Exhibit 10.7

 

Fifth Amendment

To

Employment Agreement

 

THIS FIFTH AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is made as of this 31st day of December, 2008, by and between THE BANK OF HAMPTON ROADS (“BHR”), a banking corporation organized and existing under the laws of the Commonwealth of Virginia, its successors and assigns, HAMPTON ROADS BANKSHARES, INC. (“HRB”), a Virginia corporation, its successors and assigns (collectively BHR and HRB shall be the “Bank” or “Employer” and otherwise deemed synonymous as the context may require); and JACK W. GIBSON (the “Executive”).

 

WHEREAS, BHR and the Executive entered into an Employment Agreement dated October 9, 1987, (as amended, the “Agreement”), and the Agreement has been amended by Amendment to Employment Agreement, Second Amendment to Employment Agreement, and Third Amendment to Employment Agreement; and

 

WHEREAS, HRB was incorporated on February 28, 2001, and pursuant to a corporate reorganization (the “Reorganization”) became the new parent company of BHR; and

 

WHEREAS, since the Reorganization, the Executive has served and continues to serve as an executive officer of both BHR and HRB; and

 

WHEREAS, the Bank and Executive now desire to amend the Agreement to reflect the Executive’s employment relationship with BHR and HRB and to amend certain other provisions of the Agreement;

 

NOW, THEREFORE, the parties agree as follows:

 

1.         The second paragraph of Section 3(b) of the Agreement is deleted and replaced by the following:

 

For purposes of this Agreement, the term “a change in control” is hereby defined as the date that (i) any one person, or more than one person, acting as a group, acquires ownership of stock of Hampton Roads Bankshares, Inc. that, together with stock held by such person or group constitutes more than 50% of the total fair market value or total voting power of the stock of Hampton Roads Bankshares, Inc., (b) during any period of twelve consecutive months, individuals who at the beginning of such period constituted the Board and any new directors, whose election by the Board or nomination for election by Hampton Roads Bankshares, Inc.'s stockholders was approved by a vote of at least three-fourths (3/4ths) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board, or (c) during any period of twelve consecutive months, (i) any one person, or more than one person, acting as a group, acquires ownership of stock of Hampton Roads Bankshares, Inc. that, together with stock held by such person or group constitutes more than 30% of the total voting power of the stock of Hampton Roads Bankshares, Inc., and (ii) individuals who at the beginning of such period constituted the Board cease in connection with such 30% change in voting stock ownership, cease to constitute a majority of the Board. Anything herein to the contrary notwithstanding, the definition of “Change in Control” shall be interpreted so as to comply with the terms of Section 409A of the Internal Revenue Code and the regulations thereunder.

 

 

2.         Current Section 6 of the Agreement (“Miscellaneous”) is renumbered to be Section 7 and new Section 6 is added to the Agreement as follows:

 

 

(a)       For purposes of this Section 6, a parachute payment is defined in Q&A 3 of Notice 2008-TAAP as any payment in the nature of compensation paid on account of an applicable severance of employment to the extent that the aggregate present value of such payments equals or exceeds an amount equal to three times the base amount. A parachute payment shall be interpreted in a manner that is consistent with Notice 2008-TAAP, Notice 2008-94 and all other current or future guidance issued pursuant to Section 111(b)(2)(C) of EESA or Section 280G(e) of the Internal Revenue Code of 1986, as amended (“Code”).

 

(b)     To the extent that any payment under this Agreement would be forfeited as a prohibited parachute payment under Section 111(b)(2)(C) of EESA, the Employer agrees to pay Executive an additional payment equal to the forfeited payment plus one dollar, on July 1, 2012, or if later, the earliest date when Section 111(b)(2)(C) of EESA no longer prohibits such payment. Such payment shall be made in a single lump sum in cash, without interest. The Executive may be entitled to severance payments from multiple agreements and plans. The Employer, it its sole discretion, shall determine which payments shall be delayed. Notwithstanding anything in this paragraph to the contrary, the additional amounts due under the Agreement shall not be paid if the Treasury Department or other governmental agency issues guidance subsequent to the date of this Agreement that would prohibit such payment.

 

3.         Except as amended by this Amendment, the Agreement as originally adopted and amended is hereby ratified and affirmed.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the day and year first above written.

 

 

 

 

 

 

 

Date Signed: December 31, 2008

By: /s/Emil A. Viola                          [SEAL]