AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT
10.2
AMENDED
AND RESTATED EMPLOYMENT AGREEMENT
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
is made
as of the 21st day of August, 2006, between County National Bank (the “Bank” or
“Employer”), a national bank with a principal office in Xxxx Arundel County,
Maryland and Xxxx X. Xxxxxx, a resident of the State of Maryland (the
“Employee”).
RECITALS:
On
December 19, 1996, the parties hereto entered into an Employment Agreement
(the
“Prior Agreement”).
The
parties hereto desire to amend and restate the Prior Agreement as provided
herein.
In
consideration of the above premises and the mutual agreements hereinafter set
forth, the parties hereby agree as follows:
1. DEFINITIONS.
Whenever used in this Amended and Restated Employment Agreement, the following
terms and their variant forms will have the meaning set forth
below:
1.1 “Agreement”
means
this Agreement and any exhibits incorporated herein together with any amendments
hereto made in the manner described in this Agreement.
1.2 “Affiliate”
means
any business entity which controls the Employer, is controlled by or is under
common control with the Employer.
1.3 “Area”
means
the geographic area within a radius of twenty-five (25) miles of any office
or
facility maintained by the Employer from time to time. It is the express intent
of the parties that the Area as defined herein is the area where the Employee
performs or performed services on behalf of the Employer under this Agreement
as
of, or within a reasonable time prior to, the termination of the Employee's
employment hereunder.
1.4 “Board”
means
the board of directors of the Bank.
1.5 “Business
of the Employer”
means
the business conducted by the Employer.
1.6 “Cause”
means,
any of
the
following events or conduct preceding a termination of employment initiated
by
the Employer:
(a) any
act
that constitutes, in the reasonable judgment of the Board after consultation
with legal counsel, fraud or dishonesty toward the Employer; toward any
employee, officer or director of the Employer or toward any person doing
business with the Employer on the part of the Employee;
(b) the
conviction of the Employee of a felony or crime involving moral
turpitude;
(c) the
Employee's entering into any transaction or contractual relationship (other
than
this Agreement) with, or diversion of business opportunity from, the Employer
(other than on behalf of the Employer or with the prior written consent of
the
Board); provided, however, such conduct will not constitute Cause unless the
Board delivers to the Employee written notice setting forth (1) the conduct
deemed to qualify as Cause, (2) reasonable remedial action that might
remedy such objection, and (3) a reasonable time (not less than thirty (30)
days) within which the Employee may take such remedial action, and the Employee
has not taken the specified remedial action with the specified reasonable
time;
(d) the
Employee breaches the covenants contained in Sections 5, 6, 7 or 8 hereof;
or
(e) the
Employee materially breaches any portion of this Agreement excluding Sections
5,
6, 7, or 8, and such breach is not cured within thirty (30) days after written
notice from Employer to Employee of such breach; or
(f) conduct
by the Employee that results in removal of Employee as an officer or employee
of
the Employer pursuant to a written order by any regulatory agency with authority
or jurisdiction over the Employer.
1.7 “Company”
means CN
Bancorp, Inc., the parent of the Bank.
1.8 “Company
Information”
means
Confidential Information and Trade Secrets.
1.9 “Confidential
Information”
means
data and information relating to the Business of the Employer and any affiliate
of Employer (which does not rise to the status of a Trade Secret) which is
or
has been disclosed to the Employee or of which the Employee became aware as
a
consequence of or through the Employee's relationship to the Employer and which
has value to the Employer and is not generally known to its competitors.
Confidential Information does not include any data or information that has
been
voluntarily disclosed to the public by the Employer (except where such public
disclosure has been made by the Employee without authorization) or
that
has
been independently developed and disclosed by others, or that otherwise enters
the public domain through lawful means.
1.10 “Change
in Control”
means
the occurrence of any one of the following events as certified by the Board
of
the Bank or the Company as appropriate:
(a) acquisition
by
one
person,
or more than one person acting as a group, of stock of either the Bank or the
Company that, combined with stock previously owned, constitutes more than fifty
percent (50%) of the total fair market value or total voting power of the stock;
or
(b) acquisition
by one person, or more than one person acting as a group, during any twelve
(12)-month period, of the stock of either the Bank or the Company that
constitutes thirty-five percent (35%) or more of the total fair market value
or
total voting power of the stock; or
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(c) replacement
of a majority of members of either the Bank’s or the Company’s Board during any
twelve-month (12-month) period by Directors whose appointment or election is
not
endorsed by a majority of the Board; or
(d) acquisition
by one person, or more than one person acting as a group, during any twelve
(12)-month period, of assets from the Bank or Company that have a total gross
fair market value of forty percent (40%) or more of the assets of the Bank
or
the Company.
1.11 “Effective
Date”
means
August 21, 2006.
1.12 “Total
and Permanent Disability”
means
that the Employee is unable to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which can
be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months. This determination shall be made by the
Board in its sole discretion based upon medical evidence. The Board shall have
the right to accept the determination of the Employee’s total disability made by
the Social Security Administration or send the Employee to be examined by an
independent medical examiner of its choosing.
1.13 “Trade
Secrets”
means
Employer and Affiliate information including, but not limited to, technical
or
nontechnical data, formulas, patterns, compilations, programs, devices, methods,
techniques, drawings, processes, financial data, financial plans, product plans
or lists of actual or potential customers or suppliers which:
(a) derives
economic value, actual or potential, from not being generally known to, and
not
being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and
(b) is
the
subject of efforts that are reasonable under the circumstances to maintain
its
secrecy.
2. DUTIES.
2.1 Duties
of Executive Vice President.
The
Employee is employed as the Executive Vice President of the Bank and the
Company. Subject to the direction of the Board, the Employee must perform and
discharge well and faithfully the duties which may be assigned to Employee
from
time to time by the Employer in connection with the conduct of its
business.
2.2 Other
Duties and Responsibilities.
In
addition to the duties and responsibilities specifically assigned to the
Employee pursuant to Section 2.1 hereof, the Employee must:
(a) devote
substantially all of the Employee's time, energy and skill during regular
business hours to the performance of the duties of the Employee's employment
(reasonable vacations and reasonable absences due to illness excepted) and
faithfully and industriously perform such duties;
(b) diligently
follow and implement all management policies and decisions communicated to
the
Employee by the Board; and
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(c) timely
prepare and forward to the Board all reports and accounting as may be requested
of the Employee.
2.3 Full-time
Responsibilities.
The
Employee must devote the Employee's entire business time, attention and energies
to the Business of the Employer and must not during the Term of this Agreement
be engaged (whether or not during normal business hours) in any other business
or professional activity, whether or not such activity is pursued for gain,
profit or other pecuniary advantage; but this will not be construed as
preventing the Employee from:
(a) investing
the Employee's personal assets in businesses which are not in competition with
the Business of the Employer and which will not require any services on the
part
of the Employee in their operation or affairs and in which the Employee's
participation is solely that of an investor;
(b) purchasing
securities in any corporation whose securities are regularly traded provided
that such purchase will not result in Employee collectively owning beneficially
at any time five percent (5%) or more of the equity securities of any business
in competition with the Business of the Employer;
(c) participating
in civic and professional affairs and organizations and conferences, preparing
or publishing papers or books or teaching so long as the Board approves of
such
activities prior to the Employee's engaging in them; and
(d) serving
as an advisory director or consultant to entities not in competition with
Employer.
3. TERM
AND TERMINATION.
3.1 Term.
The term
of this Agreement will initially be set at three (3) years commencing on
the Effective Date. Commencing on the first anniversary of the Effective Date
and continuing on each anniversary date thereafter (in each case the
“Anniversary Date”), this Agreement shall renew for an additional year such that
the remaining term shall be three (3) years unless written notice of non-renewal
is provided to the Employee at least ten (10) and not more than thirty (30)
days
prior to such Anniversary Date (as so calculated, the “Term”). Prior to each
notice period for non-renewal, the disinterested members of the Board (or a
Committee comprised solely of disinterested members) will conduct a
comprehensive performance evaluation and review of the Employee for purposes
of
determining whether to extend the Agreement, and the results thereof shall
be
included in the minutes of the Board’s meeting or the Committee’s meeting.
3.2 Termination.
This
Agreement may be terminated prior to the expiration of the Term at the earliest
of the following events:
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(a) Involuntary
termination of the Employee by the Employer (for Cause or not for
Cause);
(b) Total
and
Permanent Disability of the Employee;
(c) Death
of
the Employee;
(d) Change
in
Control;
(e) Voluntary
termination by the Employee.
3.3 Effect
of Termination.
Termination of the Agreement pursuant to Section 3.2 will be without prejudice
to any right or claim, which may have previously accrued to either the Employer
or the Employee hereunder.
3.4 Suspension
With Pay.
Nothing
contained herein will preclude the Employer from releasing the Employee of
the
Employee's normal duties and suspending Employee, with pay, during the pendency
of any investigation or examination to determine whether or not Cause exists
for
termination of the Employee.
3.5 Suspension
Without Pay.
If the
Employee is suspended and/or temporarily prohibited from participating in the
conduct of the Employer's affairs by a notice served under Section
8(e)(3) or (g)(1) of the Federal Deposit Insurance Act, the Employer's
obligations under this Agreement will be suspended as of the date of service
thereof, unless stayed by appropriate proceedings. If the charges in such notice
are dismissed, the Employer may in its discretion:
(a) Pay
the
Employee all or part of the compensation withheld while its contract obligations
were suspended; and/or
(b) reinstate
(in whole or in part) any of its obligations, which were suspended.
3.6 Other
Regulatory Requirements.
If the
Bank is in default, as defined in Section (3)(x)(1) of the Federal Deposit
Insurance Act, all obligations under this Agreement will terminate as of the
date of such default, but no vested rights of the Employee will be affected.
Further, all obligations under this Agreement will be terminated, except, to
the
extent determined that continuation of the Agreement is necessary for the
continued operation of the Bank:
(a) by
the
Director (the “Director”) of the Federal Deposit Insurance Corporation (“FDIC”)
or his or her designee, at the time the FDIC enters into an agreement to provide
assistance to or on behalf of the Bank under the authority of the Federal
Deposit Insurance Act; or
(b) by
the
Director or his or her designee, at the time the Director or his or her designee
approves a supervisory merger to resolve problems relating to the operation
of
the Bank or when the Bank is determined by the Director to be in an unsafe
or
unsound condition.
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3.7 Payments
in the Event of Termination of this Agreement.
The
following payments shall be made by the Employer to the Employee in the event
this Agreement is terminated prior to the expiration of its Term.
3.7.1 In
the Event of Notice of Nonrenewal of this Agreement by the Employer and the
Employee’s Involuntary Termination without Cause.
In the
event this Agreement is not renewed by the Employer pursuant to Section 3.1
and
the Employee has been involuntarily terminated without cause, the Employer
will
pay to the Employee an amount equal to the Employee’s then current Base Salary,
Incentive Compensation that may have been awarded to him prior to his
termination, and Benefits (or the cash equivalent of such Benefits) for a period
equal to the remaining term of this Agreement and twelve (12) months after
the
expiration of said Term. The amounts payable to the Employee for the initial
six
(6) month period shall be paid one (1) day after six (6) months from the date
of
the Employee’s termination and the remaining payments will continue thereafter
on the regular payroll dates of the Employer.
3.7.2 In
the Event of Involuntary Termination Without Cause and Without Notice of
Nonrenewal, or In the Event of Total and Permanent Disability or Death of the
Employee.
In the
event the Employee has been involuntarily terminated without cause and has
not
received a notice of nonrenewal of this Agreement or in the event of Total
and
Permanent Disability or Death of the Employee, the Employer shall pay to the
Employee as Severance Pay or to his Beneficiary as a death benefit an amount
equal to the Employee’s then current Base Salary, Incentive Compensation that
may have been awarded prior to the termination of this Agreement, and the
Benefits (or the cash equivalent of such Benefits) for a period equal to the
remaining Term of this Agreement. These payments will be paid during the
remaining Term on the normal payroll dates of the Employer. Notwithstanding
the
foregoing, in the event of an involuntary termination without cause, the amount
payable to the Employee for the initial six (6) month period shall be paid
one
(1) day after six (6) months from the date of the Employee’s termination and the
remaining payments will continue thereafter on the regular payroll dates of
the
Employer.
3.7.3 In
the Event of Termination for Cause.
In
the
event the Employee has been involuntarily terminated for cause, the Employer
shall pay to the Employee only the Base Salary and Benefits due and owing
through the date of termination of employment. Incentive Compensation awarded
to
the Employee, but not paid as of the Date of Termination, shall be forfeited.
3.7.4 In
the Event of Voluntary Termination by Employee.
In
the
event the Employee voluntarily terminates employment with the Employer, the
Employer shall pay the Employee only the Base Salary, Incentive Compensation,
and Benefits due and owing through the Date of Termination.
3.7.5 In
the Event of Change in Control.
In the
event a Change in Control has occurred and this Agreement is terminated, the
Employee shall be entitled to a lump sum payment equal to the sum of (a) to
the
excess of (i) 2.99 times Employee’s Average Annual Compensation over (ii) the
aggregate present value, as determined for federal income tax purposes, of
all
other payments to the Employee in the nature of compensation that are treated
for federal income tax purposes as contingent on the Change in Control plus
(b)
an annual bonus equal to the greater of target or actual bonus for the year
in
which the Agreement terminates, pro-rated for the months elapsed in the annual
bonus period at the time of the Agreement terminates. These payments shall
be
paid in a lump sum by the Employer on the date that is one (1) day after six
(6)
months from the effective date of termination of the Agreement. As used herein,
the term “Average Annual Compensation” means the Employee’s average annual
taxable compensation paid by the Employer during the most recent five (5)
taxable years (or such portion of such period during which the Employee was
employed by the Employer) ending before the date the Change in Control occurs.
In addition, (i) all of Employee’s stock awards shall immediately vest; (ii) all
of Employee’s unexercised stock options shall become immediately exercisable;
and (iii) the Employer shall continue Employee’s medical coverage for up to two
(2) years at the same level as available to employees of the Employer or provide
the Employee with the cash equivalent of such benefits.
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3.8 Calculation
of Payment Amount Upon Change of Control.
(a) Certain
Adjustments of Payment Amount.
If it
is determined that any payment or distribution, or any acceleration of vesting
of any benefit or award, by the Employer to or for the benefit of the Employee
(whether paid or payable or distributed or distributable pursuant to the terms
of this Agreement or otherwise) is subject to the limitations of section 280G
of
the Internal Revenue Code (the “Code”) (a “Parachute Payment”), the following
provisions will apply:
(i) If
the
aggregate present value of Parachute Payments is less than or equal to the
280G
limit, then no adjustment to the amount of such Parachute Payments shall be
made.
(ii) If
the
aggregate present value of Parachute Payments is greater than the 280G limit,
but equal to or less than 110% of the 280G limit, such Parachute Payments shall
be reduced to an amount, the present value of which maximizes the aggregate
present value of Parachute Payments without causing such Parachute Payments
to
exceed the 280G limit.
(iii) If
the
aggregate present value of Parachute Payments is greater than 110% of the 280G
limit, the Employee shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any excise tax imposed by Code Section 4999 or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”) imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Parachute
Payments.
For
purposes of this Section 3.8, “present value” shall be determined in accordance
with Code Section 280G(d)(4), and the “280G limit” is the amount that can be
paid under this Agreement or otherwise without causing any amount to be
nondeductible under Code Section 280G or subject to excise tax under Section
4999. The payment of a Gross-up Payment under this Section shall in no event
be
conditioned upon the Employee’s termination of employment.
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(b) Determinations
made by Accounting Firm.
All
determinations required to be made under Section 3.8(a), including the aggregate
present value of Parachute Payments, whether a reduction is required under
Section 3.8(a)(ii) and the amount of such reduction, and whether a Gross-Up
Payment is required under Section 3.8(a)(iii) and the amount of such Gross-Up
Payment, shall be made by a locally recognized accounting firm jointly selected
by the Employer and Employee (the “Accounting Firm”). The Accounting Firm shall
provide detailed supporting calculations both to the Employer and the Employee
within fifteen (15) business days after the termination of this Agreement.
The
initial Gross-Up Payment, if any, as determined pursuant to Section 3.8(a)(iii),
shall be paid to the Employee within fifteen (15) business days after the
receipt of the payments under Section 3.7.4. The Accounting Firm shall furnish
the Employee with an opinion that he or she has substantial authority to
complete and file his or her Federal income tax return in a manner consistent
with the Accounting Firm’s determination of the appropriate amount of Parachute
Payments reportable by the Employee and of the appropriate amount of Excise
Tax
required to be paid, if any. Any determination by the Accounting Firm shall
be
binding upon the Employer and the Employee.
(c) Special
Rules Applicable to Reduction of Payments.
The
Employee shall determine which and how much of the Parachute Payments shall
be
reduced consistent with the requirements of Section 3.8(a)(ii), provided that,
if the Employee does not make such determination within ten (10) business days
after the receipt of the calculations made by the Accounting Firm, the Employer
shall elect which and how much of the Parachute Payments shall be eliminated
or
reduced consistent with the requirements of Section 3.8(a)(ii) and shall notify
the Employee promptly of such election.
(d) Special
Rules Applicable to Gross-Up Payments.
The
Employee shall notify the Employer in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Employer
of the Gross-Up Payment. Such notification shall be given as soon as practicable
but not later than ten (10) business days after the Employee knows of such
claim
and shall apprise the Employer of the nature of such claim and the date on
which
such claim is requested to be paid. The Employee shall not pay such claim prior
to the expiration of the thirty (30) day period following the date on which
it
gives such notice to the Employer (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the Employer
notifies the Employee in writing prior to the expiration of such period that
it
desires to contest such claim, the Employee shall:
(i) give
the
Employer any information reasonably requested by the Employer relating to such
claim,
(ii) take
such
action in connection with contesting such claim as the Employer shall reasonably
request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably
jointly selected by the Employer and Employee,
(iii) cooperate
with the Employer in good faith in order effectively to contest such claim,
and
8
(iv) permit
the Employer to participate in any proceedings relating to such
claim,
provided,
however, that the Employer shall bear and pay directly all costs and expenses
(including interest and penalties) incurred in connection with such contest
and
shall indemnify and hold the Employee harmless, on an after-tax basis, for
any
Excise Tax or income tax, including interest and penalties with respect thereto,
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 3.8(d), the
Employer shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of
such claim and may, at its sole option, either direct the Employee to pay the
tax claimed and xxx for a refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a determination before
any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Employer shall determine. The Employer’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
If
the
Employer exhausts its remedies pursuant to this Section 3.8(d) and the Employee
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm
shall determine the amount of the Gross-Up Payment that the Employer should
have
made (“Gross-Up Deficiency”). The amount of any such Gross-Up Deficiency shall
be promptly paid by the Employer to or for the benefit of the Employee. To
the
extent that any Gross-Up Deficiency arises in the context of a Parachute Payment
that was determined pursuant to Section 3.8(a)(ii), and therefore reduced to
the
280G limit, when in fact, the amount of such Parachute Payment should have
been
determined under Section 3.8(a)(iii), the amount of any Gross-Up Deficiency
shall include the additional Parachute Payment due as a result of the
calculation of the amount under Section 3.8(a)(iii).
(e) Overpayments/Underpayments.
As a
result of the uncertainty in the application of Code Section 280G at the time
of
the initial determination by the Accounting Firm hereunder, it is possible
that
the Parachute Payments will have been made by the Employer which should not
have
been made (“Overpayment”), or that additional Parachute Payments which should
have been made by the Employer were not made (“Underpayment”), in each case
consistent with the calculations required to be made hereunder. Overpayments
and
Underpayments arising in connection with Parachute Payments appropriately
determined pursuant to Section 3.8(a)(i) or Section 3.8(a)(ii) are governed
by
this Section 3.8(e). Any Overpayment or Underpayment arising in connection
with
a Parachute Payment that is appropriately determined pursuant to Section
3.8(a)(iii) are governed by the provisions of Section 3.8(d).
(i) Overpayments.
The
provisions of this subparagraph (i) apply in connection with a Parachute Payment
that is appropriately determined pursuant to Section 3.8(a)(ii). If the
Accounting Firm, based upon the assertion of a deficiency by the Internal
Revenue Service against the Employee which the Accounting Firm believes has
a
high probability of success, determines that an Overpayment has been made,
any
such Overpayment paid or distributed by the Employer to or for the benefit
of
the Employee shall be treated for all purposes as a loan ab initio
to the
Employee which the Employee shall repay to the Employer together with interest
at the applicable federal rate provided for in Code Section 7872(f)(2);
provided, however, that no such loan shall be deemed to have been made and
no
amount shall be payable by the Employee to the Employer if and to the extent
such deemed loan and payment would not either reduce the amount on which the
Employee is subject to tax under Code Sections 280G and 4999 or generate a
refund of such taxes.
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(ii) Underpayments.
The
provisions of this subparagraph (ii) apply in connection with a Parachute
Payment that is appropriately determined pursuant to Section 3.8(a)(i) or
Section 3.8(a)(ii). If the Accounting Firm, based upon controlling precedent
or
other substantial authority, determines that an Underpayment has occurred,
any
such Underpayment shall be promptly paid by the Employer to or for the benefit
of the Employee, together with interest at the applicable federal rate provided
for in Code Section 7872(f)(2).
4. COMPENSATION
AND BENEFITS.
4.1 Compensation.
The
Employee will receive the following salary and benefits:
(a) Base
Salary.
During
the Term, the Employee will receive a base salary at the rate of $169,800 per
annum, payable in substantially equal installments in accordance with the Bank's
regular payroll practices (“Base Salary”). The Employee's Base Salary will be
reviewed by the Board annually, and the Employee will be entitled to receive
annually an increase in such amount, if any, as may be determined by the
Board.
(b) Incentive
Compensation.
(i) In
addition to Employee's Base Salary under Section 4.1(a), the Employer may,
in
its sole discretion, pay the Employee a cash or non-cash bonus as determined
each year by the Board.
(ii) The
Employee will also be entitled to participate in such other bonus, incentive
and
other executive compensation programs as are made available to senior management
of the Employer from time to time.
The
bonus
amounts and options to which the Employee may be entitled pursuant to this
Section 4.1(b) are referred to herein as “Incentive
Compensation”.
(b) No
Compensation as a Director.
The
Employee will not be compensated for service as a director.
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4.2 Annual
Leave.
On a
non-cumulative basis, the Employee will be entitled to annual leave in each
year
of this Agreement in accordance with the Bank's leave policy as then in effect,
during which the Employee's Base Salary will be paid in full. Any leave not
used
by Employee may be converted to cash compensation based on the Employee’s the
current Base Salary at the end of each year, if permitted under the Bank’s leave
policy.
4.3 Benefits.
In
addition to the Base Salary and Incentive Compensation, the Employee will be
entitled to such benefits as may be available from time to time for employees
of
the Employer. All such benefits will be awarded and administered in accordance
with the Employer's standard policies and practices. Such benefits may include,
by way of example only, health, dental, vision, profit-sharing plans,
retirement, disability insurance benefits and such other benefits as the
Employer deems appropriate. The Employer shall also provide to the Employee
(at
no cost to Employee), life insurance equal to two times the then current annual
salary of Employee but not to exceed $300,000, payable to a beneficiary or
beneficiaries selected by the Employee and an annual automobile allowance of
$9,000.00.
4.4 Withholding.
The
Employer may deduct from each payment of compensation hereunder all amounts
required to be deducted and withheld in accordance with applicable federal
and
state income, FICA and other withholding requirements.
4.5 Business
Expenses/Membership Reimbursements.
The
Employer shall reimburse the Employee for (a) reasonable business expenses
(including travel) incurred by the Employee in the performance of the Employee's
duties hereunder, as approved from time to time by the Board, and (b) dues
and other business-related expenditures, including initiation fees, associated
with membership in professional associations which are commensurate with the
Employee's position; provided, however, that the Employee must, as a condition
of reimbursement, submit verification of the nature and amount of such expenses
in sufficient detail to comply with rules and regulations promulgated by the
Internal Revenue Service and the reimbursement policies adopted from time to
time by
the
Employer.
5. COMPANY
INFORMATION
5.1 Ownership
of Information.
All
Company Information received or developed by the Employee while employed by
the
Employer will remain the sole and exclusive property of the
Employer.
5.2 Obligations
of the Employee.
The
Employee agrees (a) to hold Company Information in strictest confidence,
(b) not to use, duplicate, reproduce, distribute, disclose or otherwise
disseminate Company Information or any physical embodiments thereof and (c)
not
to take or fail to take any action with respect to Confidential Information
that
would result in any Company Information losing its character or ceasing to
qualify as Confidential Information or a Trade Secret. In the event that the
Employee is required by law to disclose any Company Information, the Employee
will not make such disclosure unless (and then only to the extent that) the
Employee has been advised by the Company’s legal counsel that such disclosure is
required by law and then only after prior written notice is given to the
Employer when the Employee becomes aware that such disclosure has been requested
and is required by law. This Section 5 will survive the termination of this
Agreement with respect to Confidential Information for so long as it remains
Confidential Information, but for no longer than three (3) years following
termination of this Agreement, and this Section 5 will survive termination
of
this Agreement with respect to Trade Secrets for so long as is permitted by
the
then-current Maryland Trade Secrets Act.
11
5.3 Delivery
upon Request or Termination.
Upon
request by the Employer, and in any event upon termination of employment with
the Employer, the Employee will promptly deliver to the Employer all property
belonging to the Employer, including without limitation, all Company Information
then in the Employee's possession or control.
6. NON-COMPETITION.
The
Employee agrees that during the Term hereunder and, in the event of the
Employee's termination of employment for any reason, thereafter for the period
of six (6) months, the Employee will not (except on behalf of or with the prior
written consent of the Employer), within the Area, either directly or
indirectly, on the Employee's own behalf or in the service or on behalf of
others, as a principal, partner, officer, director, manager, supervisor,
administrator, consultant, executive employee or in any other capacity which
involves duties and responsibilities similar to those undertaken for the
Employer, engage in any business which is the same as or essentially the same
as
the Business of the Employer.
7. NON-SOLICITATION
OF CUSTOMERS.
The
Employee agrees that during the Term hereunder and, in the event of the
Employee's termination of employment for any reason, thereafter for the period
of time, if any, the Employer is obligated to make payments under Section 3.7,
the Employee will not (except on behalf of or with the prior written consent
of
the Employer), within the Area, on the Employee's own behalf or in the service
or on behalf of others, solicit, divert or appropriate or attempt to solicit,
divert or appropriate, directly or by assisting others, any business from any
of
the Employer's customers, including actively sought prospective customers,
with
whom the Employee has or had material contact during the last two (2) years
of
the Employee's employment, for purposes of providing products or services that
are competitive with those provided by the Employer.
8. NON-SOLICITATION
OF EMPLOYEES.
The
Employee agrees that during the Term hereunder and, in the event of the
Employee's termination of employment for any reason, thereafter for the period
of time, if any, the Employer is obligated to make payments under Section 3.7,
the Employee will not (except for Employee’s Administrative Assistant), within
the Area, on the Employee's own behalf or in the service or on behalf of others,
solicit, recruit or hire away or attempt to solicit, recruit or hire away,
directly or by assisting others, any employee of the Employer or its Affiliates,
whether or not such employee is a full-time employee or a temporary employee
of
the Employer or its Affiliates and whether or not such employment is pursuant
to
written agreement and whether or not such employment is for a determined period
or is at will.
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9. REMEDIES.
The
Employee agrees that the covenants contained in Sections 5 through 8 of this
Agreement are of the essence of this Agreement; that each of the covenants
is
reasonable and necessary to protect the business, interests and properties
of
the Employer; and that irreparable loss and damage will be suffered by the
Employer should the Employee breach any of the covenants. Therefore, the
Employee agrees and consents that, in addition to all the remedies provided
by
law or in equity, the Employer shall be entitled to a temporary restraining
order and temporary and permanent injunctions to prevent a breach or
contemplated breach of any of the covenants. The Employer and the Employee
agree
that all remedies available to the Employer or the Employee, as applicable,
will
be cumulative.
10. SEVERABILITY.
The
parties agree that each of the provisions included in this Agreement is
separate, distinct and severable from the other provisions of this Agreement
and
that the invalidity or unenforceability of any Agreement provision will not
affect the validity or enforceability of any other provision of this Agreement.
Further, if any provision of this Agreement is ruled invalid or unenforceable
by
a court of competent jurisdiction because of a conflict between the provision
and any applicable law or public policy, the provision will be redrawn to make
the provision consistent with and valid and enforceable under the law or public
policy.
11. NO
SET-OFF BY THE EMPLOYEE.
The
existence of any claim, demand, action or cause of action by the Employee
against the Employer, or any Affiliate of the Employer, whether predicated
upon
this Agreement or otherwise, will not constitute a defense to the enforcement
by
the Employer of any of its rights hereunder.
12. NOTICE.
All
notices and other communications required or permitted under this Agreement
will
be in writing and, if mailed by prepaid first-class mail or certified mail,
return receipt requested, will be deemed to have been received on the earlier
of
the date shown on the receipt or three (3) business days after the
postmarked date thereof. In addition, notices hereunder may be delivered by
hand, facsimile transmission or overnight courier, in which event the notice
will be deemed effective when delivered or transmitted. All notices and other
communications under this Agreement must be given to the parties hereto at
the
following addresses:
| (i) If to the Employer: | Chairman County National Bank | |
| 0000 Xxxxxxx Xxxxxxx | ||
| Xxxx Xxxxxx, XX 00000 | ||
| With a copy to: | ||
| Xxxxx X. Xxxxxxxxxxx, Esquire | ||
| Xxxx/Xxxxx | ||
| 000 X. Xxxxxxxxx Xx. | ||
| Xxxxxxxxx, XX 00000-0000 | ||
| (ii) If to the Employee: | Xxxx X. Xxxxxx | |
| 0000 Xxxxxx Xxxxx Xxxx | ||
| Xxxxxxxx, Xxxxxxxx 00000 |
13. ASSIGNMENT.
Neither
party hereto may assign or delegate this Agreement or any of its rights and
obligations hereunder without the written consent of the other party
hereto.
14. WAIVER.
A waiver
by the Employer of any breach of this Agreement by the Employee will not be
effective unless in writing, and no waiver will operate or be construed as
a
waiver of the same or another breach on a subsequent occasion.
15. ARBITRATION.
Any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, will be settled by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
decision of the arbitration panel will be final and binding on the parties,
and
judgment upon the award rendered by the arbitration panel may be entered by
any
court having jurisdiction thereof.
16. ATTORNEYS'
FEES.
In the
event that the parties have complied with this Agreement with respect to
arbitration of disputes and litigation ensues between the parties concerning
the
enforcement of an arbitration award and the Employee must employ separate legal
counsel, the Employer shall advance to the Employee, within thirty (30) days
after receiving copies of invoices submitted by Employee, any and all reasonable
attorneys' fees and expenses incurred with preparing, investigating and
litigating such action, proceeding or suit. The Employee must reimburse the
Employer for any and all advances that exceed the first $10,000 advanced to
the
Employee for such legal expenses if and to the extent that a final decision
by a
court of competent jurisdiction has determined that the Employee was not
justified in challenging the arbitration award under this
Agreement.
17. APPLICABLE
LAW.
This
Agreement will be construed and enforced under and in accordance with the laws
of the State of Maryland. The parties agree that any appropriate state court
located in Xxxx Arundel County, Maryland, will have jurisdiction of any case
or
controversy arising under or in connection with this Agreement and will be
a
proper forum in which to adjudicate such case or controversy. The parties
consent to the jurisdiction of such courts.
18. INTERPRETATION.
Words
importing the singular form shall include the plural and vice versa. The terms
“herein”, “hereunder”, “hereby”, “hereto”, “hereof” and any similar terms refer
to this Agreement. Any captions, titles or headings preceding the text of any
article, section or subsection herein are solely for convenience of reference
and will not constitute part of this Agreement or affect its meaning,
construction or effect.
19. ENTIRE
AGREEMENT.
This
Agreement embodies the entire and final agreement of the parties on the subject
matter stated in
the
Agreement. No amendment or modification of this Agreement will be valid or
binding upon the Employer or the Employee unless made in writing and signed
by
both parties. All prior understandings and agreements relating to the subject
matter of this Agreement are hereby expressly terminated.
20. RIGHTS
OF THIRD PARTIES.
Nothing
herein expressed is intended to or will be construed to confer upon or give
to
any person, firm or other entity, other than the parties hereto and their
permitted assigns, any rights or remedies under or by reason of this
Agreement.
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21. SURVIVAL.
The
obligations of the Employee pursuant to Sections 5, 6, 7, 8 and 9 will survive
the termination of the employment of the Employee hereunder for the period
designated under each of those respective sections.
[Signature
Page Follows]
14
IN
WITNESS WHEREOF,
the
Employer and the Employee have executed and delivered this Agreement as of
the
date first shown above.
Employer:
County
National Bank
By:
/s/ Xxxx X. XxXxxxxx Xx.
NAME:
Xxxx X. XxXxxxxx Xx.
Title:
Vice Chairman of the Board
Chairman
of Human Resources Committee
Employee:
/s/
Xxxx X. Xxxxxx
Xxxx
X.
Xxxxxx
15
