Exhibit 10(a)


 


 





 


First Bancorp Annual Incentive Plan


 


February 24, 2015


 


This is a summary of the First Bancorp Annual
Incentive Plan and is not a formal legal document.


 




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First Bancorp Annual Incentive Plan





 


Introduction


 


First Bancorp (“First Bancorp”
or the “Bank”) is committed to rewarding key employees for their contributions to First Bancorp’s success. The
First Bancorp Annual Incentive Plan (the “Plan”) is part of a total compensation package which may include base salary,
annual incentives, long-term incentives and benefits. The Plan is designed to:


 


		§	Focus executives on building a strong
foundation for success and long-term sustainability that will enhance shareholder value. 



		§	Communicate expectations in terms of business
goals and results.



		§	Recognize and reward achievement of the
Bank’s annual business goals.



		§	Motivate and reward Maximum performance.



		§	Attract and retain talent needed for First
Bancorp’s success.



		§	Be competitive with the market.



		§	Encourage teamwork and collaboration.



		§	Ensure incentives are appropriately risk-balanced.



 


Effective Date and Plan Administrator


 


The Plan is effective January 1, 2015. The
Plan Administrator is the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”).
Participation and payments under this Plan are approved by the Committee Members. The Committee shall make its determinations regarding
eligibility, performance criteria, payouts and other terms and conditions typically within 90 days of the commencement of the performance
period. The Committee may delegate authority to appropriate officers, employees or agents of the Company to perform ministerial
duties related to Plan administration, subject to compliance with applicable laws.


 


Performance Period / Plan Year


 


The Performance Period is January 1st
through December 31st (the “Plan Year”), although the Committee shall have discretion to establish performance
periods that are longer or shorter than the Plan Year.


 


Participation and Eligibility


 


The Chief Executive Officer (“CEO”) participates in
the Plan unless the Committee deems otherwise. The CEO recommends other executives/senior officers for approval by the Committee.
New hires are eligible to participate in the Plan for the current performance period and may receive a prorated award.


 


Credit Quality and Regulatory Examinations


 


In the Committee’s
discretion, awards will not be paid (or in the case of restricted stock, granted), regardless of performance, if 1) any regulatory
agency issues a formal, written enforcement action, memorandum of understanding or other negative directive action (excluding MRAs)
where the Committee considers it imprudent to provide awards under this Plan, and/or 2) after a review of the Company’s credit
quality measures, the Committee considers it imprudent to provide awards under this plan.


 


Incentive Award Opportunities 


 


Each Participant eligible for an award for
a Performance Period will be assigned a target award, expressed as a percentage of the Participant’s annual salary as of
December 31 of the Performance Period (the “Target Award”). Based on market conditions and an assessment of the Company’s
financial condition and anticipated performance, the Committee shall have the ability at the beginning of the Plan Year to reduce
each participant’s Target Award for that Plan Year by a stated percentage, as deemed appropriate.


 




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Participants that will receive a portion of
their payout in restricted stock will be notified at the beginning of the period.


 


Establishment of Performance Measures, Goals,
Weightings and Definitions


 


The CEO recommends for approval by the Committee
the performance measures, goals, weightings and definitions at the beginning of the Plan Year. For purposes of this Plan, these
terms have the following meanings:


 


Performance Measures – The criteria
for which awards may be paid. Performance measures may be financial or non-financial.


 


Goals – Identifies the specific
results required to achieve a certain level of performance. Goals may be quantitative or qualitative. For each performance measure,
a threshold, target and Maximum goal is established.


 


		§	Threshold – is the minimum
level of performance for which an award is paid. If performance is below threshold, the payout is zero. Performance at threshold
results in a payment equal to 50% of the targeted incentive opportunity. 



 


		§	Target – is the expected
level of performance. Performance at target results in a payment equal to 100% of the targeted incentive opportunity. 



 


		§	Maximum – is considered outstanding
performance. Performance at Maximum results in a payment equal to 200% of the participant’s targeted incentive opportunity,
which is the highest amount to be paid under the Plan. 



 


Weightings – Weightings are used
to differentiate the relative importance/priority of the performance measures. Each performance measure is weighted a minimum of
10%, and the total of all performance measures for a Plan Year equals 100%. It is permissible for a subjective factor determined
by a participant’s manager be a goal that is weighted within the 100% total.


 


Definitions – Each performance
measure is described at the beginning of the Plan Year. Qualitative measures should carry, at a minimum, a general description
of the criteria which will be reviewed in order to make an assessment regarding performance.


 


The following schedules
are attached to this Plan document. Schedules A and B are approved by the Committee prior to the beginning of each performance
period:


 


		§	Schedule A: NEO Participants and Incentive
Award Opportunities 



		§	Schedule B: Participant’s Performance
Measures, Goals and Weightings 



 




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Award Criteria


 


If the Bank meets or exceeds the award funding
goals, award payouts are based on the participant achieving Bank and/or Branch/Department goals using a balanced scorecard. The
following provides an example of the scorecard:


 


	Performance Measures	 	 	Weight	 	 	Threshold 
(50% payout)	 	Target 
(100% payout)	 	Maximum 
(200% payout)
	Bank Goal #1	 	 	x%	 	 	TBD	 	TBD	 	TBD
	Bank Goal #2	 	 	x%	 	 	TBD	 	TBD	 	TBD
	Branch/Department Goal #1	 	 	x%	 	 	TBD	 	TBD	 	TBD
	Branch/Department Goal #2	 	 	X%	 	 	TBD	 	TBD	 	TBD



 


Managers shall have the discretion to adjust
payouts for Participants they oversee based on an assessment of relative performance.


 


Determination of Payout Level


 


Following the end of the applicable Performance
Period, actual performance will be compared to the relevant Performance Measures and Goals. Performance between Threshold and Target
and Target and Maximum will be interpolated. A listing of actual performance levels of, and proposed award payments to, Participants
will be presented to the Committee for approval. This information may be presented in summary format as deemed appropriate, except
that the Committee shall review individual payouts for Named Executive Officers (as determined in accordance with securities laws).


 


Award Payouts


 


Awards will be paid within two and one half
months following the end of the program year or otherwise in a manner intended to be exempt from, or in compliance with, Section
409A of the Code. Awards will be paid out as a percentage of a participant’s base earnings.


 


Certain Participants may receive a portion
of their award in restricted stock. In determining the number of shares granted, the Company will determine the dollar value to
be awarded as restricted stock divided by the average closing price of the last 20 trading days, rounded up to the nearest share.
For example, if the award amount is $10,000, 50% will be paid as restricted stock and the 20-day average closing price is $5, the
calculation is as follows: $10,000 x 50% = $5,000; $5,000 / $5 = 1,000 restricted shares. These shares may be subject to vesting
and other terms and conditions, which will be indicated in a separate award agreement.


 


Awards shall be subject to withholding for
required income and other applicable taxes, and the Company’s obligation to pay such awards shall be subject to compliance
with applicable withholding or other tax requirements.


 


The employee must be employed on a full or
part-time basis at the date of payment or in the case of restricted stock, the date of the award. Participants who have an unsatisfactory
performance rating at the time of payment are not eligible to receive an award.


 




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Without Committee approval, the total amount
of all award payouts shall not exceed the general ledger accrual on the company’s books and records. This may result in a
proration of awards paid to all employees.


 


New Hires, Promotions, Transfers, Role Changes
and Leave of Absence


 


New hires will receive a pro-rated award based
rounded for the number of months worked during the Plan Year.


 


Participants that are promoted or change roles
where the participant becomes eligible or ineligible for an award or experience a change in incentive opportunity will be paid
out on a pro-rated basis using their status and the effective date of the promotion or role change. Award amounts will be calculated
using the participant’s base earnings and the incentive target for the applicable period.


 


Participants that move from one branch to another
will have their payout pro-rated based the period of time they worked at each branch.


 


Participants that have an approved leave of
absence are eligible to receive a pro-rated award calculated using their time in active status as permitted by the Family Medical
Leave Act or other applicable state and federal laws and regulations.


 


Termination of Employment


 


To encourage retention, a participant must
be an active employee of the Bank on the payment date to receive an award or in the case of restricted stock, the date of the award.
Please see below for exceptions in the event of death, disability and retirement. Participants who terminate employment prior to
the payment date will not be eligible to receive an award.


 


Death or Disability 


 


If a participant ceases to be employed by the
Bank due to disability as defined under the Bank’s long-term disability program, his/her incentive award for the Plan Year
will be paid in cash and pro-rated to the date of termination.


 


In the event of death, the Bank will pay to
the participant’s estate in cash the pro rata portion of award that had been earned by the participant during his/her period
of employment. 


 


Administration


 


The Program is authorized by First Bancorp’s
Board of Directors and administered by the Committee. To ensure proper alignment with the Company’s business objectives,
the Program will be reviewed periodically by the Committee. First Bancorp’s Board of Directors has the authority to amend
the Program but the Committee has the authority to determine awards and performance measures under the Program, to interpret the
Program and to make or nullify any rules and procedures, as necessary, for proper administration of the Program. Any determination
by the Committee will be final and binding on all participants.


 


Plan Changes or Discontinuance


 


First Bancorp has developed the Plan on the
basis of existing business, market and economic conditions; current services; and staff assignments. If substantial changes occur
that affect these conditions, services, assignments, or forecasts, the Committee may add to, amend, modify or discontinue any of
the terms or conditions of the Plan at any time. Examples of substantial changes may include mergers, dispositions or other corporate
transactions, changes in laws or accounting principles or other events that would in the absence of some adjustment, frustrate
the intended operation of this arrangement.


 




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The Committee may, at its sole discretion,
waive, change or amend the Plan as it deems appropriate. 


 


No Entitlement to Incentive Compensation


 


Each Plan participant is eligible for a distribution
under the Plan only upon attainment of certain performance objectives defined under the Plan and after the approval by the Participant’s
manager and approval of the award by the Committee.


 


Participants Rights not Assignable; No Right
to Participate


 


Any participant awards shall not be subject
to assignment, pledge or other disposition, nor shall such amounts be subject to garnishment, attachment, transfer by operation
of law, or any legal process. Nothing contained in this Plan shall confer upon any employee any right to continued employment,
nor does the Plan affect the right of First Bancorp to terminate a Plan participant’s employment. Participation in the Plan
does not confer rights to participation in other Bank plans, including annual or long-term incentive plans, non-qualified retirement
or deferred compensation plans or other perquisite plans.


 


Recoupment in the Event of Accounting Restatements
(Clawback)


 


Certain Participants are subject to a clawback
policy. Participants subject to the clawback policy will be notified in writing.


 


If the Bank is required to restate its financial
statements for any reporting period due to any misstatement or omission of material fact, any failure to report its financial condition
or financial results in accordance with GAAP in any material respect, or any requirement of federal law or regulation, each Participant
shall, unless otherwise determined in the sole discretion of the Committee, reimburse the Bank upon receipt of written notification
for any portion of an award payment resulting from the circumstance requiring such restatement. In calculating such amount, the
Committee shall compare the calculation of the amount of award payment based on the restated financial statements to the amount
of award payment based on the financial statements that were required to be restated. The Company has the right to modify a Participant’s
future incentive payments or cancel unvested restricted stock awards should repayment by the Participant not occur.


 


Risk Mitigation


 


First Bancorp seeks to appropriately balance
risk with financial rewards in the Plan design and implementation. The compensation arrangements in this Plan are designed to be
sufficient to incent participants to achieve approved strategic and tactical goals while at the same time not be excessive or lead
to material financial loss to the Bank. As stated in the Credit Quality and Regulatory Examinations section above, in the Committee’s
discretion, awards will not be paid (or in the case of restricted stock, granted), regardless of performance, if 1) any regulatory
agency issues a formal, written enforcement action, memorandum of understanding or other negative directive action (excluding MRAs)
where the Committee considers it imprudent to provide awards under this Plan, and/or 2) after a review of the Company’s credit
quality measures, the Committee considers it imprudent to provide awards under this plan.


 




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Ethics and Interpretation


 


If there is any ambiguity as to the meaning
of any terms or provisions of this Plan or any questions as to the correct interpretation of any information contained therein,
the Bank's interpretation expressed by the Committee will be final and binding.


 


The altering, inflating, and/or inappropriate
manipulation of performance/financial results or any other infraction of recognized ethical business standards, will subject the
employee to disciplinary action up to and including termination of employment.  In addition, any incentive compensation as
provided by this Plan to which the employee would otherwise be entitled will be revoked or if paid, be obligated to repay any incentive
award earned during the award period in which the wrongful conduct occurred regardless of employment status.


 


Severability


 


Each provision in this Plan is severable, and
if any provision is held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions
shall not, in any way, be affected or impaired thereby.


 


Section 409A


 


This Plan is intended to comply with Section
409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), to the extent subject thereto, and, accordingly,
to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described
in the Plan that are due within the “short-term deferral period” as defined in Section 409A shall not be treated as
deferred compensation unless applicable laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent
required to avoid accelerated taxation and tax penalties under Section 409A, amounts that would otherwise be payable and benefits
that would otherwise be provided pursuant to the Plan during the six (6) month period immediately following “Specified Employee’s”
“Separation from Service” (as those terms are defined in Section 409A) shall instead be paid on the first payroll date
after the six-month anniversary of such Specified Employee’s Separation from Service (or death, if either). Notwithstanding
the foregoing, the Bank shall have no obligation to take any action to prevent the assessment of any additional tax or penalty
on any Participant under Section 409A, nor will the Bank have any liability to any Participant for such tax or penalty.


 


Choice of Law


 


The Plan and the transactions and payments
described herein shall, in all respect, be governed by, and construed and enforced in accordance with the laws of the state of
North Carolina, except to the extent preempted by federal law.


 




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Plan Approval


 


IN WITNESS WHEREOF, the parties have executed
and approved the Plan effective as of February 24, 2015.


 


	/s/ Richard H. Moore	 
	Chief Executive Officer	 
	 	 
	/s/ Mary Clara Capel	 
	Chair, Compensation Committee	 


 


This Plan is proprietary and confidential
to First Bancorp and its employees and should not be shared outside the organization other than as required by executive compensation
reporting and disclosure requirements.


 




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Schedule A:  Participants and Annual Incentive Award Opportunities



 



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Schedule B: Performance Measures, Goals and Weightings 


 




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