Exhibit 10(h)
EMPLOYMENT AGREEMENT
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THIS AGREEMENT (the "Agreement"), made this 30th day of January 1997,
by and among Xxxxx Spring Bancorp, Inc., a registered bank holding company
("Bancorp"), Xxxxx Spring National Bank of Maryland, a national banking
association and wholly owned subsidiary of Bancorp with its main office in
Olney, Maryland (the "Bank"), and Xxxxxxx X. Xxxxxx (the "Officer").
W I T N E S S E T H
WHEREAS, the Officer is employed as the Senior Vice President of the
Bank.
WHEREAS, as a result of the skill, knowledge, and experience of the
Officer, the Board of Directors of the Bank (the "Board") desires to retain the
services of the Officer.
WHEREAS, the Officer desires to continue to serve as the Senior Vice
President of the Bank.
WHEREAS, the Officer and the Board and the Board of Directors of
Bancorp desire to enter into an Agreement setting forth the terms of conditions
of the continuing employment of the Officer and the related rights and
obligations of each of the parties.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed as follows:
1. Employment. The Officer is employed as the Senior Vice President of the
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Bank, reporting to the President and Chief Executive Officer. Subject to
direction of the President and Chief Executive Officer, the Officer shall
perform all duties and shall have all powers which are commonly incident to the
office of Senior Vice President or which, consistent with that office, are
delegated to him by the President and Chief Executive Officer. The officer shall
serve as a member of the Senior Officer Policy Committee and the Asset/Liability
Committee, and as Chairman of the Senior Loan Committee of the Bank. The
Officer's duties include, but are not limited to:
a. Making recommendations to the President and Chief Executive
Officer concerning commercial and mortgage lending and related
loan quality assurance strategies, policies, needs, and
tactics of Bancorp and the Bank;
b. Management oversight of the day-to-day commercial lending
functions of the Bank, including supervision of the officers
and employees engaged in these functions;
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c. Serving as President of Xxxxx Spring Mortgage Corporation
("SSMC") and management oversight of the residential mortgage
functions of SSMC and the Bank, including supervision of the
officers and employees engaged in these functions;
d. Promoting the Bank and its services;
e. Managing the efforts of the Bank to comply with applicable
laws and regulations relating to commercial and mortgage
lending; and
f. Providing complete, timely, and accurate reports to the
President and Chief Executive Officer of Bancorp and the Bank
regarding the commercial and mortgage loan portfolio and
related lending functions.
2. Location and Facilities. The Officer will be furnished with the working
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facilities and staff customary for executive officers with the title and duties
set forth in Section 1 and as are necessary for him to perform his duties. The
location of such facilities and staff shall be at the principal administrative
offices of the Bank, or at such other site or sites customary for such offices.
3. Term.
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a. The term of this Agreement shall be (i) the initial term,
consisting of the period commencing on the date of this
Agreement (the "Effective Date") and ending immediately prior
to the second anniversary of the Effective Date, plus (ii) any
and all extensions of the initial term made pursuant to this
Section 3.
b. On each anniversary of the Effective Date prior to a
termination of the Agreement, the term under this Agreement
shall be extended for an additional one-year period beyond the
then effective expiration date without action by any party,
provided that neither the Bank nor the Officer shall have
given written notice at least sixty (60) days prior to such
anniversary date of its or his desire that the term not be
extended. The President and Chief Executive Officer will
review the Officer's performance and the advisability of
extending the term of this Agreement, and the Board shall,
based on such review, determine whether or not to extend the
term of this Agreement at a meeting or meetings at least
ninety (90) days prior to each anniversary date.
4. Base Compensation.
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a. The Bank agrees to pay the Officer during the term of this
Agreement a salary at the rate of $100,000 per annum, payable
in cash not less frequently than monthly, as may be adjusted
in accordance with this Section 4.
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b. The Human Resources Committee of the Bank (the "Committee")
with the advice of the President and Chief Executive Officer
shall perform an annual analysis of the Officer's performance
and of the compensation of officers performing similar
functions at independent financial institutions of comparable
assets and performance, and based upon this review, the
recommendation of the President and Chief Executive Officer,
and on such other factors as it deems pertinent, shall
recommend to the Board the salary rate to be paid beginning on
the next April 1 following such review. The Board shall review
annually the rate of the Officer's salary based upon this
recommendation of the Committee and other factors they deem
relevant, and may maintain, increase or decrease his salary,
provided that no such action shall (i) reduce the rate of
salary below $100,000 or (ii) reduce the rate of salary paid
to the Officer for any months prior to the month in which
notice of the reduction is provided in writing to the Officer.
c. In the absence of action by the Board, the Officer shall
continue to receive salary at the $100,000 per annum rate
specified herein or, if another rate has been established
under the provisions of this Section 4, the rate last properly
established by action of the Board under the provisions of
this Section 4.
5. Bonuses. Unless the Officer agrees otherwise, he shall be entitled to
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participate in discretionary bonuses that the Board may award from time to time
to senior management employees pursuant to bonus plans or otherwise. The Officer
also shall participate in any other fringe benefits which are or may become
available to senior management employees of the Bank, including for example: any
stock option or incentive compensation plans and any other benefits that are
commensurate with the responsibilities and functions to be performed by the
Officer under this Agreement. No other compensation provided for in this
Agreement shall be deemed a substitute for the Officer's right to participate in
such discretionary bonuses or fringe benefits.
6. Benefit Plans. The Officer shall be entitled to participate in such
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life insurance, medical, dental, pension, profit sharing, and retirement plans
and other programs and arrangements as may be approved from time to time by
Bancorp or the Bank for the benefit of the employees of the Bank. In addition,
the Officer shall be entitled to participate in a nonstatutory supplemental
retirement plan or arrangement ("SERP") established for the Officer and in the
Executive Health Expense Reimbursement and Insurance Plans (together, the
"HERP") or a successor plan or plans that provide the same or greater level of
benefits as those provided to participants under the HERP as in effect on the
Effective Date. (The resolution of the Board of the Bank approving this
Agreement shall serve as a designation of eligibility to participate in the HERP
as of the Effective Time, if the Officer had not previously been designated as
eligible.)
7. Vacation and Leave.
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a. The Officer shall be entitled to five weeks (twenty-five
working days) of vacation with pay during each consecutive
twelve-month period commencing on January 1, 1997 and each
January 1 thereafter during the term of this Agreement, to be
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taken at reasonable times and in reasonable periods as the
Officer and the Bank shall mutually determine, and provided
that no vacation time shall interfere with the duties required
to be rendered by the Officer hereunder. Any vacation time not
used during a twelve-month period shall carry over and be
useable during the succeeding twelve-month period, but not
thereafter. The Officer shall not receive any additional
compensation from the Bank on account of his failure to take
vacation.
b. In addition to paid vacations, the Officer shall be entitled,
without loss of pay, to absent himself voluntarily from the
performance of his employment for such additional periods of
time and for such valid and legitimate reasons as the
President and Chief Executive Officer may in his discretion
determine. Further, the President and Chief Executive Officer
may grant to the Officer a leave or leaves of absence, with or
without pay, at such time or times and upon such terms and
conditions as the President and Chief Executive Officer in his
discretion may determine.
8. Expense Payments and Reimbursements. The Officer shall be reimbursed
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for all reasonable out-of-pocket business expenses which he shall incur in
connection with his services under this Agreement upon substantiation of such
expenses in accordance with applicable policies of the Bank.
9. Loyalty and Confidentiality.
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a. During the term of this Agreement the Officer: (i) shall
devote all his time, attention, skill, and efforts to the
faithful performance of his duties hereunder; provided,
however, that from time to time, the Officer may serve on the
boards of directors of, and hold any other offices or
positions in, companies or organizations which will not
present any conflict of interest with Bancorp or the Bank or
any of their subsidiaries or affiliates, unfavorably affect
the performance of Officer's duties pursuant to this
Agreement, or violate any applicable statute or regulation;
and (ii) shall not engage in any business or activity contrary
to the business affairs or interests of Bancorp or the Bank.
b. Nothing contained in this Agreement shall prevent or limit the
Officer's right to invest in the capital stock or other
securities of any business dissimilar from that of Bancorp and
the Bank, or, solely as a passive, minority investor, in any
business.
c. The Officer agrees to maintain the confidentiality of any and
all information concerning the operation or financial status
of Bancorp and the Bank; the names or addresses of any of
their borrowers, depositors and other customers; any
information concerning or obtained from such customers; and
any other information concerning Bancorp or the Bank to which
he may be exposed during
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the course of his employment. The Officer further agrees that,
unless required by law or specifically permitted by Bancorp or
the Bank in writing, he will not disclose to any person or
entity, either during or subsequent to his employment, any of
the above-mentioned information which is not generally known
to the public, nor shall he employ such information in any way
other than for the benefit of Bancorp and the Bank.
10. Termination and Termination Pay. Subject to Section 11 of this
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Agreement, the Officer's employment under this Agreement may be terminated
in the following circumstances:
a. Death. The Officer's employment under this Agreement shall
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terminate upon his death during the term of this Agreement, in
which event the Officer's estate shall be entitled to receive
the compensation due to the Officer through the last day of
the calendar month in which his death occurred.
b. Retirement. This Agreement shall be terminated upon the
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normal or early retirement of the Officer under the retirement
benefit plan or plans in which he participates pursuant to
Section 6 of this Agreement.
c. Disability. The Bank or the Officer may terminate the
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Officer's employment after having established the Officer's
Disability. For purposes of this Agreement, "Disability" means
a physical or mental infirmity that impairs the Officer's
ability to substantially perform his duties under this
Agreement and that results in the Officer's becoming eligible
for long-term disability benefits under Bancorp's or the
Bank's long-term disability plan (or, if Bancorp or the Bank
has no such plan in effect, that impairs the Officer's ability
to substantially perform his duties under this Agreement for a
period of one-hundred-eighty consecutive days). In the event
of such Disability, the Officer's obligation to perform
services under this Agreement will terminate. In the event of
such termination, the Officer shall be entitled to receive the
following:
i. The compensation and benefits provided for under this
Agreement for any period during the term of this
Agreement and prior to the date of termination
pursuant to this Section 10.c. during which the
Officer is unable to work due to physical or mental
infirmity (less any amounts which the Officer
receives under any disability insurance maintained by
Bancorp or the Bank with respect to such period);
ii. For the period beginning upon the date of termination
pursuant to this Section 10.c. and continuing for the
remaining term of this Agreement, (A) salary at the
highest rate paid pursuant to Section 4 of this
Agreement during the twelve months prior to the
establishment of such disability under this Section
10.c., reduced by any payments received by the
Officer during such period following termination
under a long term disability plan
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or policy maintained by Bancorp or the Bank, and (B)
benefits pursuant to Section 6 of this Agreement.
The Board shall determine whether or not the Officer is and
continues to be permanently disabled for purposes of this Agreement in
good faith, based upon competent medical advice and other factors that
it reasonably believes to be relevant. As a condition to any benefits,
such Board may require the Officer to submit to such physical or mental
evaluations and tests as it deems reasonably appropriate.
d. Just Cause.
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i. The Board may, by written notice to the Officer in
the form and manner specified in this paragraph,
immediately terminate his employment with the Bank at
any time for Just Cause. The Officer shall have no
right to receive compensation or other benefits for
any period after termination for Just Cause.
Termination for "Just Cause" shall mean termination
because of, in the good faith determination of the
Board, the Officer's:
(1) Personal dishonesty;
(2) Incompetence;
(3) Willful misconduct;
(4) Breach of fiduciary duty involving personal
profit;
(5) Intentional failure to perform duties under
this Agreement;
(6) Other, continuing material failure to
perform his duties under this Agreement
after reasonable notification (which shall
be stated in writing and given at least
fifteen days prior to termination) by the
Board of such failure;
(7) Willful violation of any law, rule or
regulation (other than traffic violations or
similar offenses) or final cease-and-desist
order; or
(8) Material breach by the Officer of any
provision of this Agreement.
ii. Notwithstanding the foregoing, the Officer shall not
be deemed to have been terminated for Just Cause
unless there shall have been delivered to the Officer
a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the
entire membership of the Board at a meeting called
and held for the purpose (after reasonable notice to
the Officer and an opportunity for the Officer to be
heard before the Board), finding that in the good
faith opinion of the Board the Officer was guilty of
conduct described above and specifying the
particulars thereof.
e. Certain Regulatory Events.
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i. If the Officer is removed and/or permanently prohibited
from participating in the conduct of the Bank's affairs by an
order issued under Sections 8(e)(4)
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or 8(g)(1) of the Federal Deposit Insurance Act ("FDIA")
(12 U.S.C. (S)(S) 1818(e)(4) and (g)(1)), all obligations of
the Bank under this Agreement shall terminate as of the
effective date of the order, but vested rights of the parties
shall not be affected.
ii. If the Bank is in default (as defined in Section 3(x)(1)
of FDIA), all obligations of the Bank under this Agreement
shall terminate as of the date of default, but vested rights
of the parties shall not be affected.
iii. If a notice served under Sections 8(e)(3) or (g)(1) of
the FDIA (12 U.S.C. (S)(S) 1818(e)(3) and (g)(1)) suspends
and/or temporarily prohibits the Officer from participating in
the conduct of the Bank's affairs, the Bank's obligations
under this Agreement shall be suspended as of the date of such
service, unless stayed by appropriate proceedings. If the
charges in the notice are dismissed, the Bank may, in its
discretion, (i) pay the Officer all or part of the
compensation withheld while its contract obligations were
suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
The occurrence of any of the events described in paragraphs i,
ii, and iii above may be considered by the Board in connection with a
termination for Just Cause.
f. Voluntary Termination by Officer. In addition to his other
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rights to terminate under this Agreement, the Officer may voluntarily
terminate employment with the Bank during the term of this Agreement
upon at least sixty days' prior written notice to the Bank, in which
case the Officer shall receive only his compensation, vested rights and
employee benefits up to the date of his termination.
g. Without Just Cause or With Good Reason.
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i. In addition to termination pursuant to Section 10.a.
through 10.f.: the Board may, by written notice to the
Officer, immediately terminate his employment with the Bank at
any time for a reason other than Just Cause (a termination
"Without Just Cause"); and the Officer may, by written notice
to the Board, immediately terminate this Agreement at any time
within ninety days following an event of "Good Reason" as
defined below (a termination "With Good Reason").
ii. Subject to Section 11 hereof, in the event of
termination under this Section 10.g., the Officer shall be
entitled to receive the salary for the remaining term of the
Agreement, including any renewals or extensions thereof, at
the highest annual rate in effect pursuant to Section 4 of
this Agreement for any of the twelve months immediately
preceding the date of such termination, plus annual cash
bonuses for each year (prorated in the event of partial years)
remaining under such term at the amount received by the
Officer in the calendar year preceding the termination. The
sum due under this Section 10.g. shall be paid in one lump sum
within ten calendar days of such termination.
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iii. "Good Reason" shall exist if, without Officer's
express written consent, Bancorp or the Bank materially breach
any of its respective obligations under this Agreement.
Without limitation, such a material breach shall be deemed to
occur upon any of the following:
(1) A material reduction in the Officer's
responsibilities or authority in connection
with his employment with the Bank;
(2) Assignment to the Officer of duties of a
nonexecutive nature or duties for which he
is not reasonably equipped by his skills and
experience;
(3) A reduction in salary or benefits contrary
to the terms of this Agreement, or,
following a Change in Control as defined in
Section 11 of this Agreement, any reduction
in salary or material reduction in benefits
below the amounts to which he was entitled
prior to the Change in Control;
(4) Termination of incentive and benefit plans,
programs, or arrangements, or reduction of
the Officer's participation to such an
extent as to materially reduce their
aggregate value below their aggregate value
as of the Effective Date;
(5) A requirement that the Officer relocate his
principal business office or his principal
place of residence outside Xxxxxxxxxx
County, Maryland, or the assignment to the
Officer of duties that would reasonably
require such a relocation;
(6) A requirement that the Officer spend more
than thirty normal working days away from
Xxxxxxxxxx County, Maryland during any
consecutive twelve-month period; or
(7) Failure to provide office facilities,
secretarial services, and other
administrative services to Officer which are
substantially equivalent to the facilities
and services provided to the Officer on the
Effective Date (excluding brief periods
during which office facilities may be
temporarily unavailable due to fire, natural
disaster, or other calamity).
iv. Notwithstanding the foregoing: (A) a reduction or
elimination of the Officer's benefits under one or
more benefit plans maintained by Bancorp or the Bank
as part of a good faith, overall reduction or
elimination of such plan or plans or benefits
thereunder applicable to all participants in a manner
that does not discriminate against the Officer
(except as such discrimination may be necessary to
comply with law) shall not constitute an event of
Good Reason or a material breach of this Agreement,
provided that benefits of the type or to the general
extent as those offered under such plans prior to
such reduction or elimination are not available to
other officers of Bancorp or the Bank or any company
that controls either of
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them under a plan or plans in or under which the
Officer is not entitled to participate, and receive
benefits, on a fair and nondiscriminatory basis; and
(B) a requirement that the Officer report to and be
subject to the direction or supervision of a senior
officer of Bancorp or the Bank other than the
President and Chief Executive Officer shall not
constitute an event of Good Reason or a material
breach of this Agreement.
h. Continuing Covenant not to Compete or Interfere with
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Relationships. Regardless of anything herein to the contrary,
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following a termination (i) upon retirement pursuant to
Section 10.b., (ii) due to Disability pursuant to Section
10.c., (iii) for Just Cause pursuant to Section 10.d., or (iv)
by the Officer pursuant to Section 10.f.:
i. The Officer's obligations under Section 9.c. of this
Agreement will continue in effect; and
ii. During the remaining term of this Agreement
(determined immediately before such termination), the
Officer shall not serve as an officer or director or
employee of any bank holding company, bank, savings
association, savings and loan holding company, or
mortgage company (any of which, a "Financial
Institution"), which Financial Institution offers
products or services competing with those offered by
Bancorp or the Bank from offices in any county in the
State of Maryland or of any other State in which the
Bank, Bancorp or any of their subsidiaries has a
branch, and shall not interfere with the relationship
of Bancorp or the Bank and any of its employees,
agents, or representatives.
11. Termination in Connection with a Change in Control.
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a. For purposes of this Agreement, a "Change in Control" shall be
deemed to occur on the earliest of:
i. The acquisition by any entity, person or group (other
than the acquisition by a tax-qualified retirement
plan sponsored by Bancorp or the Bank) of beneficial
ownership, as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934, of more
than 25% of the outstanding capital stock of Bancorp
or the Bank entitled to vote for the election of
directors ("Voting Stock");
ii. The commencement by any entity, person, or group
(other than Bancorp or the Bank, a subsidiary of
Bancorp or the Bank or a tax-qualified retirement
plan sponsored by Bancorp or the Bank) of a tender
offer or an exchange offer for more than 20% of the
outstanding Voting Stock of Bancorp or the Bank;
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iii. The effective time of (a) a merger or consolidation
of Bancorp or the Bank with one or more other
corporations as a result of which the holders of the
outstanding Voting Stock of Bancorp or the Bank
immediately prior to such merger exercise voting
control over less than 80% of the Voting Stock of the
surviving or resulting corporation, or (b) a transfer
of substantially all of the property of Bancorp or
the Bank other than to an entity of which Bancorp or
the Bank owns at least 80% of the Voting Stock;
iv. Upon the acquisition by any entity, person, or group
of the control of the election of a majority of the
Bank's or Bancorp's directors,
v. At such time that, during any period of two
consecutive years, individuals who at the beginning
of such period constitute the Board of Bancorp or the
Bank (the "Continuing Directors") cease for any
reason to constitute at least two-thirds thereof,
provided that any individual whose election or
nomination for election as a member of the Board was
approved by a vote of at least two-thirds of the
Continuing Directors then in office shall be
considered a Continuing Director.
b. Termination. If within the period beginning six months
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prior to and ending two years after a Change in Control, (i)
the Bank shall terminate the Officer's employment Without Just
Cause, or (ii) the Officer shall voluntarily terminate his
employment With Good Reason, the Bank shall, within ten
calendar days of the termination of Officer's employment, make
a lump-sum cash payment to him equal to 2.99 times the sum of
(x) his annual salary at the highest annual rate in effect for
any of the twelve months immediately preceding the date of
such termination, plus (y) the amount of other compensation
received by him during the calendar year preceding the Change
in Control. This cash payment is subject to adjustment
pursuant to Section 14 of this Agreement, and shall be made in
lieu of any payment also required under section 10.g. of this
Agreement because of a termination in such period. The
Officer's rights under Section 10.g. are not otherwise
affected by this Section 11. Also, in such event, the Officer
shall, for three calendar years following his termination of
employment, continue to participate in any benefit plans of
Bancorp and the Bank that provide health (including medical
and dental), life or disability insurance, or similar coverage
upon terms no less favorable than the most favorable terms
provided to senior officers of the Bank during such period.
c. Funding of Trust upon Change in Control. In order to assure
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payment to the Officer of amounts that may become payable by
Bancorp or the Bank pursuant to this Section, unless and to
the extent the Officer has previously provided a written
release of any claims under Section 11 of this Agreement, not
later than ten
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business days after a Change in Control, Bancorp or the Bank
shall (i) establish a valid trust under the law of the State
of Maryland with an independent trustee that has or may be
granted corporate trust powers under Maryland law, (ii)
deposit in such trust an amount equal to 2.99 times his "base
amount" as defined in Section 280G(b)(3) of the Code and
regulations promulgated thereunder (Section 280G and related
regulations hereinafter referred to as Section 280G"), at the
time of the Change of Control, and (iii) provide the trustee
of the trust with a written direction to hold said amount and
any investment return thereon in a segregated account, and to
pay such amounts as demanded by the Officer from the trust
upon written demand from the Officer stating the amount of the
payment demanded from the trust and the basis for his rights
to such payment under Section 11 of this Agreement. Upon the
earlier of the final payment of all amounts demanded by the
Officer under this Section 11 or the date thirty-six months
after the Change in Control, the trustee of the trust shall
pay to Bancorp or the Bank, as applicable, the entire balance
remaining in the trust. Payments from the trust to the Officer
shall be considered payments made by Bancorp or the Bank for
purposes of this Agreement. Payment of such amounts to the
Officer from the trust, however, shall not relieve Bancorp or
the Bank from any obligation to pay amounts in excess of those
paid from the trust, or from any obligation to take actions or
refrain from taking actions otherwise required by this
Agreement. Unless and until a termination of or by the Officer
as described in Section 11.b.(i) or (ii), the Officer's rights
under this Agreement shall be those of a general, unsecured
creditor, he shall have no claim against the assets of the
trust, and the assets of the trust shall remain subject to the
claims of creditors of Bancorp or the Bank. Upon the
termination of the trust as specified herein, the Officer
shall have no further interest in the trust.
12. Indemnification and Liability Insurance.
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a. Indemnification. Bancorp and the Bank agree to indemnify the
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Officer (and his heirs, executors, and administrators) to the
fullest extent permitted under applicable law and regulations
against any and 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 his having been a director or officer of the Bank or
any of their subsidiaries (whether or not he continues to be a
director or officer at the time of incurring any such expenses
or liabilities) such expenses and liabilities to include, but
not be limited to, judgments, court costs and attorney's fees
and the cost of reasonable settlements, such settlements to be
approved by the Board of Bancorp or the Bank, if such action
is brought against the Officer in his capacity as an officer
or director of Bancorp or the Bank or any of their
subsidiaries. Indemnification for expense shall not extend to
matters for which the Officer has been terminated for Just
Cause. Nothing contained herein shall be deemed to provide
indemnification prohibited by applicable law or regulation.
Notwithstanding anything herein to the contrary,
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the obligations of this Section 12 shall survive the term of
this Agreement by a period of seven years.
b. Insurance. During the period in which indemnification of
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the Officer is required under this Section, Bancorp or the
Bank shall provide the Officer (and his heirs, executors, and
administrators) with coverage under a directors' and officers'
liability policy at the expense of Bancorp or the Bank, at
least equivalent to such coverage provided to directors and
senior officers of Bancorp or the Bank, whichever is more
favorable to the Officer.
13. Reimbursement of Officer's Expenses to Enforce this Agreement. Bancorp
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or the Bank shall reimburse the Officer for all out-of-pocket expenses,
including, without limitation, reasonable attorney's fees, incurred by the
Officer in connection with successful enforcement by the Officer of the
obligations of Bancorp or the Bank to the Officer under this Agreement up to a
maximum of $30,000. Successful enforcement shall mean the grant of an award of
money or the requirement that Bancorp or the Bank take some action specified by
this Agreement (i) as a result of court order; or (ii) otherwise by Bancorp or
the Bank following an initial failure of Bancorp or the Bank to pay such money
or take such action promptly after written demand therefor from the Officer
stating the reason that such money or action was due under this Agreement at or
prior to the time of such demand.
14. Adjustment of Certain Payments and Benefits.
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a. In the event that payments pursuant to this Agreement
(including, without limitation, any payment under any plan,
program, or arrangement referred to in Section 5 or 6 hereof)
would result in the imposition of a penalty tax pursuant to
Section 280G, such payments shall be reduced to equal the
maximum amount which may be paid under Section 280G without
exceeding such limits. In the event any such reduction in
payments is necessary, the Officer may determine, in his sole
discretion, which categories of payments (including, without
limitation, the value of benefits or of acceleration of
vesting or receipt of benefits or amounts) are to be reduced
or eliminated.
b. Payments made to the Officer pursuant to this Agreement or
otherwise, are subject to and conditioned upon their
compliance with Section 18(k) of the FDIA (12 U.S.C. (S) 1828
(k), relating to "golden parachute" and indemnification
payments and certain other benefits.
15. Injunctive Relief. If there is a breach or threatened breach of Section
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10.h. of this Agreement or the prohibitions upon disclosure contained in Section
9.c. of this Agreement, Bancorp or the Bank and the Officer agree that there is
no adequate remedy at law for such breach, and that Bancorp and the Bank each
shall be entitled to
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injunctive relief restraining the Officer from such breach or threatened breach,
but such relief shall not be the exclusive remedy hereunder for such breach. The
parties hereto likewise agree that the Officer shall be entitled to injunctive
relief to enforce the obligations of Bancorp and the Bank under Section 11 of
this Agreement.
16. Successors and Assigns.
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a. This Agreement shall inure to the benefit of and be binding
upon any corporate or other successor of Bancorp or the Bank
which shall acquire, directly or indirectly, by merger,
consolidation, purchase or otherwise, all or substantially all
of the assets or stock of Bancorp or the Bank.
b. Since the Bank and Bancorp are contracting for the unique and
personal skills of the Officer, the Officer shall be precluded
from assigning or delegating his rights or duties hereunder
without first obtaining the written consent of the Bank and
Bancorp.
17. No Mitigation. The Officer shall not be required to mitigate the
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amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Officer in any subsequent employment.
18. Notices. All notices, requests, demands and other communications in
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connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or 48 hours after mailing at any general
or branch United States Post Office, by registered or certified mail, postage
prepaid, addressed as follows, or to such other address as shall have been
designated in writing by the addressee:
a. If to Bancorp or the Bank:
Xxxxx Spring Bancorp, Inc.
Xxxxx Spring National Bank of Maryland
00000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attention: President and Chief Executive Officer
Copy to: Corporate Secretary
b. If to the Officer:
Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
19. Joint and Severally Liability; Payments by Bancorp and the Bank. To the
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extent permitted by law, except as otherwise provided herein, Bancorp and the
Bank shall be jointly and severally liable for the payment of all amounts due
under this Agreement. Bancorp hereby agrees that it
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shall be jointly and severally liable with the Bank for the payment of all
amounts due under this Agreement and shall guarantee the performance of the
Bank's obligations thereunder, provided that Bancorp shall not be required by
this Agreement to pay to the Officer a salary or any bonuses or any other cash
payments, except in the event that the Bank does not fulfill the obligations to
the Officer hereunder for such payments. Bancorp may, however, pay salary and
bonuses as deemed appropriate by its Board in the exercise of its discretion.
20. No Plan Created by this Agreement. The Officer, Bancorp and the Bank
---------------------------------
expressly declare and agree that this Agreement was negotiated among them and
that no provision or provisions of this Agreement are intended to, or shall be
deemed to, create any plan for purposes of the Employee Retirement Income
Security Act or any other law or regulation, and Bancorp, the Bank and the
Officer each expressly waives any right to assert the contrary. Any assertion in
any judicial or administrative filing, hearing, or process by or on behalf of
the Officer or Bancorp or the Bank that such a plan was so created by this
Agreement shall be deemed a material breach of this Agreement by the party
making such an assertion.
21. Amendments. No amendments or additions to this Agreement shall
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be binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
22. Applicable Law. Except to the extent preempted by Federal law,
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the laws of the State of Maryland shall govern this Agreement in all
respects, whether as to its validity, construction, capacity, performance
or otherwise.
23. Severability. The provisions of this Agreement shall be deemed
------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
24. Headings. Headings contained herein are for convenience of reference
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only.
25. Entire Agreement. This Agreement, together with any understanding or
----------------
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof, other than written agreements with respect to specific plans, programs,
or arrangements described in Sections 5 and 6, and supersedes all prior
agreements other than with respect to such specific plans, programs, or
arrangements.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
XXXXX SPRING NATIONAL BANK OF MARYLAND
By: /s/ Hunter X. Xxxxxx
Title: President and Chief Executive Officer
XXXXX SPRING BANCORP, INC.
By: /s/ Hunter X. Xxxxxx
Title: President and Chief Executive Officer
OFFICER
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
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