Document:

bayk-ex1014_289.htm

Exhibit 10.14

 

RETIREMENT AGREEMENT

 

This Retirement Agreement (the “Agreement”) is entered into this 11th day of October, 2019, by and between Virginia Commonwealth Bank, on behalf of it, its parent, Bay Banks of Virginia, Inc., and each of its subsidiaries and affiliates (collectively, the “Bank”) and Douglas F. Jenkins (“Employee”) in light of the following:

 

WHEREAS, Employee has been employed by the Bank;

 

WHEREAS, Employee has elected to voluntarily separate employment from the Bank;

 

WHEREAS, Employee’s last date of employment with the Bank shall be the Separation Date as set forth in Section 1 of the Agreement;

 

WHEREAS, Bank desires to recognize Employee’s years of service to the Bank and assist Employee’s transition from employment with Bank; and,

 

WHEREAS, Employee and the Bank desire to settle and resolve any and all matters arising out of or relating to Employee’s employment with the Bank and/or the cessation of that employment relationship in a mutually satisfactory and confidential manner.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which the parties hereby acknowledge, the parties do hereby covenant and agree as follows:

 

1.Separation of Employment.

a.Employee’s employment with Bank will terminate effective January 1, 2020, or such earlier date as described in Section 1.b (the applicable date, the “Separation Date”). The Bank shall pay to Employee all compensation earned by and expense reimbursements due to Employee through the Separation Date on the Bank’s first regular pay day following the Separation Date.

b.Employee acknowledges and agrees that Employee’s current employment relationship with the Bank and any and all Related Organizations will cease on the Separation Date.  The parties agree that in the event such employment relationship ceases on a date prior to January 1, 2020, such earlier date will be the Separation Date; otherwise, the Separation Date will be January 1, 2020.  For purposes of this Agreement, “Related Organizations” means the Bank’s parent, subsidiaries and affiliated corporations or companies, as well as other related entities and their predecessors.  The Bank and Employee acknowledge that the Bank has offered the Employee a director position to serve on the Board of Directors of VCB Financial Group, Inc., beginning in January 2020.  In conjunction with his service as a Director of VCB Financial Group, Inc., the Bank and Employee contemplate that Employee may work in a limited capacity in a business development role, for which Employee will be compensated on a to-be-agreed-to hourly rate, plus reimbursement of expenses.  Any such arrangement will be permitted by this Agreement, but will be negotiated and established through a separate agreement.

c.The Bank acknowledges and agrees that, in addition to the payments referenced in Subsection 1.a. hereof, the Bank will pay Employee all salary, wages, expenses, reimbursements, vacation, sick leave, and other compensation or payments to which Employee is or may have been entitled under federal or state law, contract or otherwise through the Separation Date.  The Bank acknowledges that as of December 31, 2018, Employee had 14 days of unused paid time off (“PTO”) for which the Employee will be paid, to the extent unused as of the Separation Date.  Employee will also be paid for any accrued but unused PTO for 2019 that is remaining at the Separation Date.  

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Payment of PTO will be made to the Employee on the Bank’s first regular pay day following the Separation Date.  Employee further acknowledges and agrees that there are no sums or other benefits due or owing to Employee by the Bank or to which Employee is entitled as of the Separation Date, except for the benefits and items that are outlined in Subsections 2.a., 2.b., 2.c., 2.d and Section 6.

2.Consideration.

a.In consideration of Employee’s acceptance of this Agreement and promise to abide by the terms hereof, and to assist Employee in the transition from employment with the Bank, the Bank shall pay Employee the gross sum of $58,234.56, which represents twelve (12) weeks of salary at Employee’s current rate of pay (the “Separation Pay”). The Separation Pay shall be paid in one lump sum, less applicable deductions and withholdings, on the Bank’s next regular payroll date following the Release Effective Date (as defined below).

b.In addition, the Bank shall also pay Employee the gross sum of $15,000, which represents a stipend of $625.00 per month for a period of twenty-four (24) months, which Employee may use as he wishes including to assist with payment of health insurance premiums (the “Health Insurance Stipend”). The Health Insurance Stipend shall be paid in one lump sum, less applicable deductions and withholdings, on the Bank’s next regular payroll date following the Release Effective Date (as defined below).

c.In addition, the Bank shall pay Employee the additional gross sum of $20,000.00 (the “Additional Allowance”). The Additional Allowance shall be paid in one lump sum, less applicable deductions and withholdings, on the Bank’s next regular payroll date following the Release Effective Date (as defined below).

d.In addition, if Employee is currently eligible for a short-term incentive for the year 2019, then the Bank shall pay Employee the amount of such short-term incentive that shall be calculated based on actual corporate or individual results, as applicable (the “Incentive Payment”). The Incentive Payment, if any, shall be paid in 2020 in one lump sum, less applicable deductions and withholdings, on the Bank’s next regular payroll date following the date that the Bank grants any such awards to its eligible employees.

e.Employee hereby acknowledges that Bank will deduct from the Separation Pay, Health Insurance Stipend, Additional Allowance, PTO payment and Incentive Payment (if applicable) all withholding taxes and other payroll deductions that Bank is required by law to make from wage payments to employees.  

f.Employee acknowledges and agrees that the Separation Pay, Health Insurance Stipend, Additional Allowance, PTO payment and Incentive Payment (if applicable) provided for under this Section 2 is more than the Bank is required to do under its normal policies and procedures and is in addition to anything of value to which Employee already is entitled and is sufficient legal consideration for Employee’s release of any rights pursuant to this Agreement and Employee’s other obligations hereunder.  

g.The Bank agrees that in addition to benefits outlined in Sections 1 and 2 of this Agreement, the Bank will provide Employee with resources to assist in the exercise of Employee’s stock options and in having restrictions removed on all applicable stock holdings.  Subject to compliance with applicable federal and state securities laws, the Bank agrees to cooperate with Employee so that all options will be exercised on or before March 31, 2020, if Employee so exercises those options, and all restrictions on stock holdings will be removed as soon as practicable after such date.

h.In addition to any other conditions set forth herein, Employee shall be entitled to the payments and benefits under this Section 2 only if Employee has executed a release of claims in the form attached hereto as Exhibit A (the “Release”) on or within 21 days after the Separation Date, and the Release has become irrevocable no later than the 8th day following its execution.  If Employee has signed and has not revoked the Release on or within 

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21 days after the Separation Date, the eighth (8th) day after Employee signs the Release shall be the “Release Effective Date” for purposes of this Agreement.

3.Other Defined Terms.

a.The parties acknowledge and agree that, for purposes of this Agreement, the term “Releasees” means the Bank and any Related Organizations, and all of their past and present parents, subsidiaries and affiliated corporations, companies, and other entities; each of their boards, groups, divisions, departments and units; and all of their past and present directors, trustees, officers, managers, supervisors, employees, attorneys, agents and consultants, and their predecessors, and all persons or entities acting by, with, through, under or in contract with any of them.

b.The parties acknowledge and agree that, for purposes of this Agreement, the term “Claims” means:  (i) each and every claim, complaint, cause of action, grievance, demand, allegation, or accusation, whether known or unknown, and (ii) each and every promise, assurance, contract, representation, obligation, guarantee, warranty, liability, right and commitment of any kind, whether known or unknown, and (iii) all forms of relief, including, but not limited to, all costs, expenses, losses, damages, debts and attorneys’ fees, whether known or unknown.  However, the term “Claims” does not include a Charge of Discrimination with the Equal Employment Opportunity Commission (EEOC).

4.General Waiver and Complete Release.

a.In exchange for the consideration that the Bank is giving Employee under this Agreement, Employee hereby irrevocably releases and forever discharges all Releasees from any and all Claims that Employee, or anyone on Employee’s behalf ever has or now has against any and all of the Releasees, or which Employee, or any of Employee’s heirs, executors, administrators or assigns, hereafter can, shall or may have against any and all of the Releasees for or by reason of any cause, matter, thing, occurrence, or event whatsoever from the date of Employee’s birth to the date that Employee  has signed this Agreement.  Employee acknowledges and agrees that the Claims released in this Section 4 include, but are not limited to, (i) any and all Claims based on any law, statute, or constitution or based on contract or in tort or in common law, and any and all Claims based on or arising under any civil rights laws, such as the civil rights laws of any state or jurisdiction, or Title VII of the Civil Rights Act of 1964, as amended (“Title VII”); the Age Discrimination in Employment Act (“ADEA”); the Employee Retirement Income Security Act (“ERISA”), except as provided herein; the Americans with Disabilities Act of 1990, as amended (“ADA”); the Family Medical Leave Act of 1993 (“FMLA”); the Civil Rights Act of 1991; or, to the fullest extent allowed by law, any other federal, state or local laws or regulations applicable to the employment relationship; (ii) any and all Claims under any grievance or complaint procedure of any kind or for reinstatement; and (iii) any and all Claims based on or arising out of or related to Employee’s recruitment by, employment with, the termination of Employee’s employment with, Employee’s performance of any service in any capacity for, or any business transaction with, each or any of the Releasees, including but not limited to the November 2, 2016, Employment Agreement by and among Employee, Bay Banks of Virginia, Inc. and Bank of Lancaster (now Virginia Commonwealth Bank) (the “Employment Agreement”). Employee acknowledges and agrees that the release contained in this Section 4 is a general release and is to be broadly construed as a release of all claims to fullest extent allowed by law.

b.Employee acknowledges and agrees that Employee is not waiving or releasing any rights or claims that may arise after the date this Agreement is executed. The parties also acknowledge and agree that the release contained in this Section 4 does not include a release of Employee’s right, if any, to payment of vested tax-qualified or non-qualified retirement benefits under the Bank’s ERISA plans and the right, if any, to continuation in the Bank’s medical plans as provided by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA). 

c.Additionally, and notwithstanding anything to the contrary contained herein, the parties acknowledge and agree that nothing in this Agreement shall be construed to release any claims or prohibit the 

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exercise of any rights by Employee that Employee may not waive or forego as a matter of law.  Specifically, nothing in this Agreement is intended to, or shall, interfere with Employee’s rights under federal, state or local civil rights or employment discrimination laws (including, but not limited to, Title VII, ERISA, the ADA,  or their state or local counterparts) to file or otherwise institute a Charge of Discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of Section 7 of this Agreement.  Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such action brought against any of the Releasees, regardless of who filed or initiated any such complaint, charge, or proceeding.

d.Nothing contained in this Agreement shall limit or restrict the Employee’s ability or right to report securities law violations to the Securities and Exchange Commission and other federal agencies without the Bank’s prior approval and without having to forfeit any resulting whistleblower award, if applicable.

5.Covenant Not to Sue.

a.Employee agrees not to institute a Claim of any kind against any of the Releasees.  This covenant not to sue includes any and all Claims that Employee, or anyone on Employee’s behalf ever has or now has against any and all of the Releasees, or which Employee, or any of Employee’s heirs, executors, administrators or assigns, hereafter can, shall or may have against any and all of the Releasees for or by reason of any cause, matter, thing, occurrence, or event whatsoever from the date of Employee’s birth to the date that Employee has signed this Agreement.  Employee acknowledges and agrees that this covenant not to sue covers Claims including, but not limited to, (i) any and all Claims based on any law, statute, or constitution or based on contract or in tort or in common law, and any and all Claims based on or arising under any civil rights laws, such as the civil rights laws of any state or jurisdiction, or Title VII, as amended, the ADA, or the Civil Rights Act of 1991, the FMLA, and the Fair Labor Standards Act; (ii) any and all Claims under any grievance or complaint procedure of any kind or for reinstatement; (iii) any and all Claims that this Agreement or any provision hereof should be avoided or set aside; and (iv) any and all Claims based on or arising out of or related to Employee’s recruitment by, employment with, the termination of his employment with, his performance of any service in any capacity for, or any business transaction with, each or any of the Releasees, including but not limited to the Employment Agreement.

b.Employee understands and acknowledges that the covenant not to sue contained in this Section 5 is distinct and different from the general waiver and release of claims contained in Section 4 of this Agreement.  In this Section 5, Employee is agreeing not to assert a Claim against the Bank, while in Section 4 Employee is giving up rights or claims Employee has or may have through the date Employee signs this Agreement.  If Employee violates this covenant not to sue by filing a Claim against the Bank, Employee hereby agrees to pay all the Bank’s costs and expenses of defending against any such Claim, including attorneys’ fees, and all further costs and fees, including attorneys’ fees, incurred in connection with collection.

6.Return of Bank Property.

a.Employee acknowledges and agrees that Employee will return to the Bank all business records and other Bank property or information in Employee’s possession or control.  In addition, Employee acknowledges that, during Employee’s employment with the Bank, Employee was exposed to information that is confidential, proprietary and/or trade secret information (“Confidential Information”).  Employee agrees that Employee will not disclose such Confidential Information to any person, agency, institution, company, or other entity, except as required by law.  In the event that Employee is unsure whether certain information remains confidential to the Bank or its employees, Employee will send the Bank a written inquiry about its confidentiality. The parties expressly acknowledge and agree that the obligations of this Section 6 are in addition to, and do not supersede, any obligations of confidentiality that Employee may have pursuant to any other contract or agreement with the Bank or any third-party connected to the Bank.

 

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b.The Bank agrees that Employee may keep his Bank-issued cell phone and retain its phone number.  This phone will be removed from the Bank’s cellular plan at Separation Date, at which time the Employee may add this phone and its phone number to his personal cellular plan.  The Bank also agrees that the Employee may keep the Bank-issued personal computer, docking station, monitor, keyboard and any related accessories.  It is understood that all Bank-owned or proprietary information housed on the cell phone and the personal computer will be removed prior to the Separation Date.  The Bank also agrees to transfer from the Bank to the Employee ownership of the 2017 Jeep Grand Cherokee that the Employee is currently using within 15 days following the Release Effective Date.  The Employee agrees to be responsible for the payment of any taxes that may be applicable to the retention of his computer and the transfer of ownership of the 2017 Jeep, and agrees that the Bank will withhold such taxes in connection therewith as may be required by applicable law to be withheld.

 

	
 
	
7.
	
Confidentiality of Agreement & Non-Disparagement.

a.Employee understands and agrees that the terms of this Agreement are intended to be confidential. Accordingly, Employee agrees that Employee will not disclose the existence or terms of this Agreement, or the negotiations resulting in this Agreement, to any third party, other than Employee’s attorney, spouse, and tax advisor, except as may be required by a court or governmental agency with authority to compel such disclosure, without the express written authorization of the Bank.

b.Employee agrees that Employee will not impugn, defame, disparage or do or say anything that reasonably may diminish the reputation, goodwill or status of the Bank or any Releasee or any of their products, services, procedures, methods, operations, employees, agents, officers, directors, suppliers or customers. 

c.The parties acknowledge and agree that nothing contained in this Agreement, including this Section 7, shall prohibit or be construed as prohibiting the exercise of any right by Employee that Employee cannot waive or forego under applicable laws or regulations.

	
 
	
8.
	
No Admissions.

Employee agrees that the offer of this Agreement and the Agreement itself are not an admission, and shall not be construed to be an admission, by each or any of the Releasees, that the personnel, employment, termination and any other decisions involving Employee or any conduct or actions at any time affecting or involving Employee were wrongful, discriminatory, or in any way unlawful or in violation of any right of Employee; moreover, any such liability or wrongdoing is denied by Employee. Employee shall not attempt to offer this Agreement or any of its terms as evidence of any liability or wrongdoing by each or any of the Releasees in any judicial, administrative or other proceeding now pending or hereafter instituted by any person or entity.

	
 
	
9.
	
Non-Release of Future Claims.

This Agreement does not waive or release any rights or claims that Employee may have under the ADEA or other laws which arise after the date that Employee signs this Agreement. The parties acknowledge and agree that the decision to sever the employment relationship between them was made prior to Employee’s signing this Agreement.

	
 
	
10.
	
Period for Review and Consideration of Agreement.

Employee understands that Employee has been given a period of twenty-one (21) days to review and consider this Agreement before signing it.  Employee further understands that Employee may use as much or as little of this 21-day period as Employee wishes prior to signing.

 

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11.
	
Encouragement to Consult with Attorney.

Employee is encouraged to consult with an attorney before signing this Agreement. 

	
 
	
12.
	
Employee’s Right to Revoke Agreement.

Employee may revoke this Agreement within seven (7) days of Employee’s signing it.  Revocation can be made by delivering a written notice of revocation to Peggy George at 100 South Main Street, Kilmarnock, VA 22482 or peggy.george@vcb.bank.  For this revocation to be effective, written notice must be received by Ms. George no later than the close of business on the seventh (7th) day after Employee signs this Agreement.  If Employee has not revoked the Agreement, the eighth (8th) day after Employee signs this Agreement shall be the effective date of this agreement.

	
 
	
13.
	
Acknowledgment.  

 

a.Employee acknowledges that Employee has signed this Agreement freely and voluntarily and under no duress of any kind.  Employee has conferred with an attorney about this Agreement or has knowingly and voluntarily chosen not to confer with an attorney about the Agreement.

 

b.Employee acknowledges and agrees that the Bank is not obligated to pay any of the attorneys’ fees, costs or expenses relating to this Agreement and that the release contained in Section 4 of this Agreement releases all Claims Employee had, has or may have through the date Employee signs this Agreement against any and all Releasees for attorneys’ fees, costs and expenses.

 

	
 
	
14.
	
Governing Law; Consent to Jurisdiction and Venue.

a.Employee acknowledges and agrees that this Agreement shall be construed and enforced under the laws of the Commonwealth of Virginia, without regard to its conflicts of law principles. 

b.The parties covenant and agrees that to the extent that Employee could ever raise any Claim against the Bank and seeks to do so, or if the Bank seeks enforcement of this Agreement against Employee or damages against Employee for breach of this Agreement, whether in law or equity, any such action or claim shall be brought in the Virginia Circuit Court for the County of Henrico, Virginia, or in the United States District Court for the Eastern District of Virginia, Richmond Division, to the extent that such court would have jurisdiction over the subject matter of such action or claim.  Employee hereby expressly and irrevocably consents and submits to the exclusive jurisdiction and venue of such courts for any Claim or dispute, whether initiated by the Bank or Employee, arising under or relating to this Agreement, Employee’s employment by the Bank, and/or the termination of the employment relationship between Employee and the Bank; provided, however, that nothing contained herein shall prohibit the Bank from choosing to bring any such action or Claim in any other court in any state which would have jurisdiction over such action or Claim.

	
 
	
15.
	
Waiver of Jury Trial.

EMPLOYEE AGREES TO WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, OR RELATED TO, ANY OBLIGATIONS EMPLOYEE HAS UNDER THIS AGREEMENT, EMPLOYEE’S EMPLOYMENT BY THE BANK, AND/OR THE TERMINATION OF THE EMPLOYMENT RELATIONSHIP BETWEEN EMPLOYEE AND THE BANK.  THIS WAIVER IS KNOWINGLY, INTENTIONALLY, AND VOLUNTARILY MADE BY EMPLOYEE, AND EMPLOYEE ACKNOWLEDGES THAT, EXCEPT FOR THE BANK’S AGREEMENT TO LIKEWISE WAIVE ITS RIGHTS TO A TRIAL BY JURY (WHICH THE BANK HEREBY MAKES), THE BANK HAS NOT MADE ANY REPRESENTATIONS OF FACTS TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT.  EMPLOYEE FURTHER 

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ACKNOWLEDGES THAT EMPLOYEE HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF EMPLOYEE’S OWN FREE WILL, AND THAT EMPLOYEE HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.  EMPLOYEE FURTHER ACKNOWLEDGES THAT EMPLOYEE HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER AND AS EVIDENCE OF THIS FACT SIGNS THIS AGREEMENT BELOW.

	
 
	
16.
	
Severability.

If any clause or provision of this Agreement is ruled invalid or limited by any regulatory agency or court of competent jurisdiction, the invalidity of such clause or provision shall not affect the validity of the remaining provisions, and the remainder of this Agreement shall be enforced to the fullest permitted by law; provided, however, that if Sections 4 or 5 of this Agreement, or any portion thereof, are deemed to be invalid or unenforceable, the Bank shall have no obligation to provide any of the separation benefits provided under Section 2 and Employee shall be obligated to reimburse the Bank for any such benefits provided prior to such determination.

	
 
	
17.
	
Entire Agreement and Modification.

Employee acknowledges and agrees that, except as expressly provided for herein, this Agreement contains all of the promises and covenants made between Employee and the Bank regarding the subject matter hereof. Employee intends this Agreement to constitute a complete and final agreement between Employee and the Bank, and Employee intends this Agreement to supersede and replace all prior or contemporaneous agreements, negotiations, or discussions relating to the subject matter of this Agreement, if any. The terms of this Agreement are contractual and shall not be deemed to have been altered, modified or in any way changed by any statements, promises, discussions or agreements not appearing herein.  Employee acknowledges that no promise, inducement or agreement has been made to him except as appearing herein.  This Agreement supersedes the Employment Agreement, which is terminated on the date hereof and is of no further force and effect, except that the parties acknowledge and affirm that the provisions of Sections 8, 9 and 10 of the Employment Agreement, which contemplate performance or survival after the Employee’s termination with the Bank, shall remain in full force and effect.

	
 
	
18.
	
Miscellaneous.

a.The parties acknowledge and agree that this Agreement may be executed in one or more counterparts each of which will constitute one and the same instrument. The parties further agree that all executed copies of this Agreement and photo-copies thereof shall have the same force and effect, and shall be as legally binding and enforceable, as the original.

 

b.It is the intention of the parties that the provisions hereof be binding upon the parties, their employees, affiliates, agents, heirs, successors and assigns forever.

 

c.The waiver by any party of a breach of any condition or provision of this Agreement to be performed by such other party shall not operate or be construed to be a waiver of a similar or dissimilar provision or condition at the same or any prior or subsequent time.

d.In the event the Bank is the prevailing party in any action enforcing the terms of this Agreement, including but not limited to the provisions set forth in Section 6, Employee shall pay to Bank, in addition to any damages awarded by a court of competent jurisdiction, the Bank’s costs and reasonable attorneys’ fees incurred in the enforcement of this Agreement.

e.The titles, captions, and headings in this Agreement are included for convenience only and shall 

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not be construed to define or limit any of the provisions contained herein.

	
 
	
19.
	
Knowing and Voluntary.

BY EMPLOYEE’S SIGNATURE BELOW, EMPLOYEE EXPRESSLY ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT VOLUNTARILY AND OF EMPLOYEE’S OWN FREE WILL, WITH FULL KNOWLEDGE OF THE NATURE AND CONSEQUENCES OF ITS TERMS.  EMPLOYEE HAS READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS THAT IT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

IN WITNESS WHEREOF, and intending to be legally bound, each of the parties has caused this Retirement Agreement to be executed either individually or in its entity name by its duly authorized representative.

 

Douglas F. JenkinsVIRGINIA COMMONWEALTH BANK

 

/s/ Douglas F. JenkinsBy: /s/ Randal R. Greene

 

Date: 10/11/2019Its: President and Chief Executive Officer

 

Date:10/11/2019

 

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Exhibit A to 

Retirement Agreement, entered into

October 11, 2019

 

RELEASE AND WAIVER OF CLAIMS

 

 

This Release and Waiver Of Claims (the “Release”) is entered into by Douglas F. Jenkins (the “Employee”) on _______________, 20__.  Any terms not defined herein have the meaning given them in the Retirement Agreement by and between Virginia Commonwealth Bank, on behalf of it, its parent Bay Banks of Virginia, Inc., and each of its subsidiaries and affiliates (collectively, the “Bank”), entered into October __, 2019 (the “Agreement”).

 

1.Certain Defined Terms. Employee acknowledges and agrees that, for purposes of this Release, the term “Releasees” means the Bank and any and all of their past and present parents, subsidiaries and affiliated corporations, companies, and other entities; each of their boards, groups, divisions, departments and units; and all of their past and present directors, trustees, officers, managers, supervisors, employees, attorneys, agents and consultants, and their predecessors, and all persons or entities acting by, with, through, under or in contract with any of them.  The parties acknowledge and agree that, for purposes of this Release, the term “Claims” means:  (i) each and every claim, complaint, cause of action, grievance, demand, allegation, or accusation, whether known or unknown, and (ii) each and every promise, assurance, contract, representation, obligation, guarantee, warranty, liability, right and commitment of any kind, whether known or unknown, and (iii) all forms of relief, including, but not limited to, all costs, expenses, losses, damages, debts and attorneys’ fees, whether known or unknown.  However, the term “Claims” does not include a Charge of Discrimination with the Equal Employment Opportunity Commission (“EEOC”).

2.Claims Released by Employee.   In exchange for the consideration that the Bank is giving Employee under the Agreement, Employee hereby irrevocably releases and forever discharges all Releasees from any and all Claims that Employee, or anyone on Employee’s behalf ever has or now has against any and all of the Releasees, or which Employee, or any of Employee’s heirs, executors, administrators or assigns, hereafter can, shall or may have against any and all of the Releasees for or by reason of any cause, matter, thing, occurrence, or event whatsoever from the date of Employee’s birth to the date that Employee  has signed this Release.  Employee acknowledges and agrees that the Claims released in this Section 2 include, but are not limited to, (i) any and all Claims based on any law, statute, or constitution or based on contract or in tort or in common law, and any and all Claims based on or arising under any civil rights laws, such as the civil rights laws of any state or jurisdiction, or Title VII of the Civil Rights Act of 1964, as amended (“Title VII”); the Age Discrimination in Employment Act (“ADEA”); the Employee Retirement Income Security Act (“ERISA”), except as provided herein; the Americans with Disabilities Act of 1990, as amended (“ADA”); the Family Medical Leave Act of 1993 (“FMLA”); the Civil Rights Act of 1991; or, to the fullest extent allowed by law, any other federal, state or local laws or regulations applicable to the employment relationship; (ii) any and all Claims under any grievance or complaint procedure of any kind or for reinstatement; and (iii) any and all Claims based on or arising out of or related to Employee’s recruitment by, employment with, the termination of Employee’s employment with, Employee’s performance of any service in any capacity for, or any business transaction with, each or any of the Releasees. Employee acknowledges and agrees that the release contained in this Section 2 is a general release and is to be broadly construed as a release of all claims to fullest extent allowed by law.

Employee acknowledges and agrees that Employee is not waiving or releasing any rights or claims that may arise after the date this Release is executed. The parties also acknowledge and agree that the release contained in this Section 2 does not include a release of Employee’s right, if any, to payment of vested tax-qualified or non-qualified retirement benefits under the Bank’s ERISA plans and the right, if any, to continuation in the Bank’s medical plans as provided by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA).  

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Employee acknowledges and affirms that the Employment Agreement was terminated on the date of the Agreement, except for Sections 8, 9, and 10 of the Employment Agreement, which survive such termination. 

Additionally, and notwithstanding anything to the contrary contained herein, the parties acknowledge and agree that nothing in this Release shall be construed to release any claims or prohibit the exercise of any rights by Employee that Employee may not waive or forego as a matter of law.  Specifically, nothing in this Release is intended to, or shall, interfere with Employee’s rights under federal, state or local civil rights or employment discrimination laws (including, but not limited to, Title VII, ERISA, the ADA,  or their state or local counterparts) to file or otherwise institute a Charge of Discrimination, to participate in a proceeding with any appropriate federal, state, or local government agency enforcing discrimination laws, or to cooperate with any such agency in its investigation, none of which shall constitute a breach of Section 7 of the Agreement.  Employee shall not, however, be entitled to any relief, recovery, or monies in connection with any such action brought against any of the Releasees, regardless of who filed or initiated any such complaint, charge, or proceeding.

Nothing contained in this Release shall limit or restrict the Employee’s ability or right to report securities law violations to the Securities and Exchange Commission and other federal agencies without the Bank’s prior approval and without having to forfeit any resulting whistleblower award, if applicable.

 

3.Covenant Not to Sue.  Employee agrees not to institute a Claim of any kind against any of the Releasees.  This covenant not to sue includes any and all Claims that Employee, or anyone on Employee’s behalf ever has or now has against any and all of the Releasees, or which Employee, or any of Employee’s heirs, executors, administrators or assigns, hereafter can, shall or may have against any and all of the Releasees for or by reason of any cause, matter, thing, occurrence, or event whatsoever from the date of Employee’s birth to the date that Employee has signed this Release.  Employee acknowledges and agrees that this covenant not to sue covers Claims including, but not limited to, (i) any and all Claims based on any law, statute, or constitution or based on contract or in tort or in common law, and any and all Claims based on or arising under any civil rights laws, such as the civil rights laws of any state or jurisdiction, or Title VII, as amended, the ADA, or the Civil Rights Act of 1991, the FMLA, and the Fair Labor Standards Act; (ii) any and all Claims under any grievance or complaint procedure of any kind or for reinstatement; (iii) any and all Claims that this Release or any provision hereof should be avoided or set aside; and (iv) any and all Claims based on or arising out of or related to Employee’s recruitment by, employment with, the termination of his employment with, his performance of any service in any capacity for, or any business transaction with, each or any of the Releasees, including but not limited to the Employment Agreement.

Employee understands and acknowledges that the covenant not to sue contained in this Section 3 is distinct and different from the general waiver and release of claims contained in Section 2 of this Release.  In this Section 3, Employee is agreeing not to assert a Claim against the Bank, while in Section 2 Employee is giving up rights or claims Employee has or may have through the date Employee signs this Release.  If Employee violates this covenant not to sue by filing a Claim against the Bank, Employee hereby agrees to pay all the Bank’s costs and expenses of defending against any such Claim, including attorneys’ fees, and all further costs and fees, including attorneys’ fees, incurred in connection with collection.

4.Review of Release. By signing below, Employee hereby acknowledges and represents that he has been given 21 days to review and consider whether to sign this Release and has been advised by the Bank to consult with an attorney and his personal advisors before doing so. Employee understands and agrees that by signing this Release, Employee gives up any and all rights Employee may have to recover damages against the Releasees. Employee hereby acknowledges that he is voluntarily entering into this Release of his own free will, free of any coercion, pressure or duress, that he understands the terms and conditions of this Release, and that he is knowingly releasing each of the Releasees in accordance with the terms contained herein. Employee further acknowledges that he is receiving consideration under this Release beyond anything of value to which he is already entitled. 

 

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5.Right of Revocation. Employee acknowledges that he has been advised by the Bank that he has seven days after signing this Release within which to revoke his signature, that neither the Bank nor any other person is obligated to provide any benefits to him pursuant to the Release until eight days have passed, and then only if he has not revoked his signature. Any such revocation must be received by the Bank within the seven-day revocation period to be effective, and that such a revocation may only be sent by electronic delivery or facsimile to the Bank, to the attention of Peggy George (peggy.george@vcb.bank).  Employee agrees that in the event Employee revokes his signature within such seven-day period, Employee’s termination of employment shall remain effective on the Separation Date but that this Release shall otherwise be void ab initio.

 

6.Non-Admission. Employee acknowledges that this Release does not constitute an admission by Employee or the Bank or any other Releasees of any violation of any employment law, regulation, ordinance, or administrative procedure, or any other federal, state, or local law, common law, regulation or ordinance, liability for which is expressly denied.

 

7.Acknowledgements; Review/Revocation Period.  Employee acknowledges and agrees as follows: (a) that he has read and understood the terms of this Release; (b) that he understands that the Release includes a waiver of rights pursuant to Title VII of the Civil Rights Act of 1964, as amended, the ADA, the ADEA, the Older Workers’ Benefit Protection Act, the federal False Claims Act and any similar federal, state or local law, the Virginia Human Rights Act and any other applicable federal or state civil rights law; (c) that he is not waiving any claims that arise after the date of execution of this Release; (d) that he is receiving benefits under the Agreement that are in addition to any benefits to which he is otherwise entitled; and (e) that he has been advised to consult with an attorney, and has consulted with an attorney, prior to signing this Release.  Employee understands that he has a been given a period 21 days to consider this Release and that he may elect to accept it on or within 21 days after the Separation Date, or reject it at any time after it is offered by providing written notice to the individual identified in Section 5 above.  Once accepted, Employee may revoke his acceptance for seven days after he has accepted this Release by providing written notice to the individual identified in Section 5 above, and this Release shall not be effective or enforceable until after the seven-day period has passed.

 

8.No Dispute or Disagreement.  Employee acknowledges and agrees that there is no dispute or disagreement between Employee and the Bank or its management on any matter relating to the Bank’s operations, policies or practices.

 

 

 

EMPLOYEE

 

 

_____________________________________

 

 

Printed Name: _________________________

 

Date: ________________________________

 

 

Page | 11bayk-ex1015_346.htm

Exhibit 10.15

EMPLOYMENT AGREEMENT

 

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made as of the 2nd day of January, 2020 (the “Date of Hire”), between Bay Banks of Virginia, Inc., a Virginia corporation (the “Corporation”), Virginia Commonwealth Bank, a wholly-owned bank subsidiary of the Corporation (the “Bank”), and Michael H. Troutman (“Executive”).

 

WHEREAS, it is the desire of the Corporation to have the benefit of Executive’s loyalty, service and counsel;

 

WHEREAS, the Corporation desires to protect its confidential information and guard against unfair competition;

 

WHEREAS, Executive possesses certain valuable knowledge, professional skills and expertise which will contribute to the continued success of the business of the Corporation and its affiliates; and

 

WHEREAS, the Corporation and Executive desire to set forth, in writing, the terms and conditions of their agreements and understandings.

 

NOW, THEREFORE, in consideration of the mutual promises herein contained, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending legally to be bound, agree as follows:

 

Section 1.Employment.

 

(a)The parties hereto agree that Executive shall be employed as Executive Vice President of the Corporation and Executive Vice President, Chief Revenue Officer of the Bank and shall perform such services as may be assigned to Executive by the Bank and Corporation from time to time upon the terms and conditions herein provided. 

 

(b)References in this Agreement to services rendered for the Bank and compensation and benefits payable or provided by the Bank shall include services rendered for, and compensation and benefits payable or provided by, the Corporation or any Affiliate of the Corporation. References in this Agreement to the “Bank” also shall mean and refer to each Affiliate of the Corporation for which Executive performs services. References in this Agreement to “Affiliate” shall mean any business entity that, directly or indirectly, through one or more intermediaries, is controlled by Bay Banks of Virginia, Inc.

 

(c)Executive shall devote his full time and attention to the discharge of the duties assigned to and undertaken by his hereunder. Executive shall comply with all policies, standards and regulations of the Bank now or hereafter promulgated, and shall perform his duties under this Agreement to the best of his abilities and in accordance with general business standards of conduct.

 

 

(d)Executive acknowledges that he is entering into this Agreement of his  own free will and that he has had the opportunity to obtain the advice of independent counsel of his own choice.

 

Section 2.Term of Employment.

 

The term of this Agreement shall be deemed to commence on January 2, 2020, and shall end on the second anniversary of such date, unless earlier terminated as provided herein. This Agreement will automatically renew for successive two-year terms unless either party notifies the other in writing, at least ninety (90) days prior to the end of the original term, or the end of any additional two-year renewal term, that the Agreement shall not be extended beyond its current term. The term of this Agreement, including any renewal term, is referred to as the “Term.”

 

Section 3.Compensation.

 

(a)Base Salary. During the Term, the Bank shall pay Executive an annual base salary not less than $275,000 as compensation for services rendered by Executive under this Agreement. The base salary shall be paid to Executive in accordance with established payroll practices of the Bank (but no less frequently than twice per month). Executive may receive base salary increases and incentive, bonus compensation or other compensation in the amounts determined by the Board of Directors of the Bank.

 

(b)Annual Bonus. During the Term, Executive will be eligible to participate in any long-term or short-term incentive plans of the Bank and Corporation on the same basis as other similarly situated employees of the Bank, pursuant to any such plans adopted by the Board of Directors of the Corporation or Bank or their Compensation Committees on an annual basis.

 

(c)Tax Withholdings. The Bank shall withhold state and federal income taxes, social security taxes and such other payroll deductions as may from time to time be required by law. The Bank shall withhold and remit to the proper party any amounts agreed to in writing by the Bank and Executive for participation in any corporate sponsored benefit plans for which a contribution is required.

 

(d)Compensation Following Termination. Except as otherwise expressly set forth herein, including without limitation, as set forth in Section 7(d) and Section 7(i), no compensation shall be paid pursuant to this Agreement subsequent to any termination of Executive’s employment with the Bank.

 

(e)Clawback. Executive agrees that any incentive compensation (as determined by the Bank or Corporation) that Executive receives from the Bank, the Corporation or any Affiliate pursuant to this Agreement or otherwise is subject to repayment to (i.e., clawback by) the Bank, the Corporation or any Affiliate as required by federal law and on such basis as the Bank or Corporation determines. Except where offset of, or recoupment from, compensation covered by Code Section 409A (as defined in Section 11) is prohibited by Code Section 409A, to the extent 

 

2

 

 

allowed by law and as determined by the Bank or Corporation, Executive agrees that such repayment may, in the discretion of the Bank or Corporation, be accomplished by withholding of future compensation to be paid to Executive by the Bank, the Corporation or any Affiliate. Any recovery of compensation covered by Code Section 409A shall be implemented in a manner which complies with Code Section 409A.

 

Section 4.Additional Benefits.

 

(a)Benefit Plans. Executive shall be entitled to participate in all of the Corporation’s and Bank’s employee benefit plans and programs for which he is or will become eligible according to the terms of said plans or programs. It is understood that the Board of Directors of the Corporation or Bank or their Compensation Committees may, in their sole discretion, establish, modify or terminate such plans or benefits.

 

(b)Signing Bonus. On the first payroll date to occur following the Date of Hire, the Bank will pay to Executive a one-time signing bonus of $75,000 (the “Gross Signing Bonus”), less applicable withholdings, on the date hereof.  If during the period ending on June 30, 2020, Executive voluntarily terminates his employment he will be held responsible for the reimbursement of 100% of the Gross Signing Bonus.  If Executive voluntarily terminates his employment after June 30, 2020, and on or before January 1, 2021, he will be responsible for reimbursing 50% of the Gross Signing Bonus.  Notwithstanding the foregoing, no reimbursement of the Gross Signing Bonus shall be required if Executive is terminated by the Bank without Cause, if Executive resigns for Good Reason, or if Executive’s employment with the Bank ceases for any reason on or after a Change of Control (each event as defined herein). 

 

(c)Housing; Relocation.  The Bank shall reimburse Executive for housing expenses incurred during the 90-day period beginning with the Date of Hire, not to exceed $15,000 in the aggregate.  The Bank shall reimburse Executive for reasonable lodging, travel and meal expenses incurred by Executive and his family for up to three weekend trips during the period from November 1, 2019, through March 31, 2020, for the purpose of selecting a new residence in the Bank’s market area, not to exceed $3,500 in the aggregate.  The Bank shall reimburse Executive for reasonable, documented expenses of relocation to the Bank’s market area, not to exceed $30,000 in the aggregate.  Notwithstanding the foregoing, Executive shall have no right to receive further reimbursement on or after Executive’s resignation without Good Reason or Executive’s termination for Cause.

 

(d)Automobile; Cell Phone. During the Term, the Bank shall provide the Executive with the use of a Bank-owned cell phone, and a Bank-owned Jeep Grand Cherokee.

 

(e)Country Club Membership and Fees. During the Term, the Bank shall pay Executive $300 per month for use in payment of fees at a country club designated by Executive.

 

(f)Stock Options/Restricted Stock.  During the Term, Executive may be entitled to receive awards under the Corporation’s equity compensation plans in such amounts and subject to such terms and conditions as determined by the Compensation Committee or the Board of 

 

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Directors of the Corporation.  Executive will be granted on the Date of Hire (i) a fully vested grant of 2,500 shares of common stock of the Corporation and (ii) an option grant to purchase 30,000 shares of common stock of the Corporation, such option becoming vested (exercisable) with respect to 10,000 shares on the Date of Hire, with respect to an additional 10,000 shares on the second anniversary of the Date of Hire, and with respect to the remaining 10,000 shares on the third anniversary of the Date of Hire, in each case subject to continued employment with the Bank through the applicable vesting date.  Each grant will be subject to the terms of the Corporation’s 2013 Stock Incentive Plan, as amended (or any successor equity compensation plan), and an award agreement thereunder.

 

(g)Insurance and Indemnification. The Bank, as appropriate, shall maintain appropriate insurance to indemnify Executive from any and all claims, suits, or causes of action that may arise from Executive’s employment with the Bank. Indemnification of Executive shall be according to the terms and conditions of the insurance policies covering Executive, the articles of incorporation of the Corporation and Virginia law.

 

Section 5.Expense Reimbursement.

 

The Bank shall reimburse Executive for reasonable and customary business expenses incurred in the conduct of the Bank’s business in accordance with the Bank’s policy. The Bank reserves the right to review these expenses periodically and determine, in its sole discretion, whether future reimbursement of such expenses to Executive will continue without prior approval by the Board of Directors or the Bank or its designee of the expenses. Executive agrees to timely submit records and receipts of reimbursable items and agrees that the Bank can adopt reasonable rules and policies regarding such reimbursement. The Bank agrees to make prompt payment to Executive following receipt and verification of such reports.

 

Section 6.Paid Time Off.

 

Executive shall be entitled to paid time off leave each year, according to applicable provisions of the Bank’s leave policies, which shall be taken at such time or times as may be approved by the Bank and during which Executive’s compensation hereunder shall continue to be paid.

 

Section 7.Termination and Survival of Obligations.

 

(a)Notwithstanding the termination of this Agreement or the termination of 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 Bank to make payments of any vested benefits provided hereunder or the obligations of Executive under Sections 8, 9 and 10 of this Agreement (except as otherwise 

 

4

 

 

provided in those Sections). To the extent applicable, payouts under this Section 7 shall be subject to the provisions of Section 11.

 

(b)Executive’s employment hereunder may be terminated by Executive upon thirty (30) days written notice to the Bank or at any time by mutual agreement in writing. Upon such termination of employment, Executive shall have no right to receive compensation or other benefits under this Agreement for any period after such termination.  Upon notice of such termination of employment, the Bank, at its option, may relieve Executive of all duties.

 

(c)This Agreement shall terminate upon death of Executive; provided, however, that in such event the Bank shall pay to the estate of Executive, within sixty (60) days of his death, the compensation, including salary, which otherwise would be payable to Executive through the end of the month in which his death occurs and any earned but unpaid bonuses.

 

(d)(l)The Bank may terminate Executive’s employment other than for “Cause”, as defined in Section 7(e), at any time upon written notice to Executive, which termination shall be effective immediately. Executive may resign thirty (30) days after notice to the Corporation for “Good Reason”, as hereafter defined. Provided Executive signs a release and waiver of claims reasonably satisfactory to the Bank within thirty (30) days following his termination and such release becomes irrevocable, in the event Executive’s employment terminates pursuant to this Section 7(d)(1), Executive shall receive:

 

	
 
	
(i) 
	
An amount equal to the greater of (A) a monthly amount equal to one‐twelfth (1/12) his rate of annual base salary in effect immediately preceding such termination in each month for the remainder of the Term or (B) a monthly amount equal to one-twelfth (1/12) his rate of annual base salary in effect immediately preceding such termination for one (1) year; any such payments shall be at the times such payments would have been made in accordance with Section 3(a) subject to the provision of Section 11(c), if applicable.

 

	
 
	
(ii)
	
Any bonus or other short-term incentive compensation earned, but not yet paid, for the year prior to the year in which his employment terminates which shall be paid at the time such bonus or incentive compensation would otherwise be payable if no termination had occurred; and

 

	
 
	
(iii)
	
If Executive timely elects coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the continuance of Executive’s current benefits under group health and dental plans. In such case for the period in which payments are made under Section 7(d)(i): (a) Executive will receive such benefits at the rates paid by active participants, and (b) the Bank will continue to pay its portion of such health and dental premiums in effect at the date of termination.  Any such payment of premiums by the Bank will be treated as taxable income 

 

5

 

 

	
 
		
to Executive.  In no event shall such benefits continue beyond the period permitted by COBRA.

 

(d)(2)Notwithstanding anything in this Agreement to the contrary, if Executive breaches Section 8 or 9 of this Agreement, Executive will not thereafter be entitled to receive any further compensation or benefits pursuant to Section 7(d)(1). If while he is receiving payments under Section 7(d)(1), the Executive engages in a business that provides Competitive Services (as defined in Section 9) within the area described in Section 9, such payments will cease and he will not thereafter be entitled to receive any compensation or benefits pursuant to Section 7(d)(1) even though such conduct occurs after the covenants contained in Section 9 have expired.

 

(d)(3) For purposes of this Agreement, Good Reason shall mean:

 

	
 
	
(i)
	
The assignment of duties to Executive by the Bank or the Corporation which result in Executive having significantly less authority or responsibility than he has on the Date of Hire, without his express written consent;

 

	
 
	
(ii)
	
Requiring Executive to maintain his principal office in a location that is more than fifty (50) miles from Executive’s principal office on the Date of Hire;

 

	
 
	
(iii)
	
A material reduction by the Bank or the Corporation of Executive’s base salary, as the same may have been increased from time to time; 

 

	
 
	
(iv)
	
The Corporation’s or the Bank’s failure to comply with any material term of this Agreement;

 

Executive is required to provide notice to the Bank and the Corporation of the existence of a condition described in this Section 7(d)(3) above within a ninety (90) day period beginning on the date of the initial existence of the condition, upon the notice of which the Bank or the Corporation, as applicable, shall have thirty (30) days to remedy the condition without having to pay the amounts described in this section.

 

(e)The Corporation and the Bank shall have the right to terminate Executive’s employment under this Agreement at any time for Cause, which termination shall be effective immediately. Termination for “Cause” shall mean material failure of Executive to perform his duties and responsibilities under this Agreement, incompetence, willful misconduct, dishonesty, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar minor offenses), misappropriation of the Bank’s or the Corporation’s assets (determined on a reasonable basis), commission of a felony or misdemeanor involving moral turpitude, a material violation of the Bank’s or the Corporation’s work rules or policies; or a material breach of this 

 

6

 

 

Agreement. The term “Cause” also shall include conduct that results in, or that in the reasonable judgment of the Board of Directors of the Bank, is likely to result in, material damage to the Bank, Corporation, or any Affiliate. In the event Executive’s employment under this Agreement is terminated for Cause, Executive shall thereafter have no right to receive compensation or other benefits under this Agreement, except salary for services performed through the date of termination, and any other amounts required to be paid by law.

 

(f)The Corporation or the Bank may terminate Executive’s employment under this Agreement, after having established that Executive is unable to perform his obligations under this Agreement because of Executive’s disability by giving to Executive written notice of its intention to terminate his employment for disability. For purposes of this Agreement, “disability” means Executive’s inability to perform his obligations under this Agreement, with or without reasonable accommodation, for a period of time expected to last more than 90 days.  Notwithstanding any other provision of this Agreement, the Corporation and the Bank shall comply with all requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et. seq. Notwithstanding any other provision of this Agreement, if Executive’s employment is terminated due to a “disability”, then no payments shall be paid under Section 7(d) or 7(i); provided that Executive shall be paid salary for services performed through the date of termination, and any other amounts required to be paid by law.

 

(g)If Executive is suspended and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served pursuant to the Federal Reserve Act, the Bank Holding Company Act of 1956 or the Federal Deposit Insurance Act or the Code of Virginia, each as amended, the obligations of the Bank and the Corporation 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 Bank may in its discretion (i) pay Executive all or part of the compensation  withheld while its contract obligations were suspended, and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

(h)If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under the Federal Reserve Act, the Bank Holding Company Act of 1956, the Federal Deposit Insurance Act or the Code of Virginia, each as amended, all obligations of the Bank and the Corporation under this Agreement shall terminate as of the effective date of the order, but vested rights of the parties shall not be affected.

 

(i)(1)If Executive’s employment is terminated without Cause within one year after a Change of Control shall have occurred or if he resigns for Good Reason within one year after a Change of Control shall have occurred, then, the Bank shall pay to Executive as compensation for services rendered to the Bank a cash amount (subject to any applicable payroll or other taxes required to be withheld) equal to one (1) times (x) Executive’s base salary at the rate in effect (i) on the date of termination or, if greater, (ii) immediately prior to the Change of Control, plus (y) Executive’s annual bonus for the most recent fiscal year of the Bank (i) that ends prior to Executive’s termination or, if greater, (ii) that ends prior to the Change of Control, to be paid in one lump sum on or before Executive’s last day of employment, subject to the provisions in 

 

7

 

 

Section 11(c), if applicable.  In addition, if Executive timely elects coverage under COBRA, then, for the lesser of one year or the applicable COBRA coverage period, (a) the group health and dental plan coverage elected by Executive under COBRA will continue at the rates paid by active participants, and (b) the Bank will continue to pay its portion of such health and dental premiums in effect at the date of termination. Any such payment of premiums by the Bank will be treated as taxable income to Executive. In no event will such benefits continue beyond the period permitted by COBRA.  Amounts payable, if any, under this Section 7(i)(1) shall be in lieu of amounts payable under Section 7(d).

 

(i)(2)For purposes of this Agreement, a Change of Control occurs if, after the date of this Agreement: (i) any person, including a “group” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becomes the owner or beneficial owner of securities of the Corporation having fifty percent (50%) or more of the combined voting power of the then outstanding securities of the Corporation that may be cast for the election of the Corporation’s directors other than a result of an issuance of securities initiated by the Corporation, or open market purchases approved by the Corporation’s Board of Directors, as long as the majority of the Corporation’s Board of Directors approving the purchases is a majority at the time the purchases are made; (ii) as the direct or indirect result of, or in connection with, a tender or exchange offer, a merger or other business combination, a sale of assets, a contested election of directors, or any combination of these events, the persons who were directors of the Corporation before such events cease to constitute a majority of the Corporation’s Board of Directors, or any successor’s board, within the twelve (12) month period of the last of such transactions; or (iii) the Corporation sells to an unaffiliated third party at least forty percent (40%) of the gross fair market value of the assets of the Corporation or securities of the Corporation having fifty (50%) or more of the combined voting power of the then outstanding Corporation securities that may be cast for the election of the Corporation’s directors.  For purposes of this Agreement, a Change of Control occurs on the date on which an event described in clause (i), (ii) or (iii) of the preceding sentence occurs.  If a Change of Control occurs on account of a series of transactions or events, the Change of Control occurs on the date of the last of such transactions or events.

 

(i)(3)It is the intention of the parties that no payment be made or benefit provided to Executive pursuant to this Agreement that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code and any regulations thereunder, thereby resulting in a loss of an income tax deduction by the Bank or the imposition of an excise tax on Executive under Section 4999 of the Code. If the independent accountants serving as auditors for the Bank on prior to a Change of Control (or any other accounting firm or tax adviser designated by the Corporation prior to the Change of Control) determine that some or all of the payments or benefits scheduled under this Agreement, as well as any other payments or benefits on a Change of Control, would be nondeductible by the Corporation or the Bank under Section 280G of the Code, then the payments scheduled under this Agreement will be reduced to one hundred dollars less than the maximum amount which may be paid without causing any such payment or benefit to be nondeductible. The determination made as to the reduction of benefits or payments required hereunder by the independent accountants shall be binding on the parties. 

 

 

8

 

 

(j)If Executive is a director or officer of the Corporation, the Bank or any other Affiliate at the time his employment terminates, Executive will immediately submit his resignation from such position.

 

Section 8.Confidentiality/Nondisclosure.

 

Executive covenants and agrees that any and all information concerning the business, services,  customers  or affairs of the Corporation and Bank (“Confidential Information”) of which he has knowledge  or access as a result of his association  and employment with the Bank in any capacity shall be deemed confidential in nature and the property of the Corporation and Bank, vital to their businesses, and shall not, without the proper written consent of the Corporation or Bank, directly or indirectly, at any time be used, disseminated,  disclosed or published by Executive to third parties other than in connection with the usual conduct of the business of the Corporation or Bank.  Such Confidential Information shall expressly include, but shall not be limited to, information concerning the Corporation’s and Bank’s trade secrets, business operations, business records, customer lists or other customer information. Upon termination of employment, Executive shall deliver to the Bank all property in his possession which belongs to the Corporation or Bank including all originals and copies of documents, forms, records or other information, in whatever form it may exist, concerning the Corporation or Bank or their business, customers, products or services. In construing this provision, it is agreed that it shall be interpreted broadly so as to provide the Corporation and Bank with the maximum protection. This Section 8 shall not be applicable to any Confidential Information which (i) has become generally known to and available for use by the public other than as a result of Executive’s acts or omissions or (ii) which Executive is required to disclose pursuant to an order of a court of competent jurisdiction;  provided that prior to making such disclosure Executive provides a copy of such order and the proposed disclosure to the Corporation and Bank and allows the Corporation and Bank reasonable opportunity to comment on the proposed disclosure.

 

Section 9.Restrictive Covenants.

 

(a)During the term of this Agreement and throughout any further period that he is an officer or employee of the Corporation or Bank, and for the longer of:

 

	
 
	
(i)
	
A period of one year from and after the date that Executive is, for any reason, no longer employed by the Bank; or

 

	
 
	
(ii)
	
A period of one year from the date of entry by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by Executive,

 

Executive covenants and agrees that he will not (x) engage in a business that provides Competitive Services (as defined below) within a twenty (20) mile radius of the principal executive offices of the Bank or within twenty (20) miles of any banking office operated by the Bank in any capacity that includes any of the significant responsibilities held or significant 

 

9

 

 

activities engaged in by Executive while employed by the Bank; (y) solicit, or assist any other person or business entity in soliciting any Customers (as defined below) to become customers of any other business entity providing Competitive Services or (z) induce any individuals to terminate their employment with the Corporation, Bank or of any Affiliate.  Executive’s obligations under this Section 9 shall terminate on the date a Change of Control occurs.

 

(b)The parties intend that the covenants and restrictions in this Section 9 be enforceable against Executive regardless of the reason that his employment by the Bank may terminate. The existence of any claim or cause of action by Executive against the Bank, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Bank of the restrictive covenants set forth in Sections 8 and 9 of this Agreement.

 

(c)For purposes of this Agreement, the term “Competitive Services” means providing financial products and services, which includes offering one or more of the following services and products: depository accounts, consumer and commercial lending, residential and commercial mortgage lending, cash management services, trust and estate administration, asset management, and any other services and products offered by the Bank at the time of termination of Executive’s employment.  “Competitive Services” does not include any products or services in which Executive was not significantly engaged in providing such products or services in the last year of Executive’s employment.  The term “Customer” means any individual or entity to whom or to which the Bank provided Competitive Services within one year before the date on which Executive’s employment terminates and with whom Executive has contact or about whom Executive obtained confidential information during his employment with the Bank.

 

(d)Executive agrees that the covenants in this Section 9 are reasonably necessary to protect the legitimate interests of the Bank, are reasonable with respect to the time and territory and do not interfere with the interests of the public. Executive further agrees that the descriptions of the covenants contained in this Section 9 are sufficiently accurate and definite to inform Executive of the scope of the covenants. Finally, Executive agrees that the consideration set forth in this Agreement is full, fair and adequate to support Executive’s obligations hereunder and the Bank’s rights hereunder. Executive acknowledges that in the event Executive’s employment with the Bank is terminated for any reason, Executive will be able to earn a livelihood without violating such covenants.

 

(e)The parties have attempted to limit Executive’s right to compete only to the extent necessary to protect the Bank from unfair competition. The parties recognize, however, that reasonable people may differ in making such a determination. Accordingly, the parties intend that the covenants contained in this Section 9 to be completely severable and independent, and any invalidity or unenforceability of any one or more such covenants will not render invalid or unenforceable any one or more of the other covenants. The parties further agree that, if the scope or enforceability of a covenant contained in this Section 9 is in any way disputed at any time, a court or other trier of fact may modify and reform such provision to substitute such other terms as are reasonable to protect the Bank’s legitimate business interests.

 

10

 

 

Section 10.Injunctive Relief, Damages. Etc.

 

Executive agrees that, given the nature of the positions held by Executive with the Bank, each and every one of the covenants and restrictions set forth in Sections 8 and 9 above are reasonable in scope, length of time and geographic area and are necessary for the protection of the significant investment of the Bank in developing, maintaining and expanding its business. Accordingly, the parties hereto agree that in the event of any breach by Executive of any of the provisions of Sections 8 or 9 that monetary damages alone will not adequately compensate the Bank for its losses and, therefore, that it shall be entitled to any and all legal or equitable relief available to it, specifically including, but not limited to, injunctive relief, and Executive shall be liable for all damages, including actual and consequential damages, costs and expenses, and legal costs and actual attorney’s fees incurred by the Bank as a result of taking action to enforce, or recover for any breach of Sections 8 or 9. The covenants contained in Sections 8 and 9 shall be construed and interpreted in any judicial proceeding to permit their enforcement to the maximum extent permitted by law. Should a court of competent jurisdiction determine that any provision of the covenants and restrictions set forth in Section 9 above is unenforceable as being overbroad as to time, area or scope, the court may strike the offending provision or reform such provision to substitute such other terms as are reasonable to protect the Bank’s legitimate business interests.

 

Section 11.Code Section 409A Compliance.

 

(a)The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended, and applicable guidance thereunder (“Code Section 409A”) or comply with an exemption from the application of 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.

 

(b)Neither Executive nor the Bank 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.

 

(c)If Executive is deemed on the date of separation from service with the Bank 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 the Bank 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 Executive’s separation from service or (ii) the date of Executive’s death. In the case of benefits required to be delayed under Code Section 409A, however, Executive may pay the cost of benefit coverage, and thereby obtain benefits, during such six-month delay period and then be reimbursed by the Bank thereafter when delayed payments are made pursuant to the next sentence. On the first day of the seventh month following the date of Executive’s separation from service or, if earlier, on the date of Executive’s death, all payments delayed pursuant to this Section 11(c) (whether they would have otherwise been payable in a single sum or in 

 

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installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, 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.  If any cash payment is delayed under this Section 11(c), then interest shall be paid on the amount delayed calculated at the prime rate reported in The Wall Street Journal for the date of Executive’s termination to the date of payment.

 

(d)With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits subject to Code Section 409A, 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 Code Section 105(b) 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 the Corporation’s reimbursement policies but in no event later than the calendar year following the calendar year in which the related expense is incurred.

 

(e)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.

 

(f)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 the Corporation.

 

(g)Notwithstanding any of the provisions of this Agreement, neither the Corporation nor the Bank shall be liable to Executive 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. 

 

Section 12.Invalid Provisions.

 

The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. Any provision in this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be valid and enforceable to the fullest extent permitted by law without invalidating or affecting the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

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Section 13.Entire Agreement.

 

This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any and all other agreements, either oral or in writing, among the parties hereto with respect to the subject matter hereof.

 

Section 14.Notices.

 

Any and all notices, designations, consents, offers, acceptance or other communications provided for herein shall be given in writing and shall be deemed properly delivered if delivered in person or by registered or certified mail, return receipt requested, addressed in the case of the Corporation, to its Chairman, in the case of the Bank, to its Chairman, and in the case of Executive, to his last known address.

 

Section 15.Amendment and Waiver.

 

This Agreement may not be amended except by an instrument in writing signed by or on behalf of each of the parties hereto. No waiver of any provision of this Employment Agreement shall be valid unless in writing and signed by the person or party to be charged.

 

Section 16.Case and Gender. 

 

Wherever required by the context of this Agreement, the singular or plural case and the masculine, feminine and neuter genders shall be interchangeable.

 

Section 17.Governing Law; Venue.

 

Except where preempted by federal law, the Agreement shall be subject to and construed in accordance with the laws of the Commonwealth of Virginia. Executive consents to the personal jurisdiction of the Circuit Court for the County of Henrico, Virginia (and of the appropriate appellate courts) for any action or proceeding arising from or relating to this Agreement and waives any objection of venue laid therein.

 

Section 18.Captions.

 

The captions used in this Agreement are intended for descriptive and reference purposes only and are not intended to affect the meaning of any Section hereunder.

 

Section 19. Binding Effect.

 

This Agreement shall be binding upon Executive and on the Bank and the Corporation, and their successors and assigns effective on the date first above written.  The Bank will require any successor to all or substantially all of the business and/or assets of the Bank to assume expressly and agree to perform this Agreement in the same manner and to the same extent that 

 

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the Bank and Corporation would be required to perform it if no such succession had taken place.  This Agreement shall be freely assignable by the Bank and the Corporation.

 

Section 20.Regulatory Prohibition.

 

Notwithstanding anything in this Agreement to the contrary, it is understood and agreed that the Corporation (or any of its successors in interest) shall not be required to make any payment or take any action under this Agreement if: (i) such payment or action is prohibited by any governmental agency having jurisdiction over the Corporation or any of its subsidiaries (a “Regulatory Authority”) because the Corporation or any of its subsidiaries is determined by such Regulatory Authority to be troubled, insolvent, in default or operating in an unsafe or unsound manner; or (ii) such payment or action (A) would be prohibited by or would violate any provision of state or federal law applicable to the Corporation or any of its subsidiaries, including, without limitation, the Federal Deposit Insurance Act and the regulations thereunder presently found at 12 C.F.R. Part 359, as now in effect or hereafter amended, (B) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, or any Regulatory Authority or (C) otherwise would be prohibited by any Regulatory Authority.  If any payment hereunder is alleged by any Regulatory Authority to be in violation of the foregoing, any payment alleged to have been made in violation of the foregoing shall be immediately returned by Executive to the Corporation.

 

 

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

 

 

 

 

BAY BANKS OF VIRGINIA, INC.

 

 

 

By: /s/

Name: Randal R. Greene

Title: President and Chief Executive Officer

 

 

VIRGINIA COMMONWEALTH BANK

 

 

 

By:/s/

Name: Randal R. Greene

Title: Chief Executive Officer

 

 

EXECUTIVE

 

 

/s/

Michael H. Troutman

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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