EXHIBIT 10.1
EMPLOYMENT AND CONSULTATION AGREEMENT
This Agreement is made and entered into this 18Th day of April, 1998,
by and between VIRGINIA HEARTLAND BANK, a Virginia Banking Corporation (herein
referred to as "Bank"), Party of the First Part, and Xxxxxxx X. Xxxxx, (herein
referred to as "Young"), Party of the Second Part.
RECITAL
Young is currently Chief Executive Officer and Chairman of the Board of
Directors of Bank. Bank has simultaneously with the execution of this Employment
Agreement entered into Agreement and Plan of Reorganization and Plan and
Agreement of Merger with Second National Financial Corporation ("SNFC") (herein
collectively called Plan and Agreement"). Bank desires to continue to employ
Young as its Chief Executive Officer and Chairman of its Board of Directors.
Therefore, witnesseth this Agreement: That for and in consideration of
the mutual promises and undertaking and the benefits to ensure to the parties of
this Agreement, they agree as follows:
1. This Agreement shall take effect upon the effective date as defined
in the Plan and Agreement. Until the effective date, this Agreement shall have
no effect.
2. Bank employs Young on the terms and conditions hereafter stated to
perform the duties of Chief Executive Officer and Chairman of its Board of
Directors and to perform the duties of those officer with SNFC.
3. The term of this Agreement shall commence upon the implementation of
the Plan and Agreement as set forth in paragraph 1. and shall continue as
follows:
A. As Chief Executive Officer and Chairman of the Board of
SNFC until December 31, 2000 (such period from the
effective date through December 31, 2000 being referred to
herein as Young's "Term of Employment").
B. As CEO of Bank until December 31, 1999, and as Chairman of
the Board of Directors of Bank until December 31, 2000.
C. For the years 2001 and 2002, as a part time consultant
working approximately one thousand (1,000) hours per year
(such period being referred to herein as Young's "Term of
Consultation").
Young's employment with the Bank, either as Chief Executive Officer and
Chairman of the Board and Young's services as a consultant, without cause
prior to the aforesaid termination date of his employment, Bank shall pay
Young the balance of his salary or consulting fee (as applicable) for his
remaining term of employment and/or consultation that he is currently under,
but not exceeding his salary or consultation fee (as applicable) for one year.
For purposes of this Agreement, "cause" shall mean:
(i) Willful misconduct of Young in connection with the
performance of his duties, which Bank believes does,
or may result in, material harm to Bank.
(ii) Misappropriation of funds or property of Bank by
Young.
(iii) Dishonesty.
(iv) Failure of Young to perform the duties and
responsibilities required by this Agreement (other
than by reason of disability), or
(v) The conviction of Young of a felony or misdemeanor
involving moral turpitude.
4. Bank shall pay Young an annual salary as Chief Executive Officer
and Chairman of its Board of Directors of One Hundred Sixty five Thousand
Dollars ($165,000). Bank shall pay Young an annual fee as consultant for the
calendar years 2001 and 2002, of Seventy five Thousand Dollars ($75,000).
Bank and Young agree that Young's service as a consultant shall be that of an
independent contractor and not as a common law employee.
5. During the periods of Young's employment as Chief Executive Officer
and Chairman of the Board of Directors and as a consultant, Young shall not be
eligible for merit raises, participation in stock option programs or bonus plans
given or maintained by SNFC or either Virginia Heartland Bank or Second Bank of
Culpeper. During his term of employment, but not his term of consultation, Young
shall be eligible to participate in existing benefit plans of Bank, including,
but not limited to, the 401(K) and Profit Sharing Plans of Bank. This Agreement
shall have no effect on Young's vested retirement benefits under an Employment
Agreement of August 8, 1987 and amendment thereto of June 24, 1997.
6. Upon Young's voluntary termination of his employment prior to the
expiration of his term of employment as set forth in paragraph 3. A. hereof,
Young shall not directly or indirectly become affiliated as consultant,
employee, agent, member of Board of Directors or member of advisory Board of
Directors for any financial institution with offices located within the
Commonwealth of Virginia. Both Young and Bank agree that the Commonwealth of
Virginia is the anticipated service area of Bank. This covenant not to compete
shall continue for a period of two (2) years from the date Young voluntarily
terminates his employment with Bank.
7. If any provision of this Agreement or part hereof is determined to
be unenforceable for any reason whatsoever, it shall be severable from the
remainder of this Agreement and shall not invalidate or affect the other
provisions of this Agreement.
8. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Virginia.
9. This Agreement may not be varied, altered, modified or in any way
amended, except by an instrument in writing executed by the parties hereto or
their legal representatives.
10. This Agreement shall be binding upon Young and on the Bank, its
successors and assigns, effective on the date set forth in paragraph number 1.
hereof. Bank will require any successor to all or substantially all of the
business and or assets of Bank to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that Bank would be
required to perform if no such succession had taken place.
11. This Agreement constitutes the entire Agreement of the parties
with respect to the matters addressed herein and its supercedes all other
Agreements and understandings, both written and oral, express or implies, with
respect to the subject matter of the Agreement.
Witness the following signatures and seals.
By: _________________________________(SEAL)
Xxxxxx X. Xxxxxxxx, Xx.
Secretary
_________________________________(SEAL)
Xxxxxxx X. Xxxxx
