Document:

ex10_37.htm

    EXHIBIT
10.37

    

    CHANGE
OF CONTROL AGREEMENT

    

    THIS CHANGE OF CONTROL AGREEMENT
(this "Agreement") is entered into as of the ___ day of __________, 20__, by and
among FNB United Corp., a North Carolina corporation and a registered bank
holding company (the "Corporation"), CommunityONE Bank, National Association, a
national banking association and a wholly owned subsidiary of the Corporation
(the "Bank") (hereinafter the Corporation and the Bank, or their successors, are
collectively referred to as the "Company"), and ______________ (the "Officer"),
an individual residing in __________ County, North Carolina,

    

           
             WHEREAS,
the Officer has heretofore been employed by the Company with the title(s) of
_________________________; and

    

    WHEREAS, the services of the Officer,
the Officer's experience and knowledge of the affairs of the Company and
reputation and contacts in the industry are extremely valuable to the Company;
and

    

    WHEREAS,
the Company wishes to attract and retain such well-qualified executives and it
is in the best interest of the Company and of the Officer to secure the
continued services of the Officer notwithstanding any change of control of the
Corporation or the Bank; and

    

    WHEREAS,
the Company considers the establishment and maintenance of a sound and vital
management team to be part of their overall corporate strategy and to be
essential to protecting and enhancing the best interests of the Company and its
shareholders; and

    

    WHEREAS,
the parties desire to enter into this Agreement to provide the Officer with
security in the event of a change of control of the Corporation or the Bank to
ensure the continued loyalty of the Officer during any change of control in
order to maximize shareholder value as well as the continued safe and sound
operation of the Company; and

    

    WHEREAS,
the Officer and the Company acknowledge and agree that the Officer’s employment
with the Company is and will continue to be on an at-will basis and that this
Agreement is not an employment agreement but is limited to circumstances giving
rise to a change of control of the Corporation or the Bank as set forth
herein.

    

    NOW,
THEREFORE, for and in consideration of the premises and mutual promises,
covenants, and conditions hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereby agree as follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    1.           Term.  The
initial term of this Agreement shall be for the period commencing upon the
effective date of this Agreement and ending three calendar years from the
effective date of this Agreement.  On each anniversary date of this
Agreement, the term automatically shall be extended for an additional one-year
period so that the term shall again be three years unless either the Company or
the Officer notifies the other of its decision not to continue such annual
renewal by written notice given not less than 90 days prior to such anniversary
date.

     

    2.           Change of
Control.

     

    (a)           In
the event of a termination of the Officer's employment by the Company in
connection with, or within twenty-four (24) months after, a "Change of Control"
(as defined in subparagraph (f) below) of the Corporation or the Bank, for
reasons other than for "cause" (as defined in subparagraph (b) below), death or
“disability” (as defined in subparagraph (c) below), the Officer shall be
entitled to receive the sum set forth and defined in subparagraph (e)
below.  The termination of the Officer’s employment by the Company
shall be deemed a Termination Event for purposes of subparagraph (e)
below.

     

    (b)           For
purposes of this Agreement, termination for “cause” shall mean termination by
reason of (i) an intentional, willful and continued failure by the Officer to
perform his duties as an employee of the Company (other than due to disability);
(ii) an intentional, willful and material breach by the Officer of his
fiduciary duties of loyalty and care to the Company; (iii) a conviction of,
or the entering of a plea of nolo contendere by the Officer for any felony or
any crime involving fraud or dishonesty, or (iv) a willful and knowing
violation of any material federal or state law or regulation applicable to the
Corporation or the Bank or the occurrence of any act or event as a result of
which the Officer becomes unacceptable to, or is removed, suspended or
prohibited from participating in the conduct of the Company’s affairs by any
regulatory authority having jurisdiction over the Corporation or the
Bank.

     

    (c)           For
purposes of this Agreement, “disability” shall mean the inability, by reason of
bodily injury or physical or mental disease, or any combination thereof, of the
Officer to perform his customary or other comparable duties with the Company for
a period of 90 consecutive days.  In the event that the Officer and
the Company are unable to agree as to whether the Officer is suffering a
disability, the Officer and the Company shall each select a physician and the
two physicians so chosen shall make the determination or, if they are unable to
agree, they shall select a third physician, and the determination as to whether
the Officer is suffering a disability shall be based upon the determination of a
majority of the three physicians.  The Company shall pay the
reasonable fees and expenses of all physicians selected pursuant to this
subparagraph (c).

     

    (d)           The
Officer shall have the right to resign his employment with the Company and
terminate this Agreement upon the occurrence of any of the
following

     

    
      
         

      

      
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    events
(the "Termination Events") within twenty-four (24) months following a Change of
Control of the Corporation or the Bank:

     

    (i)           The
Officer is assigned any duties and/or responsibilities that constitute a
material diminution of the Officer’s authority, duties or responsibilities at
the time of the Change of Control;

     

    (ii)           The
Officer's annual base salary rate is reduced below the annual amount in effect
as of the effective date of a Change of Control or as the same shall have been
increased from time to time following such effective date;

     

    (iii)           The
Officer's life insurance, medical or hospitalization insurance, disability
insurance, stock option plans, stock purchase plans, deferred compensation
plans, management retention plans, retirement plans, or similar plans or
benefits being provided by the Company to the Officer as of the effective date
of the Change of Control are reduced in their level, scope, or coverage, or any
such insurance, plans, or benefits are eliminated, unless such reduction or
elimination applies proportionately to all salaried employees of the Company who
participated in such benefits prior to such Change of Control; or

     

    (iv)           The
Officer is required to transfer performance of his day-to-day services required
hereunder to a location which is more than fifty (50) miles from the Officer's
current principal work location, without the Officer's express written
consent.

     

    A
Termination Event shall be deemed to have occurred on the date such action or
event is implemented or takes effect.

     

    (e)           In
the event that the Officer resigns his employment and terminates this Agreement
pursuant to subparagraph (d) above, the Company will be obligated to pay or
cause to be paid to the Officer an amount equal to
_____________________.

     

    (f)           For
the purposes of this Agreement, the term “Change of Control” shall mean a change
of control as defined in Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the rules, regulations, and guidance of general
application thereunder issued by the Department of the Treasury, including
--

     

    (i)           Change in
ownership:  a change in ownership of the Bank occurs on the
date any one person, or more than one person acting as a group, acquires
ownership of stock of the Corporation or the Bank that, together with stock of
the Corporation or the Bank held by such person or group, constitutes more than
50% of the total fair market value or total voting power of the stock of the
Corporation or the Bank;

     

    (ii)           Change in effective
control:  (x) any one person, or more
than one person acting as a group, acquires (or has acquired during the
12

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    month
period ending on the date of the most recent acquisition by such person or
persons) ownership of stock possessing 30% or more of the total voting power of
the stock of the Corporation or the Bank, or (y) a majority of the board of
directors of the Corporation is replaced during any 12-month period by directors
whose appointment or election is not endorsed by a majority of the board of
directors of the Corporation before the date of the appointment or election;
provided, however, for purposes of this Paragraph 2(f)(ii), the terms the
Corporation or the Bank shall refer to the relevant corporation identified in
Treasury Regulation 1.409A-3(i)(5)(ii) for which no other no other corporation
is a majority shareholder for purposes of that regulation; or

     

    (iii)           Change in ownership of a substantial
portion of assets:  a change in ownership of a substantial
portion of the assets of the Corporation or the Bank occurs on the date that any
one person, or more than one person acting as a group, acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets of the Corporation or the Bank having a total
gross fair market value equal to or exceeding 40% of the total gross fair market
value of all of the assets of the Corporation or the Bank, as applicable,
immediately before the acquisition or acquisitions.  For this purpose,
gross fair market value means the value of the assets of the Corporation or the
Bank, as applicable, or the value of the assets being disposed of, determined
without regard to any liabilities associated with the assets.

     

    Notwithstanding
the other provisions of this Paragraph 2, a transaction or event shall not be
considered a Change of Control if, prior to the consummation or occurrence of
such transaction or event, the Officer and the Company agree in writing that the
same shall not be treated as a Change of Control for purposes of this
Agreement.

    

    (g)           Except
as otherwise provided in Paragraph 3, amounts payable pursuant to this Paragraph
2 shall be paid in one lump sum within five business days following the date of
the termination of the Officer’s employment.

     

    (h)           Following
a Termination Event that gives rise to the Officer's rights hereunder, the
Officer shall have six months from the date of occurrence of the Termination
Event to resign his employment and terminate this Agreement pursuant to
subparagraph 2(d) above; provided, however, that no such resignation and
termination of employment shall give rise to any rights hereunder unless the
effective date of the resignation and termination is on or before the second
anniversary of the date of the Change of Control. Any such termination shall be
deemed to have occurred only upon delivery to the Corporation or Bank, or any
successors thereto, of written notice of termination, which describes the Change
of Control and Termination Event. If the Officer does not so resign his
employment and terminate this Agreement within such six-month period, the
Officer shall thereafter have no further rights hereunder with respect to that
Termination Event, but shall retain rights, if any, hereunder with respect to
any other

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Termination
Event as to which the 24-month period following the Change of Control has not
expired; provided, however, that, no such resignation and termination of
employment shall give rise to any rights hereunder unless the effective date of
the resignation and termination is on or before the second anniversary of the
date of the Change of Control.

     

    (i)           It
is the intent of the parties hereto that all payments made pursuant to this
Agreement be deductible by the Corporation or the Bank for federal income tax
purposes and not result in the imposition of an excise tax on the Officer.
Notwithstanding anything contained in this Agreement to the contrary, any
payments to be made to or for the benefit of the Officer that are deemed to be
"parachute payments," as that term is defined in Section 280G(b)(2) of the Code,
shall be modified or reduced to the extent deemed to be necessary by the
Company's Board of Directors to avoid the imposition of an excise tax on the
Officer under Section 4999 of the Code or the disallowance of a deduction to the
Company under Section 280G(a) of the Code.

     

    (j)           In
the event any dispute shall arise between the Officer and the Company as to the
terms or interpretation of this Agreement, including this Paragraph 2, whether
instituted by formal legal proceedings or otherwise, including any action taken
by the Officer to enforce the terms of this Paragraph 2 or in defending against
any action taken by the Corporation or the Bank, the Bank shall reimburse the
Officer for all costs and expenses, proceedings or actions, in the event the
Officer prevails in any such action.

     

    (k)           Notwithstanding
anything contained herein to the contrary, the Officer’s employment with the
Company shall not be considered to have terminated for purposes of the Officer’s
receiving any compensation otherwise provided under this Agreement unless (x)
the Officer would be considered to have incurred a “separation from service”
within the meaning of Section 409A from the Company or (y) the payment of such
compensation would not be subject to Section 409A.

     

    3.           Code §
409A.   It is the intent of the parties that this
Agreement and all payments made hereunder shall be in compliance with the
requirements of Section 409A of the Code and the regulations promulgated
thereunder.  If any provision of this Agreement shall not be in
compliance with Section 409A of the Code and the regulations thereunder and
payment pursuant to such provision is not otherwise exempt from Section 409A,
then such provision shall be deemed automatically amended without further action
on the part of the Company or the Officer to the minimum extent necessary to
cause such provision to be in compliance and such provision will thereafter be
given effect as so amended.  If postponing payment of any amounts due
under this Agreement is necessary for compliance with the requirements of
Section 409A of the Code and the regulations thereunder to avoid adverse tax
consequences to the Officer, then payment of such amounts shall be postponed to
comply with Section 409A.  Any and all payments that are postponed
under this Paragraph 3 shall be paid to the Officer in a lump sum at the
earliest time that does not result in adverse tax consequences to the Officer
under Section 409A.

     

    4.           Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Corporation or the Bank,
which

     

    
      
         

      

      
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    shall
acquire, directly or indirectly, by conversion, merger, consolidation, purchase,
or otherwise, all or substantially all of the assets of the Corporation or the
Bank.

     

    5.           Modification; Waiver;
Amendments.  No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Officer, the Company, except as herein otherwise
provided. No waiver by any party hereto, at any time, of any breach by any party
hereto, or compliance with, any condition or provision of this Agreement to be
performed by such party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by the parties, except as herein otherwise provided.

     

    6.           Applicable
Law.  This Agreement shall be governed in all respects whether
as to validity, construction, capacity, performance, or otherwise, by the laws
of North Carolina, except to the extent that federal law shall be deemed to
apply.

     

    7.           Severability. The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision hereof shall not affect the validity or
enforceability of the other provision hereof.

     

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.

    

    
      	
              CORPORATION:

            	 
      	
              BANK:

            
	 
      	 
      	 
      
	
              FNB
      UNITED CORP.

            	 
      	
              COMMUNITYONE
      BANK, NATIONAL

            
	 
      	 
      	 
      	
              ASSOCIATION

            
	 
      	 
      	 
      	 
      	 
      
	
              By

            	 
      	 
      	
              By

            	 
      
	 
      	
              Name:

            	 
      	 
      	
              Name:

            
	 
      	
              Title:

            	 
      	 
      	
              Title:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
              OFFICER:

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

     

    6WP Exhibit 10.5 (W0202820).DOC

Exhibit 10.5

DEFERRED COMPENSATION AGREEMENT

THIS AGREEMENT, entered into on March 2, 1990 and amended March 4, 1999, February 24, 2000, and December 16, 2005, by and between Wausau Paper Corp. (herein referred to as the “Corporation”) and San W. Orr, Jr., an individual (herein referred to as “Executive”) is hereby amended effective December 17, 2008.

NOW, THEREFORE, the parties agree as follows:

1.

Election to Defer.  Executive may, in his discretion, elect to defer all or any cash compensation (specified by amount or percentage of such compensation) payable to him by the Corporation from time to time for service to the Corporation as an employee by executing an election in the form set forth in Exhibit A hereto (herein referred to as an “Election”) and filing such Election with the secretary of the Corporation (herein referred to as the “Secretary”); provided, however, that no election to defer compensation hereunder shall be permitted or otherwise effective with respect to compensation attributable to services rendered by Executive after December 31, 2004.  An Election shall be effective with respect to all cash compensation specified on the election form filed with the Secretary by Executive which is accrued and payable after the date the Election is received by the Secretary and until the Election is amended or revoked.  An Election hereunder may be amended or revoked at any time by filing a subsequent Election with the Secretary.  Such amendment or revocation shall be effective with respect to cash compensation accrued and payable on and after receipt of such new Election by the Secretary.

2.

Deferred Compensation Account.  The Corporation shall maintain upon its corporate books a deferred compensation account (herein referred to as the “Account”) with respect to any compensation deferred under this agreement.  As of the first day of each calendar month, the Corporation shall make the following adjustments to the Account:  (a) Subtract amounts paid from the Account during the immediately preceding month; and (b) Add the amount of compensation Executive has elected to defer under paragraph 1 which was otherwise payable to Executive during the immediately preceding month.  As of the first day of each calendar year, the Corporation shall add to the Account simple interest, calculated at a rate equal to average of the prime rate published in The Wall Street Journal on the first business day of each calendar quarter in the preceding calendar year, minus one percentage point, on the average daily balance in the Account during the preceding year.  The Account created hereunder shall not represent any specific assets of the Corporation, and the Corporation is not obligated by this provision to set aside any assets in respect of the Account.

3.

Distribution.  Distribution of the amount reflected in the Account shall be made in 5 annual installments with the first installment payment to be made within the 60 day period following the date on which Executive ceases to be a member of the Board of Directors of the Corporation; provided, however, that in the event of a “Change in Control” (defined below) or Executive’s death, the remaining balance in the Account shall be distributed within the 60 day 

-1-

period following the date of such event in a single lump sum payment.  The amount of each annual installment distribution shall equal the balance in the Account on the date set for payment of such installment divided by the number of installment distributions remaining within the distribution period (including such installment).  Interest shall continue to be credited under paragraph 2 during the installment distribution period.  For purposes of this paragraph 3, a “Change in Control” shall mean a “change of control” of the Company as defined in Code Section 409A and the regulations promulgated thereunder.

4.

Recipient of Distribution.  Each payment to be made by the Corporation hereunder shall be made to Executive if he is living on the date such payment is made, and, if he is not, to such person or persons (the “Beneficiary” or “Beneficiaries”) as Executive shall designate on the form set forth in Exhibit A or in such other writing signed by the Executive.  Executive may change or revoke any such designation previously made by filing a new designation with the Secretary.  Such new designation shall be effective for purposes of this paragraph immediately upon filing.  If no designation hereunder is in effect or no designated Beneficiary is living when payment is to be made, payment shall be made to the estate of the last to die of Executive or, if a Beneficiary has been designated and such designation has not been revoked, the Beneficiary.

5.

Termination and Liquidation.  The Plan shall be terminated effective December 17, 2008, and the Executive’s Account on December 21, 2009 shall be paid in a single lump sum equal to the balance in Executive’s Account on November 30, 2009.  Interest shall continue to be credited under paragraph 2 during the period between December 17, 2008 and November 30, 2009.  In the event of the Participant’s death prior to December 21, 2009, his Account shall be distributed to his Beneficiary.  The termination and liquidation of the Plan shall be nullified and of no effect in the event that the Corporation determines based on Internal Revenue Service guidance or rulings that the termination and liquidation will adversely affect the compliance of the Agreement or any other deferred compensation plan maintained by the Corporation with Section 409A of the Internal Revenue Code of 1986, as amended.

6.

Miscellaneous.

(a)

Neither Executive nor any Beneficiary shall have any right or title to or interest in any specific assets of the Corporation in respect of this agreement.  Any person entitled to payment under the agreement shall be an unsecured general creditor of the Corporation in respect of such payment.

(b)

Except as may otherwise be required by law, no amount payable under this agreement may be alienated in any manner by Executive or any Beneficiary or be subject to the debts or liabilities of Executive or any Beneficiary.  Any attempt by Executive or any Beneficiary to alienate any amount payable under the agreement shall be void.

(c)

This agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, personal representatives and successors.

-2-

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed on this 17th day of December, 2008.

WAUSAU PAPER CORP.

By:  THOMAS J. HOWATT

Thomas J. Howatt

President and Chief Executive Officer

SAN W. ORR, JR.

San W. Orr, Jr., Executive

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EXHIBIT A

WAUSAU PAPER CORP.

DEFERRED COMPENSATION AGREEMENT ELECTION

Date: _________________, 1994

Pursuant to the provisions of the Deferred Compensation Agreement dated July 1, 1994 (the “Agreement”), I hereby elect to defer the payment of the following compensation otherwise payable to me by Wausau Paper Corp.

(1)

The amount or percentage of such compensation to be deferred under the Agreement shall be as follows:

Dollar Amount or

Type of Compensation

Deferral Percentage

Salary

__________________________________

Bonus

__________________________________

(2)

This election shall remain in effect until I amend or revoke it by subsequent election, or until the time set for distribution of deferred amounts under the Agreement.

(3)

In the event of my death before the amounts payable to me under the Agreement have been distributed to me, I hereby direct that such amounts be paid in a lump sum to:

(NOTE:  If no beneficiary is named, any amounts payable will be paid to your estate or personal representative.  You must notify the Secretary of the Corporation of any change in your beneficiary’s address.)

San W. Orr, Jr.

-4-

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