Exhibit 10.1
EXECUTIVE SEVERANCE AGREEMENT
-----------------------------
THIS EXECUTIVE SEVERANCE AGREEMENT is between AMERICAN NATIONAL BANKSHARES
INC., a Virginia corporation (the "Parent"), AMERICAN NATIONAL BANK AND TRUST
COMPANY, a national banking association, (the "Company") and X. XXXX XXXXXXX
("Executive").
WHEREAS, the Company recognizes that there is a possibility of a Change in
Control of the Parent, the Company or both; and
WHEREAS, the Parent and the Company recognize that the mere possibility of
a Change in Control of the Parent or the Company may create uncertainty on the
part of senior management or a distraction of senior management from its
day-to-day operating responsibilities; and
WHEREAS, the Parent and the Company recognize that outstanding management
is essential to advancing the interests of the Parent and the Company and their
shareholders and that the Parent and the Company can better recruit and retain
outstanding management by providing certain assurances in the event of a Change
in Control; and
WHEREAS, in the event of a Change in Control of the Parent, the Company or
both, the best interests of the Parent and the Company and their shareholders
require a continuity of the Parent's and the Company's business with a minimum
of disruption;
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the Parent, the Company and the Executive agree as
follows:
1. Effective Date. The Effective Date of this Agreement is June 17, 2003.
--------------
2. Term of Agreement. The Term of this Agreement shall begin on a Control
-----------------
Change Date and end on the earlier of (i) the day before the third anniversary
of the Control Change Date and (ii) the date that the Executive attains age
sixty-five (65).
3. Minimum Cash Compensation. During the Term of this Agreement, the total
-------------------------
amount payable to the Executive by the Parent and the Company as base salary,
"profit sharing" bonus and "incentive compensation" bonus, on an annualized
basis, shall not be less than the amounts prescribed below:
(a) The Executive's total annual base salary from the Parent and the
Company shall not be less than the annualized rate of total base salary payable
to the Executive immediately before the Control Change Date.
(b) The total annualized "profit sharing" bonus from the Parent and the
Company, expressed as a percentage of the Executive's then total base salary,
shall not be less than the "profit sharing" bonus, expressed as a percentage of
the Executive's then total base salary, payable to the Executive for the four
quarters immediately preceding the Control Change Date.
(c) The total annualized "incentive compensation" bonus from the Parent
and the Company, expressed as a percentage of the Executive's then total base
salary, shall not be less than the "incentive compensation" bonus, expressed as
a percentage of the Executive's then total base salary, payable to the Executive
for the calendar year ending immediately preceding the Control Change Date.
4. Termination Without Cause. This paragraph 4 describes the amounts
-------------------------
payable to the Executive if the Parent and the Company terminates the
Executive's employment without Cause during the Term of this Agreement.
(a) If such termination is effective before the first anniversary of
the Control Change Date, the Executive shall be entitled to receive the
Termination Benefits during the period beginning with the Executive's
termination of employment and ending on the second anniversary of the Control
Change Date or the last day of the Term of this Agreement, whichever occurs
first.
(b) If such termination is effective on or after the first anniversary
of the Control Change Date, the Executive shall be entitled to receive the
Termination Benefits during the period beginning with the Executive's
termination of employment and ending on the last day of the twelfth (12th) month
thereafter or the last day of the Term of this Agreement, whichever occurs
first.
5. Executive's Resignation. This paragraph 5 describes the amounts payable
-----------------------
to the Executive upon his resignation from the employ of the Parent and the
Company during the Term of this Agreement.
(a) During the period beginning on the Control Change Date and ending
on the last day of the third month ending after the Control Change Date, the
Executive may resign from the employ of both the Parent and the Company if (i)
the Parent or the Company breaches the obligation set forth in paragraph 3 or
(ii) the Parent or the Company notifies the Executive that he will be required
to relocate his office more than thirty (30) miles from Danville, Virginia. If
the Executive resigns in accordance with the preceding sentence, he shall be
entitled to receive the Termination Benefits for the period beginning on the
date of the Executive's termination of employment and ending on the last day of
the twelfth (12th) month thereafter or the last day of the Term of this
Agreement, whichever occurs first.
(b) During the period beginning on the first day of the fourth month
beginning after the Control Change Date and ending on the first anniversary of
the Control Change Date, the Executive may resign from the employ of both the
Parent and the Company, for any reason or no reason. If the Executive resigns in
accordance with the preceding sentence, he shall be entitled to receive the
2
Termination Benefits for the period beginning on the date of the Executive's
termination of employment and ending on the last day of the twelfth (12th) month
thereafter or the last day of the Term of this Agreement, whichever occurs
first.
(c) During the period beginning on the first anniversary of the Control
Change Date and ending on the last day of the Term of this Agreement, the
Executive may resign from the employ of both the Parent and the Company if (i)
the Parent or the Company breaches the obligation set forth in paragraph 3, (ii)
the Parent or the Company notifies the Executive that he will be required to
relocate his office more than thirty (30) miles from Danville, Virginia or (iii)
the Executive's duties, title or responsibilities with respect to the Parent or
the Company are reduced from the duties, title or responsibilities assigned to
the Executive as of the first anniversary of the Control Change Date. If the
Executive resigns in accordance with the preceding sentence, he shall be
entitled to receive the Termination Benefits for the period beginning on the
date of the Executive's termination of employment and ending on the last day of
the twelfth (12th) month thereafter or the last day of the Term of this
Agreement, whichever occurs first.
6. Maximum Benefit. No amounts will be payable and no benefits will be
---------------
provided under this Agreement to the extent that such payments or benefits,
together with other payments or benefits under other plans, agreements or
arrangements, would make the Executive liable for the payment of an excise tax
under Section 4999 of the Internal Revenue Code of 1986, as amended, or any
successor provision. The amounts otherwise payable and the benefits otherwise to
be provided under this Agreement shall be reduced to the extent necessary to
avoid the imposition of such excise tax liability; provided, however, that the
Executive shall have the right to direct which payments or benefits under this
Agreement shall be reduced in order to avoid any such excise tax liability.
7. Cause. The Parent and the Company shall be deemed to have "Cause" to
-----
terminate the Executive's employment under this Agreement if the Parent or the
Company determines that the Executive (i) has failed or refused to perform a
material duty of his position, (ii) is guilty of personal dishonesty, gross
incompetence, willful misconduct, a breach of fiduciary duty involving personal
profit, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses), unethical business practices in connection with
the Parent's or the Company's business, misappropriation of the Parent's or the
Company's assets (determined on a reasonable basis), or is subject to a final
cease-and-desist order, or has been convicted of a felony or a misdemeanor
involving moral turpitude or (iii) is guilty of a material breach of any
employment agreement between the Parent and the Executive of the Company and the
Executive.
8. Change in Control. A "Change in Control" of the Parent or the Company
-----------------
occurs if:
(a) Any person, including a "group" (as defined in section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, as in effect on the Effective
Date (the "Exchange Act") is or becomes, directly or indirectly, the owner or
3
beneficial owner of Parent or Company securities (other than as a result of an
issuance of securities initiated by the Parent or the Company, a tender offer
initiated by the Parent or the Company or open market purchases approved by the
Parent's or the Company's Board of Directors (the "Board"), as long as the
majority of the Parent's or the Company's Board approving the purchases are
directors at the time the purchases are made), having more than fifty (50%) of
the combined voting power of the then outstanding Parent or Company securities
that may be cast for the election of the Parent's or the Company's directors; or
(b) During any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period constitute the Parent's or the
Company's Board and any new director (other than a director designated by a
person who has entered into an agreement with the Parent or the Company to
effect a transaction described in subparagraphs 8(a), 8(c) or 8(d) or any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act or other actual or threatened
solicitation of proxies or consents) whose election by the Parent or the Board
or nomination for election by the Parent's or the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Parent's or the Company Board; or
(c) There is consummated a reorganization, merger, or consolidation
involving the Parent or the Company that requires the approval of the Parent's
or the Company's shareholders, other than a reorganization, merger or
consolidation with respect to which all or substantially all of the individuals
and entities who were beneficial owners, immediately prior to such
reorganization, merger or consolidation, of the combined voting power of the
Parent's or the Company's then outstanding securities beneficially owned,
directly or indirectly, immediately after such reorganization, merger or
consolidation, more than fifty percent (50%) of the combined voting power of the
securities of the corporation resulting from such reorganization, merger or
consolidation in substantially the same proportions as their respective
ownership, immediately prior to such reorganizations, merger or consolidation,
of the combined voting power of the Parent's or the Company's securities; or
(d) The Parent's or the Company's shareholders approve (i) the sale or
disposition by the Parent or the Company (other than to a subsidiary of the
Parent or the Company) of more than fifty percent (50%) of the assets of the
Parent or the Company (including a sale or disposition that is effected through
condemnation proceedings) or (ii) a complete liquidation or dissolution of the
Parent or the Company.
9. Control Change Date. A "Control Change Date" is the date on which a
-------------------
Change in Control of the Parent or the Company occurs. If a Change in Control of
the Parent or the Company occurs as the result of a series of transactions or
events, the Control Change Date is the date of the last of the transactions or
events in the series.
4
10. Termination Benefits. The "Termination Benefits" payable in accordance
--------------------
with paragraphs 4 and 5 are the following payments and benefits:
(a) Continued payment of the Executive's base salary for the applicable
period specified in paragraph 4 or 5 at the rate in effect on the date of the
Executive's termination of employment (but not less than the rate of base salary
required under paragraph 3).
(b) Payment each month during the applicable period specified in
paragraph 4 or 5 of a pro rata amount of the annualized "profit sharing" bonus
in the amount required under paragraph 3.
(c) Payment each month during the applicable period specified in
paragraph 4 or 5 of a pro rata amount of the annualized "incentive compensation"
bonus in the amount required under paragraph 3.
(d) Continued participation in the Parent's and the Company's health,
dental, vision, long-term disability and life insurance programs or plans for
the applicable period specified in paragraph 4 or 5 on the same terms and
conditions as applied to the Executive immediately before his termination of
employment; provided, however, that if such coverage cannot be provided under
the terms of a Parent or Company program or plan, the Parent or the Company
shall obtain separate insurance coverage that provides the Executive the same or
comparable benefits and the portion of the insurance premium charged to the
Executive for such separate insurance coverage shall not exceed the Executive's
cost for such coverage under the Parent's and the Company's program or plan
immediately before this termination of employment.
(e) A single sum payment equal to the difference between (i) the
present value of the benefits that the Executive would have accrued under the
Parent's or the Company's defined benefit pension plan based on his actual
service and assuming continued service during the applicable period specified in
paragraph 4 or 5 and (ii) the present value of the benefit payable to the
Executive under the Parent's or the Company's defined benefit pension plan. The
amount of the payment required under the preceding sentence shall be calculated
by the actuary of the Parent's or the Company's defined benefit pension plan
using the actuarial assumptions and methods in effect for purposes of
determining the funded status of such plan and shall assume that amounts payable
under this Agreement are recognized as compensation for purposes of such plan.
11. Successors. This Agreement shall inure to the benefit of, and be
----------
enforceable by, the Executive's legal representatives and heirs. This Agreement
shall inure to the benefit of, and be binding upon, the Parent and the Company
and their successors and assigns. The Parent and the Company shall require any
successor to the Parent or the Company (whether direct or indirect, by merger,
purchase, consolidation or otherwise) to all or substantially all of the
business or assets of the Parent or the Company to assume expressly and agree to
perform the Parent or the Company's obligations under this Agreement. References
in this Agreement to the "Parent" and to the "Company" include the Parent and
5
the Company as defined above and any successor to their business or assets that
is obligated to perform this Agreement by operation or law or otherwise.
12. Entire Agreement. This Agreement sets forth the entire agreement of the
----------------
parties with respect to the termination of the Executive's employment on or
after a Control Change Date and supersedes all prior agreements, arrangements
and understandings with respect thereto between the Parent, the Company and the
Executive. No modification, amendment or termination of this Agreement, nor any
waiver of its provisions, shall be valid or enforceable unless in writing and
signed by both parties.
13. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be deemed an original and all of which
constitute an instrument.
14. Headings. The headings herein are for convenience only and will not
--------
affect the interpretation of this Agreement.
15. Governing Law. This Agreement will be governed by, and construed in
-------------
accordance with, the laws of the Commonwealth of Virginia (other than its choice
of law provisions to the extent that they would require the application of the
laws of another State).
WITNESS, the following signatures as of the indicated dates.
AMERICAN NATIONAL BANKSHARES INC.
Dated: June 17, 2003 By: /s/Xxxxxxx X. Xxxxxx
------------- --------------------------------------
Title: President & Chief Executive Officer
-----------------------------------
AMERICAN NATIONAL BANK AND TRUST COMPANY
Dated: June 17, 2003 By: /s/Xxxxxxx X. Xxxxxx
------------- --------------------------------------
Title: President & Chief Executive Officer
-----------------------------------
X. XXXX XXXXXXX
Dated: June 17, 2003 By: /s/X. Xxxx Xxxxxxx
------------- --------------------------------------
6
Exhibit 10.2
EXECUTIVE SEVERANCE AGREEMENT
-----------------------------
THIS EXECUTIVE SEVERANCE AGREEMENT is between AMERICAN NATIONAL BANKSHARES
INC., a Virginia corporation (the "Parent"), AMERICAN NATIONAL BANK AND TRUST
COMPANY, a national banking association, (the "Company") and XXXX X. XXXXXXXXX
("Executive").
WHEREAS, the Company recognizes that there is a possibility of a Change in
Control of the Parent, the Company or both; and
WHEREAS, the Parent and the Company recognize that the mere possibility of
a Change in Control of the Parent or the Company may create uncertainty on the
part of senior management or a distraction of senior management from its
day-to-day operating responsibilities; and
WHEREAS, the Parent and the Company recognize that outstanding management
is essential to advancing the interests of the Parent and the Company and their
shareholders and that the Parent and the Company can better recruit and retain
outstanding management by providing certain assurances in the event of a Change
in Control; and
WHEREAS, in the event of a Change in Control of the Parent, the Company or
both, the best interests of the Parent and the Company and their shareholders
require a continuity of the Parent's and the Company's business with a minimum
of disruption;
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein, the Parent, the Company and the Executive agree as
follows:
1. Effective Date. The Effective Date of this Agreement is June 15, 2004.
--------------
2. Term of Agreement. The Term of this Agreement shall begin on a Control
-----------------
Change Date and end on the earlier of (i) the day before the third anniversary
of the Control Change Date and (ii) the date that the Executive attains age
sixty-five (65).
3. Minimum Cash Compensation. During the Term of this Agreement, the total
-------------------------
amount payable to the Executive by the Parent and the Company as base salary,
"profit sharing" bonus and "incentive compensation" bonus, on an annualized
basis, shall not be less than the amounts prescribed below:
(a) The Executive's total annual base salary from the Parent and the
Company shall not be less than the annualized rate of total base salary payable
to the Executive immediately before the Control Change Date.
(b) The total annualized "profit sharing" bonus from the Parent and the
Company, expressed as a percentage of the Executive's then total base salary,
shall not be less than the "profit sharing" bonus, expressed as a percentage of
the Executive's then total base salary, payable to the Executive for the four
quarters immediately preceding the Control Change Date.
(c) The total annualized "incentive compensation" bonus from the Parent
and the Company, expressed as a percentage of the Executive's then total base
salary, shall not be less than the "incentive compensation" bonus, expressed as
a percentage of the Executive's then total base salary, payable to the Executive
for the calendar year ending immediately preceding the Control Change Date.
4. Termination Without Cause. This paragraph 4 describes the amounts
-------------------------
payable to the Executive if the Parent and the Company terminates the
Executive's employment without Cause during the Term of this Agreement.
(a) If such termination is effective before the first anniversary of
the Control Change Date, the Executive shall be entitled to receive the
Termination Benefits during the period beginning with the Executive's
termination of employment and ending on the second anniversary of the Control
Change Date or the last day of the Term of this Agreement, whichever occurs
first.
(b) If such termination is effective on or after the first anniversary
of the Control Change Date, the Executive shall be entitled to receive the
Termination Benefits during the period beginning with the Executive's
termination of employment and ending on the last day of the twelfth (12th) month
thereafter or the last day of the Term of this Agreement, whichever occurs
first.
5. Executive's Resignation. This paragraph 5 describes the amounts payable
-----------------------
to the Executive upon his resignation from the employ of the Parent and the
Company during the Term of this Agreement.
(a) During the period beginning on the Control Change Date and ending
on the last day of the third month ending after the Control Change Date, the
Executive may resign from the employ of both the Parent and the Company if (i)
the Parent or the Company breaches the obligation set forth in paragraph 3 or
(ii) the Parent or the Company notifies the Executive that he will be required
to relocate his office more than thirty (30) miles from Danville, Virginia. If
the Executive resigns in accordance with the preceding sentence, he shall be
entitled to receive the Termination Benefits for the period beginning on the
date of the Executive's termination of employment and ending on the last day of
the twelfth (12th) month thereafter or the last day of the Term of this
Agreement, whichever occurs first.
(b) During the period beginning on the first day of the fourth month
beginning after the Control Change Date and ending on the first anniversary of
the Control Change Date, the Executive may resign from the employ of both the
Parent and the Company, for any reason or no reason. If the Executive resigns in
accordance with the preceding sentence, he shall be entitled to receive the
2
Termination Benefits for the period beginning on the date of the Executive's
termination of employment and ending on the last day of the twelfth (12th) month
thereafter or the last day of the Term of this Agreement, whichever occurs
first.
(c) During the period beginning on the first anniversary of the Control
Change Date and ending on the last day of the Term of this Agreement, the
Executive may resign from the employ of both the Parent and the Company if (i)
the Parent or the Company breaches the obligation set forth in paragraph 3, (ii)
the Parent or the Company notifies the Executive that he will be required to
relocate his office more than thirty (30) miles from Danville, Virginia or (iii)
the Executive's duties, title or responsibilities with respect to the Parent or
the Company are reduced from the duties, title or responsibilities assigned to
the Executive as of the first anniversary of the Control Change Date. If the
Executive resigns in accordance with the preceding sentence, he shall be
entitled to receive the Termination Benefits for the period beginning on the
date of the Executive's termination of employment and ending on the last day of
the twelfth (12th) month thereafter or the last day of the Term of this
Agreement, whichever occurs first.
6. Maximum Benefit. No amounts will be payable and no benefits will be
---------------
provided under this Agreement to the extent that such payments or benefits,
together with other payments or benefits under other plans, agreements or
arrangements, would make the Executive liable for the payment of an excise tax
under Section 4999 of the Internal Revenue Code of 1986, as amended, or any
successor provision. The amounts otherwise payable and the benefits otherwise to
be provided under this Agreement shall be reduced to the extent necessary to
avoid the imposition of such excise tax liability; provided, however, that the
Executive shall have the right to direct which payments or benefits under this
Agreement shall be reduced in order to avoid any such excise tax liability.
7. Cause. The Parent and the Company shall be deemed to have "Cause" to
-----
terminate the Executive's employment under this Agreement if the Parent or the
Company determines that the Executive (i) has failed or refused to perform a
material duty of his position, (ii) is guilty of personal dishonesty, gross
incompetence, willful misconduct, a breach of fiduciary duty involving personal
profit, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses), unethical business practices in connection with
the Parent's or the Company's business, misappropriation of the Parent's or the
Company's assets (determined on a reasonable basis), or is subject to a final
cease-and-desist order, or has been convicted of a felony or a misdemeanor
involving moral turpitude or (iii) is guilty of a material breach of any
employment agreement between the Parent and the Executive of the Company and the
Executive.
8. Change in Control. A "Change in Control" of the Parent or the Company
-----------------
occurs if:
(a) Any person, including a "group" (as defined in section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, as in effect on the Effective
Date (the "Exchange Act") is or becomes, directly or indirectly, the owner or
3
beneficial owner of Parent or Company securities (other than as a result of an
issuance of securities initiated by the Parent or the Company, a tender offer
initiated by the Parent or the Company or open market purchases approved by the
Parent's or the Company's Board of Directors (the "Board"), as long as the
majority of the Parent's or the Company's Board approving the purchases are
directors at the time the purchases are made), having more than fifty (50%) of
the combined voting power of the then outstanding Parent or Company securities
that may be cast for the election of the Parent's or the Company's directors; or
(b) During any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period constitute the Parent's or the
Company's Board and any new director (other than a director designated by a
person who has entered into an agreement with the Parent or the Company to
effect a transaction described in subparagraphs 8(a), 8(c) or 8(d) or any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act or other actual or threatened
solicitation of proxies or consents) whose election by the Parent or the Board
or nomination for election by the Parent's or the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority of the Parent's or the Company Board; or
(c) There is consummated a reorganization, merger, or consolidation
involving the Parent or the Company that requires the approval of the Parent's
or the Company's shareholders, other than a reorganization, merger or
consolidation with respect to which all or substantially all of the individuals
and entities who were beneficial owners, immediately prior to such
reorganization, merger or consolidation, of the combined voting power of the
Parent's or the Company's then outstanding securities beneficially owned,
directly or indirectly, immediately after such reorganization, merger or
consolidation, more than fifty percent (50%) of the combined voting power of the
securities of the corporation resulting from such reorganization, merger or
consolidation in substantially the same proportions as their respective
ownership, immediately prior to such reorganizations, merger or consolidation,
of the combined voting power of the Parent's or the Company's securities; or
(d) The Parent's or the Company's shareholders approve (i) the sale or
disposition by the Parent or the Company (other than to a subsidiary of the
Parent or the Company) of more than fifty percent (50%) of the assets of the
Parent or the Company (including a sale or disposition that is effected through
condemnation proceedings) or (ii) a complete liquidation or dissolution of the
Parent or the Company.
9. Control Change Date. A "Control Change Date" is the date on which a
-------------------
Change in Control of the Parent or the Company occurs. If a Change in Control of
the Parent or the Company occurs as the result of a series of transactions or
events, the Control Change Date is the date of the last of the transactions or
events in the series.
4
10. Termination Benefits. The "Termination Benefits" payable in accordance
--------------------
with paragraphs 4 and 5 are the following payments and benefits:
(a) Continued payment of the Executive's base salary for the applicable
period specified in paragraph 4 or 5 at the rate in effect on the date of the
Executive's termination of employment (but not less than the rate of base salary
required under paragraph 3).
(b) Payment each month during the applicable period specified in
paragraph 4 or 5 of a pro rata amount of the annualized "profit sharing" bonus
in the amount required under paragraph 3.
(c) Payment each month during the applicable period specified in
paragraph 4 or 5 of a pro rata amount of the annualized "incentive compensation"
bonus in the amount required under paragraph 3.
(d) Continued participation in the Parent's and the Company's health,
dental, vision, long-term disability and life insurance programs or plans for
the applicable period specified in paragraph 4 or 5 on the same terms and
conditions as applied to the Executive immediately before his termination of
employment; provided, however, that if such coverage cannot be provided under
the terms of a Parent or Company program or plan, the Parent or the Company
shall obtain separate insurance coverage that provides the Executive the same or
comparable benefits and the portion of the insurance premium charged to the
Executive for such separate insurance coverage shall not exceed the Executive's
cost for such coverage under the Parent's and the Company's program or plan
immediately before this termination of employment.
(e) A single sum payment equal to the difference between (i) the
present value of the benefits that the Executive would have accrued under the
Parent's or the Company's defined benefit pension plan based on his actual
service and assuming continued service during the applicable period specified in
paragraph 4 or 5 and (ii) the present value of the benefit payable to the
Executive under the Parent's or the Company's defined benefit pension plan. The
amount of the payment required under the preceding sentence shall be calculated
by the actuary of the Parent's or the Company's defined benefit pension plan
using the actuarial assumptions and methods in effect for purposes of
determining the funded status of such plan and shall assume that amounts payable
under this Agreement are recognized as compensation for purposes of such plan.
11. Successors. This Agreement shall inure to the benefit of, and be
----------
enforceable by, the Executive's legal representatives and heirs. This Agreement
shall inure to the benefit of, and be binding upon, the Parent and the Company
and their successors and assigns. The Parent and the Company shall require any
successor to the Parent or the Company (whether direct or indirect, by merger,
purchase, consolidation or otherwise) to all or substantially all of the
business or assets of the Parent or the Company to assume expressly and agree to
perform the Parent or the Company's obligations under this Agreement. References
in this Agreement to the "Parent" and to the "Company" include the Parent and
5
the Company as defined above and any successor to their business or assets that
is obligated to perform this Agreement by operation or law or otherwise.
12. Entire Agreement. This Agreement sets forth the entire agreement of the
----------------
parties with respect to the termination of the Executive's employment on or
after a Control Change Date and supersedes all prior agreements, arrangements
and understandings with respect thereto between the Parent, the Company and the
Executive. No modification, amendment or termination of this Agreement, nor any
waiver of its provisions, shall be valid or enforceable unless in writing and
signed by both parties.
13. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be deemed an original and all of which
constitute an instrument.
14. Headings. The headings herein are for convenience only and will not
--------
affect the interpretation of this Agreement.
15. Governing Law. This Agreement will be governed by, and construed in
-------------
accordance with, the laws of the Commonwealth of Virginia (other than its choice
of law provisions to the extent that they would require the application of the
laws of another State).
WITNESS, the following signatures as of the indicated dates.
AMERICAN NATIONAL BANKSHARES INC.
Dated: June 15, 2004 By: /s/Xxxxxxx X. Xxxxxx
------------- --------------------------------------
Title: President & Chief Executive Officer
-----------------------------------
AMERICAN NATIONAL BANK AND TRUST COMPANY
Dated: June 15, 2004 By: /s/Xxxxxxx X. Xxxxxx
------------- --------------------------------------
Title: President & Chief Executive Officer
-----------------------------------
XXXX X. XXXXXXXXX
Dated: June 15, 2004 By: /s/Xxxx X. Xxxxxxxxx
------------- --------------------------------------
6
