Exhibit 10.35
EMPLOYMENT
AGREEMENT
This Employment Agreement ,
(the “ Agreement ”) made this the
day of
,
2006, by and between The Bank Of Hampton Roads , a banking
corporation organized under the laws of the Commonwealth of
Virginia (the “ Bank ” or “
Employer ”), with a principal address of 999 Waterside
Drive, Suite 200, Norfolk, Virginia (23510), and Lorelle Fritsch
(the “ Officer ”), with an address of 1026
Copperstone Circle in the City/County of Chesapeake, in the State
of Virginia (23320)( Zip Code ).
W I T N E S S E T
H:
WHEREAS , the Officer currently is rendering or desires
to render valuable services to the Employer and it is the desire of
the Employer to have the benefit of the Officer’s continued
and future loyalty, service and counsel; and
WHEREAS , the Officer wishes to continue or become in
the employ of the Employer.
NOW , THEREFORE , in consideration of the
mutual covenants and agreements herein set forth, the parties
covenant and agree as follows;
1. Employment :
The Employer agrees to continue to or employ the Officer to perform
services for the Employer and the Officer agrees to continue to or
serve the Employer upon the terms and conditions herein provided.
The Officer agrees to perform such managerial duties and
responsibilities as shall be assigned to him or her by the Chief
Executive Officer of the Employer, which duties and
responsibilities, if Officer is presently employed by Employer,
shall be substantially those functions of the Officer on the date
of this Agreement and the commencement date hereof. The Officer
shall devote his or her time and attention on a full-time basis to
the discharge of the duties undertaken by him or her
hereunder.
2. Terms And
Compensation :
(a) Term of
Agreement. The term (the “ Term ”) of
this Agreement shall commence on that date (the “
Commencement Date ”) upon which the Compensation
Committee of the Bank’s Board of Directors approves the
Agreement or, if previously authorized by the Bank’s Board of
Directors, the date upon which Employer’s Chief Executive
Officer acknowledges and accepts this Agreement for the Bank.
Thereafter, the Agreement shall continue until the first to occur
of (i) except as otherwise provided in Section 3 hereof,
the end of the sixtieth (60 th ) consecutive month
following the Commencement Date, (ii) the Officer’s
death, or (iii) except as provided in Paragraph (d) of
this Section 2, the Officer’s disability.
Notwithstanding the foregoing, however, in the event the Officer is
not informed by the Bank, in writing, prior to the last day of the
sixtieth (60 th ) consecutive month
following the Commencement Date of employment, or any subsequent
renewal term, that this Agreement will not be renewed, this
Agreement will automatically renew itself for additional periods of
sixty (60) months (each a “ Renewal Term ”)
from the original anniversary date or, as the case may be, any
Renewal Term. For purposes of this Agreement, the
“Term” shall include and refer to, as appropriate by
the context, any Renewal Term.
1
(b) Compensation.
During the term of employment hereunder, the Officer shall receive
for his or her services a base salary and incentive or bonus
compensation in amounts determined by the (i) Bank’s
Board of Directors, (ii) an appropriate committee of the
Employer or (iii) the Bank’s Chief Executive Officer, in
accordance with the salary administration program of the Employer
as the same may from time to time be in effect.
(c) Benefits. The
Officer shall be eligible for participation in any additional
plans, programs or forms of compensation or benefits that the
Employer’s Board of Directors might hereinafter provide to
the class of employees that includes the Officer.
(d) Disability. In the
event of the physical or mental disability of the Officer by reason
of which the Officer is unable to perform the duties of his
employment hereunder, the Employer shall continue to pay or provide
to the Officer the compensation and benefits provided under
Paragraphs (b) and (c) of this Section 2 for the
first six (6) months of such disability. If, however, the
disability continues beyond such six-month period, the Employer
may, at its election, terminate the Officer’s employment
under this Agreement, in which case the Officer shall receive any
disability benefits payable the Employer’s plans in effect at
that time.
(e) Death. In the
event that the Officer’s death should occur during the Term
of this Agreement, this Agreement shall terminate and the Officer
or his estate or beneficiaries, as the case may be, shall be
entitled only to income earned but not yet paid as of the date of
death and any and all retirement or death benefits payable under
the Employer’s plans in effect at that time and no further
compensation will be paid under this Agreement.
3. Termination
:
(a) Termination by the
Employer. Nothing herein contained shall prevent the
Employer from terminating the services of the Officer at any time
prior to the expiration of this Agreement “for good
cause”. For purposes of this Agreement, “for good
cause” means a dismissal of the Officer by Employer because
of (i) the material failure of the Officer, after written
notice, for reasons other than disability, to render services to
the Employer as provided herein; (ii) the Officer’s
gross or willful neglect of duty, neglect or refusal to perform all
duties assigned to him or her, in good faith, under this Agreement
or by Employer; (iii) imprudent financial management of
Employer by the Officer which causes Employer an extraordinary or
material loss not otherwise authorized; (iv) conviction of or
guilty plea to a felony or a crime involving moral turpitude;
(v) habitual use of drugs or alcohol; (vi) conduct that
adversely affects the Employer’s business reputation;
(vi) the material breach of this Agreement;
(vii) material waste or misuse of assets of Employer;
(viii) embezzlement, dishonesty, fraud or other similar acts
reflecting adversely upon Officer’s honesty and integrity,
(ix) illegal or intentional acts by the Officer demonstrating
bad faith toward the Employer, including, but not limited to, any
conduct by Officer so as to permit, condone or acquiesce in any act
or conduct of other persons, which could cause Employer, its parent
or any of its subsidiaries, to be in material violation of any law,
statute or regulation, or (x) commission by Officer of any
other act which the Bank, in its sole discretion, determines to
have an adverse impact on its standing in the community or with its
customers, staff or shareholders. If the Employer shall terminate
the Officer’s employment “for good cause”, the
Officer shall be entitled only to receive his or her base salary in
respect of services performed through the Date of
Termination.
2
(b) Termination by the
Officer.
(i) The Officer shall be entitled to
terminate his or her employment pursuant to this Agreement
voluntarily at any time, provided, however, that in the event the
Officer terminates his or her employment pursuant to this Agreement
for any reason other than “a change of control” as
described below, then the Officer shall be entitled to no
termination allowance and/or no severance allowance and no further
compensation after the “Date of Termination” as defined
in part (d) of this Paragraph 3.
(ii) The Officer shall be entitled
to terminate his or her employment pursuant to this Agreement if
“a change of control” occurs with respect to the Bank,
in which event the Employer shall be obligated to pay the Officer
and furnish him or her the benefits provided in Section 4
hereof. For purposes of this Agreement, the term “a change in
control” shall mean (a) any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934) who is, or who has entered into a definite
agreement with the Bank to become, the beneficial owner, directly
or indirectly, of securities of the Bank representing more than 50%
of the combined voting power of the then outstanding securities of
the Bank; or (b) a change in the composition of a majority of
the Board of Directors of the Bank within twelve (12) months
after any person (as defined above) is or becomes the beneficial
owner, directly or indirectly, of securities of the Bank
representing 25% of the combined voting power of the then
outstanding securities of the Bank. The right herein conferred upon
the Officer to terminate his employment “for good
reason” may be exercised by the Officer at any time during
the Term of this Agreement at his or her sole discretion, and any
failure by the Officer to exercise this right after he or she has
“good reason” to do so shall not be deemed a waiver of
the right.
(c) Notice of
Termination. Any termination of the Officer’s
employment by the Employer or by the Officer shall be communicated
by a written Notice of Termination to the other party hereto. For
purposes of this Agreement, a “Notice of Termination”
shall mean a written notice which shall indicate the specific
termination provision(s) in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances
providing the basis for termination.
(d) Date of
Termination. The “Date of Termination” shall
mean (i) if the Agreement is terminated by the Officer, the
date on which the Notice of Termination is delivered to Employer,
(ii) if the Agreement is terminated by the Employer because of
the Officer’s disability, thirty (30) days after the
Notice of Termination is given, or (iii) if the
Officer’s employment is terminated by the Employer for any
other reason, the date on which a Notice of Termination is
given.
4. Compensation Upon
Termination By Officer For A Change of Control Event. If
the Officer terminates his or her employment pursuant to
Section 3(b)(ii) hereof then:
(a) Accrued But Unpaid
Compensation. The Employer shall pay the Officer’s
full base salary through the Date of Termination at the rate then
in effect and the amount, if any, of awards theretofore made which
have not yet been paid.
3
(b) Severance
Allowance. The Employer shall pay the Officer a severance
allowance in sixty (60) equal monthly payments commencing on
the last day of the month in which the Date of Termination occurs,
the total amount of which will equal and will not exceed the
present value of three times (3x) the base amount minus $1.00
plus the present value of any other payments in the nature of
compensation within the meaning of Section 280G(b)(2)(A)(ii)
of the Internal Revenue Code of 1954, as amended (the “
Code ”).
For purposes of this Paragraph 4(b),
the following definitions shall apply:
(i) Base Amount - The term
“base amount” means the Officer’s average
annualized includible compensation for the base period.
(ii) Annualized Includible
Compensation for the Base Period - The term “annualized
includible compensation for the base period” means the
average annual compensation paid by the Bank, which was includible
in the gross income of the officer for federal income tax purposes
for taxable years in the base period.
(iii) Base Period - The term
“base period” means the period consisting of the most
recent three (3) taxable years ending before the date on which
termination occurs, except for termination as a result of the
operation of Paragraph 3(b) above in which case the date of
termination shall be deemed to be the date a change in control
occurs with respect to the Bank.
(iv) Present Value - Present value
shall be determined in accordance with Section 1274(b)(2) of
the Code.
(c) Employee Benefits.
The Employer shall maintain in full force and effect, for the
Officer’s continued benefit until the earlier of the third
(3rd) anniversary of the Date of Termination or the date the
Officer becomes a participant in similar plans, programs or
arrangements provided by a subsequent employer, all life, accident,
medical and dental insurance benefit plans and programs or
arrangements in which the Officer was entitled to participate
immediately prior to the Date of Termination, provided that the
Officer’s continued participation is possible under the
general terms and provisions of such plans and programs. In the
event that the Officer’s participation in any such plan or
program is barred, the Employer shall arrange to provide the
Officer with benefits substantially similar to those which the
Officer is entitled to receive under such plans and programs. At
the end of the period of coverage, the Officer shall have the
option to have assigned to him or her at no cost and with no
apportionment of prepaid premiums, any assignable insurance policy
owned by the Employer and relating specifically to the
Officer.
(d) No Duty to
Mitigate. The Officer shall not be required to mitigate the
amount of any payment provided for in this Section 4 by
seeking other employment or otherwise, nor shall the amount of any
payment provided for in this Section 4 be reduced by any
compensation earned by the Officer as the result of employment by
another employer after the Date of Termination, or
otherwise.
5. Return of Bank’s
Property. When the Officer’s employment with the Bank
ends, the Officer agrees to immediately deliver to the Bank
(i) all documents, including, but not limited to, address and
telephone records of custo
