Exhibit 10.21
AMENDED EMPLOYMENT
AGREEMENT
THIS AMENDED EMPLOYMENT AGREEMENT
(the “Amended Agreement”) is entered into as of the 1st
day of January, 2007, by and between Heritage Bankshares, Inc., a
Virginia corporation (hereinafter referred to as
“Bankshares”), Heritage Bank, a Virginia corporation
(the “Bank”), and Leigh C. Keogh (the
“Executive”).
RECITALS
Bankshares and Executive previously
entered into an employment agreement as of May 5, 2005
(the “Employment Agreement”); and
Bankshares and Executive desire to
amend the Employment Agreement pursuant to the terms of this
Amended Agreement.
NOW, THEREFORE, in consideration of
the mutual promises of the parties hereto and for other good and
valuable consideration, the receipt and adequacy whereof each party
hereby acknowledges, Bankshares and Executive hereby agree as
follows:
1. DEFINITIONS : Except as
otherwise expressly provided in this Amended Agreement, the
following terms shall have the following meanings for all purposes
of this Amended Agreement:
(a) Accounting Firm means
Bankshares’ independent accounting firm immediately prior to
a Change of Control.
(b) Base Salary means the
annual compensation specified in Section 4 below.
(c) Board means the Board of
Directors of Bankshares.
(d) Cause means any of the
reasons listed in Section 7(d) below for which this Amended
Agreement may be terminated or Executive may be discharged prior to
the end of the Term hereof.
(e) Change of Control means a
change in the ownership or effective control of Bankshares or in
the ownership of a substantial portion of the assets of Bankshares
and shall be deemed to have occurred upon the occurrence of any of
the following events.
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(1) The acquisition by any
“person” or “group” (as defined in or
pursuant to Sections 13(d) and 14(d) of the Exchange Act) (other
than Bankshares, any Subsidiary or any Bankshares or
Subsidiary’s employee benefit plan), directly or indirectly,
as “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act) of securities of Bankshares representing
thirty-five percent (35%) or more of either the then
outstanding shares or the combined voting power of the then
outstanding securities of Bankshares, but excluding for this
purpose any such acquisition by any corporation with respect to
which, following the acquisition, the outstanding common stock of
Bankshares immediately prior thereto continues to represent (either
by remaining outstanding or being converted into common stock of
the surviving entity or a parent or affiliate thereof) more than
fifty percent (50%) of the outstanding common stock of
Bankshares or such surviving entity or a parent or affiliate
thereof outstanding immediately after the acquisition;
(2) Either a majority of the
directors of Bankshares elected at Bankshares’ annual
stockholders meeting shall have been nominated for election other
than by or at the direction of the “incumbent
directors” of Bankshares, or the “incumbent
directors” shall cease to constitute a majority of the
directors of Bankshares. The term “incumbent director”
shall mean any director who was a director of Bankshares on
April 27, 2005 and any individual who becomes a director of
Bankshares subsequent to April 27, 2005 and who is elected or
nominated by or at the direction of at least two-thirds of the then
incumbent directors;
(3) The shareholders of Bankshares
approve (x) a merger, consolidation or other business
combination of Bankshares with any other “person” or
“group” (as defined in or pursuant to Sections 13(d)
and 14(d) of the 1934 Act) or affiliate thereof, other than a
merger or consolidation that would result in the outstanding common
stock of Bankshares immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into common stock of the surviving entity or a parent or affiliate
thereof) more than fifty percent (50%) of the outstanding
common stock of Bankshares or such surviving entity or a parent or
affiliate thereof outstanding immediately after such merger,
consolidation or other business combination, or (y) a plan of
complete liquidation of Bankshares or an agreement for the sale or
disposition by Bankshares of all or substantially all of
Bankshares’ assets;
(4) A Change of Control as defined
in Section 280G of the Code; or
(5) Any other event or circumstance
which is not covered by the foregoing subsections but which the
Board determines to affect control of Bankshares and with respect
to which the Board adopts a resolution that the event or
circumstance constitutes a Change of Control for purposes of this
Amended Agreement.
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The date of a Change of Control described in
this Section 1(e) is the date on which an event described
above in this Section 1(e) occurs.
(f) Code means the Internal
Revenue Code of 1986, as amended.
(g) Exchange Act means the
Securities Exchange Act of 1934, as amended.
(h) Good reason means the
occurrence of any of the conditions listed in Section 7(f)
below which is followed by the resignation of Executive within
twelve (12) months after such occurrence.
(i) Resignation for good
reason means resignation by Executive in accordance with the
provisions of Section 7(f) below.
(j) Restricted Period means a
period ending on the later of (1) twelve (12) months
after Executive’s resignation or other voluntary termination
of employment pursuant to Section 7(c) below or
Executive’s termination for cause pursuant to
Section 7(d) below; or (2) the end of any period during
which Executive’s Base Salary is continued after his
termination of employment with Bankshares.
(k) Severance pay means an
amount paid to Executive pursuant to Section 8(b) in the event
he is terminated without cause following a Change of Control or
resigns for good reason following a Change of Control.
(l) Subsidiary means any
corporation at least a majority of the stock of which is owned by
Bankshares, either directly or through one or more other
Subsidiaries, and any other entity controlled, directly or
indirectly, by Bankshares or any other Subsidiary.
(m) Term means the term of
this Amended Agreement specified in Section 3 below, including
the initial term, all renewal terms and any extended term pursuant
to Section 8(a) below.
(n) Termination for cause
means discharge of Executive prior to the end of the Term in
accordance with the provisions of Section 7(d) below for any
of the reasons listed therein.
(o) Termination without cause
means discharge of Executive prior to the end of the Term in
accordance with the provisions of Section 7(e)
below.
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2. EMPLOYMENT :
(a) During the Term, Executive shall
report to the Chief Executive Officer of Bankshares or such
executive officer of Bankshares or the Bank as Bankshares’
Chief Executive Officer shall designate, and shall perform such
services for Bankshares and/or one or more Subsidiaries as may be
assigned to Executive by the Chief Executive Officer of Bankshares,
his designate, or the Board of Directors of Bankshares or the Bank
from time to time upon the terms and conditions hereinafter set
forth. Executive agrees that, during the Term of Executive’s
employment under this Amended Agreement, he will devote his full
business time and energy to the business, affairs and interests of
Bankshares and the Bank and serve diligently and to the best of his
ability. Executive may serve as a director, trustee or officer of
other corporations and entities, including without limitation
charitable organizations, and engage in other activities to the
extent those activities and services do not inhibit the performance
of Executive’s duties hereunder or conflict with the business
of Bankshares or any Subsidiary or any other affiliate of
Bankshares or a Subsidiary.
(b) References in this Amended
Agreement to services rendered for Bankshares and compensation,
benefits, indemnification and liability insurance payable or
provided by Bankshares shall include services rendered for and
compensation, benefits, indemnification and liability insurance
payable or provided by the Bank and any other Subsidiary, and
references in this Amended Agreement to “Bankshares”
shall mean and refer to the Bank and each other
“Subsidiary” for which Executive performs services, as
the context may require.
3. TERM : The initial term of
this Amended Agreement shall be for the period beginning on
January 1, 2007 and ending on December 31, 2008, and this
Amended Agreement shall continue after the initial term for
successive renewal terms of two (2) years each, unless at
least three (3) months prior to the end of the initial term or
any renewal term, either Executive or Bankshares delivers to the
other written notice that this Amended Agreement shall terminate at
the expiration of the then-existing term, subject, however, to
earlier termination in the manner provided in this Amended
Agreement. Notwithstanding the preceding sentence, the term of this
Amended Agreement shall be extended pursuant to Section 8(a)
below upon the occurrence of a Change of Control.
4. BASE SALARY : Executive
shall receive Base Salary at the rate in effect for Executive as of
January 1, 2007, payable in substantially equal installments
no less frequently than monthly (less any amounts withheld as
required by law or pursuant to any benefits plan). At least
annually, Bankshares shall review and, in its sole discretion, may
increase Executive’s Base Salary. If the Executive’s
Base Salary is increased by Bankshares, such increased Base Salary
shall then constitute the Base Salary for all purposes of this
Amended Agreement and such Base Salary shall not be reduced during
the Term of this Amended Agreement.
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5. EMPLOYEE BENEFITS AND
REIMBURSEMENTS : During the Term of employment under this
Amended Agreement, Executive shall participate or be entitled to
participate in any pension, group insurance, hospitalization,
incentive or deferred compensation and other benefit or
compensation plans of Bankshares presently in effect or hereafter
adopted and generally available to all Bank employees. Executive
shall also be entitled to any additional compensation, benefits or
perquisites, if any, that may be provided specifically to or for
Executive by Bankshares from time to time. During the Term, to the
extent provided by corporate policies, Executive shall be
reimbursed for expenditures (including travel, entertainment,
parking and business meetings) made in pursuance and furtherance of
the business and good will of Bankshares.
6. INDEMNIFICATION
:
(a) Bankshares and each bank
Subsidiary for which Executive provides services shall indemnify
and hold Executive harmless from and against all liability and
expense resulting from (1) all acts or omissions of Executive
while acting in the capacity of a director, officer, trustee, or
fiduciary and/or employee of Bankshares and its Subsidiaries during
Executive’s employment as such director, officer, and/or
employee and (2) acts or omissions of Bankshares and its
Subsidiaries occurring or alleged to have occurred during or prior
to Executive’s employment, on terms and conditions no less
favorable to Executive than the terms and conditions providing for
indemnification of officers and directors under the Articles or
Certificate of Incorporation and the Bylaws of Bankshares and each
such Subsidiary as in effect on the date of this Amended Agreement.
If the Articles or Certificate of Incorporation or the Bylaws of
Bankshares and/or each such Subsidiary are hereafter amended to
provide officers and directors with broader or greater rights of
indemnification, Bankshares and each such Subsidiary acknowledge
and agree that Executive shall be indemnified and held harmless
under such broader or greater rights of indemnification and,
further, that in no event shall Executive be entitled to any lesser
rights of indemnification than would be available to Executive
under such Articles or Certificate of Incorporation and/or Bylaws
on the date of this Amended Agreement.
(b) To the maximum extent permitted
by applicable law as in effect on the date of this Amended
Agreement and without abridging or limiting the right of
indemnification provided under Section 6(a) above, Bankshares
and each bank Subsidiary for which Executive provides services
shall indemnify and hold Executive harmless from and against all
liability and expense resulting from (1) all acts or omissions
of Executive while acting in the capacity of a director, officer,
trustee, fiduciary and/or employee of Bankshares and its
Subsidiaries during Executive’s employment as such officer
and director and (2) acts or omissions of
Bankshares
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and its Subsidiaries occurring or alleged to
have occurred during or prior to Executive’s employment. If
applicable laws relating to the indemnification of officers and
directors (including, without limitation, the rules and regulations
of the appropriate primary federal or state banking agency for
Bankshares and each bank Subsidiary for which Executive provides
services) are hereafter amended to provide officers and directors
with broader or greater rights of indemnification than is provided
under Section 6(a) above or this Section 6(b), Bankshares
and each such Subsidiary acknowledge and agree that Executive shall
be indemnified and held harmless under such broader or greater
rights of indemnification and, further, that in no event shall
Executive be entitled to any lesser rights of indemnification than
are presently available to Executive under Section 6(a) above
or this Section 6(b) on the date of this Amended Agreement.
Bankshares and Executive further acknowledge and agree that it is
the intention of the parties that Executive shall be entitled to
indemnification as set forth under Section 6(a) above and this
Section 6(b) to the greatest extent possible under either the
Articles or Certificate of Incorporation and the Bylaws of
Bankshares and each bank Subsidiary for which Executive performs
services or applicable law as in effect on the date of this Amended
Agreement or as hereafter amended from time to time to provide
broader or greater rights of indemnification.
(c) Bankshares shall carry Directors
and Officers Liability Insurance in such amounts as the Board in
its discretion deems appropriate, and any payments made under such
policy to Executive or on Executive’s behalf shall be offset
against the indemnification obligation set forth in
Section 6(a) and Section 6(b) above. Notwithstanding the
foregoing, the indemnification provided by Section 6(a) and
Section 6(b) above shall not apply, and Executive shall not be
indemnified, with respect to any acts or omissions which constitute
wanton or willful misconduct or willful gross
negligence.
(d) The indemnity obligation set
forth in this Section 6 shall be subject to the prohibitions
and limitations established by applicable law and as set forth in
applicable regulations adopted by any federal or state bank
regulatory agency having jurisdiction over Bankshares or any bank
Subsidiary.
(e) The provisions of this
Section 6 shall survive termination of this Amended
Agreement.
7. TERMINATION :
Executive’s employment under this Amended Agreement may be
terminated under any of the following conditions.
(a) Disability : If Executive
is unable to perform the essential functions of Executive’s
job on a full-time basis for a period of six (6) consecutive
months (or for such shorter period ending with Executive’s
eligibility for and receipt of long-term disability
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benefits under an insurance po
