EXECUTIVE EMPLOYMENT AGREEMENT OF DALE PHELPS
THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as the date of the last signature affixed hereto between MILLENNIUM BANK, N.A., a national banking association (the “Bank”), a wholly owned subsidiary of Millennium Bankshares Corporation (“Millennium Bankshares”), and Dale Phelps (“Executive”).
1. EMPLOYMENT DUTIES AND RESPONSIBILITIES
1.1 Position and Title . The Bank hereby agrees to employ the Executive in the position described on Addendum A attached hereto and the Executive hereby accepts such position and agrees to serve the Bank in such capacity during the employment period set forth in Section 2 below, subject to earlier termination as provided hereunder (the “Employment Period”). The Executive shall perform such job duties and responsibilities as determined in discussion with the CEO of the Bank and in accordance with the Bank’s Bylaws. The Bank shall retain the right to modify the Executive’s job title and responsibilities pursuant to the legitimate business needs of the Bank, provided that any such modification in title or responsibilities is consistent with the Executive’s expertise and training.
1.2 Reporting Relationship . The Executive shall report to the person serving in the position described on Addendum A attached hereto (the “Executive’s Manager”), although the Bank shall retain the right to modify such reporting relationship pursuant to the legitimate business needs of the Bank. The Executive shall be subject to, and shall act in accordance with, all reasonable legal instructions and directions of the Executive’s Manager which are commensurate with duties and responsibilities of similar level executives of institutions comparable to the Bank, as well as any other duties as may from time to time be reasonably assigned by the Bank that are commensurate with Executive’s position.
1.3 Bank Policies and Procedures . The Executive agrees to abide by all applicable policies and procedures of the Bank.
1.4 Full Attention . During the Employment Period, excluding any periods of vacation and sick leave to which Executive is entitled, Executive shall devote Executive’s full business time, energy and attention to the performance of Executive’s duties and responsibilities hereunder. During the Employment Period, the Executive shall at all times operate in accordance with the Bank’s Ethics Policy and may not, without the prior written consent of the Board, operate, participate in the management, operations or control of, or act as an employee, officer, consultant, agent or representative of, any other entity or business that is not related to the Bank, provided that it shall not be a violation of the foregoing for the Executive: (i) to act or serve as a director on the boards of directors of any type of non-profit civil, cultural, philanthropic or professional organization; (ii) to manage Executive’s own personal passive investments; or (c) to serve, with the written consent of the Executive’s Manager, on the board of directors of for-profit entities, so long as such activities do not violate the Bank’s policy on external directorship or materially interfere with the performance of Executive’s duties and responsibilities to the Bank as provided hereunder.
2. TERM OF EMPLOYMENT.
2.1 Effective Date . The Effective Date of this Agreement shall be as set forth on Appendix A.
2.2. Initial Term . The Bank agrees to employ the Executive and the Executive hereby agrees to serve the Bank in accordance with the terms and conditions set forth herein, for an initial term of three (3) years commencing on the Effective Date of this Agreement (“Initial Term”), unless such Agreement is earlier terminated as expressly provided herein.
2.3. Renewal Term . The Term shall be extended for an additional one (1) year term at the conclusion of the Initial Term, and then again after each successive term thereafter (such one year terms hereinafter “Renewal Term”), unless either party terminates this Agreement at the end of the Initial Term or any Renewal Term, by giving the other party written notice of intent not to renew, delivered at least ninety (90) days prior to the end of the Initial Term or any Renewal Term. In the event such notice of intent not to renew is properly delivered, this Agreement shall expire at the end of the initial term or successive term then in progress, except with respect to any obligations which explicitly by their terms survive the termination of this Agreement.
3.1 Base Salary . The Bank shall pay to Executive, and Executive shall accept from the Bank, a monthly base salary in the amount set forth on Addendum A attached hereto, payable on the Bank’s standard pay schedule, provided that the Executive has provided service to the Bank during the specified pay period. Executive’s base salary may not be decreased at any time during this Agreement without the express written consent of the Executive. The base salary may be increased at the sole discretion of the Bank, but nothing herein shall be deemed to require any such increase.
3.2 Incentive Compensation/Bonus . Executive may be eligible to receive a bonus based upon satisfactory achievement of personal performance objectives and business performance objectives as set forth in the Millennium Bank Executive Incentive Compensation Plan and Appendix A hereto.
3.3 Stock Options . Executive will be eligible for stock options and/or restricted stock as may be awarded by the Board, with the advice and consent of the CEO, in its sole discretion
3.4. Expenses . Executive shall be entitled to reimbursement of pre-approved business expenses that are incurred in the furtherance of Bank business and are consistent with the Bank’s policies for such expense reimbursement.
3.5 Benefits . Executive shall receive such health, dental, personal disability, Flexible Spending Account, life insurance and paid time-off benefits as are provided to similarly situated Executives of the Bank.
4. TERMINATION OF EMPLOYMENT
Executive’s employment with the Bank may be terminated, prior to the expiration of any term of this Employment Agreement, in accordance with any of the following provisions:
4.1 Termination By Executive Upon Mutual Agreement . Executive may not terminate Executive’s employment during the course of this Agreement unless such termination is mutually agreed upon by the Executive and the Bank. Should Executive cease providing services to the Bank prior to the end of the Term without the consent of the Bank, the Bank shall have no obligation to pay the Executive any additional compensation beyond the Executive’s last day of active service, but for the remainder of the Term, the Executive shall not be employed or engaged or provide services to any other bank or financial institution that is located within 25 miles of the Bank’s offices in Reston, Virginia, or within 25 miles of any of the Bank’s branches then in existence.
4.2 Termination By The Bank Without Cause . The Bank may terminate Executive’s employment without cause at any time during the term of this Agreement by giving the Executive three (3) months’ notice of such termination, during which period Executive will continue to receive normal compensation and benefits to which Executive would normally be entitled under the terms of this Agreement. During the notice period, Executive must fulfill all of Executive’s duties and responsibilities and use Executive’s best efforts to train and support Executive’s replacement, if any. Notwithstanding the foregoing, the Bank, at its option, may instruct Executive during such period not to undertake any active duties on behalf of the Bank.
If Executive is terminated under this section, within thirty (30) days following the conclusion of the notice period and receipt of the signed separation agreement described below, the Bank shall provide Executive: (a) a lump sum payment consisting of an amount equal to the Executive’s Base Salary for the number of days left in the Term of the Agreement or for nine (9) months, whichever is greater; (b) a lump sum payment consisting of Executive’s bonus target for the year in which the termination without cause occurs; and (c) payment by the Bank of Executive’s COBRA coverage for the remainder of the Term of the Agreement or 18 months, whichever is less, provided Executive is covered under the Bank’s health plan and timely elects continued coverage under COBRA.
Executive expressly agrees and acknowledges that all payments and benefits referenced herein which may be paid to Executive as a result of a Termination Without Cause are conditioned upon and subject to the Executive executing a valid separation agreement and general release, which includes a release of all claims the Executive may have against the Bank, and all of its respective subsidiaries, affiliates, directors, officers, employees, shareholders and agents (other than rights of indemnification, rights to directors and officers insurance, and any rights to accrued benefits under the employee benefit plans), a cooperation clause, a mutual non-disparagement clause, and an affirmation of post-employment restrictions previously agreed to by Executive in section 6 below and, as applicable, section 4.1 above.
4.3 Termination By The Bank For Cause . The Bank may, at any time and without notice (except as required below), terminate the Executive for “cause”. Termination by the Bank of the Executive for “cause” shall include but not be limited to termination based on any of the following grounds: (a) fraud, misappropriation, embezzlement or acts of similar dishonesty; (b) conviction of a crime (other than a minor traffic offense); (c) illegal use of drugs or excessive use of alcohol in the workplace; (d) intentional and willful misconduct that may subject the Bank to criminal or civil liability; or (e) breach of the Executive’s duty of loyalty to the Bank or diversion or usurpation of corporate opportunities properly belonging to the Bank; (f) willful disregard of material Bank policies and procedures for which he has received notice; and (g) insubordination or continued failure to satisfactorily perform the duties of Executive’s position. Executive shall not be terminated for cause under subsection (f) or (g) unless the Bank first has provided Executive with written notice that the Bank considers the Executive to be in violation of his obligations under those subsections and Executive fails, within 30 days of such notice, to cure the conduct that has given rise to the notice.
In the event of a termination by the Bank with cause, Executive shall be entitled to receive only that base salary earned on or before the Executive’s last day of active service and other post-employment benefits required by law or under Bank policy. Executive shall not be entitled to receive any portion of Executive’s target bonus for the period in which the termination occurs but shall receive any accrued bonus for any performance period completed prior to the date of termination.
4.4 Termination By Death Or Disability . The Executive’s employment and rights to compensation under this Employment Agreement shall terminate if the Executive is unable to perform the duties of Executive’s position due to death or disability, and the Executive, or the