Document:

Exhibits 10.4

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into on this  10th  day of February, 2016 among Hampton Roads Bankshares, Inc., a Virginia corporation having its principal place of business at 641 Lynnhaven Parkway, Virginia Beach, VA 23452 (“HRB”), Bank of Hampton Roads, a corporation organized under the laws of, and authorized by statute to accept deposits and hold itself out to the public as engaged in the banking business in, the Commonwealth of Virginia having its principal place of business at 641 Lynnhaven Parkway, Virginia Beach, VA 23452 (“BHR”) and Donna W. Richards (the “Executive”).

 

WITNESSETH:

 

WHEREAS, HRB intends to acquire Xenith Bankshares, Inc. according to that certain Agreement and Plan of Reorganization dated February 10, 2016 whereby Xenith Bankshares, Inc. will be acquired and merged into HRB and Xenith Bank, a wholly owned subsidiary of Xenith Bankshares, Inc., will be merged into HRB’s wholly owned subsidiary, BHR, with HRB and BHR as the surviving entities, whose names will change to Xenith Bankshares (“HoldCo”) and Xenith Bank (“Xenith”) respectively, if the change in name is approved by the shareholders of Holdco (the “Acquisition”)(1).

 

WHEREAS, the Executive  is currently employed as President of BHR and President and Chief Operating Officer of HRB.

 

WHEREAS, effective upon the closing of the Acquisition (the “Effective Date”), Xenith and HoldCo (collectively “Employer”) desire to provide for the continued employment of the Executive and to make certain changes in the Executive’s pre-Acquisition employment arrangements which the Employer has determined will reinforce and encourage the continued dedication of the Executive to the Employer.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained in this Agreement, the Employer and the Executive, intending to be legally bound hereby, mutually agree, conditioned upon the closing of the Acquisition, as follows:

 

1.                                      Employment.

 

(a)                                 The Employer and Executive agree that, upon the Effective Date,  Executive shall be employed as President and Chief Operating Officer (“COO”) of Xenith and President and COO of HoldCo, and shall perform such services for each as may be assigned to Executive by the Chief Executive Officer of Xenith or HoldCo, or the Board of Directors of Xenith or HoldCo (collectively, the “Board”) from time to time in accordance with the terms and conditions set forth in this Agreement.

 

(b)                                 The term of this Agreement shall commence on the Effective Date and, subject to Section 5(a) of this Agreement, shall expire on the second anniversary of the Effective Date, unless sooner terminated in accordance with the provisions of Section 5 (the “Term”).  On the second anniversary of the Effective Date and on each anniversary thereafter, the Term shall be extended for an additional one year unless the Employer shall deliver written notice to the contrary to Executive not less than 90 days prior to the end of the Term.  In the event the Employer provides the written notice described in the preceding sentence, yet Executive’s employment with the Employer continues after the expiration of the Term, Executive’s post-expiration employment will be at will.  If the Executive is offered post-expiration

 

(1)  If the name change is not approved and the current name(s) are retained, or other name(s) adopted, the appropriate name(s) shall be substituted herein as warranted.

 

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employment on substantially similar financial terms,  and refuses such employment, she will not be entitled to any severance  as a result of the expiration of this Agreement and termination of employment. If the Executive continues employment post-expiration on an at will basis, the Employer shall have no severance obligation under Section 5 of this Agreement in the event of termination of employment unless otherwise agreed by the Employer and the Executive.

 

2.                                      Duties of the Executive.

 

(a)                                 The Executive shall serve in the position of President and COO of Xenith and President and COO of HoldCo and perform all duties and services commensurate with that position. Unless otherwise specified hereafter, any services performed by the Executive shall be for the benefit of Xenith and, therefore, any payments or benefits paid to the Executive pursuant to this Agreement shall be the sole responsibility of Xenith; provided, however, Xenith’s obligation to make any payments owed to the Executive under this Agreement shall be discharged to the extent compensation payments are made by HoldCo.

 

(b)                                 The Executive shall devote her full time and attention to the discharge of the duties undertaken by her hereunder.  Executive shall comply with all policies, standards and regulations of the Employer, and shall perform her duties under this Agreement to the best of her abilities and in accordance with general business standards of conduct. The foregoing provision shall not prevent the Executive’s purchase, ownership or sale of any interest, or the Executive’s engaging in, any business that does not compete with the business of the Employer or the Executive’s involvement in charitable or community activities, provided, that the time and attention that the Executive devotes to such business and charitable or community activities does not materially interfere with the performance of the Executive’s duties under this Agreement and further provided that such conduct complies in all material respects with applicable policies of the Employer.

 

(c)                                  The Executive shall be entitled to paid time off during each calendar year in accordance with the paid time off policy of the Employer for senior executive officers, to be taken at such time or times as the Executive and the Employer shall mutually determine.  Earned but unused paid time off shall be accrued in accordance with the Employer’s paid time off policy. Any payments made by the Employer to the Executive as compensation in lieu of paid time off shall be paid in accordance with the Employer’s normal payroll practices.

 

3.                                      Compensation.  For all services to be rendered by the Executive under this Agreement, the Employer and the Executive agree as follows:

 

(a)                                 Base Salary.  The Employer shall pay the Executive a base salary (the “Base Salary”), at a rate of $400,000 per year, plus such other compensation as the Employer may, from time to time, determine in its sole discretion.  The Compensation Committee of the Xenith Board (the “Compensation Committee”), shall review annually the amount of the Executive’s Base Salary, and may increase, but not decrease, such Base Salary to such amount as the Employer may determine in its sole and absolute discretion.  Such Base Salary and other compensation shall be payable in accordance with the Employer’s normal payroll practices (and in no event less frequently than monthly) as in effect from time to time.

 

(b)                                 Restricted Stock.  An award of 200,000 Restricted Stock Units (“RSUs”) under the HRB 2011 Omnibus Incentive Plan (as revised), fifty (50) percent of such amount vesting upon the integration of Xenith’s core operating system to a single core processor and the remaining fifty (50) percent vesting on the second anniversary of the Effective Date; provided, however, any unvested RSUs (or, if unvested, stock options) immediately vest in the event of a Change of Control.  Additionally, any unvested RSUs immediately vest in the event of a termination by Executive for Good Reason. No restrictions on the sale

 

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of such Holdco common stock shall apply after payment to the Executive except to the extent required by law.

 

(c)                                  Intentionally Omitted.

 

(d)                                 Retention Bonus.  The Executive shall receive a retention bonus as follows within thirty (30) days of the closing of the Acquisition, calculated as follows:

 

i.                  (Current Base Salary plus average of last two (2) years’ bonuses) x 2.99; and

 

ii.               Immediate vesting of any unvested RSUs under her June 26, 2013, August 22, 2014, and September 16, 2015, RSU Awards,  to be settled in cash.

 

(e)                                  Incentive Bonus Plans.  The Executive will be eligible to participate in any of the Employer’s long-term or short-term incentive plans on the same terms and conditions and in relative magnitude to other Tier II senior executive officers of the Employer, subject to annual bonus performance metrics and other terms and conditions of awards adopted in the sole and absolute discretion of the Compensation Committee of the Xenith Board on an annual basis.

 

(f)                                   Other Benefits.  Subject to any applicable terms, conditions, and eligibility requirements, from and after the Effective Date and throughout Executive’s employment hereunder, except as otherwise expressly provided in the Agreement, the Executive shall be entitled to participate in all cash and non-cash employee benefit plans maintained by the Employer for senior executive officers or employees generally, including but not limited to (i) a 401(k) retirement program, (ii) long-term disability, (iii) extended medical leave, (iv) 25 days per year of paid-time off and (v) health insurance, dental insurance and life insurance coverage as are provided to the class of employees that includes the Executive.

 

(g)                                  Withholding for Taxes.  The Employer may withhold from any amounts payable to Executive under this Agreement all federal, state, city or other taxes and withholdings as shall be required pursuant to any applicable law, rule or regulation.

 

(h)                                 Excess Parachute Payment.  In the event any of the items described above would constitute an “excess parachute payment” as described in Section 5(j), Executive’s right to payment of such items shall be subject to the provisions of Section 5(j).

 

4.                                      Expenses.  The Employer shall promptly reimburse the Executive for (a) all reasonable expenses the Executive pays or incurs in connection with the performance of the Executive’s duties and responsibilities in connection with her employment under this Agreement, upon presentation of expense vouchers or other appropriate documentation for such expenses and (b) all reasonable professional expenses, such as licenses and dues and professional educational expenses, the Executive pays or incurs during her employment hereunder, all of the above in accordance with Employer’s policies with respect thereto.

 

5.                                      Termination of Employment. Notwithstanding the termination of this Agreement or the termination of the Executive’s employment for any reason, the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination.  In addition, no termination of this Agreement shall affect any liability or other obligation of either party which shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach.  No termination of employment shall terminate the obligation of the Employer to make payments or provide any vested benefits provided hereunder or any other plan or program of Employer or the obligations of the Executive under Sections 7 and 8 of this Agreement.

 

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Unless otherwise stated in this Agreement, including Sections 3(b) and 5 of this Agreement, the effect of termination on any outstanding incentive awards, stock options, stock appreciation rights, performance units,  restricted stock, restricted stock units or other incentives shall be governed by the terms of the applicable benefit or incentive plan and/or the agreements governing such incentives.

 

(a)                                 Executive With Notice.  The Executive’s employment hereunder may be terminated by the Executive upon 30 days written notice to the Employer or at any time by mutual agreement in writing.  It shall not constitute a breach of this Agreement for the Employer to suspend the Executive’s duties and to place the Executive on a paid leave during the 30-day notice period. If the Executive’s employment is terminated under this Section 5(a) of this Agreement, the Employer shall pay the Executive only any vested benefits under this Agreement or any plan or program of the Employer ( paid at the times provided thereunder) and any sums due to him as Base Salary and/or reimbursement of expenses through the date of termination.  Such  Base Salary and reimbursements shall be paid at the end of the payroll period that follows the payroll period in which her employment terminates.

 

(b)                                 Death.  This Agreement shall terminate upon death of the Executive; provided, however, that in such event the Employer shall pay to the estate of the Executive the compensation, including Base Salary and accrued but unused paid-time off in accordance with Employer’s policies with respect thereto, which otherwise would be payable to the Executive through the date on which her death occurs.  Such amounts shall be paid at the end of the payroll period that follows the payroll period in which her employment terminates due to her death.  Additionally, the Employer shall pay to the Executive’s estate any vested benefits under this Agreement or under any plan or program of the Employer (paid at the times provided thereunder) and any bonus or other short-term incentive compensation earned, but not yet paid, for any year prior to the year in which her death occurs.

 

Any bonus or other short-term incentive compensation payable under this Section 5(b) shall be paid (i) on the date of payment to other employees eligible for bonuses or other short-term incentive compensation under the same plan or plans, or, (ii) if no date or time frame for payment is specified in those plans, by March 15 of the calendar year following the calendar year in which the compensation is earned.

 

(c)                                  Disability.  The Executive understands and agrees that she is a key person in Employer’s operation and that an extended absence will cause undue hardship to Employer’s continued operations. The Employer may terminate Executive’s employment under this Agreement upon its determination of the Disability of the Executive, which Disability constitutes a “disability” under the Employer’s applicable long term disability plan or insurance program and that has continued for such period required for the Executive to become eligible to receive long term disability benefits under the Employer’s long-term disability plan or insurance program.  During the period of any Disability leading up to the termination of the Executive’s employment under this provision, the Employer shall continue to pay the Executive her full Base Salary at the rate then in effect and all perquisites and other benefits (other than any bonus) in accordance with the Employer’s normal payroll practices; provided that, the amount of any such payments to the Executive shall be reduced by the sum of the amounts, if any, payable to the Executive for the same period under any other disability benefit covering the Executive that is provided by the Employer.  Additionally, the Employer shall pay the Executive any bonus or other short-term incentive compensation earned, but not yet paid, for any year prior to the year in which her disability leads up to the termination of the Executive’s employment, on the same terms as set forth in Section 5(b) and any vested benefits under this Agreement or under any plan or program of the Employer (paid at the times provided thereunder).

 

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(d)                                 Employer Without “Cause” or Employee with “Good Reason.”

 

(1)                                 The Employer may terminate Executive’s employment under this Agreement other than for “Cause” (as defined in Section 5(e), below), at any time upon written notice to Executive, which termination shall be effective immediately.  This would include a termination in  connection with the expiration of this Agreement caused by non-renewal by Employer under Section 2(b), above.  Executive may resign after written notice to the Employer for “Good Reason”, as hereafter defined. In the event the Executive’s employment terminates pursuant to this Section 5(d)(1), Executive shall receive, at the end of the payroll period that follows the payroll period in which her employment terminates, her Base Salary earned through the date of termination and any accrued but unused paid time off, any bonuses or short-term incentive compensation shall be paid as described in Section 5(b) above. Any vested benefits under this Agreement or any plan or program of the Employer shall be paid at the times provided under this Agreement or any such plan or program, as applicable.  In the event the Executive’s employment terminates pursuant to this Section 5(d)(1), provided she complies with the requirements of Section 5(i) below, Executive shall also receive the following items:

 

(i)                                     An amount equal to 200% of the sum of (i) her current rate of annual Base Salary in effect immediately preceding such termination, and (ii) the average of her last two year’s annual bonus(es) earned, if any; provided that such amount shall be paid in a single lump sum cash payment on the date described in Section 5(i) below;

 

(ii)                                  The Executive may continue participation for both her and her covered dependents (if applicable), in accordance with the terms of the applicable benefits plans, in the Employer’s group health plan pursuant to plan continuation rules under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”).  In accordance with COBRA, assuming the Executive and her covered dependents (if applicable), are covered under the Employer’s group health plan as of her date of termination, the Executive will be entitled to elect COBRA continuation coverage for the legally required COBRA period (the “Continuation Period”) for such persons.  If the Executive timely elects COBRA coverage for group health coverage, she will be reimbursed for the full COBRA cost of the coverage for herself (which shall be treated as taxable income to Executive).  In addition, if the terms of the applicable plan documents do not allow Employer to continue to provide COBRA coverage to Executive and her covered dependents (if applicable), beyond the expiration of the statutorily-proscribed COBRA period, the Employer shall make monthly cash payments to Executive in an amount equal to the monthly COBRA premium for coverage for Executive for the duration of the period between the expiration of COBRA and twenty-four (24) months following her last day of employment.  Notwithstanding the above, if the Executive becomes eligible for qualifying health care coverage through a subsequent employer within twenty-four (24) months after her last day of employment, the Employer’s obligations hereunder with respect to the foregoing benefits provided in this subsection (ii) may be terminated by the Employer.

 

(2)                                 Notwithstanding anything in this Agreement to the contrary, if Executive breaches Sections 7 and 8 of this Agreement, Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to Section 5(d)(1) of this Agreement other than the right to participate in COBRA.

 

(3)                                 For purposes of this Agreement, “Good Reason” shall mean any of the following:  (i) a material diminution in the Executive’s Base Salary; (ii) a material diminution in the

 

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Executive’s authority, duties or responsibilities; (iii) a material diminution in the authority, duties, or responsibilities of the officer to which the Executive is required to report; (iv) a material diminution in the budget over which the Executive retains authority; (v) a material change in the geographic location at which the Executive must perform her services, provided, however, that a change in location of the headquarters to Richmond, Virginia shall not constitute Good Reason; or (vi) a material breach of this Agreement.

 

(4)                                 To terminate this Agreement and her employment under this Agreement for Good Reason, the Executive must provide written notice to the Employer of the existence of the circumstances providing grounds for termination for Good Reason within 90 days of the initial existence of such grounds and must give the Employer at least 30 days from receipt of such notice to cure the condition constituting Good Reason (“Notice of Good Reason”).  Such termination must be effective within one year after the initial existence of the condition constituting Good Reason.  In the event of termination for Good Reason, the date of termination shall be the effective date specified in the Executive’s Notice of Good Reason.

 

(e)                                  Employer with “Cause”.  The Employer shall have the right to terminate Executive’s employment under this Agreement at any time for Cause, which termination shall be effective immediately, upon delivery of written notice to the Executive which shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Employee’s employment and subject to the applicable cure provisions as set forth below.  Termination for “Cause” shall mean termination because of the Executive’s personal and material dishonesty regarding matters related to the performance of her duties for the Employer, willful misconduct in connection with the performance of her duties for the Employer, breach of fiduciary duty involving personal profit, willful violation of any final cease-and-desist order or material breach of any provision of this Agreement.  Cause shall also include termination because of

 

(1)                                 material misappropriation of, or other intentional material damage to the property or business of the Employer by the Executive,

 

(2)                                 the Executive’s excessive absences other than for physical or mental impairment or illness, subject to the cure provisions set forth in Section 5(e)(4) of this Agreement.

 

(3)                                 the Executive’s admission or conviction of, or plea of nolo contendere to, any felony or any other crime referenced in Section 19 of the Federal Deposit Insurance Act that, in the reasonable judgment of the Board, adversely affects the Employer’s reputation or the Executive’s ability to carry out the Executive’s obligations under this Agreement or

 

(4)                                 the Executive’s non-compliance with the provisions of Section 2(b) of this Agreement after notice of such non-compliance from the Employer to the Executive and a reasonable opportunity for the Executive to cure such non-compliance.  To terminate the Executive’s employment under this Agreement for Cause pursuant to Section 5(e)(2) of this Agreement and Section 5 (e)(4), the Employer must provide written notice to the Executive within ninety (90) days of the initial existence of such grounds and must give the Executive at least thirty (30) days from the receipt of such notice to cure such condition. Notwithstanding the foregoing, the Employer may not terminate the Executive’s employment under this Agreement for Cause unless the Employer provides the Executive with both written notice in accordance with the By-laws of Xenith and HoldCo of a special meeting of the Board to consider the termination of the Executive’s employment under this Agreement for Cause and the opportunity for the Executive to address such special meeting.  It shall not constitute a breach of this Agreement for the Employer to suspend the Executive’s duties and place the Executive on an unpaid leave

 

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during the period prior to the special meeting of the Board.  In the event Executive’s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other unvested benefits under this Agreement.

 

(f)                                   In Connection with a Change in Control.  If, during the term of Executive’s employment under this Agreement and within twelve (12) months immediately following a Change of Control or within six (6) months immediately prior to such Change of Control, Executive’s employment with the Employer under this Agreement is terminated without Cause or for Good Reason, then the Employer shall pay to Executive, or in the event of her subsequent death, to her designated beneficiary or beneficiaries, or to her estate, as the case may be, in lieu of all other claims under Section 5(d) of this Agreement, a severance payment in an amount equal to 200% of the sum of:  i) her current rate of annual Base Salary in effect immediately preceding such termination and ii) the average of her last two years’ annual bonus(es) earned, if any, provided that such amount shall be paid in a single lump sum cash payment on the date described in Section 5(i) below.  The Executive also shall be entitled to the continued participation in benefits plan(s) as set out in Subsection 5(d)(1)(ii) above.  In addition, all unvested outstanding equity based award held by the Executive on the date of the Executive’s termination of employment under this Section 5(f) shall vest.  Any accrued but unused paid time off, bonuses or short term incentive compensation and vested benefits shall be paid as described in Section 5 (b) of this Agreement.

 

For purposes of this Agreement, a Change in Control shall be deemed to have occurred on the earliest of the following dates:

 

(i)                                     The date any entity or person shall have become the beneficial owner of, or shall have obtained voting control over, 50% or more of the outstanding common stock of HoldCo;

 

(ii)                                  The date HoldCo completes (x) a merger or consolidation of HoldCo with or into another corporation or other business entity (each, a “corporation”), regardless of whether HoldCo is the continuing or surviving corporation or pursuant to which any shares of common stock of HoldCo would be converted into cash, securities or other property of another corporation, other than a merger or consolidation of HoldCo in which the holders of the common stock of HoldCo immediately prior to the merger or consolidation continue to own immediately after the merger or consolidation at least 50% of the common stock of HoldCo, or if HoldCo is not the surviving corporation, the common stock (or other voting securities) of the surviving corporation; or (y) a sale or other disposition of all or substantially all of the assets of HoldCo; or

 

(iii)                               The date that Continuing Directors cease for any reason to constitute a majority of the board of directors of HoldCo.  (The term “Continuing Director” means any member of the board of directors of HoldCo, while a member of such board and (a) who was a member of such board on the Effective Date or (b) whose nomination for, or election to, such HoldCo Board was recommended or approved by at least two-thirds of the members of such HoldCo Board who are then Continuing Directors; provided, however, that no member of such HoldCo Board whose initial assumption of office is in connection with an actual or threatened contest relating to the election of directors shall be deemed a Continuing Director.).

 

For the purposes of this Subsection, the term “person” shall mean any individual, corporation, partnership, group, association or other person, as such term is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, other than HoldCo, Xenith or any other subsidiary of HoldCo or any employee benefit plan(s) sponsored or maintained by HoldCo or any subsidiary thereof, and the term “beneficial owner” shall have the meaning given the term in Rule 13d-3 under the Exchange Act.

 

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(g)                                  Suspension per FDIA.  If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served pursuant to the Federal Deposit Insurance Act, the Employer’s obligations 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 Employer shall (i) pay on the first day of the first month following such dismissal of charges (or as provided elsewhere in this Agreement) the Executive all of the compensation withheld while the obligations under this Agreement were suspended; and (ii) reinstate any such obligations which were suspended.

 

(h)                                 409A Compliance.  Notwithstanding the provisions relating to the timing of payments described in this Section 5 above, if the Executive is a “specified employee” under Section 409A of the Internal Revenue Code of 1986 and any regulations thereunder (the “Code”) on the date of her termination of employment, payment of amounts due under Section of this Agreement and that constitute deferred compensation shall be made as described in Section 27 of this Agreement.

 

(i)                                     Severance Contingent on Release.  In addition, within 60 days of termination of the Executive’s employment, and as a condition to the Employer’s obligation to pay any severance under Sections 5(d) or 5(f) of this Agreement, the Executive shall execute, and not timely revoke during any revocation period provided pursuant to such release, a release and waiver of claims reasonably satisfactory to the Employer.  Payment, in most instances,  will be made as soon as practicable after such release is effective but in all events within such 60 day period. If the 60-day period spans two calendar years, such severance payment will be made as soon as possible in the subsequent taxable year, provided however that any portion of an insurance premium due to be paid by the Employer during such 60-day period under Section 5 of this Agreement shall be paid by the Employer on the due date whether or not the release and waiver has been signed.

 

(j)                                    Tax Counsel.  If tax counsel appointed by the Employer (the “Tax Counsel”) determines that any or the aggregate value (as determined pursuant to Section 280G of the Code) of all payments, distributions, accelerations of vesting, awards and provisions of benefits by the Employer to or for the benefit of Executive (whether paid or payable, distributed or distributable, accelerated, awarded or provided pursuant to the terms of this Agreement or otherwise) (a “Payment”) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), such Payment shall be reduced to the least extent necessary so that no portion of the Payment shall be subject to the Excise Tax, but only if, by reason of such reduction, the net after-tax benefit received by the Executive as a result of such reduction will exceed the net after-tax benefit that would have been received by the Executive if no such reduction were made.  The Payment shall be reduced,  if applicable, by the Employer in the following order of priority: (A) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code; (B) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code; (C) reduction of any payments attributable to any acceleration of vesting or payments with respect to any equity award that are exempt from Section 409A of the Code, in each case beginning with payments that would otherwise be made last in time; and (D) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payments attributable to any acceleration of vesting and payments with respect to any equity award that are exempt from Section 409A of the Code.  If, however, such Payment is not reduced as described above, then such Payment shall be paid in full to the Executive and the Executive shall be responsible for payment of any Excise Taxes relating to the Payment.

 

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All determinations required to be made under this Section 5, and the assumptions to be utilized in arriving at such determination, shall be made by the Tax Counsel, which shall provide its determinations and any supporting calculations both to the Employer and Executive within 10 business days of having made such determination.  The Tax Counsel shall consult with any nationally recognized compensation consultants, accounting firm and/or other legal counsel selected by the Company in determining which payments to, or for the benefit of, the Executive are to be deemed to be parachute payments within the meaning of Section 280G of the Code.  In connection with making determinations under this Section 5, the Tax Counsel shall take into account the value of any reasonable compensation for services to be rendered by the Executive before or after the Change in Control, including without limitation, the Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, and the Employer shall cooperate in good faith in connection with any such valuations and reasonable compensation positions. Without limiting the generality of the foregoing, for purposes of this provision, the Employer agrees to allocate as consideration for the covenants set forth in Section 8 the maximum amount of compensation and benefits payable under Section 5 hereof reasonably allocable thereto so as to avoid, to the extent possible, subjecting any Payment to tax under Section 4999 of the Code.

 

(k)  Offset/Recovery Upon Breach by Executive.  Notwithstanding anything in this Agreement to the contrary, if the Executive breaches Section 8 of this Agreement, the Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to Section 5 and/or will be required to repay any such benefits for the period in breach of Sections 7 and/or 8 of this Agreement.

 

6.                                      Indemnification.  Notwithstanding anything in the articles of incorporation or By-laws of Xenith or HoldCo to the contrary, the Executive shall at all times during the Executive’s employment by Xenith or HoldCo, and after such employment, be indemnified by such entities to the fullest extent applicable law permits for any matter in any way relating to the Executive’s affiliation with Xenith or HoldCo, provided, however, that if Xenith or HoldCo shall have terminated the Executive’s employment for Cause, then neither Xenith or HoldCo shall have any obligation whatsoever to indemnify the Executive for any claim arising out of the matter for which the Executive’s employment shall have been terminated for Cause or for any conduct of the Executive not within the scope of the Executive’s duties under this Agreement.

 

7.                                      Confidential Information.  The Executive understands that in the course of the Executive’s employment by the Employer, the Executive will receive confidential information concerning the business of Xenith or HoldCo and that the Employer desires to protect the confidentiality of such information (hereinafter “Confidential Information”).  For purposes of this Section 7, Confidential Information means data and information (i) relating to the business of the Employer, regardless of whether the data or information constitutes a trade secret (as such term is defined in the Uniform Trade Secrets Act), (ii) disclosed to Executive or of which she became aware of as a consequence of her relationship with the Employer, (iii) having value to the Employer, (iv) not generally known to competitors of the Employer; and (v) which includes trade secrets, methods of operation, names and contact information of customers and potential customers, information related to customers and potential customers, profit margins, financial information and projections, personnel data, and similar information; provided, however, that such term shall not mean data or information which has been voluntarily disclosed to the public by the Employer, except where such public disclosure has been made by Executive without authorization from the Employer, which has been independently developed and disclosed by others, or which has otherwise entered the public domain through lawful means.  Confidential Information also includes any information described in this Section 7 which the Employer obtains from a third party and treats as proprietary or confidential, whether or not owned or developed by the Employer.  The Executive agrees that the Executive will not at any time during or after the period of the Executive’s employment by the Employer reveal to anyone outside the Employer, or use for the Executive’s own

 

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benefit, any Confidential Information without prior specific written authorization by the Employer.  Upon termination of this Agreement, and upon the request of the Employer, the Executive shall promptly deliver to the Employer any and all written or electronic materials, records and documents, including all copies of this Agreement, made by the Executive or coming into the Executive’s possession during her employment hereunder and that the Executive retained containing or concerning Confidential Information and all other written or electronic materials furnished to and retained by the Executive by the Employer for the Executive’s use during her employment, excluding all copies of this Agreement, whether of a confidential nature or otherwise.

 

8.                                      Restrictive covenants.

 

(a)                                 Non-Solicitation of Clients. During the Executive’s employment and for a period of one year following the Executive’s last day of employment with the Employer, the Executive covenants and agrees that she will not, for herself or for the benefit of another, solicit a Client for the purpose of providing banking services of any type that the Employer rendered to its clients in the twelve months immediately preceding her termination of employment. The term “Client” as used in this Section 8 of the Agreement shall be defined as any individual or entity that paid or engaged Xenith for banking services in the twelve month period immediately preceding the date of Executive’s termination of employment and with whom Executive had contact, involvement or communication, directly or indirectly, during such time.

 

(b)                                 Non-Solicitation of Employees. During the Executive’s employment and for a period of one year following the Executive’s last day of employment with the Employer, the Executive will not, on the Executive’s own behalf or on behalf of any third party, recruit or hire any individual who was employed by the Employer or Holdco at any point during the twelve month period immediately preceding her last day of employment and with whom the Executive had contact, involvement or communication, during such time period.

 

(c)                                  Non-Competition.  During Executive’s employment and for a period of one year following the Executive’s last day of employment with the Employer, the Executive covenants and agrees that she will not, either as principal, owner (of greater than 5% of the ownership interests), partner, director, officer, employee, agent, or consultant, compete with i) HoldCo by providing services to any competing bank holding company that are substantially similar to those she provided to HoldCo during her employment; or ii) Xenith, by providing services that are substantially similar to those she provided to Xenith to any financial institution that offers banking products and services competitive to those offered by Xenith at any time during the twelve month period immediately preceding Executive’s last day of employment. The foregoing restrictions shall only apply within a 50 mile radius of the location of  HoldCo’s corporate headquarters (with respect to Section 8(c)(i), above) or ii) 50 miles of any office, branch or division of Xenith in operation as of the date of her last day of employment (with respect to Section 8(c)(ii), above).

 

9.                                      Representation and Warranty of the Executive.  The Executive represents and warrants to the Employer that the Executive is not under any obligation, contractual or otherwise, to any other firm or corporation, which would prevent the Executive from entering into the employ of the Employer under this Agreement or prevent the Executive from performing the terms of this Agreement.

 

10.                               Regulatory Compliance.  Notwithstanding anything to the contrary herein, any compensation or other benefits paid to the Executive shall be limited to the extent required by any federal or state regulatory agency having authority over Xenith or HoldCo, including any limitations or prohibitions on payments under Section 5 of this Agreement.  The Executive agrees that compliance by Xenith or HoldCo

 

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with such regulatory restrictions, even to the extent that compensation or other benefits paid to the Executive are limited, shall not be a breach of this Agreement by the Company or the Employer.

 

11.                               Clawback.  Notwithstanding any other provisions in this Agreement to the contrary, the Executive agrees that any compensation and benefits provided to her under this Agreement that are subject to recovery or recoupment under any applicable law, regulation or securities exchange rule, shall be recouped by the Employer as necessary to satisfy such law, regulation, or rules.  These laws, regulations, and rules include, but are not limited to, where such compensation constitutes “excessive compensation” within the meaning of 12 C.F.R. Part 30, Appendix A, where the Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. § 359.4(a)(4), and if Xenith becomes, and for so long as  Xenith  remains, subject to the provisions of 12 U.S.C. § 1831o(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution. In addition, the Executive agrees that any incentive compensation provided to her under this Agreement that is subject to recovery or recoupment under any internal policy of the Employer shall be shall be recouped by the Employer as necessary to satisfy such internal policy.  Executive agrees to promptly return or repay any such compensation, and authorizes the Employer to deduct such compensation from any other payments owed to the Executive by the Employer if she fails to do so.

 

12.                               Entire Agreement; Amendment.  This Agreement contains the entire agreement between the Employer and the Executive with respect to the subject matter of this Agreement, and this Agreement may not be amended, waived, changed, modified or discharged except by an instrument in writing executed by the Employer and the Executive.

 

13.                               Assignability.   This Agreement shall be binding upon, and inure to the benefit of, the Employer and its or their legal successors and assigns.  The Executive may not assign this Agreement, but the Executive’s benefits under this Agreement shall inure to the benefit of the Executive’s heirs, executors, administrators and legal representatives to the extent this Agreement expressly provides.

 

14.                               Notice.  Any notice that may be given under this Agreement shall be in writing and be deemed given when hand delivered and acknowledged or, if mailed, one day after mailing by registered or certified mail, return receipt requested, or if delivered by an overnight delivery service, one day after the notice is delivered to such service, to any party to this Agreement at its respective address stated above, or at such other address as any party may by similar notice designate.

 

15.                               Specific Performance.  The parties agree that irreparable damage would occur in the event that any of the provisions of Sections 7 and 8 of this Agreement were not performed in accordance with their specific terms or were otherwise breached.  The parties accordingly agree that each of the parties to this Agreement shall be entitled to an injunction or injunctions to prevent breaches of Sections 7 and 8 of this Agreement and to enforce specifically the terms and provisions of Sections 7 and 8 of this Agreement, and that such injunctive relief shall be in addition to any other remedy to which any party is entitled at law or in equity. The existence of any claim or cause of action of the Executive against the Employer, whether predicated on this Agreement or not, will not constitute a defense to the enforcement by the Employer of the restrictions, covenants and agreements contained in this Agreement; provided, however, that the failure by the Employer to pay the Executive her compensation due pursuant to Section 3 of this Agreement shall constitute such a defense, as shall the Employer’s failure to pay the severance and benefits due under Section 5(d)(1) of this Agreement if such failure is not in response to a breach by the Executive of Section 8 of this Agreement.  Furthermore, in addition to any other remedies, the Executive agrees that any violation of the provisions in Section 8 will result in the immediate forfeiture of any remaining payment that otherwise is or may become due under Section 5, if applicable.  The Executive further agrees that should she breach any of the provisions contained in Section 8 of this Agreement, the

 

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Executive shall repay to the Employer any amounts previously received by the Executive pursuant to Section 5 that are attributable to that portion of the payments paid for the period during which the Executive was in breach of any of the provisions.  The Employer and the Executive agree that all remedies available to the Employer or the Executive, as applicable, shall be cumulative.

 

16.                               No Third Party Beneficiaries.  Nothing in this Agreement, express or implied, is intended to confer upon any person or entity other than the Employer and the Executive and the heirs, executors, administrators and personal representatives of the Executive any rights or remedies of any nature under or by reason of this Agreement.

 

17.                               Successor Liability.  The Employer shall require any subsequent successor, whether direct or indirect, by purchase, merger, consolidation or otherwise, to all or substantially all of the business or assets of the Employer to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Employer would be required to perform it if no such succession had taken place, and the Executive agrees to continue to be bound in such case.

 

18.                               Mitigation.  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Executive as the result of employment by another employer or by retirement benefits payable after the termination of this Agreement, except that the Employer shall not be required to provide the Executive and the Executive’s eligible dependents with medical insurance coverage as long as the Executive and the Executive’s eligible dependents are receiving comparable medical insurance coverage from another employer.

 

19.                               Waiver of Breach.  The failure at any time to enforce or exercise any right under any of the provisions of this Agreement or to require at any time performance by the other parties of any of the provisions of this Agreement shall in no way be construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part of this Agreement, or the right of any party hereafter to enforce or exercise its rights under each and every provision in accordance with the terms of this Agreement.

 

20.                               No Attachment.  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect; provided, however, that nothing in this Section 20 shall preclude the assumption of such rights by executors, administrators or other legal representatives of the Executive or the Executive’s estate and their assigning any rights under this Agreement to the person or persons entitled hereto.

 

21.                               Severability.  The invalidity or unenforceability of any term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision of this Agreement shall in no way affect the validity or enforceability of any other provision, or any part of this Agreement, but this Agreement shall be construed as if such invalid or unenforceable term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision had never been contained in this Agreement unless the deletion of such term, phrase, clause, paragraph, section, restriction, covenant, agreement or other provision would result in such a material change as to cause the covenants and agreements contained in this Agreement to be unreasonable or would materially and adversely frustrate the objectives of the parties as expressed in this Agreement.

 

22.                               Survival of Benefits.  Any provision of this Agreement that provides a benefit to the Executive and that by the express terms of this Agreement does not terminate upon the expiration of her

 

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employment hereunder shall survive the expiration of the term of her employment and shall remain binding upon the Employer until such time as such benefits are paid in full to the Executive or the Executive’s estate.

 

23.                               Construction.  This Agreement shall be governed by and construed in accordance with the internal laws of the Commonwealth of Virginia, to the extent not inconsistent with and governed by federal law, without giving effect to principles of conflict of laws.  All headings in this Agreement have been inserted solely for convenience of reference only, are not to be considered a part of this Agreement and shall not affect the interpretation of any of the provisions of this Agreement.

 

24.                               Jury Waiver.  The Employer and the Executive agree that in any litigation action or proceeding arising out of or relating to this Agreement or the Executive’s employment with the Employer, trial shall be in a court of competent jurisdiction without a jury.  The Employer and the Executive irrevocably waive any right each may have to a jury trial and a copy of this Agreement may be introduced as written evidence of the waiver of the right to trial by jury.  The Employer has not made and the Executive has not relied on, any oral representation regarding the enforceability of this provision.  The Employer and the Executive have read and understand the effect of this jury waiver provision.

 

25.                               Venue.  The Employer and the Executive hereby expressly consent to be subject to the jurisdiction of the Commonwealth of Virginia to determine any disputes regarding this Agreement and further agree that the exclusive venue for any such dispute shall be in Virginia Beach, Virginia.  Employer and Executive agree to accept the jurisdiction of any such court and each waives any claim and warrants that she or it will not argue or contend that any such court does not have jurisdiction, is not an appropriate forum or venue or that such a forum is inconvenient.

 

26.                               Full Capacity.  The persons signing this Agreement represent that they have full authority and representative capacity to execute this Agreement in the capacities indicated below and to perform all obligations under this Agreement.

 

27.                               Compliance with Internal Revenue Code Section 409A.  All payments that may be made and benefits that may be provided pursuant to this Agreement are intended to qualify for an exclusion from Section 409A of the Code and any related regulations or other pronouncements thereunder and, to the extent not excluded, to meet the requirements of Section 409A of the Code.  Any payments made under Section 5 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion.  Any remaining payments under Section 5 except certain payments related to extended group health plan coverage are intended to qualify for the exclusion for separation pay plans under Treasury Regulation § 1.409A-1(b)(9). Each payment made under Section 5 shall be treated as a “separate payment”, as defined in Treasury Regulation § 1.409A-2(b)(2), for purposes of Code Section 409A. None of the payments under this Agreement are intended to result in the inclusion in Executive’s federal gross income on account of a failure under Section 409A(a)(1) of the Code.  The parties will administer and interpret this Agreement to carry out such intentions.  However, the Employer does not represent, warrant or guarantee that any payments that may be made pursuant to this Agreement will not result in inclusion in the Executive’s gross income, or any penalty, pursuant to Section 409A(a)(1) of the Code or any similar state statute or regulation.  Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1) of the Code, the payment shall be paid (or provided) in accordance with the following:

 

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(a)                                 If the Executive is a “Specified Employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Executive’s termination (the “Separation Date”), and if an exemption from the six month delay requirement of Code Section 409A(a)(2)(B)(i) is not available, then no such payment that is not otherwise exempt under 409A shall be made or commence during the period beginning on the Separation Date and ending on the date that is six months following the Separation Date or, if earlier, on the date of the Executive’s death.  The amount of any payment that would otherwise be paid to the Executive during this period shall instead be paid to the Executive on the first day of the first calendar month following the end of the period.

 

(b)                                 Payments with respect to reimbursements of expenses or benefits or provision of fringe or other in-kind benefits shall be made on or before the last day of the calendar year following the calendar year in which the relevant expense or benefit is incurred.  The amount of expenses or benefits eligible for reimbursement, payment or provision during a calendar year shall not affect the expenses or benefits eligible for reimbursement, payment or provision in any other calendar year.

 

28.                               Complete Agreement/Waiver.  This Agreement and the agreements, policies and plans referenced herein, are the full and complete expression of the terms and conditions of the Executive’s employment with Employer.  This Agreement, upon closing of the Acquisition, supersedes any prior agreements between HRB and/or BHR and the Executive.  Accordingly, upon closing, the Executive understands and agrees that, upon the closing of the Acquisition, she is not entitled to any compensation under any prior Agreement between her and HRB and/or BHR, including but not limited to her May 22, 2013, Employment Agreement, as amended, and specifically waives any such compensation.  Provided, however, nothing herein is intended to, or does, waive any  stock option or Restricted Stock Unit grant of Executive prior to the closing of the Acquisition, vested or unvested, in effect prior to the execution of this Agreement.

 

29.                               Pronouns.  Use of the male should be construed as the female herein, where applicable.

 

[Remainder of page intentionally left blank; signature page follows.]

 

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IN WITNESS WHEREOF, each of HRB, BHR and the Executive have executed this Agreement as of the date first written above.

 

	
 
    	
HAMPTON ROADS BANKSHARES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles M. Johnston
    
	
 
    	
Name: Charles M. Johnston
    
	
 
    	
Its: Chairman and Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
BANK OF HAMPTON ROADS
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles M. Johnston
    
	
 
    	
Name: Charles M. Johnston
    
	
 
    	
Its: Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
EXECUTIVE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Donna W. Richards
    
	
 
    	
Donna W. Richards
    
				

 

15EX-10.1

 Exhibit 10.1 

INDEMNIFICATION AGREEMENT 
 This
Agreement is made as of the              day of             , 2016, by and between Accretive Health, Inc., a
Delaware corporation (the “Corporation), and              (the “Indemnitee”), a director or officer of the Corporation[, and a
             of              (the “Fund Manager”)]. 

WHEREAS, it is essential to the Corporation to retain and attract as directors and officers the most capable persons available, and 

WHEREAS, the increase in corporate litigation subjects directors and officers to expensive litigation risks, and 

WHEREAS, it is now and has always been the express policy of the Corporation to indemnify its directors and officers, and 

[WHEREAS, Indemnitee is associated with the Fund Manager and has certain rights to indemnification and/or insurance provided by the Fund
Manager and/or the Fund Manager’s affiliates which Indemnitee and the Fund Manager intend to be secondary to the primary obligation of the Corporation to indemnify Indemnitee as provided herein, with the Corporation’s acknowledgment and
agreement to the foregoing being a material condition to Indemnitee’s willingness to serve on the Board, and] 
 WHEREAS, as
contemplated by Article EIGHTH, Section 10 of the Corporation’s Certificate of Incorporation, this Agreement grants indemnification rights and procedural protections to directors in addition to the indemnification provisions under the
Corporation’s Certificate of Incorporation, and WHEREAS, the Corporation desires the Indemnitee to serve, or continue to serve, as a director or officer of the Corporation. 

NOW THEREFORE, the Corporation and the Indemnitee do hereby agree as follows: 

1. Agreement to Serve. The Indemnitee agrees to serve or continue to serve as a director or officer of the Corporation for so long as
the Indemnitee is duly elected or appointed or until such time as the Indemnitee tenders a resignation in writing. 
 2. Definitions.
As used in this Agreement: 
 (a) The term “Proceeding” shall include any threatened, pending or completed action, suit,
arbitration, alternative dispute resolution proceeding, administrative hearing or other proceeding, whether brought by or in the right of the Corporation or otherwise and whether of a civil, criminal, administrative or investigative nature, and any
appeal therefrom. 
 (b) The term “Corporate Status” shall mean the status of a person who is or was, or has agreed to become, a
director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, fiduciary, partner, trustee, member, employee or agent of, or in a similar capacity with, another
corporation, partnership, joint venture, trust, limited liability company or other enterprise. 

 (c) The term “Expenses” shall include, without limitation, attorneys’ fees,
retainers, court costs, transcript costs, fees and expenses of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and other disbursements or expenses of the types customarily
incurred in connection with investigations, judicial or administrative proceedings or appeals, but shall not include the amount of judgments, fines or penalties against Indemnitee or amounts paid in settlement in connection with such matters. 

(d) References to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise
tax assessed with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves
services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Agreement. 

3. Indemnity of Indemnitee. Subject to Sections 6, 8 and 10, the Corporation shall indemnify the Indemnitee in connection with any
Proceeding as to which the Indemnitee is, was or is threatened to be made a party (or is otherwise involved) by reason of the Indemnitee’s Corporate Status, to the fullest extent permitted by law (as such may be amended from time to time). In
furtherance of the foregoing and without limiting the generality thereof: 
 (a) Indemnification in Third-Party Proceedings. The
Corporation shall indemnify the Indemnitee in accordance with the provisions of this Section 3(a) if the Indemnitee was or is a party to or threatened to be made a party to or otherwise involved in any Proceeding (other than a Proceeding by or
in the right of the Corporation to procure a judgment in its favor or a Proceeding referred to in Section 6 below) by reason of the Indemnitee’s Corporate Status or by reason of any action alleged to have been taken or omitted in
connection therewith, against all Expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by or on behalf of the Indemnitee in connection with such Proceeding, if the Indemnitee acted in good faith and
in a manner which the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation (which may be negligent acts) and, with respect to any criminal Proceeding, had no reasonable cause to believe that his or her
conduct was unlawful. 
 (b) Indemnification in Proceedings by or in the Right of the Corporation. The Corporation shall indemnify
the Indemnitee in accordance with the provisions of this Section 3(b) if the Indemnitee was or is a party to or threatened to be made a party to or otherwise involved in any Proceeding by or in the right of the Corporation to procure a judgment
in its favor by reason of the Indemnitee’s Corporate Status or by reason of any action alleged to have been taken or omitted in connection therewith, against all Expenses and, to the extent permitted by law, amounts paid in settlement actually
and reasonably incurred by or on behalf of the Indemnitee in connection with such Proceeding, if the Indemnitee acted in good faith and in a manner which the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the
Corporation, except that, if applicable law so provides, no indemnification shall be made 

  
 2 

 
under this Section 3(b) in respect of any claim, issue, or matter as to which the Indemnitee shall have been adjudged to be liable to the Corporation, unless, and only to the extent, that
the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, the Indemnitee is fairly and
reasonably entitled to indemnity for such Expenses as the Court of Chancery or such other court shall deem proper. 
 4. Indemnification
of Expenses of Successful Party. Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful, on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter
therein (other than a Proceeding referred to in Section 6), the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection therewith. Without limiting the foregoing, if
any Proceeding or any claim, issue or matter therein is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an adjudication that the
Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the Indemnitee did not act in good faith and in a manner the Indemnitee reasonably believed to
be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that the Indemnitee had reasonable cause to believe his or her conduct was unlawful, the Indemnitee shall be
considered for the purposes hereof to have been wholly successful with respect thereto. 
 5. Indemnification for Expenses of a
Witness. To the extent that the Indemnitee is, by reason of the Indemnitee’s Corporate Status, a witness in any Proceeding to which the Indemnitee is not a party, the Indemnitee shall be indemnified against all Expenses actually and
reasonably incurred by or on behalf of the Indemnitee in connection therewith. 
 6. Exceptions to Right of Indemnification.
Notwithstanding anything to the contrary in this Agreement, except as set forth in Section 11, the Corporation shall not indemnify the Indemnitee under this Agreement in connection with a Proceeding (or part thereof) initiated by the Indemnitee
unless the initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding anything to the contrary in this Agreement, the Corporation shall not indemnify the Indemnitee to the extent the Indemnitee is reimbursed
directly from the proceeds of the Corporation’s insurance, and in the event the Corporation makes any indemnification payments to the Indemnitee and the Indemnitee is subsequently reimbursed from the proceeds of the Corporation’s
insurance, the Indemnitee shall promptly refund such indemnification payments to the Corporation to the extent of such insurance reimbursement. 

7. Contribution in the Event of Joint Liability. If the indemnification provided for in this Agreement for any reason other than the
statutory limitations of applicable law or as provided for in this Agreement, is held by a court of competent jurisdiction to be unavailable to an Indemnitee in respect of any losses, claims, damages, expenses or liabilities in which the Corporation
is jointly liable with such Indemnitee, as the case may be (or would be jointly liable if joined), then the Corporation, in lieu of indemnifying the Indemnitee thereunder, shall contribute to the amount actually and reasonably incurred and paid or
payable by the Indemnitee as a result of such losses, claims, damages, expenses or liabilities in such proportion as is appropriate to reflect (a) the relative benefits received by the Corporation and the Indemnitee,

  
 3 

 
and (b) the relative fault of the Corporation and such Indemnitee in connection with the action or inaction that resulted in such losses, claims, damages, expenses or liabilities, as well as
any other relevant equitable considerations. The relative fault of the Corporation and the Indemnitee shall be determined by reference to, among other things, (i) whether an untrue or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact relates to information supplied by the Corporation or the Indemnitee, (ii) the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent the circumstances
resulting in such losses, claims, damages, expenses or liabilities, (iii) the degree to which the parties’ actions were motivated by intent to gain personal profit or advantage, (iv) the degree to which the parties’ liability is
primary or secondary, and (v) the degree to which the parties’ conduct is active or passive. The Corporation and the Indemnitee agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata or per capita allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. No person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act of 1933, as amended) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. 

8. Notification and Defense of Claim. As a condition precedent to the Indemnitee’s right to be indemnified, the Indemnitee must
notify the Corporation in writing as soon as practicable of any Proceeding for which indemnity will or could be sought; provided that failure or delay to provide such notice shall not limit the Indemnitee’s right to indemnification
hereunder except to the extent the Corporation is prejudiced by such failure or delay. With respect to any Proceeding of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to
assume the defense thereof at its own expense, with legal counsel reasonably acceptable to the Indemnitee. After notice from the Corporation to the Indemnitee of its election so to assume such defense, the Corporation shall not be liable to the
Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with such Proceeding, other than as provided below in this Section 8. The Indemnitee shall have the right to employ his or her own counsel in
connection with such Proceeding, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (i) the employment of counsel by the
Indemnitee has been authorized by the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and the Indemnitee in the
conduct of the defense of such Proceeding or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel for the Indemnitee shall be at the
expense of the Corporation, except as otherwise expressly provided by this Agreement, and provided that Indemnitee’s counsel shall cooperate reasonably with the Corporation’s counsel to minimize the cost of defending claims against
the Corporation and the Indemnitee. The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Indemnitee shall have
reasonably made the conclusion provided for in clause (ii) above. The Corporation shall not be required to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent.
The Corporation shall not settle any Proceeding in any manner that would impose any penalty or limitation on the Indemnitee without the Indemnitee’s written consent. Neither the Corporation nor the Indemnitee will unreasonably withhold or delay
their consent to any proposed settlement. 

  
 4 

 9. Advancement of Expenses. Subject to the provisions of Section 10, in the event
that (a) the Corporation does not assume the defense pursuant to Section 8 of any Proceeding of which the Corporation receives notice under this Agreement or (b) the Corporation assumes such defense but Indemnitee is, pursuant to
Section 8, entitled to have the fees and costs of Indemnitee’s own counsel paid for by the Corporation, any Expenses actually and reasonably incurred by or on behalf of the Indemnitee in defending such Proceeding shall be paid by the
Corporation in advance of the final disposition of such Proceeding; provided, however, that the payment of such Expenses incurred by or on behalf of the Indemnitee in advance of the final disposition of such Proceeding shall be made
only upon receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Corporation as authorized in this
Agreement. Such undertaking shall be accepted without reference to the financial ability of the Indemnitee to make repayment. Any advances and undertakings to repay pursuant to this Section 9 shall be unsecured and interest-free. 

10. Procedures. 
 (a) In
order to obtain indemnification or advancement of Expenses pursuant to this Agreement, the Indemnitee shall submit to the Corporation a written request, including in such request such documentation and information as is reasonably available to the
Indemnitee and is reasonably necessary to determine whether and to what extent the Indemnitee is entitled to indemnification or advancement of Expenses. Any such indemnification or advancement of Expenses shall be made promptly, and in any event
within 30 days after receipt by the Corporation of the written request of the Indemnitee, unless the Corporation determines within such 30-day period that the Indemnitee did not meet the applicable standard of
conduct. Such determination, and any determination that advanced Expenses must be repaid to the Corporation, shall be made in each instance (a) by a majority vote of the directors of the Corporation consisting of persons who are not at that
time parties to the Proceeding (“disinterested directors”), whether or not a quorum, (b) by a committee of disinterested directors designated by a majority vote of disinterested directors, whether or not a quorum, (c) if there
are no disinterested directors, or if the disinterested directors so direct, by independent legal counsel (who may, to the extent permitted by applicable law, be regular legal counsel to the Corporation) in a written opinion, or (d) by the
stockholders of the Corporation. 
 (b) The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that the Indemnitee did not act in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and,
with respect to any criminal Proceeding, had reasonable cause to believe that his or her conduct was unlawful. 
 (c) The Indemnitee shall
cooperate with the person, persons or entity making such determination with respect to the Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation

  
 5 

 
or information which is not privileged or otherwise protected from disclosure and which is reasonably available to the Indemnitee and reasonably necessary to such determination. Any Expenses
actually and reasonably incurred by the Indemnitee in so cooperating shall be borne by the Corporation (irrespective of the determination as to the Indemnitee’s entitlement to indemnification) and the Corporation hereby indemnifies the
Indemnitee therefrom. 
 11. Remedies. The right to indemnification or advancement of Expenses as provided by this Agreement shall be
enforceable by the Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the applicable period referred to in Section 10. Unless otherwise
required by law, the burden of proving that indemnification or advancement of Expenses is not appropriate shall be on the Corporation. Neither the failure of the Corporation to have made a determination prior to the commencement of such action that
indemnification is proper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation that the Indemnitee has not met such applicable standard of conduct, shall be a defense
to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. The Indemnitee’s Expenses actually and reasonably incurred in connection with successfully establishing the Indemnitee’s right to
indemnification, in whole or in part, in any such Proceeding shall also be indemnified by the Corporation. 
 12. Partial
Indemnification. If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Corporation for some or a portion of the Expenses, judgments, fines, penalties or amounts paid in settlement actually and reasonably
incurred by or on behalf of the Indemnitee in connection with any Proceeding but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify the Indemnitee for the portion of such Expenses, judgments, fines, penalties or
amounts paid in settlement to which the Indemnitee is entitled. 
 13. Subrogation. In the event of any payment under this Agreement,
the Corporation shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as
are necessary to enable the Corporation to bring suit to enforce such rights. 
 14. Term of Agreement. This Agreement shall be
applicable to Proceedings commenced or continued after execution of this Agreement, whether arising from acts or omissions occurring before or after such execution, and this Agreement shall continue until and terminate upon the later of (a) the
date when Indemnitee is no longer be subject to any possible Proceeding subject to indemnification by reason of Indemnitee’s Corporate Status and (b) the final termination of all Proceedings pending on the date of execution of this
Agreement in respect of which the Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by the Indemnitee pursuant to Section 11 of this Agreement relating thereto. 

  
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 15. Indemnification Hereunder Not Exclusive. 

(a) The indemnification and advancement of Expenses provided by this Agreement shall not be deemed exclusive of any other rights to which the
Indemnitee may be entitled under the Certification of Incorporation, the By-Laws, any other agreement, any vote of stockholders or disinterested directors, the General Corporation Law of Delaware, any other law (common or statutory), or otherwise,
both as to action in the Indemnitee’s official capacity and as to action in another capacity while holding office for the Corporation. Nothing contained in this Agreement shall be deemed to prohibit the Corporation from purchasing and
maintaining insurance, at its expense, to protect itself or the Indemnitee against any expense, liability or loss incurred by it or the Indemnitee in any such capacity, or arising out of the Indemnitee’s status as such, whether or not the
Indemnitee would be indemnified against such expense, liability or loss under this Agreement; provided that the Corporation shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to
the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. 

(b) [The Corporation hereby acknowledges that Indemnitee has certain rights to indemnification, advancement of expenses and/or insurance
provided by the Fund Manager and certain of its affiliates (the “Fund Indemnitors”). The Corporation hereby agrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligations of
the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by Indemnitee are secondary), (ii) that, to the extent the Corporation is otherwise required hereunder, the Corporation shall
be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted, without regard to any
rights Indemnitee may have against the Fund Indemnitors, and (iii) that the Corporation irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any
other recovery of any kind in respect of amounts paid by the Corporation to the Indemnitee as required hereunder. The Corporation further agrees that no advancement or payment by the Fund Indemnitors on behalf of the Indemnitee shall affect the
foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee hereunder against the Corporation. The Corporation and Indemnitee
agree that the Fund Indemnitors are express third party beneficiaries of the terms hereof.] 
 16. No Special Rights. Nothing herein
shall confer upon the Indemnitee any right to continue to serve as an officer or director of the Corporation for any period of time or at any particular rate of compensation. 

17. Savings Clause. If this Agreement or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify the Indemnitee as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect to any Proceeding to the full extent permitted by any applicable portion of this Agreement that
shall not have been invalidated and to the fullest extent permitted by applicable law. 

  
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 18. Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall constitute the original. 
 19. Successors and Assigns. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of the estate, heirs, executors, administrators and personal representatives of the Indemnitee. 

20. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute
part of this Agreement or to affect the construction thereof. 
 21. Modification and Waiver. This Agreement may be amended from time
to time to reflect changes in Delaware law or for other reasons. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision hereof nor shall any such waiver constitute a continuing waiver. 

22. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been
given (i) when delivered by hand or (ii) if mailed by certified or registered mail with postage prepaid, on the third day after the date on which it is so mailed: 
  

			
	(a)	 	if to the Indemnitee, to:
		
		 	  

		 	  

		 	  

		
	(b)	 	if to the Corporation, to:
		
		 	Accretive Health, Inc.
		 	401 North Michigan Avenue
		 	Suite 2700
		 	Chicago, IL 60611
		 	Attention: General Counsel

 or to such other address as may have been furnished to the Indemnitee by the Corporation or to the Corporation by the
Indemnitee, as the case may be. 
 23. Applicable Law. This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware. The Indemnitee may elect to have the right to indemnification or reimbursement or advancement of Expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or
events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of Expenses is sought. Such election shall be made, by
a notice in writing to the Corporation, at the time indemnification or reimbursement or advancement of Expenses is sought; provided, however, that if no such notice is given, and if the General Corporation Law of Delaware is amended,
or 

  
 8 

 
other Delaware law is enacted, to permit further indemnification of the directors and officers, then the Indemnitee shall be indemnified to the fullest extent permitted under the General
Corporation Law, as so amended, or by such other Delaware law, as so enacted. 
 24. Enforcement. The Corporation expressly confirms
and agrees that it has entered into this Agreement in order to induce the Indemnitee to continue to serve as an officer or director of the Corporation, and acknowledges that the Indemnitee is relying upon this Agreement in continuing in such
capacity. 
 25. Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements, whether oral or written, by any officer, employee or representative of any party hereto in respect of the subject matter contained herein; and any prior agreement of the parties hereto in
respect of the subject matter contained herein is hereby terminated and cancelled. For avoidance of doubt, the parties confirm that the foregoing does not apply to or limit the Indemnitee’s rights under Delaware law or the Corporation’s
Certificate of Incorporation or By-Laws. 
 26. Consent to Suit. In the case of any dispute under or in connection with this
Agreement, the Indemnitee may only bring suit against the Corporation in the Court of Chancery of the State of Delaware. The Indemnitee hereby consents to the exclusive jurisdiction and venue of the courts of the State of Delaware, and the
Indemnitee hereby waives any claim the Indemnitee may have at any time as to forum non conveniens with respect to such venue. The Corporation shall have the right to institute any legal action arising out of or relating to this Agreement in any
court of competent jurisdiction. Any judgment entered against either of the parties in any proceeding hereunder may be entered and enforced by any court of competent jurisdiction. 

[signature page follows] 

  
 9 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the
day and year first above written. 
  

			
	ACCRETIVE HEALTH, INC.
		
	 By:
	 	  

	 Name:
	 	  

	 Title:
	 	  

	
	INDEMNITEE:
	
	  

	Name:

  
 10

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