Exhibit 10.3
CEO
AMENDED and RESTATED
EMPLOYMENT AGREEMENT
THIS AMENDED and
RESTATED EMPLOYMENT AGREEMENT, effective January 1, 2008, is
an amendment and restatement of the employment agreement made and
entered into as of the 6 th day of January 2003, by and
between Eastern Virginia Bankshares, Inc., a Virginia corporation,
(the “Corporation”), and Joe A. Shearin
(“Employee”). This amended and restated agreement
provides as follows:
RECITALS
WHEREAS, the Corporation is a bank
holding company engaged in the operation of banks; and
WHEREAS, Employee has been involved
in the management of the business and affairs of the Corporation
and, therefore, possesses managerial experience, knowledge, skills
and expertise in such type of business; and
WHEREAS, the employment of Employee
by the Corporation is in the best interests of the Corporation and
Employee; and
WHEREAS, the parties have mutually
agreed upon the terms and conditions of Employee’s continued
employment by the Corporation as hereinafter set forth;
TERMS OF
AGREEMENT
NOW, THEREFORE, for and in
consideration of the premises and of the mutual promises and
undertakings of the parties as hereinafter set forth, the parties
covenant and agree as follows:
Section 1. Employment .
(a) Employee shall be employed as President and Chief
Executive Officer of the Corporation and shall discharge such
duties and responsibilities of an executive nature as may be
assigned him by the Board of Directors, including general
responsibility for the business of the Corporation. Employee also
shall serve as President of Southside Bank, the Corporation’s
wholly-owned subsidiary. Employee shall be nominated by the Board
of Directors for election to the Corporation’s Board of
Directors as long as he is the Chief Executive Officer. He shall
also be a director of Southside Bank.
(b) References in this Agreement to
services rendered for the Corporation and compensation and benefits
payable or provided by the Corporation shall include services
rendered for and compensation and benefits payable or provided by
any Affiliate. References in this Agreement to the
“Corporation” also shall mean and refer to each
Affiliate for which Employee performs services. References in this
Agreement to “Affiliate” shall mean any business entity
that, directly or indirectly, through one or more intermediaries,
is controlled by the Corporation.
Section 2. Term and
Renewal . The initial term of this Agreement shall end on
December 31, 2005. However, on January 1, 2003 and each
day thereafter the term of this Agreement shall be renewed and
extended by one day unless Employee or the Corporation notifies the
other in writing that the term shall not be renewed and extended.
This Agreement shall terminate thirty-six (36) months after a
party gives notice not to renew and extend its term.
Section 3. Exclusive
Service . Employee shall devote his best efforts and full time
to rendering services on behalf of the Corporation in furtherance
of its best interests. Employee shall comply with all policies,
standards and regulations of the Corporation now or hereafter
promulgated, and shall perform his duties under this Agreement to
the best of his abilities and in accordance with standards of
conduct applicable to chief executive officers of banks.
Section 4. Salary .
(a) As compensation while employed hereunder, Employee, during
his faithful performance of this Agreement, in whatever capacity
rendered, shall receive an annual base salary of $285,000 payable
on such terms and in such installments as the parties may from time
to time mutually agree upon. The Board of Directors, in its
discretion, may increase Employee’s base salary during the
term of this Agreement.
(b) The Corporation shall withhold
state and federal income taxes, social security taxes and such
other payroll deductions as may from time to time be required by
law or agreed upon in writing by Employee and the Corporation. The
Corporation shall also withhold and remit to the proper party any
amounts agreed to in writing by the Corporation and Employee for
participation in any corporate sponsored benefit plans for which a
contribution is required.
(c) Except as otherwise expressly
set forth hereunder, no compensation shall be paid pursuant to this
Agreement in respect of any month or portion thereof subsequent to
any termination of Employee’s employment by the
Corporation.
Section 5. Corporate Benefit
Plans . Employee shall be entitled to participate in or become
a participant in any employee benefit plan maintained by the
Corporation for which he is or will become eligible on such terms
as the Board of Directors may, in its discretion, establish, modify
or otherwise change.
Section 6. Bonuses .
Employee shall receive only such bonuses as the Board of Directors,
in its discretion, decides to pay to Employee.
Section 7. Expense
Account . The Corporation shall reimburse Employee for
reasonable and customary business expenses incurred in the conduct
of the Corporation’s business. Such expenses will include
business meals, out-of-town lodging and travel expenses. Employee
agrees to timely submit records and receipts of reimbursable items
and agrees that the Corporation can adopt reasonable rules and
policies regarding such reimbursement. The Corporation agrees to
make prompt payment to Employee following receipt and verification
of such reports.
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Section 8. Personal and Sick
Leave . Employee shall be entitled to the same personal and
sick leave as the Board of Directors may from time to time
designate for all full-time employees of the
Corporation.
Section 9. Vacations .
Employee shall be entitled to twenty-five (25) week days of
vacation leave each year which shall be taken at such time or times
as may be approved by the Corporation and during which
Employee’s compensation hereunder shall continue to be
paid.
Section 10. Termination
. (a) Notwithstanding the termination of Employee’s
employment pursuant to any provision of this Agreement, the parties
shall be required to carry out any provisions of this Agreement
which contemplate performance by them subsequent to such
termination. In addition, no termination shall affect any liability
or other obligation of either party which shall have accrued prior
to such termination, including, but not limited to, any liability,
loss or damage on account of breach. No termination of employment
shall terminate the obligation of the Corporation to make payments
of any vested benefits provided hereunder or the obligations of
Employee under Sections 11,12 and 13.
(b) Employee’s employment
hereunder may be terminated by Employee upon thirty (30) days
written notice to the Corporation or at any time by mutual
agreement in writing.
(c) This Agreement shall terminate
upon death of Employee; provided, however, that in such event the
Corporation shall pay to the estate of Employee the compensation
including salary and accrued bonus, if any, which otherwise would
be payable to Employee through the end of the month in which his
death occurs.
(d)(1) The Corporation may terminate
Employee’s employment other than for “Cause”, as
defined in Section 10(e), at any time upon written notice to
Employee, which termination shall be effective immediately.
Employee may resign thirty (30) days after notice to the
Corporation for “Good Reason”, as hereafter defined. In
the event the Employee’s employment terminates pursuant to
this Section 10(d):
(i) Employee shall receive a monthly
amount equal to one-twelfth (1/12) his rate of annual base
salary in effect immediately preceding such termination in each
month for the remainder of the term of this Agreement at the times
such payments would have been made in accordance with
Section 4(a) provided, however, that if Employee is a
Specified Employee (as defined below) on his Separation from
Service (as defined below), payment shall be delayed in accordance
with item (iv) below.
(ii) The Corporation shall maintain
in full force and effect for the continued benefit of the Employee
for the remainder of the then current term of this Agreement all
employee health insurance programs in which the Employee was
entitled to participate immediately prior to such termination for
the maximum period for which Employee or any of his dependents are
entitled under to continue benefits under the Consolidated Omnibus
Reconciliation Act of 1985 (COBRA) with such premiums fully paid by
the Corporation; and
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(iii) The Employee will be entitled
to receive complete out-placement services, including job search
services, paid by the Corporation up to a total of $ 10,000.00. The
services will be provided by a recognized out-placement
organization selected by the Employee with the approval of the
Corporation (which approval will not be unreasonably withheld). The
services will be provided for up to two years after the date
Employee’s employment by the Corporation
terminates.
(iv) If Employee is a Specified
Employee on his Separation from Service, payments under this
section shall be delayed for six months. Such payments shall be
accumulated and paid with interest on the first day of the seventh
month following such Employee’s Separation from Service. The
amount of interest paid shall be based on the prime rate of
interest in effect on the first day of the month following his
Separation from Service as reported in the Wall Street Journal.
Notwithstanding anything in the Plan to the contrary, no payment
may be made which accelerates the time over which distributions
shall be made to the Participant (except as other permitted under
Code section 409A). Notwithstanding the preceding, the Company, in
its discretion, may accelerate distributions under the Plan in
accordance with each of the payment events contained in Treasury
Regulation section 1.409A-3(j)(4)(ii) through (xiv).
(v) Specified Employee means an
Employee who on the date of his Separation from Service is a Key
Employee of the Corporation provided that the Corporation is
publicly traded on an established securities market. The
Corporation shall determine the Employees who are Key Employees on
the Specified Employee Identification Date. Any Employee who is a
Key Employee on the Specified Employee Identification Date shall be
treated as a Key Employee for the entire 12 month period beginning
on the Specified Employee Effective Date. Key Employee means an
Employee who meets the requirements of Code section
416(i)(l)(A)(i), (ii), or (iii) applied in accordance with the
regulations thereunder and disregarding Code section 416(i)(5).
Compensation for purposes of identifying the Key Employee is
defined according to Treasury Regulation section 1.415(c)-2(a)
applied without regard to the safe harbor provided in Treasury
Regulation section 1.415(c)-2(d), the special timing rules provided
in Treasury Regulation section 1.415(c)-2(e), and the special rules
provided in Treasury Regulation section 1.415(c)-2(g). Separation
from Service means either: (i) the complete cessation of the
performance of services by the Employee for the Corporation for
whatever reason, or (ii) a diminished level of services where
the Employee is expected to perform services at a level equal to
20% or less of the average level of service provided during the
immediately preceding 36 months.
(2) Notwithstanding anything in this
Agreement to the contrary:
(i) If Employee breaches
Section 11 or 12, Employee will not thereafter be entitled to
receive any further compensation or benefits pursuant to this
Section 10(d); and
(ii) If, while he is receiving
payments under this Section 10(d), Employee engages in a
Competitive Business within the area described in
Section 12(i), such payments will cease and he will not
thereafter be entitled to receive any compensation or benefits
pursuant to this Section 10(d) even though such conduct occurs
after the covenants contained in Section 12 have
expired.
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(3) The Corporation shall not be
required to make payment of or provide any benefit under
Section 10(d)(l) to the extent such payment is prohibited by
the terms of the regulations presently found at 12 C.F.R. part 359
or to the extent that any other governmental approval of the
payment required by law is not received.
(4) Except as set forth in
Secti
