Exhibit 10.15

EMPLOYMENT AGREEMENT

 

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made as of the 2nd day of
January, 2020 (the “Date of Hire”), between Bay Banks of Virginia, Inc., a
Virginia corporation (the “Corporation”), Virginia Commonwealth Bank, a
wholly-owned bank subsidiary of the Corporation (the “Bank”), and Michael H.
Troutman (“Executive”).

 

WHEREAS, it is the desire of the Corporation to have the benefit of Executive’s
loyalty, service and counsel;

 

WHEREAS, the Corporation desires to protect its confidential information and
guard against unfair competition;

 

WHEREAS, Executive possesses certain valuable knowledge, professional skills and
expertise which will contribute to the continued success of the business of the
Corporation and its affiliates; and

 

WHEREAS, the Corporation and Executive desire to set forth, in writing, the
terms and conditions of their agreements and understandings.

 

NOW, THEREFORE, in consideration 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:

 

Section 1.Employment.

 

(a)The parties hereto agree that Executive shall be employed as Executive Vice
President of the Corporation and Executive Vice President, Chief Revenue Officer
of the Bank and shall perform such services as may be assigned to Executive by
the Bank and Corporation from time to time upon the terms and conditions herein
provided.

 

(b)References in this Agreement to services rendered for the Bank and
compensation and benefits payable or provided by the Bank shall include services
rendered for, and compensation and benefits payable or provided by, the
Corporation or any Affiliate of the Corporation. References in this Agreement to
the “Bank” also shall mean and refer to each Affiliate of the Corporation for
which Executive performs services. References in this Agreement to “Affiliate”
shall mean any business entity that, directly or indirectly, through one or more
intermediaries, is controlled by Bay Banks of Virginia, Inc.

 

(c)Executive shall devote his full time and attention to the discharge of the
duties assigned to and undertaken by his hereunder. Executive shall comply with
all policies, standards and regulations of the Bank now or hereafter
promulgated, and shall perform his duties under this Agreement to the best of
his abilities and in accordance with general business standards of conduct.

 

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(d)Executive acknowledges that he is entering into this Agreement of his  own
free will and that he has had the opportunity to obtain the advice of
independent counsel of his own choice.

 

Section 2.Term of Employment.

 

The term of this Agreement shall be deemed to commence on January 2, 2020, and
shall end on the second anniversary of such date, unless earlier terminated as
provided herein. This Agreement will automatically renew for successive two-year
terms unless either party notifies the other in writing, at least ninety (90)
days prior to the end of the original term, or the end of any additional
two-year renewal term, that the Agreement shall not be extended beyond its
current term. The term of this Agreement, including any renewal term, is
referred to as the “Term.”

 

Section 3.Compensation.

 

(a)Base Salary. During the Term, the Bank shall pay Executive an annual base
salary not less than $275,000 as compensation for services rendered by Executive
under this Agreement. The base salary shall be paid to Executive in accordance
with established payroll practices of the Bank (but no less frequently than
twice per month). Executive may receive base salary increases and incentive,
bonus compensation or other compensation in the amounts determined by the Board
of Directors of the Bank.

 

(b)Annual Bonus. During the Term, Executive will be eligible to participate in
any long-term or short-term incentive plans of the Bank and Corporation on the
same basis as other similarly situated employees of the Bank, pursuant to any
such plans adopted by the Board of Directors of the Corporation or Bank or their
Compensation Committees on an annual basis.

 

(c)Tax Withholdings. The Bank shall withhold state and federal income taxes,
social security taxes and such other payroll deductions as may from time to time
be required by law. The Bank shall withhold and remit to the proper party any
amounts agreed to in writing by the Bank and Executive for participation in any
corporate sponsored benefit plans for which a contribution is required.

 

(d)Compensation Following Termination. Except as otherwise expressly set forth
herein, including without limitation, as set forth in Section 7(d) and Section
7(i), no compensation shall be paid pursuant to this Agreement subsequent to any
termination of Executive’s employment with the Bank.

 

(e)Clawback. Executive agrees that any incentive compensation (as determined by
the Bank or Corporation) that Executive receives from the Bank, the Corporation
or any Affiliate pursuant to this Agreement or otherwise is subject to repayment
to (i.e., clawback by) the Bank, the Corporation or any Affiliate as required by
federal law and on such basis as the Bank or Corporation determines. Except
where offset of, or recoupment from, compensation covered by Code Section 409A
(as defined in Section 11) is prohibited by Code Section 409A, to the extent

 

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allowed by law and as determined by the Bank or Corporation, Executive agrees
that such repayment may, in the discretion of the Bank or Corporation, be
accomplished by withholding of future compensation to be paid to Executive by
the Bank, the Corporation or any Affiliate. Any recovery of compensation covered
by Code Section 409A shall be implemented in a manner which complies with Code
Section 409A.

 

Section 4.Additional Benefits.

 

(a)Benefit Plans. Executive shall be entitled to participate in all of the
Corporation’s and Bank’s employee benefit plans and programs for which he is or
will become eligible according to the terms of said plans or programs. It is
understood that the Board of Directors of the Corporation or Bank or their
Compensation Committees may, in their sole discretion, establish, modify or
terminate such plans or benefits.

 

(b)Signing Bonus. On the first payroll date to occur following the Date of Hire,
the Bank will pay to Executive a one-time signing bonus of $75,000 (the “Gross
Signing Bonus”), less applicable withholdings, on the date hereof.  If during
the period ending on June 30, 2020, Executive voluntarily terminates his
employment he will be held responsible for the reimbursement of 100% of the
Gross Signing Bonus.  If Executive voluntarily terminates his employment after
June 30, 2020, and on or before January 1, 2021, he will be responsible for
reimbursing 50% of the Gross Signing Bonus. Notwithstanding the foregoing, no
reimbursement of the Gross Signing Bonus shall be required if Executive is
terminated by the Bank without Cause, if Executive resigns for Good Reason, or
if Executive’s employment with the Bank ceases for any reason on or after a
Change of Control (each event as defined herein).

 

(c)Housing; Relocation.  The Bank shall reimburse Executive for housing expenses
incurred during the 90-day period beginning with the Date of Hire, not to exceed
$15,000 in the aggregate.  The Bank shall reimburse Executive for reasonable
lodging, travel and meal expenses incurred by Executive and his family for up to
three weekend trips during the period from November 1, 2019, through March 31,
2020, for the purpose of selecting a new residence in the Bank’s market area,
not to exceed $3,500 in the aggregate.  The Bank shall reimburse Executive for
reasonable, documented expenses of relocation to the Bank’s market area, not to
exceed $30,000 in the aggregate.  Notwithstanding the foregoing, Executive shall
have no right to receive further reimbursement on or after Executive’s
resignation without Good Reason or Executive’s termination for Cause.

 

(d)Automobile; Cell Phone. During the Term, the Bank shall provide the Executive
with the use of a Bank-owned cell phone, and a Bank-owned Jeep Grand Cherokee.

 

(e)Country Club Membership and Fees. During the Term, the Bank shall pay
Executive $300 per month for use in payment of fees at a country club designated
by Executive.

 

(f)Stock Options/Restricted Stock.  During the Term, Executive may be entitled
to receive awards under the Corporation’s equity compensation plans in such
amounts and subject to such terms and conditions as determined by the
Compensation Committee or the Board of

 

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Directors of the Corporation.  Executive will be granted on the Date of Hire (i)
a fully vested grant of 2,500 shares of common stock of the Corporation and (ii)
an option grant to purchase 30,000 shares of common stock of the Corporation,
such option becoming vested (exercisable) with respect to 10,000 shares on the
Date of Hire, with respect to an additional 10,000 shares on the second
anniversary of the Date of Hire, and with respect to the remaining 10,000 shares
on the third anniversary of the Date of Hire, in each case subject to continued
employment with the Bank through the applicable vesting date.  Each grant will
be subject to the terms of the Corporation’s 2013 Stock Incentive Plan, as
amended (or any successor equity compensation plan), and an award agreement
thereunder.

 

(g)Insurance and Indemnification. The Bank, as appropriate, shall maintain
appropriate insurance to indemnify Executive from any and all claims, suits, or
causes of action that may arise from Executive’s employment with the Bank.
Indemnification of Executive shall be according to the terms and conditions of
the insurance policies covering Executive, the articles of incorporation of the
Corporation and Virginia law.

 

Section 5.Expense Reimbursement.

 

The Bank shall reimburse Executive for reasonable and customary business
expenses incurred in the conduct of the Bank’s business in accordance with the
Bank’s policy. The Bank reserves the right to review these expenses periodically
and determine, in its sole discretion, whether future reimbursement of such
expenses to Executive will continue without prior approval by the Board of
Directors or the Bank or its designee of the expenses. Executive agrees to
timely submit records and receipts of reimbursable items and agrees that the
Bank can adopt reasonable rules and policies regarding such reimbursement. The
Bank agrees to make prompt payment to Executive following receipt and
verification of such reports.

 

Section 6.Paid Time Off.

 

Executive shall be entitled to paid time off leave each year, according to
applicable provisions of the Bank’s leave policies, which shall be taken at such
time or times as may be approved by the Bank and during which Executive’s
compensation hereunder shall continue to be paid.

 

Section 7.Termination and Survival of Obligations.

 

(a)Notwithstanding the termination of this Agreement or the termination of
Executive’s employment for any reason, the parties shall be required to carry
out any provisions of this Agreement which contemplate performance by them
subsequent to such termination. In addition, no termination of this Agreement
shall affect any liability or other obligation of either party which shall have
accrued prior to such termination, including, but not limited to, any liability,
loss or damage on account of breach. No termination of employment shall
terminate the obligation of the Bank to make payments of any vested benefits
provided hereunder or the obligations of Executive under Sections 8, 9 and 10 of
this Agreement (except as otherwise

 

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provided in those Sections). To the extent applicable, payouts under this
Section 7 shall be subject to the provisions of Section 11.

 

(b)Executive’s employment hereunder may be terminated by Executive upon thirty
(30) days written notice to the Bank or at any time by mutual agreement in
writing. Upon such termination of employment, Executive shall have no right to
receive compensation or other benefits under this Agreement for any period after
such termination.  Upon notice of such termination of employment, the Bank, at
its option, may relieve Executive of all duties.

 

(c)This Agreement shall terminate upon death of Executive; provided, however,
that in such event the Bank shall pay to the estate of Executive, within sixty
(60) days of his death, the compensation, including salary, which otherwise
would be payable to Executive through the end of the month in which his death
occurs and any earned but unpaid bonuses.

 

(d)(l)The Bank may terminate Executive’s employment other than for “Cause”, as
defined in Section 7(e), at any time upon written notice to Executive, which
termination shall be effective immediately. Executive may resign thirty (30)
days after notice to the Corporation for “Good Reason”, as hereafter defined.
Provided Executive signs a release and waiver of claims reasonably satisfactory
to the Bank within thirty (30) days following his termination and such release
becomes irrevocable, in the event Executive’s employment terminates pursuant to
this Section 7(d)(1), Executive shall receive:

 

 

(i)

An amount equal to the greater of (A) a monthly amount equal to one‑twelfth
(1/12) his rate of annual base salary in effect immediately preceding such
termination in each month for the remainder of the Term or (B) a monthly amount
equal to one-twelfth (1/12) his rate of annual base salary in effect immediately
preceding such termination for one (1) year; any such payments shall be at the
times such payments would have been made in accordance with Section 3(a) subject
to the provision of Section 11(c), if applicable.

 

 

(ii)

Any bonus or other short-term incentive compensation earned, but not yet paid,
for the year prior to the year in which his employment terminates which shall be
paid at the time such bonus or incentive compensation would otherwise be payable
if no termination had occurred; and

 

 

(iii)

If Executive timely elects coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), the continuance of Executive’s
current benefits under group health and dental plans. In such case for the
period in which payments are made under Section 7(d)(i): (a) Executive will
receive such benefits at the rates paid by active participants, and (b) the Bank
will continue to pay its portion of such health and dental premiums in effect at
the date of termination.  Any such payment of premiums by the Bank will be
treated as taxable income

 

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to Executive.  In no event shall such benefits continue beyond the period
permitted by COBRA.

 

(d)(2)Notwithstanding anything in this Agreement to the contrary, if Executive
breaches Section 8 or 9 of this Agreement, Executive will not thereafter be
entitled to receive any further compensation or benefits pursuant to Section
7(d)(1). If while he is receiving payments under Section 7(d)(1), the Executive
engages in a business that provides Competitive Services (as defined in Section
9) within the area described in Section 9, such payments will cease and he will
not thereafter be entitled to receive any compensation or benefits pursuant to
Section 7(d)(1) even though such conduct occurs after the covenants contained in
Section 9 have expired.

 

(d)(3) For purposes of this Agreement, Good Reason shall mean:

 

 

(i)

The assignment of duties to Executive by the Bank or the Corporation which
result in Executive having significantly less authority or responsibility than
he has on the Date of Hire, without his express written consent;

 

 

(ii)

Requiring Executive to maintain his principal office in a location that is more
than fifty (50) miles from Executive’s principal office on the Date of Hire;

 

 

(iii)

A material reduction by the Bank or the Corporation of Executive’s base salary,
as the same may have been increased from time to time;

 

 

(iv)

The Corporation’s or the Bank’s failure to comply with any material term of this
Agreement;

 

Executive is required to provide notice to the Bank and the Corporation of the
existence of a condition described in this Section 7(d)(3) above within a ninety
(90) day period beginning on the date of the initial existence of the condition,
upon the notice of which the Bank or the Corporation, as applicable, shall have
thirty (30) days to remedy the condition without having to pay the amounts
described in this section.

 

(e)The Corporation and the Bank shall have the right to terminate Executive’s
employment under this Agreement at any time for Cause, which termination shall
be effective immediately. Termination for “Cause” shall mean material failure of
Executive to perform his duties and responsibilities under this Agreement,
incompetence, willful misconduct, dishonesty, breach of a fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule or regulation (other than traffic violations or
similar minor offenses), misappropriation of the Bank’s or the Corporation’s
assets (determined on a reasonable basis), commission of a felony or misdemeanor
involving moral turpitude, a material violation of the Bank’s or the
Corporation’s work rules or policies; or a material breach of this

 

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Agreement. The term “Cause” also shall include conduct that results in, or that
in the reasonable judgment of the Board of Directors of the Bank, is likely to
result in, material damage to the Bank, Corporation, or any Affiliate. In the
event Executive’s employment under this Agreement is terminated for Cause,
Executive shall thereafter have no right to receive compensation or other
benefits under this Agreement, except salary for services performed through the
date of termination, and any other amounts required to be paid by law.

 

(f)The Corporation or the Bank may terminate Executive’s employment under this
Agreement, after having established that Executive is unable to perform his
obligations under this Agreement because of Executive’s disability by giving to
Executive written notice of its intention to terminate his employment for
disability. For purposes of this Agreement, “disability” means Executive’s
inability to perform his obligations under this Agreement, with or without
reasonable accommodation, for a period of time expected to last more than 90
days.  Notwithstanding any other provision of this Agreement, the Corporation
and the Bank shall comply with all requirements of the Americans with
Disabilities Act, 42 U.S.C. § 12101 et. seq. Notwithstanding any other provision
of this Agreement, if Executive’s employment is terminated due to a
“disability”, then no payments shall be paid under Section 7(d) or 7(i);
provided that Executive shall be paid salary for services performed through the
date of termination, and any other amounts required to be paid by law.

 

(g)If Executive is suspended and/or temporarily prohibited from participating in
the conduct of the Bank’s affairs by a notice served pursuant to the Federal
Reserve Act, the Bank Holding Company Act of 1956 or the Federal Deposit
Insurance Act or the Code of Virginia, each as amended, the obligations of the
Bank and the Corporation under this Agreement shall be suspended as of the date
of service unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Bank may in its discretion (i) pay Executive all or
part of the compensation  withheld while its contract obligations were
suspended, and (ii) reinstate (in whole or in part) any of its obligations which
were suspended.

 

(h)If Executive is removed and/or permanently prohibited from participating in
the conduct of the Bank’s affairs by an order issued under the Federal Reserve
Act, the Bank Holding Company Act of 1956, the Federal Deposit Insurance Act or
the Code of Virginia, each as amended, all obligations of the Bank and the
Corporation under this Agreement shall terminate as of the effective date of the
order, but vested rights of the parties shall not be affected.

 

(i)(1)If Executive’s employment is terminated without Cause within one year
after a Change of Control shall have occurred or if he resigns for Good Reason
within one year after a Change of Control shall have occurred, then, the Bank
shall pay to Executive as compensation for services rendered to the Bank a cash
amount (subject to any applicable payroll or other taxes required to be
withheld) equal to one (1) times (x) Executive’s base salary at the rate in
effect (i) on the date of termination or, if greater, (ii) immediately prior to
the Change of Control, plus (y) Executive’s annual bonus for the most recent
fiscal year of the Bank (i) that ends prior to Executive’s termination or, if
greater, (ii) that ends prior to the Change of Control, to be paid in one lump
sum on or before Executive’s last day of employment, subject to the provisions
in

 

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Section 11(c), if applicable.  In addition, if Executive timely elects coverage
under COBRA, then, for the lesser of one year or the applicable COBRA coverage
period, (a) the group health and dental plan coverage elected by Executive under
COBRA will continue at the rates paid by active participants, and (b) the Bank
will continue to pay its portion of such health and dental premiums in effect at
the date of termination. Any such payment of premiums by the Bank will be
treated as taxable income to Executive. In no event will such benefits continue
beyond the period permitted by COBRA.  Amounts payable, if any, under this
Section 7(i)(1) shall be in lieu of amounts payable under Section 7(d).

 

(i)(2)For purposes of this Agreement, a Change of Control occurs if, after the
date of this Agreement: (i) any person, including a “group” as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), becomes the owner or beneficial owner of securities of the
Corporation having fifty percent (50%) or more of the combined voting power of
the then outstanding securities of the Corporation that may be cast for the
election of the Corporation’s directors other than a result of an issuance of
securities initiated by the Corporation, or open market purchases approved by
the Corporation’s Board of Directors, as long as the majority of the
Corporation’s Board of Directors approving the purchases is a majority at the
time the purchases are made; (ii) as the direct or indirect result of, or in
connection with, a tender or exchange offer, a merger or other business
combination, a sale of assets, a contested election of directors, or any
combination of these events, the persons who were directors of the Corporation
before such events cease to constitute a majority of the Corporation’s Board of
Directors, or any successor’s board, within the twelve (12) month period of the
last of such transactions; or (iii) the Corporation sells to an unaffiliated
third party at least forty percent (40%) of the gross fair market value of the
assets of the Corporation or securities of the Corporation having fifty (50%) 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.  For purposes
of this Agreement, a Change of Control occurs on the date on which an event
described in clause (i), (ii) or (iii) of the preceding sentence occurs.  If a
Change of Control occurs on account of a series of transactions or events, the
Change of Control occurs on the date of the last of such transactions or events.

 

(i)(3)It is the intention of the parties that no payment be made or benefit
provided to 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 Bank or the imposition of an excise tax on Executive under
Section 4999 of the Code. If the independent accountants serving as auditors for
the Bank on prior to a Change of Control (or any other accounting firm or tax
adviser designated by the Corporation prior to the Change of Control) determine
that some or all of the payments or benefits scheduled under this Agreement, as
well as any other payments or benefits on a Change of Control, would be
nondeductible by the Corporation or the Bank under Section 280G of the Code,
then the payments scheduled under this Agreement will be reduced to one hundred
dollars 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.

 

 

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(j)If Executive is a director or officer of the Corporation, the Bank or any
other Affiliate at the time his employment terminates, Executive will
immediately submit his resignation from such position.

 

Section 8.Confidentiality/Nondisclosure.

 

Executive covenants and agrees that any and all information concerning the
business, services,  customers  or affairs of the Corporation and Bank
(“Confidential Information”) of which he has knowledge  or access as a result of
his association  and employment with the Bank in any capacity shall be deemed
confidential in nature and the property of the Corporation and Bank, vital to
their businesses, and shall not, without the proper written consent of the
Corporation or Bank, directly or indirectly, at any time be used,
disseminated,  disclosed or published by Executive to third parties other than
in connection with the usual conduct of the business of the Corporation or
Bank.  Such Confidential Information shall expressly include, but shall not be
limited to, information concerning the Corporation’s and Bank’s trade secrets,
business operations, business records, customer lists or other customer
information. Upon termination of employment, Executive shall deliver to the Bank
all property in his possession which belongs to the Corporation or Bank
including all originals and copies of documents, forms, records or other
information, in whatever form it may exist, concerning the Corporation or Bank
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 and Bank with the maximum protection. This Section 8 shall not
be applicable to any Confidential Information which (i) has become generally
known to and available for use by the public other than as a result of
Executive’s acts or omissions or (ii) which Executive is required to disclose
pursuant to an order of a court of competent jurisdiction;  provided that prior
to making such disclosure Executive provides a copy of such order and the
proposed disclosure to the Corporation and Bank and allows the Corporation and
Bank reasonable opportunity to comment on the proposed disclosure.

 

Section 9.Restrictive Covenants.

 

(a)During the term of this Agreement and throughout any further period that he
is an officer or employee of the Corporation or Bank, and for the longer of:

 

 

(i)

A period of one year from and after the date that Executive is, for any reason,
no longer employed by the Bank; or

 

 

(ii)

A period of one year 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,

 

Executive covenants and agrees that he will not (x) engage in a business that
provides Competitive Services (as defined below) within a twenty (20) mile
radius of the principal executive offices of the Bank or within twenty (20)
miles of any banking office operated by the Bank in any capacity that includes
any of the significant responsibilities held or significant

 

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activities engaged in by Executive while employed by the Bank; (y) solicit, or
assist any other person or business entity in soliciting any Customers (as
defined below) to become customers of any other business entity providing
Competitive Services or (z) induce any individuals to terminate their employment
with the Corporation, Bank or of any Affiliate.  Executive’s obligations under
this Section 9 shall terminate on the date a Change of Control occurs.

 

(b)The parties intend that the covenants and restrictions in this Section 9 be
enforceable against Executive regardless of the reason that his employment by
the Bank may terminate. The existence of any claim or cause of action by
Executive against the Bank, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Bank of the restrictive
covenants set forth in Sections 8 and 9 of this Agreement.

 

(c)For purposes of this Agreement, the term “Competitive Services” means
providing financial products and services, which includes offering one or more
of the following services and products: depository accounts, consumer and
commercial lending, residential and commercial mortgage lending, cash management
services, trust and estate administration, asset management, and any other
services and products offered by the Bank at the time of termination of
Executive’s employment.  “Competitive Services” does not include any products or
services in which Executive was not significantly engaged in providing such
products or services in the last year of Executive’s employment.  The term
“Customer” means any individual or entity to whom or to which the Bank provided
Competitive Services within one year before the date on which Executive’s
employment terminates and with whom Executive has contact or about whom
Executive obtained confidential information during his employment with the Bank.

 

(d)Executive agrees that the covenants in this Section 9 are reasonably
necessary to protect the legitimate interests of the Bank, are reasonable with
respect to the time and territory and do not interfere with the interests of the
public. Executive further agrees that the descriptions of the covenants
contained in this Section 9 are sufficiently accurate and definite to inform
Executive of the scope of the covenants. Finally, Executive agrees that the
consideration set forth in this Agreement is full, fair and adequate to support
Executive’s obligations hereunder and the Bank’s rights hereunder. Executive
acknowledges that in the event Executive’s employment with the Bank is
terminated for any reason, Executive will be able to earn a livelihood without
violating such covenants.

 

(e)The parties have attempted to limit Executive’s right to compete only to the
extent necessary to protect the Bank from unfair competition. The parties
recognize, however, that reasonable people may differ in making such a
determination. Accordingly, the parties intend that the covenants contained in
this Section 9 to be completely severable and independent, and any invalidity or
unenforceability of any one or more such covenants will not render invalid or
unenforceable any one or more of the other covenants. The parties further agree
that, if the scope or enforceability of a covenant contained in this Section 9
is in any way disputed at any time, a court or other trier of fact may modify
and reform such provision to substitute such other terms as are reasonable to
protect the Bank’s legitimate business interests.

 

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Section 10.Injunctive Relief, Damages. Etc.

 

Executive agrees that, given the nature of the positions held by Executive with
the Bank, each and every one of the covenants and restrictions set forth in
Sections 8 and 9 above are reasonable in scope, length of time and geographic
area and are necessary for the protection of the significant investment of the
Bank 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 8 or 9 that monetary damages alone will not adequately
compensate the Bank for its losses and, therefore, that it shall be entitled to
any and all legal or equitable relief available to it, specifically including,
but not limited to, injunctive relief, and Executive shall be liable for all
damages, including actual and consequential damages, costs and expenses, and
legal costs and actual attorney’s fees incurred by the Bank as a result of
taking action to enforce, or recover for any breach of Sections 8 or 9. The
covenants contained in Sections 8 and 9 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 9 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 Bank’s legitimate business interests.

 

Section 11.Code Section 409A Compliance.

 

(a)The intent of the parties is that payments and benefits under this Agreement
comply with Section 409A of the Internal Revenue Code of 1986, as amended, and
applicable guidance thereunder (“Code Section 409A”) or comply with an exemption
from the application of Code Section 409A and, accordingly, all provisions of
this Agreement shall be construed in a manner consistent with the requirements
for avoiding taxes or penalties under Code Section 409A.

 

(b)Neither Executive nor the Bank shall take any action to accelerate or delay
the payment of any monies and/or provision of any benefits in any matter which
would not be in compliance with Code Section 409A.

 

(c)If Executive is deemed on the date of separation from service with the Bank
to be a “specified employee”, within the meaning of that term under Code Section
409A(a)(2)(B) and using the identification methodology selected by the Bank from
time to time, or if none, the default methodology, then with regard to any
payment or benefit that is required  to be delayed in compliance with Code
Section 409A(a)(2)(B), such payment or benefit shall not be made or provided
prior to the earlier of (i) the expiration of the six-month period measured from
the date of Executive’s separation from service or (ii) the date of Executive’s
death. In the case of benefits required to be delayed under Code Section 409A,
however, Executive may pay the cost of benefit coverage, and thereby obtain
benefits, during such six-month delay period and then be reimbursed by the Bank
thereafter when delayed payments are made pursuant to the next sentence. On the
first day of the seventh month following the date of Executive’s separation from
service or, if earlier, on the date of Executive’s death, all payments delayed
pursuant to this Section 11(c) (whether they would have otherwise been payable
in a single sum or in

 

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installments in the absence of such delay) shall be paid or reimbursed to
Executive in a lump sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal payment dates
specified for them herein.  If any cash payment is delayed under this Section
11(c), then interest shall be paid on the amount delayed calculated at the prime
rate reported in The Wall Street Journal for the date of Executive’s termination
to the date of payment.

 

(d)With regard to any provision herein that provides for reimbursement of
expenses or in-kind benefits subject to Code Section 409A, except as permitted
by Code Section 409A, (i) the right to reimbursement  or in-kind benefits is not
subject to liquidation or exchange for another benefit, and (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits, provided during any
taxable year shall not affect the expenses eligible for reimbursement, or in-
kind benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated with regard to expenses reimbursed
under any arrangement covered by Code Section 105(b) solely because such
expenses are subject to a limit related to the period the arrangement is in
effect. All reimbursements shall be reimbursed in accordance with the
Corporation’s reimbursement policies but in no event later than the calendar
year following the calendar year in which the related expense is incurred.

 

(e)If under this Agreement, an amount is to be paid in two or more installments,
for purposes of Code Section 409A, each installment shall be treated as a
separate payment.

 

(f)When, if ever, a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within ten (10) days
following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Corporation.

 

(g)Notwithstanding any of the provisions of this Agreement, neither the
Corporation nor the Bank shall be liable to Executive if any payment or benefit
which is to be provided pursuant to this Agreement and which is considered
deferred compensation subject to Code Section 409A otherwise fails to comply
with, or be exempt from, the requirements of Code Section 409A.

 

Section 12.Invalid Provisions.

 

The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect. Any provision in this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be valid and enforceable to the fullest extent permitted by law
without invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

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Section 13.Entire Agreement.

 

This Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes any and all other agreements, either
oral or in writing, among the parties hereto with respect to the subject matter
hereof.

 

Section 14.Notices.

 

Any and all notices, designations, consents, offers, acceptance or other
communications provided for herein shall be given in writing and shall be deemed
properly delivered if delivered in person or by registered or certified mail,
return receipt requested, addressed in the case of the Corporation, to its
Chairman, in the case of the Bank, to its Chairman, and in the case of
Executive, to his last known address.

 

Section 15.Amendment and Waiver.

 

This Agreement may not be amended except by an instrument in writing signed by
or on behalf of each of the parties hereto. No waiver of any provision of this
Employment Agreement shall be valid unless in writing and signed by the person
or party to be charged.

 

Section 16.Case and Gender.

 

Wherever required by the context of this Agreement, the singular or plural case
and the masculine, feminine and neuter genders shall be interchangeable.

 

Section 17.Governing Law; Venue.

 

Except where preempted by federal law, the Agreement shall be subject to and
construed in accordance with the laws of the Commonwealth of Virginia. Executive
consents to the personal jurisdiction of the Circuit Court for the County of
Henrico, Virginia (and of the appropriate appellate courts) for any action or
proceeding arising from or relating to this Agreement and waives any objection
of venue laid therein.

 

Section 18.Captions.

 

The captions used in this Agreement are intended for descriptive and reference
purposes only and are not intended to affect the meaning of any Section
hereunder.

 

Section 19. Binding Effect.

 

This Agreement shall be binding upon Executive and on the Bank and the
Corporation, and their successors and assigns effective on the date first above
written.  The Bank will require any successor to all or substantially all of the
business and/or assets of the Bank to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that

 

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the Bank and Corporation would be required to perform it if no such succession
had taken place.  This Agreement shall be freely assignable by the Bank and the
Corporation.

 

Section 20.Regulatory Prohibition.

 

Notwithstanding anything in this Agreement to the contrary, it is understood and
agreed that the Corporation (or any of its successors in interest) shall not be
required to make any payment or take any action under this Agreement if: (i)
such payment or action is prohibited by any governmental agency having
jurisdiction over the Corporation or any of its subsidiaries (a “Regulatory
Authority”) because the Corporation or any of its subsidiaries is determined by
such Regulatory Authority to be troubled, insolvent, in default or operating in
an unsafe or unsound manner; or (ii) such payment or action (A) would be
prohibited by or would violate any provision of state or federal law applicable
to the Corporation or any of its subsidiaries, including, without limitation,
the Federal Deposit Insurance Act and the regulations thereunder presently found
at 12 C.F.R. Part 359, as now in effect or hereafter amended, (B) would be
prohibited by or would violate any applicable rules, regulations, orders or
statements of policy, whether now existing or hereafter promulgated, or any
Regulatory Authority or (C) otherwise would be prohibited by any Regulatory
Authority.  If any payment hereunder is alleged by any Regulatory Authority to
be in violation of the foregoing, any payment alleged to have been made in
violation of the foregoing shall be immediately returned by Executive to the
Corporation.

 

 

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.

 

 

 

 

BAY BANKS OF VIRGINIA, INC.

 

 

 

By: /s/

Name: Randal R. Greene

Title: President and Chief Executive Officer

 

 

VIRGINIA COMMONWEALTH BANK

 

 

 

By:/s/

Name: Randal R. Greene

Title: Chief Executive Officer

 

 

EXECUTIVE

 

 

/s/

Michael H. Troutman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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