Exhibit 10.40
HAMPTON ROADS BANKSHARES,
INC.
2008 DIRECTOR DEFERRED
COMPENSATION PLAN
1. PLAN ADMINISTRATION AND
ELIGIBILITY.
1.1. PURPOSE. The purpose of the
Hampton Roads Bankshares, Inc. (the “Company”) 2008
Director Deferred Compensation Plan (the “Plan”) is to
advance the interests of the Company and its shareholders by
attracting and retaining the highest quality of experienced persons
as directors and to further align the interests of the directors
with the interests of the Company’s shareholders.
1.2. ELIGIBILITY. Each member of the
Board of Directors of Hampton Roads Bankshares, Inc. is eligible to
participate in the Plan. Additionally, the Board of Directors of
the Company, in its sole discretion, may extend participation in
this Plan to the Boards of its wholly owned subsidiaries. The
members of the Board of Directors of the Company and the Boards of
Directors of subsidiaries selected for participation are
“Eligible Directors.”
1.3. ADMINISTRATION. The Plan shall
be administered, construed and interpreted by the Board of
Directors of the Company (“HRB Board”). Pursuant to
such authorization, the HRB Board shall have the responsibility for
carrying out the terms of the Plan, including but not limited to
the determination of the amount and form of payment or any annual
or monthly retainer and any additional fees payable by the Company
or a subsidiary to an Eligible Director for his or her services as
a director (the “Fees,” which shall not include
reimbursements or other payments not for services rendered). To the
extent permitted under the securities laws applicable to
compensation plans including, without limitation, the requirements
of Section 16(b) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or under the Internal
Revenue Code of 1986, as amended (the “Code”), a
committee of the HRB Board, or a subcommittee of any committee, may
exercise the discretion granted to the HRB Board under the Plan,
provided that the composition of such committee or subcommittee
shall satisfy the requirements of Rule 16b-3 under the Exchange Act
(i.e. comprised of independent and/or non-executive directors), or
any successor rule or regulation. The HRB Board of Directors may
also designate a plan administrator to manage the record keeping
and other routine administrative duties under the Plan.
2. STOCK SUBJECT TO THE
PLAN.
2.1. SHARE PURCHASE. To satisfy the
requirements of Section 3, the Company shall direct the
trustees (“Trustee”) of the Hampton Roads Bankshares,
Inc. Executive Savings Plan Trust (the “ESP Trust”) to
purchase shares of the Company’s common stock
(“Shares”) on the open market or from the Company. The
purchase, holding and distribution of Shares by the Trustee
hereunder shall in all cases be conducted pursuant to applicable
law (including the rules and regulations of the U.S. Securities and
Exchange Commission) and any Company policies and procedures then
in effect.
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2.2. GENERAL RESTRICTIONS. Delivery
of Shares under Section 3 of the Plan shall be subject to the
following:
(a) Notwithstanding any other
provision of the Plan, the Company shall have no liability to
deliver any Shares under the Plan or make any other distribution of
benefits under the Plan unless such delivery or distribution would
comply with all applicable laws (including, without limitation, the
requirements of the Securities Act of 1933), and the applicable
requirements of any securities exchange or similar
entity.
(b) To the extent that the Plan
provides for delivery of stock certificates, the delivery may be
effected on a non-certificated basis, to the extent not prohibited
by applicable law or the applicable rules of any stock
exchange.
2.3. TAX WITHHOLDING. The HRB Board
may condition the delivery of any shares or other benefits under
the Plan on satisfaction of any applicable withholding obligations.
The HRB Board, in its discretion, and subject to such requirements
as the HRB Board may impose prior to the occurrence of such
withholding, may permit such withholding obligations to be
satisfied through cash payment by the participating Eligible
Director (“Participant”), through the surrender of
Shares which the Participant already owns, or through the surrender
of Shares to which the participant is otherwise entitled under the
Plan.
3. DEFERRED COMPENSATION.
3.1. DEFERRAL OF FEES.
(a) Any Eligible Director may elect
to defer in either cash or Shares all or a portion of the Fees
earned during any calendar year by delivering a deferral election
to the Company not later than (i) December 31 of the year
immediately preceding the year to which the deferral election
relates, or (ii) with respect to an Eligible Director’s
first year or partial year of service as a director, thirty days
following the date on which such director first became a director,
but only for Fees earned after such election is made. The election
form shall specify the amount or portion of the Fees to be
deferred; whether and to what extent such Fees are to be deferred
in cash or in Shares; the manner of payment with respect to such
deferred amounts; and the date on which the deferred amounts shall
be paid and whether paid in a lump sum or in installment. Such
election shall remain in force for such calendar year and for each
year thereafter until changed or revoked by the director by written
notice to the Company not later than December 31 immediately
preceding the year to which such change or revocation relates. A
deferral election may not be changed or revoked after the beginning
of the calendar year to which it relates.
(b) For Fees to be earned in 2008,
an Eligible Director’s deferral election pursuant to the
Hampton Roads Bankshares, Inc. Directors’ Deferred
Compensation Plan which was frozen as of December 31, 2007 and
delivered to the Company before December 31, 2007 shall be a
valid deferral election for purposes of this Plan.
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3.2. ACCOUNTS; INTEREST AND DIVIDEND
CREDITS. On the first day of each calendar quarter (the
“Credit Date”), an Eligible Director who elects to
defer his or her Fees shall receive a credit to his or her deferred
compensation accounts (the “Deferred Compensation
Accounts”) under the Plan as hereinafter provided. Any
portion of a Participant’s Fees which are deferred in cash
shall be credited to the Participant’s Cash Deferral Account.
The amount of the credit shall equal the amount of Fees deferred in
cash by the Participant during the immediately preceding quarter.
Any portion of a Participant’s Fees which are deferred in
Shares shall be credited to the Participant’s Deferred Stock
Account and such Fees shall be contributed to the ESP Trust. The
Trustee shall use the contributed Fees to purchase Shares in the
open market or from the Company and the Deferred Stock Account
shall be credited with the number of shares purchased by the
Trustee. Only whole shares shall be purchased and any residual Fees
which remain shall be held until the next Credit Date and
aggregated with Fees deferred during such quarter.
On the first day of each calendar
quarter, an amount shall be credited to each Participant’s
Cash Deferral Account equal to the Interest Rate (as hereinafter
defined) on the balance credited to the Cash Deferral Account
during the immediately preceding quarter. Interest shall accrue on
the balance of each Participant’s Cash Deferral Account
commencing with the date t
