EXHIBIT 10.2(b)
THIS EMPLOYMENT AGREEMENT made and entered into this 27th day of June, 2001
between TransCommunity Bankshares, Inc. ("Employer"), a Virginia
corporation, and Xxxxx X. Xxxxx ( Employee").
WHEREAS, Employer is in the process of forming a Virginia multi-bank
holding company ("Holding Company"); and,
WHEREAS, Employee has agreed to become President and Chief Operating
Officer of the Holding Company; and,
WHEREAS, the parties wish to establish the terms and conditions of
Employee's employment.
NOW, THEREFORE, in consideration of the promises and the mutual covenants
and agreements set forth herein, the parties hereby agree as follows:
1. RELATIONSHIP AND DUTIES BETWEEN THE PARTIES.
1.1 Holding Company.
Employer agrees to employ Employee on the effective date of this
Agreement as President and Chief Operating Officer of the Holding Company, and
to perform such services and duties as the Holding Company's Chief Executive
Officer may, from time to time, designate during the term hereof. Subject to the
terms and conditions hereof, Employee will perform such duties and exercise such
authority as are customarily performed and exercised by persons holding such
office, subject to the direction of the Chief Executive Officer and the Holding
Company's Board of Directors ("Holding Company Board").
1.2 Employee Undertakings.
1.2.1 Employee accepts such employment and shall devote his full
time, attention, and best efforts to the diligent performance of his duties
herein specified and as an officer of the Holding Company. While employed by
Employer, the Employee will not, without the prior express consent of the Chief
Executive Officer, accept employment with any other individual, corporation,
partnership, governmental authority or other entity, or engage in any other
venture for profit which Employer or the Holding Company Board may consider to
be in conflict with the best interests of the Holding Company or to be in
competition with the Holding Company, or which may interfere in any way with the
Employee's performance of his duties hereunder. It is understood that Employee
does have the right to participate in passive investments including income
producing real estate that does not conflict with the interest of the Banks or
Bank Holding Company.
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1.2.2 Employer shall not require the Employee, as a part of his
duties, to perform or to participate in any activity which constitutes a
violation of any state or federal law, rule, ordinance or regulation.
1.3. Regulatory Approval.
1.3.1 In the event that the Federal Reserve Board declines to
approve Employee as President of the Holding Company, but does not otherwise
prohibit the Holding Company from employing the Employee in an alternative
senior officer position, the Employer agrees to negotiate in good faith with
Employee to determine mutually acceptable terms of employment and compensation
in such lesser capacity.
2. DEFINITIONS.
2.1 "Complete disability" shall mean the inability of Employee, due to
illness, accident, or any other physical or mental incapacity, completely to
fulfill his obligations hereunder for an aggregate of ninety (90) days within
any period of 180 consecutive days during the term hereof.
2.2 "Cause" shall include, without limitation: dishonesty; theft;
conviction of a crime, which is either (a) a felony, or (b) a misdemeanor
involving moral turpitude or financial impropriety; unethical business conduct;
activity which is contrary to the Holding Company's interests; gross or repeated
negligence in carrying out Employee's duties; or material violation of
Employee's obligations hereunder.
2.3 "Employer" shall be deemed synonymous with the terms "Holding
Company" or "Holding Company Board", whenever the context so requires.
3. TERMS OF EMPLOYMENT
3.1 Term.
3.1.1 The term of Employee's employment with the Company shall be
for three (3) years from the effective date of this agreement (the "Term");
provided, however, the Company may, at its option and in its sole discretion,
not later than 30 days prior to the end of the Term, renew the Term for an
additional, successive two (2) year period (the "Renewal Term") the same terms
and conditions as are applicable during the initial Term, subject to such
appropriate increases in salary and other benefits as the parties may agree upon
unless terminated earlier pursuant to the terms hereof.
3.1.2 Employee's employment pursuant to this Agreement shall be
terminated by the first to occur of any of the following:
3.1.2.1 The death of Employee;
3.1.2.2 The complete disability of Employee,
3.1.2.3 The discharge of Employee by Employer for cause.
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Notwithstanding the foregoing, the Company may terminate immediately the
Employee's employment with the company with Cause(as defined herein) upon
written notice to the Employee. For purposes of this agreement, Cause will be
defined as:
3.1.3 Employees repeated failure to perform satisfactorily
Employee's job duties under this agreement and as determined by the Board of
Directors.
3.1.4 Employee's failure to comply with all material applicable
laws in performing Employee's job duties or in directing the conduct of Company
business.
3.1.5 Employee's commission of any felony or intentionally
fraudulent or other act against the company, or its affiliates, employees,
agents or customers which demonstrates Employee's untrustworthiness or lack of
integrity.
3.1.6 Employee's participation in any activity which is directly
competitive with or intentionally injurious to the Company.
3.1.7 Discharge for "cause" will require a two-thirds majority
vote of the Holding Company Board, exclusive of the Employee.
3.1.7 Termination of Employee's employment for cause shall
include termination as an employee, officer and director of the Holding Company.
Except as expressly provided herein, all compensation, benefits and
the like otherwise payable to Employee with respect to periods after his
cessation of employment shall cease to be due and owing for periods after
his cessation of employment for any reason.
3.2 Termination Without Cause. Employee shall serve at the pleasure of
the Holding Company Board. Employer may terminate this Agreement without cause
at any time upon an affirmative vote of two-thirds (2/3) of all members of the
Holding Company Board, whether or not in attendance at the meeting or voting
upon the issue. In the event of such termination without cause by Employer,
Employee shall be paid a severance payment equal to Employee's annual base
salary in effect at the time of termination or the remaining salary represented
in this contract, whichever is less. Such severance pay shall be paid in a lump
sum, less applicable tax withholdings, not later than thirty (30) days following
the effective date of termination. Employee shall not be entitled to any
performance bonus for the year of termination, except as may be awarded in the
sole discretion of the Holding Company Board.
4. COMPENSATION
For all services which Employee may render to Employer during the term
hereof, Employer shall pay to Employee, subject to such deductions as may be
required by law, according to the schedule set out below:
4.1 Base Salary. From the effective date hereof, Employee shall
receive for the term of this Agreement a salary based on an annual rate of
$124,000, payable in equal monthly installments, subject to such deductions as
may be required by law. The Employee will
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receive performance reviews at least annually at the end of each fiscal year
from the Chief Executive Officer, and the Employee's base salary may be
increased but not decreased at the sole discretion of the Holding Company Board.
4.2 Formation Bonus. Employer shall pay to Employee, on or before
January 31, 2002, a total formation bonus of up to $25,000, consisting of
payments as indicated below for each of the following items which has been
successfully completed on or before December 31, 2001; provided, that if
Employer determines to defer or abandon any of the efforts described in sections
4.2.1 through 4.2.3 below, Employee shall be deemed to have earned that portion
of the formation bonus provided all other terms are met:
4.2.1 The reorganization whereby the Bank of Powhatan, N.A. will
become a wholly owned subsidiary of the Holding Company (the "Reorganization")
has received final approval from all necessary regulatory authorities, and from
the shareholders of the Bank of Powhatan, N.A., and the Reorganization is
consummated; the Holding Company has properly completed all regulatory
applications necessary to operate the Holding Company and has filed the same
with the appropriate regulatory authorities; and the Holding Company has filed
with the Securities Exchange Commission and any necessary state regulatory
authorities of an appropriate registration statement to permit the public
offering of the stock of the Holding Company -$12,500.
4.2.3 All regulatory applications necessary to operate two
additional subsidiary national banks, the Bank of Goochland, N.A., and the Bank
of Louisa, N.A., excluding the identification of banking officers, board members
and operating locations, have been prepared and approved by the Holding Company
Board, each of the appropriate subsidiary bank boards, the OCC and the FDIC; and
the Holding Company shall have received firm commitments or actual payment of
capital from investors in an amount equal to $10 Million Dollars- $12,500
4.3 Termination for Cause. If Employee is terminated for cause prior
to the end of a fiscal year, Employer shall not be obligated to pay any annual
performance bonus for the year of, and any year, after such termination,
notwithstanding whether the Employee has met the requirements to earn components
of an annual performance bonus.
4.4 Fees. If Employee serves on the Holding Company Board or the board
of directors of a subsidiary of the Holding Company, or a committee thereof,
Employee shall not be entitled to directors fees or meeting fees unless
otherwise determined by the Holding Company Board.
5. OTHER BENEFITS
During the term of Employee's employment hereunder, Employer shall
provide the following to Employee:
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5.1 A term life insurance policy providing for death benefits of
$500,000 having a beneficiary designated by the Employee.
5.2 After consummation of the Reorganization, a health insurance
policy covering the Employee and, if the Employee desires, covering the
dependent children and spouse of the Employee at no cost to the Employee other
than usual deductibles, copayments and the like as may be applicable to all
other employees.
5.3 A long term disability insurance policy, as generally defined in
the insurance industry, providing for benefits of at least 60% of Employee's
annual base salary with a waiting period of no longer than six (6) months. This
long term disability policy will be as consistent as reasonably possible with
the definition of "complete disability" provided above.
5.4 A complete physical examination for the Employee on an annual
basis at the Holding Company's expense.
5.5 Employee shall be entitled to such paid sick leave, paid vacation
and other paid or unpaid leave as may be provided by the Holding Company under
its applicable personnel policies. Approved attendance at meetings or
conventions of banking associations or organizations shall not be charged
against Employee's annual vacation entitlement.
5.6 In the event that Employee is terminated by Employer for any
reason other than cause, Employee may continue the health and disability
insurance benefits in section 5.3 and 5.4 above for twelve months, or such
greater period as applicable law may require, provided Employee timely pays the
applicable premium cost therefor.
6. STOCK OPTIONS
6.1 No later than a reasonable time after the Reorganization is
effected, Employee shall be granted an option to purchase 21,000 shares of stock
of the Holding Company at an exercise price of not less than fair market value
at the date of grant, with performance based vesting as provided below. The
number of options to be awarded shall be equitably adjusted in the event of a
stock split, stock dividend, recapitalzation or similar event or in the event
the number of the Holding Company's common stock initial outstanding after the
Reorganization is other than 1,500,000 shares.
6.2 Vesting in (i.e., the right to exercise) the options shall be
based on the following: One-third of the option shares shall vest if at the end
of the first fiscal year of the Holding Company or December 31,2002, whichever
is sooner. A second one-third of the option shares shall vest if at the end of
the second fiscal year of the Holding Company or December 31, 2003, whichever is
sooner., The final one-third of the option shares shall vest if at the end of
the third fiscal year of the Holding Company or December 31, 2004, whichever is
sooner.
6.3 Subject to section 6.4 below, once the vesting benchmark for a
fiscal year is met, the options thereby vested may be exercised in whole or in
part at any time during the first ten (10) years after the date of the
Reorganization.
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6.4 If Employee is terminated for cause, all outstanding options
issued pursuant to section 6.1 shall be forfeited immediately. If Employee's
employment with Employer terminates for any reason other than cause, Employee
(or if deceased, his estate or other successor in interest) shall have ninety
(90) days after such termination in which to exercise any and all such stock
options which are then exercisable. In no event shall Employer be obligated to
issue any further stock options to Employee after his cessation of employment
for any reason.
7. FAILURE TO OBTAIN CHARTER OR FINANCING
Upon the happening of either of the following events, either party may
terminate this Agreement by notice in writing to the other, in which event this
Agreement shall cease and be null, void, and of no further force and effect,
except as expressly provided in this section:
7.1 The refusal or failure of the Federal Reserve Board to approve the
Reorganization within 180 days of an application for such having been submitted
to said agency by Employer; or
7.2 The failure for any reason by Employee to raise capital in an
amount equal to $ 2 Million within 180 days after Employee begins to raise such
capital for the Holding Company.
If this Agreement is terminated by reason of the foregoing, Employer
agrees that Employee shall be entitled, as liquidated damages in lieu of all
other claims, to an amount equal to Employee's annual base salary. Such amount
shall be paid in a lump sum, less applicable tax withholdings, not later than
thirty (30) days following the effective date of termination.
8. EXPENSES
Upon Employee's presentment to Employer of expense reports acceptable
to Employer and which are in sufficiently detailed form to comply with standards
for deduction of business expenses established from time to time by the Internal
Revenue Service, Employer will reimburse Employee for such expenses approved by
Employer and incurred by Employee in connection with performance of his duties
hereunder.
9. POST TERMINATION COVENANTS
9.1 At such time as Employee's employment by Employer terminates,
other than a termination of Employee by Employer without cause, whether during
the initial term of employment or thereafter, Employee agrees that for six (6)
months year following such termination he will not engage (either individually
or as an employee, director, consultant or representative of any other person or
entity) in any business activity in which the Holding Company or any of its
subsidiaries engages or has formulated plans to engage, within a twenty-five
(25) mile radius of any location of the Holding Company, or any location of its
subsidiary banks identified prior to such termination.
9.2 Employee further agrees that for one (1) year following
such termination he will not engage (either individually or as an employee or
representative of any other person or
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entity) in any business activity in which the Holding Company or any of its
subsidiaries engages or has formulated plans to engage as president or chief
operating officer of any financial institution, or as an officer other than
president or chief operating officer of a financial institution having assets of
$1,000,000,000 or less, within a twenty-five (25) mile radius of any location of
the Holding Company, or any location of a subsidiary bank existing prior to such
termination.
9.3 Furthermore, for one (1) year following such termination, Employee
agrees that he will not, without the prior written consent of Employer: (i)
furnish anyone with the name of, or any list or lists which identify, any
customers or stockholders of the Employer or utilize such list or information
himself; (ii) furnish, use, or divulge to anyone any confidential information of
Employer acquired by him from Employer and relating to Employer's business
activities; (iii) contact directly or indirectly any customer of Employer for
the purpose of soliciting such person's business for another bank or similar
financial institution; (iv) hire for any other employer (including himself) any
employee of Employer or directly or indirectly cause such employee to leave his
or her employment to work for another; (v) pursue an actual or potential
business opportunity of interest to and which could be pursued by Employer which
came to the attention of Employee in connection with his employment with
Employer and which Employee had not previously offered in writing to Employer
with sufficient advance notice to allow Employer to examine and pursue or reject
such opportunity. Excepted from the requirements of subparagraphs (i) and (ii)
in this paragraph is any information which is or becomes publicly available
information through no fault or act of Employee.
9.4 It is understood and agreed by the parties hereto that the
provisions of this section are independent of each other, and to the extent any
provision or portion thereof shall be determined by a court of competent
jurisdiction to be unenforceable, such determination shall not affect the
validity or enforceability of any other provision of this paragraph or the
remainder of this Agreement.
10. WAIVER OF PROVISIONS
Failure by any of the parties hereto to insist, in one or more
instances, on performance by the other in strict accordance with the terms and
conditions of this Agreement shall not be deemed a waiver or relinquishment of
any right granted hereunder or of the obligation of future performance of any
such term or condition or of any other term or condition of this Agreement,
unless such waiver is contained in writing signed by or on behalf of all the
parties.
11. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia. If for any reason any
provision of this Agreement shall be held by a court of competent jurisdiction
to be void or unenforceable, the same shall not affect the remaining provisions
hereof.
12. MODIFICATION AND AMENDMENT
This Agreement contains the sole and entire agreement among the
parties hereto and supersedes all prior discussions and agreements among the
parties, and any such prior
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agreements shall, from and after the date hereof, be null and void. This
Agreement shall not be modified or amended except by an instrument in writing
signed by or on behalf of all parties hereto.
13. COUNTERPARTS AND HEADINGS
This Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. The headings set out herein are for
convenience of reference and shall not be deemed a part of this Agreement.
14. INJUNCTIVE RELIEF
In the event of a breach or threatened breach by Employee of any of
the provisions hereof, and notwithstanding any other provision in this
Agreement, Employer, in addition to any other available rights or remedies,
shall be entitled to such temporary restraining orders and permanent
injunctions, as are allowable and authorized by the laws of the Commonwealth of
Virginia based on the facts of the case, to restrain such breach by Employee
and/or any persons directly or indirectly acting for or with him. Employee's
obligations under paragraph 9 hereof shall remain binding and enforceable
according to its terms notwithstanding expiration or termination of the other
terms of this Agreement or the expiration or termination of Employee's
employment relationship with the Bank.
15. SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon the
Employer, its successors and assigns and upon the Employee, and his heirs and
personal representatives. Neither this Agreement nor performance hereunder and
may be assigned by Employee or Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the date first written above.
EMPLOYEE:
/s/ Xxxxx X. Xxxxx (SEAL)
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EMPLOYER:
TransCommunity Bankshares, Inc.
By: /s/ Xxxxxxx X. Xxxxx (SEAL)
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