XXXXX XXXXX, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this day of , 2001,
between XXXXX XXXXX, INC., a Maryland corporation (the "Corporation"), and
XXXXX XXXXX ("Xxxxx").
WITNESSETH
Hyatt is the President of the Corporation and possesses an intimate
knowledge of the business and affairs of the Corporation. The Corporation
recognizes Hyatt's contribution to the growth and success of the Corporation and
desires to assure to the Corporation the continued benefits of the Hyatt's
expertise and knowledge. The Hyatt, in turn, desires to continue in full-time
employment with the Corporation on the terms provided herein. Severn Bancorp,
Inc. ("Bancorp") intends to acquire the Company as described in an Agreement and
Plan of Reorganization (the "Plan") between Hyatt and Bancorp, and a condition
of the Plan is that the Company and Hyatt enter into this Agreement.
Accordingly, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:
1. Full-Time Employment of Hyatt.
1.1. Duties and Status.
(a) The Corporation hereby engages Hyatt as a fulltime executive
employee for the period (the "Employment Period") specified in Section 4, and
the Hyatt accepts such employment, on the terms and conditions set forth in this
Agreement. During the Employment Period, Hyatt shall exercise such authority and
perform such executive duties as are commensurate with the authority being
exercised and duties being performed by Hyatt for the Corporation immediately
prior to the effective date of this Agreement.
(b) During the Employment Period, Hyatt shall (i) devote his full time
and efforts to the business of the Corporation and will not engage in consulting
work or any trade or business for his own account or for or on behalf of any
other person, firm or corporation which competes, conflicts or interferes with
the performance of his duties hereunder in any way; and (ii) accept such
additional office or offices to which he may be elected by the Board of
Directors of the Corporation, provided that the performance of the duties of
such office or offices shall be consistent with the scope of the duties provided
for in subsection (a) of this Section 1.1.
(c) Hyatt will be required to perform the services and duties provided
for in subsection (a) of this Section 1.1 only at the location where Hyatt was
employed immediately prior to the effective date of this Agreement or such other
location of the principal executive offices of the Corporation in the Annapolis,
Maryland metropolitan area as the Board of Directors of the Corporation may
designate. Hyatt shall be entitled to vacation, leave of absence, and leave for
illness or temporary disability in accordance with the policies of the
Corporation in effect, which shall not be less favorable than those in effect at
the date immediately prior to this Agreement.
1.2. Compensation and General Benefits. As compensation for his
services under this Agreement, Hyatt shall be compensated as follows:
(a) The Corporation shall pay Hyatt a minimum annual base salary of
Fifty Thousand Dollars ($50,000). Such salary shall be payable in periodic
bi-weekly equal installments. Such base salary shall be subject to normal
periodic review at least annually based on the policies of the Corporation and
contributions to the enterprises of the Corporation, however, such annual base
salary shall not be less than Fifty Thousand Dollars ($50,000) during the term
hereof.
(b) In addition to the annual base salary, Hyatt shall receive
commission income arising out of properties leased or sold by Hyatt where the
Company receives a commission. Hyatt shall receive no less than 25% of the gross
commission when acting as the listing agent and no less than 25% of the gross
commission when acting as the selling agent. As used herein "gross commission"
shall mean the total sum of money paid in the form of a fee or commission
arising out of a lease or sale of real estate, received by the Company.
(c) Hyatt shall be entitled to receive employee benefits, including,
without limitation, 401K Plan participation, accident and health insurance and
other benefits no less favorable than those benefits received by the executive
officers of Severn Savings Bank, FSB. Hyatt shall also be entitled to receive
the full-time use of a company automobile which shall be a Lincoln Continental,
or equivalent, during the period of this Agreement.
2. Competition; Confidential Information. Hyatt and the Corporation
recognize that due to the nature of his association with the Corporation and of
his engagements hereunder, and the relationship of Hyatt to the Corporation,
both in the past as an executive and in the future hereunder, Hyatt has had
access to and has acquired, will have access to and will acquire, and has
assisted in and may assist in developing, confidential and proprietary
information relating to the business and operations of the Corporation and its
affiliates, including, without limiting the generality of the foregoing,
information with respect to their present and prospective products, systems,
customers, agents, processes, and sales and marketing methods. Hyatt
acknowledges that such information has been and will continue to be of central
importance to the business of the Corporation and its affiliates and that
disclosure of it to or its use by others could cause substantial loss to the
Corporation. Hyatt and the Corporation also recognize that an important part of
Hyatt's duties will be to develop good will for the Corporation and its
affiliates through his personal contact with customers, agents and others having
business relationships with the Corporation and its affiliates, and that there
is a danger that this good will, a proprietary asset of the Corporation and its
affiliates, may follow Hyatt if and when his relationship with the Corporation
is terminated. Hyatt accordingly agrees as follows:
2.1. Non-Competition.
(a) During the Employment Period and for a period of one year
thereafter Hyatt will not, directly or indirectly, either individually or as
owner partner, agent, employee, consultant or otherwise, except for the account
of and on behalf of the Corporation or its affiliates, engage in any activity
competitive with the business of the Corporation, nor will he, in competition
with the Corporation, solicit or otherwise attempt to establish for himself or
any other person, firm or entity, any business relationships with any person,
firm or corporation which was, at any time during the Employment Period, a
customer or employee of the Corporation or one of its affiliates and with which
Hyatt had direct contact and/or to which Hyatt rendered any services.
(b) Nothing in this Section 2 shall be construed to prevent Hyatt from
owning, as an investment, not more than 1 percent of a class of equity
securities issued by any competitor of the Corporation, publicly traded and
registered under Section 12 of the Securities Exchange Act of 1934.
2.2. Trade Secrets. Hyatt will keep confidential any trade
secrets or confidential or proprietary information of the Corporation and its
affiliates which are now known to him or which hereafter may become known to him
as a result of his employment or association with the Corporation and shall not
at any time directly or indirectly disclose any such information to any person,
firm or corporation, or use the same in any way other than in connection with
the business of the Corporation or its affiliates during and at all times after
the expiration of the Employment Period. For purposes of this Agreement, "trade
secrets or confidential or proprietary information" means information unique to
the Corporation or any of its affiliates which has a significant business
purpose and is not known or generally available from sources outside the
Corporation or any of its affiliates or typical of industry practice.
3. Corporation's Remedies for Breach. It is recognized that damages in
the event of breach of paragraph 2 by Hyatt would be difficult, if not
impossible, to ascertain, and it is, therefore, agreed that the Corporation, in
addition to and without limiting any other remedy or right it may have, shall
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any breach, and Hyatt hereby waives any and
all defenses he may have on the ground of lack of jurisdiction or competence of
the court to grant such an injunction or other equitable relief. The existence
of this right shall not preclude any other rights and remedies at law or in
equity which the Corporation may have.
4. Employment Period; Certain Rights
4.1 Duration. The Employment Period shall commence on the date
of this Agreement and shall continue until the earlier of close of business on
the day immediately preceding the fifth anniversary of the date of this
Agreement or death or Total Disability of Hyatt. The Employment Period may be
renewed from year to year by agreement executed in writing prior to each such
anniversary.
4.2 Definitions. The following words shall have the specified meanings
when used in the Sections specified:
(a) In this Section 4, the phrase "termination resulting in rights of
Hyatt" means termination (i) by the Corporation of the employment of Hyatt with
the Corporation for any reason other than death or total disability of Hyatt or
cause; or (ii) by resignation of Hyatt due to a significant diminution in the
nature or scope of his authorities or duties from those contemplated in
Subsection (a) of Section 1.1, a reduction in total compensation from that
provided in Section 1.2, or the breach by the Corporation of any other provision
of this Agreement.
(b) In Subsection (a) of this Section 4.2 the term "cause" means (i)
fraud, misappropriation or intentional material damage to the property or
business of the Corporation; commission of a felon; (ii) continuance of failure
by Hyatt to perform his duties in compliance with this Agreement after written
notice to Hyatt by the Board of Directors specifying such failure, provided that
such "cause" shall have been found by a majority vote of the members of the
Board of Directors of the Corporation other than Hyatt; or (iii) a violation of
Section 2 of this Agreement.
4.3 Certain Rights. If a termination resulting in rights of
Hyatt (as defined in Section 4.2) occurs, then (a) the Corporation shall be
obligated to comply with all the provisions of Section 1.2 until the end of the
Employment Period, (b) Hyatt shall not thereafter be obligated to fulfill any of
his obligations under Section 1.1, and (c) obligations of Hyatt under Section 2
shall continue. If a termination other than a termination resulting in rights of
Hyatt (as defined in Section 4.2) occurs, including voluntary termination by
Hyatt not governed by Section 4.2(a)(ii), the Corporation shall cease to have
any obligations to Hyatt under this Agreement and Hyatt shall continue to be
bound by all of the provisions hereof.
5. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to Hyatt at the last residence address he has filed
in writing with the Corporation or, in the case of the Corporation, at its
principal executive offices.
6. Binding Agreement. This Agreement shall be effective as of the date
hereof and shall be binding upon and inure to the benefit of Hyatt, his heirs,
personal and legal representatives, guardians and permitted assigns. The rights
and obligations of the Corporation under this Agreement shall inure to the
benefit of and shall be binding upon any successor or assignee of the
Corporation.
7. Entire Agreement. This Agreement constitutes the entire
understanding of Hyatt and the Corporation with respect to the subject matter
hereof and supersedes any and all prior understandings written or oral. This
Agreement may not be changed, modified, or discharged orally, but only by an
instrument in writing signed by the parties. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Maryland,
and the invalidity or unenforceability of any provisions hereof shall in no way
affect the validity or enforceability of any other provision.
IN WITNESS WHEREOF, the parties have executed, sealed and delivered
this Agreement as of the date first above written.
ATTEST: XXXXX XXXXX, INC.
By:
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Jo Xxx Xxxxx, Xxxxxx, Secretary , Vice President
WITNESS:
Xxxxx Xxxxx
