HIGHLANDS BANKSHARES, INC.
PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT
THIS PERFORMANCE-BASED RESTRICTED STOCK AWARD AGREEMENT (this Agreement), dated as of [ ] (Award Date), is made by and between Highlands Bankshares, Inc., a Virginia corporation (the Company), and [ ] (Grantee).
WHEREAS, the board of directors (the Board) and shareholders of the Company have adopted the Highlands Bankshares, Inc. 2018 Restricted Stock Plan (the Plan), pursuant to which the Company may grant awards of restricted stock (Restricted Stock); and
WHEREAS, the Company desires to grant to Grantee, and Grantee desires to accept, the number of shares of Restricted Stock provided herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
Section 1. Definitions. For purposes of and as used in this Agreement, the terms defined below shall, when capitalized, have the indicated meanings.
(a) Affiliate means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more intermediaries controls, is controlled by, or is under common control with, the Company, as determined by the Company.
(b) Change in Control shall mean: (x) the acquisition by one person or entity (a Person) (or more than one Person acting as a group) of ownership of stock of the Company that, together with the stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company; provided, a Change in Control shall not occur if any Person (or more than one Person acting as a group) owns more than 50% of the total fair market value or total voting power of the Companys stock and acquires additional stock; (y) the replacement of a majority of the members of the Board of the Company during any 12-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or (z) the acquisition (or series of acquisitions within a 12-month period) by one Person (or more than one Person acting as a group) of assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition(s).
(c) Code means the Internal Revenue Code of 1986, as amended from time to time. For purposes of this Agreement, references to sections of the Code shall be deemed to include references to any applicable regulations thereunder and any successor or similar provision.
(d) Common Stock means the common stock, $0.625 par value, of the Company.
(e) Continuous Service means the absence of any interruption or termination of service as an employee, officer, consultant, or director of the Company or any Affiliate, as applicable. The Grantees Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Grantee renders service to Company or an Affiliate as an employee, consultant, or director or a change in the entity for which the Grantee renders such service, provided that there is no interruption or termination of the Grantees Continuous Service; provided further that this sentence shall only be given effect to the extent consistent with Section 409A of the Code. The Board or its designee, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal or family leave of absence.