Exhibit 10.2
EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into this 30th day of September, 2003, by and
between XXXXXXXXX COUNTY BANK, a West Virginia corporation (the "Bank") and
XXXXXXX X. LOVING, (the "Executive"), and joined in by Allegheny Bancshares,
Inc. ("Allegheny"), parent of "Bank" who agree as follows:
RECITALS:
A) The Bank considers it essential to the best interests of its
shareholders to xxxxxx the continuous employment of key management
personnel.
B) In this connection, the Bank recognizes that the possibility of a
change in Control may arise and that such possibility, and the
uncertainty which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of
the Bank and its shareholders.
C) Accordingly, the Bank's Board of Directors (the "Board") has
determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of management to
their assigned duties without distraction in circumstances arising
from the possibility of a change in Control. In particular, the Board
believes it important, should the Bank receive a proposal for transfer
of control, that the Executive be able to assess and advise the board
whether such proposal would be in the best interests of the Bank and
its shareholders and to take such other action regarding such proposal
as the Board might determine to be appropriate, without being
influenced by the uncertainties regarding the Executive's personal
situation.
D) In order to encourage the Executive to remain in the Bank's employ,
this Agreement sets forth the severance benefits which the Bank and
the Executive agree will provide both the Bank and the Executive
assurances of an orderly transition in the event of a Change in
Control under the circumstances described below. This Agreement shall
be in addition to the Employment Agreement ("Employment Agreement") of
even date herewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties hereto agree as follows:
1) Defined Terms. The definitions of capitalized terms used in this Agreement
are provided in the last section of this Agreement and, if not defined
there, are defined elsewhere in this Agreement.
2) Term of Agreement. This Agreement shall commence on the date hereof and
shall continue in effect until December 31, 2003; provided, however, that
commencing on January 1, 2004 and each January 1 thereafter, the term of
this Agreement shall automatically be extended for one (1) additional year
unless, at least ninety (90) days prior to such January 1st date, the Bank
or the Executive shall have given notice that this Agreement shall not be
extended: and provided further, that, notwithstanding the delivery
Page 1 of 13
of any such notice, this Agreement shall continue in effect for a period of
twenty-four (24) months after a Change in Control, if such change in
Control shall have occurred while this Agreement is in effect.
Notwithstanding anything in this Section 2 to the contrary, this Agreement
shall terminate if the Executive or the bank terminates the Executive's
employment prior to a Change in Control of the Bank.
3) Agreement to Provide Services; Right to Terminate.
A) Except as otherwise provided in paragraph (B) below and in the
Executive's Employment Agreement, the Bank or the Executive may
terminate the Executive's employment at any time following a Change in
Control, subject to the Bank's providing the benefits hereinafter
specified in accordance with the terms hereof.
B) In the event a Person makes an offer which, if accepted by the Bank
and subsequently consummated, would constitute a Change in Control,
the Executive agrees that he will not leave the employ of the Bank
(other than as a result of Disability or upon Retirement, as such
terms are hereinafter defined) and will render the services
contemplated in the recitals to this Agreement until such Change in
Control offer has been abandoned or terminated or a change in Control
has occurred.
4) Termination following change in Control.
A) If any of the events constituting a Change in Control of the Bank
shall have occurred, the Executive shall be entitled to the benefits
provided in Section 5 hereof upon the termination of the Executive's
employment with the bank within twenty-four (24) months after such
Change in Control, unless such termination is (i) because of the
Executive's death, (ii) by the Bank for Cause or Disability or (iii)
by the Executive other than for Good Reason.
B) Notice of Termination. Any purported termination by the Bank or by the
Executive following a Change in Control shall be communicated by
written Notice of Termination to the other party hereto.
5) Severance Upon Termination or During Disability; Other Agreements.
A) During any period following a Change in Control of the Bank that the
Executive fails to perform his duties as a result of incapacity due to
physical or mental illness, the Executive shall continue to receive
his base salary at the rate then in effect and any benefits or awards
under any Plans shall continue to accrue during such period, to the
extent not inconsistent with such Plans, until his employment is
terminated pursuant to and in accordance with Sections 4(B), 15(d) and
15(g) hereof. Thereafter, the Executive's benefits shall be determined
in accordance with the Plans then in effect.
B) If the Executive's employment is terminated for cause following a
Change in Control of the Bank, the Bank shall pay to the Executive his
base salary through the Date of Termination at the rate in effect just
prior to the time a Notice of Termination is given plus any benefits
or awards which pursuant to the terms of any Plans have been earned or
become payable, but which have not yet been paid to the Executive.
Page 2 of 13
Thereupon the Bank shall have no further obligations to the Executive
under this Agreement.
C) If, within twenty-four (24) months after a Change in Control of the
Bank has occurred, the Executive's employment by the Bank is
terminated (i) by the Bank other than for Cause or Disability or (ii)
by the Executive for Good Reason, then the Bank shall pay to the
Executive, no later than the fifth (5th) day following the Date of
Termination, without regard to any contrary provisions of any Plan,
the following:
a) The Executive's base salary through the Date of Termination
at the rate in effect just prior to the time a Notice of
Termination is given plus any benefits or awards which pursuant
to the terms of any Plans have been earned or become payable, but
which have not yet been paid to the Executive (including amounts
which previously had been deferred at the Executive's request);
b) An amount in cash equal to two and one-half (2 1/2) times
(a) the higher of (1) the Executive's annual base salary on the
Date of Termination or (2) the Executive's annual base salary in
effect immediately prior to the Change in Control, plus any
benefits or awards which pursuant to the terms of any Plans which
could have been earned and payable, but which have not yet been
paid to the Executive (including amounts which previously had
been deferred at the Executive's request). For purposes of
calculating benefits or awards, said amount shall be the average
amount (s) paid to Employee based upon the prior three (3) years
under said plans.
For the purposes of this Agreement, the term "base salary" shall
include any amounts deducted by the Bank with respect to the Executive or for
his account pursuant to Sections 125 and 401(k) of the Code.
D) If, within twenty-four (24) months after a Change in Control of the
Bank has occurred, the Executive's employment with the Bank is
terminated (i) by the Bank other than for Cause or Disability, or (ii)
by the executive for Good Reason, then the Bank shall maintain in full
force and effect, for the continued benefit of the Executive and his
dependents for a period terminating on the earliest of (a) 30 months
after the Date of Termination or (b) the commencement date of
equivalent benefits from a new employer, insured and self-insured
employee welfare benefit Plans in which the executive was entitled to
participate immediately prior to the date of Termination, provided
that the Executive's continued participation is possible under the
general terms and provisions of such plans (and any applicable funding
media) and he continues to pay an amount equal to the Executive's
regular contribution under such plans for such participation. If
neither 30 months after the Date of Termination the Executive has not
previously received, nor is then receiving, equivalent benefits from a
new employer, the Bank shall offer the Executive continuation of
coverage under COBRA as prescribed under Section 498OB of the Code. At
the expiration of such continuation coverage (or, if COBRA
continuation coverage is not applicable to the Plan, then upon the
expiration of the 30 month period beginning on the Termination date),
the Bank shall arrange, at its sole cost and expense, to enable the
Executive to convert him and his dependents' coverage under such plans
to individual policies and
Page 3 of 13
programs upon the same terms as employees of the bank may apply for
such conversions. In the event that the Executive's participation in
any such Plan is barred, the Bank, at its sole cost and expense, shall
arrange to have issued for the benefit of him and his dependents
individual policies of insurance providing benefits substantially
similar (on an after-tax basis) to those which the Executive otherwise
would have been entitled to receive under such Plans pursuant to this
paragraph (v) or, if such insurance is not available at a reasonable
cost to the Bank, the Bank shall otherwise provide the Executive and
his dependents with equivalent benefits (on an after-tax basis). The
Executive shall not be required to pay any premiums or other charges
in an amount greater than that which he would have paid in order to
participate in such Plans.
E) Except as specifically provided in paragraph (D) above, the amount of
any payment provided for in this Section 5 shall not be reduced,
offset or subject to recovery by the Bank by reason of any
compensation earned by the Executive as the result of employment by
another employer after the Date of Termination, or otherwise.
6) Successors; Binding Agreement.
A) The Bank will seek, by written request at least five (5) business days
prior to the time a Person becomes a Successor, to have such Person,
by agreement in form and substance satisfactory to the Executive,
assent to the fulfillment of the Bank's obligations under this
Agreement. Failure of such Person to furnish such assent by the later
of (i) three (3) business days prior to the time such Person becomes a
successor or (ii) two (2) business days after such Person receives a
written request to so assent shall constitute Good Reason for
termination by the Executive of his employment if a change in Control
of the Bank occurs or has occurred.
B) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal legal representatives, executors, administrators,
successors, heirs, distributes, devisees and delegates. If the
Executive should die while any amount would still be payable to him
hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of the Agreement to the Executive's devisee, delegate or other
designee or, if no such designee exists, to his estate.
C) For purposes of this Agreement, the Bank shall include any
subsidiaries and any corporation or other entity which is the
surviving or continuing entity in respect of any merger, consolidation
or form of business combination in which the Bank ceases to exist.
7) Fees and Expenses; Mitigation.
A) The Bank shall reimburse the Executive, on a current basis, for all
reasonable legal fees and related expenses incurred by him in
connection with the Agreement following a Change in Control of the
Bank, including without limitation, (i) all such fees and expenses, if
any, incurred in contesting or disputing any termination of the
Executive's employment or (ii) the Executive's seeking to obtain or
enforce any right or benefit provided by this Agreement, in each case
regardless of whether or not his claim is
Page 4 of 13
upheld by a court of competent jurisdiction; provided by this
Agreement, provided, however, the Executive shall be required to repay
any such amounts to the Bank to the extent that a court issues a final
and non-appealable order setting forth the determination that the
position taken by him was frivolous or advanced by him in bad faith.
B) The Executive shall not be required to mitigate the amount of any
payment the Bank becomes obligated to make to him in connection with
this Agreement, by seeking other employment or otherwise.
8) Taxes. Subject to the provisions of Section 5(e), all payments to be made
to the Executive under this Agreement will be subject to required
withholding of federal, state and local income and employment taxes.
9) Survival. The respective obligations of, and benefits afforded to, the Bank
and the Executive provided in Sections 5, 6(B), 7, 8, 12, and 14 of this
Agreement shall survive Termination of this Agreement.
10) Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid and addressed,
in the case of the Bank, to the address set forth on the first page of this
Agreement or, in the case of the undersigned employee, to the address set
forth below his signature, provided that all notices to the Bank shall be
directed to the attention of the Chairman of the Board of the Bank, with a
copy to the Secretary of the Bank, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
11) Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in a
writing signed by the Executive and the Chairman of the Board of the Bank.
No waiver by either party hereto at any time of any breach by the other
party hereto of, or of compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not expressly set forth in this agreement.
12) Governing Law and Venue. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
West Virginia. Venue for any proceeding related to the performance or
interpretation of this Agreement, or in any way arising out of this
Agreement, shall be either the state or federal courts for Xxxxxxxxx
County, West Virginia.
13) Validity. 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.
Page 5 of 13
14) Executive's Commitment. The Executive agrees that subsequent to his period
of employment with the Bank, the Executive will not at any time communicate
or disclose to any unauthorized person, without the written consent of the
Bank, any proprietary processes of the Bank or other confidential
information concerning its business, affairs, products, suppliers or
customers which, if disclosed, would have a material adverse effect upon
the business or operations of the Bank, taken as a whole; it being
understood, however, that the obligations under this Section 14 shall not
apply to the extent that the aforesaid matters (i) are disclosed in
circumstances where the Executive is legally required to do so or (ii)
become generally known to, and available for use by, the public otherwise
than by the Executive's wrongful act or omission.
15) 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 and
Employment Agreement of even date.
16) Enforceability. This agreement shall serve to replace any previous
Executive Severance Agreements, if any, between Bank and Executive and
shall continue in force, pursuant to the terms and conditions contained
herein, until changed, modified, or replaced.
17) Definitions.
A) Cause. Termination by the Bank of the Executive's employment for
"Cause" shall mean termination upon (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'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 purpose
(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.
B) Change in Control. A "change in Control" shall mean:
i) The acquisition by any individual, entity or group (within
the meaning of Section 13 (d) (3) or 14 (d) (2) of the
Securities and Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of rule 13d-3 promulgated under the
Page 6 of 13
Exchange Act) of fifty percent (50%) or more of either the
then outstanding shares of common stock of the Bank (the
"Outstanding Company Common Stock") or the combined voting
power of the then outstanding voting securities of the Bank
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however,
that in no event may the following acquisitions constitute a
Change in Control: (a) any acquisition by the Bank, (b) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Bank or any corporation
controlled by the Bank, (c) any acquisition by any
corporation pursuant to a reorganization, merger or
consolidation, the conditions described in clauses (a), (b)
and (c) of paragraph (iii) of this Section are satisfied, or
(d) any sale or other disposition of all or substantially
all of the assets of the Bank, if, following such sale or
other disposition, the conditions described in (1), (2) and
(3) paragraph (iv) of this Section are satisfied; or
ii) Individuals who, on September 30, 2003, constitute the Board
(the "Incumbent Directors") cease for any reason to
constitute at least a majority of the board, provided that
any person becoming a director subsequent to September 30,
2003, whose election or nomination for election was approved
by a vote of at least two-thirds (2/3) of the Incumbent
Directors then on the Board (either by specific vote or by
approval of the proxy statement of the Employer in which
such person is named as a nominee for director, without
objection to such nomination) shall be an Incumbent
Director; provided, however, that no individual elected or
nominated as a director of the employer initially as a
result of an actual or threatened election contest with
respect to directors or an other actual or threatened
solicitation of proxies or consents by or on behalf of any
person other than the Board shall be deemed to an Incumbent
Director.
iii) Approval by the shareholders of the Bank of a
reorganization, merger or consolidation, unless, in each
case following such reorganization, merger, or
consolidation, (a) more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger
or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals who were the beneficial
owners, respectively, of the Outstanding Company Common
Stock and reorganization, merger or consolidation in
substantially the same proportions as their ownership
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be,
(b) no Person (excluding the Bank, any employee benefit plan
(or related trust) of the Bank or a corporation resulting
from such reorganization, merger or consolidation)
beneficially owns,
Page 7 of 13
directly or indirectly, forty-nine percent (49%) or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such reorganization, merger
or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled
to vote generally in the election of directors, and (c) at
least a majority of the members of the board of directors of
the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the
time of the execution of the initial agreement providing for
such reorganization, merger or consolidation; or
iv) Approval by the shareholders of the Bank of (a) a complete
liquidation or dissolution of the Bank or (b) the sale or
other disposition of all or substantially all of the assets
of the Bank, other than to a corporation with respect to
which following such sale or other disposition, (1) more
than fifty percent (50%) of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned,
directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding company Common Stock and
Outstanding company Voting Securities immediately prior to
such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case
may be, (2) no Person (excluding the Bank and any employee
benefit plan (or related trust) of the Bank or such
corporation) beneficially owns, directly or indirectly,
forty-nine percent (49%) or more of, respectively, the then
outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in
the election of directors and (3) at least a majority of the
members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution
of the initial agreement or action of the Board providing
for such sale or other disposition of assets of the Bank.
C) Code. "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
D) Date of Termination. "Date of Termination" following a Change in
Control shall mean (i) if the Executive's employment is to be
terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full time basis during
such thirty (30) day period), (ii) if the Executive's employment is to
be terminated by the Bank for Cause or by him pursuant to Sections 6
or 15 (f) hereof or for any other good Reason, the date specified in
the Notice of Termination, (iii) if the Executive's employment is to
be terminated by the Bank for any reason other than Cause, the date
specified in the
Page 8 of 13
Notice of Termination, which in no event shall be a date earlier than
ninety (90) days after the date on which a Notice of Termination is
given, unless an earlier date has been expressly agreed to by the
Executive in writing either in advance of, or after, receiving such
Notice of Termination, or (iv) if the Executive's employment is
terminated on account of his death, the day after his death. In the
case of termination of the Executive's employment by the Bank for
Cause, if he has not previously expressly agreed in writing to the
termination, then within thirty (30) days after receipt by the
Executive of the Notice of Termination with respect thereto, he may
notify the Bank that a dispute exists concerning the termination, in
which event the Date of Termination shall be the date set either by
mutual written agreement of the parties or by such court having the
matter before it. During the pendency of any such dispute, the Bank
will continue to pay the Executive his full compensation in effect
just prior to the time the Notice of Termination is given and until
the dispute is resolved. However, if such court issues a final and
non-appealable order finding that the Bank had Cause to terminate the
Executive, then he must return all compensation paid to him after the
Date of Termination specified in the Notice of Termination previously
received by him.
E) Disability. Termination by the Bank of the Executive's employment
based on "Disability" shall mean termination because of the
Executive's absence from his duties with the Bank on a full time basis
for one hundred eighty (180) consecutive days as a result of his
incapacity due to physical or mental illness, unless within thirty
(30) days after Notice of Termination (as defined herein) is given to
the Executive following such absence, he shall have returned to the
full time performance of his duties.
F) Good Reason. Termination by the Executive of his employment for "Good
Reason" shall mean termination based on:
i) a determination by the Executive, in his reasonable
judgment, that there has been an adverse change in his
status or position(s) as an executive officer of the Bank as
in effect immediately prior to the change in Control,
including, without limitation, any adverse change in his
status or position as a result of a diminution in his duties
or responsibilities (other than, if applicable, any such
change directly attributable to the fact that the Bank is no
longer privately owned) or the assignment to him of any
duties or responsibilities which are inconsistent with such
status or position(s), or any removal of him from, or any
failure to reappoint or reelect him to, such positions (s)
(except in connection with the termination of his employment
for Cause or Disability or as a result of his death or by
him other than for Good Reason);
ii) a material reduction by the Bank in the Executive's base
salary as in effect immediately prior to the Change in
Control;
iii) the failure by the Bank to continue in effect any Plan (as
hereinafter defined) in which the Executive is participating
at the time of the Change in Control of the bank (or Plans
providing the Executive with at least substantially similar
benefits) other than as a result of the normal expiration of
any such Plan in accordance with its terms as in
Page 9 of 13
effect at the time of the Change in Control, or the taking
of any action, or the failure to act, by the Bank which
would adversely affect the Executive's continued
participation in any of such Plans on at least as favorable
a basis to the Executive as is the case on the date of the
Change in Control or which would materially reduce his
benefits in the future under such Plans or deprive him of
any material benefit enjoyed by him at the time of the
Change in Control;
iv) the failure by the bank to provide and credit the Executive
with the number of paid vacation days to which the Executive
is then entitled in accordance with the Bank's normal
vacation policy as in effect immediately prior to the Change
in Control;
v) The Bank's requiring the Executive to be based at any office
that is greater than thirty (30) miles from where his office
is located immediately prior to the Change in Control except
for required travel on the Bank's business to an extent
substantially consistent with the business travel
obligations which he undertook on behalf of the Bank prior
to the Change in Control;
vi) the failure by the Bank to obtain from any Successor (as
defined herein) the assent to this Agreement contemplated by
Section 6 hereof;
vii) Any refusal by the bank to continue to allow the Executive
to attend to matters or engage in activities not directly
related to the business of the Bank which, prior to the
Change in Control, the Executive was permitted by the Board
to attend to or engage in.
G) Notice of Termination. "Notice of Termination" shall mean a notice
which shall indicate the specific termination provision in this
Agreement relied upon.
H) Plan. "Plan" shall mean any compensation plan, or employee benefit
plan such as a pension, profit sharing, medical, disability, accident,
life insurance plan or any other plan, program or policy of the bank
intended to benefit employees.
I) Retirement. "Retirement" shall mean a termination of the Executive's
employment by the Executive on or after he has reached age sixty-five
(65) and has completed at least five (5) years of service for the Bank
(including any service for a predecessor of the Bank where such prior
service is recognized by the Bank for the purpose of awarding other
benefits).
J) Successor. "Successor" shall mean any Person that succeeds to, or has
the practical ability to control (either immediately or with the
passage of time), the Bank's business, directly by merger or
consolidation, or indirectly, by purchase of the outstanding Voting
Securities or otherwise.
Page 10 of 13
K) Years of Service. "Years of Service" shall be defined as a twelve (12)
consecutive month period in while the Executive has at least one
thousand (1,000) hours of service with the Bank.
IN WITNESS WHEREOF, the Bank and Allegheny has caused this instrument
to be signed in its name and on its behalf; and
WITNESS the following signatures and seals.
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
Page 11 of 13
MODIFICATION
EMPLOYMENT AGREEMENT
EXECUTIVE SEVERANCE AGREEMENT
Xxxxxxx X. Loving (Employee), and Xxxxxxxxx Community Bank (Bank) and
Allegheny Bancshares, Inc. hereby agree to modify that certain Employment
Agreement between the parties dated September 30, 2003 ("Employment Agreement")
and that certain Executive Severance Agreement between the parties also dated
September 30, 2003 ("Executive Severance Agreement") as hereinafter set forth.
1. Section 6 of the Employment Agreement is amended by adding the
following paragraph at the end:
Notwithstanding the above, if at the time of the Employee's
termination from employment the Employee is a "specified employee" as
defined under Section 409A of the Internal Code and regulations
thereunder, any cash "Termination Compensation" due Employee during
the first six months following the date of his termination shall be
accumulated and paid in a lump sum on the first day of the seventh
month following the termination of his employment. Except for these
cash payments, all other Termination Compensation shall be made in
accordance with the provisions of this Agreement.
2. Paragraph 5(C)(b) of the Executive Severance Agreement 5(C) is
amended by adding the following at its end:
Notwithstanding the payment date set forth in the preamble to
Paragraph 5(C), if Executive at the time of his termination is a
"specified employee" as defined under Section 409A of the Internal
Revenue Code and regulations thereunder, the cash severance benefit
shall be deferred and paid as of the first day of the seventh month
following Executive's termination.
3. Except as hereinabove amended the Employment Agreement and the
Executive Severance Agreement shall remain in full force and effect.
Page 12 of 13
In Witness Whereof, Employee, Bank and Allegheny Bancshares, Inc. has
caused this Modification to be executed as of the 28th day of December, 2006.
XXXXXXXXX COMMUNITY BANK
By:
------------------------------------
Its:
----------------------------------
ALLEGHENY BANCSHARES, INC.
By:
------------------------------------
Its:
-----------------------------------
----------------------------------------
XXXXXXX X. XXXXXX, XX.
Page 13 of 13
