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Exhibit
10.6
NON-COMPETITION
AGREEMENT
THIS NON-COMPETITION
AGREEMENT (this “Agreement”), dated as of this 28th
day of August 2007, by and between Virginia Financial Group,
Inc. , a Virginia corporation (the “Company”), and
William P. Heath, Jr . (the
“Executive”).
WHEREAS , pursuant to
an Agreement and Plan of Reorganization, dated as of July 26,
2007 (the “Merger Agreement”), the Company and FNB
Corporation, a Virginia corporation (“FNB”), have
agreed to form a new company through the merger of FNB with and
into the Company (the “Merger”);
WHEREAS ,
simultaneously with the execution and delivery of this Agreement,
the Company and the Executive are entering into an Employment
Agreement of even date herewith to provide for the employment of
the Executive by the Company following the Merger (the
“Employment Agreement”);
WHEREAS , the Company
is willing to enter into the Employment Agreement only if the
Company and the Executive also enter into this Agreement;
and
WHEREAS , each of the
Company and the Executive desires to enter into this
Agreement;
In consideration of the
mutual covenants contained herein, the parties agree as
follows:
1. Not an Employment
Agreement . For the avoidance of doubt, each of the Company and
the Executive acknowledges and agrees that this Agreement is not an
employment agreement, and that nothing in this Agreement is
intended to create or should be interpreted to create an employment
contract for any length of time.
2. Non-Competition .
Conditional upon consummation of the Merger and the
Executive’s being in the employment of FNB until the
effective date of the Merger (the “Effective Date”),
and effective at the Effective Date, in exchange for the payments
as provided herein and other valuable consideration hereby
acknowledged, the Executive agrees that if (i) the Executive
is employed by the Company through the end of the employment term
set forth in the Employment Agreement, (ii) the
Executive’s employment is terminated by the Company without
Cause (as defined in the Employment Agreement), or (iii) the
Executive terminates employment for Good Reason (as defined in the
Employment Agreement), the Executive will not engage in Competition
for a period of three (3) years after the end of the
employment term set forth in the Employment Agreement. For purposes
hereof:
(i) “Competition”
means the Executive’s engaging without the written consent of
the Board of Directors of the Company or a person authorized
thereby, in an activity as an officer, a director, an employee, a
partner, a more than
one percent shareholder or
other owner, an agent, a consultant, or in any other individual or
representative capacity within ten (10) miles of the Company
‘s headquarters or any branch office of the Company or any of
its subsidiaries (unless the Executive’s duties,
responsibilities and activities, including supervisory activities,
for or on behalf of such activity, are not related in any way to
such competitive activity) if it involves:
(A) engaging in or entering
into the business of any banking, lending or any other business
activity in which the Company or any subsidiary thereof is actively
engaged at the time the Executive’s employment ceases,
or
(B) soliciting or contacting,
either directly or indirectly, any of the customers or clients of
the Company or any subsidiary thereof for the purpose of competing
with the products or services provided by the Company or any
subsidiary thereof, or
(C) employing or soliciting
for employment any employees of the Company or any subsidiary
thereof for the purpose of competing with the Company or any
subsidiary thereof;
provided, however, that
activity which cannot reasonably be construed to have the potential
to compete with or to further competition with the Company or any
of its subsidiaries shall not be prohibited by this
Agreement.
(ii) For purposes of this
Agreement, “customers” or “clients” of the
Company or any subsidiary thereof means individuals or entities to
whom the Company or any subsidiary thereof has provided banking,
lending, or other similar financial services at any time from the
Effective Date through the date the Executive’s employment
with the Company ceases.
3. Cause; Other Than for
Good Reason . Notwithstanding any other provision of this
Agreement, if the Executive’s employment shall have been
terminated for Cause (as defined in the Employment Agreement) or
for other than Good Reason (as defined in the Employment
Agreement), the Executive will not be required to comply with the
covenants in Section 2, the Executive will still be required
to comply with the covenants in Section 5, and the Company
shall have no obligation to make any of the payments to the
Executive otherwise provided for in this Agreement.
4. Remedies . The
Executive acknowledges that the restrictions set forth in
Section 2 of this Agreement are just, reasonable, and
necessary to protect the legitimate business
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