Exhibit 10.7

 

SUPPLEMENTAL RETIREMENT AGREEMENT

 

THIS SUPPLEMENTAL RETIREMENT AGREEMENT (“Agreement”), made and entered into this
27th day of May, 2008, by and between the Bank of Hampton Roads, a banking
corporation organized and existing under the laws of the commonwealth of
Virginia, hereinafter called the Corporation, and Douglas J. Glenn, hereinafter
called the Executive.

 

WITNESSETH:

 

WHEREAS, the Executive was employed by the Corporation on November 1, 2007 as
its Executive Vice President and General Counsel;

 

WHEREAS, the terms of this Agreement were contained in summary form in a letter
outlining the terms of employment between the Corporation and the Executive
dated September 11, 2007; and,

 

WHEREAS, the Corporation and the Executive now desire to enter into this
Agreement as follows:

 

ARTICLE ONE

 

Definitions

 

1.01

“Agreement Effective Date” is November 1, 2007.

 

1.02

“Plan Retirement Date” is the Executive’s 65th birthday.

 

1.03       “Plan Administrator” shall mean the Board of Directors of the
Corporation or their designee.

 

1.04      “Change in Control” means (a) the date that any one person, or more
than one person, acting as a group, acquires ownership of stock of the Parent
Company that, together with stock 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 Parent Company, (b) the date any one person, or more than one person, acting
as a group, acquires (or has acquired ownership during the 12 month period
ending on the date of the most recent acquisition be such person) ownership of
stock of the Parent Company possessing 30% or more of the total voting power of
the stock, or (c) the date a majority of the members of the Parent Company’s
Board is replaced during any twelve (12) month period by directors whose
appointment or election is not endorsed by a majority of the members of the
Parent Company’s Board before the date of the appointment or election.

 

1.05      “Accrued Benefit” shall mean the Executive’s Normal Retirement Benefit
calculated on the basis of the Benefit Computation Base as of the date on which
the Executive’s employment with the Corporation is terminated (to include
voluntary retirement), multiplied by a fraction: the numerator of which is: if
employment is terminated prior to November 1, 2012, the numerator is

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zero (0); if employment is terminated on or after November 1, 2012 the numerator
is the number of completed calendar months the Executive has participated under
this Agreement after November 1, 2007 to a maximum of 180; and the denominator
of which is the number 180.

 

1.06       “Benefit Computation Base” shall mean the average of the Executive’s
compensation including bonuses (but excluding profit sharing contributions) from
the Corporation and the Parent Company for his three highest compensation
completed calendar years prior to the year during which the Plan Retirement Date
occurs.

 

1.07      “Normal Retirement Benefit” shall mean an annual benefit payable in
fifteen (15) equal installments equal to the greater of: (a) fifty percent (50%)
of the Executive’s Benefit Computation Base, or (b) $150,000.

 

1.08      ”Actuarial Equivalent” shall mean a benefit of equivalent current
value to the benefit which could otherwise have been provided to the Executive,
computed on the basis of an interest rate of (7.0%) per year.

 

1.09       “Disability” or “disability” shall mean that the Executive: (a) is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, or (b) is receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Company because of any medically determinable physical or mental impairment
expected to result in death or expected to last for a continuous period of not
less than 12 months.

 

1.10

“Parent Company” shall mean Hampton Roads Bankshares, Inc.

 

 

ARTICLE TWO

 

2.01       Employment. The Corporation agrees to employ the Executive in such
capacity as the Corporation may from time to time determine. The Executive will
continue in the employ of the Corporation in such capacity and with such duties
and responsibilities as may be assigned to him, and with such compensation as
may be determined from time to time by the Board of Directors of the
Corporation. Executive agrees to devote his full time and attention exclusively
to the business and affairs of the Corporation, except during vacation periods
and to use his best efforts to furnish faithful and satisfactory services to the
Corporation. The Executive further agrees that during the period of his
employment pursuant to this Agreement he will not have any other business
affiliations without the approval of the Board of Directors of the Corporation.

 

The supplemental retirement benefits provided by this Agreement are granted by
the Corporation as a fringe benefit and are not part of any salary reduction
plan or an arrangement deferring a bonus or a salary increase. The Executive has
no option to take any current payment or bonus in lieu of these salary
continuation benefits.

 

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ARTICLE THREE

 

3.01       Retirement Benefit. The Executive shall receive his Normal Retirement
Benefit on the first day of the month following the attainment of his Plan
Retirement Date.

 

3.02       Retirement Death Benefit. The Corporation agrees that if the
Executive shall so retire, but shall die before receiving the fifteen (15)
annual payments, it will continue to make such annual payments to such
individual or individuals as the Executive may have designated in writing, filed
with and been approved by the Corporation, until the expiration of fifteen (15)
years from the date such payments commence. In the absence of any effective
designation of beneficiary any such amounts becoming due and payable upon the
death of the Executive shall be payable to his duly qualified executor or
administrator.

 

ARTICLE FOUR

 

4.01       Death Prior to Retirement. In the event the Executive should die
while actively employed by the Corporation at any time after November 1, 2027
but prior to his retirement from the Corporation, the Corporation shall pay the
greater of [a] the sum of Five Hundred Thousand Dollars ($500,000.00) in equal
annual installments of Fifty Thousand Dollars ($50,000.00) for a period of ten
(10) years, or [b] the Normal Retirement Benefit calculated using the
Executive’s date of death as the date of his termination of employment with the
Corporation, to such individual or individuals as the Executive may have
designated in writing, filed with and approved by the Corporation. The said
annual payments shall begin on the first day of the third month following the
Executive’s date of death. In the absence of any effective designation of
beneficiary by the Executive, any such amounts becoming due and payable upon the
death of the Executive shall be payable to his duly qualified executor or
administrator, or, if none shall be appointed, as provided by applicable law.

 

ARTICLE FIVE

 

5. 01      Involuntary Termination. If the Corporation terminates the
Executive’s employment prior to his Plan Retirement Date for “Cause”, the
Executive Shall not be entitled to any benefits under the terms of this
Agreement. For purposes of this Agreement, “Cause shall mean:

 

(a) deliberate dishonesty with respect to the Corporation or any subsidiary or
affiliate thereof;

 

(b) conviction of a crime involving moral turpitude; or

 

(c) gross and willful failure to perform a substantial portion of the
Executive’s duties and, responsibilities hereunder, which failure continues for
more than thirty days after written notice given to the Executive pursuant to a
two-thirds vote of the Board of Directors then in office, such vote set forth in
reasonable detail the nature of such failure.

 

5.02

Other Termination of Service. The corporation reserves the right to terminate
the

 

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employment of the Executive at any time prior to retirement. In the event that
the employment of the Executive shall terminate prior to his Plan Retirement
Date, other than by his death or his discharge for actions inimical to the
Corporate interests, but including his disability, then this Agreement shall
terminate upon the date of such termination of employment and the Corporation
shall pay to the Executive as severance compensation the present value
(“Actuarial Equivalent”) of his “Accrued Benefit”. This amount shall be paid to
the Executive in a LUMP SUM with the payment due on the first day of the second
month following the month in which such severance occurs.

 

5.03       Benefits Payable When An Executive’s Services Are Terminated
Following A Change In Control. If the termination of an Executive’s service
occurs within twenty-four (24) months following a Change in Control, then
Executive will be entitled to a lump sum payment equal to his (i) Normal
Retirement Benefit increased by 50% if he has not attained his Plan Retirement
Date, or (ii) the sum of his remaining installment payments increased by 50% if
he has attained his Plan Retirement Date. This amount shall be paid to the
Executive on the first day of the second month following the month in which such
severance occurs. For example, assume that: (a) the Executive’s annual benefit
is $50,000, (b) he received 5 annual installments under the terms of the plan
and (c) the Change in Control occurs before the 6th annual installment. The
Executive would be entitled to a lump sum payment of $750,000 which is the sum
of the remaining 10 installments of $50,000 increased by 50%.

 

ARTICLE SIX

 

6.01 Alienability. Neither the Executive, his widow, nor any other beneficiary
under this Agreement shall have any power or right to transfer, assign,
anticipate, hypothecate, mortgage, commute, modify, or otherwise encumber in
advance any of the benefits payable hereunder, nor shall any of said benefits be
subject to seizure for the payment of any debts, judgments, alimony or separate
maintenance, owed by the Executive or his beneficiary or any of them, or be
transferable by operation of law in the event of bankruptcy, insolvency, or
otherwise. In the event the Executive or any beneficiary attempts assignment,
commutation, hypothecation, transfer, or disposal of the benefit hereunder the
Corporation’s liabilities shall forthwith cease and terminate.

 

ARTICLE SEVEN

 

7.01       Participation in Other Plans. Nothing contained in this Agreement
shall be construed to altar, abridge, or in any manner affect the rights and
privileges of the executive to participate in and be covered by any pension,
profit-sharing, group insurance, bonus or similar employee plans which the
Corporation may now or hereafter have.

 

ARTICLE EIGHT

 

8.01       Funding. The Corporation reserves the absolute right at its sole and
exclusive discretion either to fund the obligations of the Corporation
undertaken by this agreement or to refrain from funding the same, and to
determine the extent, nature, and method of such funding. Should the

 

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Corporation select to fund this Agreement, in whole or in part, through the
medium of life insurance or annuities, or both, the Corporation shall be the
owner and beneficiary of the policy. The Corporation reserves the absolute
right, in its sole discretion, to terminate such life insurance or annuities, as
well as any other funding program, at any time, either in whole or in part. At
no time shall the Executive be deemed to have any right, title or interest in or
to any specified asset or assets of the Corporation, including, but not by way
of restriction, any insurance or annuity contract or contracts or the proceeds
therefrom.

 

Any such policy shall not in any way be considered to be security of the
performance of the obligations of this Agreement. It shall be, and remain, a
general, unpledged, unrestricted asset of the Corporation.

 

If the Corporation purchases a life insurance or annuity policy on the life of
the Executive, he agrees to sign any papers that may be required for that
purpose and to undergo any medical examination or tests which may be necessary.

 

If the Executive is asked to submit information to an insurance company and if
the Executive makes a material misrepresentation in an application for any
insurance that may be used by the Corporation to insure any or all of its
obligations under this Agreement, and if as a result of that material
misrepresentation the insurance company is not required to pay all or any part
of the benefits provided under that insurance, the Executive shall forfeit all
rights and benefits payable under this Agreement.

 

8.02       This Article shall not be construed as giving the Executive or his
beneficiary any greater rights than those of any other unsecured creditor of the
Corporation.

 

ARTICLE NINE

 

9.01       Reorganization. The Corporation shall not merge or consolidate into
or with another corporation, or reorganize, or sell substantially all of its
assets to another corporation, firm, or person unless and until such succeeding
or continuing corporation, firm, or person agrees to assume and discharge the
obligations of the Corporation under this Agreement. Upon the occurrence of such
event, the term “Corporation” as used in this Agreement shall be deemed to refer
to such successor or survivor Corporation.

 

ARTICLE TEN

 

10.01     Benefits and Burdens. This Agreement shall be binding upon and inure
to the benefit of the Executive and his personal representatives, and the
Corporation, and any successor organization which shall succeed to substantially
all of either the Corporation’s assets or its business without regard to the
form of such succession.

 

ARTICLE ELEVEN

 

11.01     Communications. Any notice or communication required of either party
with respect to this Agreement shall be made in writing and may either be
delivered personally or sent by first

 

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class mail to: Bank of Hampton Roads, 999 Waterside Dr., Suite 200, Norfolk, VA
23510. Each party shall have the right by written notice to change the place to
which any notice may be addressed.

 

ARTICLE TWELVE

 

12.01     Not a Contract of Employment. This Agreement shall not be deemed to
constitute a contract of employment between the parties hereto, nor shall any
provision hereof restrict the right of the Corporation to discharge the
Executive, or restrict the right of the Executive to terminate his employment.

 

ARTICLE THIRTEEN

 

13.01     Claims Procedure. In the event that benefits under this Plan Agreement
are not paid to the Executive (or his beneficiary on the case of the Executive’s
death), and such person feel entitled to receive them, a claim shall be made in
writing to the Plan Administrator within sixty (60) days from the date payments
are not made. Such claim shall be reviewed by the Plan Administrator and the
Corporation. If the claim is denied, in full or in part, the Plan Administrator
shall provide a written notice within ninety (90) days setting forth the
specific reasons for denial, specific reference to the provisions of this
Agreement upon which the denial is based, and any additional material or
information necessary to perfect the claim, if any. Also, such written notice
shall indicate the steps to be taken if a review of the denial is desired.

 

If a claim is denied and a review is desired, the Executive (or his beneficiary
in the case of the Executive’s death), shall notify the Plan Administrator in
writing within sixty (60) days (and a claim shall be deemed denied if the Plan
Administrator does not take any action within the aforesaid ninety (90) day
period). In requesting a review, the Executive or his beneficiary may review
this Plan Agreement or any documents relating to it and submit any written
issues and comments he or she may feel appropriate. In its sale discretion the
Plan Administrator shall then review the claim and provide a written decision
within sixty (60) days. This decision likewise shall state the specific reason
for the decision and shall include reference to specific provisions of this Plan
Agreement on which the decision is based.

 

For purposes of implementing this claims procedure (but not for any other
purpose), (___________) is hereby designated as the Named Fiduciary and Plan
Administrator of this Plan Agreement.

 

ARTICLE FOURTEEN

 

14.01     This agreement shall be construed in accordance with and governed by
the laws of the Commonwealth of Virginia.

 

 

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ARTICLE FIFTEEN

 

15.01     Compliance with Section 409A of the Internal Revenue Code (“Code”).
Any benefit, payment or other right provided by the Plan shall be provided or
made in a manner, and at such time, in such form and subject to such election
procedures (if any), as complies with the applicable requirements of Code
Section 409A(a)(1), including without limitation, deferring payment until the
occurrence of a specified payment event described in Code Section 409A(a)(2).
Notwithstanding any other provision hereof or document pertaining hereto, the
Plan shall be so construed and interpreted to meet the applicable requirements
of Code Section 409A to avoid a plan failure described in Code Section
409A(a)(1).

 

15.02     Delay in Distributions. To the extent required by Section 409A of the
Code, in the event the Executive is a “specified employee” as provided in
Section 409A(a)(2)(b)(i) on his date of termination from employment, any amounts
payable hereunder shall be paid no earlier than the first business day after the
six month anniversary of the date of termination. Whether the Executive is a
specified employee and whether an amount payable to the Executive hereunder is
subject to Section 409A of the Code shall be determined by the Company.

 

15.03 Anti-Acceleration. The Company shall not accelerate the time over which
payments shall be made to the Executive; provided, however, the Company, in its
discretion, may accelerate payments under the Plan in accordance with each of
the payment events contained in Treasury Regulation section 1.409A-3(j)(4)(ii)
through (xiv).

 

 

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IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed and its corporate seal affixed, duly attested by its Secretary, and the
Executive has hereunto sat his hand and seal at Norfolk, Virginia, the day and
year first above written.

 

THE BANK OF HAMPTON ROADS

 

 

 

By:

/s/  Emil A. Viola

 

Emil A. Viola, Chairman

 

 

ATTEST:

 

/s/ Tiffany K. Glenn

 

Tiffany K. Glenn, Secretary

 

 

EXECUTIVE:

 

 

 

/s/ Douglas J. Glenn

 

Douglas J. Glenn

 

 

Acknowledged and Affirmed:

 

HAMPTON ROADS BANKSHARES, INC.

 

 

 

By:

/s/  Emil A. Viola

 

Emil A. Viola, Chairman

 

ATTEST:

 

/s/ Tiffany K. Glenn

Tiffany K. Glenn, Secretary

 

 

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