Document:

Exhibit 10.10.4

 

AMENDED AND RESTATED

C&F FINANCIAL CORPORATION

 2004 INCENTIVE STOCK PLAN

FORM OF RESTRICTED STOCK AGREEMENT

 

Granted <<DATE>>

 

This Restricted Stock Agreement (the "Agreement") is entered into as of <<DATE>> pursuant to Article VIII of the Amended and Restated C&F Financial Corporation 2004 Incentive Stock Plan (the "Plan") and evidences the grant, and the terms, conditions and restrictions pertaining thereto, of Restricted Stock awarded to <<NAME>> (the "Participant").

 

	
1.

	
Award of Shares.  In consideration of the services rendered to C&F Financial Corporation (the "Company") and/or its Subsidiaries by the Participant as a Key Employee or Non-Employee Director of the Company or a Subsidiary, the Committee hereby grants to the Participant a Restricted Stock Award as of <<DATE>> ("Award Date"), covering <<NUMBER>> Shares of the Company's Stock (the "Award Shares") subject to the terms, conditions, and restrictions set forth in this Agreement.  This Award is granted pursuant to the Plan and is subject to the terms thereof.

 

	
2.

	
Period of Restriction.

 

	
(a)

	
Subject to earlier vesting or forfeiture as hereinafter provided, the period of restriction (the "Period of Restriction") applicable to the Award Shares is as follows:  <<INSERT VESTING SCHEDULE>>

 

	
(b)

	
If a Change in Control occurs after the Award Date and during the continuation of the Participant's Company Service (as defined in Paragraph 7), the Period of Restriction shall end and any remaining restrictions applicable to any of the Award Shares shall automatically terminate and the Award Shares shall be free of restrictions and freely transferable.

 

	
(c)

	
The applicable portion of the Award Shares shall become freely transferable by the Participant after the last day of its Period of Restriction.

 

	
3.

	
Stock Certificates.  The stock certificate(s) for the Award Shares shall be registered on the Company's stock transfer books in the name of the Participant in book entry or electronic form or in certificated form as determined by the Committee.  If issued in certificated form, physical possession of the stock certificate(s) shall be retained by the Company until such time as the Period of Restriction lapses.

 

Any Award Shares issued in book entry or electronic form shall be subject to the following legend, and any certificate(s) evidencing the Award Shares shall bear the following legend, during the Period of Restriction:

 

The sale or other transfer of the shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the Amended and Restated C&F Financial Corporation 2004 Incentive Stock Plan, in the rules and administrative procedures adopted pursuant to such Plan, and in a Restricted Stock Agreement dated <<DATE>>.  A copy of the Plan, such rules and procedures, and such Restricted Stock Agreement may be obtained from the Secretary of C&F Financial Corporation.

 

	
4.

	
Voting Rights.  During the Period of Restriction, the Participant may exercise full voting rights with respect to the Award Shares.

 

- 1 -

 

	
5.

	
Dividends and Other Distributions.  During the Period of Restriction, the Participant shall be entitled to receive currently all dividends and other distributions paid with respect to the Award Shares (other than dividends or distributions which are paid in Shares of Stock).  If, during the Period of Restriction, any such dividends or distributions are paid in Shares of Stock with respect to the Award Shares, such Shares shall be registered in the name of the Participant and, if issued in certificate form, deposited with the Company as provided in Paragraph 3, and such Shares shall be subject to the same vesting rules and restrictions on transferability as the Award Shares with respect to which they were paid.

 

	
6.

	
Company Service and Forfeiture.

 

	
(a)

	
If the Participant's Company Service (as defined in Paragraph 7) ceases due to the Participant's death or permanent and total disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code), any remaining Period of Restriction applicable to the Award Shares shall automatically terminate and the Award Shares shall be free of restrictions and freely transferable.

 

	
(b)

	
If the Participant's Company Service (as defined in Paragraph 7) ceases due to the Participant's retirement from employment with the Company or one of its Subsidiaries in accordance with any applicable Company policy on mandatory or permissive, early or normal retirement as in effect at the date of such retirement during the Period of Restriction, any remaining Period of Restriction applicable to the Award Shares shall automatically terminate and the Award Shares shall be free of restrictions and freely transferable.

 

	
(c)

	
If the Participant's Company Service (as defined in Paragraph 7) ceases due to termination by the Company or one of its Subsidiaries, or by shareholder removal, for reasons other than for Cause, any remaining Period of Restriction applicable to the Award Shares shall automatically terminate and the Award Shares shall be free of restrictions and freely transferable. For purposes hereof,

 

	
(i)

	
"Cause" means continued neglect of duties and obligations, willful or material misconduct in connection with the performance of the Participant's duties and obligations, repeated failure substantially to perform assigned duties appropriate for the Participant's position, and any other conduct of the Participant involving moral turpitude, commission of a crime, engaging in Competition (as defined below) or Unauthorized Disclosure of Confidential Information (as defined below), habitual drunkenness or drug abuse, or any illegal act or intentional act evidencing bad faith by the Participant toward the Company or one of its Subsidiaries that would make retention of the Participant in his position with the Company or Subsidiary prejudicial to its best interests.

 

	
(ii)

	
"Competition" means engaging by the Participant, without the written consent of the Board of Directors of the Company, or a committee thereof, or a person authorized thereby, in an activity as an officer, a director, an employee, a partner, a more than one percent shareholder or other owner, an agent, a consultant, an independent contractor, or any other individual or representative capacity (unless the Participant's duties, responsibilities and activities, including supervisory activities, for or on behalf of such activity, are not related in any way to such "competitive activity") if it involves:

 

	
(A)

	
engaging in, or entering into services or providing advice pertaining to, any banking, lending, other financial activity or other business activity that the Company or any of its Subsidiaries actively engages in within fifty (50) miles of any branch or office of, or in any service area in which such activity is conducted by, the Company or any of its Subsidiaries, or

 

	
(B)

	
soliciting or contacting, either directly or indirectly, any of the customers of the Company or any of its Subsidiaries for the purpose of competing with the products or services provided by the Company or any of its Subsidiaries, or

 

- 2 -

 

	
(C)

	
employing or soliciting for employment any employees of the Company or any of its Subsidiaries.

 

	
(iii)

	
"Unauthorized Disclosure of Confidential Information" means the disclosure by the Participant, without the written consent of the Board of Directors of the Company, or a committee thereof, or a person authorized thereby, to any person other than as required by law or court order, or other than to an authorized employee of the Company or any Subsidiary, or to a person to whom disclosure is necessary or appropriate in connection with the performance by the Participant of his duties as an employee of, or in any other capacity for, the Company or any Subsidiary (including, but not limited to, disclosure to the Company's or any Subsidiary's outside counsel, accountants or bankers of financial data properly requested by such persons and approved by an authorized officer of the Company), any confidential information of the Company or any of its Subsidiaries with respect to any of the marketing or advertising, customers, services, solicitation techniques or methods, business plans and financial statements, reports and projections, or any other confidential information relating to or dealing with the business operations or activities of the Company or any of its Subsidiaries; provided, however, that:

 

	
(A)

	
confidential information shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Participant) or any information of a type not otherwise considered confidential by persons engaged in the same activity or an activity similar to that conducted by the Company or any of its Subsidiaries; and

 

	
(B)

	
the Participant shall be allowed to disclose confidential information to the Participant's attorney solely for the purpose of ascertaining whether such information is confidential within the intent of this Agreement, but only so long as the Participant both discloses to the Participant's attorney the provisions of this paragraph and agrees not to waive the attorney-client privilege with respect thereto.

 

All determinations regarding Competition or Unauthorized Disclosure of Confidential Information under this Agreement shall be made by the Board of Directors of the Company, or a committee thereof, in its discretion.

 

	
(d)

	
If the Participant is a Non-Employee Director for whom Company Service (as defined in Paragraph 7) ceases, for reasons other than for Cause, due to either (i) the expiration of a term of office without renomination for a new term or (ii) failure to be re-elected by the Company's shareholders for a term of office for which the Non-Employee Director has been nominated, any remaining Period of Restriction applicable to the Award Shares shall automatically terminate and the Award Shares shall be free of restrictions and freely transferable.

 

	
(e)

	
If the Participant's Company Service (as defined in Paragraph 7) ceases for any reason other than those set forth in Paragraphs 6(a), (b), (c) and (d) above during the Period of Restriction, any Award Shares still subject to restrictions at the date of such cessation of Company Service shall be automatically forfeited to the Company.

 

	
7.

	
Company Service.

 

	
(a)

	
For purposes hereof, "Company Service" means service as an Employee and/or Non‐Employee Director.  Notwithstanding any contrary provision or implication herein, in determining cessation of Company Service for purposes hereof, transfers between the Company and/or any Subsidiary shall be disregarded and shall not be considered a cessation of Company Service, and changes in status between that of an Employee and a Non‐Employee Director shall be disregarded and shall not be considered a cessation of Company Service.

 

- 3 -

 

	
(b)

	
Nothing under the Plan or in this Agreement shall confer upon the Participant any right to continue Company Service or in any way affect any right of the Company to terminate the Participant's Company Service without prior notice at any time for any or no reason.

 

	
8.

	
Withholding Taxes.  The Company shall have the right to retain and withhold the amount of taxes (at the statutorily required rates) required by any government to be withheld or otherwise deducted and paid with respect to the Award Shares.  At its discretion, the Committee may require the Participant to reimburse the Company for any such taxes required to be withheld by the Company and may withhold any distribution in whole or in part until the Company is so reimbursed.  The Participant or any successor in interest may elect to have the Company retain and withhold a number of Shares of Stock having a Fair Market Value (on the date that the amount of tax to be withheld is to be determined) not less than the amount of such taxes, and cancel any such Shares so withheld, in order to reimburse the Company for any such taxes.  In the event the Participant does not elect to have the Company retain and withhold Shares of Stock as described in the preceding sentence, the Company shall have the right to withhold from any other cash amounts due to or to become due from the Company to the Participant an amount equal to such taxes required to be withheld by the Company to reimburse the Company for any such taxes.  An election to have the Company retain and withhold Shares of Stock will be communicated in advance in a writing acceptable to the Chairman of the Committee.

 

	
9.

	
Compliance with Securities Laws.  The Company covenants that it will attempt to maintain an effective registration statement with the Securities and Exchange Commission covering the Shares of Stock of the Company that are the subject of this Award.

 

	
10.

	
Administration.  The Plan is administered by a Committee appointed by the Company's Board of Directors.  The Committee has the authority to construe and interpret the Plan, to make rules of general application relating to the Plan, to amend outstanding Awards, and to require of any person receiving Stock pursuant to this Award, at the time of such receipt, the execution of any paper or the making of any representation or the giving of any commitment that the Committee shall, in its discretion, deem necessary or advisable by reason of the securities laws of the United States or any state, or the execution of any paper or the payment of any sum of money in respect of taxes or the undertaking to pay or have paid any such sum that the Committee shall, in its discretion, deem necessary by reason of the Internal Revenue Code or any rule or regulation thereunder or by reason of the tax laws of any state.  All such Committee determinations shall be final, conclusive, and binding upon the Company and the Participant.

 

	
11.

	
Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of Virginia.

 

	
12.

	
Successors.  This Agreement shall be binding upon and inure to the benefit of the successors, assigns, heirs, and legal representatives of the respective parties.

 

	
13.

	
Prohibition Against Pledge, Attachment, etc.  Except as otherwise provided herein, during the Period of Restriction, the Award Shares, and the rights and privileges conferred hereby, shall not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated in any way and shall not be subject to execution, attachment or similar process.

 

	
14.

	
Capitalized Terms.  Capitalized terms in this Agreement have the meaning assigned to them in the Plan, unless this Agreement provides, or the context requires, otherwise.

- 4 -

To evidence its grant of the Award Shares and the terms, conditions and restrictions thereof, the Company has signed this Agreement as of the Award Date.  This Agreement shall not become legally binding unless the Participant has accepted this Agreement within thirty (30) days after the Award Date (or such longer period as the Chairman of the Committee may accept) pursuant to such means as the Committee may permit.  If the Participant fails to timely accept this Agreement, the grant of the Award Shares shall be cancelled and forfeited ab initio.

 

	
C&F FINANCIAL CORPORATION

		
By:

	  
			 	
	
 

	
 

	
Its:

	

	
 

	
 

	
 

	
 

				
	
PARTICIPANT:

		  	  
	
 

	
 

	
<<NAME>>

 

 

- 5 -Exhibit 10.12

EMPLOYMENT AGREEMENT

(AMENDED AND RESTATED)

 

THIS AGREEMENT made as of the 1st day of January, 2013, by and between C&F MORTGAGE CORPORATION (C&F), Virginia Corporation and BRYAN McKERNON (McKernon):

 

RECITAL

 

This Agreement originally entered into as of December 19, 2006, as amended through the date hereof, is now being amended and restated to incorporate the prior amendments and to reflect changes in annual salary, bonus opportunity, and non-solicitation provisions.

 

WITNESSETH:

 

That for and in consideration of the mutual covenants contained herein, the parties hereto do agree as follows:

 

1.            Scope of Services; Exclusivity. C&F hereby employs McKernon and McKernon hereby agrees to accept employment and serve as President and Chief Executive Officer of C&F Mortgage Corporation. McKernon agrees to perform the duties normally associated with such positions, as well as such other legally permissible and proper duties and functions as the Board of Directors of C&F shall from time to time assign to him.

 

During the period of his employment with C&F, McKernon will devote his exclusive efforts toward the establishment and operation of C&F. He will not engage in any activities which would conflict with the present or future enterprises of C&F and will use his best efforts to promote the present and future welfare of C&F in all his business and social dealings.

 

2.            Compensation; Bonus. McKernon shall be paid monthly salary payments, based on an annual salary of no less than $220,000.00.

In addition, C&F will pay to McKernon a bonus equal to a percentage of the _____________________ (calculated according to Generally Accepted Accounting Principles)(____) realized by C&F, according to the following schedule:

 

	
 

	
  %

	
 

	
 

	
 

	
 

	
 

	
 

 

The bonus will be computed at the end of each month and will be paid prior to the end of the next month, except as limited by the next sentences. The bonus computation will be based upon 80% of the annualized year-to-date results and will be adjusted at year-end based upon final results in order that the total bonus will be equal to the appropriate percentage of year end ____.  Any amount due based on the adjustment after the end of any calendar year will be paid no later than 60 days after the end of such calendar year.

 

3.            Term of Agreement; Termination. The term of this Agreement shall be 3 years at all times, unless and until notice is given pursuant to the following sentence or until terminated as otherwise allowed herein. Either party may give notice to the other party, at any time and for any reason, that the party giving notice intends to terminate this Agreement 3 years from the date that the notice is received. Three years from the date of such notice, this Agreement shall be terminated and neither party hereto shall have any further obligation or liability hereunder. McKernon may terminate this Agreement immediately upon the happening of an event of "Covered Termination" as defined in that "Change in Control Agreement" between McKernon and C&F Financial Corporation attached hereto and labeled "Schedule A" (the "Change in Control Agreement"). Any termination of this Agreement shall also terminate the Change in Control Agreement with the exception of a termination of this Agreement by McKernon as allowed by the preceding sentence.

 

4.            Further Termination of Agreement.

 

A.            Anything to the contrary in this Agreement notwithstanding, either party may terminate this Agreement, with no further obligation of any nature to the other party, except that C&F may elect to purchase a non-solicitation commitment under paragraph 4.C., upon the happening of either of the following events: (i) if there shall be ________  in which C&F experiences ______ during any period of ____________________; or (ii) if C&F experiences ______ during any __________________________ exceeding  the sum of ________.

 

B.            Except as otherwise provided in this Agreement, C & F shall have the right, at any time and at its sole option, to buy out McKernon's interest in this Agreement and terminate his employment, thereafter having no further obligation to McKernon except as may be set out in this Agreement, based upon the following chart:

 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

For purposes of this paragraph, ____ (as defined in Section 2) shall be calculated for the 12 months immediately preceding the buyout.  Such buyout payments shall be paid in a lump sum within 30 days of McKernon's termination of employment.

 

C.            Should McKernon's employment terminate (either voluntarily by him or involuntarily by C&F) and this Agreement be terminated for any reason other than McKernon's death or termination of this Agreement in accordance with the second sentence in paragraph 3, C&F shall have the right, in its sole discretion, to purchase a non-solicitation commitment from McKernon, on a month-to-month basis for up to _________ following termination of employment, based upon the following monthly purchase price:  (i) if McKernon voluntarily terminates his employment, a monthly amount equal to _______________________________; or (ii) if C&F terminates McKernon's employment, a monthly amount equal to ______________________________.  Under the non-solicitation commitment, McKernon shall be prohibited from, directly or indirectly, communicating with, soliciting or hiring any employee of C&F.

 

D.            This Agreement shall terminate upon the death or disability of McKernon, whereupon C&F shall have no obligation to McKernon, his heirs or personal representatives except as may be set out in this Agreement.

 

E.            This Agreement shall terminate upon the failure of either party to fulfill its obligations undertaken herein. Thereafter, the aggrieved party shall be free to pursue any remedies it may have at law and in equity against the breaching party.

 

F.            McKernon acknowledges that the non-solicitation provisions set forth in paragraph 4.C. are just, reasonable, and necessary to protect the legitimate business interests of C&F.  McKernon further acknowledges that if he breaches or threatens to breach the applicable non-solicitation provisions, C&F's remedies at law will be inadequate, and C&F will be irreparably harmed.  Accordingly, C&F shall be entitled to an injunction, both preliminary and permanent, restraining McKernon from such breach or threatened breach, such injunctive relief not to preclude C&F from pursuing all available legal and equitable remedies.  In addition to all other available remedies, if McKernon violates the non-solicitation provisions in paragraph 4.C., McKernon shall pay all reasonable costs and reasonable attorneys' fees incurred by C&F in enforcing the provision of paragraph 4.C.

2

5.            Benefits. C&F shall provide McKernon, during the time of his employment by C&F, benefits commensurate with benefits furnished to other employees of C&F. Such benefits are anticipated to include: major medical/hospitalization insurance; dental insurance; long-term disability insurance; and life insurance.

 

6.            Vacations; Sick Leave. McKernon shall accrue vacation leave at the rate of 20 days per year and shall accrue sick leave at the rate of 12 days per year.

 

7.            Confidentiality. All information, whether printed, written or oral, acquired by McKernon from or in connection with his employment by C&F shall be held in confidence by McKernon and shall be considered proprietary in nature. All such information shall be used for business purposes only. Upon termination of his employment, McKernon shall immediately return all such information to C&F, keeping no copies.

 

8.            Disqualification from Performance of Duties. Should McKernon be disqualified from the performance of his duties under this Agreement, or otherwise be rendered unable to perform such duties, by Federal, state or local statutes, laws, rules, regulations, or ordinances, this Agreement shall at once be terminated and C&F shall have no obligation to McKernon hereunder except as may be set out in this Agreement.

 

9.            General Provisions.

 

A.            This Agreement and Schedule A constitute the entire agreement between the parties. This Agreement supercedes and replaces all previous agreements between the parties addressing the subject matter.

 

B.            This Agreement shall be binding upon and inure to the benefit of the heirs, personal representatives, successors and assigns of the parties.

 

C.            If any provision or any portion thereof contained in this Agreement is held to be unconstitutional, invalid or unenforceable, the remainder of this Agreement or portion thereof shall be deemed severable, and shall not be affected and shall remain in full force and effect; waiver of any provision of this Agreement shall be in writing and shall not be deemed to be a waiver of any default thereafter occurring.

 

D.            In the event of a dispute regarding the interpretation, application or enforcement of this Agreement, the parties agree that the jurisdiction for a resolution of such dispute shall be the appropriate court of law in King William County, Virginia.

 

E.            Code Section 409A Provisions.

 

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

 

(2)           Neither McKernon nor C&F shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in any matter which would not be in compliance with Code Section 409A (including any transition or grandfather rules thereunder) to the extent Code Section 409A applies to such payment or benefit.

 

(3)           A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the form or timing of payment of any amounts or benefits upon or following a termination of employment unless such termination is also a "separation from service" (within the meaning of Code Section 409A) and, for purposes of any such provision of this Agreement under which (and to the extent) deferred compensation subject to Code Section 409A is paid, references to a "termination" or "termination of employment" or like references shall mean separation from service.  If McKernon is deemed on the date of separation from service with C&F to be a "specified employee", within the meaning of that term under Code Section 409A(a)(2)(B) and using the identification methodology selected by C&F from time to time, or if none, the default methodology, then with regard to any payment or benefit that is required to be delayed in compliance with Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided prior to the earlier of (i) the expiration of the six- month period measured from the date of McKernon's separation from service or (ii) the date of McKernon's death.  On the first day of the seventh month following the date of McKernon's separation from service or, if earlier, on the date of McKernon's death, all payments delayed pursuant to this Section 9.E(3) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to McKernon in a lump sum (without interest), and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

3

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

 

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

 

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

 

(7)           Notwithstanding any of the provisions of this Agreement, C&F shall not be liable to McKernon if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A.

 

10.          Clawback.  McKernon agrees that any incentive-based compensation or award he receives, or has received, from C&F or any subsidiary or affiliate, pursuant to this Agreement or otherwise, is subject to such clawback (recovery) as may be required to be made pursuant to law, rule, regulation or stock exchange listing requirement or any policy of C&F or any subsidiary or affiliate adopted pursuant to any such law, rule, regulation or stock exchange listing requirement.

 

WITNESS the following signatures and seals as of the day, month and year first above written.

	
 

	
 

	
 

	
C&F Mortgage Corporation

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
March 1, 2013

	
 

	
By:

	
/s/ Larry G. Dillon

	
 

	
 

	
 

	
Chairman, Board of Directors

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date:

	
March 1, 2013

	
 

	
/s/ Bryan McKernon

	
 

	
 

	
 

	
Bryan McKernon

 

 

4

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