Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT"), made as of the 1st day of
January, 1998, by and between INDEPENDENT COMMUNITY BANKSHARES, INC., a Virginia
corporation ("Corporation") and XXXXXX X. XXXXXX ("Executive").
WHEREAS, it is the desire of the Corporation to have the benefit of
Executive's loyalty, service and counsel; and
WHEREAS, the Executive wishes to continue in the employ of the
Corporation as its Chairman, President and Chief Executive Officer; and
WHEREAS, the Corporation desires to continue to employ the Executive in
his present capacity; and
WHEREAS, Executive possesses certain valuable knowledge, professional
skills and expertise essential to the continued success of the business of the
Corporation; and
WHEREAS, the Corporation desires to continue to utilize the aforesaid
knowledge, professional skills and expertise of the Executive in the conduct of
the business of the Corporation; and
WHEREAS, the Corporation and Executive desire to continue to set forth,
in writing, the terms and conditions of their agreements and understandings;
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises herein contained, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
legally to be bound, agree as follows:
1. Employment: The Corporation agrees to continue to employ
the Executive as Chairman, President and Chief Executive Officer and the
Executive agrees to serve the Corporation upon the terms and conditions herein
provided. The Executive also shall serve as the Chairman, President and Chief
Executive Officer of The Middleburg Bank, a wholly owned subsidiary of the
Corporation (the "Bank"). The Executive agrees to perform such managerial duties
and responsibilities as shall be assigned to him by the Boards of Directors of
the Corporation and the Bank. The Executive shall devote his full time and
attention to the discharge of the duties undertaken by him hereunder.
2. Term of Employment: The term of this Agreement and the
employment of the Executive hereunder shall be deemed to have commenced on
January 1, 1998, and shall continue to December 31, 2002, unless sooner
terminated in accordance with the provisions of Section 5. Beginning on December
31, 2000, and on December 31 of each of the succeeding seven (7) years
thereafter, the term of this Agreement and all its terms and provisions shall be
automatically extended for one additional year, unless terminated in accordance
with the
provisions of Section 5. If Executive's employment by the Corporation
terminates, his employment by the Bank shall terminate automatically at the same
time.
3. Compensation: (a) As compensation for the services to be
rendered by the Executive under this Agreement, the Executive shall receive a
base annual salary of One Hundred Ninety-One Thousand Four Hundred Eight Dollars
($191,408) for the year 1998. The Executive may receive base salary increases
and incentive or bonus compensation in the amounts determined by the Executive
Committee of the Board of Directors of the Corporation in accordance with
performance objectives established by the Board of Directors.
(b) Except as otherwise expressly set forth herein, no compensation
shall be paid pursuant to this Agreement subsequent to any termination of
Executive's employment by the Corporation; provided, however, that Executive's
right to exercise stock options following a termination of employment shall be
governed by the terms of the Corporation's stock option plans and any stock
option agreements between the Corporation and the Executive. No stock options
shall be granted to Executive after his employment terminates.
4. Additional Benefits:
(a) In addition to all the benefits which are provided to all other
senior officers of the Corporation and the Bank, Executive shall be eligible for
participation in annual salary increases and any additional plans, programs or
forms of compensation or benefits that the Board of Directors of the Corporation
might hereafter provide to the employees of the Corporation or its subsidiaries,
to include but not be limited to, major medical and dental insurance, membership
in the Middleburg Tennis Club and in a local golf club.
(b) The Corporation shall provide to Executive an automobile and
payment of all related automobile expenses.
5. Termination:
(a) For Cause. Notwithstanding any other provision hereof, the
Corporation may terminate Executive's employment under this Agreement for cause.
The termination shall be evidenced by written notice thereof to the Executive,
which shall specify the cause of termination. For purposes hereof, the term
"cause" shall mean failure of the Executive to perform his duties under this
Agreement for any reason other than disability; unlawful business conduct;
theft; commission of a felony; or a material breach of this Agreement. The term
"cause" shall also include the failure of Executive for any reason, within ten
(10) days after receipt by Executive of written notice thereof from the Board of
Directors of the Corporation to correct, cease, or otherwise alter any action or
omission that materially or adversely affects the Corporation's profits or
operations.
(b) Resignation. (1) The Executive may resign or voluntarily leave
the employ of the Corporation upon giving the Corporation ninety (90) days
advance notice and on the effective
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date of such resignation, the Corporation's obligations to Executive under this
Agreement shall terminate and the Corporation shall have no further liability to
Executive under this Agreement.
(2) However, if Executive resigns or voluntarily leaves the
employ of the Corporation for "good reason" (as hereafter defined), then
Executive shall be entitled to the compensation and benefits set forth in
Sections 3 and 4 hereof for the period of time set forth in Section 5(c) hereof.
Notwithstanding anything in this Agreement to the contrary, if Executive
breaches Section 6 or Section 7(a), Executive will not thereafter be entitled to
receive any further compensation or benefits pursuant to this Section 5(b).
For purposes of this Agreement, "good reason" shall mean:
(i) The assignment of duties to the Executive by the
Corporation which result in the Executive having significantly less authority or
responsibility than he has on the date hereof, without his express written
consent;
(ii) The removal of the Executive from or any failure to
re-elect him to the position of Chairman, President and Chief Executive Officer
of the Corporation and the Bank;
(iii) Requiring the Executive to maintain his principal office
outside of Loudoun County, Virginia;
(iv) A reduction by the Corporation of the Executive's base
salary, as the same may have been increased from time to time;
(v) The failure of the Corporation to provide the Executive
with substantially the same fringe benefits that were provided to him
immediately prior to the date hereof;
(vi) The Corporation's failure to comply with any material
term of this Agreement; or
(vii) The failure of the Corporation to obtain the assumption
of and agreement to perform this Agreement by any successor as contemplated in
Section 9 hereof.
(c) Without Cause. The Corporation may at any time, elect to
terminate Executive's employment without "cause" and remove Executive from
employment on thirty (30) days written notice. If the Corporation elects to
terminate Executive's employment without "cause", then Executive shall be
entitled to receive the salary provided under Section 3 and the medical and
dental insurance, automobile and club memberships provided under Section 4 of
this Agreement for a period of time which is the greater of (i) the remaining
term of employment provided for in this Agreement, or (ii) thirty-six (36)
months, commencing on the date of termination. Executive shall not be entitled
to receive any bonuses or other form of incentive compensation following a
termination of employment pursuant to Section 5(b)(2) or this Section 5(c).
Notwithstanding anything in this Agreement to the contrary, if Executive
breaches Section 6 or Section 7(a), Executive will not thereafter be entitled to
receive any further compensation or benefits pursuant
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to this Section 5(c).
(d) Death. This Agreement shall terminate upon death of the
Executive; provided, however, that in such event the Corporation shall pay to
the estate of the Executive the compensation including salary and accrued bonus,
if any, which otherwise would be payable to the Executive through the end of the
month in which his death occurs.
(e) Disability. The Corporation may terminate this Agreement, after
having established the Executive's disability by giving to the Executive written
notice of its intention to terminate his employment for disability and his
employment with the Corporation shall terminate effective on the 90th day after
receipt of such notice if within 90 days after such receipt the Executive shall
fail to return to full-time performance of the essential functions of his
position (and if the Executive's inability to perform has been established
pursuant to the definition of "disability" set forth below). For purposes of
this Agreement, "disability " means either (i) a physical or mental impairment
which after the expiration of more than 13 consecutive weeks after its
commencement is determined by a physician selected and paid for by the
Corporation or its insurers, and acceptable to the Executive or his legal
representative, which consent shall not be unreasonably withheld, to be such
that the Executive is permanently unable to perform the essential functions of
his position or (ii) disability as defined in the policy of disability insurance
maintained by the Corporation or the Bank for the benefit of the Executive.
Notwithstanding the foregoing, the Corporation shall comply with all
requirements of the Americans with Disabilities Act, 42 U.S.C. ss. 12101 et.
seq.
6. Confidentiality/Nondisclosure Executive covenants and
agrees that any and all information concerning the customers, businesses and
services of the Corporation and its subsidiaries of which he has knowledge or
access as a result of his association with the Corporation in any capacity,
shall be deemed confidential in nature and shall not, without the proper written
consent of the Corporation, be directly or indirectly used, disseminated,
disclosed or published by Executive to third parties other than in connection
with the usual conduct of the business of the Corporation. Such information
shall expressly include, but shall not be limited to, information concerning the
Corporation's and its subsidiaries' trade secrets, business operations, business
records, customer lists or other customer information. Upon termination of
employment the Executive shall deliver to the Corporation all originals and
copies of documents, forms, records or other information, in whatever form it
may exist, concerning the Corporation and its subsidiaries or their business,
customers, products or services. In construing this provision it is agreed that
it shall be interpreted broadly so as to provide the Corporation with the
maximum protection. This Section 6 shall not be applicable to any information
which, through no misconduct or negligence of Executive, has previously been
disclosed to the public by anyone other than Executive.
7. Covenant Not to Compete. (a) During the term of this
Agreement and throughout any further period that he is an officer or employee of
the Corporation, and for a period of twelve (12) months from and after the date
that Executive is (for any reason) no longer employed by the Corporation or for
a period of twelve (12) months from the date of entry by a court of competent
jurisdiction of a final judgment enforcing this covenant in the event of a
breach by Executive, whichever is later, Executive covenants and agrees that he
will not, directly or indirectly, either as a principal, agent, employee,
employer, stockholder, co-partner or in any other individual or
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representative capacity whatsoever: (i) engage in a Competitive Business
anywhere within a 25 mile radius of any office operated by the Corporation or
the Bank on the date the Executive's employment terminates; or (ii) solicit, or
assist any other person or business entity in soliciting, any depositors or
other customers of the Corporation or the Bank to make deposits in or to become
customers of any other financial institution conducting a Competitive Business;
or (iii) induce any individuals to terminate their employment with the
Corporation or the Bank. As used in this Agreement, the term "Competitive
Business" means all banking and financial products and services that are
substantially similar to those offered by the Corporation or the Bank on the
date that the Executive's employment terminates.
(b) Notwithstanding the foregoing, Section 7(a) shall not apply if
Executive's employment terminates after a Change of Control. A "change of
control" is defined as any of the following: (i) any person, including a "group"
as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, becomes
the owner or beneficial owner of Corporation securities having twenty percent or
more of the combined voting power of the then outstanding Corporation securities
that may be cast for the election of the Corporation's directors, other than as
a result of an issuance of securities initiated by Corporation, or open market
purchases approved by the Board of Directors, as long as the majority of the
Board of Directors approving the purchases is a majority at the time the
purchases are made; (ii) a contested election of directors in which less than a
majority of the individuals nominated by the Board of Directors of the
Corporation are elected; or (iii) a merger or consolidation of Corporation with,
or into, another corporation or the sale, conveyance or other transfer of
substantially all of the assets or stock of Corporation if, immediately
following such transaction, those who were directors of the Corporation
immediately before such transaction do not constitute at least a majority of the
surviving or resulting corporation. In the event that there is a transaction
under a plan which involves a change of control of the Corporation, then the
date of change of control shall be the date that the last step in the plan
causes a change of control of the Corporation to occur.
8. Injunctive Relief. The Executive agrees that given the
nature of the positions held by Executive with the Corporation, that each and
every one of the covenants and restrictions set forth in Sections 6 and 7(a)
above are reasonable in scope, length of time and geographic area and are
necessary for the protection of the significant investment of the Corporation in
developing, maintaining and expanding its business. Accordingly, the parties
hereto agree that in the event of any breach by Executive of any of the
provisions of Sections 6 or 7(a) that monetary damages alone will not adequately
compensate the Corporation for its losses and, therefore, that it may seek any
and all legal or equitable relief available to it, specifically including, but
not limited to, injunctive relief. The covenants contained in Sections 6 and
7(a) shall be construed and interpreted in any judicial proceeding to permit
their enforcement to the maximum extent permitted by law. Should a court of
competent jurisdiction determine that any provision of the covenants and
restrictions set forth in Section 7(a) above is unenforceable as being overbroad
as to time, area or scope, the court may strike the offending provision or
reform such provision to substitute such other terms as are reasonable to
protect the Corporation's legitimate business interests.
9. Successors. The Corporation will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business,
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stock or assets of the Corporation, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in its entirety. Failure of the Corporation to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle the Executive to the compensation
described in Section 5(b)(2). As used in this Agreement, "Corporation" shall
mean Independent Community Bankshares Inc., a Virginia corporation, and any
successor to its respective business, stock or assets as aforesaid which
executes and delivers the agreement provided for in this Section 9 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
10. Limitation Of Benefits: It is the intention of the
parties that no payment be made or benefit provided to the Executive pursuant to
this Agreement that would constitute an "excess parachute payment" within the
meaning of Section 280G of the Code and any regulations thereunder, thereby
resulting in a loss of an income tax deduction by the Corporation or the
imposition of an excise tax on the Executive under Section 4999 of the Code. If
the independent accountants serving as auditors for the Corporation determine
that some or all of the payments or benefits scheduled under this Agreement, as
well as any other payments or benefits to which the Executive is entitled, would
be nondeductible by the Company under Section 280G of the Code, then the
payments scheduled under this Agreement will be reduced to one dollar less than
the maximum amount which may be paid without causing any such payment or benefit
to be nondeductible. The determination made as to the reduction of benefits or
payments required hereunder by the independent accountants shall be binding on
the parties. The Executive shall have the right to designate within a reasonable
period, which payments or benefits will be reduced; provided, however, that if
no direction is received from the Executive, the Corporation shall implement the
reductions in its discretion.
11. Severability: The provisions of this Agreement shall be
deemed severable, and the invalidity or unenforceability of any one or more of
the provisions of this Agreement shall not affect the validity and
enforceability of the other provisions.
12. Miscellaneous: The Corporation, by the signature of all
members of the Board of Directors (except the Executive), hereby approves this
Employment Agreement with the Executive dated as of January 1, 1998.
This Agreement shall be governed by the laws of the Commonwealth of
Virginia except to the extent the federal banking laws may be controlling.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
INDEPENDENT COMMUNITY BANKSHARES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------(SEAL)
Xxxxxx X. Xxxxxxxx
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By: /s/ Childs Xxxxx Burden
--------------------------(SEAL)
Childs Xxxxx Burden
By: /s/ J. Xxxx Xxxxxxxx, Xx.
--------------------------(SEAL)
J. Xxxx Xxxxxxxx, Xx.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------(SEAL)
Xxxxxxx X. Xxxxxx
By: /s/ X. X. Xxxxxx, III
--------------------------(SEAL)
X. X. Xxxxxx, III
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------(SEAL)
Xxxxxx X. Xxxxxx, Xx.
By: /s/ X. Xxxxxx Iselin, III
--------------------------(SEAL)
X. Xxxxxx Iselin, III
By: /s/ Xxxxxxx X. Xxxxx
--------------------------(SEAL)
Xxxxxxx X. Xxxxx
By: /s/ Xxxxxx X. Xxxxx
--------------------------(SEAL)
Xxxxxx X. Xxxxx
By: /s/ Xxxx X. Xxxxxx
--------------------------(SEAL)
Xxxx X. Xxxxxx
By: /s/ Xxxx Xxxxxxx
--------------------------(SEAL)
Xxxx Xxxxxxx
By: /s/ Xxxxxxxxx X. Xxxx
--------------------------(SEAL)
Xxxxxxxxx X. Xxxx
By: /s/ Xxxxxx X. Xxxxxx
--------------------------(SEAL)
Xxxxxx X. Xxxxxx
EXECUTIVE
/s/ Xxxxxx X. Xxxxxx
------------------------------(SEAL)
Xxxxxx X. Xxxxxx
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