Document:

ex10.21 2013 10K

EXHIBIT 10.21

Valley Bank
Employee Profit Sharing Plan
2013

Valley Bank (“Company”) recognizes the importance of a well-designed profit-sharing plan that rewards individual performance as well as allows employees to share in the profits of the Company when strategic goals are met.   As such, the Company has developed the Employee Profit Sharing Plan (“Plan”) as part of the Company’s overall Strategic Plan.  The Plan is designed to reward performance for meeting individual goals and objectives that are aligned with the Company’s overall Strategic Plan.  All Company compensation programs shall exclude incentives for SEOs to take unnecessary and excessive risks that threaten the value of the Company and shall not incorporate any activities that would encourage manipulation of reported earnings to enhance the compensation of any employee.
Administration
    
Eligible Employees:

Employees eligible to participate in the Plan include all employees, hired prior to July 1 of the current year. Part-time employees’ bonus amount will be prorated at 62.5% of award amount.  Additionally, bonuses will be prorated for eligible employees hired during the year based on number of months employed.  Employees must be employed (and not in a termination or resignation period) through the date of payment to be eligible for payment.  

The Company participated in the Capital Purchase Program in 2008 and is subject to numerous executive compensation restrictions included in the American Recovery and Reinvestment Act of 2009.  As a result, the Company is prohibited from paying or accruing any bonus, retention award or incentive compensation, except for payments of long-term restricted stock to our most highly compensated employee during the period in which the U.S. Treasury owns preferred stock of the Company.  Therefore, any incentive earned by the President and CEO under this Plan will be paid in the form of long-term restricted stock that vests upon repayment of TARP proceeds to the U.S. Treasury.

Calculation of Award

The profit sharing plan award amount totaling $550,000 (exclusive of any employer taxes associated with the award) will be included in the Company’s budget and accrued on a monthly basis.  The payout amount will be 100% if the Company meets its profitability budget for the year (“profitability budget” defined as budgeted net income available to common shareholders less profit earned from residential real estate and mortgage lines of business).  If the Company does not meet its profitability budget, the total profit sharing contribution will be reduced by the amount required for the Bank to hit the profitability budget.  The remaining contribution, if any, will be allocated on a pro-rata basis according to the full contribution schedule:     

	
		
	Title
	Profit Sharing % of Base Salary*

	President
	15%

	Executive Vice President
	12%

	Senior Vice President - Exec. Officer
	10%

	Senior Vice President - Other 
	9%

	Vice President 
	8%

	Assistant Vice President 
	7%

	Bank Officer 
	5%

	Exempt, non-officer
	3%

	Non-exempt, non-officer
	Flat $500

		
	•
	The base salary for employees on a commission only pay structure has been pre-determined as follows:

SVP, Wealth Management:  $125,000
VP, Mortgage Officer:  $96,000
AVP, Mortgage Officer:  $48,000
Mortgage Officer:  $35,000

If the Company exceeds its profitability budget, the profit sharing award will be increased to the maximum allowable under the Plan without exceeding 10% of reportable net income to common shareholders for the year ended December 31, 2013.  In no event will the total profit sharing contribution exceed 10% of reportable net income to common shareholders for the year ended December 31, 2013.

Clawback Provision

Any profit-sharing awards made under this Plan will be subject to a “clawback” if payments were based upon materially inaccurate financial statements or any other materially inaccurate performance criteria or if it is subsequently determined that the employee has violated the Company’s Code of Ethics.  This provision is not exclusively applicable to accounting restatements and covers material inaccuracies of performance metrics in addition to the actual financial statements.

Payment of Award

Payment of the award will be made on or about January 31, 2014 (after the Company has released earnings for the year ended December 31, 2013).

Additional Awards
    

The Human Resources Committee has the authority to make additional awards at its discretion.ex10.22 2013 10K

EXHIBIT 10.22

VALLEY FINANCIAL CORPORATION

Restricted Stock Award Agreement

THIS AGREEMENT dated as of the ____ day of _____________, 2014, between VALLEY FINANCIAL CORPORATION, a Virginia corporation (the “Corporation”), and Ellis L. Gutshall (“Participant”), is made pursuant and subject to the provisions of the VALLEY FINANCIAL CORPORATION 2011 STOCK INCENTIVE PLAN (the “Plan”).  All terms used herein that are defined in the Plan have the same meaning given them in the Plan.

1.    Award of Stock.  Pursuant to the Plan, the Corporation, on ______________, authorized the award of ______ shares of Stock (“Restricted Stock”) to Participant.   This award of Restricted Stock is subject to the terms and conditions of the Plan and the terms and conditions set forth herein.

2.    Restrictions.  Except as provided in this Agreement, the Restricted Stock is nontransferable and is subject to a substantial risk of forfeiture.

3.    Vesting.  Participant’s interest in the shares of Restricted Stock shall be transferable and nonforfeitable (“Vested”) on the second anniversary of the Award Date.

4.    Death, Disability or Change in Control.  Notwithstanding Section 3 above, in the event of Participant’s death, Disability (as defined below) or upon a Change in Control (as defined in the Plan), Participant shall become fully Vested in the Restricted Stock.  For purposes of this Agreement, Disability means a condition resulting from bodily injury or disease that renders Participant unable to perform any and every duty pertaining to Participant’s employment with the Corporation.  The Board of Directors of the Corporation, in its sole discretion, will determine whether Participant is Disabled based on medical evidence and Participant’s eligibility under the long-term disability policy maintained by the Corporation, if any.  The date of the Board of Director’s determination will be considered Participant’s date of Disability for purposes of this Agreement.

5.    Forfeiture.  All shares of Restricted Stock that are not then Vested shall be forfeited if Participant’s employment with the Corporation or a Subsidiary terminates prior to the date such shares have become Vested pursuant to Section 3.

6.    Shareholder Rights.  Participant will have all the rights of a shareholder of the Corporation with respect to the Restricted Stock, including the right to receive dividends on and to vote the Restricted Stock; provided, however, that (i) Participant may not sell, transfer, pledge, exchange, hypothecate or otherwise dispose of Restricted Stock, (ii) the Corporation shall retain custody of the certificates evidencing shares of Restricted Stock as provided in Section 8, and (iii) Participant will deliver a stock power in accordance with Section 9.

7.    Custody of Certificates.  Custody of stock certificates evidencing the Restricted Stock shall be retained by the Corporation so long as the Restricted Stock is not Vested.  The Corporation shall deliver to Participant the stock certificates evidencing the Common Stock as soon as practicable after the Restricted Stock becomes Vested.

8.    Stock Power.  Participant shall deliver to the Corporation a stock power, endorsed in blank, with respect to the Restricted Stock. The Corporation shall use the stock power to cancel any shares of Restricted Stock that do not become Vested.  The Corporation shall return the stock power to Participant with respect to any shares of Restricted Stock that become Vested.

9.    Fractional Shares.  Fractional shares shall not be issuable hereunder, and when any provision hereof or the Plan may entitle Participant to a fractional share, such fraction shall be disregarded.

10.    Taxes.  The Corporation shall have the right to retain and withhold from any award of the Restricted Stock, the amount of taxes required by any government to be withheld or otherwise deducted and paid with respect to such award.  The Corporation may retain and withhold a number of shares of vested Restricted Stock, having a Fair Market Value as of the date the shares become Vested not less than the amount of such taxes, and cancel in whole or in part any such shares so withheld, in order to satisfy the Corporation’s withholding obligations.

11.    No Right to Continued Employment.  This Agreement does not confer upon Participant any right with respect to continued employment by the Corporation, nor shall it interfere in any way with the right of the Corporation to terminate Participant’s employment at any time.

12.    Change in Capital Structure.  In accordance with the terms of the Plan, the terms of this award shall be adjusted as the Committee determines is equitably required in the event the Corporation effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.

13.    Governing Law.  This Agreement shall be governed by the laws of the Commonwealth of Virginia.

14.    Conflicts.  In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall govern.  

15.    Participant Bound by Plan.  Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof.

16.    Binding Effect.  Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representatives of the Participant and the successors of the Corporation.

    

IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on its behalf, and the Participant has affixed his signature hereto.

VALLEY FINANCIAL CORPORATION

By: _________________________                    
        Anna L. Lawson, Chairman
        Human Resources Committee of the     Board of Directors

PARTICIPANT

____________________________                    
Ellis L. Gutshall
                    
Date:

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