Exhibit 10.2
RESTRICTIVE COVENANT
AGREEMENT
This Restrictive Covenant Agreement
(“Agreement”) effective as of this 1st day of June,
2008, is entered into by and between Scott C. Harvard
(“Officer”) and Hampton Roads Bankshares, a Virginia
corporation (“HRB”).
RECITALS
WHEREAS, this Agreement
is entered into by HRB as a condition of the closing of that
certain Agreement and Plan of Merger (the “Merger
Agreement”) dated January 8, 2008, by and between HRB and
Shore Financial Corporation, a Virginia corporation,
(“SFC”), pursuant to which Merger Agreement SFC will
become a wholly owned subsidiary of HRB;
WHEREAS , Officer is
being directly and materially benefited as an equity holder or
executive of SFC and through this Agreement with HRB;
WHEREAS , the Officer
currently is rendering or desires to render valuable services to
HRB and it is the desire of HRB to have the benefit of the
Officer's continued and future loyalty, service and
counsel;
WHEREAS , HRB is
engaged in the business of banking and Officer has particular and
peculiar knowledge and background in the operation of a business of
this nature;
WHEREAS, Officer is
currently employed as the President and Chief Executive Officer of
Shore Bank, a wholly owned subsidiary of SFC, and shall continue to
be employed in such capacity after the closing of the Merger
Agreement;
WHEREAS, upon closing
of the Merger Agreement between HRB and SFC, Shore Bank, shall
become a wholly owned subsidiary of HRB;
WHEREAS, upon closing
of the Merger Agreement between HRB and SFC, Officer shall become
an executive officer of HRB as HRB is currently structured and a
member of the Board of Directors of HRB and Bank of Hampton Roads
with integral knowledge of the confidential and trade secret
information of both entities; and
WHEREAS , HRB desires
to protect its investment in SFC, Shore Bank and Bank of Hampton
Road and any of its subsidiaries from unfair competition and its
confidential information from unauthorized disclosure or
misappropriation.
NOW, THEREFORE , in
consideration of the mutual covenants and agreements herein set
forth, the parties covenant and agree as follows:
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1.
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Effective Date; Payment to Officer upon
Closing of Merger.
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The effective date of this Agreement shall be the
closing date of the Merger Agreement. In consideration for his
covenants and obligations as set forth herein, HRB will pay to
Officer
One Hundred Seventy-Five Thousand Dollars and no
cents ($175,000.00) upon the closing of the Merger
Agreement.
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2.
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Restrictive Covenants.
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(a)
During the Officer's employment with Shore Bank and
for a period of one (1) year following the date Officer's
employment with Shore Bank ends, the Officer will not, directly or
indirectly, either as a principal, agent, employee, employer,
stockholder, partner or in any other individual or representative
capacity whatsoever, serve in a position where Officer is engaged
in the process of providing services or products that compete with
the services or products provided by HRB or any direct or indirect
wholly owned subsidiary of HRB, including, but not limited to, Bank
of Hampton Roads and Shore Bank, at any time during the last year
of Officer’s employment with Shore Bank. This restriction
shall only apply within a twenty-five (25) mile radius of any
office or branch operated by Shore Bank, Bank of Hampton Roads, HRB
or any direct or indirect wholly owned subsidiary of HRB on the
date Officer’s employment with Shore Bank ends.
(b)
During the Officer's employment with Shore Bank and
for a period of one (1) year following the later of (i) the date
Officer's employment with Shore Bank ends or (ii) the date Officer
ceases to receive any payment from Shore Bank pursuant to any
agreement (except as provided below), Officer will not solicit, or
assist any person or entity to solicit, any person or entity who,
during the six (6) month period prior to the date Officer’s
employment with Shore Bank ends, paid or engaged Shore Bank, Bank
of Hampton Roads, HRB or any direct or indirect wholly owned
subsidiary of HRB, for products or services, for the purpose of
providing services or selling products where those services or
products compete with the services or products offered by Shore
Bank, Bank of Hampton Roads, HRB or any direct or indirect wholly
owned subsidiary of HRB, as of the date Officer’s employment
with Shore Bank ends. If Officer’s employment with Shore Bank
is terminated by either Shore Bank or the Officer as a result of a
“Change in Control” of HRB, then the duration of the
restriction set forth in this section 2(b) shall be one (1) year
from the date Officer’s employment with Shore Bank ends. For
purposes of this Agreement, a “Change in Control” shall
be defined as (a) the date that any one person, or more than one
person, acting as a group, acquires ownership of stock of HRB that,
together with stock held by such person o
