Exhibit 10.1
HCNB BANCORP, INC.
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of _________, 1999,
is entered by and between HCNB Bancorp, Inc (the "Company") and Xxxxxxx X. Xxxxx
("Employee").
The Company and Employee, in consideration of the mutual promises set forth
herein and for other valuable consideration the sufficiency of which is hereby
acknowledged and intending to be legally bound, agree as follows:
1. Employment. The Company agrees to employ Employee, and Employee
----------
agrees to accept employment with the Company. Employee agrees to perform his
duties and responsibilities in accordance with the terms and conditions set
forth herein.
1.1 Employment Term. The term of this Agreement (the "Employment Term")
---------------
shall commence on ______ __, 1999 and shall terminate on the Effective Date of
an employment agreement in substantially similar form as Exhibit A hereto
between Harbor Capital National Bank ("Bank") and Employee or on the date the
board of directors of the company makes a determination to abandon efforts to
raise capital for the purpose of chartering the Bank.
1.2 Duties and Responsibilities
---------------------------
(a) During the Employment Term, Employee shall serve as Vice President of
the Company and shall perform all duties and accept all responsibilities
incidental to such position or as may be assigned to him from time to time by
the Company's Board of Directors. Employee shall devote his productive time,
ability, attention, and energies to the fulfillment of said duties during the
Employment Term. During such time, the Employee shall not directly or
indirectly render any services of a business, commercial, or professional nature
to any other person or organization except for entities affiliated with the
Company, whether or not for compensation, without the prior written consent of
the Company.
(b) Employee represents to the Company that he is not subject or a party
to any employment, non-competition, non-disclosure or other agreement, covenant,
understanding or restriction which would prohibit Employee from executing this
Agreement and performing fully his duties and responsibilities hereunder, or
which would in any manner, directly or indirectly, limit or affect the duties
and responsibilities which may now or in the future be assigned to Employee by
the Company.
1.3(a) Compensation. The Company shall pay Employee a base salary at
------------
the annual rate of $100,000. The Company agrees that the Employee's base salary
will be reviewed annually by the Company's Board of Directors to determine, in
light of the performance of Employee and the Company, if an increase is
appropriate. Such increases shall be in the sole discretion of the
Company's Board of Directors. All compensation under this Agreement shall be
paid less withholding required by law or agreed to by Employee, and shall be
payable as determined by the Board of Directors of the Company. The Company also
agrees to pay Employee $10,000 on the date HCNB Bancorp, Inc., has collected in
escrow the minimum amount necessary to break escrow in its initial public
offering or upon a determination by the board of directors of the Company to
abandon efforts to raise capital for the purpose of chartering the Bank.
2. Other Benefits.
--------------
2.1 Plan Benefits. Upon the opening of the Company, the Company shall
-------------
provide to Employee the following benefits: family health, dental and vision
insurance, life insurance equal to one year's base salary and officers and
directors liability insurance. From the date of commencement of this Agreement
until the opening of the Company, the Company shall reimburse Employee in an
amount equal to the amount Employee pays for COBRA coverage from his previous
employer.
2.2 Supplemental Disability. The Company agrees to provide to the
-----------------------
Employee disability insurance coverage in an amount equal to 60% of Employee's
base salary.
2.4. Automobile. Company shall provide to Employee during the term of
----------
this Agreement an automobile allowance of $1,000.00 per month.
3. Non-Disclosure of Confidential Information and Records.
------------------------------------------------------
3.1 During the term of his employment, Employee will have access to the
Company's (which includes information concerning the Bank) proprietary
information or information which is entrusted to the Company, including
information relating to business plans and to business as conducted or
anticipated to be conducted, and to past, current or anticipated products,
employees, and services ("Confidential Information").
3.2 In further consideration of Employee's employment and continued
employment, and other benefits provided to Employee by the Company, Employee
agrees as follows: (i) except as required by Employee's duties to the Company,
not to at any time directly or indirectly disclose to or use for others or
appropriate for his own personal use or cause to be used by others any
Confidential Information without first obtaining the written consent of the
Board of Directors of the Company to do so; (ii) all records and other writings
of Confidential Information prepared by Employee, or which come into his
possession or control, or which he has access to, are and shall remain the
exclusive property of the Company, and upon termination of Employee's
employment, Employee will not remove any such records or copies thereof, but all
shall be left with the Company, and any such records or copies not with the
Company in an Employee's possession or control, shall be, upon termination of
employment, immediately returned to the Company along with any other property of
the Company.
2
3.3 The requirements of this Section 3 shall apply during the time of
Employee's employment with the Company and thereafter with no time limitation,
unless it can be demonstrated conclusively that such Confidential Information
has through no act or fault of Employee become part of the public domain.
4. Non-Competition.
---------------
4.1 During the Employment Term, Employee will not, unless acting pursuant
thereto or with the prior written consent of the Board of Directors of the
Company, directly or indirectly, own, manage, operate, join, control, finance or
participate in the ownership, management, operation, control or financing of, or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with or use or permit his name to be
used in connection with, any federally chartered or state chartered Company,
savings and loan, thrift or other financial institution offices of which are
located in Xxxxxxxxxx County.
4.2 The foregoing restriction shall not be construed to prohibit the
ownership by Employee of not more than five percent (5%) of any class of
securities of any corporation which is engaged in the business of banking having
a class of securities registered pursuant to the Securities Exchange Act of
1934, provided that such ownership represents a passive investment and that
neither Employee nor any group of persons, including Employee in any way, either
directly or indirectly, manages or exercises control of any such corporation,
guarantees any of its financial obligations, otherwise takes any part in its
business, other than exercising his rights as a shareholder, or seeks to do any
of the foregoing.
4.3 This Covenant Not to Compete is an inducement to cause the Company
to execute this Agreement and is a condition to, and consideration for, such
employment and continued employment, raises, promotions, severance, and other
benefits provided to Employee by the Company.
5. No Solicitation. Employee agrees that, for a period of one (1) year
---------------
after the employment of the Employee by the Company or any of its affiliates has
ended (whether or not such employment is pursuant to this Agreement), he will
not either directly or indirectly, (i) call on or solicit any person,
institution, corporation, trust or other entity who or which at the time of such
termination was, or within one (1) year prior thereto had been, a customer of
the Company or any of its affiliates in connection with the activities
prohibited by Section 5 hereof or (ii) solicit the employment of any person who
was employed by the Company or any of its affiliates on a full or part time
basis at the time of Employee's termination of employment, unless such person
(a) was involuntarily discharged by the Company or such affiliates, or (b)
voluntarily terminated his relationship with the Company or such affiliate prior
to Employee's termination of employment.
3
6. Equitable Relief.
----------------
6.1 Employee acknowledges that the restrictions contained in Sections 3, 4
and 5 are reasonable and necessary to protect the legitimate interests of the
Company and its affiliates, that the Company would not have entered into this
Agreement in the absence of such restrictions and that any violation of any
provision of these Sections will result in irreparable injury to the Company and
its affiliates. Employee further represents and acknowledges that (i) he has
been advised by the Company to consult his own legal counsel in respect of this
Agreement, and (ii) that he has had full opportunity, prior to execution of this
Agreement, to review thoroughly this Agreement with his counsel.
6.2 Employee agrees that the Company's remedy at law for a breach of
paragraphs 3, 4, and 5 would be inadequate and that the Company shall be
entitled to preliminary and permanent injunctive relief, without the necessity
of providing actual damages, as well as an equitable accounting of all earnings,
profits and other benefits arising from any violation of Sections 3, 4, or 5,
which rights shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled. In the event that any of the provisions
of Sections 3, 4, or 5 should ever be adjudicated to exceed the time, geographic
or other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic or other limitations permitted by applicable law.
6.3 Employee irrevocably and unconditionally (i) agrees that any suit,
action or other legal proceeding arising out of this Agreement, including
without limitation, any action commenced by the Company for preliminary and
permanent injunctive relief and other equitable relief, may be brought in the
United States District Court for the District of Maryland, or if such court does
not have jurisdiction or will not accept jurisdiction, in any court of general
jurisdiction in Xxxxxxxxxx County, Maryland, (ii) consents to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding, and (iii)
waives any objection which Employee may have to the laying of venue of any such
suit. Employee also irrevocably and unconditionally consents to the service of
any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 11 of this Agreement.
6.4 Employee agrees that he will provide, and that the Company may
similarly provide, a copy of Sections 3, 4, and 5 of this Agreement to any
business or enterprise (i) which he may directly or indirectly own, manage,
operate, finance, join, control or participate in the ownership, management,
operation, financing, or control of, or (ii) with which he may be connected as
an officer, director, employee, partner, principal, agent, representative,
consultant or otherwise, or in connection with which he may use or permit his
name to be used; provided, however, that this provision shall not apply in
respect of Section 5 of this Agreement after expiration of the time periods set
forth therein.
7. Termination. This Agreement shall terminate prior to the expiration
-----------
of its term set forth in Section 1.1 above, upon the occurrence of any one of
the following events:
4
7.1 Disability. In the event that Employee becomes unable to perform his
----------
duties hereunder for a period of six consecutive months or otherwise is deemed
to be disabled by the board of directors, this Agreement may be terminated by
the Company, and the Company shall have no further liability or obligation to
Employee for compensation; provided, however, that if the Employee becomes
disabled during the employment term, the Company shall pay to him or his legal
representatives an amount equal to the installment of his salary set forth in
Section 1.3 hereof for the month in which he becomes disabled which have been
earned but not yet paid. Employee agrees, in the event of any dispute under
this Section 6.1, to submit to up to three physical examinations by licensed
physicians selected by the Employee and the Company in any four month period.
In the event of a disagreement among such physicians, Employee and the Company
agree to be bound by the concurring conclusions of two such physicians. This
Section shall be interpreted in compliance with the Family Medical Leave Act to
the extent that the provisions of that law would apply.
7.2 Death. In the event that Employee dies during the Employment Term,
-----
the Company shall pay to his executors, legal representatives or administrators
an amount equal to the installment of his salary set forth in Section 1.3 hereof
for the month in which he dies, which have been earned but not yet paid and
thereafter except as otherwise provided in this Agreement, the Company shall
have no further liability or obligation hereunder to his executors, legal
representatives, administrators, heirs or assigns or any other person claiming
under or through him, provided, however, that Employee's estate or designated
beneficiaries shall be entitled to receive the payments described for such
recipients under any death benefit plan which may be in effect for executive-
level employees of the Company and in which Employees participated.
7.3 Termination by Company For Cause. Nothing in this Agreement shall be
--------------------------------
construed to prevent its termination by the Company at any time for "cause"
without prior notice. For purposes of this Agreement, "cause" shall mean the
failure of Employee to perform or observe any of the terms or provisions of this
Agreement or to comply fully with the lawful directives of the Members of the
Company, dishonesty, misconduct, conviction of a crime or otherwise causing
embarrassment to the Company and its public reputation, substance abuse,
misappropriation of funds, disparagement of the Company or failure to comply
with Company policy.
7.4 Termination by Either Party Without Cause. This Agreement may be
-----------------------------------------
terminated by either party for any reason whatsoever, by giving 30 days' prior
written notice of termination to the other party. If Employee is terminated
without cause pursuant to this Section 7.4, Employee shall receive continue to
receive compensation and benefits as provided in this Agreement.
7.5 Effect of Termination at Employee's Election. In the event of the
--------------------------------------------
termination of this Agreement by Employee prior to the completion of the
Employment Term, the Employee shall be entitled to the base compensation earned
prior to the date of termination as provided for in this Agreement under Section
1.3, computed pro-rata up to and including the date of termination. The
Employee shall be entitled to no other compensation.
5
8. Survival. Notwithstanding the termination of employment under this
--------
Agreement for any reason, the Employee's obligations under Section 3 and 5
hereof and with respect to termination of employment under Sections 7.1, 7.3 or
by Employee under 7.4, the Employee's obligations under Sections 4 and 5 hereof
shall survive and remain in full force and effect for the periods therein
provided, and the provisions for equitable relief in Section 6 of the Agreement
shall continue in force.
9. Governing Law. This Agreement shall be governed by and interpreted
-------------
under the laws of the State of Maryland without giving effect to any conflict of
laws provisions.
10. Litigation Expenses. In the event of a lawsuit by either party to
-------------------
enforce the provisions of this Agreement, the prevailing party shall be entitled
to recover reasonable costs, expenses and attorney's fees from the other party.
Disputes arising under Section 7 of the Agreement shall be submitted to an
arbitrator (who is agreeable to both parties). The decision of the arbitrator
shall be binding on both parties and the fees (including legal fees) and cost
attributable to that arbitration process will be assessed as part of that
process by the arbitrator. Such arbitration shall be held in the Baltimore
Metropolitan area and shall be conducted by the American Arbitration Association
(or other mutually selected arbitrators) ("AAA") by an arbitrator selected using
the AAA's procedures.
11. Notices. All notices and other communications required or permitted
-------
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received);
If to the Company, to: Xxxxxxx X. Xxxxx
0000 X. Xxxx Xxxxx
Xxxxx 000X
Xxxxxxxxx, Xxxxxxxx 00000
If to Employee, to: Xxxxxxx X. Xxxxx
8501 High Timber Court
Xxxxxxxx Xxxx, Xxxxxxxx 00000
or to such other names and addresses as the Company or Employee, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
12. Contents of Agreement; Amendment and Assignment.
-----------------------------------------------
12.1 This Agreement supersedes all prior agreements and sets forth the
entire understanding among the parties with respect to the subject matter hereof
and cannot be changed, modified, extended or terminated except upon written
amendment approved by the Board of Directors of the Company.. Without
limitation, nothing in this Agreement shall be construed as giving Employee any
6
right to be retained in the employ of the Company beyond the expiration of the
Employment Term and Employee specifically acknowledges that he shall be an
employee-at-will of the Company thereafter, and thus subject to discharge by the
Company with or without cause and without compensation of any nature unless a
new Agreement is executed by both parties (or employment is continued at will).
12.2 All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties, except that the duties and responsibilities of Employee hereunder are
of a personal nature and shall not be assignable or delegatable in whole or in
part by Employee.
13. Severability. If any provision of this Agreement or application
------------
thereof to anyone or under any circumstance is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.
14. Remedies Cumulative; No Waiver. No remedy conferred upon the parties
------------------------------
by this Agreement is intended to be exclusive of any other remedy, and each and
every remedy shall be cumulative and shall be in addition to any other remedy
given hereunder or now or hereafter existing at law or in equity. No delay or
omission by the parties in exercising any right, remedy or power hereunder or
existing at law or in equity shall be construed as a waiver thereof, and any
such right, remedy or power may be exercised by the parties from time to time
and as often as may be deemed expedient or necessary by such party in its sole
discretion.
15. Miscellaneous. All section headings are for convenience only. This
-------------
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in marking proof of this Agreement or any counterpart
to produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
Attest: HCNB BANCORP, INC.
______________________ By:________________________________________
Secretary Name:
Title:
7
Witness:
______________________ -------------------------------------------
8
