Exhibit 10.1
EMPLOYMENT AGREEMENT
This Agreement is made as of the 30th day of September, 2003, by and
between XXXXXXXXX COUNTY BANK, a West Virginia corporation (the "Bank"), XXXXXXX
X. LOVING ("Employee"), and joined in by Allegheny Bancshares, Inc.
("Allegheny"), parent of "Bank"..
RECITALS
The Bank desires to employ Employee, and Employee desires to provide
services to the Bank, upon the terms and conditions hereinafter set forth.
WITNESSETH:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1) Employment
a) The Bank hereby employs Employee and Employee hereby accepts such
employment. During the term of Employee's employment under this
Agreement (the "Employment Term"), Employee shall serve as the Chief
Executive Officer of the Bank, and shall perform such duties as are
reasonably requested from time to time by the Board of Directors of
the Bank.
b) Employee represents to the Bank that he is not subject, or a party, to
any employment agreement, non-competition covenant, non-disclosure
agreement or any other agreement, covenant, understanding or
restriction of any nature which would prohibit Employee from executing
this Agreement and performing fully his duties and responsibilities
hereunder, or which would in any manner, directly or indirectly, limit
or affect the duties and responsibilities which may now or in the
future be assigned to Employee by the Bank.
2) Performance. Employee shall devote his entire business efforts to the
performance of his duties hereunder; provided, however, that Employee may
engage in any of the following activities so long as they do not interfere
with the performance of his duties hereunder: (i) serve on such civic,
charitable or trade association boards or committees; and (ii) manage his
personal investments.
3) Term. The Employment Term shall begin on the date hereof and shall
continue until September 30, 2006 ("Anniversary Date") and shall
automatically renew for additional three (3) year periods, unless
terminated prior thereto in accordance with Sections 5 or 6 of this
agreement or either party gives notice, at least 90 days prior to the
Anniversary Date, of their intent not to renew this agreement.
2
Exhibit 10.1
4) Compensation for Employment
a) The basic annual rate of compensation of Employee for his employment
services during the Employment term shall be One Hundred Twenty-Five
Thousand and no/100 Dollars ($125,000.00) (such amount, as adjusted
in accordance with this Section 4(a), is referred to herein as the
"Salary"), which the Bank shall pay to Employee in equal
installments in accordance with the normal payroll policies of the
Bank. The Salary may be adjusted upward on an annual basis as the
Board of Directors may approve, in its sole discretion, but the
Salary shall not be decreased.
b) During the Employment Term, the Bank shall reimburse Employee for
reasonable expenses incurred in connection with the performance of
his services hereunder and the Bank shall provide Employee with
fringe benefits that are substantially equivalent, but not limited
to the fringe benefits specified in "Exhibit A" hereto (the "Fringe
Benefits").
5) Termination Without Compensation
a) Total Disability. If employee becomes totally disabled (as
defined below), the Bank may terminate the
Employment Term by notice to the Employee, and as of the
termination date, defined as the date Employee is eligible
for Long Term Disability coverages under bank's plan, the Bank
shall have no further liability or obligation to Employee
hereunder except as follow: Employee shall receive: (i) any
unpaid Salary, Fringe Benefits and bonuses that have accrued
through the date of termination; and (ii) whatever benefits that
he may be entitled to receive under any then existing disability
benefit plans of the Bank, including any such plans included in the
Fringe Benefits. For the purposes hereof, Employee shall be
deemed to be "totally disabled" if Employee is considered
totally disabled under any group disability plan maintained
by the Bank and in effect at that time, or in the absence of any
such plan, under applicable Social Security regulations. In
the event of any dispute under this Section 5(a), Employee
shall submit to a physical examination by a licensed physician
mutually satisfactory to the Bank and Employee, the cost of such
examination to be paid by the Bank, and the determination of such
physician shall be conclusive.
b) Death. If Employee dies, this Employment Agreement shall terminate
on the date of death, and thereafter the Bank shall not have any
further liability or obligation to Employee, his executors,
administrators, heirs, assigns or any other person claiming under
or through him, except that Employee's estate shall receive any
unpaid Salary, Fringe Benefits and bonuses that have accrued
through the date of termination.
3
Exhibit 10.1
c) Cause. The Bank may terminate the Employment Term for "cause"
by giving Employee notice of the termination date (which may be
immediate), and as of the termination date, the Bank shall not
have any further liability or obligation to Employee, except that
Employee shall receive any unpaid Salary and fringe Benefits that
have accrued through the date of termination. For purposes of
this Agreement, "cause" shall mean: (i) the failure of Employee
to observe or perform (other than by reason of illness,
injury or incapacity) any of the material terms or provisions
of this Agreement; (ii) the failure of Employee to comply fully
with the lawful directives of the Board of Directors of the Bank
(the "Board"); (iii) willful misconduct; (iv) material neglect
of the business of the Bank; (v) conviction of a felony
or other crime involving moral turpitude; (vi) misappropriation
of funds; or (vii) habitual insobriety or drug addiction. In the
case of a termination for "cause," the notice of termination
shall specify the basis for the Bank's determination of "cause".
Any act or failure to act based upon authority given
pursuant to a resolution duly adopted by the Board or based
upon the advice of counsel for the Bank shall be conclusively
presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Bank. It is also
expressly understood that the Executive's attention to
matters not directly related to the business of the Bank shall
not provide a basis for termination for Cause. Notwithstanding
the foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the
affirmative vote of a majority of the Board at a meeting of the
Board called and held for such purposes (after reasonable
notice to the Executive and an opportunity for him, together with
his counsel, to be heard before the Board), finding that in the
good faith opinion of the board the Executive was guilty of
the conduct set forth above and specifying the particulars thereof
in detail.
d) Resignation. Employee shall have the right to terminate the
Employment Term at any time by giving the Bank 90 days notice of
the termination date. Under such circumstances, the Bank shall not
have any further liability or obligation to Employee, except that
Employee shall receive any unpaid Salary and Fringe Benefits that
have accrued through the date of termination.
4
Exhibit 10.1
6) Termination With Compensation. The Bank shall have the right to
terminate the Employment term without cause at any time by giving
Employee 60 days notice of the termination date. Under such
circumstances, the Bank shall continue to pay to Employee based upon
the Salary at time of notice of termination earned in the prior year
and provide to Employee the Fringe Benefits which it is permitted by
law to provide through the earlier of: (i) the end of the Employment
Term; or (ii) twelve (12) months after such date of termination. Such
period is referred to herein as the "Pay-Out Period" and the Salary and
the Fringe Benefits to be provided under this Section 6 are referred to
herein as the "Termination Compensation". As of the termination date,
the Bank shall not have any further liability or obligation to Employee
other than to continue providing the Termination Compensation for the
period specified in this Section 6. Employee shall not be entitled to
any Termination Compensation unless Employee executes and delivers to
the Bank after a notice of termination a release in a form satisfactory
to the Bank in its reasonable discretion by which Employee releases the
Bank from any obligations and liabilities of any type whatsoever,
except for the Bank's obligations with respect to the Termination
Compensation. The parties hereto acknowledge that the Termination
Compensation to be provided under this Section 6 is to be provided in
consideration for the above-specified release.
7) Agreement Not to Compete.
a) During the period (the "Restricted Period") beginning on the
expiration of the term of this Agreement or the termination of
Employee's employment hereunder and in doing on the second
anniversary of the date of such termination of employment
hereunder, employee shall not, directly or indirectly, own,
manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of,
or be connected as a partner, principal, member, manager,
agent, representative, consultant or otherwise with or use or
permit his name to be used in connection with, any business or
enterprise engaged directly or indirectly in competition with the
business ("Business") conducted by the Bank at any time during
such period within the Counties of Pendleton, Grant, Hardy, and
Pocahontas, West Virginia, and any other County the Bank
may have an office of operation, regardless of state
("Restricted Area"). It is recognized by Employee and the Bank
that the Business is and is expected to continue to be conducted
throughout the Restricted Area and that more narrow geographical
limitations of any nature on this non-competition covenant (and
the non-solicitation covenant set forth in Section 7(b)
are therefore not appropriate. The foregoing restriction
shall not be construed to prohibit the ownership by Employee
as a passive investment of not more than one percent of any class
of securities of any corporation which is engaged in any of the
foregoing businesses having a class of securities
registered pursuant to the Securities Exchange Act of 1934.
5
Exhibit 10.1
b) During the Restricted Period, Employee shall not, either directly
or indirectly, (i) call on or solicit any person who or which has
been a customer of the Bank with respect to the activities
prohibited by Section 7 (a); or (ii) solicit the employment of
any person who is employed by the Bank during such period on a
full or part-time basis.
c) Employee acknowledges that the restrictions contained in this
Section 7 are reasonable and necessary to protect the legitimate
interests of the Bank, and that any violation will result in
irreparable injury to the Bank.
d) The Bank shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual
damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of this
Section 7 should ever be adjudicated to exceed the time,
geographic, product or service, or other limitations permitted
by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, product or service, or other
limitations permitted by applicable law.
8) Confidential Information.
a) Employee has had and will have possession of or access to
confidential information relating to the business of the Bank,
including writings, processes, reports, manuals, financial
information, business plans, customer lists, the identity of
or other facts relating to prospective customers, arrangements
with customers, computer programs, or other material
embodying trade secrets, customer or product
information or technical or business information of the
bank. All such information, other than any information that
is in the public domain through no act or omission of
Employee or which he is authorized to disclose, is referred
to collectively as the "Bank Information". During and after
the Employment Term, Employee shall not: (i) use or exploit
in any manner the Bank information for himself or any person,
partnership, association, corporation or other entity other
than the Bank; (ii) remove any Bank information, or any
reproduction thereof, from the possession or control of the
bank; or (iii) treat Bank information otherwise than in a
confidential manner.
b) All Bank information developed, created or maintained by
Employee, alone or with others while employed by the Bank, and
all Bank information maintained by Employee thereafter, shall
remain at all times the exclusive property of the Bank. Employee
shall return to the Bank all Bank information, and reproductions
thereof, whether prepared by him or others, that are in his
possession immediately upon request and in any event upon the
completion of his employment by the Bank.
6
Exhibit 10.1
9) Remedies. Employee expressly acknowledges that the remedy of law for
any breach of Sections 7 and 8 will be inadequate and that upon any
such breach or threatened breach, the Bank shall be entitled as a
matter of right to injunctive relief in any court of competent
jurisdiction, in equity or otherwise, and to enforce the specific
performance of Employee's obligations under these provisions without
the necessity of proving actual damage to the Bank or the inadequacy of
a legal remedy. The rights conferred upon the Bank by the preceding
sentence shall not be exclusive of, but shall be in addition to, any
other rights or remedies which the Bank may have at law, in equity or
otherwise.
10) General.
a) Governing Law. The terms of this Agreement shall be governed by the
laws of the State of West Virginia (exclusive of its provisions
regarding conflicts of laws).
b) Bank. For purposes of Sections 7, 8, 9 and 10, the term "Bank"
shall be deemed to include any incorporated or unincorporated
entities that are controlled by, or under common control with,
directly or indirectly, the Bank through ownership, agreement
or otherwise.
c) Binding Effect. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit and be enforceable
by the respective heirs, representatives, successors (including
any successor as a result of a merger or similar reorganization)
and assigns of the parties hereto, except that the duties and
responsibilities of Employee hereunder are of a personal nature
and shall not be assignable in whole or in part by Employee.
d) Notices. All notices that are required or permitted hereunder shall
be in writing and shall be sufficient if personally delivered or
sent by mail, facsimile message or federal express or other
national, recognized overnight delivery service. Any notices
shall be deemed given upon the earlier of the date when received,
or the third day after the date when sent by registered or
certified mail or the day after the date when sent by Federal
express or other national, recognized overnight delivery service
to, the address or fax number is changed by notice to the other
party hereto, given in accordance with the foregoing notice
procedures:
If to the Bank:
Xxxxxxxxx County Bank
XX Xxx 000
Xxxxxxxx, XX 00000
Attn: Chairman of the Board
7
Exhibit 10.1
With a copy to:
Xxxxxxx Xxxxxx
Xxxxxxx Xxxxx Associates, LLC
X.X. Xxx 000 Xxxxxxxxxx, XX 00000
Fax: (000) 000-0000
If to Employee:
Xxxxxxx X. Loving
X.X. Xxx 000
Xxxxxxxx, XX 00000
With a copy to:
---------------------
---------------------
Fax:__________________
Attn:__________________
e) Entire Agreement; Modification. This Agreement and the Executive
Severance Agreement of even date herewith, constitutes the entire
agreement of the parties hereto with respect to the subject matter
hereof and may not be modified or amended in any way except in
writing by the parties hereto. In the event that terms in this
Agreement conflict with the Executive Severance Agreement, the
term(s) shall be interrupted most favorable to Employee.
f) Duration. Notwithstanding the termination of the Employment Term
and of Employee's employment by the Bank, this Agreement shall
continue to bind the parties for so long as any obligations remain
under the terms of this Agreement.
g) Waiver. No waiver of any breach of this Agreement shall be construed
to be a waiver as to succeeding breaches.
h) Severability. If any provision of this Agreement or application
thereof to anyone under any circumstances is adjucated to be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect any other provisions or
applications of this Agreement which can be given effect without
the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
i) Joinder. Allegheny Bancshares, Inc. joins into this agreement as
evidence and consent and agrees to employ employee as it's Executive
Vice President and CEO without additional pay and on the terms and
conditions herein.
8
Exhibit 10.1
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement as of the day and year first written
above.
Xxxxxxxxx County Bank,
a West Virginia Corporation
By ______________________________
President
By ______________________________
Chairman of the Board
Allegheny Bancshares, Inc.
By: _____________________________
President
By: _____________________________
Chairman of the Board
By: _____________________________
Executive Xxxxxxx X. Xxxxxx, Xx.,
CLBB
9
Exhibit 10.1
"EXHIBIT A"
FRINGE BENEFITS
A) Term Life, Disability, and Health insurance, including family coverage in
amounts in accordance with Bank's policies.
B) Paid holidays in accordance with the Bank's policies.
C) Paid vacation in accordance with Bank's policies..
D) Participation, when eligible, in Bank's 401K or other retirement plans.
E) Participation in any Bonus Plan, if any, adopted by the Bank in accordance
with its terms and conditions.
F) Bank will provide automobile for employee's use. Employee will be taxed,
according to IRS rules and regulations, according to economic benefit
provided.
