect; and if the Company meets either the Threshold or Target EPS
Goal, but not the Maximum EPS Goal, for a particular performance period, such
Options Shares and Performance Units subject to potential vesting based on
performance for that performance period in excess of the level of EPS Goal
achieved for that performance period (whether Threshold, plus any prorated
amount, or Target, plus any prorated amount), shall immediately terminate and be
of no further force and effect.
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Performance
Period
Year
Ended
December
31,
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EPS
Goals
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Date
of Vesting
(if
Performance
Goals
are
Achieved)
Year
Ended
December
31,
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#
of Awards that Vest if EPS Goals
and
Time to Vesting is Met
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Threshold
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Target
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Maximum
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Threshold
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Target
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Maximum
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Options
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Performance
Units
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Options
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Performance
Units
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Options
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Performance
Units
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2008
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***
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***
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***
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2010
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2009
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***
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***
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***
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2011
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2010
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***
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***
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***
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2012
|
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*** Information
redacted in accordance with Instruction 2 to Item 402(e) of Regulation
S-K.
In the
event of a Participant’s Termination or a Change in Control of the Company, the
vesting and exercisability of the Options and Performance Units represented
hereby shall be governed by the terms of the Plan applicable to such Awards,
except that, in lieu of the terms of Section 10.1(a) of the Plan, the following
terms shall apply: If the Participant’s Termination is due to death
or Disability, all of the Participant’s then unvested Options or Performance
Units with respect to which the EPS Goals for any applicable performance period
have been met prior to the time of the Participant’s Termination shall become
fully vested and, if applicable, exercisable, and all of the Participant’s
Options or Performance Units with respect to which the EPS Goals for any
applicable performance period have not been met prior to the time of
Participant’s Termination shall immediately terminate and be of no further force
and effect. Upon the Participant’s Termination for any other reason,
any Awards that are not vested and/or exercisable on the date of such
Termination shall immediately terminate and be of no further force and
effect.
4. Transferability. Except
as otherwise approved by the Committee, an Award granted pursuant to this
Agreement is not transferable other than as designated by the Participant by
will, the laws of descent and distribution or a qualified domestic relations
order.
5. Beneficiary
Designation. Each Participant may name a beneficiary or
beneficiaries to receive or exercise any vested Award that is unpaid or
unexercised at the Participant’s death. Unless otherwise provided in
the beneficiary designation, each designation will revoke all prior designations
made by the same Participant, must be made on a form prescribed by the Committee
and will be effective only when filed in writing with the
Committee. If a Participant has not made an effective beneficiary
designation, the deceased Participant’s beneficiary will be the Participant’s
surviving spouse
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or, if
none, the deceased Participant’s estate. The identity of a
Participant’s designated beneficiary will be based only on the information
included in the latest beneficiary designation form completed by the Participant
and will not be inferred from any other evidence.
6. Administration. The
authority to manage and control the operation and administration of this
Agreement shall be vested in the Committee, which shall have all powers with
respect to this Agreement as it has with respect to the Plan (to the fullest
extent permitted by the Plan). Any interpretation of the Agreement by
the Committee and any decision made by it with respect to the Agreement is final
and binding on all persons.
7. Plan
Governs. Notwithstanding anything in this Agreement to the
contrary, the terms of this Agreement shall be subject to the terms of the Plan,
a copy of which is attached hereto. This Agreement is subject to all
interpretations, amendments, rules and regulations promulgated by the Committee
from time to time pursuant to the Plan. If and to the extent of a
conflict between this Agreement and the terms of the Plan, the terms of the Plan
will govern.
8. No Right
to Employment. None of the actions of the Company in
establishing the Plan, the actions taken by the Company, the Board or the
Committee under the Plan, or the granting of any Award pursuant to this
Agreement shall be deemed (a) to create any obligation on the part of the
Company or any Subsidiary to retain the Participant in the employ of, or
continue the provision of services to, the Company or any Subsidiary, or
(b) to be evidence of any agreement or understanding, express or implied,
that the Participant has a right to continue as an employee for any period of
time or at any particular rate of compensation.
9. Notices. Any
written notices provided for in this Agreement or the Plan shall be in writing
and shall be deemed sufficiently given if either hand delivered or if sent by
fax or overnight courier, or by postage paid first-class
mail. Notices sent by mail shall be deemed received three business
days after mailing but in no event later than the date of actual
receipt. Notices shall be directed, if to the Participant, at the
Participant’s address indicated by the Company’s records, or if to the Company,
at the Company’s corporate headquarters.
10. Amendment. Subject
to the terms of the Plan, this Agreement may be amended or modified by
(i) unilateral action of the Committee or (ii) written agreement of
the Participant and the Company, in each case without the consent of any other
person.
11. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina.
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IN WITNESS WHEREOF, the
Participant has executed this Agreement, and the Company has caused this
Agreement to be executed in its name and on its behalf, effective as of the
Grant Date.
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Participant:
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Print
Name:
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FIRST
BANCORP
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By:
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Its:
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