Exhibit 10.54
EMPLOYMENT AND CHANGE-OF-CONTROL AGREEMENT
THIS EMPLOYMENT AND CHANGE-OF-CONTROL AGREEMENT (“Agreement”) made as of the 1st
day of June, 2011, by and between CENTRA BANK, INC., a West Virginia corporation
(“Employer”), and Henry M. Kayes, Jr. (“Employee”), joined in by CENTRA
FINANCIAL HOLDINGS, INC., a West Virginia corporation (“Centra Financial”), and
by CENTRA FINANCIAL CORPORATION-MARTINSBURG, INC., a West Virginia corporation
(“CFC”).
WITNESSETH THAT:
WHEREAS, Employer desires to retain the services of Employee as its Executive
Vice President and Chief Credit Officer and President — Centra Financial
Corporation-Martinsburg, Inc., and Employee is willing to make his or her
services available to Employer, on the terms and subject to the conditions set
forth herein; and
WHEREAS, Employee acknowledges that this Agreement is a benefit to him or her,
that this Agreement is not required for continued employment with Employer or
any affiliate and that Employee is executing this Agreement voluntarily and of
his or her free will and volition.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties hereto agree as follows:
1. Employment. Employee is hereby employed as Executive Vice President and Chief
Credit Officer of Employer and President — Centra Financial
Corporation-Martinsburg, to have such duties and responsibilities as are
commensurate with such position. Employee hereby accepts and agrees to such
employment, subject to the general supervision and pursuant to the orders,
advice, and direction of Employer and its Board of Directors. Employee shall
perform such duties as are customarily performed by one holding such position in
other same or similar businesses or enterprises as that engaged in by Employer,
and shall also additionally render such other services and duties as may be
reasonably assigned to him or her from time to time by Employer, consistent with
his position.
2. Term of Agreement. The term of this Agreement (Term) shall commence from and
after the date hereof, and shall terminate on the day next preceding the second
anniversary of the date hereof, except for the provisions of Subsection 4(d),
which will survive the term of this Agreement and shall be for a term of two
(2) years (Change-of-Control Term). The Change-of-Control Term will be
automatically extended for one month, on each monthly anniversary date after the
date hereof, that Employee is employed by Employer.

 

 

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3. Compensation; Other Benefits.
a. For all services rendered by Employee to Employer under this Agreement,
Employer shall pay to Employee, for the two-year period beginning on the date
hereof, an annual salary of $198,267.28, payable in accordance with the payroll
practices of Employer applicable to all officers. This salary may be reviewed
for an increase sooner if approved by Employee’s Board of Directors. Any salary
increase payable to Employee shall be determined based on a review of Employee’s
total compensation package, Employer’s performance, the performance of Employee
and market competitiveness. Employee’s annual salary, as it may be adjusted from
time to time, will be his or her base salary for purposes of future calculations
of benefits. The base salary for purposes of future calculation of benefits may
not be reduced.
b. Except as modified by this Agreement, Employee shall be entitled to
participate in all compensation or employee benefit plans or programs for which
Employee may legally be eligible, and to receive all benefits, perquisites and
emoluments for which executive officers of Employer generally are eligible under
any plan or program now or hereafter established and maintained by Employer,
including group hospitalization, health, dental care, life insurance, travel or
accident insurance, disability plans, tax-qualified or non-qualified pension,
savings, thrift, profit-sharing, bonus and incentive plans, deferred
compensation plans, sick-leave plans, and executive incentive compensation
plans, including, without limitation, capital accumulation programs and stock
purchase plans. Employee shall be entitled to four (4) weeks of vacation per
year.
c. Employer shall pay or reimburse Employee for all reasonable travel and other
expenses incurred by Employee (and his or her spouse where there is a legitimate
business reason for his or her spouse to accompany him or her) in connection
with the performance of his or her duties and obligations under this Agreement,
subject to Employee’s presentation of appropriate vouchers in accordance with
such procedures as Employer may from time to time establish for executive
officers generally.
4. Termination.
a. Termination of Employment. Except for Just Cause, in the event that Employee
shall suffer a termination of employment by Employer or a material change in
title, position, status, pay or benefits, location of employment or authority or
duties, the Employee shall be entitled to receive two year’s compensation,
including base salary for purposes of benefit calculation, and customary and
usual incentives and bonuses (based on the average of the incentives and bonuses
paid to Employee during or for the previous two full years, or if less than two
full years the amount of said incentives and bonuses so paid divided by two,
prior to termination) payable to Employee within ninety (90) days after
termination, and all benefits as set forth in this Agreement, including the
benefits provided for in Section 3 hereof, except use of an automobile and
country club membership, will continue to be paid by Employer for a period of
two (2) years or until Employee is employed by a third party who provides or
makes available such benefits to its employees, generally, whichever is earlier.
At the time of said termination, this Agreement shall terminate and the Employer
shall be obligated to make the payments as set forth in this Subsection 4(a) as
severance compensation to the Employee. Provided, however, that the payments
provided for herein shall not be payable to Employee in the event of voluntary
termination by Employee, except a voluntary termination by Employee following a
material change in title, position, status, pay or benefits, location of
employment or authority or duties by Employer without Just Cause.

 

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b. Death. If Employee shall die during the Term, this Agreement and the
employment relationship hereunder will automatically terminate on the date of
death, which date shall be the last date of the Term. Notwithstanding this
Subsection 4(b), if Employee dies while employed by Employer, Employee’s estate
shall receive Employee’s Compensation as defined in Section 3 herein for a
period of two years. If the Employee shall die while terminated from the Bank
and is receiving payments as set forth in Subsection 4(a) hereinabove, then the
Employee’s beneficiaries shall, at their option, be entitled to receive the
remainder of payments due hereunder in a lump sum. Said amount shall be payable
on the first day of the second month following the decease of the Employee.
c. Just Cause. Employer shall have the right to terminate Employee’s employment
under this Agreement at any time for Just Cause, which termination shall be
effective immediately. Termination for “Just Cause” shall be defined as (i) the
willful and/or continued failure of Employee to perform substantially his or her
duties with the Employer to the Employer’s reasonable satisfaction (other than
any such failure resulting from Employee’s incapacity due to illness), (ii) the
willful engaging by Employee in illegal conduct, personal dishonesty, gross
personal misbehavior, or gross misconduct that is demonstrably injurious to
Employer, Centra Financial, or CFC, (iii) the Employee’s conviction of, or plea
of guilty or nolo contendere to, a felony involving moral turpitude, (iv) breach
of any fiduciary duty involving personal profit, (v) failure to pass any legal
drug test given by or on behalf of the Employer pursuant to a drug testing
policy applicable to Employer’s employees generally, (vi) a material breach by
Employee of this Agreement or any employment agreement with Employer, or
(vii) breach of Section 6 hereof, with a breach to be determined in Employer’s
sole discretion. In the event Employee’s employment under this Agreement is
terminated for Just Cause, Employee shall have no right to receive compensation
or other benefits under this Agreement for any period after such termination.
d. Change of Control. In the event of a Change of Control (as defined below) of
Employer at any time after the date hereof, and there is a termination as
defined in Section 4(a) within 24 months after the Change of Control, Employee
shall be entitled to receive any compensation due but not yet paid through the
date of termination and all compensation and benefits as set forth in Section
4(a) of this Agreement payable within ninety (90) days following such
termination.
A “Change of Control” shall be deemed to have occurred if (i) any person or
group of persons (as defined in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934) together with its affiliates, excluding employee benefit
plans of Employer, is or becomes, directly or indirectly, the “beneficial owner”
(as defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
of securities of Employer or Centra Financial representing 50% or more of the
combined voting power of Employer’s then outstanding securities; provided,
however, that any public or private stock issuance by Employer shall not
constitute a change of control for purposes hereunder; or (ii) during the term
of this Agreement: (X) as a result of a tender offer or exchange offer for the

 

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purchase of securities of Employer (other than such an offer by Employer for its
own securities), or (Y) as a result of a proxy contest, merger, consolidation or
sale of assets, and (Z) as a result of either or any combination of the
foregoing, there is a change in the composition of at least one-half of the
members of Employer’s Board of Directors, except new directors whose election or
nomination for election by Employer’s shareholders is approved by a vote of at
least a majority of the directors still in office who were directors at the
beginning of such two-year period; or (iii) the shareholders of Employer or
Centra Financial approve a merger or consolidation of Employer or Centra
Financial with and into any other corporation or entity, which entity is the
survivor, other than a merger or consolidation which would result in the voting
securities of Employer or Centra Financial outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or being converted into
voting securities of the surviving entity) at least 50% of the combined voting
power of the voting securities of Employer or Centra Financial or such surviving
entity outstanding immediately after such merger or consolidation.
e. Non-Competition. During any period in which or for which Employee receives
compensation pursuant to this Agreement, including any period represented by
payments under Section 4(a) hereof, Employee will not directly or indirectly,
either as a principal, agent, employer, stockholder, co-partner or in any other
individual or representative capacity whatsoever, engage in the banking and
financial services business, which includes consumer, savings, commercial
banking and the insurance and trust businesses, or the savings and loan or
mortgage banking business, or any other business in which Employer or its
Affiliates are engaged, anywhere in any county in which Employer or its
Affiliates have an office, and in any county contiguous to any county in which
Employer or its Affiliates have an office, nor will Employee solicit, or assist
any other person in soliciting, any depositors or customers of Employer or its
Affiliates or induce any then or former employee of Employer or its Affiliates
to terminate their employment with Employer or its Affiliates. The term
Affiliate as used in this Agreement means a Person that directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, another Person. The term Person as used in this Agreement
means any person, partnership, corporation, group or other entity.
f. No Mitigation. In receiving any payments pursuant to this Section 4, Employee
shall not be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Employee hereunder and such amounts
shall not be reduced or terminated whether or not Employee obtains other
employment.
g. Parachute Payments.
(1) Notwithstanding anything in this Agreement to the contrary, in the event it
shall be determined that any payment, award, benefit or distribution (or any
acceleration of any payment, award, benefit or distribution) by Employer (or any
of its affiliated entities) or any entity which effectuates a Change of Control
(or any of its affiliated entities) to or for the benefit of Employee (whether
pursuant to the terms of this Agreement or otherwise) (the Payments) would be
subject to the excise tax (the Excise Tax) under Section 4999 of the Internal
Revenue Code of 1986, as amended (the Code), then the amounts payable to
Employee under this Agreement shall be reduced (reducing first the payments
under Section 3(b), unless an alternative method of reduction is elected by
Employee) to the maximum amount as will result in no portion of the Payments
being subject to such Excise Tax (the Safe Harbor Cap). For purposes of reducing
the Payments of the Safe Harbor Cap, only amounts payable under this Agreement
(and no other Payments) shall be reduced, unless consented to by Employee.

 

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(2) All determinations required to be made under this Subsection 4(g) shall be
made by the public accounting firm that is generally retained by Employer (the
Accounting Firm). In the event that the Accounting Firm is serving as accountant
or auditor for any individual, entity or group effecting a Change of Control (or
if the Accounting Firm fails to make the Determination), Employee may appoint
another nationally recognized public accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). If payments are reduced to the Safe Harbor Cap, the
Accounting Firm shall provide a reasonable opinion to Employee that he or she is
not required to report any Excise Tax on his federal income tax return. All
fees, costs and expenses (including, but not limited to the costs of retaining
experts) of the Accounting Firm shall be borne by Employer, and the
determination by the Accounting Firm shall be binding upon Employer and Employee
(except as provided in Subsection (3) below).
(3) If it is established pursuant to a final determination of a court or an
Internal Revenue Service (the IRS) proceeding which has been finally and
conclusively resolved, that Payments have been made to, or provided for the
benefit of, Employee by Employer, which are in excess of the limitations
provided in this Section 4 (hereinafter referred to as an Excess Payment), such
Excess Payment shall be deemed for all purposes to be a loan to Employee made on
the date Employee received the Excess Payment and Employee shall repay the
Excess Payment to Employer on demand, together with interest on the Excess
Payment at the applicable federal rate (as defined in Section 1274(d) of the
Code) from the date of Employee’s receipt of such Excess Payment until the date
of such repayment. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the determination, it is possible that
Payments which will not have been made by Employer shall have been made (an
Underpayment), consistent with the calculations required to be made under this
Subsection 4(g). In the event that it is determined (i) by the Accounting Firm,
Employer (which shall include the position taken by Employer, or together with
its consolidated group, on its federal income tax return) or the IRS, or
(ii) pursuant to a determination by a court, that an Underpayment has occurred,
Employer shall pay an amount equal to such Underpayment to Employee within ten
(10) days of such determination together with interest on such amount at the
applicable federal rate from the date such amount would have been paid to
Employee until the date of payment.
h. Key Employee. To the extent that Employee is a “key employee” (as defined
under Section 416(i) of the Internal Revenue Code, disregarding
Section 416(i)(5) of the Internal Revenue Code) of the Company, no payment of
Termination Compensation may be made under this Section 4 prior to the earlier
of (i) the expiration of the six (6) month period measured from the date of
Employee’s separation from service, or (ii) the date of the Employee’s death;
provided, however, that the six (6) month delay required under this Section 4(i)
shall not apply to the portion of any payment resulting from the Employee’s
“involuntary separation from service” (as defined in Treas. Reg. 1.409A 1(n) and
including a “separation from service for good reason” as defined in Treas. Reg.
1.409A i(n)(2) that (a) is payable no later than the last day of the second year
following the year in which the separation of service occurs, and (b) does not
exceed two times the lesser of (i) the Employee’s annualized compensation for
the year prior to the year in which the separation from services occurs, or
(ii) the dollar limit described in Section 401 (a)(17) of the Code. To the
extent Termination Compensation payable in monthly installments under this
Section 4 is required to be deferred under the preceding sentence, the first six
months of monthly installments shall be payable in month seven following
Employee’s separation from service and the remaining monthly payments shall be
made when otherwise scheduled.

 

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i. Termination of Employment. Any reference in this Agreement to a termination
of employment, severance from employment or separation from employment shall be
deemed to mean a “Termination of Employment.” A “Termination of Employment”
means the termination of the Employee’s employment with the Company and its
Affiliates for reasons other than death or disability. Whether a Termination of
Employment takes place is determined based on the facts and circumstances
surrounding the termination of the Employee’s employment. A Termination of
Employment will be considered to have occurred if it is reasonably anticipated
that:
(i) the Employee will not perform any services for the Company or its Affiliates
after Termination of Employment, or
(ii) the Employee will continue to provide services for the Company or its
Affiliates at an annual rate that is less than fifty percent (50%) of the bona
fide services rendered during the immediately preceding twelve (12) months of
employment.
5. Other Employment. Employee shall devote all of his or her business time,
attention, knowledge and skills solely to the business and interest of Employer
and its Affiliates, and Employer and its Affiliates shall be entitled to all of
the benefits, profits and other emoluments arising from or incident to all work,
services and advice of Employee, and Employee shall not, during the Term hereof,
become interested directly or indirectly, in any manner, as partner, officer,
director, stockholder, advisor, employee or in any other capacity in any other
business similar to Employer’s business; provided, however, that nothing herein
contained shall be deemed to prevent or limit the right of Employee to invest in
a business similar to Employer’s business if such investment is limited to less
than 5% of the capital stock or other securities of any corporation or similar
organization whose stock or securities are publicly owned or are regularly
traded on any public exchange or less than 1% of the capital stock of any other
entity.
6. Nondisparagement. Employee agrees that during the Term of this Agreement and
for five (5) years thereafter not to make any statements that disparage
Employer, its respective affiliates, employees, officers, directors, products or
services. Notwithstanding the foregoing, statements made in the course of sworn
testimony in administrative, judicial or arbitral proceedings (including,
without limitation, depositions in connection with such proceedings) shall not
be subject to this Section 6. For the purposes of this Agreement the term
“disparagement”, “disparaging” or “disparage” shall mean a comment, remark,
statement or implication, direct or indirect, made orally, in writing or by any
other medium that has the effect of: (i) casting doubt on the quality of goods
or services of a person or entity; (ii) influencing, or tending to influence,
another not to conduct business or associate with a person or entity;
(iii) derogating, belittling, discrediting, casting in a bad light or defaming a
person or entity; or (iv) taking away, casting doubt on, or reducing, or
detracting from, the general reputation, veracity, competency, character or
worth of a person or entity or the quality of the products or services of a
person or entity.

 

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7. Arbitration. Except as otherwise provided in this Section 7, all disputes
arising out of or relating to this Agreement, the interpretation or application
of this Agreement, or Employee’s employment with Employer (hereinafter “Covered
Disputes”), shall be resolved solely and exclusively by binding arbitration,
applying the law of West Virginia.
Unless otherwise agreed in writing by the parties:

  (i)  
the arbitration will be conducted before a single arbitrator of the American
Arbitration Association (“AAA”), in accordance with the rules of the AAA then in
effect regarding arbitration of employment disputes, which arbitrator shall be
independent of and from all of the parties, and the arbitrator, any immediate
family member living in the arbitrator’s household or any entity controlled by
the arbitrator or any immediate family member living in the arbitrator’s
household shall not be a customer, supplier, contractor or shareholder of
Employer or any affiliate thereof; and
    (ii)  
the arbitration will be conducted in Morgantown, West Virginia.

For purposes of the foregoing, “control” shall mean the direct or indirect
ownership of a majority of an entity’s capital stock, ownership units or other
ownership interests, or the direct or indirect ownership of an interest in a
partnership as a general partner. The award rendered by the arbitrator shall be
binding on the parties, and judgment on such award may be entered by any court
of competent jurisdiction.
a. Injunctions to Enforce Arbitration and to Restrain Violations Pending
Arbitration. Notwithstanding the foregoing, either party may file a lawsuit to
compel arbitration of disputes between the parties and to enjoin violations of
this Agreement pending arbitration. Such lawsuit may be brought only in the
Circuit Court of Monongalia County, West Virginia, or the United States District
Court for the Northern District of West Virginia, and Employee and Employer
hereby waive any right that they might have to challenge the selection of those
forums, including but not limited to challenges to personal jurisdiction, venue,
or the convenience of the forum. Specifically, by executing this Agreement,
Employee and Employer agree, consent, and stipulate that, in any action to
compel arbitration of a Covered Dispute or to enjoin violations of this
Agreement pending arbitration: (i) the aforesaid courts have personal
jurisdiction over Employee and Employer, (ii) venue is proper in those courts,
(iii) those courts provide a convenient forum for that action; and (iv) neither
the Employer nor the Employee shall be required to provide a bond or surety
pursuant to West Virginia Code Section 53-5-9, and in the event such bond or
such surety is required that the amount of such bond or such surety be as little
as possible.

 

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To the maximum extent permitted by the law, the parties stipulate and agree that
this provision supersedes any analysis of choice of laws. To the extent that a
choice-of-laws analysis is required, the parties stipulate and agree that West
Virginia and Federal law shall govern such analysis.
b. Arbitration Costs. Employer shall pay all costs and fees charged by AAA for
the arbitration, including the arbitrator’s fees and expenses (“Arbitration
Costs”) provided, however, the arbitrator shall apportion the award of
Arbitration Costs between the parties based upon their relative degree of
success.
8. Joinder by Centra Financial and CFC. Centra Financial and CFC join into this
Agreement to evidence their consent to, and their agreement to be bound by, the
terms hereof. CFC further agrees to employ Employee as its Executive Vice
President and Chief Credit Officer of Employer and President — Centra Financial
Corporation-Martinsburg, Inc. during all times that Employee is Executive Vice
President of Employer, with compensation to Employee to be made by Employer
until such time as Employer, Employee, CFC, and Centra Financial agree to the
contrary.
9. Miscellaneous.
a. This Agreement shall be governed by and construed in accordance with the laws
of the State of West Virginia without regard to conflicts of law principles
thereof.
b. This Agreement constitutes the entire Agreement between Employee and
Employer, with respect to the subject matter hereof, and supersedes all prior
agreements with respect thereto.
c. This Agreement may be executed in one or more counterparts, all of which,
taken together, shall constitute one and the same instrument.
d. Any notice or other communication required or permitted under this Agreement
shall be effective only if it is in writing and delivered in person or by
reliable overnight courier service or deposited in the mails, postage prepaid,
return receipt requested, addressed as follows:
To Employer:
President
Centra Bank, Inc.
990 Elmer Prince Drive
P. O. Box 656
Morgantown, WV 26507-0656

 

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with a copy to:
President
Centra Financial Holdings, Inc.
Centra Financial Corporation-Morgantown, Inc.
990 Elmer Prince Drive
P.O. Box 656
Morgantown, WV 26507-0656
Corporate Secretary
Centra Financial Corporation-Martinsburg, Inc.
P.O. Box 1109
Martinsburg, WV 25402
To Employee:
Henry M. Kayes, Jr.
122 N. Rosemont Avenue
Martinsburg, WV 25401
with a copy (which shall not constitute notice) to:
Henry M. Kayes
Jenkins Fenstermaker, PLLC
Suite 100, Coal Exchange Building
Fourth Avenue and Eleventh Street
PO Box 2688
Huntington, WV 25726-2688
Notices given in person or by overnight courier service shall be deemed given
when delivered to the address required by this Section 8(d), and notices given
by mail shall be deemed given three days after deposit in the mails. Any party
hereto may designate by written notice to the other party in accordance herewith
any other address to which notices addressed to him shall be sent.
e. The provisions of this Agreement shall be deemed severable and the invalidity
or unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. It is understood and agreed that
no failure or delay by Employer or Employee in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder.
f. The Employer shall not merge or consolidate into or with another bank or sell
substantially all its assets to another bank, firm or person until such bank,
firm or person expressly agrees, in writing, to assume and discharge the duties
and obligations of the Bank under this Agreement. This Agreement shall be
binding upon the parties hereto, their successors, beneficiaries, heirs and
personal representatives.

 

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g. It is agreed by and between the parties hereto that, during the lifetime of
the Employee, this Agreement may be amended or revoked at any time or times, in
whole or in part, by the mutual written consent of the Employee and the
Employer.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first above written.

         
 
  CENTRA BANK, INC.    
 
       
 
 
 
Douglas J. Leech    
 
  President and CEO    
 
       
 
  CENTRA FINANCIAL HOLDINGS, INC.    
 
       
 
     
 
  Douglas J. Leech    
 
  President and CEO    
 
       
 
  CENTRA FINANCIAL CORPORATION-MARTINSBURG, INC.    
 
       
 
     
 
  Douglas J. Leech    
 
  Vice President    
 
       
 
  EMPLOYEE:    
 
       
 
     
 
  Henry M. Kayes, Jr.    

 

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