Ex-10.3



 



Exhibit 10.3


EMPLOYMENT AGREEMENT



     THIS EMPLOYMENT AGREEMENT (“Agreement”) is executed as of April 4, 2003,
by and among UNITED BANKSHARES, INC., a West Virginia bank holding company
(“United”), UNITED BANK, a bank organized under the laws of the State of
Virginia (“United Bank — Virginia”), and J. PAUL McNAMARA (the “Employee”).
United and United Bank — Virginia are sometimes collectively referred to herein
as “Employer.”


WITNESSETH:



     WHEREAS, Employee has been President and Chief Operating Officer of
Sequoia Bancshares, Inc., and Sequoia Bank (“Sequoia”), and by Agreement and
Plan of Reorganization dated April 4, 2003 (the “Merger Agreement”), Sequoia
has agreed to be merged into United Bank, a Virginia state chartered bank (the
“Merger”);


     WHEREAS, the parties have agreed to enter into this Employment Agreement
to provide for the employment of Employee by Employer following the Merger, and
to be effective at the Effective Time of the Merger (the “Effective Time”) and
to be conditioned upon consummation thereof;


     WHEREAS, Employer considers the availability of Employee’s services to be
important to the management and conduct of Employer’s business and desires to
secure the continued availability of Employee’s services; and


     WHEREAS, Employee is willing to make his services available to Employer on
the terms and subject to the conditions set forth herein;


     NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:


     1.     Employment Conditioned Upon Consummation of Merger . At the Effective
Time, Employer hereby employs Employee and Employee hereby accepts employment
with the Employer as Vice Chairman of United Bank — Virginia and member of the
Board of Directors of United upon the terms and conditions set forth in Section
7.14(a) of the Merger Agreement.


     2.     Term. a. The term of this Agreement shall be (i) the initial term
consisting of the period commencing on the Effective Date and ending on the
third anniversary of the Effective Date, plus (ii) any and all extensions of
the initial term made pursuant to this Section 2.


            b. On each anniversary of the Effective Date prior to a termination of the
Agreement, the term under this Agreement shall be extended automatically for an
additional one (1) year period beyond the then effective expiration date
without action by any party, provided that neither United nor United Bank, on
the one hand, nor the Executive, on the other, shall have given written notice
at least sixty (60) days prior to such anniversary date of its or his desire
that the term not be extended.



     3.     Duties. Employee shall perform and have all of the duties and
responsibilities that may be assigned to him from time to time by the Board of
Directors of United Bank — Virginia. Employee shall devote his best efforts on
a full-time basis to the performance of such duties.








 


     4.          Compensation and Benefits. During the term of employment, the Employer
agrees to pay Employee a base salary and to provide benefits as set forth
below:


          a.     For all services rendered by Employee to Employer under this Agreement,
Employer shall pay to Employee an annual base salary (“Base Salary”) of
$250,000. Base Salary amounts shall be payable in accordance with the payroll
practices of Employer applicable to officers.



          b.     Except as otherwise specifically provided herein, for as long as
Employee is employed by Employer, Employee also shall be entitled to receive,
on the same basis as other executive officers of United Bank – Virginia,
incentive bonuses, stock options, employee pension and welfare benefits,
prerequisites and group employee benefits such as sick leave, vacation (but not
less than 6 weeks vacation), group disability and health, life and accident
insurance and similar indirect compensation which Employer may from time to
time extend to its similarly situated executive officers. In addition,
Employer agrees to pay on behalf of Employee (i) annual dues for the Columbia
Country Club, Farmington Country Club and University Club; and (ii) expenses
associated with attendance at the annual Maryland Bankers’ and ABA Conventions.
Employee shall also be entitled to an executive office in a Washington, DC and
Maryland location of United Bank – Virginia and the use of a company-owned or
leased vehicle similar to the vehicle used by the Employee and on the same
terms as such vehicle was made available by Sequoia.



          c.     At the Effective Time, Employee shall be granted 20,000 options to
purchase United stock pursuant to United’s 2001 Incentive Stock Option Plan.



     5.          Termination by the Company or Employee. The employment of Employee
with the Employer may be terminated by any one of the following means, in which
case Employee shall be entitled to such compensation as is described below:



	 	A.	 	Mutual Agreement: The Employee’s employment may
be termination by mutual agreement of the parties upon such
terms and conditions as they may agree.
	 
	 	B.	 	For Cause.




	 	 	 	 	 	 	 
	 	 	 	 	(1)	 	The Employee’s employment may be
terminated by the Employer for cause consisting of one
or more of the reasons specified in Paragraph
5(B)(2)(a)-(e) below; provided, however, that if the
cause of termination is for a reason specified in
Paragraph 5(B)(2)(a) below, and if in the reasonable
judgment of the Board of Directors of the Employer the
damage incurred by the company as a result of Employee’s
conduct constituting cause is damage of a type that is
capable of being substantially reversed and corrected,
the Employer shall give Employee thirty (30) days
advance notice of the Employer’s intention to terminate
his employment for cause and a reasonable opportunity to
cure the cause of the possible termination to the
satisfaction of the Employer.
	 	 	 	 	 	 	 
	 	 	 	 	(2)	 	For purposes of this Agreement, the
term “cause” shall be defined as follows:




	 	 	 	 	 
	 	 	
  (a)
	 	Employee’s repeated
negligence, malfeasance or misfeasance in the
performance of Employee’s duties that can reasonably be








 




	 	 	 	 	 
	 	 	 	 	expected to have an adverse impact
upon the business and affairs of the Employer;
	 	 	 	 	 
	 	 	
(b)
	 	Employee’s commission of
any act constituting theft, intentional wrongdoing
or fraud;
	 	 	 	 	 
	 	 	
(c)
	 	The conviction of the
Employee of a felony criminal offense in either
state or federal court;
	 	 	 	 	 
	 	 	
(d)
	 	Any single act by
Employee constituting gross negligence or which
causes material harm to the reputation, financial
condition or property of the Employer; or
	 	 	 	 	 
	 	 	
(e)
	 	The death of Employee
during the term of this Agreement, in which event
the Company shall pay to the estate of the
Employee any compensation for services rendered
but unpaid prior to the Employee’s date of death.




	 	 	 	 	 	 	 
	 	 	 	 	(3)	 	The Board of Directors of United Bank
shall determine, in its sole discretion, whether any
acts and/or omissions on the part of Employee constitute
“cause” as defined above. Notwithstanding the
foregoing, Employee shall be entitled to arbitrate a
finding of the Board of Directors of “cause” in
accordance with Paragraph 10 hereof.
	 	 	 	 	 	 	 
	 	 	 	 	(4)	 	In the event that Employer terminates
Employee’s employment for cause as defined above,
Employee shall be entitled to be paid his regular salary
and benefits up to the effective date of the
termination, but not any additional compensation.




	 	C.	 	Not for Cause. Employee’s employment may be
terminated by the Employer for any reason permitted under
applicable law so long as Employee is given thirty (30) days
advance written notice (or payment in lieu thereof). In the
event of a termination pursuant to this subparagraph, Employee
shall be entitled to payment from the Employer equivalent to
the base salary compensation set forth in this Agreement for
the remaining term of the Agreement, provided Employee does
not breach the provisions of Paragraph 6 below.
	 
	 	D.	 	Employee Resignation. Employee recognizes and
understands the vital role he plays in the Employer’s
operation, growth and development, and therefore agrees not to
resign from employment during the initial term of this
Agreement except in the event of his disability. If the
Employee resigns in violation of this commitment, Employee
agrees to comply with the restrictions set forth in Paragraph
6 below.
	 
	 	E.	 	Change in Control. Exhibit A hereto sets forth
the rights and responsibilities of the parties in the event of
a change in control, as defined therein, and is incorporated
herein by reference. For purposes of Exhibit A, the term
Company shall mean United.



  6.     Noncompetition and Nonsolicitation. In consideration of the covenants
set forth herein, including but not limited to the payments set forth in
Paragraph 4 and Exhibit A, Employee agrees as follows:







 


          (a)     The Employee agrees that during Employee’s employment and during the
two-year period after Employee’s employment with Employer is terminated for any
reason other than Employee’s disability, the Employee will not, directly or
indirectly, (i) become a director, officer, employee, principal, agent,
consultant or independent contractor of any insured depository institution,
trust company or parent holding company of any such institution or company (or
any other entity offering products or services competing with such institution
or company) which has an office in Virginia, Maryland or the District of
Columbia (a “Competing Business”), provided, however, that this provision shall
not prohibit the Employee from owning bonds, non-voting preferred stock or up
to five percent (5%) of the outstanding common stock of any such entity if such
common stock is publicly traded, or (ii) solicit
(whether by mail, telephone, personal meeting or any other means) any customer
of United or any of its subsidiaries to transact business with any other
entity, whether or not a Competing Business, or to reduce or refrain from doing
any business with United or its subsidiaries, or interfere with or damage (or
attempt to interfere with or damage) any relationship between United or its
subsidiaries and any such customers.



          (b)     Except as required by law or regulation (including without limitation
in connection with any judicial or administrative process or proceeding), the
Employee shall keep secret and confidential and shall not disclose to any third
party (other than the Company, United or any of their respective subsidiaries)
in any fashion or for any purpose whatsoever any information regarding the
Company, United or any of their respective subsidiaries which is not available
to the general public to which the Employee had access at any time during the
course of the Employee’s employment by the Company or any of its subsidiaries,
including, without limitation, any such information relating to: business or
operations; plans, strategies, prospects or objectives; products, technology,
processes or specifications; research and development operations or plans;
customers and customer lists; distribution, sales, service, support and
marketing practices and operations; financial condition, results of operations
and prospects; operational strengths and weaknesses; and personnel and
compensation policies and procedures.



          (c)     Employee agrees that during Employee’s employment and during the
two-year period after Employee’s employment with Employer is terminated for any
reason other than Employee’s disability, Employee shall not, on his own behalf
or on behalf of any other person, corporation or entity, either directly or
indirectly, solicit, induce, recruit or cause another person in the employ of
United or its affiliates to terminate his or her employment for the purpose of
joining, associating or becoming an employee with any business which is in
competition with any business or activity engaged in by United or its
affiliates.



          (d)     The Employee agrees that damages at law will be an insufficient remedy
to United in the event that the Employee violates any of the provisions of
paragraph (a), (b) or (c) of this Section 6, and that United may apply for and,
upon the requisite showing, have injunctive relief in any court of competent
jurisdiction to restrain the breach or threatened or attempted breach of or
otherwise to specifically enforce any of the covenants contained in paragraph
(a), (b) or (c) of this Section 6. The Employee hereby consents to any
injunction (temporary or otherwise) which may be issued against the Employee
and to any other court order which may be issued against the Employee from
violating, or directing the Employee to comply with, any of the covenants in
paragraph (a), (b) or (c) of this Section 6. The Employee also agrees that
such remedies shall be in addition to any and all remedies, including damages,
available to United against the Employee for such breaches or threatened or
attempted breaches.



          (e)     In addition to United’s rights set forth in paragraph (d) of this
Section 6, in the event that the Employee shall violate the terms and
conditions of paragraphs (a), (b) or (c) of this Section 6, United and its
subsidiaries may terminate any payments or benefits of any type and regardless
of source payable by United or its subsidiaries, if applicable, to the
Employee, other than with respect to payments









 





or benefits to the Employee under
plans or arrangements that are covered by the Employee Retirement Income
Security Act of 1974, as amended.


     7.          Definition of Disability. For the purposes of the Agreement, the term
“disability” shall mean a physical or mental condition rendering Employee
substantially and permanently unable to perform the duties of an officer and
director of a banking organization.


     8.          Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by registered or certified
mail listed herein. In the case of Employee to the following address: 5512 Oak
Place, Bethesda, Maryland 20817. In the case of the Employer to the
Chairman addressed to 514 Market Street, Parkersburg, West Virginia 26101.
Any notice sent pursuant to this paragraph shall be effective when deposited
in the mail.


     9.          Confidential Information. Employee shall not, during the term of this
Agreement or at any time thereafter, directly or indirectly, publish or
disclose to any person or entity any confidential information concerning the
assets, business or affairs of the Employer, including but not limited to any
trade secrets, financial data, employee or customer/client information or
organizational structure.


     10.        Arbitration. Any dispute between the parties arising out of or with
respect to this Agreement or any of its provisions or Employee’s employment
with the Employer shall be resolved by the sole and exclusive remedy of binding
arbitration. Arbitration shall be conducted in Virginia or such other place as
might be mutually agreed between the parties, in accordance with the rules of
the American Arbitration Association (“AAA”). The parties agree to select one
arbitrator from an AAA employment panel. The arbitration shall be conducted in
accordance with the Virginia Rules of Evidence and all discovery issues shall
be decided by the arbitrator. The arbitrator shall supply a written opinion
and analysis of the matter submitted for arbitration along with the decision.
The arbitration decision shall be final and subject to enforcement in the local
circuit court.


     11.        Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and shall supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof, other than that certain Executive Agreement of even date
herewith to which the Employee is a party. and may not be changed or amended
except by an instrument in writing to be executed by each of the parties
hereto.


     12.        Severability. If any provision hereof, or any portion of any
provision hereof, is held to be invalid, illegal or unenforceable, all other
provisions shall remain in force and effect as if such invalid, illegal or
unenforceable provision or portion thereof has not been included herein. If
any provision or portion of any provision of this Agreement is so broad as to
be unenforceable, such provision or a portion thereof shall be interpreted to
be only so broad as is enforceable.


     13.        Headings. The headings contained in this Agreement are included for
convenience or reference only and shall have no effect on the construction,
meaning or interpretation of this Agreement.


     14.        Governing Law. The laws of the State of Virginia shall govern the
interpretation and enforcement of this Agreement.


     15.        Amendments. Any amendments to this Agreement must be in writing and
signed by all parties hereto except that extensions of the term of this
Agreement under Paragraph 2 above, may be evidenced by minutes of a meeting of
the Board of Directors.







 


     16.        Waiver of Breach. No requirement of this Agreement may be waived
except by a written document signed by the party adversely affected. A waiver
of a breach of any provision of the Agreement by any party shall not be
construed as a waiver of subsequent breaches of that provision.


     17.        Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same Agreement and each of which shall be
deemed an original.


     18.        Special Post-Termination Provisions. Upon the expiration of this
Agreement or the termination of Employee’s employment under this Agreement or
otherwise for any reason, other than for cause, the following shall occur:



	 	A.	 	The Employee shall be fully vested (without
regard to his actual age or years of service as of such date)
in the “Normal Retirement Benefit” described in Section 2.1 of
the Amended and Restated Salary Continuation Agreement (“SCA”)
between the Employee and Sequoia Bank, as amended, which
agreement has been assumed as an obligation of United pursuant
to the Merger Agreement, and such benefit shall commence as if
the Employee has terminated employment on his “Normal
Retirement Date” under the SCA.
	 
	 	B.	 	For a period of 36 months from and after the
Employee’s termination of employment under this Agreement or
otherwise; United shall continue the Employee’s participation
in benefit plans of United and United Bank-Virginia that
provide health including medical and dental, life and
disability insurance, or provide the Employee with similar
coverage under the terms no less favorable than those provided
to senior executive of United during such period; provided,
however, that, in the event that such coverage cannot be
provided under plans of United because the Employee is no
longer an Employee, United shall provide the Employee with
comparable coverage under an individual policy.








 


     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
in its corporate name by its corporate officer thereunto duly authorized, and
Employee has hereunto set his hand and seal, as of the day and year first above
written:



	 	 	 	 	 
	 	 	UNITED BANKSHARES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ Richard M. Adams
	 	 	

	 	 	Name: Richard Adams

Title: Chairman and Chief Executive Officer
	 	 	 	 	 
	 	 	UNITED BANK
	 	 	 	 	 
	 	 	
By:
	 	/s/ James J. Consagra, Jr.
	 	 	

	 	 	Name: James J. Consagra Jr.

Title: Chief Financial Officer and Chief Operating Officer
	 	 	 	 	 
	 	 	EMPLOYEE:
	 	 	 	 	 
	 	 	 	 	/s/ J. Paul McNamara
	 	 	

	 	 	J. PAUL McNAMARA








 






EXHIBIT A

CHANGE IN CONTROL AGREEMENT



     1.          Definitions. For purposes of this Exhibit A, the following definitions
shall apply to designated phrases used in this Agreement.


          a.     “Change of Control” means (i) a change of ownership of the Company
which must be reported to the Securities and Exchange Commission as a change of
control, including but not limited to the acquisition by any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities and Exchange Act of
1934 (the “Exchange Act”)), of direct or indirect “beneficial ownership” (as
defined by Rule 13d-3 under the Exchange Act) of twenty-five percent (25%) or
more of the combined voting power of the Company’s then outstanding securities;
or (ii) the failure during any period of two (2) consecutive years of
individuals who at the beginning of such period constitute the Board for any
reason to constitute at least a majority thereof, unless the election of each
director who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds (2/3) of the
directors at the beginning of the period.



          b.     “Good Cause” includes (i) termination for continued poor work
performance after reasonable opportunity to correct deficiencies; (ii)
termination for behavior outside or on the job which affects the ability of
management of the Company or co-workers to perform their jobs and which is not
corrected after reasonable warning; (iii) termination for failure to devote
reasonable time to the job which is not corrected after reasonable warning; and
(iv) any other reasonable deficiency in performance by the Executive which is
not corrected after reasonable warning.



          c.     “Disability” means total and permanent disability as defined by
Company’s (or its successor’s) Long-Term Disability Plan.



          d.     “Retirement” means termination of employment by an Executive in
accordance with Company’s (or its successor’s) retirement plan, including early
retirement, generally applicable to its salaried employees.



          e.     “Good Reason” means (i) a Change of Control in the Company (as defined
above), as well as and as a direct result thereof, (a) a decrease in the total
amount of the Executive’s base salary below its level in effect on the date of
consummation of the Change of Control, without the Executive’ consent; or (b) a
material reduction in the importance of the Executive’s job responsibilities
without the Executive’s consent; or (c) a geographical relocation of the
Executive to an office more than 50 miles from the Executive’s location at the
time of the Change of Control without the Executive’s consent; (ii) failure of
Company to obtain assumption of this Agreement by its successor, or (iii) any
purported termination of the Executive’s employment which is not effected
pursuant to a Notice of Termination required in paragraph 2.



          f.     “Wrongful Termination” means termination of the Executive’s employment
by the Company or its affiliates for any reason other than Good Cause or the
death, Disability or Retirement of Executive prior to the expiration of
thirty-six (36) months after consummation of the Change of Control.



     2.          Termination for Good Reason or For Cause; Notice of Termination. The
Executive may terminate his employment with the Company or its affiliates for
Good Reason. In the event of a Change of Control, the Company may terminate
Executive’s employment only for Good Cause within thirty-six months after
consummation of Change in Control. Any termination of the Executive’s
employment by







 


the Company or by the Executive shall be communicated by written
Notice of Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon
and which shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for the termination of the Executive’s employment
under the provision so indicated.


     3.          Date of Termination. Date of Termination shall mean the date on which
Notice of Termination is given.


     4.          Compensation of Executives Upon Termination for Good Reason or Wrongful
Termination.


          a.     Except as hereinafter provided, if the Executive terminates his
employment with the Company for Good Reason or the Company terminates the
Executive’s employment in a manner constituting Wrongful Termination, the
Company hereby agrees to pay the Executive a cash payment equal to the
Executive’s monthly base salary in effect on either (i) the Date of
Termination; or (ii) the date immediately preceding the Change of Control,
whichever is higher, multiplied by the number of full months between the Date
of Termination and the date that is thirty-six (36) months after the date of
consummation of the Change of Control.



          b.     For the year in which termination occurs, the Executive will be
entitled to receive his reasonable share of the Company’s cash incentive award
allocated in accordance with existing principles and authorized by the Board of
Directors. The amount of the Executive’s cash incentive award shall not be
reduced due to the Executive not being actively employed for the full year.



     5.          Other Employment. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment, nor shall the amount of any payment provided for in this Agreement
be reduced by any compensation earned or benefits provided as the result of
employment by another employer after the Date of Termination.


     6.          Rights of Company Prior to the Change of Control. This Agreement shall
not effect the right of the Company to terminate the Executive, or change the
salary or benefits of the Executive, with or without Good Cause, prior to any
Change of Control; provided, however, any termination or change which takes
place after discussions have commenced which result in a Change of Control
shall be presumed to be a violation of this Agreement which entitled the
Executive to the benefits hereof, absent clear and convincing evidence to the
contrary.


     7.          Successors; Binding Agreement.


          a.     The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if he terminated his employment for Good Reason.
As used in this Agreement, “Company” shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the agreement provided for in this









 





paragraph 5 or which otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.


     b.          This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.
If the Executive should die while any amounts would still be payable to him
hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to the Executive’s devisee, legatee, or other designee or, if there be no such
designee, to the Executive’s estate.