Business Context and Reporting Period
Company: First Community Corporation (South Carolina)
Filing Type: Form 8-K (Current Report)
Date of Report: August 2, 2006
Event: Entry into a Material Definitive Agreement (Item 1.01). First Community Bank, NA, the wholly-owned operating subsidiary, entered into Salary Continuation Agreements with six executive officers.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the terms of executive compensation agreements.
Compensation Terms (Annual Supplemental Retirement Benefit):
| Executive Name | Normal Retirement Age | Annual Benefit | Years of Benefit |
|---|---|---|---|
| Robin Brown | 62 | $45,900 | 15 |
| Michael Crapps | 65 | $137,300 | 15 |
| James Leventis | 72 | $30,100 | 10 |
| J. Ted Nissen | 65 | $47,800 | 15 |
| David Proctor | 65 | $62,900 | 15 |
| Joseph Sawyer | 65 | $55,500 | 15 |
Material Changes and Agreements
- Triggering Events: Benefits commence at normal retirement age or upon termination following a change in control.
- Death Benefits:
- If death occurs after separation but before benefit commencement: Paid to beneficiaries monthly.
- If death occurs after benefit commencement: Remaining benefits paid to beneficiaries.
- If death occurs during active service: 100% of accrual balance paid as a lump sum.
- Disability/Termination:
- Disability prior to retirement age: Entitled to 100% of accrual balance.
- Termination without cause: Entitled to 100% of accrual balance (subject to vesting schedules).
- Vesting Schedules:
- James Leventis: 33 1/3% per year until 100% vested.
- Other Executives: 10% per year until 100% vested.
Outlook, Risks, and Unusual Items
Funding Mechanism: To offset annual expense accruals, the Bank acquired Bank-Owned Life Insurance (BOLI). It is anticipated that the BOLI will provide full cost recovery of the benefits paid upon the executives' deaths.
Risks/Contingencies: The filing notes that the summary is qualified in its entirety by reference to the full agreement text (Exhibit 10.1). No other material risks or contingencies are disclosed in this specific report.
Investor Verification Checklist
- Verify the total annual liability exposure by summing the annual benefits ($379,500) and multiplying by the respective duration for each executive.
- Review Exhibit 10.1 (Form of Salary Continuation Agreement) for specific definitions of "change in control," "termination without cause," and "accrual balance."
- Confirm the current status and valuation of the BOLI policies acquired to fund these liabilities.
- Assess the impact of these agreements on the Bank's future earnings and cash flow projections.