Exhibit 10.1 Employment Agreement between State Capital Bancorp,
Inc. and Xxxx X. Xxxxxxxx, Xx.
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This agreement made this 4th day of December, 1996, between Xxxx X.
Xxxxxxxx, Xx., hereinafter referred to as "Employee", and State Capital Bancorp,
Inc., its successors and assigns, hereinafter referred to as "Employer".
1. Employer is a Maryland corporation in the process of completing the
tasks necessary to become a bank holding company which is to become the sole
stockholder of a full service commercial bank/trust company whose principal
office will be located in Annapolis, Maryland ("the Bank"). So as to accomplish
this task, Employer shall undertake a public offering of common stock ("the
Offering") the completion of which shall require both acceptance of
subscriptions for the minimum number of shares of common stock offered and
receipt of certain regulatory approvals. For the purpose of this agreement, "the
Date of Satisfaction of Escrow Conditions" shall be the first day of the month
following the last to occur of the following: (i) Employer's acceptance of
subscriptions and payment in full to purchase a minimum of 550,000 shares of
common stock in the Offering; (ii) the Company obtaining regulatory approvals to
acquire all of the stock of the Bank and thereafter to become a bank holding
company; and (iii) the Bank receiving preliminary approval of its application
for a charter from the Maryland Bank Commissioner, preliminary approval of its
application for membership in the Federal Reserve System from the Federal
Reserve Board, and preliminary approval of its application for insurance of
deposit accounts from the Federal Deposit Insurance Corporation.
2. Employee is willing to be employed by Employer and Employer is
willing to employ Employee on the terms, covenants, and conditions hereinafter
set forth.
For the reason set forth above and in consideration of the mutual
promises and agreements hereinafter set forth, Employer and Employee agree as
follows:
SECTION ONE - EMPLOYMENT
Employer hereby employs, engages and hires Employee as the President &
Chief Executive Officer of State Capital Bancorp, Inc., its successors and
assigns, and Employee hereby accepts and agrees to such hiring, engagement and
employment subject to the general supervision and pursuant to the orders, advice
and direction of the Board of Directors of Employer. Following the Date of
Satisfaction of Escrow Conditions, the term "Employer" shall be expanded to also
include the Bank. Employee shall perform such duties as are customarily
performed by persons holding such position in other similar businesses or
enterprises as that engaged in by Employer, and shall render such other and
unrelated services and duties as may be assigned to him from time to time by
Employer.
SECTION TWO - BEST EFFORTS OF EMPLOYEE
Employee agrees that he will at all times faithfully, industriously and
to the best of his ability, experience, and talents, perform all duties that may
be required of and from him pursuant to the express and implicit terms hereof,
to the reasonable satisfaction of Employer.
Such duties shall be rendered at the principal office of Employer and at such
other place or places as Employer shall in good faith require or as the
interests, needs, business or opportunity of Employer shall require. Employer
will allow fifteen (15) working days vacation annually, during which time
Employee's compensation shall be paid in full.
SECTION THREE - TERM OF EMPLOYMENT
This agreement is effective on the date of its execution, and its term
shall continue to be in effect for a period of five (5) years commencing on the
Date of Satisfaction of Escrow Conditions, unless sooner terminated by either
party pursuant to the provisions of SECTION EIGHT of this agreement.
SECTION FOUR - COMPENSATION OF EMPLOYEE
Prior to the Date of Satisfaction of Escrow Conditions, Employer shall
pay Employee for Employee's services hereunder, compensation at a minimum salary
of Seventy Thousand Dollars ($70,000.00) per annum, payable biweekly while this
agreement is in force. Additionally, Employer shall reimburse Employee for all
reasonable business expenses incurred by Employee.
After the Date of Satisfaction of Escrow Conditions, Employer shall pay
Employee for Employee's services hereunder, compensation at an initial minimum
salary of One Hundred Thousand Dollars ($100,000.00) per annum, payable
bi-weekly while this agreement is in force. The amount of this salary shall
increase by ten percent (10.0% ) per annum effective on each anniversary of the
Date of Satisfaction of Escrow Conditions so long as this agreement is in force.
Additionally, Employer shall provide Employee will a company automobile and all
expenses pertaining to the use, repair, and maintenance of said automobile shall
be paid by Employer. Employer shall provide Employee with non-contributory
family health insurance, reimbursement of reasonable business expenses, and
group benefits as provided for other executive officers of Employer. Employee
may receive cash bonuses as deemed appropriate by the Board of Directors of
Employer, however, no such bonuses shall be paid until Employer attains
profitable operating results.
On the Date of Satisfaction of Escrow Conditions, Employer shall grant
Employee a non-transferable incentive stock option to purchase, at a price of
$10.00 per share, that number of shares of common stock equal to one percent
(1.0%) of the aggregate number of shares sold in the Offering ("the Options").
The Options shall be exercisable for a period of ten years, subject to a five
year vesting schedule with 20% of the Options becoming exercisable annually on
each anniversary of the Date of Satisfaction of Escrow Conditions. The Options
shall be subject to all other applicable provisions of Employer's Incentive
Stock Option Plan.
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SECTION FIVE - OTHER EMPLOYMENT
Employer shall be entitled to all benefits, profits, or other issues
arising from or incident to all work, services and advice of Employee. Employee
shall not, during the term hereof, be interested directly or indirectly, in any
manner, as a partner, officer, director, advisor, employee or in any other
capacity, in any other business similar to Employer's business or allied trade.
However, nothing herein contained shall be deemed to prevent or limit the right
of Employee to invest any of his funds in the capital stock or any other
security of any corporation, nor shall anything herein contained be deemed to
prevent or limit Employee's right to invest his funds in real estate or other
similar investments.
SECTION SIX - RECOMMENDATIONS FOR IMPROVING OPERATIONS
Employee and Employer shall make available to each other all
information of which each shall have any knowledge and shall make all
suggestions and recommendations that will be of mutual benefit to Employer and
Employee.
SECTION SEVEN - COMPLETENESS / MODIFICATION OF CONTRACT
This agreement contains the complete agreement concerning the
employment arrangement between the parties and shall, as of the effective date
hereof, supersede any and all other agreements between the parties. No waiver or
modification of this agreement or any covenant or limitation herein contained
shall be valid unless in writing and duly executed by both parties.
SECTION EIGHT - TERMINATION
This agreement may be terminated by either party at any time with or
without cause. For the purposes of this agreement, "cause" shall be defined as
Employee's intentional failure to perform stated duties, personal dishonesty
which results in a material loss to Employer, willful violation of any law,
rule, regulation or final cease and desist order which results in any material
loss to Employer, or any material breach of this agreement. For purposes of this
section, no act , or the failure to act, on Employee's part shall be "willful"
unless done, or omitted to be done, not in good faith and without reasonable
belief that the action or omission was in the best interest of the Employer.
Employee may terminate this agreement upon providing 180 days advance
written notice of resignation to Employer. Should Employee terminate this
agreement by voluntary resignation, Employee agrees not to compete with Employer
in Xxxx Arundel County, Maryland for a period of two years following such
resignation, except as agreed to pursuant to a resolution duly adopted by the
Board of Directors of Employer. Employee agrees that during such period and
within said county, Employee shall not work for or advise, consult, or otherwise
serve with, directly or indirectly, any entity whose business materially
competes with the banking or other business activities of Employer. The parties
hereto, recognizing
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that irreparable injury will result to Employer, its businesses and properties
in the event of Employees breach of this covenant, agree that in the event of
any such breach by Employee, Employer will be entitled, in addition to other
remedies and damages available, to an injunction to restrain the violation
hereof by Employee. Nothing contained in this section shall be construed to
limit Employee's ability to compete with Employer in Xxxx Arundel County,
Maryland or elsewhere in the event that (I) this agreement is terminated by
Employer for any reason, or (ii) this agreement is terminated by either party
subsequent to a change of control of Employer as herein defined.
Prior to the Date of Satisfaction of Escrow Conditions, this agreement
may be terminated by Employer, with no liability to Employee except for rights
earned through the date of termination.
After the Date of Satisfaction of Escrow Conditions, this agreement may
be terminated by Employer, with no liability to Employee except for rights
earned through the date of termination, upon: (i) Employee's discharge for cause
(as defined herein), or (ii) Employee's death, disability (as defined herein),
or resignation. Employer agrees to pay Employee a lump sum payment equal to one
and one-half (1.5) times the base salary and bonus which was paid to Employee
during the preceding twelve month period immediately upon termination of this
agreement by Employer other than for cause or Employee's death, disability, or
resignation. In addition, and not withstanding any other termination provision
herein contained, in the event of a change of control of Employer (as herein
defined), then and in that event, Employee shall have the option, exercised
within six (6) months from the date of said change of control of Employer (as
defined herein), to elect either (a) to execute a new Employment Agreement with
Employer on terms mutually agreeable, or (b) to receive a lump sum payment equal
to one and one-half (1.5) times the base salary and bonus which was paid to
Employee during the twelve month period immediately preceding said change of
control. For purposes of this agreement, a "change of control of Employer" shall
be defined as an event of a nature that (a) would be required to be reported in
response to Item 1(a) of the current report on Form 8-K, as in effect on the
date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, or (b) results in a Change of Control of Employer within the meaning of
the Change in Control Act and the rules and regulations promulgated by the
Federal Deposit Insurance Corporation at 12 C.F.R., 303.4(a) with respect to the
Bank, and the Board of Governors of the Federal Reserve System at 12 C.F.R.,
225.41(b) with respect to the bank holding company, as of the date hereof, or
(c) results in a change in the power, directly or indirectly, to direct the
management or policies of Employer or to vote twenty percent (20.0%) or more of
the any class of voting securities of Employer.
SECTION NINE - TERMINATION FOR DISABILITY
Not withstanding anything in this agreement to the contrary, Employer
is hereby given the option of terminating this agreement in the event that
Employee, during the term hereof, becomes permanently disabled as the term
"permanently disabled" is hereinafter fixed and defined. For the purpose of this
agreement, Employee shall be deemed to have become
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permanently disabled if, because of ill health, physical or mental disability,
or for other causes beyond his control, he shall have been continuously unable
or unwilling or shall have failed to perform his duties for a period of one
hundred eighty (180) days within any year, irrespective of whether such days are
consecutive. Following the one hundred eightieth day of nonperformance of duties
during any year by Employee, no further obligations shall exist between the
parties hereto, including but not limited to, any further compensation.
SECTION TEN -SEVERABILITY / ASSIGNMENT / LAWS AND REGULATIONS
All agreements contained herein are severable, and in the event any of
the provisions hereof, with the exception of those contained in Sections One,
Four, and Eight hereof, shall be held to be invalid by any competent court, this
agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein. This agreement is personal in nature and neither of the
parties hereto shall, without the written consent of the other, assign or
transfer this agreement or any rights or obligations hereunder. In the event
Employer shall attempt to terminate the employment of Employee for "cause", as
that term is defined in Section Eight of this agreement, Employer and Employee
hereby consent to the jurisdiction of and hereby agree to be bound by the final
decision of the American Arbitration Association with respect to whether said
termination shall preclude receipt of compensation under the terms of this
agreement. All reasonable legal fees paid or incurred by Employee pursuant to
any dispute or question of interpretation relating to this Agreement shall be
paid or reimbursed by Employer, if Employee is successful on the merits pursuant
to a legal judgment, arbitration or settlement.
SECTION ELEVEN - INDEMNIFICATION
Employer shall provide Employee with coverage under a standard
directors' and officers' liability insurance policy at its expense, or in lieu
thereof, shall indemnify Employee to the fullest extent permitted under Maryland
law against all expenses and liabilities reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of having been a director or officer of Employer (whether
or not he continues to be a director or officer at the time of incurring such
expenses or liabilities), such expenses and liabilities to include, but not
limited to, judgments, court costs and attorney's fees, and the cost of
reasonable settlements.
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In witness whereof, the parties hereto have set their hands and seals
on this fourth day of December, 1996.
"Employer"
Attest State Capital Bancorp, Inc.
_______________________________ By:_______________________
Xxxxxxx X. Xxxx, Xx., Secretary
Corporate Seal
Witness: "Employee"
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Xxxx X. Xxxxxxxx, Xx.
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