Eastern Virginia Bankshares, Inc. FORM OF Restricted Stock Agreement
Exhibit 10.20
Eastern Virginia Bankshares, Inc.
FORM OF
THIS AGREEMENT dated as of the <<grant date>>, between EASTERN VIRGINIA BANKSHARES, INC., a Virginia corporation (the “Corporation”), and <<name>> (“Participant”), is made pursuant and subject to the provisions of the Eastern Virginia Bankshares, Inc. 2007 Equity Compensation Plan (the “Plan”). All capitalized terms used in this Agreement have the meaning assigned to them in the Plan, unless this Agreement provides, or the context requires, otherwise.
In consideration of the benefits which the Corporation expects to be derived from the services rendered to it and/or any Subsidiary by the Participant and of the covenants contained herein, the parties hereby agree as follows:
1. Award of Stock. Pursuant to the Plan, the Corporation, on <<grant date>>, (the “Award Date”), granted Participant <<number>> shares of Common Stock (“Restricted Stock”), subject to the terms and conditions of the Plan and subject further to the terms and conditions set forth herein (the “Award”). <<Number>> percent (<<percent>>%) of the Restricted Stock (i.e., <<number of shares of time-based restricted stock>>) shall be transferable and nonforfeitable (“Vested” or “Vesting”) over a period of time (“Time-Based Shares”), and the remaining <<number>> percent (<<percent>>%) of the Restricted Stock (i.e., <<number of shares of performance-based restricted stock >>) shall be Vested in connection with the performance of the Corporation (“Performance-Based Shares”), all as set forth further below. The Time-Based Shares and Performance-Based Shares collectively may be referred to as Restricted Stock as the context requires.
2. Restrictions. Except as provided in this Agreement, the Restricted Stock is nontransferable and is subject to a substantial risk of forfeiture.
3. Terminology. The following terms have the following meanings for purposes of this Agreement:
| (a) | “Cause” shall have the meaning set forth in the Participant’s Employment Agreement, if applicable, and if Participant does not have an Employment Agreement or Participant’s Employment Agreement does not define the term, “Cause” shall mean Participant’s personal dishonesty, incompetence, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, conviction of a felony or of a misdemeanor involving moral turpitude, or misappropriation of the Corporation’s assets (determined on a reasonable basis and solely by the Board of Directors) or those of a Subsidiary. |
| (b) | “Peer Group” means the financial institutions listed on Attachment A hereto, provided that any listed financial institution shall be eliminated if it is acquired or otherwise changes its structure or business such that it is no longer reasonably comparable to the Corporation (as determined by the Committee), and in the case of any such elimination, the Committee may or may not replace the eliminated financial institution with another financial institution which it considers reasonably comparable to the Corporation. |
| (c) | “Vesting Acceleration Event” means during the period in which any share of Restricted Stock is not Vested: |
| (i) | the Participant’s retirement, with the consent of the Board of Directors or its delegate, at or after age sixty-five (65) where there is no Cause (as defined above) for the Corporation to terminate the Participant’s employment; |
| (ii) | the occurrence of a Change in Control (as defined in the Plan), if the Participant has remained employed with the Corporation and/or a Subsidiary through the date the Change in Control occurs; |
| (iii) | the Participant’s death; or |
| (iv) | if the Participant does not have an Employment Agreement, the Participant’s termination of employment due to becoming disabled (as defined for purposes of Section 22(e)(3) of the Internal Revenue Code), or, if the Participant has an Employment Agreement, the Participant’s termination of employment due to becoming disabled (as defined in his or her Employment Agreement or, if not so defined, as defined for purposes of Section 22(e)(3) of the Internal Revenue Code). |
| For purposes of determining a Vesting Acceleration Event, an “Employment Agreement” means a written individual employment agreement, or if there is no employment agreement, then a written individual change in control agreement, as in effect on the Award Date between the Participant and the Corporation and/or a Subsidiary. If a Participant does not have such a written individual employment agreement or change in control agreement, the Participant is considered not to have an Employment Agreement for purposes hereof. |
4. Vesting in the Time-Based Shares. Subject to earlier Vesting or forfeiture as provided below, the Participant’s interest in 100% of the Time-Based Shares shall be Vested on the following dates, provided the Participant remains in employment with the Corporation and/or a Subsidiary from the Award Date through such respective dates:
|
Date |
Percentage of Time-Based Shares Vesting
|
| <<vesting schedule>> | <<percentage>> |
5. Vesting in the Performance-Based Shares.
| (a) | Subject to earlier Vesting or forfeiture as provided below, the Participant’s interest in 100% of the Performance-Based Shares shall be Vested on <<vesting date>>, provided the Participant remains in employment with the Corporation and/or a Subsidiary from the Award Date through such date, if and only if certain minimum performance measures are satisfied as described under this Paragraph 5. |
| (b) | Vesting of the Performance-Based Shares will be determined by the Corporation’s <<financial measures, such as earnings per share and/or return on assets>> ranking for the <<performance period>> (the “Performance Period”) compared to the <<relevant financial measure(s)>> for the Peer Group (see Attachment A) as follows, where Vesting in the Performance-Based Shares is equal to the number of the Performance-Based Shares multiplied by the Vesting percentage below: |
|
[Higher of] <<relevant financial measures>> Ranking |
Vesting Percentage for Performance-Based Shares |
| <<rank>> and above | 100% |
| <<rank>> up to but excluding <<rank>> | 50% |
| below <<rank>> | 0% |
| [FOR USE WHEN MORE THAN ONE FINANCIAL MEASURE IS INCLUDED: The [higher] <<weighting of the relevant financial measures>> will determine the Vesting percentage (for example, if the Corporation’s <<relevant financial measure>> ranking is above <<rank>> and the <<relevant financial measure>> ranking is below <<rank>>, the Vesting percentage is <<vesting percentage>>).] If the relevant ranking is above <<rank>>, but less than <<rank>>, the Vesting percentage shall not be subject to interpolation (for example, the Vesting percentage is 50% whether the ranking is <<rank>> or <<rank>>). |
| (c) | All determinations regarding Vesting and entitlement to the Performance-Based Shares under this Paragraph 5 shall be made and certified to in writing by the Committee. If the Committee determines that all or any portion of the Performance-Based Shares shall not become Vested, such Performance-Based Shares (or portion thereof) shall be forfeited as of the date of the Committee’s determination. |
6. Vesting Acceleration Events. Upon the occurrence of a Vesting Acceleration Event defined in Paragraph 3(c), any shares of Restricted Stock that are not then Vested shall immediately become Vested.
7. Forfeiture. Except in connection with a Vesting Acceleration Event defined in Paragraph 3(c), all shares of Restricted Stock that are not considered Vested by or at the cessation of the Participant’s employment with the Corporation or a Subsidiary (or both in the case of dual employment) shall be forfeited to the Corporation.
8. Shareholder Rights. Subject to Paragraph 14, Participant will have all the rights of a shareholder of the Corporation with respect to the Restricted Stock, including the right to receive dividends or distributions on (other than dividends or distributions which are paid in shares of Common Stock) and to vote the Restricted Stock; provided, however, that (i) Participant may not sell, transfer, pledge, assign, exchange, hypothecate or otherwise dispose of the Restricted Stock prior to Vesting, otherwise than by will or by the laws of descent and distribution, (ii) the Corporation shall retain custody of the certificates evidencing shares of the Restricted Stock as provided in Paragraph 9, and (iii) Participant will deliver a stock power in accordance with Paragraph 10. If, prior to Vesting, any such dividends or distributions are paid in shares of Common Stock with respect to the Restricted Stock, such shares shall be registered in the name of the Participant and deposited with the Corporation as provided in Paragraph 9, and shall be subject to the same restrictions on transferability and the same rules for custody as the Restricted Stock with respect to which they were paid.
9. Custody of Certificates. Custody of stock certificates evidencing the Restricted Stock (if the Restricted Stock is issued in certificated form) shall be retained by the Corporation so long as the Restricted Stock is not Vested. The Corporation reserves the right to place a legend on each certificate restricting the transferability of shares evidenced by any certificate. The Corporation shall deliver to the Participant the stock certificate or certificates (or cause the Corporation’s transfer agent to make a book-entry or electronic notation) as soon as practicable after the Restricted Stock becomes Vested.
10. Stock Power. Participant shall deliver to the Corporation a stock power, endorsed in blank, with respect to the Restricted Stock. The Corporation shall use the stock power to cancel any shares of Restricted Stock that do not become Vested. The Corporation shall return the stock power to Participant with respect to any shares of Restricted Stock that become Vested. The Participant, by execution of this Agreement, shall be deemed to appoint, and does so appoint, the Corporation and each of its authorized representatives as the Participant’s attorney(s) in fact to effect any transfer of forfeited shares (or shares otherwise reacquired or withheld by the Corporation hereunder), or any adjustment to the number of shares of Restricted Stock pursuant to Paragraph 14 below, to the Corporation as may be required pursuant to the Plan or this Agreement and to execute such documents as the Corporation or such representatives deem necessary or advisable in connection with any such transfer.
11. Fractional Shares. Fractional shares shall not be issuable hereunder, and when any provision hereof or of the Plan may entitle Participant to a fractional share, such fraction shall be disregarded.
12. Taxes. The Corporation shall have the right to retain and withhold from any award of the Restricted Stock, the amount of taxes (at the statutorily required rates) required by any government to be withheld or otherwise deducted and paid with respect to such Award. At its discretion, the Committee may require the Participant to reimburse the Corporation for any such taxes required to be withheld by the Corporation and to withhold any distribution in whole or in part until the Corporation is so reimbursed. In accordance with procedures established by the Committee, Participant or any successor in interest may elect to have the Corporation retain and withhold a number of Vested shares of Restricted Stock having a Fair Market Value on the date of withholding not less than the amount of such taxes and cancel in whole or in part any such shares so withheld, in order to satisfy the Corporation’s withholding obligations. In accordance with procedures established by the Committee, Participant or any successor in interest is also authorized to deliver shares of the Corporation’s Common Stock having a Fair Market Value on the date of delivery not less than the amount of such taxes, in order to satisfy the Corporation’s withholding obligations. In the event the Participant does not deliver or elect to have the Corporation retain and withhold shares as described in this Paragraph 12, the Corporation shall have the right to withhold from any other cash amounts due or to become due from the Corporation (or a Subsidiary) to the Participant an amount equal to such taxes required to be withheld by the Corporation to reimburse the Corporation for any such taxes.
13. No Right to Continued Employment. This Agreement does not confer upon Participant any right with respect to continued employment by the Corporation, nor shall it interfere in any way with the right of the Corporation to terminate Participant’s employment at any time (subject to the terms of Participant’s Employment Agreement, if applicable).
14. Change in Capital Structure. In accordance with the terms of the Plan, the terms of this Award shall be adjusted as the Board of Directors or the Committee determines is equitably required in the event the Corporation effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.
15. Governing Law. This Agreement and the Award shall be governed by the laws of the Commonwealth of Virginia.
16. Conflicts. In the event of any conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall govern.
17. Participant Bound by Plan; Prospectus. Participant hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof. Participant also hereby acknowledges receipt of a prospectus for the Plan.
18. Clawback. This Award (whether Vested or not Vested) shall be subject to the terms of the Corporation’s recoupment, clawback or similar policy as such may be in effect from time to time, as well as any similar provisions of applicable law, which could in certain circumstances require repayment or forfeiture of the Restricted Stock or any shares or other cash or property received with respect to the Restricted Stock (including any value received from a disposition of the Restricted Stock after it has become Vested).
19. Binding Effect. Subject to the limitations stated above and in the Plan, this Agreement shall be binding upon and inure to the benefit of the legatees, distributees, and personal representative of the Participant and the successors of the Corporation.
To evidence its grant of the Restricted Stock and the terms, conditions and restrictions thereof, the Corporation has signed this Agreement as of the Award Date. This Agreement shall not become legally binding unless the Participant has accepted this Agreement within thirty (30) days after the Award Date (or such longer period as the Chairman of the Committee may accept) pursuant to such means as the Committee may permit. If the Participant fails to timely accept this Agreement, the grant of the Restricted Stock shall be cancelled and forfeited ab initio.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be signed on its behalf, and the Participant has affixed his signature hereto.
| EASTERN VIRGINIA BANKSHARES, INC | ||||
| Date: <<grant date>> | By: | |||
| (Printed Name and Title) | ||||
| <<name>> | ||||
| Date: | ||||
| (Printed Name) | ||||
Attachment A
Listing of Peer Group
<<list of peer financial institutions>>