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.
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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.
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
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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.
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.
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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.
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,
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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.
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
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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
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.
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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.
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
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"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.
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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.
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3. Except as hereinabove amended the Employment Agreement and the
Executive Severance Agreement shall remain in full force and effect.
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.
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