Exhibit 10.1
SEPARATION
AGREEMENT
This Separation and
Release Agreement (“Agreement”) dated this 18
th
day of May, 2009, by
and between Hampton Roads Bankshares, Inc. and any of its
affiliates and subsidiaries (“Company”) and Jack W.
Gibson (“Executive”).
WHEREAS, the Company and Executive
have agreed that Executive shall resign all positions he holds with
the Company and any of its subsidiaries.
WHEREAS, the parties to this
Agreement desire to resolve any issues arising out of the cessation
of Executive’s employment in a mutually satisfactory and
amicable manner.
NOW, THEREFORE, in consideration of
the promises and of the mutual covenants herein contained and other
good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, the parties do hereby covenant and
agree as follows:
1. Resignation of
Employment . Executive’s last day of employment with
the Company is May 18, 2009 (the “Separation
Date”). Executive agrees to and hereby resigns as Chief
Executive Officer of the Company and his position on the
Company’s Board of Directors effective May 18, 2009. The
Executive also agrees to immediately resign from any other
positions he may hold for the Company, including, but not limited
to, any position as a trustee or representative for any of the
Company’s plans.
2. Separation Benefits
. In exchange for
Executive’s acceptance of this Agreement and the promises
contained herein, the Company agrees not to pursue any claims
against the Executive it may have under the Benefit Plans defined
below. In addition, the Company agrees to grant Executive the
option, on the latter of January 4, 2010 or such date as the
Company is permitted to do so in accordance with law (“Option
Date”), to require the Company to purchase 100,000 of his
shares of the Company, free and clear of all liens, for the closing
price of the Company’s stock on the Option Date. Should
Executive elect his option, the purchase price for said shares will
be paid to Executive by the Company in twelve (12) equal
monthly installments with the first installment being paid to the
Executive on the Option Date.
To the extent permitted by law,
Executive will retain his benefits under the following Company
plans: Supplemental Retirement Plan, 401(k), Executive Savings,
Stock Options, Restricted Stock, and Director Deferred Compensation
(“Benefit Plans”). Benefits under said Benefit Plans
will be paid to Executive in accordance with the applicable plan
terms. The Company agrees to take all reasonable action as shall be
required to make the timing of the payments under the Supplemental
Retirement Plan as requested by Executive, provided such timing is
in accordance with all applicable laws, including
Section 409(A) of the Internal Revenue Code.
3. Consultancy Arrangement
.
a. Consulting Duties .
In his role as a consultant for the Company, Executive agrees to
perform the services requested of him by the Company’s Chief
Executive Officer, President, or Chief Operating Officer for a
period of three years from the date of this Agreement
(“Consulting Period”).
b. Compensation . In
exchange for Executive’s consulting services and for the
other provisions contained in this Section 3 including the
covenants set forth below, Company will pay Executive the total sum
of $1,300,000.00 as an independent contractor (and not employee),
to be paid in the amount of $600,000.00 on the date hereof and
$700,000.00 on January 1, 2010. Executive is required to pay
his own federal and state taxes out of this sum. Moreover, if
Executive elects to continue participation in the Company’s
medical plans as provided by COBRA, Company will pay 100% of
Executive’s COBRA premiums for 18 months. In addition,
Company agrees to turn over ownership of the Company vehicle that
Executive is currently using for Company business upon complete
execution of this Agreement. Further, during the Consulting Period,
Company agrees to reimburse Executive for his membership dues at
Greenbrier Country Club. Finally, during the Consulting Period,
Company agrees to provide Executive with any necessary incidentals
subject to the approval of the Chairman of the Board of the
Company.
c. Executive as Independent
Contractor . The Company and Executive agree that Executive
shall furnish services as an independent contractor and not as an
employee of the Company. Executive has no power or authority to act
for, represent, or bind the Company in any matter, including but
not limited to, entering into contracts or agreements. As an
independent contractor, Executive will have no supervisory or
management level control over Company employees. Executive
acknowledges that, as an independent contractor, the compensation
that he receives shall not be considered “wages” for
purposes of income tax withholding, FICA, and unemployment taxes.
Executive further acknowledges that he is solely responsible for
any tax liability arising from payments made under this Agreement,
and he agrees to indemnify the Company from any and all liability
that may be assessed against the Company for his failure to pay
taxes on such compensation.
d. Restrictive
Covenants . During the Consulting Period, Executive agrees
that:
(i) Executive will not, either as a
principal, agent, employee, employer, stockholder, partner or in
any other individual or representative capacity whatsoever, serve
in a position where Executive is engaged in the process of
providing services or products that compete with the services or
products provided by Company during the term of this Agreement or
at any time during the twelve month period immediately preceding
the Consulting Period. This restriction shall only apply within a
fifteen (15) mile radius of any bank office or bank branch
operated by Company as of the date this Agreement is executed by
Executive.
(ii) Executive shall not solicit, or
assist any person or entity to solicit, any Customer of Company for
the purpose of providing services or selling products that compete
with the services or products offered by Company. For purposes of
this Agreement, “Customer” shall be defined as
(i) any person or entity who, during Consulting Period paid or
engaged Company for products or services, or (ii) any person
or entity who paid or engaged Company for products or services in
the twelve month period immediately preceding Consulting
Period.
(iii) Executive shall not on his own
behalf or on behalf of any person or entity, solicit, recruit or
hire or assist others in soliciting, recruiting or hiring any
person who, during
2
the Consulting Period was an employee or
consultant of Company or for the twelve (12) month period
immediately preceding the Consulting Period, was an employee or
consultant with the Company.
(e) Confidentiality .
During the Consulting Period and thereafter, Executive shall not at
any time disclose, communicate or divulge to any third party, or
use, or permit others to
