Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On January 11, 2021, Southern National Bancorp of Virginia, Inc. (the "Company")
announced that effective immediately, Mr. Jeffery Karafa would be transitioning
from his current role as Chief Financial Officer of the Company and the
Company's wholly-owned subsidiary, Sonabank, to the role of Chief Accounting
Officer, responsible for the accounting and financial reporting areas of the
organization. In connection with Mr. Karafa's new role, the Company and Mr.
Karafa entered into a retention agreement, pursuant to which Sonabank will pay
to Mr. Karafa within thirty days a $250,000 bonus, which bonus is subject to
prorated repayment if Mr. Karafa's employment terminates prior to January 11,
2023 (other by reason of his death, resignation for good reason or a termination
without cause). The Company, Sonabank and Mr. Karafa also agreed to terminate
his existing change-in-control severance agreement, effective as of January 11,
2021. The foregoing description of the retention agreement is only a summary and
is qualified in its entirety by reference to the full text of the retention
agreement, which will be filed as an exhibit to the Company's quarterly report
on Form 10-Q for the period ending March 31, 2021.
Concurrently, the Company has appointed Matthew Switzer as Executive Vice
President and Chief Financial Officer of the Company and Sonabank. Mr. Switzer,
43, most recently served as Managing Director at Stephens, Inc. since June 2015.
Prior to that, Mr. Switzer served as Managing Director at Keefe, Bruyette &
Woods, a Stifel Company, from July 2005 to May 2015. There are no familial
relationships between Mr. Switzer and any director or executive officer of the
Company. Additionally, Mr. Switzer has not engaged in any transaction with the
Company that would be reportable as a related party transaction under Item
404(a) of Regulation S-K.
In connection with his appointment as Chief Financial Officer, Mr. Switzer
entered into an employment agreement with the Company, pursuant to which he will
receive an initial annual base salary at the rate of $285,000 per year, and he
will be eligible for an annual bonus at the discretion of the Board, subject to
achievement of agreed-upon performance metrics. The term of the employment
agreement expires on the second anniversary of the date his employment commences
with the Company, with automatic 2-year renewals unless either party provides
60-day notice of non-renewal. In connection with his commencement of employment,
Mr. Switzer will receive a grant of 8,000 shares of restricted stock, which
shares will vest ratably over 5 years subject to his continued employment with
the Company. Pursuant to the employment agreement, if the Company terminates Mr.
Switzer's employment without "cause" or Mr. Switzer resigns for "good reason"
(as such terms are defined in the employment agreement), then Mr. Switzer will
receive (i) a lump sum payment equal to two times the sum of his base salary
plus his highest cash bonus earned with respect to any fiscal year within the
two most recently completed fiscal years immediately preceding the termination;
(ii) a pro rata cash bonus for the year of termination, based on actual
applicable performance results; (iii) reimbursement for COBRA premiums for 18
months; and (iv) acceleration of vesting of outstanding stock awards. The
employment agreement contains customary confidentiality covenants as well as
covenants regarding the non-solicitation of customers and employees and
non-competition that apply for 18 months following Mr. Switzer's termination of
employment. The foregoing description of the employment agreement is only a
summary and is qualified in its entirety by reference to the full text of the
employment agreement, which will be filed as an exhibit to the Company's
quarterly report on Form 10-Q for the period ending March 31, 2021.
A copy of the press release announcing these organizational changes is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
99.1 Press Release, dated January 11, 2021
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