EXHIBIT 10.20
CHANGE IN CONTROL AGREEMENT
This CHANGE IN CONTROL AGREEMENT is made as if the first day of
January, 1998, by and among Essex Bancorp, Inc. ("Bancorp") and Earl McPherson
("Employee").
WITNESSETH
WHEREAS, certain subsidiaries of Bancorp and Employee entered into a
Restated Executive Services Agreement ("Employment Agreement") dated as of
January 1, 1998; and
WHEREAS, Bancorp and its subsidiaries desire to amend the Employment
Agreement to eliminate the obligation thereunder to pay certain benefits to
Employee upon a "Change in Control" (as defined in the Employment Agreement) and
to instead provide such payments under a separate agreement ("Agreement")
between Bancorp and Employee only; and
WHEREAS, Employee is willing to consent to the above change to the
Employment Agreement on the condition that the Change in Control payment
provisions contained therein be continued in a separate agreement between
Bancorp and the Employee.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, and other good and valuable consideration, the adequacy of
which is hereby acknowledged, Bancorp and Employee agree as follows:
1. Change in Control Payment.
(a) In the event a Change in Control occurs prior to or on the
effective date of termination of the Employment Agreement, Bancorp shall: (1)
pay to the Employee in a lump sum within thirty (30) days of the Change in
Control an amount equal to one hundred and fifty percent (150%) of his highest
rate of annual Salary (as defined in the Employment Agreement) in effect during
the period commencing on May 1, 1997 and ending on the date of the Change in
Control; and (2) provide continuing health and medical insurance, disability
insurance and life insurance coverage on behalf of the Employee (and his other
family members, if applicable) for a period of twelve (12) months following the
Change in Control on the same basis as was in effect as of the effective date of
termination. For purposes of this Agreement, a "Change in Control" shall occur
if and only if after December 31, 1997 a "person" or "group" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934),
directly or indirectly, first becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of securities of Bancorp
representing 25% or more of the combined voting power of the then outstanding
securities of Bancorp. Any provision herein to the contrary notwithstanding, no
Change in Control shall be deemed to occur as a result of: (1) any transaction
prior to January 1, 1998; (2) any purchase, transfer, or other disposition of
the Series B and Series C preferred shares of Bancorp; or (3) any exercise or
conversion of warrants or options of Bancorp which were issued prior to 1996
(and any exercise, or conversion of such warrants or options shall be
disregarded in determining whether a Change in Control has occurred).
(b) Any provision herein to the contrary notwithstanding: (1)
no Change in Control payment under Section 1(a) shall be due to Employee if
Employee is terminated (with or without Cause) or resigns under the Employment
Agreement prior to a Change in Control; and (2) under no circumstances shall
Employee be entitled to a payment under both Section 11 of the Employment
Agreement and this Agreement.
2. Term of Agreement. This Agreement shall continue in force during the
term of the Employment Agreement and shall expire on the effective date of
termination of the Employment Agreement.
3. General Matters.
(a) This Agreement shall be governed by the substantive laws
of the Sate of Virginia and shall be construed in accordance therewith. This
Agreement constitutes the entire agreement between the parties as to the matters
described herein and supersedes all prior agreements and understandings between
the parties as to such matters.
(b) No provision of this Agreement may be waived except by
agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as a waiver of any other term or provision.
(c) This Agreement may be amended, altered or revoked at any
time, in whole or in part, only by a written instrument setting forth such
changes, signed by all the parties.
(d) This Agreement shall be binding upon the Employee and the
Employers, and shall not be assignable in any event by the Employee.
(e) Throughout this Agreement the singular shall include the
plural and the plural shall include the singular whenever the context so
requires.
(f) If any provision of this Agreement is declared by any
court of common jurisdiction to be invalid for any reason such invalidity shall
not affect the remaining provisions. On the contrary, such remaining provisions
shall be construed in force as if such invalid provisions had never been
inserted in this Agreement.
IN TESTIMONY WHEREOF, the parties have caused this Agreement to be
executed as of the 24th day of June, 1998.
ESSEX BANCORP, INC.
By: /s/ Gene D. Ross
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Its: President
/s/ EARL McPHERSON
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