Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made and entered into as of
December 1, 2016 (the “Effective Date”), by and among New Peoples Bankshares,
Inc., a Virginia bank holding corporation (the “Company”), New Peoples Bank,
Inc., a Virginia bank (the “Bank” and, together with the Company, “New
Peoples”), and C. Todd Asbury (“Executive”).

 

WHEREAS, the Company and Executive wish to formalize and update the terms and
conditions of their employment relationship pursuant to this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing, the mutual promises herein
contained, and other good and valuable consideration, including the continued
employment of Executive by New Peoples and the compensation received by
Executive from New Peoples from time to time, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as:

 

1.       Employment.

 

a.       Employment. Subject to the terms set forth herein, the Company and the
Bank agree to employ Executive as President and Chief Executive Officer of the
Company and President and Chief Executive Officer of the Bank, respectively, and
Executive hereby accepts such employment. As President and Chief Executive
Officer of the Company and the Bank, Executive shall have such authority,
perform such duties, and fulfill such responsibilities commonly incident to such
positions, as well as those that are delegated to Executive by the Board of
Directors of the Company (the “Board”) or the Board of Directors of the Bank
(the “Bank Board”). While employed, Executive shall report to the Board with
respect to his duties for the Company and shall report to the Bank Board with
respect to his duties for the Bank. Executive shall devote his full business
time and attention to the business and affairs of the Company and the Bank and
shall use his best efforts to advance the interests of the Company and the Bank;
provided that Executive may engage in outside activities in accordance with
Section 5.

 

2.       Employment Period.

 

a.       Duration. Executive’s period of employment with New Peoples under this
Agreement shall begin on the Effective Date and shall continue for a term of
three (3) years and thereafter shall automatically renew for successive two (2)
year terms unless at least six (6) months prior to the end of the then existing
term either Executive or the Company gives the other party notice of its
election not to renew the term of this Agreement at the end of its then existing
term (or, if a Change in Control (as defined below) occurs prior to such
anniversary, the second anniversary of the date of the Change in Control, if
later), unless terminated prior thereto by either New Peoples or Executive in
accordance with Section 6 hereof (such period of employment being the
“Employment Period”).

 

b.       Employment Following Termination of Employment Period. Nothing in this
Agreement shall mandate or prohibit a continuation of Executive’s employment
following the expiration of the Employment Period upon such terms and conditions
as the Company, the Bank, and Executive may agree.

 

3.       Compensation.

 

a.       Base Salary. In consideration for the services performed by Executive
during the Employment Period, the Bank shall pay to Executive an annual salary
(“Base Salary”) of $255,000.00. The Base Salary shall be paid in approximately
equal installments in accordance with the Bank’s customary payroll practices.
Executive’s Base Salary shall be reviewed at least annually during the
Employment Period for possible upward adjustment beginning for the second year
of the initial three year term of this Agreement. Executive’s Base Salary shall
not be reduced without Executive’s consent. The term Base Salary, as utilized in
this Agreement, shall refer to Base Salary as it may be increased from time to
time.

 

 

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b.       Annual Bonus. During the Employment Period, in January of each year,
Executive shall be considered by New People’s Board (or a committee thereof) for
a bonus based on the Board (or committee’s) determination of whether the
Executive’s performance during the prior year was exceptional which
determination shall be in the sole discretion and judgment of the Board (or
committee). The actual amount of Executive’s annual bonus shall be determined by
the Board (or committee) in its sole discretion and judgment based on such
factors as the Board (or committee) deems relevant in respect to evaluating the
Executive’s overall performance. Nothing herein shall entitle Executive to any
bonus.

 

c.       Long-Term Compensation. During the Employment Period, Executive shall
be eligible to participate in any equity and/or other long-term compensation
programs established by the Company from time to time for senior executive
officers on a basis consistent with Executive’s status as President and Chief
Executive Officer of the Company and the Bank.

 

d.       Employee Benefit Plans; Paid Time Off.

 

i.       Benefit Plans. During the Employment Period, Executive shall be an
employee of the Company and the Bank, and shall be entitled to participate, on
terms and conditions not less favorable to Executive than other similarly
situated senior executives of New Peoples generally, in New Peoples’s
(A) tax-qualified defined contribution retirement plans (currently, New
Peoples’s 401(k)); (B) group life, health and disability insurance plans,
supplemental life insurance and supplemental long-term disability; (C) such
other executive benefits as may be approved from time to time adopted by the
Board; and (D) other employee benefit plans and programs and perquisites in
accordance with New Peoples’s customary practices with respect to other
similarly situated senior executives of New Peoples generally; provided that
Executive’s participation shall be subject to the terms of such plans and
programs (including being a member of the class of employees eligible to
commence participation in the plan or program); and provided, further, that
nothing herein shall limit New Peoples’s right to amend or terminate any such
plans or programs.

 

ii.       Paid Time Off. Executive shall be entitled to five (5) weeks of paid
vacation time each year during the Employment Period (measured on a fiscal or
calendar year basis, in accordance with New Peoples’s usual practices), as well
as sick leave, holidays and other paid absences in accordance with New Peoples’s
policies and procedures for senior executives. Executive shall be compensated
for any unused paid time off to the extent provided for under New Peoples’s
policies and procedures as applicable to other similarly situated senior
executives of New Peoples generally.

 

e.       Expenses. The Bank shall reimburse Executive for Executive’s ordinary
and necessary business expenses and travel and entertainment expenses incurred
in connection with the performance of Executive’s duties under this Agreement
upon presentation to the Bank of an itemized account of such expenses in such
form as the Bank may reasonably require.

 

4.       Principal Place of Employment.

 

Executive’s principal place of employment during the Employment Period shall be
at the Company’s principal executive offices or at such other location upon
which the Company and Executive may mutually agree, and subject to travel to
such other locations as shall be necessary to fulfill the employment duties.

 

5.       Outside Activities and Board Memberships. During the Employment Period,
Executive shall not provide services on behalf of any financial institution or
other entity or business that competes with the Company, the Bank or any of
their affiliates (each, a “competitive business”), or any subsidiary or
affiliate of any such competitive business, as an employee, consultant,
independent contractor, agent, sole proprietor, partner, joint venturer,
corporate officer or director; nor shall Executive acquire, by reason of
purchase during the Employment Period, the ownership of more than five percent
(5%) of the outstanding equity interest in any such competitive business. In
addition, during the Employment Period, Executive shall not, directly or
indirectly, acquire a beneficial interest, or engage in any joint venture with
New Peoples. Subject to the foregoing, Executive may serve on boards of
directors of unaffiliated corporations, subject to approval by the Board, which
shall not be unreasonably withheld, and boards of directors of not-for-profit
organizations and trade associations, subject to approval by the Board in
accordance with New Peoples’s policies and procedures. Except as specifically
set forth herein, Executive may engage in personal business and investment
activities, including real estate investments and personal investments in the
stocks, securities and obligations of other financial institutions (or their
holding companies). Notwithstanding the foregoing, in no event shall Executive’s
outside activities, services, personal business and investments materially
interfere with the performance of Executive’s duties under this Agreement.
Nothing in this Section 5 shall limit any of Executive’s obligations under
Section 9 hereof.

 

6.       Termination of Employment.

 

 

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a.       Termination by New Peoples Without Cause.

New Peoples shall have the right to terminate Executive’s employment at any time
during the Employment Period without Cause (which shall include but not be
limited to the Company's election pursuant to Section 2(a) not to renew the then
existing term of this Agreement) by giving notice to Executive as described in
Section 6(f). For sake of clarity, neither termination of Executive’s employment
pursuant to Section 6(e) nor upon or after expiration of the Employment Period
shall constitute a termination without Cause for purposes of this Section 6.
Termination by the Company shall automatically constitute termination by the
Bank and vice versa unless the Company and Bank agree otherwise.

 

i.       In the event that New Peoples terminates Executive’s employment during
the Employment Period without Cause:

 

1.      New Peoples shall pay or provide to Executive any Accrued Obligations;

 

2.      Subject to Section 6(g), New Peoples shall pay to Executive within
sixty (60) days following the date of termination a lump sum cash payment (the
“Severance Payment”) equal to the product of (i) two (2) and (ii) the sum of
Executive’s Base Salary immediately prior to termination of employment and the
amount of Executive’s bonus, if any, for the fiscal year during which
Executive’s termination of employment occurs. Notwithstanding the foregoing, a
multiplier of three (3) (instead of two (2)) shall be used in the preceding
clause (B)(i) if Executive’s termination of employment occurs upon or within
twenty-four (24) months following a Change in Control except in the case of the
Sale of the Company in which case a multiplier of one (1) shall be used in the
preceding clause B(i) if the total consideration received by the Company's
shareholders in such transaction ("Shareholder Consideration") is less than the
book value of the Company as reflected in the Company's then most recent audited
financial statements ("Book Value") or a multiplier of two (2) shall be used in
the preceding clause (B)(i) if the Shareholder Consideration is equal to or up
to 1.5 times the Book Value of the Company; or a multiplier of three (3) shall
be used in the preceding clause (B)(i) if the Shareholder Consideration is
greater than 1.5 times the Book Value of the Company;

 

3.      Subject to Section 6(g), New Peoples shall pay to Executive on a monthly
basis commencing with the first month following Executive’s termination of
employment and continuing until the eighteenth (18th) month following
Executive’s termination of employment a cash payment (subject to reduction for
applicable withholding taxes) equal to the monthly COBRA premium in effect as of
the date of Executive’s termination of employment for the level of coverage in
effect for Executive under New Peoples’s group health plan (the “COBRA Premium
Payments”);

 

ii.       If such termination occurs upon or within twenty-four (24) months
after a Change in Control, then, subject to Section 6(g) and except to the
extent otherwise provided in the applicable award agreements or terms of the
applicable plan(s), all of Executive’s then outstanding stock options and other
equity-based awards, if any, shall become fully vested (to the extent not
previously vested) on the sixtieth (60th) day after such termination of
employment, except that in the case of any stock options or other equity based
awards the scheduled vesting of which is, in whole or in part, contingent upon
the achievement of one or more performance goals, such performance goals shall
be deemed to be fully achieved (at “target,” to the extent applicable) as of the
date of Executive’s termination of employment and such option or other
equity-based award shall vest on a pro rata basis on the sixtieth (60th) day
after termination of employment based on the number of days during the scheduled
vesting period during which Executive was employed relative to the total number
of days during the scheduled vesting period. It is understood and agreed that if
Executive’s termination of employment occurs prior to a Change in Control or
more than twenty-four (24) months after a Change in Control, Executive’s then
outstanding stock options and other equity compensation awards, if any, covering
the Company’s common stock shall vest if and to the extent provided in the
applicable award agreements and terms of the applicable plan(s). Any accelerated
vesting that occurs pursuant to the terms of this clause (D) is herein referred
to as the “Accelerated Equity Vesting.”

 

b.       Termination by the Company for Cause. New Peoples shall have the right
to terminate Executive’s employment at any time during the Employment Period for
Cause by giving notice to Executive as provided in Section 6(f) hereof. In the
event Executive’s employment is terminated for Cause, New Peoples’s sole
obligation shall be to pay or provide to Executive any Accrued Obligations.
Termination by the Company shall automatically constitute termination by the
Bank and vice versa unless the Company and Bank agree otherwise.

 

c.       Resignation by Executive without Good Reason. Executive may resign from
employment during the Employment Period without Good Reason (which shall include
but not be limited to the Executive's election pursuant to Section 2(a) not to
renew the then existing term of this Agreement) at any time by giving notice to
the Company as described in Section 6(f). In the event Executive resigns from
employment without Good Reason, New Peoples’s sole obligation shall be to pay or
provide to Executive any Accrued Obligations. Resignation by Executive of
employment with either the Company or the Bank shall automatically constitute
resignation of employment with the other.

 

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d.       Resignation by Executive for Good Reason. Executive may resign from
employment under this Agreement for Good Reason by giving notice to the Company
as described in Section 6(f). In the event Executive resigns from employment for
Good Reason, (i) New Peoples Bank shall pay or provide to Executive any Accrued
Obligations and (ii) Executive shall, subject to Section 6(g), be entitled to
the Severance Payment, the COBRA Premium Payment and Accelerated Equity Vesting,
if applicable (together, the “Severance Benefits”) to the same extent as if
Executive’s employment was terminated by New Peoples without Cause pursuant to
Section 6(a) as of the date of Executive’s termination of employment for Good
Reason. Resignation by Executive of employment with either the Company or the
Bank shall automatically constitute resignation of employment with the other.

 

e.       Termination by Reason of Death or Disability of Executive.

 

i.       In the event of Executive’s death during the Employment Period, New
Peoples’s sole obligation shall be to pay to Executive’s legal representatives
any Accrued Obligations.

 

ii.       New Peoples shall be entitled to terminate Executive’s employment due
to Executive’s Disability. If Executive’s employment hereunder is terminated due
to Executive’s Disability, New Peoples’s sole obligation shall be to pay or
provide to Executive any Accrued Obligations.

 

f.       Notice; Effective Date of Termination. Notice of termination of
employment under this Agreement shall be communicated by or to Executive (on one
hand) or New Peoples (on the other hand) in writing in accordance with
Section 14. Termination of Executive’s employment pursuant to this Agreement
shall be effective on the earliest of:

 

i.       immediately after New Peoples gives notice to Executive of Executive’s
termination without Cause, unless the parties agree to a later date, in which
case, termination shall be effective as of such later date;

 

ii.       immediately upon approval by the Board or Bank Board of termination of
Executive’s employment for Cause;

 

iii.       immediately upon Executive’s death;

 

iv.       in the case of termination by reason of Executive’s Disability, the
date on which Executive is determined to be permanently disabled for purposes of
New Peoples’s long-term disability plan or policy that covers Executive; or

 

v.       thirty (30) days after Executive gives written notice to New Peoples of
Executive’s resignation from employment under this Agreement for Good Reason,
provided that New Peoples may set an earlier termination date at any time prior
to the date of termination of employment, in which case Executive’s resignation
shall be effective as of such other date.

 

g.       General Release of Claims. Executive shall not be entitled to any of
the Severance Benefits pursuant to Sections 6(a) or 6(d) unless (i) Executive
has executed and delivered to New Peoples a general release of claims (in the
form attached hereto as Exhibit A) (the “Release”) and (ii) such Release has
become irrevocable under the Age Discrimination in Employment Act not later than
fifty-six (56) days after the date of Executive’s termination of employment
hereunder. Executive’s entitlement to the Severance Benefits is further
conditioned upon Executive returning to New Peoples all property of New Peoples
within seven (7) days following the date of Executive’s termination of
employment with New Peoples and complying with the terms of Sections 8, 9(a) and
9(b) hereof, subject to written notice by the Bank and a reasonable opportunity
for Executive to cure, if subject to cure. New Peoples shall deliver to
Executive a copy of the Release not later than three (3) days after Executive’s
termination of employment hereunder pursuant to Section 6(a) or 6(d) hereof. In
the event that the fifty-six (56) day period referenced above begins and ends in
different taxable years of Executive, any payments or benefits under this
Agreement that constitute nonqualified deferred compensation under Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), and the payment
or settlement of which is conditioned on the effectiveness of the Release shall
be paid in the later taxable year.

 

h.       No Other Severance Benefits. Executive acknowledges and agrees the
Severance Benefits are in lieu of, and not in addition to, any payments and/or
benefits to which Executive may otherwise be entitled under any severance plan,
policy or program of New Peoples.

 

i.       Payment of Obligations. Notwithstanding anything to the contrary
herein, any payment obligation of the Bank under this Agreement may be satisfied
in whole or in part by payment by the Company, the Bank or any affiliate, and
any such payment shall, for purposes of this Agreement, be treated as if made by
the Bank.

 

 

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j.       Resignation from Positions. Upon termination of Executive’s employment
for any reason, Executive shall promptly (i) resign from all positions
(including, without limitation, any management, officer, or director position)
with New Peoples and its affiliates and (ii) relinquish any power of attorney,
signing authority, trust authorization, or bank account signatory authorization
that Executive may hold on behalf of New Peoples and its affiliates. Executive’s
execution of this Agreement shall be deemed the grant by Executive to the
officers of the Company and the Bank of a limited power of attorney to sign in
Executive’s name and on Executive’s behalf such documentation as may be
necessary or appropriate for the limited purposes of effectuating such
resignations and relinquishments.

 

k.       Golden Parachute Limit. Notwithstanding any other provision of this
Agreement, in the event that any portion of the Severance Benefits or any other
payment or benefit received or to be received by Executive in connection with a
“change in ownership or control” (within the meaning of Section 280G of the
Code) of the Company occurring following the Effective Date (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement)
(collectively, the “Total Benefits”) would be subject to the excise tax imposed
under Section 4999 of the Code (the “Excise Tax”), the Total Benefits shall be
reduced to the extent necessary so that no portion of the Total Benefits is
subject to the Excise Tax; provided, however, that no such reduction in the
Total Benefits shall be made if by not making such reduction, Executive’s
Retained Amount (as hereinafter defined) would be greater than Executive’s
Retained Amount if the Total Benefits are so reduced. All determinations
required to be made under this Section 6(k) shall be made by tax counsel or a
nationally recognized certified public accounting firm or other professional
organization that is a certified public accounting firm recognized as an expert
in determinations and calculations for purposes of Section 280G of the Code
selected by the Company prior to a Change in Control and reasonably acceptable
to Executive (“Tax Counsel”), which determinations shall be conclusive and
binding on Executive and the Company absent manifest error. All fees and
expenses of Tax Counsel shall be borne solely by the Company. Prior to any
reduction in Executive’s Total Benefits pursuant to this Section 6(k), Tax
Counsel shall provide Executive and the Company with a report setting forth its
calculations and containing related supporting information. In the event any
such reduction is required, the Total Benefits shall be reduced in the following
order: (i) the COBRA Premium Payments, (ii) the Severance Payment, (iii) any
other portion of the Total Benefits that are not subject to Section 409A of the
Code (other than Total Benefits resulting from any accelerated vesting of equity
awards), (iv) Total Benefits that are subject to Section 409A of the Code in
reverse order of payment, and (v) Total Benefits that are not subject to
Section 409A and arise from any accelerated vesting of equity awards. The
parties hereto hereby elect to use the applicable federal rate that is in effect
on the date this Agreement is entered into for purposes of determining the
present value of any payments provided for hereunder for purposes of
Section 280G of the Code. “Retained Amount” shall mean the present value (as
determined in accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the
Code) of the Total Benefits net of all federal, state and local taxes imposed on
Executive with respect thereto. In connection with making determinations under
this Section 6(k), the Tax Counsel shall take into account the value of any
reasonable compensation for services to be rendered by Executive before or after
the Change in Control, including any noncompetition provisions that may apply to
Executive, and New Peoples shall cooperate in the valuation of any such
services, including any noncompetition provisions.

 

1.       No purported termination of Executive’s employment by the Company for
any reason shall be effective unless and until approved by the affirmative vote
of at least seventy-five percent (75%) of the full Board.

 

7.       Certain Definitions.

 

a.       “Accrued Obligations” means (i) any accrued and unpaid Base Salary of
Executive through the date of termination of employment, payable pursuant to the
Bank’s standard payroll policies, (ii) with respect to any termination without
Cause and any resignation for Good Reason, any earned and unpaid bonus of
Executive for any completed fiscal year prior to the date of termination of
employment, (iii) any compensation and benefits to the extent payable to
Executive based on Executive’s participation in any compensation or benefit
plan, program or arrangement of New Peoples through the date of termination of
employment, payable in accordance with the terms of such plan, program or
arrangement, and (iv) any expense reimbursement to which Executive is entitled
under New Peoples’s standard expense reimbursement policy (as applicable) and
Sections 3(e) and 10 hereof.

 

 

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b.       “Cause” means Executive’s failure or refusal to substantially perform
Executive’s duties hereunder, personal dishonesty, incompetence, willful
misconduct, breach of fiduciary duty involving personal profit, breach of New
Peoples’s Code of Ethics, material violation of the Sarbanes-Oxley requirements
for officers of public companies that in the reasonable opinion of the Board
will likely cause substantial financial harm or substantial injury to the
reputation of the Company or the Bank, willfully engaging in actions that in the
reasonable opinion of the Board will likely cause substantial financial harm or
substantial injury to the business reputation of the Company or the Bank,
willful violation of any law, rule or regulation (other than routine traffic
violations or similar offenses) or final cease-and-desist order or regulatory
action removing the Executive or substantially affecting Executive’s ability to
carry out his obligations hereunder, or material breach of any provision of this
Agreement. The cessation of employment of Executive shall not be deemed to be
for Cause unless and until (i) notice to the Executive specifying each basis for
Cause and providing thirty (30) days to cure such basis (if such basis is
curable); (ii) if there is any curable basis specified in the notice, thirty
(30) days shall have passed without each curable basis for Cause specified in
the notice to Executive having been fully cured; and (iii) there shall have been
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose, finding that, in the good
faith opinion of the Board, the basis for Cause specified in the notice to the
Executive exists and either that there are no curable bases or that each of the
curable bases specified in such notice have not been fully cured within the
required thirty (30) day cure period. For purposes hereof, no act or failure to
act, on the part of Executive, shall be considered “willful” unless it is done,
or omitted to be done, by Executive in bad faith or without reasonable good
faith belief that Executive’s action or omission was in the best interests of
the Company and the Bank. Any act, or failure to act, based upon the direction
of the Board or the Bank Board based upon the advice of counsel for the Company
or the Bank shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Company or the Bank.

 

c.       “Change in Control” means the occurrence of any of the following with
respect to the Company occurring after the Effective Date:

 

i.       any “person” (as the term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than
any employee benefit plan of New Peoples or any affiliate or a person currently
as of the Effective Date serving on the Company’s Board of Directors, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of Company’s
outstanding securities; or

 

ii.       individuals who constitute the Board on the date hereof (the
“Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date
hereof whose election was approved by a vote of at least three-quarters of the
directors comprising the Incumbent Board, or whose nomination for election by
the Company’s stockholders was approved by the Nominating Committee serving
under an Incumbent Board, shall be, for purposes of this clause (ii), considered
as though such person were a member of the Incumbent Board; or

 

iii.       the Company consummates a merger, consolidation, share exchange,
division or other reorganization or transaction of the Company (a “Fundamental
Transaction”) with any other corporation, other than a Fundamental Transaction
that results in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power immediately after such Fundamental
Transaction of (A) the Company’s outstanding securities, (B) the surviving
entity’s outstanding securities, or (C) in the case of a division, the
outstanding securities of each entity resulting from the division ("Sale of the
Company"); or

 

iv.       the shareholders of the Company approve a plan of complete liquidation
or winding up of the Company; or

 

v.       the consummation of an agreement for the sale or disposition (in one
transaction or a series of transactions) of all or substantially all of the
Company’s or the Bank’s assets.

 

d.       “Disability” means that Executive is deemed disabled for purposes of
New Peoples’s long-term disability plan or policy that covers Executive.

 

e.       “Good Reason” means the occurrence of any of the following events
(without Executive’s consent):

 

i.       a material reduction of any element of the compensation and benefits
required to be provided to Executive in accordance with any of the provisions of
Section 3;

 

 

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ii.       a material adverse change in Executive’s functions, duties or
responsibilities with the Company and the Bank, which change would cause
Executive’s position to become one of materially lesser responsibility,
importance or scope;

 

iii.       New Peoples requiring Executive to be based at any office or location
other than as provided in Section 4 resulting in an increase in Executive’s
commute of thirty (30) miles or more; or

 

iv.       a material breach of this Agreement by the Company or the Bank.

 

Notwithstanding the foregoing, no such event shall constitute “Good Reason”
unless (A) Executive shall have given written notice of such event to the
Company within ninety (90) days after the initial occurrence thereof, (B) the
Company and the Bank shall have failed to cure the situation within thirty
(30) days following the delivery of such notice (or such longer cure period as
may be agreed upon by the parties), and (C) Executive terminates employment
within thirty (30) days after expiration of such cure period.

 

8.       Confidentiality. In the course of Executive’s employment with and
involvement with New Peoples and its affiliates, Executive has obtained, and
will obtain, secret or confidential information, knowledge or data concerning
New Peoples’s and its affiliates’ businesses, strategies, operations, clients,
customers, prospects, financial affairs, organizational and personnel matters,
policies, procedures and other nonpublic matters, or concerning those of third
parties. Executive shall hold in a fiduciary capacity for the benefit of New
Peoples and its affiliates, all secret or confidential information, knowledge or
data relating to New Peoples or any of its affiliated companies, and their
respective businesses, which shall have been obtained by Executive during
Executive’s employment by New Peoples or any of its affiliates and which shall
not be or become public knowledge (other than by acts by Executive or
representatives of Executive in violation of this Agreement). All records,
files, memoranda, reports, customer lists, documents and the like (whether in
paper or electronic format) that Executive has used or prepared during
Executive’s employment shall remain the sole property of New Peoples and shall
be promptly returned to New Peoples’s premises upon any termination of
employment. After termination of Executive’s services with New Peoples,
Executive shall not, without the prior written consent of the Bank or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Bank and those
designated by it. The confidentiality provision contained herein is in addition
to and not in limitation of Executive’s duties as an officer and director under
applicable law. For purposes of this Section 8 and Section 9, references to the
Company, the Bank, New Peoples and their affiliates shall include their
predecessor and any successor entities.

 

9.       Nonsolicitation; Noncompetition; Post-Termination Cooperation;
Non-Disparagement.

 

a.       Executive hereby covenants and agrees that, while employed and for a
period of twelve (12) months following his termination of employment with New
Peoples for any reason, Executive shall not, without the prior written consent
of the Bank, either directly or indirectly, (i) induce or attempt to induce any
employee or independent contractor of the Company, the Bank or any of their
respective affiliates to leave the Company, the Bank or any such affiliate,
(ii) hire any person who was an employee or independent contractor of the
Company, the Bank or any of their respective affiliates until six (6) months
after such individual’s relationship with the Company, the Bank or such
affiliate has been terminated, (iii) induce or attempt to induce any client,
customer or other business relation (whether (A) current, (B) former, within the
six (6) months after such relationship has been terminated or (C) prospective,
provided that there are demonstrable efforts or plans to establish such
relationship) of the Company, the Bank or any of their respective affiliates to
cease doing business or to reduce the amount of business which any client,
customer or other business relation has customarily done or contemplates doing
with the Company, the Bank or any such affiliate, whether or not the
relationship between the Company, the Bank or any such affiliate and such
client, customer or other business relation was originally established, in whole
or in part, through Executive’s efforts, or in any way interfere with the
relationship between any such client, customer or business relation, on the one
hand, and the Company, the Bank or any such affiliate, on the other hand.

 

 

7

 

 

b.       Executive acknowledges that, in the course of Executive’s employment
with the Company, the Bank and their respective affiliates (including their
predecessor and any successor entities), Executive has become familiar, or will
become familiar, with the Company’s, the Bank’s and their respective affiliates’
trade secrets and with other confidential information, knowledge or data
concerning the Company, the Bank, their respective affiliates and their
respective predecessors, and that Executive’s services have been and will be of
special, unique and extraordinary value to the Company, the Bank and their
respective affiliates. Therefore, Executive agrees that, while employed and for
a period of twelve (12) months following his termination of employment with New
Peoples for any reason (the “Noncompetition Period”), Executive shall not,
directly or indirectly, own, manage, operate, control, be employed by (whether
as an employee, director consultant, independent contractor or otherwise, and
whether or not for compensation) or render services in any capacity to a
Competing Business (as defined below), within twenty five (25) miles of any
branch or office in which the Company, the Bank or any of their respective
affiliates conducts business; provided, however, that the restriction set forth
in this Section 9(b) shall not apply if Executive’s employment is terminated
following a Change in Control. For purposes of this Agreement, a “Competing
Business” shall mean any person, firm, corporation or other entity, in whatever
form, engaged in the business in which the Company, the Bank and their
respective affiliates engage, including the sale or servicing of banking and
financial products and services, including business and consumer lending,
asset-based financing, residential mortgage warehouse funding,
factoring/accounts receivable management services, equipment financing,
commercial and residential mortgage lending and brokerage, deposit services
(including municipal deposit services) and trade financing, sale of annuities,
life and health insurance products, title insurance services, real estate
investment trusts and investment advisory services. Nothing herein shall
prohibit Executive from being a passive owner of not more than five percent
(5%) of the outstanding equity interest in any entity which is publicly traded,
so long as Executive has no active participation in the business of such entity.

 

c.       Executive hereby agrees that prior to accepting employment with any
other person or entity during the Noncompetition Period, Executive shall provide
such prospective employer with written notice of this Section 9, with a copy of
such notice delivered promptly to the Bank.

 

d.       During the Employment Period and following the cessation of Executive’s
employment for any reason, Executive shall, upon reasonable notice, (i) furnish
such information and assistance to the Company, the Bank and/or their respective
affiliates, as may reasonably be requested by the Company, the Bank or such
affiliates, with respect to any matter, project, initiative or effort for which
Executive is or was responsible or has relevant knowledge or had substantial
involvement in while employed by the Company or the Bank under this Agreement,
and (ii) cooperate with the Company, the Bank and their respective affiliates
during the course of all third-party proceedings arising out of the Company, the
Bank and their respective affiliates’ business about which Executive has
knowledge or information; provided, however, that Executive shall not be
required to provide information or assistance with respect to any litigation
between Executive and the Company, the Bank or any of their subsidiaries or
affiliates.

 

e.       Executive acknowledges and agrees that: (i) the purposes of the
foregoing covenants, including without limitation the noncompetition covenant of
Section 9(b), are to protect the goodwill and trade secrets and confidential
information of the Company, the Bank, New Peoples and their respective
affiliates; and (ii) because of the nature of the business in which the Company,
the Bank and their respective affiliates are engaged, and because of the nature
of the trade secrets and confidential information to which Executive has access,
it would be impractical and excessively difficult to determine the actual
damages of the Company and its affiliates in the event Executive breached any of
the covenants of Section 8 or this Section 9. Executive understands that the
covenants may limit Executive’s ability to earn a livelihood in a Competing
Business. Executive acknowledges that the Company would be irreparably injured
by a violation of Section 8 or this Section 9, and that it is impossible to
measure in money the damages that will accrue to the Company by reason of a
failure by Executive to perform any of Executive’s obligations under Section 8
or this Section 9. Accordingly, if the Company or its affiliates institutes any
action or proceeding to enforce any of the provisions of Section 8 or this
Section 9, to the extent permitted by applicable law, Executive hereby waives
the claim or defense that the Company or its affiliates have an adequate remedy
at law, and Executive shall not urge in any such action or proceeding the
defense that any such remedy exists at law. Furthermore, in addition to other
remedies that may be available (including, without limitation, termination of
the obligation for the Company and the Bank to pay compensation or benefits
hereunder due to Executive’s failure to comply in all material respects with the
restrictive covenants in Section 8, 9(a) or 9(b), subject to written notice by
the Bank and a reasonable opportunity for Executive to cure, if subject to
cure), the Company and its affiliates shall be entitled to specific performance
and other injunctive relief, without the requirement to post a bond. If any of
the covenants set forth in Section 8 or this Section 9 is finally held to be
invalid, illegal or unenforceable (whether in whole or in part), such covenant
shall be deemed modified to the extent, but only to the extent, of such
invalidity, illegality or unenforceability, and the remaining covenants shall
not be affected thereby. Any termination of Executive’s services or of this
Agreement shall have no effect on the continuing operation of Section 8 and this
Section 9, which shall survive in accordance with their terms.

 

 

8

 

 

f.       Subsequent to the termination of Executive's employment hereunder: (i)
Executive shall not provide information, issue statements or make any
communication having the effect of disparaging or causing harm to the reputation
of the Company or Bank or their representatives, directors or officers; (ii) New
Peoples shall not provide information, issue statements or make any
communication having the effect of disparaging or causing harm to the Executive;
provided that nothing in this Section shall prohibit (yy) either party from
providing communications when required by law or to the regulations of financial
institutions or (zz) which, in the case of New Peoples are necessary or
appropriate in the opinion of its counsel, for communications with investors or
in filings with the U.S. Securities and Exchange Commission or set out the basis
under this Agreement for the termination of Executive's employment.

 

10.        Section 409A of the Code.

 

This Agreement is intended to comply with the requirements of Section 409A of
the Code (including the exceptions thereto), to the extent applicable, and the
Company shall administer and interpret this Agreement in accordance with such
requirements. If any provision contained in the Agreement conflicts with the
requirements of Section 409A of the Code (or the exemptions intended to apply
under this Agreement), this Agreement shall be deemed to be reformed to comply
with the requirements of Section 409A of the Code (or the applicable exemptions
thereto). Notwithstanding anything to the contrary herein, for purposes of
determining Executive’s entitlement to payment or receipt of amounts or benefits
that constitute nonqualified deferred compensation within the meaning of
Section 409A of the Code, Executive’s employment shall not be deemed to have
terminated unless and until Executive incurs a “separation from service” as
defined in Section 409A of the Code. Reimbursement of any expenses provided for
in this Agreement shall be made promptly upon presentation of documentation in
accordance with New Peoples’s policies with respect thereto as in effect from
time to time (but in no event later than the end of calendar year following the
year such expenses were incurred); provided, however, that in no event shall the
amount of expenses eligible for reimbursement hereunder during a calendar year
affect the expenses eligible for reimbursement in any other taxable year.
Notwithstanding anything to the contrary herein, if a payment or benefit under
this Agreement that constitutes nonqualified deferred compensation within the
meaning of Section 409A of the Code is payable or provided due to a “separation
from service” for purposes of the rules under Treas. Reg. § 1.409A-3(i)(2)
(payments to specified employees upon a separation from service) and Executive
is determined to be a “specified employee” (as determined under Treas. Reg.
§ 1.409A-1(i) and related Company procedures), such payment shall, to the extent
necessary to comply with the requirements of Section 409A of the Code, be made
on the date that is six (6) months after the date of Executive’s separation from
service (or, if earlier, the date of Executive’s death). Any installment
payments that are delayed pursuant to this Section 10 shall be accumulated and
paid in a lump sum on the first day of the seventh month following the date of
Executive’s separation from service (or, if earlier, upon Executive’s death) and
the remaining installment payments shall begin on such date in accordance with
the schedule provided in this Agreement. The Severance Benefits are intended not
to constitute deferred compensation subject to Section 409A of the Code to the
extent such Severance Benefits are covered by (a) the “short-term deferral
exception” set forth in Treas. Reg. § 1.409A-1(b)(4), (b) the “two times
severance exception” set forth in Treas. Reg. § 1.409A-1(b)(9)(iii), or (c) the
“limited payments exception” set forth in Treas. Reg. § 1.409A-1(b)(9)(v)(D).
The short-term deferral exception, the two times severance exception and the
limited payments exception shall be applied to the Severance Benefits in order
of payment in such manner as results in the maximum exclusion of such Severance
Payments from treatment as deferred compensation under Section 409A of the Code.
Each installment of the Severance Benefits and any other payment or benefits
that constitute nonqualified deferred compensation within the meaning of
Section 409A of the Code shall be deemed to be a separate payment for purposes
of Section 409A of the Code. In no event may Executive, directly or indirectly,
designate the calendar year of any payment under this Agreement.

 

 

9

 

 

11.       Additional Termination and Suspension Provisions.

 

a.       If Executive is suspended and/or temporarily prohibited from
participating in the conduct of the Bank’s affairs by a notice served under
Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, as amended (12
U.S.C. §§ 1818(e)(3) and (g)(1)), all obligations of the Company and the Bank
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
Company and the Bank may in their discretion (but subject in all events to the
requirements of Code Section 409A), (i) pay Executive all of the compensation
withheld while the Company’s and the Bank’s obligations under this Agreement
were suspended and (ii) reinstate (in whole) any of the Company’s and the Bank’s
obligations which were suspended, and in exercising such discretion, the Company
and the Bank shall consider the facts and make a decision promptly following
such dismissal of charges and act in good faith in deciding whether to pay any
withheld compensation to Executive and to reinstate any suspended obligations of
the Company and the Bank.

 

b.       If Executive is removed and/or permanently prohibited from
participating in the conduct of the Bank’s affairs by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, as amended (12
U.S.C. §§ 1818 (e)(4) or (g)(1)), all obligations of the Company and the Bank
under this Agreement shall terminate as of the effective date of the order, but
vested rights of the parties shall not be affected.

 

c.       If the Bank is in default, as defined in Section 3(x)(1) of the Federal
Deposit Insurance Act, as amended (12 U.S.C. §§ 1813 (x)(1)), all obligations of
the Company and the Bank under this Agreement shall terminate as of the date of
default, but this provision shall not affect any vested rights of the parties.

 

d.       All obligations under this Agreement shall be terminated, except to the
extent it is determined that continuation of this Agreement is necessary for the
continued operation of the Bank, (i) by the Bureau of Financial Institutions or
other applicable banking regulator (the “Regulator”), at the time the FDIC
enters into an agreement to provide assistance to or on behalf of the Bank under
the authority contained in Section 13(c) of the Federal Deposit Insurance Act,
as amended; or (ii) by the Regulator, at the time the Regulator approves a
supervisory merger to resolve problems related to operation of the Bank or when
the Bank is determined by the Regulator to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not be
affected by such action.

 

e.       If any regulation applicable to the Company or the Bank shall hereafter
be adopted, amended or modified or if any new regulation applicable to the
Company or the Bank and effective after the date of this Agreement:

 

i.       shall require the inclusion in this Agreement of a provision not
presently included in this Agreement, then the foregoing provisions of this
Section shall be deemed amended to the extent necessary to give effect in this
Agreement to any such amended, modified or new regulation; and

 

ii.       shall permit the exclusion of a limitation in this Agreement on the
payment to Executive of an amount or benefit provided for presently in this
Agreement, then the foregoing provisions of this Section shall be deemed amended
to the extent permissible to exclude from this Agreement any such limitation
previously required to be included in this Agreement by a regulation prior to
its amendment, modification or repeal.

 

12.       Arbitration. Any dispute or controversy arising out of, under, in
connection with, or relating to this Agreement or any amendment hereof shall be
submitted to binding arbitration before one arbitrator in the counties of
Russell, Tazewell and Washington and the City of Bristol, Virginia in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
for expedited arbitration, and any judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall be an attorney selected by Executive and New Peoples who shall
have experience in representing financial institutions and their executives in
respect to employment matters. In the event the parties cannot agree on a single
arbitrator then each shall designate an arbitrator qualified as herein before
provided and each arbitrator so selected shall select a third arbitrator
qualified as hereinbefore provided. The arbitrator(s) shall award reasonable
legal fees and costs of the arbitration to the party substantially prevailing in
the arbitration.

 

 

10

 

 

13.       Indemnification and Insurance.

 

a.       New Peoples will provide its senior executive officers with coverage
under a directors’ and officers’ liability insurance policy, New Peoples shall
provide such coverage to Executive on substantially the same basis. New Peoples
shall indemnify Executive (and Executive’s heirs, executors and administrators)
to the fullest extent permitted under applicable law against all expenses and
liabilities reasonably incurred by Executive in connection with or arising out
of any action, suit or proceeding in which he may be involved by reason of
Executive’s having been an officer of the Company or the Bank (whether or not
Executive continues to be an officer at the time of incurring such expenses or
liabilities and for a period of six years following Executive’s termination of
employment with New Peoples), such expenses and liabilities to include, but not
be limited to, judgments, court costs and attorneys’ fees and the cost of
reasonable settlements (such settlements must be approved by the Board). Any
such indemnification shall be made consistent with Regulations and Section 18(k)
of the Federal Deposit Insurance Act, 12 U.S.C. § 1828(k), and the regulations
issued thereunder in 12 C.F.R. Part 359.

 

b.       Notwithstanding the foregoing, no indemnification shall be made by the
Bank unless the Bank gives the Regulator, to the extent required, at least
sixty (60) days’ notice of its intention to make such indemnification. Such
notice shall state the facts on which the action arose, the terms of any
settlement, and any disposition of the action by a court. Such notice, a copy
thereof, and a certified copy of the resolution containing the required
determination by the Board shall be sent to the Regulator, to the extent
required. The notice period for any such notice shall run from the date of such
receipt. No such indemnification shall be made if the Regulator advises the Bank
in writing within such notice period, of its objection thereto.

 

14.       Notices. The persons or addresses to which mailings or deliveries
shall be made may change from time to time by notice given pursuant to the
provisions of this Section. Any notice or other communication given pursuant to
the provisions of this Section shall be deemed to have been given (a) if sent by
messenger, upon personal delivery to the party to whom the notice is directed;
(b) if sent by reputable overnight courier, one business day after delivery to
such courier; (c) if sent by facsimile, upon electronic or telephonic
confirmation of receipt from the receiving facsimile machine; and (d) if sent by
mail, three business days following deposit in the United States mail, properly
addressed, postage prepaid, certified or registered mail with return receipt
requested. All notices required or permitted to be given hereunder shall be
addressed as follows:

 

 

If to Executive:

  C. Todd Asbury           If to the Company or the Bank:  

New Peoples Bankshares, Inc. or

New Peoples Bank, Inc.,

as applicable

   

53 Commerce Drive

Honaker, Virginia 24260

Attention: Chair of the Board of Directors

W

      With a copy to:  

Douglas W. Densmore, Esquire

CowanPerry, PC

317 Washington Ave. SW

Roanoke, Virginia 24016

 

     

15.       Amendment. No modifications of this Agreement shall be valid unless
made in writing and signed by the parties hereto. In addition, no modifications
of this Agreement made prior to December 1, 2019 shall be valid unless such
modifications are approved by the affirmative vote of at least seventy-five
percent (75%) of the full Board.

 

 

11

 

 

16.        Miscellaneous.

 

a.       Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon Executive, his legal representatives and estate and
intestate distributees, and the Company and the Bank, their successors and
assigns, including any successor by merger or consolidation or a statutory
receiver or any other person or firm or corporation to which all or
substantially all of the assets and business of the Company or the Bank, as
applicable, may be sold or otherwise transferred. Any such successor of the
Company or the Bank shall be deemed to have assumed this Agreement and to have
become obligated hereunder to the same extent as the Company or the Bank, as
applicable, and Executive’s obligations hereunder shall continue in favor of
such successor.

 

b.       Severability. A determination that any provision of this Agreement is
invalid or unenforceable shall not affect the validity or enforceability of any
other provision hereof.

 

c.       Waiver. Failure to insist upon strict compliance with any terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition. A waiver of any provision of this Agreement must be made
in writing, designated as a waiver, and signed by the party against whom its
enforcement is sought. Any waiver or relinquishment of any right or power
hereunder at any one or more times shall not be deemed a waiver or
relinquishment of such right or power at any other time or times.

 

d.       Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same Agreement.

 

e.       Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the Commonwealth of Virginia, without
reference to conflicts of law principles, except to the extent governed by
federal law in which case federal law shall govern. Any payments made to
Executive pursuant to this Agreement or otherwise are subject to all applicable
banking laws and regulations, including, without limitation, 12 U.S.C. § 1828(k)
and any regulations promulgated thereunder.

 

f.       Withholding. The Company and the Bank may withhold from any amounts
payable to Executive hereunder all federal, state, city or other taxes that the
Company or the Bank may reasonably determine are required to be withheld
pursuant to any applicable law or regulation (it being understood, that
Executive shall be responsible for payment of all taxes in respect of the
payments and benefits provided herein).

 

g.       Headings and Construction. The headings of sections in this Agreement
are for convenience of reference only and are not intended to qualify the
meaning of any Section. Any reference to a Section number shall refer to a
Section of this Agreement, unless otherwise specified. 

 

 

12

 

 

IN WITNESS WHEREOF, the Company and the Bank have caused this Agreement to be
executed and Executive has hereunto set his hand, all as of the Effective Date
specified above.

 

NEW PEOPLES BANKSHARES, INC.

 

By: /s/ Harold Lynn Keene

Name: H. Lynn Keene

Title: Chairman of the Board

 

 

NEW PEOPLES BANK, INC.

 

By: /s/ Harold Lynn Keene

Name: H. Lynn Keene

Title: Chairman of the Board

 

C. TODD ASBURY

 

/s/ C. Todd Asbury

 

13

 

 

 

EXHIBIT A

 

RELEASE AGREEMENT

 

THIS RELEASE AGREEMENT (hereinafter “Agreement”) is made and entered into on the
[    ] day of [            ], 20[    ] by and among New Peoples Bankshares,
Inc., a Virginia bank holding corporation (the “Company”), New Peoples Bank,
Inc., a Virginia bank (the “Bank” and, together with the Company, “New
Peoples”), and C. Todd Asbury (“Executive”).

 

WHEREAS, New Peoples and Executive are parties to an Employment Agreement, dated
as of ____________, 2016 (the “Employment Agreement”), pursuant to which
Executive is eligible, subject to the terms and conditions set forth in the
Employment Agreement, to receive certain compensation and benefits in connection
with certain terminations of Executive’s services to New Peoples.

 

NOW, THEREFORE, in consideration of New Peoples agreeing to provide the
compensation and benefits under Section 6 of the Employment Agreement to
Executive and of other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged by the parties, it is agreed as
follows:

 

1.       In exchange for the consideration referenced above, Executive hereby
completely, irrevocably, and unconditionally releases and forever discharges New
Peoples, and any of their predecessor or affiliated companies, and each and all
of their officers, agents, directors, supervisors, employees, representatives,
and their successors and assigns, and all persons acting by, through, under,
for, or in concert with them, or any of them, in any and all of their capacities
(hereinafter individually or collectively, the “Released Parties”), from any and
all charges, complaints, claims, and liabilities of any kind or nature
whatsoever, known or unknown, suspected or unsuspected (hereinafter referred to
as “claim” or “claims”) which Executive at any time heretofore had or claimed to
have or which Executive may have or claim to have regarding events that have
occurred as of the Effective Date of this Agreement, including, without
limitation, those based on: any employee welfare benefit or pension plan
governed by the Employee Retirement Income Security Act of 1974, as amended
(hereinafter “ERISA”) (provided that this release does not extend to any vested
benefits of Executive under New Peoples’s pension and welfare benefit plans as
of the date of Executive’s termination of services); the Civil Rights Act of
1964, as amended (race, color, religion, sex and national origin discrimination
and harassment); the Civil Rights Act of 1966 (42 U.S.C. § 1981)
(discrimination); the Age Discrimination in Employment Act of 1967, as amended
(hereinafter “ADEA”); the Older Workers Benefit Protection Act, as amended; the
Americans With Disabilities Act, as amended (hereinafter “ADA”); § 503 of the
Rehabilitation Act of 1973; the Fair Labor Standards Act, as amended (wage and
hour matters); the Family and Medical Leave Act, as amended (family leave
matters); any other federal, state, or local laws or regulations regarding
employment discrimination or harassment, wages, insurance, leave, privacy or any
other matter; any negligent or intentional tort; any contract, policy or
practice (implied, oral, or written); or any other theory of recovery under
federal, state, or local law, and whether for compensatory or punitive damages,
or other equitable relief, including, but not limited to, any and all claims
which Executive may now have or may have had, arising from or in any way
whatsoever connected with Executive’s employment, service, or contacts, with New
Peoples or any other of the Released Parties. Notwithstanding the foregoing, the
released claims do not include, and this Agreement does not release, any: (a)
rights to compensation and benefits provided under Section 6 of the Employment
Agreement; (b) rights to indemnification Executive may have under applicable
law, the bylaws or certificate of incorporation of New Peoples, any applicable
director and officer liability policy or under the Employment Agreement, as a
result of having served as an officer or director of New Peoples or any of its
affiliates; and (c) any claims that Executive may not by law release through a
settlement agreement such as this.

 

2.       To the extent permitted by law, Executive agrees that Executive will
not cause or encourage any future legal proceedings to be maintained or
instituted against any of the Released Parties. To the extent permitted by law,
Executive agrees that Executive will not accept any remedy or recovery arising
from any charge filed or proceedings or investigation conducted by the EEOC or
by any state or local human rights or employment rights enforcement agency
relating to any of the matters released in this Agreement.

 

 

14

 

 

3.       Older Workers Benefit Protection Act /ADEA Waiver:

 

a.       Executive acknowledges that New Peoples has advised Executive in
writing to consult with an attorney of Executive’s choice before signing this
Agreement, and Executive has been given the opportunity to consult with an
attorney of Executive’s choice before signing this Agreement.

 

b.       Executive acknowledges that Executive has been given the opportunity to
review and consider this Agreement for a full twenty-one days before signing it,
and that, if Executive has signed this Agreement in less than that time,
Executive has done so voluntarily in order to obtain sooner the benefits of this
Agreement.

 

c.       Executive further acknowledges that Executive may revoke this Agreement
within seven (7) days after signing it, provided that this Agreement will not
become effective until such seven (7) day period has expired. To be effective,
any such revocation must be in writing and delivered to Company’s principal
place of business by the close of business on the seventh (7th) day after
signing the Agreement and must expressly state Executive’s intention to revoke
this Agreement. Provided that Executive does not timely revoke this Agreement,
the eighth (8th) day following Executive’s execution hereof shall be deemed the
“Effective Date” of this Agreement.

 

d.       The Parties also agree that the release provided by Executive in this
Agreement does not include a release for claims under the ADEA arising after the
date Executive signs this Agreement.

 

4.       Executive shall promptly turn over to the Company any and all
documents, files, computer records, or other materials belonging to, or
containing confidential or proprietary information obtained from New Peoples
that are in Executive’s possession, custody, or control, including any such
materials that may be at Executive’s home.

 

5.       This Agreement shall not in any way be construed as an admission by New
Peoples of any acts of unlawful conduct, wrongdoing or discrimination against
Executive, and New Peoples specifically disclaims any liability to Executive on
the part of itself, its employees, and its agents.

 

6.       This Agreement cannot be amended, modified, or supplemented in any
respect except by written agreement entered into and signed by the parties
hereto.

 

7.       The Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia, without regard to the principles of
conflict of laws.

 

8.       Executive hereby acknowledges that Executive has read and understands
the terms of this Agreement and that Executive signs it voluntarily and without
coercion. Executive further acknowledges that Executive was given an opportunity
to consider and review this Agreement and the waivers contained in this
Agreement, that Executive has done so and that the waivers made herein are
knowing, conscious and with full appreciation that Executive is forever
foreclosed from pursing any of the rights so waived.

 

9.       The Agreement may be signed in counterparts, and each counterpart shall
be considered an original for all purposes.

 

PLEASE READ THIS AGREEMENT CAREFULLY; IT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

 

 

15

 

 

IN WITNESS WHEREOF, the Company and Bank have caused this Agreement to be
executed by their duly authorized officers, and Executive has executed this
Agreement, as of the date first written above.

 

NEW PEOPLES BANKSHARES, INC.

 

By:_________________________________

Name:

Title:

 

NEW PEOPLES BANK, INC.

 

By:_________________________________

Name:

Title:

C. TODD ASBURY

 

____________________________________

 

 

16