EMPLOYMENT AGREEMENT
Exhibit 10.4
THIS AGREEMENT is entered into this 30th day of May, 2008, between Community Bankers
Acquisition Corp., a corporation organized and existing under the laws of the Commonwealth of
Virginia (“Company”), and Xxxxxx X. Longest, Jr. (“Employee”).
WHEREAS, Company and BOE Financial Services of Virginia, Inc. (“Merger Partner”) have
entered into an Agreement and Plan of Merger (the “Merger Agreement”), under which Merger
Partner will be merged into Company; and
WHEREAS, Company and Employee have agreed that upon the consummation of the merger (the
“Merger”) contemplated by the Merger Agreement, Employee shall become an employee of
Company under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the parties do hereby
agree as follows:
1. Employment. Conditional upon consummation of the Merger and Employee being in the
employment of Merger Partner on the effective date of the Merger (the “Merger Date”), and
effective at the Merger Date, Employee shall be employed by Company on the terms and subject to the
conditions set forth in this Agreement.
2. Term. The term of the employment hereunder shall commence on the Merger Date and
shall continue until the third anniversary of the Merger Date, unless terminated earlier as
provided herein (the “Term”); provided, however, that on each anniversary of the Merger
Date, upon the review and approval of Company’s Board of Directors, the Term shall be extended by
an additional year unless Company or Employee gives written notice at least thirty (30) days prior
to an anniversary date that no further extensions shall occur.
3. Position and Responsibilities. Commencing upon the Merger Date, Employee shall
serve as the President of the Company and, effective January 1, 2010, Employee shall also serve as
the Chief Executive Officer of the Company. Subject to the review and approval of the Board of
Directors of Company’s banking subsidiary (the “Bank”), and subject to the further review
and approval of the Bank’s Board of Directors as to the extension of the term as set forth in
Section 2, during the Term, Employee also shall serve as the Chief Executive Officer of the Bank.
Employee shall have the duties, responsibilities, rights, power and authority that may be from time
to time delegated or assigned to him by the Boards of Directors of Company or the Bank.
4. Duties. During the period of employment hereunder, Employee shall devote all of
his time, attention, skills and efforts to the business of Company and the Bank and the faithful
performance of his duties and responsibilities hereunder. Employee shall be loyal to Company and
the Bank and shall refrain from rendering any business services to any person or
entity other
than Company and the Bank and their respective affiliates without the prior
written consent of Company.
5. Compensation and Benefits.
(a) Annual Base Salary. During the Term, Company shall pay Employee an annual
base salary equal to or in excess of the Employee’s current annual base salary, subject to
applicable federal and state income and social security tax withholding requirements (the
“Base Salary”). The initial Base Salary shall be determined as soon as practicable
after the Merger Date by the Board of Directors of the Company and shall be effective as of
the Merger Date. The Base Salary shall be payable in accordance with Company’s customary
payroll practices and may be increased, but not decreased, upon regular reviews in
accordance with senior management compensation policies and performance of Employee.
(b) Reimbursement of Expenses. Company shall pay or reimburse Employee for all
reasonable travel and other business related expenses incurred by him in performing his
duties under this Agreement. Such expenses shall be appropriately documented and submitted
to Company in accordance with Company’s policies and procedures as established from time to
time.
(c) Vacation and Sick Leave. Employee shall be provided with vacation and sick
leave in accordance with Company’s policies and procedures for senior executives as
established from time to time, but in no event less than four weeks of vacation annually.
(d) Employee Benefit Plans. During the Term, Employee shall be entitled to
participate in the employee benefit plans of Company or its successors or assigns, as
presently in effect or as they may be modified or added to from time to time, to the extent
such benefit plans are provided to other similarly situated senior executive employees on a
basis not less favorable than that provided to such class of employees.
(e) Incentive Bonus Plans. During the Term, Employee shall be entitled to
participate in Company’s incentive-based bonus plans, applicable to his employment position,
in accordance with both the terms and conditions of such plans and Company’s policies and
procedures as established from time to time.
(f) Other Employment Benefits. The Company will provide Employee with an
appropriate automobile or automobile allowance, including appropriate insurance coverage and
maintenance expenses, as determined by the Board of Directors of the Company. The Company
will pay (or reimburse Employee for) Employee’s country club dues incurred during the Term.
(g) Stock Compensation. Employee will be entitled to receive during the Term
stock awards under the Company’s stock incentive plan in such amounts and subject
to such terms and conditions as determined by the Compensation Committee or the Board
of Directors. In addition, as soon as reasonably practicable after consummation of the
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Merger, Employee shall receive a stock option to purchase such number of shares of Company
common stock as determined by the Board of Directors of the Company at an exercise price
equal to the fair market value of the Company’s common stock on the date of grant, and with
such further terms and conditions as may be set forth in a separate stock option agreement.
6. Termination of Employment.
(a) Termination Upon Death or Disability. If Employee dies while employed by
the Company, the Company will pay his beneficiary designated in writing or, if none, his
estate, as applicable, an amount equal to two (2) months of Employee’s Base Salary in effect
at his death. Such amount shall be payable in a lump sum payment within twenty (20) days of
Employee’s death. If the Company determines that the Disability, as hereinafter defined, of
Employee has occurred, it may terminate Employee’s employment and this Agreement upon thirty
(30) days written notice, provided that, within such thirty day notice period, Employee
shall not have returned to full-time performance of Employee’s assigned duties. If
Employee’s employment is terminated for Disability, Employee shall be entitled only to the
disability benefits provided under the policy of disability insurance provided for all
employees, as such policy may be changed from time to time. For the purpose of this
Agreement, “Disability” shall be as defined under Company’s disability insurance
policy maintained for Employee from time to time.
(b) Termination for Cause. Employee’s employment may be terminated for Cause
at any time without further liability on the part of the Company. If the Company terminates
Employee for Cause, Employee shall have no right to render services or to receive
compensation or other benefits under this Agreement for any period after such termination.
Termination for Cause shall be effective immediately or upon such notice to Employee as may
determined by the Company. For the purpose of this Agreement, “Cause” means: (A)
the repeated failure of Employee to perform his responsibilities and duties hereunder after
reasonable notice and opportunity to cure; (B) the commission of an act by Employee
constituting dishonesty or fraud against Company or the Bank; (C) the conviction of or the
entering of a guilty or no contest plea with respect to a felony or any crime involving
moral turpitude; (D) any breach by Employee of a material term of this Agreement, or
violation in any material respect of any code or standard of behavior generally applicable
to officers of Company or the Bank, after being advised in writing of such breach or
violation and being given a reasonable opportunity and period (as determined by the Company)
to remedy such breach or violation; or (E) the willful engaging by Employee in conduct that
is reasonably likely to result, in the good faith judgment of the Company, in material
injury to the Company or any of its subsidiaries, monetarily or otherwise.
(c) Termination Without Cause. Company shall have the right to terminate
Employee’s employment at any time without Cause. In the event the Company shall
terminate Employee’s employment without Cause during the Term, Employee shall be
entitled to the following, provided Employee executes a general release of claims prepared
by the Company:
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(i) For twenty-four (24) months following the date of termination, the Company
shall continue to pay Employee his Base Salary in effect on the date of termination,
such payments to be made on the same periodic dates as salary payments would have
been made to Employee had his employment not been terminated, subject to applicable
federal and state income and social security tax withholding requirements.
(ii) For twenty-four (24) months following the date of termination, Employee
shall continue to receive any health care (medical, dental and vision) plan coverage
provided to Employee and his spouse and dependents at the date of termination, with
the Company paying the normal Company paid contribution, on a monthly or more
frequent basis, for similarly situated active employees during such health care
continuation period, provided that Employee’s continued participation is possible
under the general terms and provisions of such plans and programs. If the Company
reasonably determines that maintaining such coverage for Employee for Employee’s
spouse or dependents is not possible under the terms and provisions of such plans
and programs or any provision of law would create an adverse tax effect for Employee
or the Company due to such participation, the Company shall provide substantially
identical benefits directly or through a separate insurance arrangement.
(iii) The Company’s obligation to provide Employee and his dependents with
health care plan coverage pursuant to Section 6(c)(ii) hereof shall terminate with
respect to each particular type of insurance if and when Employee has obtained
coverage under one or more welfare benefit plans of a subsequent employer that
provides for equal or greater benefits to Employee and his dependents with respect
to that specific type of benefit.
(iv) If Employee dies while receiving such continued health care coverage,
Employee’s spouse and dependents will continue to be covered under all applicable
health care plans during the remainder of the coverage period as described above.
Employee’s spouse and dependents will become eligible for COBRA continuation
coverage for health and dental benefits at the end of such health care continuation
coverage period.
(d) Termination by Employee for Good Reason. Employee may terminate his
employment for Good Reason and will be entitled to the payments and other benefits provided
in Section 6(c), provided Employee executes a general release of claims prepared by the
Company. For purposes of this Agreement, “Good Reason” shall mean:
(i) the continued assignment to Employee of duties inconsistent with Employee’s
position, authority, duties or responsibilities as contemplated by Sections 3 and 4
hereof;
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(ii) any action taken by the Company which results in a substantial reduction
in the status of Employee, including a significant diminution in Employee’s
position, authority, duties or responsibilities;
(iii) the relocation of Employee to any other primary place of employment which
might require Employee to move his residence which, for this purpose, includes any
reassignment to a place of employment located more than thirty-five (35) miles from
Employee’s initially assigned place of employment (which includes for purposes of
this Agreement both Tappahannock and Richmond, Virginia), without Employee’s express
written consent to such relocation; or
(iv) any failure by the Company, or any successor entity following a Change of
Control, to comply with the provisions of Section 5 or to honor any other term or
provision of this Agreement.
Notwithstanding the above, Good Reason shall not include the removal of Employee as an
officer of any subsidiary of the Company (including the Bank) in order that Employee might
concentrate his efforts on the Company, any resignation by Employee where Cause for
Employee’s termination by the Company exists, or an isolated, insubstantial and/or
inadvertent action not taken in bad faith by the Company and which is remedied by the
Company within a reasonable time after receipt of notice thereof given by Employee.
(e) Termination by Employee. Employee shall have the right at any time
voluntarily to terminate his employment, upon thirty (30) days written notice, in which
event Employee shall be entitled only to the Base Salary through the date of termination.
7. Change in Control.
(a) Termination Following Change in Control. Notwithstanding Sections 6(c) and
6(d) above, if Company terminates Employee’s employment without Cause or if Employee resigns
with Good Reason within one hundred twenty (120) days after the occurrence of Good Reason,
in either case within two (2) years of a Change in Control (as defined herein), Employee
will be entitled to the following benefits, subject to applicable federal and state income
and social security tax withholding requirements and the execution by Employee of a general
release of claims prepared by Company:
(i) Accrued Obligations. The “Accrued Obligations” are the sum
of: (1) Employee’s Base Salary through the date of termination at the rate then in
effect; (2) the amount, if any, of any incentive or bonus compensation
theretofore earned which has not yet been paid; (3) the product of the annual bonus
paid or payable, including by reason of deferral, for the most recently completed
year and a fraction, the numerator of which is the number of days in the current
year through the date of termination and the denominator of which is 365; and (4)
any benefits or awards (including both the cash and stock components) which pursuant
to the terms of any plans, policies or programs have been earned or become payable,
but which have not
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yet been paid to Employee (but not including amounts that
previously had been deferred at Employee’s request, which amounts will be paid in
accordance with Employee’s existing directions). The Accrued Obligations will be
paid to Employee in a lump sum payment of cash or stock, as applicable, as soon as
administratively feasible after the date of termination; provided, however, that if
payment of any such Accrued Obligations at such time would result in a prohibited
acceleration under Section 409A of the Internal Code of 1986 (the “Code”), such
Accrued Obligations shall be paid at the time the Accrued Obligations would have
been paid under the applicable plan, policy, program or arrangement relating to such
Accrued Obligation had Employee remained employed by the Company.
(ii) Salary Continuance Benefit. The “Salary Continuance
Benefit” is an amount equal to 2.99 times Employee’s Final Compensation. For
purposes of this Agreement, “Final Compensation” means the Base Salary in
effect at the date of termination, plus the average of the annual bonus paid or
payable for the two most recently completed years (both of which shall include any
amount contributed therefrom by Employee to any salary reduction agreement or any
other program that provides for pre-tax salary reductions or compensation
deferrals). The Salary Continuance Benefit will be paid to Employee in a lump sum
cash payment as soon as administratively feasible following the date of termination.
(iii) Health Care Continuance Benefit. (1) For thirty-six (36) months
following the date of termination, coverage under any health care (medical, dental
and vision) plan or plans (“Health Care Plans”) shall continue with the
Company paying the normal Company paid contribution for similarly situated active
employees and with such coverage being available on the same basis as available to
similarly situated active employees during such continuation period (the “Health
Care Continuance Benefit”), provided that Employee’s continued participation is
possible under the general terms and provisions of such plans. If participation in
any one or more of the Health Care Plans is not possible under the terms of the
Health Care Plan or any provision of law would create an adverse tax effect for
Employee or the Company due to such participation, the Company will provide
substantially identical benefits directly or through a separate insurance
arrangement. The Health Care Continuance Benefit as to any Health Care Plan will
cease if and when Employee has obtained coverage under one or more welfare benefit
plans of a subsequent employer that provides for equal or greater benefits to
Employee and his dependents with respect to the specific type of benefit.
(v) Continuance of Health Care Continuation Benefits Upon Death. If
Employee dies while receiving a Health Care Continuance Benefit, Employee’s spouse
and dependents will continue to be covered under all applicable Health Care Plans
during the remainder of the thirty-six (36) month coverage period as described
above. Employee’s spouse and dependents will become eligible for COBRA continuation
coverage for health and dental benefits at the end of such thirty-six (36) month
period.
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(b) Parachute Limitation and Excise Tax Gross-up. In the event any payment or
distribution by the Company to or for the benefit of Employee (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section 7(b)) (the
“Total Payments”) would subject Employee to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by Employee with respect to such excise tax
(collectively, the “Excise Tax”) on “excess parachute payments” (as defined in Section 280G
of the Code and the regulations related thereto), then Employee will be entitled to receive
an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the
Employee of all taxes (including any income and employment taxes and interest or penalties
imposed with respect to such taxes) and the Excise Tax imposed on the Gross-Up Payment,
Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the
Total Payments. Notwithstanding the foregoing, if the amount of the Total Payments that
exceeds three times the Employee’s “base amount” (as defined in Section 280G of the Code) is
less than $25,000, then the Total Payments shall be reduced to the extent necessary so that
the Total Payments would not subject Employee to any Excise Tax. All determinations
required to be made under this Section 7(b), including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment, will be made by the independent
accounting firm of the Company immediately prior to Employee’s termination of employment
(the “Accounting Firm”). All fees and expenses of the Accounting Firm will be borne solely
by the Company, and any determination by the Accounting Firm will be binding upon the
Company Bank and Employee. Any Gross-Up Payment, as determined pursuant to this Section
7(e), will be paid by the Company to Employee within ten days of the receipt of the
Accounting Firm’s determination.
(i) If the Accounting Firm determines that no Excise Tax is payable by
Employee, it shall so indicate to Employee in writing.
(ii) In the event there is an under-payment of the Gross-Up Payment due to the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm and Employee thereafter is required to
make a payment of any Excise Tax, the Accounting Firm will determine the amount of
any such under-payment that has occurred and such
amount will be promptly paid by the Company to or for the benefit of Employee.
(c) Change of Control Defined. A “Change in Control” means the occurrence of
any of the following events:
(i) The acquisition by one person, or more than one person acting as a group,
of ownership of stock in the Company that, together with stock held by such person
or group, constitutes more than 25% of the total fair market value or total voting
power of the stock of the Company; however, if any one person, or more than one
person acting as a group, is considered to own more than 25% of the total fair
market value or total voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons will not be considered a Change in
Control and an increase of the effective percentage of
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stock owned by any one
person, or more than one person acting as a group, as a result of a transaction in
which the Company acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this paragraph; provided,
further, however, that the following acquisitions will not
constitute a Change in Control: (A) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any entity controlled
by the Company, (B) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), or (C) any
acquisition pursuant to a reorganization, merger, share exchange, or consolidation
by any corporation owned or proposed to be owned, directly or indirectly, by
shareholders of the Company if the shareholders’ ownership of securities of the
corporation resulting from such transaction constitutes a majority of the ownership
of securities of the resulting entity and at least a majority of the members of the
board of directors of the corporation resulting from such transaction were members
of the Incumbent Board (as defined below) at the time of the execution of the
initial agreement providing for such transaction.
(ii) Where individuals who, as of the Merger Date, constitute the Board of
Directors of the Company (the “Incumbent Board”) cease for any reason to constitute
at least a majority of such Board of Directors; provided, however, that any
individual becoming a director subsequent to the Merger Date whose election, or
nomination for election, by the shareholders was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board.
(iii) The Company consummates after the Merger Date (A) a reorganization,
merger, share exchange or consolidation of the Company with any other entity,
except as provided above in subparagraph (c)(i)(C), or (B) the sale or other
disposition of all or substantially all of the assets of the Company.
For purposes of this Section, the provisions of section 318(a) of the Code regarding
the constructive ownership of stock will apply to determine stock ownership;
provided, that stock underlying unvested options (including options exercisable for
stock that is not substantially vested) will not be treated as owned by the individual who
holds the option. Notwithstanding the foregoing, the consummation of the Merger shall not
constitute a Change of Control.
(d) Restrictive Covenants. If, after the occurrence of a Change of Control,
Employee’s employment is terminated without Cause or Employee terminates for Good Reason,
the restrictive covenants set forth in Sections 8(e) and 8(g) will be applicable for twelve
(12), and not twenty-four (24), months following the date of termination of employment.
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8. Restrictive Covenants.
(a) Ownership of Work Product. Company shall own all Work Product arising
during the course of Employee’s employment. For purposes hereof, “Work Product”
shall mean all intellectual property rights, including all Trade Secrets, United States and
international copyrights, patentable inventions, and other intellectual property rights in
any programming, documentation, technology or other work product that relates to Company,
the Bank, their respective businesses or customers and that Employee conceives, develops, or
delivers to Company or the Bank at any time during his employment. Employee agrees to take
such actions and execute such further acknowledgments and assignments as Company may
reasonably request to give effect to this provision.
(b) Protection of Trade Secrets. Employee agrees to maintain in strict
confidence and, except as necessary to perform his duties for Company and the Bank, Employee
agrees not to use or disclose any Trade Secrets, as defined by applicable law, of Company
and the Bank during or after his employment.
(c) Protection of Other Confidential Information. In addition, Employee agrees
to maintain in strict confidence and, except as necessary to perform his duties for Company,
not to use or disclose any Confidential Business Information of Company or the Bank during
his employment and for a period of twenty-four (24) months following termination of his
employment. “Confidential Business Information” shall mean any internal, non-public
information (other than Trade Secrets addressed above) concerning Company’s and the Bank’s
financial position and results of operations (including revenues, assets, net income, etc.);
annual and long-range business plans; product or service plans; marketing plans and methods;
training, educational and administrative manuals; customer and supplier information and
purchase histories; and employee lists. The provisions of Sections 7(b) and 7(b) shall also
apply to protect Trade Secrets and Confidential Business Information of third parties
provided to Company or the Bank under an obligation of secrecy.
(d) Return of Materials. Employee shall return to Company, promptly upon its
request and in any event upon termination of his employment, all media, documents,
notebooks, computer programs, handbooks, data files, models, samples, price lists, drawings,
customer lists, prospect data, or other material of any nature whatsoever (in tangible or
electronic form) in Employee’s possession or control, including all copies thereof, relating
to Company, the Bank, and their respective businesses or customers. Upon the request of
Company, Employee shall certify in writing compliance with the foregoing requirement.
(e) No Solicitation of Customers. During Employee’s employment with Company
and, subject to Section 7(d), for twenty-four (24) months thereafter, Employee shall not
(except on behalf of or with the prior written consent of Company), either directly or
indirectly, on Employee’s own behalf or in the service or on behalf of others, (A) solicit,
divert, or appropriate to or for a Competing Business, or (B) attempt to solicit,
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divert, or
appropriate to or for a Competing Business, any person or entity that is or was a customer
of Company or the Bank or any of their affiliates at any time during the twelve (12) months
prior to the date of termination and with whom Employee has had material contact. A
“Competing Business” shall mean a depository financial institution or holding
company providing services that are the same as or substantially similar to those provided
to the customer by Company or the Bank at the time of termination of Employee’s employment.
(f) No Recruitment of Personnel. During Employee’s employment with Company and
for twenty-four (24) months thereafter, Employee shall not, either directly or indirectly,
on Employee’s own behalf or in the service or on behalf of others, (A) solicit, divert, or
hire away, or (B) attempt to solicit, divert, or hire away, any employee of or consultant to
Company or the Bank.
(g) Non-Competition. During Employee’s employment with Company and, subject to
Section 7(d), for twenty-four (24) months thereafter, Employee shall not (without the prior
written consent of Company) compete with Company, the Bank or any of their affiliates by,
directly or indirectly, forming, serving as an organizer, director or officer of, or
consultant to, or acquiring or maintaining more than a 1% passive investment in, a
depository financial institution or holding company if such depository institution or
holding company has one or more offices or branches located within a ten (10) mile radius of
the headquarters or any branch banking office of the Company or Bank, or for which
regulatory approval is pending, as of the date of termination of employment; provided,
however, that any activity that cannot be reasonably construed to have the potential to
compete with or to further competition with the Company or the Bank shall not be prohibited
by this Agreement.
9. General Provisions.
(a) Entire Agreement. Except as provided in the next sentence, this Agreement
contains the entire understanding between the parties hereto relating to the employment of
Employee by Company and supersedes any and all prior employment or compensation agreements
between Employee and Merger Partner, including agreements in effect immediately prior to the
Merger. It is specifically agreed and acknowledged that the exercisability of stock options
and vesting of restricted stock, benefits or other rights on account of the Merger
constituting a “change of control” (as defined in any applicable plan or agreement providing
for rights upon the occurrence of a change of control) in plans or agreements other than
those designated as severance, separation, change of control or employment agreements shall
not be superseded by this Agreement and shall operate in accordance with their terms.
(b) Assignability. Neither this Agreement nor any right or interest hereunder
shall be assignable by Employee without Company’s prior written consent, with the sole
exception that the Company or Bank shall be permitted to assign this Agreement to the
appropriate person, entity or successor entity in connection with a Change of Control.
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(c) Binding Agreement. This Agreement shall be binding upon, and inure to the
benefit of, Employee and Company and their respective successors and assigns. The Company
will require any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of the Company to
assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken
place.
(d) Amendment of Agreement. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
(e) Severability. If any provision contained in this Agreement shall for any
reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement, but this
Agreement shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If a court determines that this Agreement or any covenant
contained herein is unreasonable, void or unenforceable, for any reason whatsoever, then in
such event the parties hereto agree that the duration, geographical or other limitation
imposed herein should be such as the court, or jury, as the case may be, determines to be
fair and reasonable, it being the intent of each of the parties hereto to be subject to an
agreement that is necessary for the protection of the legitimate interest of Company and its
successors or assigns and that is not unduly harsh in curtailing the legitimate rights of
Employee.
(f) Notices. All notices under this Agreement shall be in writing and shall be
deemed effective when delivered in person (with respect to Company or the Bank, to Company’s
Chief Executive Officer) or when mailed if mailed by certified mail, return receipt
requested. Notices mailed shall be addressed, in the case of Employee, to his last known
residential address, and in the case of Company or the Bank, to Company’s corporate
headquarters, attention of the Chief Executive Officer, or to such other address as Employee
or Company any designate in writing at the time or from time to time to the other party in
accordance with this Section.
(g) Waiver. No delay or omission by either party hereto in exercising any
right, power or privilege hereunder shall impair such right, power or privilege, nor shall
any single or partial exercise of any right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power of privilege. The provisions of
this Section 8(g) cannot be waived except in writing signed by both parties.
(h) Governing Law. This Agreement has been executed and delivered in the
Commonwealth of Virginia, and its validity, interpretation, performance and enforcement
shall be governed by the laws of the Commonwealth of Virginia.
(i) Fees and Expenses. The Company will pay or reimburse Employee for all
costs and expenses, including, without limitation, court costs and reasonable attorneys’
fees, incurred by Employee (i) in contesting or disputing any termination of the
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Employee’s
employment or (ii) in seeking to obtain or enforce any right or benefit provided by this
Agreement, in each case provided Employee’s claim is substantially upheld by a court of
competent jurisdiction. Any reimbursements to be paid by the Company to Employee under this
Section 8(i) must be paid as soon as administratively feasible after the termination of any
such litigation or other proceeding, or the settlement thereof, under terms on which the
Employee’s claim is substantially upheld.
(j) Deferred Compensation Omnibus Provision. Notwithstanding any other
provision of this Agreement, it is intended that any payment or benefit which is provided
pursuant to or in connection with this Agreement which is considered to be deferred
compensation subject to Section 409A of the Code shall be provided and paid in a manner, and
at such time, including without limitation payment and provision of benefits only in
connection with the occurrence of a permissible payment event contained in Section 409A
(e.g. death, disability, separation from service from the Company and its affiliates as
defined for purposes of Section 409A of the Code), and in such form, as complies with the
applicable requirements of Section 409A of the Code to avoid the unfavorable tax
consequences provided therein for non compliance. Notwithstanding any other provision of
this Agreement, the Company’s Compensation Committee or Board of Directors is authorized to
amend this Agreement, to amend or void any election made by Employee under this Agreement
and/or to delay the payment of any monies and/or provision of any benefits in such manner as
may be determined by it to be necessary or appropriate to comply, or to evidence or further
evidence required compliance, with Section 409A of the Code (including any transition or
grandfather rules thereunder). For purposes of this Agreement, all rights to payments
and benefits hereunder shall be treated as rights to receive a series of separate payments
and benefits to the fullest extent allowed by Section 409A of the Code. If Employee is a
key employee (as defined in Section 416(i) of the Code without regard to paragraph (5)
thereof) and any of the Company’s stock is publicly traded on an established securities
market or otherwise, then payment of any amount or provision of any benefit under this
Agreement which is considered deferred compensation subject to Section 409A of the Code
shall be deferred for six (6) months as required by Section 409A(a)(2)(B)(i) of the Code
(the “409A Deferral Period”). In the event such payments are otherwise due to be made in
installments or periodically during the 409A Deferral Period, the payments which would
otherwise have been made in the 409A Deferral Period shall be accumulated and paid in a lump
sum as soon as the 409A Deferral Period ends, and the balance of the payments shall be made
as otherwise scheduled. In the event benefits are required to be deferred, any such benefit
may be provided during the 409A Deferral Period at Employee’s expense, with Employee having
a right to reimbursement from the Company once the 409A Deferral Period ends, and the
balance of the benefits shall be provided as otherwise scheduled. For purposes of this
Agreement, termination of employment and date of termination or cessation of employment will
be read to mean a “separation from service” within the meaning of Section 409A of the Code
where it is reasonably anticipated that no further services would be performed after such
date or that the level of bona fide services Employee would perform after that date (whether
as an employee or independent contractor) would permanently decrease to less than 50% of the
average level of bona fide services performed over the immediately preceding thirty-six (36)
month period.
[Signatures Appear on the Following Page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above stated.
| Community Bankers Acquisition Corp. |
||||
| By: | /s/ Xxxx X. Xxxxxxxx | |||
| Name: | Xxxx X. Xxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| Employee |
||||
| /s/ Xxxxxx X. Longest, Jr. | ||||
| Xxxxxx X. Longest, Jr. | ||||
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