Attached files
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EX-31.1 - EX-31.1 - Xenith Bankshares, Inc. | w82531a1exv31w1.htm |
EX-31.2 - EX-31.2 - Xenith Bankshares, Inc. | w82531a1exv31w2.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2010
Commission File Number 001-32968
HAMPTON ROADS BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Virginia | 54-2053718 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
999 Waterside Dr., Suite 200 | ||
Norfolk, Virginia | 23510 | |
(Address of principal executive offices) | (Zip Code) |
(757) 217-1000
(Registrants telephone number, including area code)
(Registrants telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Name of each exchange on which registered | |
Common Stock, par value $0.01 per share | The NASDAQ Stock Market |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate website, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
(Check one):
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes o No þ
State the aggregate market value of the voting and non-voting common equity held by nonaffiliates
computed by reference to the price at which the common equity was last sold, or the average bid and
asked price of such common equity, as of the last business day of the registrants most recently
completed second fiscal quarter: $14,048,796
The number of shares outstanding of the issuers common stock as of March 10, 2011 was 834,675,026
shares, par value $0.01 per share.
DOCUMENTS INCORPORATED BY REFERENCE
None.
EXPLANATORY NOTE
This Amendment No. 1 (Amendment No. 1) of Hampton Roads Bankshares, Inc. (the Company)
amends the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2010,
originally filed March 23, 2011 (the Form 10-K). It is being filed solely to include the
information required in Part III (Items 10, 11, 12, 13 and 14) of Form 10-K that was previously
omitted from the Form 10-K.
General Instruction G(3) to Form 10-K allows such omitted information to be filed as an
amendment to the Form 10-K or incorporated by reference from the Companys definitive proxy
statement which involves the election of directors not later than 120 days after the end of the
fiscal year covered by the Form 10-K. Because the Companys definitive Proxy Statement for the
2011 Annual Meeting of Stockholders will not be filed with the Securities and Exchange Commission
(SEC) within 120 days after the end of the fiscal year ended December 31, 2010, the information
required by Part III of Form 10-K cannot be incorporated by reference and, therefore, must be
included as part of the Form 10-K. Accordingly, the Company is filing this Amendment No. 1 to
include such omitted information as part of the Form 10-K.
Except as modified herein, no other information in the Form 10-K is being modified or amended
by Amendment No. 1, and unless indicated otherwise, Amendment No. 1 does not reflect events
occurring after March 23, 2011, which is the filing date of the Form 10-K. Accordingly, Amendment
No. 1 should be read in conjunction with the Form 10-K and the Companys other filings with the
SEC. This Amendment No. 1 consists solely of the preceding cover page, this explanatory note, Part
III (Items 10, 11, 12, 13 and 14), the exhibit list, the signature page and the certifications
required to be filed as exhibits to this Amendment No. 1. Unless otherwise indicated, capitalized
terms used herein but not defined shall have the meanings ascribed to them in the Form 10-K.
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ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
DIRECTORS
The following sets forth the names, ages and business experience for the past five years of
each of the Companys directors, the date each became a director and their respective term of
office.
Director | Term | |||||||||||||
Name | Age | Principal Occupation | Since | Expires in | ||||||||||
John A. B. Andy
Davies, Jr.
|
60 | Mr. Davies was named President and CEO of the Company in July 2009. Prior to joining the Company, Davies was President and CEO of The Marathon Organization Ltd., a management consulting firm focused on community banks. Davies served as Chairman of the Virginia Board of Directors of RBC Centura Bank from 2001 to 2004 and as Regional President Virginia Market of Centura Bank from 1999 to 2001. From 1991 to 1999, he was President, CEO, and Director of First Coastal Bankshares. His banking career began in 1974. He is a graduate of the College of William and Mary and the Stonier Graduate School of Banking. Mr. Davies has been actively engaged with numerous civic, cultural, and educational organizations in Hampton Roads, including the role of board chairman with ACCESS College Foundation, WHRO Foundation, United Way of South Hampton Roads, and Junior Achievement of Greater Hampton Roads. Mr. Davies experience in the banking industry and his extensive knowledge of financial services provide the Board with an invaluable resource for assessing and managing risk and for strategic corporate planning. | 2009 | 2011 | ||||||||||
Douglas J. Glenn
|
44 | Mr. Glenn is Executive Vice President, Chief Operating Officer, and General Counsel of the Company and Executive Vice-President and General Counsel of the Bank of Hampton Roads. He was appointed Executive Vice President and General Counsel of the Company and the Bank in 2007. He added the responsibilities of Chief Operating Officer of the Company in February 2009. | 2006 | 2012 | ||||||||||
Prior to joining the Company, Mr. Glenn practiced law at Pender & Coward, P.C. in Virginia Beach, Virginia. His law practice was focused primarily on small business clients and clients involved in various aspects of real estate. His knowledge of small business and |
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Director | Term | |||||||||||||
Name | Age | Principal Occupation | Since | Expires in | ||||||||||
real estate finance and legal issues are valuable attributes for the Companys Board of Directors. | ||||||||||||||
Billy G. Roughton
|
66 | Mr. Roughton was a director of Gateway Financial Holdings, Inc. (Gateway) until its merger with the Company on December 31, 2008 and was Chairman of the Board of Gateway Bank & Trust Co, Inc. (Gateway Bank) until May 2009. He is President and CEO of BGR Development, a company that develops and manages both residential and commercial real estate, positions he has held since 1974. He also is Dealer Principal, President, and CEO of JEB Management Services, Inc., doing business as Alliance Nissan, which is a franchised automobile dealership, positions he has held since 2009. In addition, Mr. Roughton is the Managing Partner of various companies involved in real estate development and project management for both residential and commercial real estate. He is directly involved in the management of the business ventures including, among other aspects, personnel management, financing, project cash flow, permit acquisition, operations, and overall viability and corporate stability. Mr. Roughton has substantial knowledge of the market for residential and commercial real estate and of participants in the market on the Outer Banks area of North Carolina. | 2008 | 2012 | ||||||||||
Henry P. Custis, Jr.
|
65 | Mr. Custis is currently the Chairman of the Companys Board of Directors, a position he has held since 2010. Mr. Custis is a Partner at Custis, Lewis & Dix, a law firm in Accomac, Virginia. He has practiced law since 1970. He was chairman of the board of Shore until its merger with the Company on June 1, 2008 and currently serves as chairman of Shore Bank, a position he has held since 1997. He also has served on boards for Eastern Shore Citizens Bank from 1974-1975 and predecessor banks to the current SunTrust Banks, Inc. Mr. Custis is a former director of the Eastern Shore of Virginia Community Foundation. He has practiced law for 39 years, served on bank boards for 36 years, and been an investor for 35 years. | 2008 | 2012 | ||||||||||
Patrick E. Corbin
|
57 | Mr. Corbin is the Managing Shareholder of Corbin & Company, P.C. He has been a | 2009 | 2012 |
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Director | Term | |||||||||||||
Name | Age | Principal Occupation | Since | Expires in | ||||||||||
Certified Public Accountant since 1979. From 1988 to 2000 he was a director and chairman of the audit committee of Cenit Bank for Savings in Norfolk, Virginia. He holds a Bachelor of Science degree in business with a major in accounting from Virginia Polytechnic Institute. He is a member of professional organizations including, the American Institute of Certified Public Accountants, the Virginia Society of Certified Public Accountants, and the Tidewater Virginia Society of Certified Public Accountants. He is a director and past chairman of the Chesapeake Alliance. He was designated as Super CPA by Virginia Business magazine in the fields of litigation support and business valuation for the years 2002-2007. Mr. Corbin brings significant experience to the Board in the fields of accounting and small business expertise. | ||||||||||||||
William A. Paulette
|
63 | Mr. Paulette was a director of Gateway until its merger with the Company on December 31, 2008 and was a director of Bank of Richmond from 1998 to 2007. He has served on the board of Virginia Military Institute since 2003. He is founder, President, and CEO of KBS, Inc., a construction firm based in Richmond, Virginia. He is responsible for the general management of KBS including its financial success. | 2009 | 2012 | ||||||||||
W. Lewis Witt
|
68 | Mr. Witt has been the owner and president of Inner-view, Ltd. since September 1976, a utility contractor, and has been the owner of Greenbrier Self Storage since 1997. He previously served as a Chairman of Coastal Virginia Bank until its acquisition by the Company in 1992. Mr. Witts involvement with utility contracting acquaints him with a wide network of community officials and other contractors. He is knowledgeable regarding the South Hampton Roads real estate and development market and many of its participants. | 2001 | 2013 | ||||||||||
Jordan E. Slone
|
49 | Mr. Slone has been the Chairman and CEO of Harbor Group International since July 1985, a diversified real estate investment and financial services company with offices in the United States, Canada, and Israel and owns and manages properties in five countries, including properties in the Companys markets. Harbor Groups property portfolio of Class A office buildings and apartment complexes exceeds | 2006 | 2013 |
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Director | Term | |||||||||||||
Name | Age | Principal Occupation | Since | Expires in | ||||||||||
$2.7 billion in value. Harbor Group also owns 3.5% of the third largest mobile home company in the United States. Additionally, the company originates and purchases loans as well as commercial mortgage-backed securities. Prior to forming Harbor Group in 1985, Mr. Slone was co-founder and Vice President of International Spring Corporation, a Portsmouth, Virginia manufacturer of inner box springs for the mattress industry. In 1986, the Slone family sold International Spring to Leggett and Platt, Inc., a Fortune 500 company. Mr. Slone also serves on the Board of Directors of USA Discounters, a furniture retailer and finance company with 13 stores across the United States. In addition, he is an Advisory Board Member of the National Multi-Housing Council. Mr. Slone brings significant knowledge regarding commercial real estate and finance as well as organizational and managerial skills to the Company. | ||||||||||||||
Randal K. Quarles
|
53 | Mr. Quarles was designated to the Companys Board of Directors by an affiliate of The Carlyle Group pursuant to the terms of the Investment Agreements. Mr. Quarles is currently a managing director with The Carlyle Group in Washington D.C., a position he has held since August 2007. Mr. Quarles brings a wealth of experience related to the regulation of financial institutions. From August 2001 until October 2006, Mr. Quarles served in a variety of senior roles at the U.S. Department of the Treasury: from August 2005 to December 2006 as Under Secretary of the Treasury for Domestic Finance; from 2002 to 2005 as Assistant Secretary of the Treasury for International Affairs; and from 2001 to 2002 as the United States Executive Director at the International Monetary Fund. From 1984 to 1991 and from 1993 to 2001, Mr. Quarles practiced law in the private sector at Davis Polk & Wardwell, where he was a partner from 1994 to 2001 and co-head of the firms Financial Institutions Group from 1996 to 2001. In the interval from 1991 to 1993, Mr. Quarles also served in the Treasury Department: from 1992 to 1993 as Deputy Assistant Secretary for Financial Institutions Policy, and from 1991 to 1992 as Special Assistant to the Secretary of the Treasury. | 2010 | 2011 |
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Director | Term | |||||||||||||
Name | Age | Principal Occupation | Since | Expires in | ||||||||||
Hal F. Goltz
|
28 | Mr. Goltz was designated to the Companys Board of Directors by an affiliate of Anchorage Advisors pursuant to the terms of the Investment Agreements. Mr. Goltz is currently a Senior Analyst at Anchorage Advisors, a position which he has held since October 2007. From June 2004-June 2007, he was an Event-Driven Analyst of Citadel Investment Group. Mr. Goltz has significant experience in the financial services industry and experience with distressed financial institutions. | 2010 | 2011 | ||||||||||
Robert B. Goldstein
|
71 | Robert B. Goldstein is a founding Principal in CapGen Capital Advisers, a private equity fund that invests in banks and financial service companies. His experience includes many years in commercial banks, savings and loan associations and other financial institutions. Over the years, he has been CEO of numerous banks and thrifts, and on the boards of directors as both a management member as well as serving as an independent director. The institutions range in size from small to large cap and have been located in various geographic areas. Goldstein draws from a team of highly experienced bankers who bring skills in such diverse areas as risk management, asset quality administration, audit, finance and marketing. | 2010 | 2011 | ||||||||||
In addition to his role as a Director of both BankFIRST and as Chairman of the board of The BANKshares, Inc, Goldstein is a Founding Principal of CapGen Capital Advisers; serves on the Board of Directors of FNB Corporation, Hermitage, PA; serves on the Board of Directors of Seacoast Banking Corporation and Seacoast National Bank, Stuart, FL; as well as on the board of Palmetto Bancshares, Inc and Palmetto Bank, Greenville, SC; also on the board of Hampton Road Bankshares, Inc, Norfolk, VA and is a member of the Executive Network of Glencoe Capital LLC of Chicago, IL. Among other achievements, he was named Businessperson of the Year in New Haven. | ||||||||||||||
Goldstein received a B.B.A. degree from Texas Christian University, where he graduated magna cum laude and was an Honor Student in the University of Texas program for merit scholars. He also served for seven years on the faculty of the Southwestern Graduate School of Banking at Southern Methodist University. |
7
NON-DIRECTOR EXECUTIVE OFFICERS (INCLUDING NAMED EXECUTIVE OFFICERS)
The following sets forth the names, ages, and business experience for the past five years of
the Companys executive officers (including named executive officers pursuant to Item 402 of
Regulation S-K), other than the ones listed under Directors above.
Stephen P. Theobald, 49, is an Executive Vice President and the Companys Chief
Financial Officer, a position he assumed in December 2010. From April 2010 to November 2010, Mr.
Theobald served as a financial consultant to the Company. Prior to joining the Company as a
financial consultant, Mr. Theobald held a number of senior positions at Capital One Financial
Corporation (Capital One) from 1999 to 2010, most recently serving as CFO, Local Banking, a
position he held from 2005 to 2010. Other positions he held at Capital One include: CFO, Global
Financial Services (from 2002 to 2005), Executive Lead-Regulatory Relations, Executive Lead of
Peoplesoft Program, and Controller.
Lorelle L. Fritsch, 44, is the Companys Senior Vice President and Chief
Accounting Officer, positions she assumed in 2004. Ms. Fritsch also assumed the role of
Controller, effective January 1, 2011. Previously, Ms. Fritsch acted as the Chief Financial
Officer of the Company from August 2008 to February 2009 and May 2010 to December 2010 and of Bank
of Hampton Roads from August 2008 to December 2010.
Kevin Pack, 49, has been president and CEO of Gateway Bank Mortgage since December
2009. He was President of Gateway Bank Mortgage from May 2006 to December 2009. Prior to joining
the Company, Mr. Pack was vice president of Charter One Mortgage from November 2005 to April 2006
and Senior Vice President of SunTrust Mortgage prior thereto.
Family relationships
There are no family relationships between any director, executive officer, or person nominated
or chosen by the Company to become a director or executive officer.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires directors,
executive officers, and persons who beneficially own more than 10% of the Companys common stock to
file initial reports of ownership and reports of changes in beneficial ownership with the SEC. Such
persons are also required to furnish the Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the Company, the Company
believes that all Section 16(a) filing requirements applicable to its directors, executive
officers, and greater than 10% beneficial owners were complied with in 2010, except for the
following: a Form 3 was not timely filed by Kevin Pack and a Form 4 was amended by Mr. Pack to
report three transactions that were not timely reported. William A. Paulette failed to timely file
a Form 4 to report one transaction.
Code of Ethics
The Company has a Code of Ethics for its senior financial officers and the Chief
Executive Officer. The Code of Ethics covers topics including, but not limited to, conflicts of
interest, confidentiality of information, and compliance with laws and regulations. The Audit
Committee has also adopted a policy under the Companys Audit Committee Charter that establishes
procedures for employees to
8
communicate concerns about questionable accounting or auditing matters or other improper
activities directly to the Audit Committee through its designee.
Any waivers of, or amendments to, the Code of Ethics will be disclosed through the timely
filing of a Form 8-K with the SEC. A copy of the Companys Code of Ethics can be obtained, without
charge, through written communications addressed to Attn: Douglas J. Glenn, Executive Vice
President, Chief Operating Officer and General Counsel, Hampton Roads Bankshares, Inc., 999
Waterside Dr., Suite 200, Norfolk, Virginia 23510.
ITEM 11. | EXECUTIVE COMPENSATION |
Compensation Discussion and Analysis
Particularly during this challenging environment for banking services and the depressed market
for bank stocks, our Compensation Committee and management believe that shareholder value must
drive executive compensation decisions. While our compensation philosophy has been to maintain a
competitive compensation package to attract qualified executive officers, we have historically had
a pay-for-performance program that bases compensation decisions on the financial performance of the
Company. Due to primarily to economic conditions, the Company was unable to provide in fiscal 2010
the return to shareholders that management and the Board of Directors desired. As a result of
continued worsening economic conditions, compensation to our executive officers continued to be
frozen in 2010, with bonus and stock compensation all but eliminated.
Our recent mergers have also factored into our executive compensation program. The June 1,
2008 merger combined the Companys and Shores executive management teams and the December 31, 2008
merger combined the Companys and Gateways management teams. Both mergers brought together
different executive compensation programs.
The following plans of Shore were assumed by the Company in connection with its acquisition:
the Shore Financial Corp. 2001 Stock Incentive Plan and the Shore Financial Corp. 401(k) Plan (the
Shore 401(k) Plan). The following plans of Gateway were assumed by the Company in connection
with its acquisition of Gateway: the Gateway Bank and Trust Company Employees Savings & Profit
Sharing Plan and Trust (the Gateway 401(k) Plan); the 1999 Incentive Stock Option Plan of Gateway
Financial Holdings, Inc.; the 1999 Non-Statutory Stock Option Plan of Gateway Financial Holdings,
Inc.; the 2001 Non-Statutory Stock Option Plan of Gateway Financial Holdings, Inc.; the 2005
Omnibus Stock Ownership and Long-Term Incentive Plan of Gateway Financial Holdings, Inc.; and the
1999 Bank of Richmond Stock Option Plan of Gateway Financial Holdings, Inc.
During 2010, our Compensation Committee focused on retaining and attracting key executives to
assist in managing though the financial challenges facing the Company. The Compensation Committee
reviews the compensation, including salaries, bonuses, employee benefits, executive incentive
plans, policies, practices and programs, for the Companys executive officers. We evaluate the
performance of the Companys Chief Executive Officer and, with the assistance of the Chief
Executive Officer, the performance of the other executive officers.
Our intent is to offer compensation packages that will attract and retain high quality
personnel for our organization. We want to provide our employees with incentives that will align
their interests with the long-term and short-term goals of the organization as a whole. Several
components of our compensation packages include vesting periods and stock ownership which are
designed to promote loyalty and longevity among employees. We wish to reward those employees who
are excelling in their respective positions and, by so doing, enhance the future profitability of
our Company.
9
Changing Regulatory Environment
Our compensation programs during 2010 were also impacted by our participation in the Capital
Purchase Program (CPP) of the United States Department of the Treasurys Troubled Asset Relief
Program (TARP). As a result of participation in TARP, our executives and certain of our
employees were subject to compensation related limitations and restrictions, which applies during
the period which any obligation to the Treasury from financial assistance remains outstanding
(disregarding any warrants to purchase our common stock that the Treasury may hold). The TARP
compensation limitations and restrictions include:
| a prohibition on payment to any of our five most highly compensated employees of any cash bonuses; |
| a prohibition on our Named Executive Officers and the next five most highly compensated employees from receiving any severance payments upon a termination of employment or any payments triggered by a change-in-control; |
| a requirement that we claw back incentive compensation to our Named Executive Officers and the next 20 most highly compensated employees if it is based on materially inaccurate financial statements or performance metrics, and a prohibition on payment of any tax gross-up payment to this group; and |
| a limitation on tax deductions for compensation paid to each of our Named Executive Officers that exceeds $500,000 in any year. |
On June 21, 2010, the Federal Reserve, the Office of the Comptroller of the Currency, the
Federal Deposit Insurance Corporation and the Office of Thrift Supervision issued guidance on sound
incentive compensation policies. The guidance includes three broad principles:
| Incentive compensation arrangements should balance risk and financial results in a manner that does not encourage employees to expose their organizations to imprudent risks. |
| A banking organizations risk-management processes and internal controls should reinforce and support the development and maintenance of balanced incentive compensation arrangements. |
| Banking organizations should have strong and effective corporate governance to help ensure sound compensation practices, including active and effective oversight by the board of directors. |
The guidance was immediately effective under the agencies power to regulate the safety and
soundness of financial institutions. The guidance applies to all U.S. financial institutions.
As required by TARP, and consistent with the other regulatory guidance mentioned above:
| Performance-based bonuses and other incentive payments to the five most highly compensated employees, and all other employees were not made during fiscal 2010. |
| The change of control agreements previously applicable to senior executive officers, the next five most highly compensated employees, and all other employees continued to be suspended in fiscal 2010. |
The
Company has agreements with Andy Davies, Lorelle Fritsch, David
Twiddy (who resigned as Executive Vice President in
February 2011), and Doug Glenn, which authorize the Company or the applicable subsidiary of the
Company to amend his or her compensation, bonus, incentive, and other benefit plans and
arrangements
10
and agreements as necessary to comply with the requirements of Section 111(b) of the
EESA and the Treasurys CPP and waives any and all claims against the Treasury and against the
Company for those changes that the Company shall make to its compensation and benefit programs to
allow the Company to comply with Section 111(b) of EESA in conjunction with its participation in
the Treasurys CPP.
Our Board also adopted an Excessive or Luxury Expenditure Policy that is consistent with the
TARP requirements and that can be found on the Companys website. This policy, which applies to all
our employees, covers expenditures for entertainment or events, office and facility renovations,
aviation or other transportation services, and other activities or events. These expenditures are
prohibited excessive or luxury expenditures to the extent they are not reasonable expenditures for
staff development, reasonable performance incentives, or other similar reasonable measures
conducted in the normal course of the Companys business operations.
In addition to the TARP executive compensation restrictions described above, the Company is
prohibited, under section 18(k) of the Federal Deposit Insurance Act and 12 C.F.R. Part 359, from
making any severance or indemnification payments to its employees for so long as Bank of Hampton
Roads or the Company remain in troubled condition under applicable federal regulations. To the
extent that our arrangements, plans or other arrangements described herein provide for severance or
indemnification payments, we may be prohibited from making such payments by 12 C.F.R. Part 359.
Elements of Compensation
The challenge for management and the Compensation Committee is to motivate, retain and reward
key performers for working harder and smarter than ever in a very difficult banking environment. At
the same time, we recognize that some of the tools we would use to accomplish these objectives were
unavailable due to the TARP compensation restrictions. In 2010, management and the Compensation
Committee, believing in the long term validity of our compensation program, attempted to preserve
the integrity of that program to the extent possible, while respecting the requirements and
restrictions of TARP.
Our compensation packages currently consist of the following elements:
Salary: We consider many factors in determining the salary component for each of the
executive officers. Because one of our objectives is to attract and retain high quality personnel,
historically, we have conducted surveys of other financial institutions and reviewed data from a
peer group within our region taking into account asset size and revenue base to ensure that we are
comparing ourselves to similar organizations. In fiscal 2010, however, no such survey or peer
review was conducted and no benchmarking was used in setting annual compensation.
Salary for each executive officer is determined based on his or her individual and group
responsibilities and achievements during the preceding year and such determination includes
judgments based on performance evaluations, regulatory examination results, efficiency in
performance of duties, and demonstrated leadership skills. Normally, decisions to increase or
decrease compensation materially from the prior period are influenced by the amount of new
responsibilities taken on by the executive officers and their contributions to the profitability of
the Company.
Consistent with 2009 compensation, economic conditions and Company performance, however, in
2010 it was apparent that making most incentive payments to executive officers might not be
appropriate. As a result, the compensation to our executive officers, including our Named
Executive Officers, continued to be frozen, with bonus and stock compensation all but eliminated.
In freezing our compensation, the Company specifically considered worsening economic conditions in
the markets in which our borrowers operate and that the levels of loan delinquencies and defaults
that we were experiencing were substantially higher than historical levels.
11
The salary of Mr. Theobald, who joined the Company in 2010, was based on negotiated amounts
between Mr. Theobald and the Company, taking into account his respective experience level, the
financial condition of the Company and restrictions imposed on the Company due to its participation
in the TARP CPP and troubled financial institution status. Prior to being appointed as Chief
Financial Officer, Mr. Theobald acted as a financial consultant to the Company. See Summary
Compensation Table All Other Compensation for the fees he received while acting as a consultant
in 2010.
Otherwise, the executive officers do not play a role in the compensation process except for
the Chief Executive Officer, John A. B. Davies, Jr., who would present information regarding the
other executive officers to the Compensation Committee for their consideration. Mr. Davies was
never present while the Compensation Committee deliberated on his compensation package.
Several of our Named Executive Officers also had access to Company automobiles for personal
use through September 30, 2010. At present, however, except for Mr. Davies, none of the Named
Executive Officers retains personal use of a Company automobile.
Employment Agreements:
John A. B. Davies, Jr. We have an employment agreement with our President and Chief Executive
Officer, John A. B. Davies, Jr. Mr. Davies joined the Company as President and Chief Executive
Officer effective July 14, 2009. The Company and Mr. Davies have entered into a three-year
employment contract, which provides for an initial annual salary of $500,000. He is eligible to
participate in all cash and non-cash employee benefit plans maintained by the Company for its
senior executive officers, as may be determined by the Board of Directors. All of the plans are
more fully discussed herein. Other benefits extended to Mr. Davies include the personal use of a
Company automobile.
Subject to certain limitations, Mr. Davies employment agreement provides that he is to
receive annually restricted stock grants equal to the lesser of 25% of his annual base salary on
the date of grant or the maximum the Company is able to provide under the applicable restricted
stock plan and each such annual award of restricted shares shall be subject to vesting as follows:
one-third of such shares shall vest as of the second anniversary of the date of grant; one-third of
such shares shall vest on the second anniversary of the date of grant to the extent the Company
attains reasonable performance standards for the year in which the grant occurred; and (iii)
one-third of such shares shall vest upon the Companys attainment of reasonable performance
standards for the three-year period, beginning with the year in which the grant occurred. Mr.
Davies received no such restricted stock grants in 2010.
In the event Mr. Davies is terminated other than for cause or resigns for good reason (as
those terms are defined in his employment agreement), other than in connection with a change of
control (as that term is defined in his employment agreement), he will be entitled to receive an
amount equal to his base salary then in effect that he would have received for the remainder of the
term of the agreement. If Mr. Davies is terminated other than for cause or resigns for good reason
within one year after a change of control, he will be entitled to receive an amount equal to the
excess, if any, of 2.99% of his annualized includable compensation of the base period as
determined under Section 280G of the Internal Revenue Code. Mr. Davies is not entitled to any
payment, acceleration or other benefit pursuant to his employment agreement as a result of the
completion of the Companys $255 million private placement with institutional investors (the
Private Placement) and the transactions related thereto.
The Companys obligation to make the payments provided for in Mr. Davies employment agreement
is qualified in its entirety by the Companys ability to make such payments under applicable law.
To the extent any payment is prohibited by 12 C.F.R. Part 359 or to the extent that any
governmental approval of any payment is not received or such payment would be prohibited by any
state or federal statutes or regulations, the Company will not be required to make such payment to
Mr. Davies.
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Stephen P. Theobald. Mr. Theobald has no written employment contract with the
Company. His annual base salary is $425,000. In addition, Mr. Theobald is eligible to participate
in all of the plans and arrangements that are generally available to all of the Companys salaried
employees.
Lorelle Fritsch. Mrs. Fritsch previously entered into a five-year employment contract with
Bank of Hampton Roads, which includes payment of a severance amount in the event of a
change-in-control of the Company, which may be paid unless the Treasury Department or other
government agency issues guidance that would prohibit such payments, such as EESA and ARRA. Mrs.
Fritsch is not entitled to any payment, acceleration or other benefit pursuant to his employment
agreement as a result of the completion of the Private Placement and the transactions related
thereto. Her annual salary in 2010 was $175,000 through May 20, 2010, at which time it was
adjusted to $250,000 due to serving in the role of Interim Chief Financial Officer. Her contract
was amended as of July 23, 2008 to make the Company a party in addition to Bank of Hampton Roads.
If permitted by law, the severance amount will be equivalent to three times the average of her
previous three years salary minus one dollar payable over a sixty-month period. Mrs. Fritschs
employment contract will renew in five-year increments.
Douglas J. Glenn. Mr. Glenn entered into a six year employment contract in 2007. His annual
salary in 2010 was $400,000 through November 1, 2010, on which date it was adjusted to $425,000.
Mr. Glenn is eligible to participate in the following compensation programs offered by the Company:
Supplemental Retirement Agreement, Stock Incentive Plan, and the Executive Savings Plan, which was
terminated effective September 30, 2010. In addition, Mr. Glenn is eligible to participate in all
of the plans and arrangements that are generally available to all of the Companys salaried
employees, including the Companys 401(k) plan. Other benefits extended to Mr. Glenn in 2010
included the personal use of a Company automobile (through September 30, 2010) and club dues. In
the event of a change-in-control of the Company, Mr. Glenn will be eligible to receive a payment
consistent with change-in-control payments for other Named Executive Officers. Mr. Glenn is not
entitled to any payment, acceleration or other benefit pursuant to his employment agreement as a
result of the completion of the Private Placement and the transactions related thereto. Mr.
Glenns employment contract will renew in five year increments after the initial term upon similar
terms as other executive officers of the Company.
Mr. Glenn also has a supplemental employment retirement agreement. The plan provides benefits
to Mr. Glenn at age 65 in the amount of one half of his final three years of service for a period
of 15 years following retirement. The plan vests ratably over fifteen years beginning after the
fifth anniversary of service. This plan contains change-in-control provisions consistent with
those of other executive officers. For purposes of this supplemental employment retirement plan,
the Private Placement and the transactions related thereto do not constitute a change-in-control.
Upon his hiring, Mr. Glenn was granted incentive stock options for 20,000 shares of Company
common stock that vests in years five through ten of Mr. Glenns employment, or immediately upon a
change-of-control event and other customary circumstances.
David
Twiddy. Effective February 24, 2011, David Twiddy resigned
as Executive Vice President of the Company.
Previously, on December 31, 2008, Gateway Bank (now Bank of Hampton Roads) entered into an
employment agreement with David R. Twiddy. The agreement had a term of thirty-six months with an
initial base salary of $425,000. The agreement provided for certain payments under specified
circumstances including a change-in-control of the Company. Mr. Twiddy is not entitled to any
payment, acceleration or other benefit pursuant to his employment agreement as a result of the
completion of the Private Placement and the transactions related thereto. The agreement restricts
Mr. Twiddy from employment that competes with the Company or any of its subsidiaries for one year
following termination of employment. In addition, Mr. Twiddy is restricted from the solicitation of
business of the Companys or any of its affiliates customers and solicitation of employment of the
Companys or any of its affiliates employees for a period of one year following termination of employment. The agreement further
prohibits
13
the disclosure of proprietary information. In addition, the Company entered into a
restrictive covenant agreement with Mr. Twiddy that restricts Mr. Twiddy from employment that
competes with the Company and any of its affiliates for a period of time specified in the covenant.
Mr. Twiddy received $425,000 in net compensation for entering into the covenant and to which the
Company paid the taxes on.
Kevin Pack. We do not have a written employment agreement with our President and CEO of
Gateway Bank Mortgage, Kevin Pack. Mr. Pack receives an annual salary of $325,000.
On November 12, 2010, Bank of Hampton Roads and Gateway Bank Mortgage, Inc. entered into a
non-solicitation and non-competition agreement with Kevin Pack, effective on that date. Under that
agreement, Mr. Pack must refrain from soliciting mortgage services from bank clients for so long as
he is employed and for 6 months thereafter and from providing competitive services within 25 miles
of Bank of Hampton Roads corporate headquarters and any bank office or bank branch operated by
Bank of Hampton Roads or its affiliates. During the same time period, Mr. Pack also agreed not to
solicit for employment bank employees (or former bank employees within the last 12 months). In
return for entering into the Agreement, Mr. Pack received $150,000.
He is eligible to participate in all employee benefit plans maintained by the Company. Other
benefits extended to Mr. Pack in 2010 include the personal use of a Company vehicle through
September 30, 2010.
Neal Petrovich. Mr. Petrovich had no written employment contract with the Company. His
annual salary in 2010 was $325,000. Mr. Petrovich was eligible to participate in the following
compensation programs offered by the Company: Supplemental Executive Retirement Plan, Stock
Incentive Plan and the Executive Savings Plan. In addition, Mr. Petrovich was eligible to
participate in all of the plans and arrangements that are generally available to all of the
Companys salaried employees. Other benefits extended to Mr. Petrovich in 2010 included the
personal use of a Company automobile. He also received a moving allowance to assist with his
relocation expenses. As an incentive to join the company, Mr. Petrovich was initially issued 5,000
shares of restricted stock, 4,000 of which he forfeited to the Company upon his resignation,
effective June 4, 2010.
Incentive Arrangement:: In order to focus our executive officers attention on the
profitability of the organization as a whole, we have historically paid cash incentives based upon
our annual financial performance as measured by return on average assets. Given the operating
losses experienced in the first half of 2009, a decision was reached that the Company would not pay
bonuses to executive officers under this plan during 2010.
2006 Stock Incentive Plan: We strongly encourage all directors and employees to own stock in
the Company. We feel that stock ownership among employees fosters loyalty and longevity and is an
excellent method for aligning employee interests with the long-term goals of the organization and
our shareholders. To facilitate stock ownership, the compensation committee of the Board of
Directors adopted the 2006 Stock Incentive Plan on March 14, 2006. This plan was approved by the
shareholders of the Company at the April 25, 2006 Annual Meeting of Shareholders. Under the plan,
shares of our common stock may be issued to our directors, officers, key employees, consultants,
and advisors in the form of restricted stock awards, incentive stock awards, incentive stock
options, and non-statutory stock options. Each type of award under the plan is subject to
different requirements and the awards may be conditioned by the performance of the officers and
their contribution to the performance of the Company. The plan provides that no person shall be
granted incentive stock options worth more than $100,000 based on their exercise price or 50,000
shares of restricted stock or stock options during any calendar year. During 2010, the Company
granted no stock options or stock awards under this plan.
Executive Savings Plan: We implemented an Executive Savings Plan with executive officers and
certain other officers whereby an initial contribution of the officers salary made by the officer
will be
14
matched 100% each year by the Company as long as the officers employment with the Company
continues and the officer is in good standing. There were no contributions made to the Executive
Savings Plan during 2010 and this plan was terminated, effective September 30, 2010. Amounts may
only be withdrawn from the plan upon termination of employment at which time the participant may
elect to take the distribution as a lump sum payment or in annual installments. All remaining
account balances will be distributed on October 1, 2011. Additional information regarding these
payments can be found further in this document.
Defined Contribution Plan: We provide defined contribution 401(k) plans at each of our
subsidiary banks. The Company may also make an additional discretionary contribution to the plans.
Participants are fully vested in their contributions and the Companys match immediately and
become fully vested in the Companys discretionary contributions after three years of service.
Under the Bank of Hampton Roads 401(k) plan, all employees who are 21 years of age and have
completed one year of service are eligible to participate. Participants may contribute up to 20%
of their compensation, subject to statutory limitations and the Company matches 100% of the
employees contributions up to 4% of salary.
Under the Shore Bank 401(k) plan, all employees who are 18 years of age and have completed 3
months of service are eligible to participate. Participants may contribute up to 15% of their
compensation and the Company matches 100% up to 3% of the employees contributions and 50% of the
next 3%.
Under the Gateway 401(k) plan, all employees over the age of 18 that have completed three
months of service are eligible to participate. The Company matches 100% of the employees
contributions up to 6% of the employees salary.
Supplemental Retirement Agreement: The Company has entered into Supplemental Retirement
Agreements with several key officers. The following gives a description of the plan.
Gateway Bank entered into a Supplemental Retirement Agreement with David R. Twiddy on December
24, 2008. The purpose of the agreement was to provide a retirement vehicle for Mr. Twiddy. Under
this agreement, Mr. Twiddy is eligible to receive an annual benefit payable in 15 installments
equal to 70% of his benefit computation base following the attainment of his plan retirement date,
September 24, 2022. The benefit computation base is calculated as his average compensation
including bonuses from us over the three highest compensation completed calendar years prior to the
year during which the plan retirement date occurs. If Mr. Twiddys employment is terminated prior
to his plan retirement date, other than by his death or for cause (as that term is defined in the
agreement), he may be eligible under this agreement to receive the present value of the amount of
his accrued benefit as of the date of such termination of employment. However, the Company is
prohibited from making any such payment without prior regulatory approval as a result of the
Companys troubled condition under section 18(k) of the Federal Deposit Insurance Act and 12 C.F.R.
Part 359.
We entered into a Supplemental Retirement Agreement with Douglas J. Glenn on November 1, 2007.
The purpose of the agreement is to provide a retirement vehicle for Mr. Glenn that will reward his
years of service to the Company. Under this agreement, Mr. Glenn is eligible to receive an annual
benefit payable in 15 installments equal to 50% of his benefit computation base following the
attainment of his plan retirement date in 2031. The benefit computation base is calculated as his
average compensation including bonuses from us over the three highest compensation completed
calendar years prior to the year during which the plan retirement date occurs. The estimated
annual benefits payable upon retirement at the plan retirement date are $488,668. Mr. Glenn will
become fully vested in the plan in November 2022.
Supplemental Executive Retirement Plan (SERP). Bank of Hampton Roads adopted a SERP in
2005. The only Named Executive Officer currently participating in the SERP is Lorelle
Fritsch. The
15
purpose of the agreement is to provide a retirement vehicle for Mrs. Fritsch that
will reward her years of service to the Company. Under this agreement, Mrs. Fritsch is eligible to
receive an annual benefit payable in 15 installments of $50,000 for a total of $750,000 commencing
upon the first month after such executive attains age 65. The benefits shall, to the extent in
compliance with applicable law, vest ratably from the date of the sixtieth month of participation
in the SERP through the executive attaining age 65.
Perquisites and other benefits. In addition to the benefits described above, we provide our
executive officers with certain other perquisites that the Compensation Committee considers to be
usual and customary within our peer group to remain competitive in the market for experienced
management. For instance, Named Executive Officers receive partial reimbursement from the Company
of their country club expenses and the use of an automobile. Gateway paid premiums for dependent
health insurance coverage for its executive officers and reimburses executive officers for the
payment of federal and state income taxes imposed as a result of the grant of restricted stock.
Split Dollar Arrangements. Gateway Bank (now Bank of Hampton Roads) was a party to a Split
Dollar Agreement with Mr. Twiddy, which provides for the division of the death proceeds on the life
insurance policy on his life, which was owned by Bank of Hampton Roads, with his designated
beneficiary. Under the Split Dollar Agreement, if Mr. Twiddy dies, his beneficiary shall be
entitled to a fixed cash benefit from Bank of Hampton Roads. As of December 31, 2010, the amount
was approximately $2,535,500 for Mr. Twiddy. Bank of Hampton Roads is not permitted to sell,
surrender, or transfer ownership of any life insurance policy without replacing the policy with a
comparable policy to cover the benefit provided by the Split Dollar Agreement. Bank of Hampton
Roads may not terminate or amend the Split Dollar Agreements without the officers consent. All
life insurance policies are subject to the claims of creditors.
Risk Assessment
We reviewed our compensation programs and policies for all employees and determined that they
are not reasonably likely to have a material adverse effect on the Company. We believe our
compensation programs are designed with the appropriate balance of risk and reward in relation to
our Companys overall business strategy. In addition, our executive compensation programs did not
provide for the payment of performance based-bonuses in 2010, which significantly reduces the
amount of excessive risk-taking that our compensation programs might impose.
Leadership Structure
We have operated under a board leadership structure with separate roles for our Chairman
of the Board and our Chief Executive Officer, although our governance documents do not require
this. Mr. Custis, as our Chairman of the Board, is responsible for presiding over the meetings of
the Board of Directors and the annual meetings of stockholders, and Mr. Davies, as our Chief
Executive Officer, is responsible for the general management of the business, financial affairs and
day-today operations of the Company. As our directors continue to have more oversight
responsibility, we believe it is beneficial to have a Chairman whose focus is to lead the board and
facilitate communication among directors and management. Accordingly, we believe this structure is
the best governance model for the Company and our stockholders.
2010 Compensation Committee Report
The Compensation Committee has reviewed the Compensation Discussion and Analysis included
in this Annual Report on Form 10-K and to be included in the Companys proxy statement related to
its 2011 Annual Meeting of Shareholders and discussed it with the Companys management. Based on
this review and discussion, the Compensation Committee recommended that the Compensation Discussion
and Analysis be included in the Companys annual report on Form 10-K for the year ended
December 31,
16
2010, as amended, and the Companys Proxy Statement.
During fiscal 2010, the Company participated in the Troubled Asset Relief Program
(TARP) established by the U.S. Department of the Treasury (the Treasury) under the Emergency
Economic Stabilization Act of 2008 (EESA) as a result of its prior sale of preferred stock to the
Treasury and subsequent exchange and conversion of preferred stock into common stock of the
Company.
As required by the TARP and by the American Recovery and Reinvestment Act of 2009 (ARRA),
the Compensation Committee reviewed the terms of each senior executive officer and employee
compensation plan with the Companys senior risk officer. This process included the review of all
applicable senior executive officer and employee contracts, including salary, annual incentives,
and long-term incentives and performance measurements.
Changes to Executive Compensation Program: As required by ARRA, a number of changes were
made to our executive compensation program. The changes include:
| Performance-based bonuses and other incentive payments to the five most highly compensated employees, as well as all other employees were not made during fiscal 2010. | ||
| The change of control agreements previously applicable to senior executive officers, the next five most highly compensated employees, and all other employees were suspended during fiscal 2010. |
In addition, the Company has required that bonus payments to senior executive officers or
any of the next twenty most highly compensated employees, as defined in the regulations and
guidance established under section 111 of EESA (bonus payments), be subject to a recovery or
clawback provision during any part of the most recently completed fiscal year that was a TARP
period if the bonus payments were based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria. However, there were no such bonus payments to
any such officers or employees during fiscal 2010.
The purpose of the review was to identify any features of the compensation plans that
could encourage the Companys executive officers to take unnecessary and excessive risks or
encourage the Companys employees to manipulate reported earnings to enhance compensation. The
Committee believes that the compensation plans do not encourage the senior executive officers to
take unnecessary or excessive risks that threaten the value of the Company or encourage the
manipulation of reported earnings because such plans currently do not contain performance-based
compensation elements. In addition, to ensure compliance with relevant laws associated with the
receipt of TARP and to limit potential risks posed by its compensation plans, the Company suspended
all incentives, with the exclusion of base salaries.
17
The Compensation Committee certifies that it has reviewed with the senior risk officer
the senior executive officer compensation plans and has made all reasonable efforts to ensure that
these plans do not encourage senior executive officers to take unnecessary and excessive risks that
threaten the value of the Company. The Compensation Committee further certifies that it has
reviewed with the senior risk officer the employee compensation plans and has made all reasonable
efforts to limit any unnecessary risks these plans pose to the Company; and the Company has
reviewed the employee compensation plans to eliminate any features of these plans that would
encourage the manipulation of reported earnings of the Company to enhance the compensation of any
employee.
Patrick E. Corbin
Henry P. Custis, Jr.
Robert B. Goldstein
Hal F. Goltz
W. Lewis Witt
Henry P. Custis, Jr.
Robert B. Goldstein
Hal F. Goltz
W. Lewis Witt
Summary Compensation Table
The following table shows the compensation of our principal executive officers and principal
financial officers during fiscal 2010, as well as our three most highly compensated executive
officers (other than our principal executive officer and principal financial officers) during the
year. References throughout this Annual Report on Form 10-K to our Named Executive Officers or
named executives refer to each of the individuals named in the table below.
Non- | Change in | |||||||||||||||||||||||||||||||||||
Equity | Pension Value | |||||||||||||||||||||||||||||||||||
Incentive | and | |||||||||||||||||||||||||||||||||||
Plan | Nonqualified | |||||||||||||||||||||||||||||||||||
Name and | Stock | Option | Compen- | Deferred | All Other | |||||||||||||||||||||||||||||||
Principal | Bonus | Awards | Awards | sation | Compensation | Compensation | Total | |||||||||||||||||||||||||||||
Position | Year | Salary ($) | ($) | (h)($) | (i)($) | ($) | Earnings (j)($) | ($) | ($) | |||||||||||||||||||||||||||
John A. B. Davies, Jr. |
2010 | $ | 500,000 | | | | | | $ | 78,197 | (a) | 578,197 | ||||||||||||||||||||||||
2009 | 242,628 | 57,895 | 123,750 | | | | 11,913 | 436,186 | ||||||||||||||||||||||||||||
Stephen P. Theobald |
2010 | 35,417 | (b) | | | | | | 269,785 | (m) | 305,202 | |||||||||||||||||||||||||
Neal A. Petrovich |
2010 | 135,417 | (k) | | | | | | 4,944 | (c) | 135,466 | |||||||||||||||||||||||||
2009 | 234,006 | | 41,500 | | | | 33,976 | 309,482 | ||||||||||||||||||||||||||||
Lorelle L. Fritsch (l) |
2010 | 205,817 | | | | | 17,226 | 10,451 | (d) | 233,494 | ||||||||||||||||||||||||||
2009 | 181,166 | | | | | 16,099 | 11,405 | 208,670 | ||||||||||||||||||||||||||||
2008 | 131,907 | | 22,500 | | | 15,046 | 44,022 | 213,475 | ||||||||||||||||||||||||||||
David Twiddy(n) |
2010 | 425,000 | | | | | 244,463 | 25,439 | (e) | 694,902 | ||||||||||||||||||||||||||
2009 | 425,000 | | | | | 205,945 | 109,605 | 740,550 | ||||||||||||||||||||||||||||
2008 | 425,000 | 130,000 | 80,000 | | | | 855,307 | 1,490,307 | ||||||||||||||||||||||||||||
Douglas J. Glenn |
2010 | 404,167 | | | | | 55,976 | 59,942 | (f) | 527,393 | ||||||||||||||||||||||||||
2009 | 400,000 | | | | | 55,193 | 75,302 | 530,495 | ||||||||||||||||||||||||||||
Kevin Pack |
2010 | 325,000 | | | | | 169,299 | (g) | 494,299 | |||||||||||||||||||||||||||
2009 | 353,718 | | | | | | 19,344 | 373,062 |
18
(a) | This column includes $40,150 in fees for acting as a director of the Company, $3,874 for personal use of a Company automobile, and a $34,173 payment to correct an underpayment due to payment error in 2009. | |
(b) | This amount represents part-year compensation due to Mr. Theobald having joined the Company as Chief Financial Officer on December 1, 2010. | |
(c) | This column includes Greenbrier Country Club dues of $1,801, $1,073 for personal use of a Company automobile and a $2,070 payment related to the vesting of restricted stock. | |
(d) | This column includes $8,233 in 401(k) match, $1,168 for personal use of a Company automobile, and $1,050 earnings related to an executive savings plan. | |
(e) | This column includes $14,700 in 401(k) match, $900 for personal use of a Company automobile, the Pines Lake Country Club dues of $1,725, and BOLI imputed income of $8,114. | |
(f) | This column includes $9,800 in 401(k) match, $3,830 for personal use of a Company automobile, a $1,760 payment related to the vesting of restricted stock, ($7,308) earnings for an executive savings plan, and Cavalier Golf & Yacht Club dues of $11,960. This total also includes $39,900 in fees for acting as a director of the Company. | |
(g) | This column includes $14,700 in 401(k) match, $700 for personal use of an automobile, Capital City Club dues of $1,914, State Club dues of $1,030, BOLI imputed income of $955 and $150,000 in regards to a non-solicitation and non-competition agreement. | |
(h) | This column represents stock awards granted by the Company. The expense was calculated according to ASC Topic 718 (formerly known as FASB Statement 123R). Stock awards are expensed over the vesting periods established at the time the grants are made by the Company. | |
(i) | This column represents the expense to the Company related to stock options granted. The expense was calculated according to ASC Topic 718 (formerly known as FASB Statement 123R). Stock options granted to employees and Directors have exercise prices equal to the market value of our common stock on the grant date. | |
(j) | This column represents the change in the benefit obligation for the Supplemental Retirement Agreements from the previous year to the current year. These amounts were expensed during the year and a liability was recorded on the Companys balance sheet which represents the present value of payments that will be made to employees under the Supplemental Retirement Agreements upon their retirement. We have funded the Supplemental Retirement Agreements within this column with life insurance policies which name the company as beneficiary. These life insurance policies will reimburse the Company for all expenses related to the Supplemental Retirement Agreements including the policy premiums and the payments made to employees upon their retirement. | |
(k) | This amount represents part-year compensation due to Mr. Petrovich having resigned from the Company, effective June 4, 2010. | |
(l) | Ms. Fritsch acted as the Chief Financial Officer of the Company from August 2008 to February 2009 and May 2010 to December 1, 2010. | |
(m) | Represents consulting fees earned prior to becoming Chief Financial Officer. |
19
(n) | Mr. Twiddy resigned as Executive Vice President of the Company effective February 24, 2011. |
Grants of Plan-Based Awards Table
The following table presents all plan-based awards granted to the Named Executive Officers
during 2010.
All Other | All Other Option | |||||||||||||||||||
Stock Awards: | Awards: Number | Exercise or | Grant Date | |||||||||||||||||
Number of | of Securities | Base Price of | Fair Value | |||||||||||||||||
Shares of | Underlying | Option | of Stock and | |||||||||||||||||
Stock or Units | Options | Awards | Option | |||||||||||||||||
Name | Grant Date | (#) | (#) | ($/Sh) | Awards ($) | |||||||||||||||
John A. B. Davies, Jr. |
| | | | | |||||||||||||||
Stephen P. Theobald |
| | | | | |||||||||||||||
Neal A. Petrovich |
| | | | | |||||||||||||||
Lorelle L. Fritsch |
| | | | | |||||||||||||||
David Twiddy |
| | | | | |||||||||||||||
Douglas J. Glenn |
| | | | | |||||||||||||||
Kevin Pack |
| | | | |
Outstanding Equity Awards at Fiscal Year-End Table
The following table presents outstanding stock option and non-vested stock awards as of
December 31, 2010.
Option Awards | Stock Awards | |||||||||||||||||||||||
Number | Market | |||||||||||||||||||||||
of | Value of | |||||||||||||||||||||||
Shares | Shares | |||||||||||||||||||||||
or Units | or Units | |||||||||||||||||||||||
Number of | Number of | of Stock | of Stock | |||||||||||||||||||||
Securities | Securities | That | That | |||||||||||||||||||||
Underlying | Underlying | Option | Have | Have | ||||||||||||||||||||
Unexercised | Unexercised | Exercise | Option | Not | Not | |||||||||||||||||||
Options (#) | Options (#) | Price | Expiration | Vested | Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | (#) | ($) | ||||||||||||||||||
John A. B. Davies, Jr. |
0 | 0 | $ | 0.00 | n/a | 0 | $ | 0.00 | ||||||||||||||||
Stephen P. Theobald |
0 | 0 | $ | 0.00 | n/a | 0 | $ | 0.00 | ||||||||||||||||
Neal A. Petrovich |
0 | 0 | $ | 0.00 | n/a | 0 | $ | 0.00 | ||||||||||||||||
Lorelle L. Fritsch |
0 | $ | 0.00 | |||||||||||||||||||||
2,400 | 600 | $ | 12.00 | 12/31/2016 |
20
Option Awards | Stock Awards | |||||||||||||||||||||||
Number | Market | |||||||||||||||||||||||
of | Value of | |||||||||||||||||||||||
Shares | Shares | |||||||||||||||||||||||
or Units | or Units | |||||||||||||||||||||||
Number of | Number of | of Stock | of Stock | |||||||||||||||||||||
Securities | Securities | That | That | |||||||||||||||||||||
Underlying | Underlying | Option | Have | Have | ||||||||||||||||||||
Unexercised | Unexercised | Exercise | Option | Not | Not | |||||||||||||||||||
Options (#) | Options (#) | Price | Expiration | Vested | Vested | |||||||||||||||||||
Name | Exercisable | Unexercisable | ($) | Date | (#) | ($) | ||||||||||||||||||
1,978 | 0 | $ | 10.65 | 12/31/2015 | ||||||||||||||||||||
2,079 | 0 | $ | 9.75 | 12/31/2014 | ||||||||||||||||||||
1,074 | 0 | $ | 8.77 | 12/31/2013 | ||||||||||||||||||||
1,006 | 0 | $ | 7.09 | 12/31/2012 | ||||||||||||||||||||
1,192 | 0 | $ | 7.03 | 12/31/2011 | ||||||||||||||||||||
729 | 0 | $ | 6.53 | 12/31/2010 | ||||||||||||||||||||
David Twiddy |
670 | 2,680 | $ | 21.87 | 8/28/2016 | |||||||||||||||||||
24,321 | 0 | $ | 19.67 | 11/24/2014 | ||||||||||||||||||||
13,764 | 0 | $ | 9.16 | 8/2/2011 | ||||||||||||||||||||
6,075 | 0 | $ | 8.64 | 11/20/2010 | ||||||||||||||||||||
Douglas J. Glenn |
4,000 | $ | 2,080.00 | |||||||||||||||||||||
0 | 20,000 | $ | 12.25 | 11/1/2017 | ||||||||||||||||||||
2,000 | 0 | $ | 12.00 | 12/31/2016 | ||||||||||||||||||||
10,000 | 0 | $ | 12.00 | 12/31/2016 | ||||||||||||||||||||
Kevin Pack |
1,340 | 5,360 | $ | 20.985 | 8/31/2017 |
All of the above stock options were fully vested on the grant date except for the stock
options granted on December 31, 2006 and November 1, 2007. Of the stock options granted on December 31,
2006, Ms. Fritschs options have a five-year vesting schedule. All stock options have 10-year
terms.
Option Exercises and Stock Vested Table
The following table presents the stock options exercised and the stock awards vested for the
Named Executive Officers during 2010.
Option Awards | Stock Awards | |||||||||||||||
Number of Shares | Number of | |||||||||||||||
Acquired on | Value Realized | Shares Acquired | Value Realized | |||||||||||||
Exercise | on Exercise | on Vesting | on Vesting | |||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||
John A. B. Davies, Jr. |
| | | | ||||||||||||
Stephen P. Theobald |
| | | | ||||||||||||
Neal A. Petrovich |
1000 | $ | 2070 | |||||||||||||
Lorelle L. Fritsch |
| | | | ||||||||||||
David Twiddy |
| | | | ||||||||||||
Douglas J. Glenn |
2000 | $ | 1760 | |||||||||||||
Kevin Pack |
| | | |
Pension Benefits Table
The following table presents information related to the Supplemental Retirement Agreements for
the Named Executive Officers as of and for the year ended December 31, 2010.
21
Number of | Present Value of | Payments | ||||||||||||
Years Credited | Accumulated | During Last | ||||||||||||
Service | Benefit | Fiscal Year | ||||||||||||
Name | Plan Name | (#) | ($) | ($) | ||||||||||
John A. B. Davies, Jr. |
None | | | | ||||||||||
Stephen P. Theobald |
None | | | | ||||||||||
Neal A. Petrovich |
None | | | | ||||||||||
Lorelle L. Fritsch |
Supplemental Executive Retirement Plan | 3 | $ | 48,372 | | |||||||||
David Twiddy |
Supplemental Retirement Agreement | 2 | $ | 805,615 | | |||||||||
Douglas J. Glenn |
None | 3 | $ | 155,482 | | |||||||||
Kevin Pack |
None | | | |
The Supplemental Retirement Agreements are discussed in further detail in the Compensation
Disclosure and Analysis section of this Annual Report on Form 10-K. The discount rate used to
calculate the Present Value of Accumulated Benefit was 7% under the terms of the plan agreement.
Nonqualified Deferred Compensation Table
The following table presents information related to the Executive Savings Plan for the Named
Executive Officers during 2010.
Executive | Registrant | Aggregate | Aggregate | |||||||||||||||||
Contributions | Contributions | Earnings in | Aggregate | Balance at | ||||||||||||||||
in Last Fiscal | in Last Fiscal | Last Fiscal | Withdrawals/ | Last Fiscal | ||||||||||||||||
Year | Year | Year | Distributions | Year-End | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
John A. B. Davies, Jr. |
| | | | | |||||||||||||||
Stephen P. Theobald |
| | | | N/A | |||||||||||||||
Neal A. Petrovich |
| | | | | |||||||||||||||
Lorelle L. Fritsch |
| | $ | 1,050 | | $ | 50,477 | |||||||||||||
David Twiddy |
| | | | | |||||||||||||||
Douglas J. Glenn |
| | $ | (7,308 | ) | | $ | 4,939 | ||||||||||||
Kevin Pack |
| | | | |
22
The Executive Savings Plan is discussed in further detail in the Compensation Disclosure and
Analysis section of this Annual Report on Form 10-K. Amounts disclosed above in the Registrant
Contributions in Last Fiscal Year and Aggregate Earnings in Last Fiscal Year columns were also
included in the All Other Compensation column of the Summary Compensation Table above.
Potential Payments upon Termination or Change-in-Control
The table below shows the present value of estimated Company payments under the employment
agreements, equity plans, and other non-qualified plans described above, upon a termination of
employment, including the Company gross-up payments for excise tax on the parachute payments upon a
change of control, for each of Mr. Davies, Mr. Theobald, Mr. Petrovich, Ms. Fritsch, Mr. Twiddy,
Mr. Glenn and Mr. Pack.(1) The payments represent the maximum possible payments under
interpretations and assumptions most favorable to the executive officer. All termination events,
except retirement, are assumed to occur on December 31, 2010 and termination upon a change of
control is assumed to be involuntary by the Company or its successor. Termination upon retirement
is assumed to occur upon the
officers normal retirement date. Company payments to a terminated executive may be more or less
than the amounts contained in the various agreements and plans. In addition, certain amounts
currently are vested and, thus, do not represent an increased amount of benefits.
Davies | Theobald | Petrovich | Fritsch | Glenn | Pack | Twiddy | ||||||||||||||||||||||
CHANGE OF CONTROL |
||||||||||||||||||||||||||||
Employment Agreement |
2,040,793 | | | 408,084 | 1,073,791 | | 2,064,502 | |||||||||||||||||||||
Supplemental Retirement
Agreement/Plan |
||||||||||||||||||||||||||||
Fully vested prior to
Change of Control |
424,284 | |||||||||||||||||||||||||||
Additional vesting due
to change in control |
| | | 683,094 | 2,328,283 | | 3,640,122 | |||||||||||||||||||||
Employee Savings Plan |
| | | 197,277 | 332,501 | | | |||||||||||||||||||||
Restricted Stock |
| | | | 750 | | | |||||||||||||||||||||
Sub Total |
2,040,793 | | | 1,288,454 | 3,735,325 | | 6,128,909 | |||||||||||||||||||||
Contractual Gross-Up for
Excise Taxes |
| | | 588,113 | 1,699,201 | | 2,587,300 | |||||||||||||||||||||
Company Payment Upon
Change of Control |
2,040,793 | | | 1,876,567 | 5,434,526 | | 8,716,209 | |||||||||||||||||||||
RETIREMENT |
||||||||||||||||||||||||||||
Restricted Stock Plan |
| | | | | | | |||||||||||||||||||||
Employment Agreement |
| | | | | | | |||||||||||||||||||||
Supplemental Retirement
Agreement |
1,660,842 | 2,899,277 | ||||||||||||||||||||||||||
SERP |
455,396 | |||||||||||||||||||||||||||
Employee Savings Plan |
41,902 | |||||||||||||||||||||||||||
Retirement |
497,298 | 1,660,842 | 2,899,277 | |||||||||||||||||||||||||
TERMINATION OF
EMPLOYMENT BY EXECUTIVE
WITH GOOD REASON |
||||||||||||||||||||||||||||
Restricted Stock Plan |
| | | | | | | |||||||||||||||||||||
Employment Agreement |
| | | | | | 424,261 | |||||||||||||||||||||
Supplemental Retirement
Agreement |
| | | | | | 424,284 |
23
Davies | Theobald | Petrovich | Fritsch | Glenn | Pack | Twiddy | ||||||||||||||||||||||
SERP |
| | | | | | | |||||||||||||||||||||
Employee Savings Plan |
| | | 41,902 | | | | |||||||||||||||||||||
EXECUTIVE TERM W/ GOOD
REASON |
| | | 41,902 | | | 848,545 | |||||||||||||||||||||
TERMINATION OF
EMPLOYMENT BY EXECUTIVE
WITHOUT GOOD REASON |
||||||||||||||||||||||||||||
Restricted Stock Plan |
| | | | | | | |||||||||||||||||||||
Employment Agreement /
Consulting Agreement |
| | | | | | | |||||||||||||||||||||
Supplemental Retirement
Agreement |
| | | | | | $ | 424,284 | ||||||||||||||||||||
SERP |
| | | | | | | |||||||||||||||||||||
Director Deferred Comp
Plan |
| | | | | | | |||||||||||||||||||||
Director Retirement
Agreements |
| | | | | | | |||||||||||||||||||||
Employee Savings Plan |
| | | 41,902 | | | | |||||||||||||||||||||
EXECUTIVE TERM
W/O GOOD REASON |
| | | 41,902 | | | 424,284 | |||||||||||||||||||||
TERMINATION OF
EMPLOYMENT BY BANK
WITHOUT CAUSE |
||||||||||||||||||||||||||||
Restricted Stock |
| | | | | | | |||||||||||||||||||||
Employment Agreement |
747,985 | | | | 424,261 | | 424,261 | |||||||||||||||||||||
Supplemental Retirement
Agreement |
| | | | | | 424,284 | |||||||||||||||||||||
SERP |
| | | | | | | |||||||||||||||||||||
Employee Savings Plan |
| | | 41,902 | | | | |||||||||||||||||||||
BANK TERM W/O
CAUSE |
747,985 | 41,902 | 424,261 | 848,545 | ||||||||||||||||||||||||
TERMINATION OF EMPLOYMENT BY BANK WITH
CAUSE |
| | | | | | | |||||||||||||||||||||
DEATH |
||||||||||||||||||||||||||||
Restricted Stock |
| | | | 3,120 | | | |||||||||||||||||||||
Employment Agreement |
| | | | | | | |||||||||||||||||||||
Supplemental Retirement
Agreement |
| | | | 417,734 | | 417,734 | |||||||||||||||||||||
SERP |
| | | 351,179 | | | | |||||||||||||||||||||
Executive Savings Plan |
| | | 41,902 | | | | |||||||||||||||||||||
DEATH |
| | | 393,081 | 420,854 | | 417,734 | |||||||||||||||||||||
DISABILITY |
||||||||||||||||||||||||||||
Restricted Stock |
| | | | 3,120 | | | |||||||||||||||||||||
Employment Agreement |
| | | 112,500 | 212,500 | | 212,500 | |||||||||||||||||||||
Supplemental Retirement
Agreement |
| | | | | | 424,284 | |||||||||||||||||||||
SERP |
| | | 455,396 | | | | |||||||||||||||||||||
Executive Savings Plan |
| | | 41,902 | | | | |||||||||||||||||||||
DISABILITY |
| | | 609,798 | 215,620 | | 636,784 |
24
(1) | The TARP compensation limitations prohibit the Company from making any payment to the Named Executive Officers for departure from the Company for any reason, or paying any benefit upon a change-in-control, except for payments for services performed or benefits accrued. In addition, the Company is prohibited, under section 18(k) of the Federal Deposit Insurance Act and 12 C.F.R. Part 359, from making any severance or indemnification payments to its employees for so long as Bank of Hampton Roads or the Company remain in troubled condition under applicable federal regulations. Both of these limitations exclude payments due to an employee on death or disability. Therefore, even though we have discussed above potential payments that would have been due had a termination of an executive officer occurred as of December 31, 2010, it is likely that the application of the TARP compensation limitations and/or 12 C.F.R. Part 359 would result in a prohibition of all such payments, except to the extent previously accrued under generally accepted accounting principles or due to death or disability, to a Named Executive Officer if such officer terminated employment during the TARP period or while the restrictions of 12 C.F.R. Part 359 apply. |
Director Compensation Table
The following table shows compensation paid to directors of the Company during 2010.
Fees Earned or | ||||||||||||||||||||
Paid in Cash | ||||||||||||||||||||
from the | Fees Earned or | |||||||||||||||||||
Total Fees | Company/Bank | Paid in Cash | ||||||||||||||||||
Earned or Paid | Option | of Hampton | from Shore | |||||||||||||||||
in Cash | Stock Awards | Awards | Roads | Bank | ||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | |||||||||||||||
William Brumsey, III(1)(6) |
25,025 | | | 25,025 | | |||||||||||||||
Pat Corbin(7) |
32,325 | | | 31,825 | 500 | |||||||||||||||
Henry P. Custis(7)(10) |
49,525 | | | 25,525 | 24,000 | |||||||||||||||
John A. B. Davies, Jr.
(7) |
40,150 | | | 23,650 | 16,500 | |||||||||||||||
Douglas J. Glenn(7) |
39,900 | | | 23,400 | 16,500 | |||||||||||||||
Robert B. Goldstein(2) |
4,225 | | | 4,225 | | |||||||||||||||
Hal F. Goltz(3) |
| | | | | |||||||||||||||
Herman A. Hall,
III(1)(6)(11) |
28,650 | | | 28,650 | | |||||||||||||||
Richard F. Hall,
III(4)(8)(12) |
49,850 | | | 29,650 | 20,200 | |||||||||||||||
Robert R. Kinser(1)(6) |
27,900 | | | 27,900 | | |||||||||||||||
William E. Paulette |
24,100 | | | 24,100 | | |||||||||||||||
Randal K. Quarles(3) |
5,650 | | | 5,650 | | |||||||||||||||
Bobby L. Ralph(1)(6) |
30,650 | | | 30,650 | | |||||||||||||||
Billy G. Roughton |
25,650 | | | 25,650 | | |||||||||||||||
Jordan E. Slone |
27,275 | | | 27,275 | | |||||||||||||||
Roland Carroll Smith,
Sr. (1)(6) |
26,250 | | | 26,250 | | |||||||||||||||
Ollin B. Sykes(1)(6) |
26,400 | | | 26,400 | | |||||||||||||||
Emil A. Viola(5)(9) |
22,700 | | | 22,700 | | |||||||||||||||
Frank T. Williams(1)(6) |
27,025 | | | 27,025 | | |||||||||||||||
W. Lewis Witt |
29,900 | | | 29,900 | | |||||||||||||||
Jerry T. Womack(1)(6) |
25,650 | | | 25,650 | |
25
(1) | Company Directorship ended on September 30, 2010; remains a director of Bank of Hampton Roads. | |
(2) | Company Directorship began on October 4, 2010. | |
(3) | Company Directorship began on September 30, 2010. | |
(4) | Company Directorship ended on September 30, 2010. | |
(5) | Company Directorship and Bank of Hampton Roads Directorship ended on September 28, 2010. | |
(6) | Fees paid after September 30, 2010, for Bank of Hampton Roads Directorship only. | |
(7) | Received only one fee for both Company and Bank of Hampton Roads Directorships. | |
(8) | Fees paid after September 30, 2010 for Bank of Hampton Roads and Shore Bank Directorships only. | |
(9) | Chairman of the Boards for the Company and Bank of Hampton Roads until September 28, 2010. | |
(10) | Chairman of the Companys board as of September 28, 2010; Chairman of the Shore Bank Board until October 25, 2010. | |
(11) | Chairman of the Board of Bank of Hampton Roads as of September 28, 2010. | |
(12) | Chairman of the Board of Shore Bank as of October 25, 2010. |
During fiscal year 2010, each director of the Company received a monthly directors fee
of $1,800 and $250 per committee meeting attended. Neither the Chairman of the Companys Board nor
any chairman of a board committee was otherwise compensated. The Company had a Directors Deferred
Compensation Agreement through which directors could elect to defer their directors fees by using
the fees to purchase shares of our stock held in a rabbi trust. The directors could also elect to
defer their board fees and, until March 31, 2010, accrue interest on the deferred fees at an
interest rate equal to the
highest rate currently being offered on a certificate of deposit at the Companys bank
subsidiaries. Effective April 1, 2010, this interest rate was changed to .50%. This plan was
terminated September 30, 2010.
Certain of the Companys directors resigned as of September 30, 2010, but remained directors
of The Bank of Hampton Roads, a wholly owned subsidiary of the Company. During fiscal year 2010,
each director of The Bank of Hampton Roads who was not also a director of the Company received a
monthly directors fee of $1,800 and $250 per committee meeting attended. Neither the Chairman of
the Board for The Bank of Hampton Roads nor any chairman of a board committee was otherwise
compensated.
Certain of the Companys directors also serve as directors of Shore Bank, a wholly owned
subsidiary of the Company. Each director of Shore Bank receives an annual retainer of $9,000
regardless of whether he attends meetings of the board plus $500 for each meeting attended, except
for the chairman of the Shore Bank board, who receives an annual retainer of $18,000 plus $500 for
each meeting attended. In addition, each director, excluding Messrs. Davies and Glenn, is paid
$250 for each board committee meeting attended. The Chair of the Investment, Asset/Liability
Management and Compensation committees is paid $500 per meeting attended, and the Chair of the
Audit Committee is compensated $700 per meeting, with other Audit Committee members receiving $350
per meeting attended.
Compensation Committee Interlocks and Insider Participation
No member of the Companys Compensation Committee was an officer or employee of the Company
during 2010. During 2010, none of our executive officers served as a member of a Compensation
Committee of another entity, nor did any of our executive officers serve as a director of another
entity whose executive officers served on our Compensation Committee. There are members of our
Compensation Committee that have outstanding loans with Bank of Hampton Roads. Each of these loans
was made in the ordinary course of business on substantially the same terms, including interest
rates, collateral, and repayment terms, as those prevailing at the time for comparable transactions
with unrelated parties and did not involve more than the normal risk of collectability or present
other unfavorable features. See Certain Relationships and Related Transactions.
26
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial Ownership of Directors, Executive Officers, and Principal Shareholders of the Company
The following table sets forth for (1) each director and the executive officers named in the
Summary Compensation Table, (2) all directors and executive officers as a group, and (3) each
beneficial owner of 5% or more of our common stock: (i) the number of shares of common stock
beneficially owned on April 11, 2011, and (ii) such persons or groups percentage ownership of
outstanding shares of common stock on such date. All of the Companys directors and executive
officers receive mail at the Companys principal executive office at Attn: Douglas J. Glenn,
Executive Vice President, General Counsel, and Chief Operating Officer at Hampton Roads Bankshares,
Inc., 999 Waterside Dr., Suite 200, Norfolk, Virginia 23510.
This table is based upon information supplied by officers, directors, and principal
shareholders. Unless indicated in the footnotes to this table and subject to community property
laws where applicable, the Company believes that each of the shareholders named in this table has
sole voting and investment power with respect to the shares indicated as beneficially owned.
Number of Shares | Percent of | |||||||
Name | Beneficially Owned | Outstanding Shares (1) | ||||||
Certain Beneficial Owners: |
||||||||
Carlyle Financial Services Harbor, L.P.(2) |
196,767,315.00 | (3) | 23.57 | (3) | ||||
ACMO-HR, L.L.C.(4) |
196,543,825.00 | (5) | 23.09 | (5) | ||||
CapGen Capital Group VI LP(6) |
159,389,597.00 | (7) | 18.91 | (7) | ||||
Fir Tree Value Master Fund, L.P.(8) |
82,633,418.00 | 9.90 | ||||||
Affiliates of Davidson Kempner Capital
Management LLC |
82,633,418.00 | (9) | 9.90 | |||||
United States Department of the Treasury |
53,551,408.00 | (10) | 6.41 | |||||
Directors: |
||||||||
John A. B. Davies, Jr. |
119,843.05 | (11) | * | |||||
Patrick E. Corbin |
697,641.67 | (12) | * | |||||
Henry P. Custis |
630,496.00 | (13) | * | |||||
Douglas J. Glenn |
126,893.02 | (14) | * | |||||
William A. Paulette |
417,346.00 | (15) | * | |||||
Billy Roughton |
1,276,896.71 | (16) | * | |||||
Jordan E. Slone |
371,093.34 | (17) | * |
27
Number of Shares | Percent of | |||||||
Name | Beneficially Owned | Outstanding Shares (1) | ||||||
W. Lewis Witt |
1,000,087.86 | (18) | * | |||||
Robert B. Goldstein(19) |
159,389,597.00 | (20) | 18.91 | |||||
Hal F. Goltz |
| | ||||||
Randal K. Quarles |
| | ||||||
Non-Director Executive Officers (not
included above): |
||||||||
Stephen P. Theobald |
| | ||||||
Lorelle L. Fritsch |
22,934.51 | (21) | * | |||||
Kevin Pack |
205,586.41 | (22) | * | |||||
All Directors and Executive Officers, as
a group (14 persons) |
168,431,818.58 | (23) | 19.88 |
* | Represents less than 1% of outstanding shares. | |
(1) | Applicable percentages are based on 834,680,993.56 shares outstanding on April 11, 2011. Shares of common stock subject to options and warrants exercisable within 60 days of April 11, 2011 are deemed outstanding (without regard for limitations on exercise) for computing the percentage of the person holding such options or warrants but are not deemed outstanding for computing the percentage held by any other person. The table includes shares owned by spouses, other immediate family members, in trust, shares held in retirement accounts or funds for the benefit of the named individuals, shares held as restricted stock and other forms of ownership, over which shares the persons named in the table may possess voting and/or investment power. | |
(2) | DBD Cayman Holdings, Ltd., is the sole shareholder of DBD Cayman, Ltd., which is the general partner of TCG Holdings Cayman II, L.P., which is the general partner of TC Group Cayman Investment Holdings, L.P., which is the sole shareholder of Carlyle Financial Services, Ltd., which is the general partner of TCG Financial Services, L.P., which is the general partner of Carlyle Financial Services Harbor, L.P. William E. Conway, Jr., Daniel A. DAniello and David M. Rubenstein are the ordinary members as well as the directors of DBD Cayman Holdings, Ltd. and, in such capacities, may be deemed to share beneficial ownership of the shares of common stock owned by DBD Cayman, Ltd. William E. Conway, Jr., Daniel A. DAniello, David M. Rubenstein and Glenn Youngkin are the directors of Carlyle Financial Services, Ltd. and, in such capacity, may be deemed to share beneficial ownership of the shares of common stock beneficially owned by Carlyle Financial Services, Ltd. | |
(3) | Does not include 8,346,810.00 shares of common stock underlying a warrant that becomes exercisable only upon the occurrence of a stay of the Written Agreement the with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission (the Written Agreement) or the occurrence of a Sale Event, as defined in the applicable warrant agreement. | |
(4) | All investment and voting decisions with respect to the shares of common stock held by ACMO- |
28
HR, L.L.C. are made by Anchorage Capital Group, L.L.C. (formerly named Anchorage Advisors, L.L.C.). Because of their respective relationships with ACMO-HR, L.L.C. and each other, each of Anchorage Advisors Management, L.L.C., Anchorage Capital Group, L.L.C., Anchorage Capital Master Offshore, Ltd., ACMO-HR, L.L.C and Messrs. Anthony L. Davis and Kevin M. Ulrich may be deemed to share voting and disposition power with respect to the shares of common stock beneficially owned by ACMO-HR, L.L.C. None of these persons or entities may be deemed to have sole voting and disposition power with respect to any shares of common stock beneficially owned by ACMO-HR, L.L.C. | ||
(5) | Includes 16,693,620.00 shares of common stock issuable pursuant to a non-contingent warrant, but does not include 8,346,810.00 shares of common stock underlying a warrant that becomes exercisable only upon the occurrence of a stay of the Written Agreement or the occurrence of a Sale Event, as defined in the applicable warrant agreement. | |
(6) | Messrs. John Rose, Robert Goldstein, Eugene A. Ludwig, John Sullivan, Alfred Moses and Edward Mathias comprise the investment committee of CapGen Capital Group VI LLC, and the investment committee is responsible for making all decisions with respect to the voting or disposition of the shares of common stock held by CapGen Capital Group VI LLC. CapGen Capital Group VI LLC is the general partner of CapGen Capital Group VI LP. | |
(7) | Includes 8,346,810.00 shares of common stock issuable pursuant to a non-contingent warrant, but does not include 4,173,405.00 common shares underlying a warrant that becomes exercisable only upon the occurrence of a stay of the Written Agreement or the occurrence of a Sale Event,. as defined in the applicable warrant agreement. | |
(8) | Fir Tree, Inc. may be deemed to beneficially own the shares of common stock held by Fir Tree Value Master Fund, L.P. as a result of being the investment manager of Fir Tree Value Master Fund, L.P. Fir Tree Value Master Fund, L.P. may direct the vote and disposition of the shares of common stock beneficially held by it. Fir Tree, Inc. has been granted investment discretion over the common stock held by Fir Tree Value Master Fund, L.P., and thus, has the shared power to direct the vote and disposition of the shares of common stock beneficially held by Fir Tree Value Master Fund, L.P. Fir Tree, Inc. is also the investment manager of Fir Tree REOF II Master Fund, LLC, and has been granted investment discretion over the common stock held by Fir Tree REOF II Master Fund, LLC, and thus also has the shared power to direct the vote and disposition of such shares of common stock. | |
(9) | Each of Messrs. Thomas L. Kempner, Jr., Stephen M. Dowicz, Scott E. Davidson, Timothy I. Levart, Robert J. Brivio, Jr., Anthony A. Yoseloff, Eric P. Epstein, Avram Z. Friedman and Conor Bastable may be deemed to share beneficial ownership over an aggregate of 82,633,418.00 shares of common stock. Each of these individuals disclaims all beneficial ownership as affiliates of a registered investment advisor, and each such individual disclaims all beneficial ownership except as to the extent of his pecuniary interest in the shares of common stock. The business address of each such individual is c/o Davidson Kempner Capital Management LLC, 65 East 55th Street, 19th Floor, New York, New York 10022. | |
(10) | Includes 52,225,550.00 shares of common stock issued on September 30, 2010, and 1,325,858.00 shares of common stock underlying a warrant issued that is immediately exercisable. | |
(11) | Includes 25,000.00 shares of fully-vested restricted stock held by the Company for John A.B. Davies, Jr. | |
(12) | Includes 204.67 shares owned jointly by Patrick E. Corbin and Brenda C. Corbin (wife), 188.77 shares owned by Brenda C. Corbin, 7,405.17 shares held in a deferred compensation plan for |
29
Patrick E. Corbin, and 44,843.05 shares held in a revocable trust for Patrick E. Corbin. | ||
(13) | Includes 303,000.00 shares held in a revocable trust for Henry P. Custis, 50,000.00 shares held in a revocable trust jointly for Henry P. Custis and Linda Custis (wife), and 277,496.00 shares owned by Linda Custis. | |
(14) | Includes 32,000.00 options to purchase shares, 14,831.00 options to purchase shares by Tiffany K. Glenn (wife), 272.71 shares held in the Companys 401(k) Profit Sharing Plan and Trust for Douglas J. Glenn, 4,633.92 shares held in the Companys 401(k) Profit Sharing Plan and Trust for Tiffany K. Glenn, 10,718.92 shares of restricted stock held by the Company for Douglas J. Glenn, 1,764.00 shares held by Tiffany K. Glenn, 9,464.59 shares held in a Rabbi Trust for Douglas J. Glenn, 7,559.07 shares held in a Rabbi Trust for Tiffany K. Glenn, 12,217.23 shares owned jointly by Douglas J. Glenn and Tiffany K. Glenn, 17,806.06 shares held in the Companys director compensation plans for Douglas J. Glenn, 444.59 shares held by Tiffany K. Glenn as custodian for Grayson Glenn (son), and 444.77 shares held by Tiffany K. Glenn as custodian for Bayler Glenn (daughter). | |
(15) | Includes 29,846.00 shares owned jointly by William A. Paulette and Carolyn E. Paulette (wife). | |
(16) | Includes 19,765.00 options to purchase shares, 299,296.66 shares owned jointly by Billy Roughton and Mildred H. Roughton (wife), 18,206.25 shares held in a SEP for Billy Roughton and 2,128.81 shares held in a SEP for Mildred H. Roughton. | |
(17) | Includes 12,000.00 options to purchase shares, 1,720.00 shares held by the 2003 Irrevocable Slone Childrens Trust, 34,479.28 shares held by Garden Capital Acquisitions, LLC, a company operated by Jordan E. Slone, and 165,268.25 shares held by Slone Investments. | |
(18) | Includes 20,013.00 options to purchase shares, 57,777.93 shares owned jointly by W. Lewis Witt and Judith W. Witt (wife), 6,300.62 shares held in an IRA for W. Lewis Witt, 24,234.29 shares held in an IRA for Judith W. Witt, 335,664.48 shares held in the Companys director compensation plans for W. Lewis Witt, 20,197.19 shares owned by Inner-View, Ltd., a company owned by W. Lewis Witt, and 150,933.00 shares held in an IRA for W. Lewis Witt. | |
(19) | As a principal member and member of the investment committee of CapGen, LLC, the general partner of CapGen Capital Group VI LP, Mr. Goldstein may be deemed to be the indirect beneficial owner of such shares or shares underlying the warrants under Rule 16a-1(a)(2) promulgated under the Exchange Act. Pursuant to Rule 16a-1(a)(4) promulgated under the Exchange Act, Mr. Goldstein disclaims that he is the beneficial owner of such shares, to the extent of his pecuniary interest. | |
(20) | Includes 8,346,810.00 shares of common stock underlying a warrant issued to CapGen Capital Group VI LP that is immediately exercisable, but does not include 4,173,405.00 shares of common stock underlying a warrant issued to CapGen Capital Group VI LP that becomes exercisable only upon the occurrence of a stay of the Written Agreement or the occurrence of a Sale Event, as defined in the applicable warrant agreement. | |
(21) | Includes 11,827.00 options to purchase shares, 1,695.20 shares owned jointly with David E. Fritsch (husband), 4,799.55 shares held in the Companys 401(k) Profit Sharing Plan and Trust, and 1,965.77 shares held in a Rabbi Trust for Lorelle L. Fritsch. | |
(22) | Includes 6,700.00 options to purchase shares, 16,436.41 shares held in the Companys 401(k) Profit Sharing Plan and Trust, 25,563 shares held in a Gateway investments stock account for Kevin Pack and 34,270.00 shares held in an IRA for Kevin Pack. |
30
(23) | Includes options to purchase shares. |
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During fiscal year 2010, some director-nominees, directors, and executive officers of the
Company, their affiliates, and members of their immediate families were customers of and had loan
transactions with the Company in the normal course of business and are expected to continue to have
customer relationships with the Company in the future. All outstanding loans and commitments
included in such transactions were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with unrelated persons,
and did not involve more than a normal risk of collectability or present other unfavorable
features.
At December 31, 2010, loans to executive officers, directors, and their associates amounted to
$99.7 million. During 2010, additional loans and repayments of loans by executive officers,
directors, and their associates netted $8.8 million.
A nominal payment of $363 was made to Vico Construction Corporation in 2010. This entity is
affiliated with Emil A. Viola, a former director of the Company. In the opinion of management, the
payment made to this entity was as favorable to the Company as could have been made with
unaffiliated parties.
Jordan E. Slone, a director of the Company, is the managing member of two limited liability
companies that serve as the managers for the legal entities which own and manage the Dominion Tower
at 999 Waterside Drive, Norfolk, Virginia 23510. The Company currently leases the second floor and
a portion of the nineteenth floor of the Dominion Tower for its executive offices and a portion of
the first floor as a financial center. Our lease, as amended, expires in September 2021. Rent
payments made in 2010 totaled approximated $895,000 for the year. The payments under this lease in
2011 are expected to be approximately the same. It is also expected that the rent paid will exceed
5% of the gross revenues of the entities that own Dominion Tower. The terms of this lease are
substantially similar to the terms of leases that are the result of arms length negotiations
between unrelated parties, and the rent is comparable to current market rates. In the opinion of
management, the payments under the Dominion Tower lease are as favorable to the Company as could
have been made with unaffiliated parties.
Bank of Hampton Roads leases its Nags Head, North Carolina and one of its Kitty Hawk, North
Carolina branches from Billy G. Roughton, a director of the Company, and his wife for monthly
payments of $8,000 and $17,523 during 2010, respectively. Total payments under these leases in
2011 are expected to be approximately the same as in 2010. The interests of the Roughtons in these
transactions are equal to the monthly lease payments. Kitty Hawk is a land lease that commenced in
April 2006 for a term of twenty years, with three five-year renewals. In the opinion of
management, the payments under these leases are as favorable to the Company as could have been made
with unaffiliated parties.
Shore Bank has a ground lease with Richard F. Hall, Jr., and Virginia B. Hall, the father and
mother of Richard F. Hall, III, a former director of the Company and current director and officer
of Shore Bank, for its Onley branch. Monthly payments during 2010 were $2,280 and the terms of the
lease were extended for five years commencing June 2009 with one additional five-year renewal. The
payments under this lease in 2011 are expected to be approximately the same as in 2010. Monthly
payments were $2,006 in 2009. In the opinion of management, the payments made under the
Onley branch lease are as favorable to the Company as could have been made with unaffiliated
parties.
On February 4, 2010, the Company entered into a consulting agreement with Tiffany Glenn, the
wife of Doug Glenn. The consulting agreement requires a payment in the aggregate amount of
$156,000.
31
As part of her consulting duties, Ms. Glenn was required to assist with investor relations,
public relations, Securities and Exchange Commission filings, and otherwise assist with the
transition of her duties to the new corporate secretary.
On September 30, 2010, under the terms of a letter agreement with the Company, Carlyle
Investment Management L.L.C. received a $3,000,000 cash fee as well as a warrant to purchase
7,846,859 shares of our common stock at $0.40 per share, as consideration for assistance provided
in structuring the Companys Private Placement. Randal K. Quarles is a managing director of this
entity and a director of the Company. Carlyle Investment Management L.L.C. is also affiliated with
Carlyle Financial Services Harbor, L.P., who is a participant in the Private Placement.
On September 30, 2010, ACMO-HR, L.L.C. received warrants to purchase 23,540,576 shares of our
common stock at $0.40 per share. ACMO-HR, L.L.C. is also a participant in the Private Placement.
Anchorage Advisors is affiliated with ACMO-HR, L.L.C. and Hal F. Goltz, a director of the Company,
is a senior analyst of Anchorage Advisors.
On September 30, 2010, CapGen Capital Group VI LP received warrants for the purchase of
11,770,288 shares of our common stock for $0.40 per share. CapGen Capital Group VI is also a
participant in the Private Placement and Robert B. Goldstein, a director of the Company, is
affiliated with this entity.
In addition, as a result of the common stock issuances in the second closing of the Private
Placement and related transactions, on December 28, 2010, the amount of shares of our common stock
for which the warrants (discussed immediately above) are exercisable automatically increased
pursuant the terms of such warrants. The underlying share amounts increased by the following
amounts: by 499,958 shares, under a warrant issued to Carlyle Financial Services Harbor, L.P.; by
1,499,874 shares, under warrants issued to ACMO-HR, L.L.C.; and by 749,937 shares under warrants
issued to CapGen Capital Group VI LP.
Corporate Governance
Director Independence
The Board is comprised of a majority of independent directors as defined by the NASDAQ listing
standards. The Board of Directors in its business judgment has determined that the following of
its members are independent as defined under the NASDAQ Stock Markets listing standards: Patrick
E. Corbin, Henry P. Custis, William A. Paulette, W. Lewis Witt, Randy K. Quarles, Hal F. Goltz and
Robert B. Goldstein. In reaching this conclusion, the Board of Directors considered that the
Company and its subsidiaries provide services to, and otherwise conduct business with, certain
members of the Board of Directors or members of their immediate families or companies with which
members of the Board of Directors are affiliated. These transactions are discussed in greater
detail in the Certain Relationships and Related Transactions section of this Annual Report on
Form 10-K.
Based on these standards, the Board of Directors determined that Jordon E. Slone was not
independent because of his affiliation with entities that own the Dominion Tower. The Board of
Directors determined that Billy Roughton was not independent because he owns two branches in North
Carolina. These transactions are discussed in greater detail in the Certain Relationships and
Related Transactions section of this Annual Report on Form 10-K. Except for Jordan E. Slone and
Billy Roughton, none of our non-employee directors, their immediate family members, or employees,
are engaged in such relationships with us.
The Board of Directors considered the following transactions between us and certain of our
directors or their affiliates and determined that such transactions did not impair the directors
32
independence under the above standard:
| Loans made by us and our subsidiaries to certain directors and their associates in the ordinary course of business. | ||
| Payments, which were under $200,000 and 5% of such companys consolidated gross revenues, for storage services made to Greenbrier Self Storage, a business affiliated with W. Lewis Witt. | ||
| Payments, which were under $200,000 and 5% of such companys consolidated gross revenues, for the lease of property made to Accawmacke Associates, a business affiliated with Henry P. Custis, Jr. | ||
| Transaction-related fees paid to Carlyle Investment Management L.L.C. in connection with the Private Placement and the relationship that Randal K. Quarles has with this entity. | ||
| Transaction-related fees paid to ACMO-HR, L.L.C. in connection with the Private Placement and the relationship that Hal F. Goltz has with this entity. | ||
| Transaction-related fees paid to CapGen Capital Group VI LP in connection with the Private Placement and the relationship that Robert B. Goldstein has with this entity. |
Committees
The Company currently has separate Audit, Compensation, and Nominating Committees which are
composed of directors who are each an independent director as that term is defined under the
NASDAQ Stock Markets listing standards and the requirements of the SEC.
Audit Committee
Through the end of September 2010, the Audit Committee consisted of Patrick E. Corbin, Herman
A. Hall III, Richard F. Hall III, Robert R. Kinser, Bobby L. Ralph, Ollin B. Sykes, Frank T.
Williams, W. Lewis Witt, and Jerry T. Womack. Beginning in October 2010, the Audit Committee
consisted of Patrick E. Corbin, William A. Paulette and W. Lewis Witt. The Board of Directors
determined that all of these directors were independent directors as that term is defined under
the NASDAQ Stock Markets listing standards and the requirements of the SEC.
The Audit Committee and the Board of Directors has determined that Herman A. Hall, III and
Ollin B. Sykes met the qualifications of an Audit Committee Financial Expert as defined under
final rules adopted by the SEC. Beginning in November 2010, Patrick E. Corbin was designated as the
Audit Committee Financial Expert, as defined under the SECs rules. The Audit Committees charter
appears on the Companys website at
http://www.snl.com/irweblinkx/corporateprofile.aspx?iid=4066242.
The Audit Committee is responsible for the appointment, compensation, and oversight of the
work of the independent registered public accounting firm of the Company. It also must pre-approve
all audit and non-audit services provided by the independent registered public accounting firm. The
Audit Committee acts as the intermediary between the Company and the independent registered public
accounting firm and reviews the reports of the independent registered public accounting firm. The
Audit Committee held 16 meetings in 2010. See Audit Committee Report below.
Audit Committee Report
The Audit Committee reviews the Companys financial reporting process, including internal
control over financial reporting, on behalf of the Board of Directors. As required by the Audit
Charter, each Audit Committee member satisfies the independence and financial literacy requirements
for serving on the Audit Committee, and at least one member has accounting or related financial
management expertise, all as stated in the NASDAQ rules.
Management has the primary responsibility for the consolidated financial statements and the
33
reporting process, including internal control over financial reporting. In this context, the
Audit Committee has met and held discussions with management and the independent registered public
accounting firm. Management represented to the Audit Committee that the Companys consolidated
financial statements were prepared using U.S. generally accepted accounting principles (GAAP).
The Audit Committee has reviewed and discussed the consolidated financial statements with
management and the independent registered public accounting firm.
The Audit Committee discussed with the independent registered public accounting firm matters
required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit
Committees, as amended, including their judgment about the quality, not just the acceptability, of
the Companys accounting principles and underlying estimates in the Companys consolidated
financial statements; all critical accounting policies and practices to be used; all alternative
treatments within GAAP for policies and practices related to material items that have been
discussed with management of the Company; and other material written communications between the
independent registered public accounting firm and the management of the Company, such as any
management letter or schedule of unadjusted differences. In addition, the Audit Committee has
discussed with the independent registered public accounting firm its independence from the Company
and its management, including the matters in the written disclosures required by the applicable
requirements of the Public Company Accounting Oversight Board regarding the independent
accountants communications with the audit committee concerning independence. The Audit Committee
discussed with the Companys internal and independent registered public accounting firm the overall
scope and specific plans for their respective audits.
The Audit Committee meets with the internal and independent registered public accounting firm
to discuss the results of their audits, the evaluations of the Companys internal controls, and the
overall quality of the Companys financial reporting. The meetings also are designed to facilitate
any private communications with the Audit Committee desired by the internal auditors or independent
registered public accounting firm. In reliance on the reviews and discussions referred to above,
the Audit Committee recommended to the Board of Directors, and the Board has approved, that the
audited consolidated financial statements of the Company be included in the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 2010, as amended, for filing with the SEC.
Patrick E. Corbin
William A. Paulette
W. Lewis Witt
William A. Paulette
W. Lewis Witt
Nominating, Compensation and Human Resources Committee
Through September 2010, the Company had a combined Nominating, Compensation and Human
Resources Committee (NCHRC), and subsequently split them up into two committees in the fourth
quarter of 2010. Prior to splitting up this committee, it met seven times in 2010. After
separating in October 2010, the Nominating and Corporate Governance Committee and the Compensation
Committee, each met zero and four times, respectively in 2010.
Prior to splitting up into separate committees, the NCHRC consisted of William Brumsey, III,
Patrick E. Corbin, Henry P. Custis Jr., Herman A. Hall III, Richard F. Hall III, Robert R. Kinser,
Bobby L. Ralph, Roland Carroll Smith Sr., Frank T. Williams, and W. Lewis Witt, all of whom the
Board of Directors determined were independent in 2010 under standards set by the NASDAQ Stock
Market.
Compensation Committee
Beginning in October, 2010, the Compensation Committee consisted of Patrick E. Corbin, Henry
P. Custis, Jr., Robert B. Goldstein, Hal F. Goltz and W. Lewis Witt, all of whom the Board of
Directors determined were independent in 2010 under standards set by the NASDAQ Stock Market. This
newly
34
formed committee met four times in 2010.
The Compensation Committee reviews the compensation of all executive officers, determines the
compensation package for the Chief Executive Officer, and administers the Companys compensation
programs. Previously, the NCHRC had this responsibility. See Compensation Discussion and
Analysis and 2010 Compensation Committee Report.
The charter of the Compensation Committee appears on the Companys website at
http://www.snl.com/irweblinkx/corporateprofile.aspx?iid=4066242.
Corporate Governance and Nominating Committee
Beginning in October 2010, the Corporate Governance and Nominating Committee consisted of
Henry P. Custis, Robert B. Goldstein, William A. Paulette and Randal K. Quarles, all of whom the
Board of Directors determined were independent in 2010 under standards set by the NASDAQ Stock
Market. This newly formed committee did not meet in 2010.
The Nominating Committee does not have a written diversity policy, however, it does give
consideration to potential candidates who would promote diversity on the Board with respect to
professional background, experience, and expertise.
Qualification of Directors. In evaluating candidates for election to the Board, the
Nominating Committee shall take into account the qualifications of the individual candidate as well
as the composition of the Board of Directors as a whole. Among other things, the Nominating
Committee considers:
| the candidates ability to help the Board of Directors create stockholder wealth; | ||
| the candidates ability to represent the interests of the stockholders; | ||
| the business judgment, experience that is relevant to the business and acumen of the candidate; | ||
| the need of the Board for Directors to have certain skills and experience relevant to the business; | ||
| the candidates ability to fully participate in Board of Directors activities and fulfill the responsibilities of a director, including attendance at and active participation in, meetings of the Board of Directors or its committees; | ||
| other business and professional commitments of the candidate, including the number of other boards (public, private and charitable) on which the candidate serves; and | ||
| the financial sophistication, including the ability to qualify as financially literate under NASDAQ listing standards. |
Under our Bylaws, shareholders may submit nominees for director. However, there have been no
material changes to the procedures by which shareholders may submit such nominees since they were
last reported by the Company.
The charter of the Corporate Governance and Nominating Committee appears on the Companys
website at http://www.snl.com/irweblinkx/corporateprofile.aspx?iid=4066242.
35
Boards Role in Risk Oversight
The Board of Directors is actively involved in overseeing enterprise risk, primarily
through the assistance of its Audit Committee. The Companys Internal Audit Department conducts an
annual investigation and evaluation of enterprise risk. The Internal Audit department reports its
findings to and answers inquiries of the Audit Committee. The Chairman of the Audit Committee then
shares this information with the full Board of Directors at its next meeting and responds to its
directions. In addition to the Audit Committee, other committees of the Board of Directors consider
risk within their areas of responsibility. In setting executive compensation, the Compensation
Committee considers risks that may be implicated by our compensation programs and endeavors to set
executive compensation that creates incentives to achieve long-term shareholder value without
encouraging excessive risk taking to achieve short-term results. The Compensation Committee reports
its findings with explanations to the full Board.
Information About Shareholders
The Board of Directors has not established a written policy regarding communications with
shareholders. A formal policy has not been adopted because directors have periodic contact with
shareholders through business, personal, and community-based activities. Although not prescribed in
a policy, shareholders may communicate with the Board of Directors through written communications
addressed to the Companys executive office at Attn: : Douglas J. Glenn, Executive Vice President,
Chief Operating Officer and General Counsel at Hampton Roads Bankshares, Inc., 999 Waterside Dr.,
Suite 200, Norfolk, Virginia 23510.
Board and Committee Meetings
The business of the Company is managed under the direction of the Board of Directors.
The Board of Directors generally meets twice a month and held 22 meetings in 2010. During 2010
each director participated in at least 75% of all Board of Directors meetings and at least 75% of
all meetings of committees on which he served, except for William Brumsey, III, Herman A. Hall,
III, Robert R. Kinser, Bobby L. Ralph, Roland Carroll Smith, Sr., Ollin B. Sykes, Frank T.
Williams, and Jerry T. Womack, each of whom resigned from the Companys Board of Directors
effective September 30, 2010 and Richard F. Hall, who resigned on October 4, 2010. Prior to their
respective resignations, each participated in at least 75% of all Board of Directors meetings and
at least 75% of all meetings of committees on which he served in 2010. Effective September 30,
2010, Randy K. Quarles and Hal F. Goltz joined the Board of Directors and Robert B. Goldstein
joined the Board of Directors on October 4, 2010. Each attended at least 75% of all Board meetings
during the portion of 2010 that they served as directors and at least 75% of all meetings of
committees on which he served in 2010. The Board of Directors does not have a policy regarding
attendance at annual shareholders meetings. However, directors are encouraged to attend such
meetings, and at the 2010 annual meeting of shareholders, held on September 28, 2010, all then
current directors were in attendance, with the exception of Mr. Slone. All Board committee
meetings are scheduled by the committee chairpersons as deemed necessary.
ITEM 14 | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Amounts paid to KPMG, LLP (KPMG) and Yount Hyde & Barbour, P.C. (YHB) for work performed
in 2010 and 2009 appear below:
KPMG(1) | YHB | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Audit fees (2) |
$ | 126,893 | $ | 20,000 | $ | 259,771 | $ | 329,846 | ||||||||
Audit-related fees |
30,604 | (6) | 10,500 | (8) | 108,365 | (7) | 132,254 | (3) | ||||||||
Tax fees |
367,516 | | 17,820 | 45,115 | (4) | |||||||||||
All other fees |
| | 13,379 | (6) | 21,000 | (5) |
36
(1) | On October 7, 2010, the Audit Committee of the Board of Directors of the Company appointed KPMG as the Companys independent registered public accounting firm. Therefore, although KPMG conducted the year end audit of the Companys 2010 financial statements, YHB performed a review of its Form 10-Qs for the first three quarters of 2010. | |
(2) | Fees for financial statement audit, including audit of internal control over financial reporting and interim reviews. | |
(3) | Fees for assistance with capital raise efforts and related S-3, assistance with Gateway merger and related S-4, assistance with TARP transaction and related S-3, employee benefit plan audit, assistance with S-8 filing regarding Gateway 401k plan, and consultations concerning financial accounting reporting standards and other related issues. | |
(4) | Fees for preparing federal and state income tax returns and consultation regarding tax compliance issues. | |
(5) | Fees for SysTrust audit of systems reliability and agreed upon procedures for vulnerability testing. | |
(6) | Fees for Goodwill impairment testing, SEC comment letter, and capital raise efforts and related S-3. | |
(7) | Fees for SEC comment letter, capital raise efforts and related S-3, and 401(k) plan audits. | |
(8) | Relates to fees paid for consents on Form S-3 filings. |
As stated in the Audit Committee charter, the Audit Committee must pre-approve all audit and
non-audit services provided by the firm of independent auditors. During 2010, the Audit Committee
pre-approved 100% of services provided by KPMG and YHB. The Audit Committee has considered the
provisions of these services by KPMG and has determined that the services are compatible with
maintaining KPMGs independence.
37
PART IV
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
3.1
|
Amended and Restated Articles of Incorporation of Hampton Roads Bankshares, Inc., attached as Exhibit 3.1 to the Registrants Current Report on Form 8-K dated September 28, 2010, incorporated herein by reference. | |
3.2
|
Bylaws of Hampton Roads Bankshares, Inc., as amended, attached as Exhibit 3.4 to the Registrants Current Report on Form 8-K dated September 24, 2009, incorporated herein by reference. | |
4.1
|
Specimen of Common Stock Certificate, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.2
|
Carlyle Contingent Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30. 2010, filed November 9, 2010. | |
4.3
|
Anchorage Contingent Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.4
|
Anchorage Standard Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30. 2010, filed November 9, 2010. | |
4.5
|
CapGen Contingent Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.6
|
CapGen Standard Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.7
|
Amended and Restated Warrant for Purchase of Shares of Common Stock issued to the United States Department of the Treasury, incorporated by reference from the Registrants Form 8-K, filed August 18, 2010. | |
4.8
|
Letter Agreement, dated December 31, 2008, by and between Hampton Roads Bankshares, Inc. and the United States Department of the Treasury, incorporated by reference from the Registrants Form 8-K, filed January 5, 2009. | |
4.9
|
Exchange Agreement, dated August 12, 2010, by and between Hampton Roads Bankshares, Inc. and the United States Department of the Treasury, incorporated by reference from the Registrants Form 8-K, filed August 18, 2010. | |
10.1
|
Second Amended and Restated Investment Agreement, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.2
|
Amended and Restated CapGen Investment Agreement, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.3
|
Form of Second Amended and Restated Securities Purchase Agreement, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.4
|
Amended and Restated Securities Purchase Agreement, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.5
|
Carlyle Investor Letter, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. |
38
10.6
|
Anchorage Investor Letter, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.7
|
CapGen Investor Letter, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.8
|
Consent Letter with affiliate of Davidson Kempner, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.9
|
Consent Letter with affiliates of Fir Tree, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.10
|
Assignment and Assumption Agreement, among Goldman, Sachs, & Co., CapGen Capital Group VI LP, and C12 Protium Value Opportunities Ltd, dated September 23, 2010, incorporated by reference from the Registrants Form 8-K, filed September 23, 2010. | |
10.11
|
Supplemental Retirement Agreement, dated as of March 31, 1994, attached as Exhibit 10.5 to the Registrants Annual Report on Form 10-K for the year ended December 31, 1993, incorporated herein by reference. | |
10.12
|
Director Retirement Plan, dated as of November 28, 2006, attached as Exhibit 10.28 to the Registrants Annual Report on Form 10-K dated March 1, 2008, incorporated herein by reference. | |
10.13
|
Employment Agreement, dated as of November 1, 2007, between the Registrant and Douglas J. Glenn, attached as Exhibit 10.29 to the Registrants Annual Report on Form 10-K dated March 11, 2008, incorporated herein by reference. | |
10.14
|
First Amendment to the Employment Agreement between Hampton Roads Bankshares, Inc. and Douglas J. Glenn, dated as of May 27, 2008, attached as Exhibit 10.3 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.15
|
Supplemental Retirement Agreement between Bank of Hampton Roads and Douglas J. Glenn, dated May 27, 2008, attached as Exhibit 10.5 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.16
|
Credit Agreement between Compass Bank and Hampton Roads Bankshares, Inc., dated May 29, 2008, attached as Exhibit 10-6 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.17
|
Pledge Agreement between Compass Bank and Hampton Roads Bankshares, Inc., dated May 29, 2008 attached as Exhibit 10.7 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.18
|
Employment Agreement, dated as of August 28, 2006, between Hampton Roads Bankshares, Inc. and Lorelle L. Fritsch, attached as Exhibit 10.35 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.19
|
First Amendment to the Employment Agreement between Hampton Roads Bankshares, Inc. and Lorelle L. Fritsch, dated as of July 23, 2008, attached as Exhibit 10.36 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.20
|
Bank of Hampton Roads Supplemental Executive Retirement Plan, dated as of January 1, 2005, attached as Exhibit 99.5 to the Registrants Current Report on Form 8-K dated June 27, 2006, incorporated herein by reference. | |
10.21
|
First Amendment to Bank of Hampton Roads Supplemental Executive Retirement Plan, dated as of December 30, 2008, attached as Exhibit 10.38 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. |
39
10.22
|
Second Amendment to the Bank of Hampton Roads Supplemental Executive Retirement Plan, dated as of December 30, 2008, attached as Exhibit 10.39 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.23
|
Hampton Roads Bankshares, Inc. 2008 Director Deferred Compensation Plan dated as of January 1, 2008, attached as Exhibit 10.40 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.24
|
Amended and Restated Hampton Roads Bankshares, Inc. Directors Deferred Compensation Plan attached, as Exhibit 10.41 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.25
|
Hampton Roads Bankshares, Inc. Executive Savings Plan, dated as of July 23, 2006, attached as Exhibit 4 to the Registrants Registration Statement on Form S-8 (Registration No. 333-139968) dated January 12, 2007, incorporated herein by reference. | |
10.26
|
First Amendment to Hampton Roads Bankshares, Inc. Executive Savings Plan, dated as of December 30, 2008, attached as Exhibit 10.43 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.27
|
Second Amendment to Hampton Roads Bankshares, Inc. Executive Savings Plan, dated as of December 30, 2008, attached as Exhibit 10.44 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.28
|
Hampton Roads Bankshares, Inc. Executive Savings Plan Trust, dated as of July 23, 2006, attached as Exhibit 10.45 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.29
|
Hampton Roads Bankshares, Inc. 2006 Stock Incentive Plan, dated as of March 14, 2006, attached as Exhibit 10.1 to the Registrants Registration Statement on Form S-8 (Registration No. 333-134583) dated May 31, 2006, incorporated herein by reference. | |
10.30
|
First Amendment to Hampton Roads Bankshares, Inc. 2006 Stock Incentive Plan, dated as of December 26, 2008 attached as Exhibit 10.47 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.31
|
Non-Qualified Limited Stock Option Plan for Directors and Employees, dated March 31, 1994, attached as Exhibit 10.6 to the Registrants Annual Report on Form 10-K for the year ended December 31, 1994, incorporated herein by reference. | |
10.32
|
Dividend Reinvestment and Optional Cash Purchase Plan Prospectus, dated as of March 14, 2002, attached as Exhibit 99.1 to the Registrants Registration Statement on Form S-3 dated March 14, 2002, incorporated herein by reference. | |
10.33
|
Amended and Restated Dividend Reinvestment and Optional Cash Purchase Plan Prospectus, dated as of July 23, 2008, included in Registrants Prospectus on Form 424B3 filed August 15, 2008, incorporated herein by reference. | |
10.34
|
Supplement No. 1 to Amended and Restated Dividend Reinvestment and Optional Cash Purchase Plan Prospectus, dated as of January 27, 2009, included in Registrants Prospectus on Form 424B3 filed March 4, 2009, incorporated herein by reference. | |
10.35
|
Gateway Financial Holdings, Inc. 2005 Omnibus Stock Ownership and Long-Term Incentive Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-127978) dated August 31, 2005, incorporated herein by reference. | |
10.36
|
Gateway Financial Holdings, Inc. 2001 Nonstatutory Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-98021) dated August 13, 2002, incorporated herein by reference. |
40
10.37
|
Gateway Financial Holdings, Inc. 1999 Incentive Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-98025) dated August 13, 2002, incorporated herein by reference. | |
10.38
|
Gateway Financial Holdings, Inc. 1999 Nonstatutory Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-98027) dated August 13, 2002, incorporated herein by reference. | |
10.39
|
Gateway Financial Holdings, Inc. 1999 BOR Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-144841) dated July 25, 2007, incorporated herein by reference. | |
10.40
|
Shore Financial Corporation 2001 Stock Incentive Plan, attached as Exhibit 99 to Shore Financial Corporations Registration Statement on Form S-8 (Registration No. 333-82838) dated February 15, 2002, incorporated herein by reference. | |
10.41
|
Shore Savings Bank, F.S.B. 1992 Stock Option Plan dated November 10, 1992, attached as Exhibit 10 to Shore Financial Corporations Registration Statement on Form S-4EF dated September 15, 1997, incorporated herein by reference. | |
10.42
|
Employment Agreement between Hampton Roads Bankshares, Inc. and David Twiddy, attached as Exhibit 10.4 to the Registrants Current Report on Form 8-K, dated January 7, 2009, incorporated herein by reference. | |
10.43
|
Employment Agreement between Hampton Roads Bankshares, Inc. and John A. B. Davies, Jr., attached as Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated July 30, 2009, incorporated herein by reference. | |
10.44
|
Non-Solicitation and Non-Competition Agreement by and among Bank of Hampton Roads, Gateway Bank Mortgage, Inc, and Kevin M. Pack, dated November 12, 2010, attached as Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated December 30, 2010, incorporated herein by reference. | |
14.1
|
The Company has a Code of Ethics for its senior financial officers and the Chief Executive Officer. Any waivers of, or amendments to, the Code of Ethics will be disclosed through the timely filing of a Form 8-K with the SEC. A copy of the Companys Code of Ethics can be obtained through written communications addressed to Stephen P. Theobald, Chief Financial Officer, Hampton Roads Bankshares, Inc., 999 Waterside Drive, Suite 200, Norfolk, VA 23510. | |
16.1
|
Letter regarding Change in Independent Registered Public Accounting Firm, dated October 13, 2010, attached as Exhibit 16.1 to the Registrants Current Report on Form 8-K, filed October 13, 2010, incorporated herein by reference. | |
21.1
|
A list of the subsidiaries of Hampton Roads Bankshares, Inc., previously filed. | |
23.1
|
Consent of KPMG, previously filed. | |
23.2
|
Consent of Yount, Hyde, & Barbour, P.C., previously filed. | |
31.1
|
The Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer, filed herewith. | |
31.2
|
The Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer, filed herewith. | |
32.1
|
Statement of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, previously filed. | |
99.1
|
TARP Certification of Chief Executive Officer and Chief Financial Officer, previously filed. |
41
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Hampton Roads Bankshares, Inc. |
||||
Date April 26, 2011 | /s/ John A. B. Davies, Jr. | |||
John A. B. Davies, Jr. | ||||
President and Chief Executive Officer |
42
Exhibit Index
Hampton Roads Bankshares, Inc.
Hampton Roads Bankshares, Inc.
3.1
|
Amended and Restated Articles of Incorporation of Hampton Roads Bankshares, Inc., attached as Exhibit 3.1 to the Registrants Current Report on Form 8-K dated September 28, 2010, incorporated herein by reference. | |
3.2
|
Bylaws of Hampton Roads Bankshares, Inc., as amended, attached as Exhibit 3.4 to the Registrants Current Report on Form 8-K dated September 24, 2009, incorporated herein by reference. | |
4.1
|
Specimen of Common Stock Certificate, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.2
|
Carlyle Contingent Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30. 2010, filed November 9, 2010. | |
4.3
|
Anchorage Contingent Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.4
|
Anchorage Standard Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30. 2010, filed November 9, 2010. | |
4.5
|
CapGen Contingent Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.6
|
CapGen Standard Warrant for Purchase of Shares of Common Stock, incorporated by reference from the Registrants Form 10-Q for the quarter ended September 30, 2010, filed November 9, 2010. | |
4.7
|
Amended and Restated Warrant for Purchase of Shares of Common Stock issued to the United States Department of the Treasury, incorporated by reference from the Registrants Form 8-K, filed August 18, 2010. | |
4.8
|
Letter Agreement, dated December 31, 2008, by and between Hampton Roads Bankshares, Inc. and the United States Department of the Treasury, incorporated by reference from the Registrants Form 8-K, filed January 5, 2009. | |
4.9
|
Exchange Agreement, dated August 12, 2010, by and between Hampton Roads Bankshares, Inc. and the United States Department of the Treasury, incorporated by reference from the Registrants Form 8-K, filed August 18, 2010. | |
10.1
|
Second Amended and Restated Investment Agreement, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.2
|
Amended and Restated CapGen Investment Agreement, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.3
|
Form of Second Amended and Restated Securities Purchase Agreement, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.4
|
Amended and Restated Securities Purchase Agreement, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.5
|
Carlyle Investor Letter, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.6
|
Anchorage Investor Letter, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. |
43
10.7
|
CapGen Investor Letter, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.8
|
Consent Letter with affiliate of Davidson Kempner, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.9
|
Consent Letter with affiliates of Fir Tree, dated August 11, 2010, incorporated by reference from the Registrants Form 8-K, filed August 17, 2010. | |
10.10
|
Assignment and Assumption Agreement, among Goldman, Sachs, & Co., CapGen Capital Group VI LP, and C12 Protium Value Opportunities Ltd, dated September 23, 2010, incorporated by reference from the Registrants Form 8-K, filed September 23, 2010. | |
10.11
|
Supplemental Retirement Agreement, dated as of March 31, 1994, attached as Exhibit 10.5 to the Registrants Annual Report on Form 10-K for the year ended December 31, 1993, incorporated herein by reference. | |
10.12
|
Director Retirement Plan, dated as of November 28, 2006, attached as Exhibit 10.28 to the Registrants Annual Report on Form 10-K dated March 1, 2008, incorporated herein by reference. | |
10.13
|
Employment Agreement, dated as of November 1, 2007, between the Registrant and Douglas J. Glenn, attached as Exhibit 10.29 to the Registrants Annual Report on Form 10-K dated March 11, 2008, incorporated herein by reference. | |
10.14
|
First Amendment to the Employment Agreement between Hampton Roads Bankshares, Inc. and Douglas J. Glenn, dated as of May 27, 2008, attached as Exhibit 10.3 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.15
|
Supplemental Retirement Agreement between Bank of Hampton Roads and Douglas J. Glenn, dated May 27, 2008, attached as Exhibit 10.5 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.16
|
Credit Agreement between Compass Bank and Hampton Roads Bankshares, Inc., dated May 29, 2008, attached as Exhibit 10-6 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.17
|
Pledge Agreement between Compass Bank and Hampton Roads Bankshares, Inc., dated May 29, 2008 attached as Exhibit 10.7 to the Registrants Current Report on Form 8-K dated June 2, 2008, incorporated herein by reference. | |
10.18
|
Employment Agreement, dated as of August 28, 2006, between Hampton Roads Bankshares, Inc. and Lorelle L. Fritsch, attached as Exhibit 10.35 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.19
|
First Amendment to the Employment Agreement between Hampton Roads Bankshares, Inc. and Lorelle L. Fritsch, dated as of July 23, 2008, attached as Exhibit 10.36 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.20
|
Bank of Hampton Roads Supplemental Executive Retirement Plan, dated as of January 1, 2005, attached as Exhibit 99.5 to the Registrants Current Report on Form 8-K dated June 27, 2006, incorporated herein by reference. | |
10.21
|
First Amendment to Bank of Hampton Roads Supplemental Executive Retirement Plan, dated as of December 30, 2008, attached as Exhibit 10.38 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.22
|
Second Amendment to the Bank of Hampton Roads Supplemental Executive Retirement Plan, dated as of December 30, 2008, attached as Exhibit 10.39 to the Registrants Annual Report on Form | |
10-K for the year ended December 31, 2008, incorporated herein by reference. |
44
10.23
|
Hampton Roads Bankshares, Inc. 2008 Director Deferred Compensation Plan dated as of January 1, 2008, attached as Exhibit 10.40 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.24
|
Amended and Restated Hampton Roads Bankshares, Inc. Directors Deferred Compensation Plan attached, as Exhibit 10.41 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.25
|
Hampton Roads Bankshares, Inc. Executive Savings Plan, dated as of July 23, 2006, attached as Exhibit 4 to the Registrants Registration Statement on Form S-8 (Registration No. 333-139968) dated January 12, 2007, incorporated herein by reference. | |
10.26
|
First Amendment to Hampton Roads Bankshares, Inc. Executive Savings Plan, dated as of December 30, 2008, attached as Exhibit 10.43 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.27
|
Second Amendment to Hampton Roads Bankshares, Inc. Executive Savings Plan, dated as of December 30, 2008, attached as Exhibit 10.44 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.28
|
Hampton Roads Bankshares, Inc. Executive Savings Plan Trust, dated as of July 23, 2006, attached as Exhibit 10.45 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.29
|
Hampton Roads Bankshares, Inc. 2006 Stock Incentive Plan, dated as of March 14, 2006, attached as Exhibit 10.1 to the Registrants Registration Statement on Form S-8 (Registration No. 333-134583) dated May 31, 2006, incorporated herein by reference. | |
10.30
|
First Amendment to Hampton Roads Bankshares, Inc. 2006 Stock Incentive Plan, dated as of December 26, 2008 attached as Exhibit 10.47 to the Registrants Annual Report on Form 10-K for the year ended December 31, 2008, incorporated herein by reference. | |
10.31
|
Non-Qualified Limited Stock Option Plan for Directors and Employees, dated March 31, 1994, attached as Exhibit 10.6 to the Registrants Annual Report on Form 10-K for the year ended December 31, 1994, incorporated herein by reference. | |
10.32
|
Dividend Reinvestment and Optional Cash Purchase Plan Prospectus, dated as of March 14, 2002, attached as Exhibit 99.1 to the Registrants Registration Statement on Form S-3 dated March 14, 2002, incorporated herein by reference. | |
10.33
|
Amended and Restated Dividend Reinvestment and Optional Cash Purchase Plan Prospectus, dated as of July 23, 2008, included in Registrants Prospectus on Form 424B3 filed August 15, 2008, incorporated herein by reference. | |
10.34
|
Supplement No. 1 to Amended and Restated Dividend Reinvestment and Optional Cash Purchase Plan Prospectus, dated as of January 27, 2009, included in Registrants Prospectus on Form 424B3 filed March 4, 2009, incorporated herein by reference. | |
10.35
|
Gateway Financial Holdings, Inc. 2005 Omnibus Stock Ownership and Long-Term Incentive Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-127978) dated August 31, 2005, incorporated herein by reference. | |
10.36
|
Gateway Financial Holdings, Inc. 2001 Nonstatutory Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-98021) dated August 13, 2002, incorporated herein by reference. |
45
10.37
|
Gateway Financial Holdings, Inc. 1999 Incentive Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-98025) dated August 13, 2002, incorporated herein by reference. | |
10.38
|
Gateway Financial Holdings, Inc. 1999 Nonstatutory Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-98027) dated August 13, 2002, incorporated herein by reference. | |
10.39
|
Gateway Financial Holdings, Inc. 1999 BOR Stock Option Plan, attached as Exhibit 4.2 to Gateway Financial Holdings, Inc.s Registration Statement on Form S-8 (Registration No. 333-144841) dated July 25, 2007, incorporated herein by reference. | |
10.40
|
Shore Financial Corporation 2001 Stock Incentive Plan, attached as Exhibit 99 to Shore Financial Corporations Registration Statement on Form S-8 (Registration No. 333-82838) dated February 15, 2002, incorporated herein by reference. | |
10.41
|
Shore Savings Bank, F.S.B. 1992 Stock Option Plan dated November 10, 1992, attached as Exhibit 10 to Shore Financial Corporations Registration Statement on Form S-4EF dated September 15, 1997, incorporated herein by reference. | |
10.42
|
Employment Agreement between Hampton Roads Bankshares, Inc. and David Twiddy, attached as Exhibit 10.4 to the Registrants Current Report on Form 8-K, dated January 7, 2009, incorporated herein by reference. | |
10.43
|
Employment Agreement between Hampton Roads Bankshares, Inc. and John A. B. Davies, Jr., attached as Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated July 30, 2009, incorporated herein by reference. | |
10.44
|
Non-Solicitation and Non-Competition Agreement by and among Bank of Hampton Roads, Gateway Bank Mortgage, Inc, and Kevin M. Pack, dated November 12, 2010, attached as Exhibit 10.1 to the Registrants Current Report on Form 8-K, dated December 30, 2010, incorporated herein by reference. | |
14.1
|
The Company has a Code of Ethics for its senior financial officers and the Chief Executive Officer. Any waivers of, or amendments to, the Code of Ethics will be disclosed through the timely filing of a Form 8-K with the SEC. A copy of the Companys Code of Ethics can be obtained through written communications addressed to Stephen P. Theobald, Chief Financial Officer, Hampton Roads Bankshares, Inc., 999 Waterside Drive, Suite 200, Norfolk, VA 23510. | |
16.1
|
Letter regarding Change in Independent Registered Public Accounting Firm, dated October 13, 2010, attached as Exhibit 16.1 to the Registrants Current Report on Form 8-K, filed October 13, 2010, incorporated herein by reference. | |
21.1
|
A list of the subsidiaries of Hampton Roads Bankshares, Inc., previously filed. | |
23.1
|
Consent of KPMG, previously filed. | |
23.2
|
Consent of Yount, Hyde, & Barbour, P.C., previously filed. | |
31.1
|
The Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer, filed herewith. | |
31.2
|
The Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer, filed herewith. | |
32.1
|
Statement of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, previously filed. | |
99.1
|
TARP Certification of Chief Executive Officer and Chief Financial Officer, previously filed. |
46