Village Bank & Trust Financial Corp. (Form: 8-K, Received: 03/26/2020 16:31:04)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): March 24, 2020

VILLAGE BANK AND TRUST FINANCIAL CORP.

(Exact Name of Registrant as Specified in Charter)

Virginia

(State or Other Jurisdiction

of Incorporation)

0-50765

(Commission File Number)

16-1694602

(IRS Employer

Identification No.)

13319 Midlothian Turnpike

Midlothian, Virginia

(Address of Principal Executive Offices)

23113

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (804) 897-3900

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $4.00 per share	VBFC	Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On March 24, 2020, Village Bank and Trust Financial Corp. (the “Company”) entered into a new change of control agreement with Donald M. Kaloski, Jr., Executive Vice President and Chief Financial Officer of the Company and Village Bank (the “Bank”), a wholly-owned subsidiary of the Company. On the same date, the Bank entered into a new change of control agreement with Max C. Morehead, Jr., Executive Vice President, Commercial Lending of the Bank. The new agreements, which are substantially similar, supersede and replace the prior agreement Mr. Kaloski had with the Company and Mr. Morehead had with the Bank, respectively, each dated May 1, 2018.

The initial term of the new agreements will expire on March 31, 2022. The agreements may be extended for an additional period of up to 24 months at the discretion of the board of directors. Pursuant to each agreement, if, within 12 months following a “change of control” (as defined in each agreement) of the Company, the officer’s employment is terminated without “cause” (as defined in each agreement) or by the officer following a reduction in his base salary of at least 10%, then he will be entitled to a lump sum cash payment equal to nine months of his monthly base salary as in effect on his termination date or in effect immediately prior to the change of control, whichever is greater. Such benefit is contingent upon the officer signing a customary release and waiver of claims in favor of the Company.

The foregoing summary description of the change of control agreements is qualified in its entirety by reference to the agreements, copies of which are attached to this report as Exhibits 10.1 and 10.2 and incorporated herein by reference.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On March 24, 2020, the Board of Directors of the Company amended Article II, Sections 3, 4 and 6 of the Company’s Bylaws to provide flexibility in holding shareholder meetings by remote participation as permitted under Section 13.1-660.2 of the Code of Virginia, including by having electronic virtual-only meetings of shareholders.

A copy of the Company’s Bylaws, as amended, is attached to this report as Exhibit 3.2 and is incorporated herein by reference.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are filed herewith

	Exhibit No.	Description of Exhibit

	3.2	Bylaws of Village Bank and Trust Financial Corp., as amended March 24, 2020.
	10.1	Change of Control Agreement, dated March 24, 2020, by and between Village Bank and Trust Financial Corp. and Donald M. Kaloski, Jr.
	10.2	Change of Control Agreement, dated March 24, 2020, by and between Village Bank and Max C. Morehead, Jr.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VILLAGE BANK AND TRUST FINANCIAL CORP.
	(Registrant)


Date: March 26, 2020	By:	/s/ Donald M. Kaloski, Jr.
		Donald M. Kaloski, Jr.
		Executive Vice President and CFO

EXHIBIT 3.2

AMENDED AND RESTATED

BYLAWS

VILLAGE BANK AND TRUST FINANCIAL CORP.

(as of March 24, 2020)

Table of Contents

			Page

ARTICLE I – SHARES			1

	Section 1.	Certificates	1
	Section 2.	Signatures	1
	Section 3.	Duplicate Certificates	1
	Section 4.	Transfer of Shares	1
	Section 5.	Restrictions on Transfer	1

ARTICLE II – SHAREHOLDERS			2

	Section 1.	Holders of Shares	2
	Section 2.	Organization and Order of Business	2
	Section 3.	Meetings Generally	2
	Section 4.	Annual Meetings	2
	Section 5.	Special Meetings	3
	Section 6.	Notice	3
	Section 7.	Determination of Shareholders of Record	3
	Section 8.	Procedure at Meetings	3
	Section 9.	Quorum and Voting	4
	Section 10.	Inspectors	4

ARTICLE III – DIRECTORS			5

	Section 1.	General Powers	5
	Section 2.	Number and Qualifications	5
	Section 3.	Nominations	5
	Section 4.	Regular Meetings	6
	Section 5.	Special Meetings	6
	Section 6.	Notice	6
	Section 7.	Waiver of Notice	6
	Section 8.	Action Without Meeting	6
	Section 9.	Conduct of Meetings	6

	Section 10.	Procedure at Meetings	6
	Section 11.	Participation by Conference Telephone	7
	Section 12.	Quorum	7
	Section 13.	Committees	7
	Section 14.	Term of Office	8
	Section 15.	Resignation	8
	Section 16.	Removal	9
	Section 17.	Vacancies	9
	Section 18	Honorary and Advisory Directors	9

ARTICLE IV – OFFICERS			9

	Section 1.	Generally	9
	Section 2.	President	9
	Section 3.	Vice Presidents	9
	Section 4.	Secretary	10
	Section 5.	Treasurer	10
	Section 6.	Delegation of Power	10
	Section 7.	Term of Office	10
	Section 8.	Resignation	10
	Section 9.	Removal	10
	Section 10.	Execution of Instruments	10
	Section 11.	Proxies	10

ARTICLE V – SEAL			11

ARTICLE VI – INDEMNIFICATION AND ELIMINATION OF LIABILITY			11

ARTICLE VII – FISCAL YEAR			11

ARTICLE VIII – AMENDMENTS			11

ARTICLE IX – CONTROL SHARE ACQUISITIONS STATUTE			11

AMENDED AND RESTATED

BYLAWS

VILLAGE BANK AND TRUST FINANCIAL CORP.

(as of March 24, 2020)

_____________________________________________________

ARTICLE I - SHARES

1. Certificates. Shares of capital stock issued by the Corporation shall be represented by certificates in such form as may be required by law and approved by the Board of Directors. Alternatively, the Board of Directors may authorize the issuance of some or all shares without certificates. In such event, within a reasonable time after issuance, the Corporation shall mail to the shareholder a written confirmation of its records with respect to such shares containing the information required by law. When issued, share certificates shall, subject to the provisions of Section 2 of this Article, be signed by the President or a Vice President and by the Treasurer, an Assistant Treasurer, the Secretary, an Assistant Secretary or any other officer authorized by resolution of the Board of Directors. Each share certificate may, but need not, be sealed with the seal of the Corporation or a facsimile thereof.

2. Signatures. The signatures of the officers upon a share certificate may be facsimiles if the certificate is countersigned by a transfer agent, or registered by a registrar, other than the Corporation itself or an employee of the Corporation. If any person who signed, either manually or by facsimile, a share certificate no longer holds office when such certificate is issued, the certificate is nevertheless valid.

3. Duplicate Certificates. In case of the loss, mutilation or destruction of a share certificate, a duplicate may be issued upon such terms, and bearing such legend, if any, as the Board of Directors may lawfully prescribe.

4. Transfer of Shares. A transfer of shares of the Corporation and/or of the certificates representing such shares shall be recorded in the share transfer books of the Corporation upon surrender of the certificates representing such shares, if any, endorsed or accompanied by a written assignment signed by the holder of record or by his duly authorized attorney-in-fact. The Board of Directors may from time to time make such reasonable regulations governing the transfer of shares and/or certificates representing such shares as it may deem necessary or proper.

5. Restrictions on Transfer. A transfer of shares shall be made only in accordance with any provisions of the Articles of Incorporation or these Bylaws or an agreement among or between the shareholders and the Corporation that impose restrictions on the transfer of shares.

ARTICLE II - SHAREHOLDERS

1. Holders of Shares. Only shareholders of record on the share transfer books of the Corporation shall be entitled to be treated by the Corporation as the holders of the shares standing in their respective names, and, except to the extent, if any, required by law, the Corporation shall not be obligated to recognize any equitable or other claim to or interest in any share on the part of any other person, whether or not it shall have express or other notice thereof.

2. Organization and Order of Business. The Chairman of the Board of Directors shall serve as chairman at all meetings of the shareholders. In the absence of the Chairman or if he or she declines to serve, the Vice-Chairman shall act as chairman. The Secretary or, in the Secretary’s absence, an Assistant Secretary shall act at all meetings of the shareholders. In the event that neither the Secretary nor an Assistant Secretary is present, the chairman of the meeting may appoint any person to act as secretary of the meeting.

The chairman shall have the authority to make rules and regulations, to establish such procedure and to take such steps as he or she may deem necessary or desirable for the proper conduct of each meeting the shareholders, including, without limitation, the authority to make the agenda and to establish procedures for (i) dismissing of business not properly presented., (ii) maintaining of order and safety, (iii) placing limitations on the time allotted to questions or comments on the affairs of the Corporation, (iv) placing restrictions on attendance at a meeting by persons or classes of persons who are not shareholders or their proxies, (v) restricting entry to a meeting after the time prescribed for the commencement thereof and (vi) commencing, conducting and closing voting on any matter.

Any business which might properly have been conducted on an original meeting date may come before an adjourned meeting when reconvened.

3. Meetings Generally. Meetings of shareholders shall be held at the registered office or the principal office of the Corporation or at such other place, within or without the Commonwealth of Virginia, or, in the case of virtual-only meetings, at no physical place but solely by means of remote communication, in each case, as the Board of Directors may designate from time to time. At least 10 days before each meeting, the officer or agent having charge of the share transfer books of the Corporation shall prepare a complete list of the shareholders entitled to vote at such meeting or any adjournment thereof, with the address and number of shares held by each, arranged by voting group and within each voting group by class or series of shares. For a period of 10 days prior to the meeting, the list of shareholders kept on file at the registered office or the principal office of the Corporation or at the office of its transfer agent or registrar shall be subject to inspection by any shareholders at any time during usual business hours. Such list shall also be produced and kept open at the time and place (if any) of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting for the purposes thereof.

4. Annual Meetings. An annual meeting of the shareholders shall be held on a date and at a time and place (if any) chosen by the Board of Directors for the purpose of electing Directors and transacting such other business as may properly come before the meeting.

5. Special Meetings. A special meeting of the shareholders shall be held on the call of the President or the Board of Directors.

6. Notice. Written notice of the date, time and place (if any) of a meeting and, in the case of a special meeting (or, if required by law, the Articles of Incorporation or these Bylaws), the purpose or purposes for which the meeting is called shall be given to each shareholder entitled to vote at the meeting. Such notice shall be given either by personal delivery or by mail, by or at the direction of the officer or persons calling the meeting, not more than 60 days nor less than 10 days before the date of the meeting (except that such notice shall be given to each shareholder, whether or not entitled to vote, not less than 25 days before a meeting called to act on an amendment to the Articles of Incorporation, a plan of merger or share exchange, a proposed sale, lease, exchange or other disposition of all, or substantially all, of the property of the Corporation other than in the usual and regular course of business, or the dissolution of the Corporation, which notice shall be accompanied by a copy of the proposed amendment, plan of merger or share exchange, agreement of sale or plan of dissolution, as the case may be). Notice to a shareholder shall be deemed given when mailed postage prepaid, correctly addressed, to the shareholder at his address as shown in the current record of the shareholders of the Corporation.

A shareholder’s attendance at a meeting shall be deemed a waiver of objection to: (i) lack of notice or defective notice of the meeting, unless at the beginning of the meeting he objects to holding the meeting or transacting business at the meeting; and (ii) consideration of a particular matter at the meeting that is not within the purposes described in the notice of the meeting, unless he objects to considering the matter when it is presented.

7. Determination of Shareholders of Record. The share transfer books may be closed by order of the Board of Directors for the purpose of determining shareholders entitled to notice or to vote not more than 70 days before any meeting of the shareholders or any adjournment thereof (or entitled to receive any distribution or in order to make a determination of shareholders for any other purpose). In lieu of closing such books, the Board of Directors may fix in advance as the record date for any such determination a date not more than 70 days before the date on which such meeting is to be held (or such distribution made or other action requiring such determination is to be taken). If the books are not thus closed or the record date is not thus fixed, the record date shall be the close of business on the day before the effective date of the notice to shareholders.

8. Procedure at Meetings. At an annual meeting of the shareholders of the Corporation, only such business shall be conducted as shall have been properly brought before the meeting. To be brought before an annual meeting, business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise bought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a shareholder. The procedure at meetings of the shareholders shall be determined by the chairman, and (subject to the provisions of Section 10 of this Article) the vote on all questions before any meeting shall be taken in such manner as the chairman prescribes.

In order for business to be properly brought before a meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice must be delivered to or mailed and received by the Secretary not less than 60 days nor more than 90 days prior to the date of the scheduled meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by a shareholder, to be timely, must be so received not later than the close of business on the 10th day following the earlier of the day on which such notice of the date of the schedule meeting was mailed or the date on which such public disclosure was made. A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting; (ii) the name and address, as they appear on the Corporation’s books of the shareholder proposing such business and of any other person or entity who is the record or beneficial owner of any shares of the Corporation and who, to the knowledge of the shareholder proposing such business, supports such proposal; (iii) the class and number of shares of the Corporation which are beneficially owned and owned of record by the shareholder proposing such business on the date of his notice to the Corporation and the number of shares so owned by any person or entity who, to the knowledge of the shareholder proposing such business, supports such proposal; and (iv) any material interest (financial or other) of such shareholder in such proposal.

Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any meeting of shareholders except in accordance with the procedures set forth in this Section 8. The Chairman of a meeting of shareholders shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting and in accordance with the provisions of this Section and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.

9. Quorum and Voting. A quorum at any meeting of shareholders shall be a majority of the votes entitled to be cast, represented in person or by proxy. If a quorum exists, action on a matter is approved by a majority of the votes cast within the voting group, unless a greater vote is required by law or the Articles of Incorporation (except that in elections of Directors those receiving the greatest number of votes shall be elected even though less than a majority).

10. Inspectors. The Board of Directors, in advance of any meeting of shareholders, may, but shall not be required to, appoint one or more inspectors to act at such meeting or any adjournment thereof. If any of the inspectors so appointed shall fail to appear or act, the Chairman of the meeting may appoint one or more inspectors. The inspectors shall determine the number of shares of capital stock of the Corporation outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots or consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate all votes, ballots or consents, determine the results, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the Chairman of the meeting, the inspectors shall make a report of any challenge, request or matter determined by them and shall execute a certificate of any fact found by them. No director or candidate for the office of director shall act as an inspector of an election of directors. Inspectors need not be shareholders.

ARTICLE III - DIRECTORS

1. General Powers. Except as expressly provided in the Articles of Incorporation or these Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Corporation managed under the direction of, the Board of Directors.

2. Number and Qualifications. The Board of Directors shall consist of not less than 7 nor more than 25 Directors. The number of Directors may be changed, within such limits by the Board of Directors. Until changed by action of the Board of Directors, the number of Directors shall be eleven (11). Directors need not be residents of Virginia, but shall have such other qualifications as may be specified under the laws of Virginia. Directors shall be elected at each annual meeting of the shareholders and may be elected at any special meeting of the shareholders.

3. Nominations. Only persons who are nominated in accordance with the procedures set forth in this Section 3 shall be eligible for election as Directors. Nominations of persons for election to the Board of Directors of the Corporation may be made by or at the direction of the Board of Directors, or by any shareholder of the Corporation entitled to vote for the election of Directors who complies with the notice procedures set forth in this Section 3. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporations not less than sixty (60) days nor more than ninety (90) days prior to the date of the scheduled annual meeting, regardless of postponements, deferrals, or adjournments of that meeting to a later date; provided, however, in the event that less than seventy (70) days’ notice or prior public disclosure of the date of the meeting is given or made, notice by the shareholder to be timely must be so received not later than the close of business on the 10th day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. Such shareholder’s notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election as a Director, (1) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended; and (b) as to the shareholder giving the notice (i) the name and address of such shareholder and of any other person or entity who is the record or beneficial owner of shares of the Corporation and who, to the knowledge of the shareholder giving notice, supports such nominee(s) and (ii) the class and number of shares of the Corporation which are beneficially owned and owned of record by such shareholder and by any other person or entity who is the record or beneficial owner of shares of the Corporation and who, to the knowledge of the shareholder giving the notice, supports such nominee(s). At the request of the Board of Directors any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Corporation the information required to be set forth in a shareholder’s notice of nomination which pertains to the nominee. No person shall be eligible for election as a Director of the Corporation unless nominated in accordance with the procedures set forth in this Section 3. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and if the Chairman should so determine, the Chairman shall so declare to the meeting and the defective nomination shall be disregarded.

4. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at the registered office or principal office of the Corporation or at such other place, within or without the Commonwealth of Virginia, as the Board may designate from time to time. A regular meeting of the Board of Directors shall be held as soon as practicable after each annual meeting of the shareholders for the purpose of appointing officers and transacting such other business as may properly come before the meeting.

5. Special Meetings. Special meetings of the Board of Directors may be called on not less than 24 hours notice by the President or any one of the Directors.

6. Notice. Written notice of the date, time and place of special meetings shall be given to each Director, by personal delivery, mail or telephone, by or at the direction of the officer or Director calling the meeting, to the address of such Director as it appears in the records of the Corporation not less than 10 days before the date of the meeting. Neither the business to be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified in the notice or any waiver of notice of such meeting.

A Director’s attendance at or participation in a meeting shall be deemed a waiver of any required notice to him of the meeting, unless he, at the beginning of the meeting or promptly upon his arrival, objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to the action taken at the meeting.

7. Waiver of Notice. Notice of any meeting may be waived before or after the date and time of the meeting in a writing signed by the Director entitled to notice and delivered to the Secretary of the Corporation for inclusion in the minutes of the meeting or filing with the corporate records.

8. Action Without Meeting. Any action required or permitted by law to be taken at a meeting of the Board of Directors may be taken without a meeting if the action is taken by all of the members of the Board of Directors. The action shall be evidenced by one or more written consents stating the action taken, signed by each Director, either before or after the action taken, and included in the minutes or filed with the corporate records reflecting the action taken.

9. Conduct of Meetings. The Board of Directors at the first regular meeting following the annual meeting of shareholders shall elect a Chairman of the Board. The Chairman shall preside over meetings of the Board of Directors. In the absence of the Chairman, the meeting shall elect an acting chairman. The Secretary, or in his absence the Assistant Secretary, shall act as secretary of such meetings. If no such officer is present, the Chairman shall appoint a secretary of the meeting.

10. Procedure at Meetings. The procedure at meetings of the Board of Directors shall be determined by the Chairman, and (subject to the provisions of Section 17 of this Article) the vote on all matters before any meeting shall be taken in such manner as the Chairman may prescribe.

11. Participation by Conference Telephone. The Board of Directors may permit any and all Directors to participate in a meeting of the Directors by, or conduct the meeting through the use of, conference telephone or any other means of communication by which all Directors participating may simultaneously hear each other during the meeting. A Director participating in a meeting by such means shall be deemed to be present in person at the meeting. When a meeting is so conducted, a written record shall be made of the action taken at such meeting.

12. Quorum. A quorum at any meeting of the Board of Directors shall be a majority of the number of Directors fixed or prescribed by these Bylaws or, if no number is prescribed, the number of Directors in office immediately before the meeting begins. The affirmative vote of the majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

13. Committees. The Board of Directors, by resolution adopted by a majority of the number of Directors fixed by these Bylaws, shall elect the following standing Committees and may elect additional standing, special or ad hoc Committees. Each Committee shall elect a chairman and a secretary from its members and establish a procedure for meetings, unless such matters are specified by the Board in appointing the Committee. The Chairman of the Board shall be an ex officio member of each Committee.

(a) An Executive Committee which shall consist of not less than 3 nor more than 5 Directors, including the President. When the Board of Directors is not in session, the Executive Committee shall have all powers and authority vested in the Board of Directors by law, the Articles of Incorporation, or these Bylaws; except that the Executive Committee shall not have the power to (i) approve or recommend to shareholders action that is required to be approved by shareholders; (ii) fill vacancies on the Board or any of its Committees; (iii) amend the Articles of Incorporation; (iv) adopt, amend or repeal the Bylaws; (v) approve a plan of merger not requiring shareholder approval; (vi) authorize or approve a distribution to shareholders, except according to a general formula or method prescribed by the Board of Directors; or (vii) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares, other than within limits specifically prescribed by the Board of Directors.

(b) A Compliance Review Committee which shall consist of 3 Directors who are not officers or employees of the Corporation. The Compliance Review Committee shall evaluate and ensure the Corporation’s compliance with federal and state laws and adherence to its own established ethical and financial standards.

(c) An Audit Committee which shall consist of not less than 3 nor more than 5 Directors. The Audit Committee shall ensure that appropriate financial and fiduciary controls and procedures are in effect, authorize the conduct of audits of the Corporation and its officers, receive the report of audits of the Corporation on behalf of the Board of Directors and coordinate with the management and the Board the Corporation’s response to such audits and investigations as are conducted by the Bureau of Financial Institutions of the State Corporation Commission of Virginia or other regulatory authorities. The Committee shall recommend to the Board of Directors the appointment of the independent auditors, and maintain communication with internal auditors, independent auditors and regulatory examiners for the purpose of satisfying the Board that audit procedures and programs are comprehensive and adequate, that management takes appropriate and timely action on recommendations made by internal auditors, independent auditors and regulatory examiners, and that personnel cooperate fully with internal auditors, independent auditors and regulatory examiners. The Chairman of the Audit Committee shall regularly report to the Board of Directors on the Committee’s findings, any recommendations made by the Committee, and action taken by management on such recommendations.

(d) A Compensation Committee which shall consist of not less than 3 nor more than 7 Directors who are not officers or other employees of the Corporation. The Compensation Committee shall establish and administer the Corporation’s salary, incentive, benefit and stock plans, review and recommend adjustments to the compensation of senior officers, review and recommend assignment and succession of top executive management, and at least annually review the performance of the President and Chief Executive Officer and reporting its findings to the nonmanagerial members of the Board.

(e) A Corporate Governance and Nominating Committee which shall consist of not less than 3 nor more than 7 Directors, of whom at least a majority shall be Directors whose terms do not expire at the next annual meeting. The Committee shall consider and recommend nominees for the Board of Directors. The Committee will consider recommendations for Director nominees made by shareholders of the Corporation.

(f) The Board of Directors may create additional standing committees and one or more special or ad hoc committees and appoint members of the Board of Directors or Advisory Board, or other qualified persons, to serve at the pleasure of the Board of Directors. Any such committee, to the extent specified by the Board of Directors, may exercise the authority that may be exercised by the Board of Directors except to the extent prohibited or restricted by law, the Articles of Incorporation or these Bylaws.

The provisions of Sections 3 through 11 of this Article, which provide for, among other things, meetings, action without meetings, notice and waiver of notice, quorum and voting requirements of the Board of Directors, shall apply to Committees and their members as well.

14. Term of Office. Each Director shall be elected to hold office for a term as specified in the Articles of Incorporation, or until his successor shall have been elected and qualified, or until there is a decrease in the number of Directors, or such earlier time as he shall resign, die or be removed. No decrease in the number of Directors by amendment to these Bylaws shall shorten the term of any incumbent Director.

15. Resignation. A Director may resign at any time by delivering written notice to the Board of Directors, the President or the Secretary. A resignation shall be effective when delivered, unless the notice specifies a later effective date.

16. Removal. At a meeting of the shareholders called and noticed expressly for that purpose any Director may be removed, with or without cause, if the number of votes cast to remove him constitutes a majority of the votes entitled to be cast at an election of Directors.

17. Vacancies. Subject to the final paragraph of Article III, Section 3, any vacancy in the Board of Directors (including any vacancy resulting from an increase in the number of Directors) may be filled by the affirmative vote of a majority of the remaining Directors, even though less than a quorum, unless sooner filled by the shareholders.

18. Honorary and Advisory Directors. The Board of Directors may appoint to the position of Honorary Director or Advisory Director such persons as it deems appropriate. Honorary Directors shall be entitled to receive notice of, and to attend all meetings of the Board, but they shall not be Directors and shall not be entitled to vote, nor shall they be counted in determining a quorum of the Board. Advisory Directors shall be entitled only to notice of meetings of Advisory Board or committees of the Board of the Corporation to which they shall be appointed. Honorary and Advisory Directors shall receive such compensation as may be authorized by the Board for attendance at meetings of Advisory or committees to which such Advisory or Honorary Directors are appointed.

ARTICLE IV - OFFICERS

1. Generally. The officers of the Corporation shall be a President, a Secretary and a Treasurer, each of whom shall be appointed by the Board of Directors at a regular meeting of the Directors held as soon as may be practicable after each annual meeting of the shareholders or, if a vacancy shall exist in any such office, at a special meeting of the Directors held as soon as may be practicable after the resignation, death or removal of the officer theretofore holding the office. The Board of Directors or the President may also at any time appoint one or more Vice Presidents or other officers and assistant officers and fill any vacancy that may exist in any such office as a result of the resignation, death or removal of the officer holding the same. Any officer may hold more than one office and may, but need not be, a Director. Each officer shall have the authority and perform the duties which pertain to the office held by him, or as set forth in these Bylaws or, to the extent consistent with these Bylaws, such duties as may be prescribed by the Board or the President.

2. President. The President shall be the Chief Executive Officer of the Corporation. The President shall have general supervision over, responsibility for and control of the other officers, agents and employees of the Corporation. The President shall act as chairman of and preside over meetings of the shareholders and Directors and shall perform, to the extent consistent with the Bylaws, such duties as may be conferred upon such office by the Board of Directors.

3. Vice Presidents. Each Vice President shall perform, to the extent consistent with these Bylaws, such duties as may be prescribed by the Board of Directors or the President. In the event of and during the absence, disqualification or inability to act of the President, the Vice Presidents, in the order designated by the Board of Directors from time to time (and if no such designation is made, in the order of their appointment as Vice Presidents), shall have the authority and perform the duties of the President.

4. Secretary. The Secretary shall have the responsibility for preparing and maintaining custody of minutes of meetings of the shareholders and Directors in books kept for that purpose and the responsibility for authenticating records of the Corporation. The Secretary shall maintain a record of shareholders of the Corporation, listing the names and addresses of all shareholders and the numbers, classes and series of the shares held by each and, unless otherwise prescribed by the Board of Directors, shall maintain the share transfer books of the Corporation. The Secretary shall have such further responsibility as may be prescribed by these Bylaws or assigned by the President or the Board.

5. Treasurer. The Treasurer shall be the Chief Financial Officer of the Corporation. The Treasurer shall have the custody of all monies and securities of the Corporation and shall deposit the same in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors and, unless otherwise prescribed by the Board of Directors or the President, shall maintain the books of account and financial records.

6. Delegation of Power. In the event of and during the absence, disqualification or inability to act of any officer other than the President, such other officers or employees as may be designated by the Board of Directors or by the President shall have the authority and perform the duties of such officer.

7. Term of Office. Each officer shall be appointed to hold office until the first regular meeting of the Board of Directors held after each annual meeting of the shareholders, or for such longer or shorter term as the Board of Directors may specify, and until his successor shall have been appointed or such earlier time as he shall resign, die or be removed. Except as may be specifically provided in a written agreement executed by the Corporation and such officer, employee or other person, the employment of any person by the Corporation shall be terminable at the discretion of the President or the Board of Directors.

8. Resignation. An officer may resign at any time by delivering written notice to the Board of Directors, the President or the Secretary. A resignation shall be effective when delivered unless the notice specifies a later effective date.

9. Removal. Any officer may be removed, with or without cause, at any time by the Board of Directors and any officer or assistant officer, if appointed by another officer, may likewise be removed by such officer.

10. Execution of Instruments. Checks, drafts, notes and orders for the payment of money shall be signed by such officers or such other individuals as the Board of Directors may from time to time authorize, and any endorsement of such paper in the ordinary course of business shall be similarly made, except that the officer or assistant officer of the Corporation may endorse checks, drafts or notes for collection or deposit to the credits of the Corporation. The signature of any such officer or other individual may be a facsimile when authorized by the Board of Directors.

11. Proxies. Unless otherwise prescribed by the Board of Directors, the President may from time to time himself, or by such proxies, attorneys, or agents of the Corporation as he shall designate in the name and on behalf of the Corporation, cast the votes to which the Corporation may be entitled as a shareholder or otherwise in any other corporation, at meetings, or consent in writing to any action by any such other corporation; and he may instruct the individual or individuals so appointed as to the manner of casting such votes or giving such consent, and execute or cause to be executed on behalf of the Corporation such written proxies, consents, waivers or other instruments as he may deem necessary or desirable.

ARTICLE V - SEAL

The seal of the Corporation shall be a flat-face circular die containing the name of the Corporation, of which there may be any number of counterparts or facsimiles, in such form as the board of directors shall from time to time adopt.

ARTICLE VI - INDEMNIFICATION AND ELIMINATION OF LIABILITY

The Corporation shall indemnify every individual made a part to a proceeding because he is or was a Director, officer, employee or agent of the Corporation, against liability incurred in the proceeding as and to the extent provided in the Articles of Incorporation.

ARTICLE VII - FISCAL YEAR

The fiscal year of the Corporation shall be an annual accounting period ending on December 31 in each calendar year.

ARTICLE VIII - AMENDMENTS

These bylaws may be amended or repealed by the Board of Directors except to the extent that: (i) the power of amendment is reserved exclusively to the shareholders by law or the Articles of Incorporation; or (ii) the shareholders in adopting or amending a particular Bylaw provide expressly that the Board of Directors may not amend or repeal the same. These Bylaws may be amended or repealed by the shareholders even though the same also may be amended or repealed by the Board of Directors.

ARTICLE IX - CONTROL SHARE ACQUISITIONS STATUTE

The provisions of Article 14.1 of the Virginia Stock Corporation Act, entitled Control Share Acquisitions, shall not apply to the Corporation.

EXHIBIT 10.1

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

This Amended and Restated Change of Control Agreement (this “Agreement”) is entered into as of March 24, 2020 (the “Effective Date”), by and between Village Bank and Trust Financial Corp., a Virginia corporation (the “Corporation”), and Donald M. Kaloski, Jr. (the “Executive”) and supersedes and replaces the Change of Control Agreement, effective May 1, 2018, between the Corporation and the Executive.

W I T N E S S E T H:

WHEREAS, the Corporation desires to provide the Executive with the opportunity to receive severance protection in connection with a Change of Control of the Corporation (as defined herein) on the terms and conditions set forth herein and, for purpose of effecting the same, the Board of Directors of the Corporation (the “Board”) has approved this Agreement and authorized its execution and delivery on the Corporation’s behalf to the Executive;

WHEREAS, the Executive has significant experience serving in senior bank management positions, and the Corporation desires to retain the Executive as a key executive officer of the Corporation whose dedication, availability, advice and counsel to the Corporation is deemed important to the Board, the Corporation and its shareholders;

WHEREAS, Corporation recognizes that the possibility of a Change of Control exists, and the uncertainty and questions that it may raise among management may result in the departure or distraction of management personnel to the detriment of the Corporation and its shareholders;

WHEREAS, the Corporation wishes to retain such well-qualified executives, and it is in the best interests of the Corporation and of the Executive to secure the services of the Executive to continue employment with the Corporation and/or its affiliates or successors in interest by merger or acquisition through and after a Change of Control by providing reasonable employment security to Executive and to recognize the prior service of Executive in the event of a Change of Control;

NOW, THEREFORE, to assure the Corporation of the Executive’s dedication, the availability of Executive’s advice and counsel to the Corporation, and to induce the Executive to remain in the employ of the Corporation and for other good and valuable consideration, the receipt and adequacy whereof each party hereby acknowledges, the Corporation and the Executive hereby agree as follows:

TERM, EXTENSIONS OF TERM, AND CONTINUING OBLIGATIONS:

(a)

This Agreement will be effective on the Effective Date set forth above and will expire at the end of the calendar day on March 31, 2022, provided that this Agreement may be extended for an additional period of up to 24 months at the discretion of the Board. If the Board desires to extend this Agreement, it shall provide the Executive with at least 15 days’ written notice of the applicable period of such extension. Unless Executive notifies the Corporation in writing prior to commencement of the extended term that the Executive does not agree to the extension, the Agreement will continue in effect until the expiration date set by the Board in its notice.

(b)

The parties intend that the covenants and restrictions in Sections 6 and 13 be enforceable against Executive regardless of the reason that Executive’s employment by the Corporation may terminate and that such covenants and restrictions shall be enforceable against Executive even if this Agreement expires. The existence of any claim or cause of action by the Executive against the Corporation, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Corporation of the restrictive covenants and confidentiality requirements set forth in Sections 6 and 13 of this Agreement.

CHANGE OF CONTROL:

(a)

If the Executive’s employment:

(i) is terminated by the Corporation without Cause (and other than on account of the Executive’s death or “Incapacity” as described in Section 4) within twelve (12) months following a Change of Control, or

(ii) is terminated by Executive following a reduction in Executive’s base salary of at least 10%, which salary reduction and termination occur within twelve (12) months following a Change of Control,

then, provided that the Executive signs a release and waiver of claims reasonably satisfactory to the Corporation (to be provided to the Executive no later than the date of the Executive’s termination), and such release and waiver has become effective no more than 30 days following Executive’s termination, the Executive shall receive a lump sum payment equal to nine (9) months of Executive’s monthly base salary (as in effect (x) on Executive’s termination date, or (y) immediately prior to the Change of Control, whichever is greater). Such payment shall be made on the first regularly scheduled payroll date that is at least 30 days following Executive’s termination.

(b)

For purposes of this Agreement, a “Change of Control” shall mean (i) the acquisition by any “person” or “group” (as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than Kenneth R. Lehman, the Corporation, any subsidiary of the Corporation or any employee benefit plan of the Corporation or any Corporation subsidiary, directly or indirectly, as “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Corporation representing fifty percent (50%) or more of either the then outstanding shares of common stock or the combined voting power of the then outstanding securities of the Corporation; (ii) the acquisition by Kenneth R. Lehman, individually or as part of a group, as “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Corporation representing sixty-six and two-thirds percent (66 2/3%) or more of either the then outstanding shares of common stock or the combined voting power of the then outstanding securities of the Corporation; (iii) either a majority of the directors of the Corporation elected at the Corporation’s most recent annual shareholders meeting shall have been nominated for election other than by or at the direction of the “incumbent directors” of the Corporation, or the “incumbent directors” shall cease to constitute a majority of the directors of the Corporation (the term “incumbent director” shall mean any director who was a director of the Corporation on March 1, 2020 and any individual who becomes a director of the Corporation subsequent to March 1, 2020 and who is elected or nominated by or at the direction of at least two-thirds of the then incumbent directors); (iv) the Corporation consummates a reorganization, merger, share exchange, consolidation or other business combination (a “Reorganization”) with any other “person” or “group” (as defined in Sections 13(d) and 14(d) of the Exchange Act) or affiliate thereof, other than a Reorganization that would result in the outstanding common stock of the Corporation immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof, at least fifty percent (50%) of the common stock of the Corporation or such surviving entity or a parent or affiliate thereof outstanding immediately after the Reorganization; or (v) a plan of complete liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of all or substantially all of the Corporation’s assets.

(c)

The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement under Section 2(a) by seeking other employment or otherwise.

DEATH: In the event of the Executive’s death prior to becoming entitled to a payment under Section 2(a), this Agreement (if not previously terminated) shall terminate as of the date of death without any further obligation on the part of the Corporation under this Agreement.

ILLNESS: In the event the Executive is unable to perform the essential functions of Executive’s job, with or without reasonable accommodations, for a period of four (4) consecutive months by reason of illness or other physical or mental disability (“Incapacity”), the Corporation may terminate this Agreement by written notice to Executive (which notice may take effect immediately) without further or additional compensation being due the Executive from the Corporation pursuant to this Agreement. Notwithstanding any other provision in this Agreement, the Corporation will comply with the Americans with Disabilities Act and Family Medical Leave Act.

CAUSE; REGULATORY TERMINATION:

(a)

For purposes of this Agreement, “Cause” shall mean the Executive’s unlawful or unethical business conduct, dishonesty, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses), the Executive’s material violation of the Corporation’s work rules, Code of Ethics or policies, or the Executive’s material breach of this Agreement. Cause shall not exist based on the Executive’s material violation of the Corporation’s work rules, Code of Ethics or policies, unless the Board has first provided him written notice of any such failure or breach and a reasonable period of time, not less than ten (10) days, in which to remedy such failure or breach.

(b)

If the Executive is suspended and/or prohibited from participating in the conduct of the Corporation’s affairs by a notice served under the Federal Deposit Insurance Act or any other regulatory authority, the Corporation’s obligations under this Agreement shall be terminated and the Corporation thereafter shall have no obligation to make any payments under this Agreement.

COVENANTS:

(a)

During the term of this Agreement and, if the Executive’s employment with the Corporation ceases for any reason during the term of this Agreement, for the longer of:

(x) nine (9) months from and after the date that the Executive is (for any reason) no longer employed by the Corporation; or

(y) nine (9) months from the date of entry by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by the Executive,

the Executive will not, directly or indirectly, on behalf of the Executive or any other person or entity (i) solicit or induce, or attempt to solicit or induce any person then employed by the Corporation to terminate the employee’s employment with the Corporation or (ii) solicit or divert away or attempt to solicit or divert away any Customer of the Corporation for the purpose of selling or providing Competitive Services, provided the Corporation is then still engaged in the sale or provision of Competitive Services.

(b)

For purposes of this Agreement, the term “Customer” means any individual or entity to whom or to which the Corporation provided Competitive Services within the two years prior to the Executive’s solicitation or diversion away or attempt to do either (“prohibited action”), or if the prohibited action occurs after the termination of Executive’s employment with the Corporation, then within the two years prior to the date Executive’s employment terminates, and: (i) with whom or with which the Executive had direct contact in connection with the provision of such Competitive Services by the Corporation; or (ii) about whom or which the Executive learned confidential information by way of Executive’s employment with the Corporation.

(c)

For purposes of this Agreement, “Competitive Services” means providing commercial and consumer financial products and services that, as of the date of this Agreement or (if the prohibited action occurs after the termination of Executive's employment) as of the date of termination of employment, are provided to Customers of the Corporation, whether such services are provided directly by the Corporation or by others under a contractual arrangement with the Corporation.

(d)

The Executive agrees that the covenants in this Section 6 are reasonably necessary to protect the legitimate interests of the Corporation, are reasonable with respect to time and do not interfere with the interests of the public. The Executive further agrees that the descriptions of the covenants contained in this Section 6 are sufficiently accurate and definite to inform the Executive of the scope of the covenants. Finally, the Executive agrees that the consideration set forth in this Agreement is full, fair and adequate to support the Executive’s obligations hereunder and the Corporation’s rights hereunder. The Executive acknowledges that in the event the Executive’s employment with the Corporation is terminated for any reason, the Executive will be able to earn a livelihood without violating such covenants.

(e)

The parties intend that the covenants contained in this Section 6 to be completely severable and independent, and any invalidity or unenforceability of any one or more such covenants will not render invalid or unenforceable any one or more of the other covenants. The parties further agree that, if the scope or enforceability of a covenant contained in this Section 6 is in any way disputed at any time, and if permitted by applicable law and public policy, a court or other trier of fact may modify and reform such provision to substitute such other terms as are reasonable to protect the Corporation’s legitimate business interests.

(f)

The Executive agrees that, given the nature of the positions held by the Executive with the Corporation, each and every one of the covenants and restrictions set forth in this Agreement above are reasonable in scope, length of time and geographic area and are necessary for the protection of the significant investment of the Corporation in developing, maintaining and expanding its business. Accordingly, the parties hereto agree that in the event of any breach by the Executive of any of the provisions of Sections 6 and/or 13 of this Agreement that monetary damages alone will not adequately compensate the Corporation for its losses and, therefore, that it shall be entitled to any and all legal or equitable relief available to it, specifically including, but not limited to, injunctive relief, and the Executive shall be liable for all damages, including actual and consequential damages, costs and expenses, and legal costs and actual attorneys fees incurred by the Corporation as a result of taking action to enforce, or recover for any breach of Section 6 and/or 13.

(g)

Notwithstanding anything in this Agreement to the contrary, the restrictive covenants described in this Section 6 shall apply if the Executive experiences a termination of employment with the Corporation for any reason, with or without a Change of Control, during the term of the Agreement.

(h)

For purposes of this Section 6, the term “Corporation” means the Corporation and any parent or subsidiary entity with respect to the Corporation.

NOTICES: For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

	If to the Executive:	Donald M. Kaloski, Jr.
		3393 Lake Pines Place
		Powhatan, Virginia 23139

	If to the Corporation:	Craig D. Bell, Esquire
		Chairman of Village Bank and Trust Financial Corp.
		McGuireWoods LLP
		Gateway Plaza
		800 East Canal Street
		Richmond, Virginia 23219-3916

	With a copy to:	Deborah M. Golding
		Vice President, Corporate Secretary
		Village Bank and Trust Financial Corp.
		P.O. Box 330
		Midlothian, Virginia 23113

or at such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

MODIFICATION, WAIVERS, APPLICABLE LAW: No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, signed by the Executive and on behalf of the Corporation by such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provision or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party, which are not set forth expressly in this Agreement. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Virginia.

INVALIDITY, ENFORCEABILITY: The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

10.

SUCCESSOR RIGHTS: This Agreement shall inure to the benefit of and be enforceable by the the successors of the Corporation and Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s executor or, if there is no such executor, to Executive’s estate.

11.

HEADINGS: Descriptive headings contained in this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision hereof.

12.

ARBITRATION: With the exception of Sections 6 and 13 and the enforcement of those sections in accordance with Section 6(f), all other claims under this Agreement will be resolved by binding arbitration. Any dispute, controversy or claim arising under or in connection with this Agreement shall be settled exclusively by arbitration, in Richmond, Virginia in accordance with the Employment Arbitration Rules and Procedures Rules of JAMS then in effect. The Corporation shall pay all administrative fees associated with such arbitration. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. Unless otherwise provided in the rules of the American Arbitration Association, the arbitrators shall, in their award, allocate between the parties the costs of arbitration, which shall include reasonable attorneys’ fees and expenses of the parties, as well as the arbitrator’s fees and expenses, in such proportions as the arbitrator deems just.

13.

CONFIDENTIALITY: Executive covenants and agrees that any and all proprietary information maintained as confidential by the Corporation and concerning the customers or businesses and services of the Corporation of which Executive has knowledge as a result of Executive’s association with the Corporation in any capacity, shall be deemed confidential in nature and shall not, without the proper written consent of the Corporation, be directly or indirectly used, disseminated, disclosed or published by the Executive to third parties other than in connection with the usual conduct of the business of the Corporation, or as required by law or the Corporation’s Code of Ethics. Such information shall expressly include, but shall not be limited to, confidential and proprietary information concerning the Corporation’s trade secrets within the meaning of the Virginia Trade Secrets Act, business operations, business records, documented customer lists or other confidential customer information. Upon termination of employment, the Executive shall deliver to the Corporation all property in Executive’s possession which belongs to the Corporation including all originals and copies of documents, forms, records or other information, in whatever form it may exist, concerning the Corporation or its business, customers, products or services. This Section 13 shall not be applicable to any information which, through no misconduct or negligence of Executive, has been disclosed to the public by anyone other than Executive.

14.

409A COMPLIANCE:

(a)

The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code (“Code”) Section 409A, or satisfy an exemption (e.g., involuntary separation pay) thereunder, and this Agreement shall be administered and interpreted accordingly. To the maximum extent permitted under Code Section 409A, the terms of this Agreement, including, without limitation, “termination” and “termination of employment,” and similar terms, shall be interpreted to comply with Section 409A or an applicable exemption. In no event whatsoever shall the Corporation be liable for any additional tax, interest or penalty that may be imposed on the Executive by Code Section 409A or damages for failing to comply with Code Section 409A.

(b)

Notwithstanding any other payment schedule provided herein to the contrary, if the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then the remainder of this Subsection 14(b) shall apply. With regard to any payment that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment shall be made on the date which is the earlier of (x) the expiration of the six (6)-month period measured from the date of such ‘separation from service’ of the Executive, and (y) the date of the Executive’s death (the “Delay Period”) to the extent required under Code Section 409A. Upon the expiration of the Delay Period, all payments delayed pursuant to this Section 14 (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to the Executive in a lump sum, and all remaining payments due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c)

For purposes of Code Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.

(d)

In no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Code Section 409A be offset by any other payment pursuant to this Agreement or otherwise.

15.

REGULATORY REQUIREMENTS AND CLAWBACK: Notwithstanding anything contained in this Agreement to the contrary, it is understood and agreed that the Corporation (or any of its successors in interest) shall not be required to make any payment or take any action under this Agreement if:

(a)

such payment or action is prohibited by any governmental agency having jurisdiction over the Corporation or any of its subsidiaries or affiliates (hereinafter referred to as “Regulatory Authority”) because the Corporation or any of its subsidiaries or affiliates is declared by such Regulatory Authority to be insolvent, in default or operating in an unsafe or unsound manner; or

(b)

such payment or action (i) would be prohibited by or would violate any provision of state or federal law applicable to the Corporation or its subsidiaries or affiliates, including, without limitation, the Emergency Economic Stabilization Act of 2008 and the Federal Deposit Insurance Act, each as now in effect or hereafter amended,

(ii) would be prohibited by or would violate any applicable rules, regulations, orders or statements of policy, whether now existing or hereafter promulgated, of any Regulatory Authority, or (iii) otherwise would be prohibited by any Regulatory Authority.

(c)

Executive agrees that any incentive based compensation or award that Executive receives, or has received, from the Corporation under this Agreement or otherwise, will be subject to clawback by the Corporation as may be required by applicable law or stock exchange listing requirement and on such basis as the Board determines, but in no event with a look-back period of more than three years, unless required by applicable law or stock exchange listing requirement.

16.

POSSIBLE REDUCTION IN PAYMENT AND BENEFITS: No amounts will be payable and no benefits will be provided under this Agreement to the extent that such payments or benefits, together with other payments or benefits under other plans, agreements or arrangements, would make the Executive liable for the payment of an excise tax under Code Section 4999 or any successor provision. The amounts otherwise payable and the benefits otherwise to be provided under this Agreement shall be reduced in a manner determined by the Corporation (by the minimum possible amount) that is consistent with the requirements of Code Section 409A until no amount payable to the Executive will be subject to such excise tax. All calculations and determinations under this Section 16 shall be made by an independent accounting firm or independent tax counsel appointed by the Corporation (the “Tax Advisor”) whose determinations shall be conclusive and binding on the Corporation and the Executive for all purposes. The Tax Advisor may rely on reasonable, good faith assumptions and approximations concerning the application of Code Section 280G and Code Section 4999. The Corporation shall bear all costs of the Tax Advisor.

(Signatures appear on the following page)

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.

	EXECUTIVE


	By:	/s/ Donald M. Kaloski, Jr.
		Donald M. Kaloski, Jr.

	Date:	March 24, 2020



	VILLAGE BANK AND TRUST FINANCIAL CORP.


	By:	/s/ William G. Foster
		William G. Foster
		President and Chief Executive Officer

	Date:	March 24, 2020

EXHIBIT 10.2

AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT

This Amended and Restated Change of Control Agreement (this “Agreement”) is entered into as of March 24, 2020 (the “Effective Date”), by and between Village Bank, a Virginia banking corporation (the “Corporation”), and Max C. Morehead, Jr. (the “Executive”) and supersedes and replaces the Change of Control Agreement, effective May 1, 2018, between the Corporation and the Executive.

W I T N E S S E T H:

WHEREAS, the Corporation desires to provide the Executive with the opportunity to receive severance protection in connection with a Change of Control (as defined herein) of Village Bank and Trust Financial Corp. (the “Holding Company”) on the terms and conditions set forth herein and, for purpose of effecting the same, the Board of Directors of the Corporation (the “Board”) has approved this Agreement and authorized its execution and delivery on the Corporation’s behalf to the Executive;

TERM, EXTENSIONS OF TERM, AND CONTINUING OBLIGATIONS:

(a)

(b)

CHANGE OF CONTROL:

(a)

If the Executive’s employment:

(b)

For purposes of this Agreement, a “Change of Control” shall mean (i) the acquisition by any “person” or “group” (as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than Kenneth R. Lehman, the Holding Company, any subsidiary of the Holding Company or any employee benefit plan of the Holding Company or any Holding Company subsidiary, directly or indirectly, as “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Holding Company representing fifty percent (50%) or more of either the then outstanding shares of common stock or the combined voting power of the then outstanding securities of the Holding Company; (ii) the acquisition by Kenneth R. Lehman, individually or as part of a group, as “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act) of securities of the Holding Company representing sixty-six and two-thirds percent (66 2/3%) or more of either the then outstanding shares of common stock or the combined voting power of the then outstanding securities of the Holding Company; (iii) either a majority of the directors of the Holding Company elected at the Holding Company’s most recent annual shareholders meeting shall have been nominated for election other than by or at the direction of the “incumbent directors” of the Holding Company, or the “incumbent directors” shall cease to constitute a majority of the directors of the Holding Company (the term “incumbent director” shall mean any director who was a director of the Holding Company on March 1, 2020 and any individual who becomes a director of the Holding Company subsequent to March 1, 2020 and who is elected or nominated by or at the direction of at least two-thirds of the then incumbent directors); (iv) the Holding Company consummates a reorganization, merger, share exchange, consolidation or other business combination (a “Reorganization”) with any other “person” or “group” (as defined in Sections 13(d) and 14(d) of the Exchange Act) or affiliate thereof, other than a Reorganization that would result in the outstanding common stock of the Holding Company immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof, at least fifty percent (50%) of the common stock of the Holding Company or such surviving entity or a parent or affiliate thereof outstanding immediately after the Reorganization; or (v) a plan of complete liquidation of the Holding Company or an agreement for the sale or disposition by the Holding Company of all or substantially all of the Holding Company’s assets.

(c)

The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement under Section 2(a) by seeking other employment or otherwise.

CAUSE; REGULATORY TERMINATION:

(a)

(b)

COVENANTS:

(a)

During the term of this Agreement and, if the Executive’s employment with the Corporation ceases for any reason during the term of this Agreement, for the longer of:

(x) nine (9) months from and after the date that the Executive is (for any reason) no longer employed by the Corporation; or

(y) nine (9) months from the date of entry by a court of competent jurisdiction of a final judgment enforcing this covenant in the event of a breach by the Executive,

(b)

(c)

(d)

(e)

(f)

(g)

(h)

For purposes of this Section 6, the term “Corporation” means the Corporation and any parent or subsidiary entity with respect to the Corporation.

	If to the Executive:	Max C. Morehead, Jr.
		16525 Saville Chase Road
		Midlothian, Virginia 23112

	If to the Corporation:	Craig D. Bell, Esquire
		Chairman of Village Bank and Trust Financial Corp.
		McGuireWoods LLP
		Gateway Plaza
		800 East Canal Street
		Richmond, Virginia 23219-3916

	With a copy to:	Deborah M. Golding
		Vice President, Corporate Secretary
		Village Bank and Trust Financial Corp.
		P.O. Box 330
		Midlothian, Virginia 23113

or at such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

10.

SUCCESSOR RIGHTS: This Agreement shall inure to the benefit of and be enforceable by the successors of the Corporation and Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts would still be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s executor or, if there is no such executor, to Executive’s estate.

11.

HEADINGS: Descriptive headings contained in this Agreement are for convenience only and shall not control or affect the meaning or construction of any provision hereof.

12.

13.

CONFIDENTIALITY: Executive covenants and agrees that any and all proprietary information maintained as confidential by the Corporation and concerning the customers or businesses and services of the Corporation of which Executive has knowledge as a result of Executive’s association with the Corporation in any capacity, shall be deemed confidential in nature and shall not, without the proper written consent of the Corporation, be directly or indirectly used, disseminated, disclosed or published by the Executive to third parties other than in connection with the usual conduct of the business of the Corporation, or as required by law or the Corporation’s or Holding Company’s Code of Ethics. Such information shall expressly include, but shall not be limited to, confidential and proprietary information concerning the Corporation’s trade secrets within the meaning of the Virginia Trade Secrets Act, business operations, business records, documented customer lists or other confidential customer information. Upon termination of employment, the Executive shall deliver to the Corporation all property in Executive’s possession which belongs to the Corporation including all originals and copies of documents, forms, records or other information, in whatever form it may exist, concerning the Corporation or its business, customers, products or services. This Section 13 shall not be applicable to any information which, through no misconduct or negligence of Executive, has been disclosed to the public by anyone other than Executive.

14.

409A COMPLIANCE:

(a)

(b)

(c)

(d)

15.

(a)

(b)

(c)

16.

POSSIBLE REDUCTION IN PAYMENT AND BENEFITS: No amounts will be payable and no benefits will be provided under this Agreement to the extent that such payments or benefits, together with other payments or benefits under other plans, agreements or arrangements, would make the Executive liable for the payment of an excise tax under Code Section 4999 or any successor provision. The amounts otherwise payable and the benefits otherwise to be provided under this Agreement shall be reduced in a manner determined by the Holding Company (by the minimum possible amount) that is consistent with the requirements of Code Section 409A until no amount payable to the Executive will be subject to such excise tax. All calculations and determinations under this Section 16 shall be made by an independent accounting firm or independent tax counsel appointed by the Holding Company (the “Tax Advisor”) whose determinations shall be conclusive and binding on the Corporation and the Executive for all purposes. The Tax Advisor may rely on reasonable, good faith assumptions and approximations concerning the application of Code Section 280G and Code Section 4999. The Corporation shall bear all costs of the Tax Advisor.

(Signatures appear on the following page)

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.

	EXECUTIVE


	By:	/s/ Max C. Morehead, Jr.
		Max C. Morehead, Jr.

	Date:	March 24, 2020



	VILLAGE BANK


	By:	/s/ William G. Foster
		William G. Foster
		President and Chief Executive Officer

	Date:	March 24, 2020