8-K: Blue Ridge Bankshares Amends Employment Agreements for Top Executives

Blue Ridge Bankshares, Inc. has amended and restated employment agreements with its President and CEO, G. William Beale, and Executive Vice President and CFO, Judy C. Gavant, effective January 1, 2025.

Summary

• Blue Ridge Bankshares, Inc. and its subsidiary, Blue Ridge Bank, National Association, have entered into amended and restated employment agreements with G. William Beale and Judy C. Gavant.
• The agreement with Mr. Beale is effective January 1, 2025, replacing his previous agreement from October 24, 2023.
• The agreement with Ms. Gavant is effective January 1, 2025, replacing her previous agreement from April 20, 2022.
• Both agreements have a two-year term expiring on January 1, 2027, with automatic one-year extensions unless either party provides a 90-day notice of nonrenewal.
• Mr. Beale's amended agreement modifies the severance benefits period upon termination without cause or for good reason to the greater of the remaining months in the term or 12 months.
• The calculation of the lump sum cash payment for Mr. Beale upon termination without cause or for good reason within one year after a change in control is revised to two times the sum of his annual base salary and the highest annual bonus paid or payable for the two years preceding the termination year.
• Mr. Beale's non-competition covenant is extended from three months to 12 months following termination, and fintech businesses are removed from the definition of competitive business.
• Ms. Gavant's agreement includes a minimum base salary of $360,000.
• Mr. Beale's agreement includes a minimum base salary of $547,000.
• Both agreements contain ministerial and administrative changes.

Sentiment

Score: 7

Explanation: The document is factual and relates to standard executive employment agreements. The sentiment is neutral to slightly positive as it provides stability and clarity regarding key leadership roles.

Positives

• The amended agreements provide clarity and stability regarding the employment terms for key executives.
• The automatic extension clause in both agreements offers long-term security for both the executives and the company, provided performance is satisfactory.
• The updated severance terms for Mr. Beale may provide him with enhanced protection in certain termination scenarios.
• The agreements include a non-disparagement clause protecting the company's reputation.

Negatives

• The increased non-competition covenant for Mr. Beale could potentially limit his future career options.
• The agreements include clauses that could trigger clawbacks of incentive-based compensation under certain circumstances.
• The agreements include clauses that could trigger termination of benefits if the executive is suspended or prohibited from participating in the conduct of the affairs of the Employer by a notice served under the Federal Deposit Insurance Act (the FDIA) or an order issued by any federal or state government agency.

Risks

• The agreements are subject to regulatory provisions, including potential suspension or termination of benefits if the executives are subject to actions by regulatory agencies.
• The agreements contain clauses that could trigger clawbacks of incentive-based compensation under certain circumstances.
• The agreements include clauses that could trigger termination of benefits if the Employer is in default as defined in the FDIA or any order issued by any federal or state government agency.

Future Outlook

The agreements provide a framework for the continued employment of key executives through January 1, 2027, with potential for automatic extensions, subject to either party providing notice of nonrenewal.

Industry Context

Executive compensation and employment agreements are standard practice in the banking industry to attract and retain qualified leaders. The terms of these agreements, including base salary, bonus potential, and severance provisions, are often benchmarked against peer institutions to ensure competitiveness.

Comparison to Industry Standards

• Executive compensation packages in the banking industry typically include a base salary, annual bonus, long-term incentives (stock options or restricted stock), and benefits.
• Severance packages often include a multiple of base salary and continued benefits coverage, with the multiple varying based on the executive's level and tenure.
• Non-competition agreements are common to protect the bank's customer relationships and confidential information.
• Change in control provisions are designed to protect executives in the event of a merger or acquisition.

Stakeholder Impact

• Shareholders may view the amended agreements as a positive sign of stability and commitment from key executives.
• Employees may be reassured by the continued leadership of experienced executives.
• Customers may not be directly impacted by these agreements, but the stability of leadership can contribute to consistent service and strategy.

Next Steps

• The amended agreements are effective as of January 1, 2025.
• The Board will annually review and determine the base salaries and bonus programs for the executives.
• The agreements will automatically extend for additional one-year periods unless either party provides a 90-day notice of nonrenewal.

Key Dates