Exhibit 10(b)
PRESIDENT EMPLOYMENT AGREEMENT
This President Employment Agreement ("Agreement") is made this 2nd day
of August 1999, between XXXXXXX X. XXXXXX, an individual residing at 0000
Xxxxxxxxxxxxx Xxxxx, Xxxxxxxxxxxxx, Xxxxxxxx 00000 ("Xx. Xxxxxx") and
CommerceFirst Bancorp, Inc., a Maryland Corporation, with its principal place of
business at 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, its
successors, and assigns ("the Holding Company").
RECITALS
WHEREAS, the Holding Company is engaged in the business of organizing a
bank holding company and Maryland commercial bank (the "Bank"), to be wholly
owned by the Holding Company, whose principal office is located in Annapolis,
Maryland.
WHEREAS, Xx. Xxxxxx is willing to be employed by the Holding Company,
and the Holding Company is willing to employ Xx. Xxxxxx on the terms, covenants,
and conditions hereinafter set forth.
NOW THERFORE, for the reasons set forth above and in consideration of
the mutual promises and agreements set forth below, the Holding Company and Xx.
Xxxxxx agree as follows:
ARTICLE I. EMPLOYMENT
1.1 Employment by the Holding Company. The Holding Company employs Xx.
Xxxxxx as its President and Chief Executive Officer, and Xx. Xxxxxx accepts such
employment subject to the general supervision, advice, and direction of the
Board of Directors of the Holding Company. At the discretion of the Stockholders
of the Holding Company, Xx. Xxxxxx will serve, during the term of his
employment, as a member of the Board of Directors of the Holding Company for no
additional compensation except as otherwise provided hereunder, but he will not
participate in any decisions concerning his employment relationship with the
Holding Company.
1.2. Employment by the Bank. Upon the opening of the Bank, the Holding
Company shall cause the Bank to employ Xx. Xxxxxx as its President and Chief
Executive Officer and Xx. Xxxxxx will perform such duties as are customarily
performed by persons holding such positions in the banking industry, including
but not limited to the following:
1.2.1 The coordination and leadership of the efforts of the
Bank to maintain any and all necessary and/or appropriate federal and state
regulatory approvals and permissions required for the successful operation of
the Bank, including coordination of the professional services of counsel,
accountants and bank consultants.
1.2.2 The provision of any and all services necessary,
appropriate and/or helpful to operations of the Bank at a minimum of additional
cost or overhead to the Bank.
1.2.3 The provision of updates, status reports and such other
data and information as may be reasonably required by the Bank and federal and
state regulators.
1.2.4 Subject to the guidelines and/or criteria established by
the Bank, the hiring, promotion, supervision, retention and discharge of all
employees except for the President of the Bank.
1.2.5 The formulation and implementation of employee personnel
policies and benefits, subject to approval by the Board of Directors of the
Bank.
1.2.6 The promotion of the reputation and business of the Bank
within the community.
1.2.7 The advancement of the business purposes of the Bank,
including, but not limited to, business development, customer, deposit and
public relations.
1.2.8 Participation in and service upon such committees and
subcommittees as may be directed by the Board of Directors of the Bank without
additional compensation to that set forth hereinbelow. At a minimum, it is
anticipated that Xx. Xxxxxx will be elected to a seat on the Board of Directors
of the Bank and will serve on the Executive Committee of the Bank, although the
Board of Directors reserves the right to limit management to Two (2) seats on
the Board of Directors.
1.2.9 Supervision of the maintenance of the books and accounts
and the supervision and maintenance of accounts payable and expenses of the Bank
and the reporting of the status thereof to the Bank at each scheduled or called
meeting of the Board of Directors or any committee thereof; provided, however,
that all expenditures on behalf of the Bank shall be approved in accordance with
the terms and conditions of procedures established by the Bank.
1.2.10 To be present or available at the offices of the Bank
during normal business hours (which shall mean an average of not less than Forty
(40) hours per week) and such additional hours as may be necessary or
appropriate to work for the Bank and to assist, direct or supervise the
operations and other employees of the Bank upon such terms, conditions, rules,
policies and regulations as may be set by the Board of Directors of the Bank
from time to time.
1.3 Performance of Services. Xx. Xxxxxx agrees to use his best
efforts to perform all duties required of and from him by the Holding Company
and the Bank, respectively, pursuant to the express and implicit terms hereof,
to the reasonable satisfaction of the Holding Company and the Bank. Such duties
will be rendered at the Holding Company's principal office, the Bank's principal
office or other places as the interests, needs, business, or opportunity of the
Holding Company or the Bank require. Xx. Xxxxxx warrants and represents that he
has the training, experience, and knowledge to perform the duties of his
position, and that he is not restricted or limited in doing so by any
contractual obligations, conflicts of interest, bank or securities regulatory
orders, rules, regulations, memoranda or otherwise.
ARTICLE II. TERM OF EMPLOYMENT
2.1 Term. This Agreement is effective beginning on the date of its
execution by both parties (the "Effective Date") and for a term of Five (5)
years thereafter, unless sooner terminated by either party pursuant to the terms
of this Agreement.
ARTICLE III. COMPENSATION AND BENEFITS
3.1 Annual Base Salary. Subject to the pre-opening deferral referred to
below, the aggregate initial Annual Base Compensation payable to Xx. Xxxxxx for
all of his services under this Agreement shall be ONE HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($125,000.00) per annum. Until the Bank opens (the "Bank
Opening Date"), all compensation payable to Xx. Xxxxxx hereunder will be paid by
the Holding Company. Beginning on the Bank Opening Date, all compensation
payable to Xx. Xxxxxx will be paid by the Bank.
3.2 Pre-opening Deferral. Until the Bank Opening Date, Xx. Xxxxxx
agrees to defer Forty Percent (40%) of his Annual Base Salary and the Annual
Base Salary paid in cash to Xx. Xxxxxx by the Holding Company until the Bank
Opening Date shall be thereby adjusted.
3.3 Payment of Salary Deferral Upon Bank Opening. Within not more than
One (1) Month after the Bank Opening Date, the Bank shall pay to Xx. Xxxxxx, the
amount of Annual Base Salary pre-opening deferral referred to in Section 3.2,
above provided that Xx. Xxxxxx is still employed by the Bank at such time. Xx.
Xxxxxx may elect to receive such deferred salary in cash or in stock of the
Holding Company.
3.4 Vehicle or Vehicle Allowance. After the Bank Opening Date, the Bank
will provide to Xx. Xxxxxx either a leased vehicle or a vehicle allowance in an
amount customary in the banking industry in the primary service area of the
Bank.
3.5 Base Salary Increases. Beginning in December of 2000, the Board of
Directors of the Holding Company shall undertake an Annual Review of and will
adjust Xx. Xxxxxx'x Base Salary according to plans, goals and criteria set by
the Board of Directors from time to time; provided that beginning on January 1,
2001, Xx. Xxxxxx'x Base Salary shall be at least One Hundred Thirty Thousand
Dollars ($130,000), and beginning on January 1, 2002, Xx. Xxxxxx'x Annual Base
Salary shall be at least One Hundred Thirty Five Thousand Dollars ($135,000).
3.6 Insurance and Vacation. Until the Bank Opening Date, the Holding
Company will provide Xx. Xxxxxx with non-contributory family health insurance,
reimbursement of reasonable business expenses, group benefits as provided to its
other executive officers, and Twenty (20) working days paid vacation annually.
Until such coverage can be instituted, the Holding Company will pay for COBRA
costs incurred by Xx. Xxxxxx. Additionally, the Holding Company will purchase a
term life insurance policy to be owned by Xx. Xxxxxx in the amount of Three
Hundred Thousand Dollars ($300,000) insuring the life of Xx. Xxxxxx. After the
Bank Opening Date, such benefits shall be provided to Xx. Xxxxxx by the Bank.
3.7 Stock Options.
3.7.1 Granting of Annual Options. As soon as practicable
following the Bank Opening Date, the Holding Company will grant to Xx. Xxxxxx
non-transferable incentive stock options to purchase up to Ten Thousand (10,000)
shares of the Holding Company's common stock at an exercise price equal to the
initial offering price per share (the "Initial Options"). The Holding Company
will provide additional non-transferable incentive stock options to Xx. Xxxxxx
annually (the "Annual Options") as soon as practicable following the close of
the calendar year. The exercise price per share of all Annual Options granted
will be calculated as the book value per share of the Holding Company's common
stock as of the end of the calendar year initially preceding such grant. The
number of Annual Options so provided will be determined by the Board of
Directors of the Holding Company on an annual basis according to plans, goals
and criteria set by the Board of Directors from time to time.
3.8 Annual Incentive Bonus. The Bank may pay an incentive cash bonus to
Xx. Xxxxxx annually (the "Annual Bonus") as soon as practicable following the
close of calendar year 2000 and each calendar year thereafter. Any such
incentive bonus shall be determined by the Board of Directors of the Holding
Company on an Annual Basis according to plans, goals and criteria set by the
Board of Directors from time to time.
ARTICLE IV. OTHER EMPLOYMENT
4.1 Duty of Loyalty. The Holding Company and the Bank will be entitled
to all benefits, profits, or other issues arising from or incident to all work,
services, and advice of Xx. Xxxxxx. Xx. Xxxxxx will devote his full business and
productive time, ability, and attention to his duties for the Holding Company
and the Bank. Xx. Xxxxxx will not, during the term hereof, be interested
directly or indirectly, in any manner, as a compensated partner, officer,
director, advisor, employee, or in any other similar capacity, in any other
business. This provision does not prohibit Xx. Xxxxxx from:
4.1.1 Making passive investments;
4.1.2 Engaging in religious, charitable or other community or
nonprofit activities that do not impair his ability to fulfill his duties and
responsibilities under this Agreement; and
4.1.3 Serving with the approval of the Holding Company and the
Bank, on the board of directors of a company, subject to the prohibitions set
forth in Articles 8 and 9, and provided that Xx. Xxxxxx will not render any
material services with respect to the operations or affairs of any such company.
ARTICLE V. CONDITIONS OF AGREEMENT
5.1 Approval By Federal and State Regulatory Agencies. This Agreement,
all of its terms and conditions and the employment of Xx. Xxxxxx by the Holding
Company and the Bank shall be subject to the ratification and approval of any
and all federal or state regulators or regulatory agencies whose approval of the
Bank, the Holding Company and/or its stock offering is a necessary prerequisite
to the successful organization of the Bank.
5.2 Compliance With Regulatory Requirements. Should any terms or
conditions of this Agreement, upon subsequent detailed review by legal counsel
and federal or state regulators, be found to be not in compliance with federal
or state regulations, or should any terms or conditions required to be included
herein by such regulations be absent, this Agreement may be terminated by the
Holding Company and the Bank if the parties hereto cannot agree upon such
additions or deletions as may be deemed necessary or appropriate under such
federal or state regulations and the interpretations thereof.
ARTICLE VI. RIGHTS TO TERMINATE AGREEMENT
6.1 Failure to Successfully Open the Bank. At the option of the Holding
Company, this Agreement may be terminated if, for any reason, the Bank is not
successfully opened on or before August 1, 2000; in addition, if at any time
prior to that date the Holding Company formally abandons the project (including
the withdrawal of federal and state bank and/or holding company applications) of
attempting to organize and open the Bank, this Agreement may be terminated by
the Holding Company. In the event of a termination prior to the Bank Opening
Date, the Holding Company shall pay to Xx. Xxxxxx, including all amounts
actually paid to Xx. Xxxxxx during his employment by the Holding Company, an
aggregate amount of Six (6) months of Annual Base Salary at the pre-opening
deferral rate.
6.2 Breach or Default Under Agreement. Either party may terminate this
Agreement for breach or default as provided hereinbelow.
6.3 Termination Without Cause. If Xx. Xxxxxx is not in breach or
default of this Agreement and the Holding Company and/or the Bank terminates him
for any reason and under any procedure other than those specified in Section
6.1, above, or Section 6.4, below, then the Annual Base Salary and all Insurance
and other benefits provided for hereinabove shall continue for a period of
Twelve (12) months from and after the termination date if such termination be
without cause.
6.4 Termination With Cause; Procedure.
6.4.1 Termination of Compensation. If the Holding Company
and/or the Bank terminates Xx. Xxxxxx for Cause as set forth in this Section
6.4, then the compensation payments provided for herein shall cease.
6.4.2 Definition of Cause. Under this Agreement, "Cause" shall
be defined to be:
(a) Any willful act or action on the part of Xx.
Xxxxxx done in connection with or associated with the services rendered by Xx.
Xxxxxx under this Agreement for which a criminal prosecution (other than traffic
and misdemeanor actions) is commenced by the prosecuting authorities in the
jurisdiction in which such act or action occurred. For the purposes of this
Agreement, the commencement of a criminal prosecution shall be deemed to have
occurred upon the filing of a criminal information against Xx. Xxxxxx or the
indictment of Xx. Xxxxxx by any local, state or federal authority.
(b) Any act of theft, fraud, deceit,
misrepresentation, assault or battery done by Xx. Xxxxxx in connection with or
associated with the services rendered by Xx. Xxxxxx to the Holding Company
and/or the Bank under this Agreement.
(c) Any act, action, failure to act or omission which
constitutes gross misconduct or gross negligence in connection with the services
rendered by Xx. Xxxxxx under this Agreement, provided that the procedures of
Section 6.4.3 are followed.
(d) Any termination following a default of this
Agreement by Xx. Xxxxxx, pursuant to the provisions of Article XI, below.
6.4.3 Procedure For Termination With Cause. The procedure for
termination with Cause shall be as follows:
(a) For any reason specified in Section 6.4.2(a), Xx.
Xxxxxx shall be terminated upon the commencement of prosecution, as of the date
of the act to which that Section applies.
(b) For any reason specified in Sections 6.4.2(b) or
6.4.2(c), the Holding Company and/or the Bank shall give Xx. Xxxxxx written
notice of the Cause alleged to be the basis for Xx. Xxxxxx'x termination. Xx.
Xxxxxx shall, thereafter, have a period of Thirty (30) days from the date of the
receipt of the written notice in which to dispute and/or explain the
situation(s) referred to in the written notice. If Xx. Xxxxxx does not respond
to the written notice, Xx. Xxxxxx shall be deemed to have agreed to the
allegations contained therein and the termination shall be effective as of the
date of the written notice. If Xx. Xxxxxx disputes the allegations contained in
the written notice, Xx. Xxxxxx shall notify the Holding Company and/or the Bank
in writing within the time period set forth above and the Holding Company and/or
the Bank shall set up a meeting to discuss a resolution of the dispute. If the
parties do not reach agreement within Forty-five (45) days of the written notice
of the Bank and/or the Holding Company, the Bank and/or the Holding Company, by
a majority of their respective Board of Directors, shall have the right to
terminate Xx. Xxxxxx and to discontinue the compensation provided hereunder to
Xx. Xxxxxx. If Xx. Xxxxxx nevertheless still disagrees that his termination was
proper under the terms of this Agreement, both parties hereto by their execution
hereof agree to submit to binding arbitration under the rules, regulations and
procedures of the American Arbitration Association.
6.5 Death or Disability. If Xx. Xxxxxx should be unable to perform his
professional duties due to death or disability (defined as Sixty (60)
consecutive days unavailable or unable to perform work), then the compensation
provided for hereinabove shall cease, but Xx. Xxxxxx shall not be liable to the
Holding Company and/or the Bank for any damages for advanced wages.
6.6 Revision of Provisions to Conform to Established Holding Company or
Bank Policy. The provisions of this Agreement relating to termination with cause
and the procedures therefore, and the provisions relating to the death or
disability of Xx. Xxxxxx shall be applicable to the Holding Company or Bank,
respectively, only until such time as the Holding Company and/or the Bank, as
the case may be, establishes formal personnel termination and disability
policies applicable to all employees or officers of the Holding Company or the
Bank, as the case may be. Upon the adoption of such policies, the provisions of
this Agreement shall be deemed modified and superseded by any such policies
which are inconsistent with the terms or conditions of this Agreement as it
relates to the Holding Company or the Bank.
6.7 Survival of Restrictions. In the event of a termination of this
Agreement, all covenants and restrictions contained herein shall survive the
termination and shall continue in full force and effect as provided for herein.
ARTICLE VII. REPRESENTATIONS, WARRANTIES AND COVENANTS
7.1 Representations and Warranties of Xx. Xxxxxx. Xx. Xxxxxx represents
and warrants to the Holding Company and the Bank the following:
7.1.1 Information Supplied to the Holding Company and the
Bank. All information and data, including but not limited to, personal data,
work histories, salaries and responsibilities, represented and provided to the
Holding Company and/or the Bank by Xx. Xxxxxx in his application for the
positions of President and Chief Executive Officer of the Holding Company and/or
the Bank prior to the execution of this Agreement are true and correct in all
material respects and Xx. Xxxxxx has not stated any facts or circumstances to
the Holding Company or the Bank the statement or omission of which would cause
Xx. Xxxxxx'x applications to be false or misleading in any material respect.
7.1.2 Prior Employment Agreements. As of the date of execution
of this Agreement, Xx. Xxxxxx is not now a party to or bound by any employment ,
consulting or other type of agreement, nor has he been a party to or bound by
any such agreement which would be breached by, or of which Xx. Xxxxxx would be
in default, by virtue of any provision contained in this Agreement.
7.1.3 Regulatory Approval. To the best of Xx. Xxxxxx'x
knowledge, information and belief, there are no facts or circumstances contained
in Xx. Xxxxxx'x personal or professional history which are likely to,
or which in fact will, cause any federal or state regulatory disapproval of Xx.
Xxxxxx for the eventual positions of President and Chief Executive Officer of
the Holding Company and the Bank.
7.2 Covenants of Xx. Xxxxxx.
7.2.1 Agreement Not to Compete. For a period of time defined
as the "Noncompetition Period," from and after the last day Xx. Xxxxxx performs
services for compensation on behalf of the Holding Company and/or the Bank, Xx.
Xxxxxx covenants and agrees that he:
(a) Shall not accept employment by or on behalf of
any bank headquartered in Xxxx Arundel County, Maryland, nor in such capacity
shall he directly or indirectly request or advise any present or future
investors, depositors or customers of the Holding Company or the Bank, as the
case may be, to curtail or discontinue their business with the Holding Company
or the Bank, nor in this capacity shall he directly or indirectly induce, or
attempt to induce, any employee of the Holding Company or the Bank to terminate
his employment with the Holding Company or the Bank.
(b) Shall not directly or indirectly disparage the
business of the Holding Company or the Bank, nor disclose any information
relating to the business, processes, trade secrets, procedures, computer
software or other information of the Holding Company or the Bank learned by him
as an employee of the Holding Company or the Bank, to any person, firm or
corporation, whether such person, firm or corporation shall be a present or
former customer or employee of the Holding Company or the Bank.
(c) Shall not directly or indirectly or indirectly
discuss or disclose to any other person, firm or corporation the names of past,
present or future customers or employees of the Holding Company or the Bank.
7.2.2 Noncompetition Period Defined. The noncompetition period
shall be that amount of time equal to the length of time Xx. Xxxxxx has been
employed by the Holding Company and/or the Bank, up to a maximum of Twelve (12)
months.
ARTICLE VIII. CONFIDENTIAL INFORMATION
8.1 Proprietary Information. Xx. Xxxxxx acknowledges that upon
acceptance of employment with the Holding Company and the Bank hereunder, he
will be making use of, acquiring and adding to the confidential and proprietary
information of the Bank and the Holding Company. Such confidential information
shall be of a special and unique nature and value relating to such matters as,
but not limited to the business operations, internal structure, financial
affairs, programs, software, systems, procedures, manuals, confidential reports,
and sales and marketing methods of the Holding Company and the Bank, as well as
the amount, nature and type of services, equipment and methods used and
preferred by the suppliers, and customers of the Holding Company and the Bank,
all of which shall be deemed to be confidential information. Xx. Xxxxxx
acknowledges that such confidential information has been and will continue to be
of central importance to the business of the Holding Company and the Bank,
respectively, and that disclosure of it or its use by others could cause
substantial loss to the Holding Company and/or the Bank. In consideration of his
anticipated and thereafter continued employment by the Holding Company and the
Bank, upon acceptance hereof, Xx. Xxxxxx agrees that during the entire period of
his employment with the Holding Company and/or the Bank, and upon and after
leaving the employ of the Holding Company and/or the Bank for any reason
whatsoever, Xx. Xxxxxx shall not, for any purpose whatsoever, directly or
indirectly, divulge, reveal, report, publish, transfer, or disclose to any
person or entity any of such confidential information which was obtained by Xx.
Xxxxxx as a result of Xx. Xxxxxx'x employment with the Holding Company or the
Bank, as the case may be, nor shall Xx. Xxxxxx reveal to any person or entity
any trade secrets of the Holding Company or the Bank, but Xx. Xxxxxx shall hold
all of the same confidential and inviolate.
8.2 Property of the Bank. All contracts, agreements, forms, financial
books, records, instruments and documents, supplier lists, memoranda, data,
reports, programs, software, tapes, rolodexes, telephone and address books,
letters, research, listings, programming, and any other instruments, records or
documents relating or pertaining to the Holding Company or the Bank (hereinafter
referred to as "Records") shall at all times be and remain the property of the
Holding Company and the Bank respectively. Upon termination of Xx. Xxxxxx'x
employment with the Holding Company and/or the Bank for any reason whatsoever,
the President shall return to the Holding Company and/or the Bank all Records
(whether furnished by the Holding Company, the Bank, by a third party or
prepared by Xx. Xxxxxx), and Xx. Xxxxxx shall neither make nor retain any copies
of any such Records after such termination.
8.3 Inventions and Creations. All inventions and other creations,
whether or not patentable or copyrightable, and all ideas, reports and other
creative works, including, without limitation, innovations, manuals or other
materials, made or conceived in whole or in part by Xx. Xxxxxx while employed by
the Holding Company and/or the Bank, which relate in any manner whatsoever to
the business, existing or proposed of the Holding Company and/or the Bank or any
other business or research development effort in which the Holding Company, the
Bank or any of their respective subsidiaries or affiliates engages during Xx.
Xxxxxx'x employment by the Holding Company and/or the Bank, will be disclosed
promptly by Xx. Xxxxxx to the Holding Company and/or the Bank and shall be the
sole and exclusive property of the Holding Company and the Bank.
ARTICLE IX. CHANGE OF CONTROL
9.1 Change of Control of the Holding Company. In the event of a change
of control of the Holding Company (as herein defined), Xx. Xxxxxx will have the
option, exercisable within Twelve (12) months from the date of said change of
control, to elect either:
9.1.1 To continue his employment with the Bank and the Holding
Company under the terms of this Agreement with the consent of the Bank and the
Holding Company;
9.1.2 To execute a new employment agreement as President and
Chief Executive Officer of the Holding Company and/or the Bank on terms mutually
agreeable; or,
9.1.3 To resign his employment with Thirty (30) days written
notice and receive a one-time payment or equal monthly payments over the
subsequent Twelve (12) month period totaling Two (2) times the base salary and
cash bonuses paid to Xx. Xxxxxx by the Bank and the Holding Company during the
Twelve (12) month period immediately preceding said change of control of the
Holding Company ("Change of Control Payments"). In addition to the Change of
Control Payments, Xx. Xxxxxx shall be entitled to continued Insurance and other
benefits provided for herein for a period of Twelve (12) Months.
9.2. Termination Without Cause Following Change of Control. If the Bank
and/or the Holding Company terminate Xx. Xxxxxx without cause within Twelve (12)
months from a change of control of the Holding Company, the Bank and/or the
Holding Company will provide him with Change of Control Payments.
9.3 Termination With Cause, Death or Disability Following Change of
Control. If Xx. Xxxxxx'x termination of employment with the Bank and/or the
Holding Company within Six (6) months of a change of control of the Holding
Company is for Cause, or due to his death, neither the Bank nor the Holding
Company will have any obligation to him under the terms of this Agreement.
9.4 Continued Employment Following Change of Control. In the event that
Xx. Xxxxxx remains employed by the Bank and the Holding Company under the terms
of this Agreement for more than Twelve (12) months following a change of control
of the Holding Company, the provisions of Article VI will apply to any
subsequent termination. This section does not apply in the event that Xx.
Xxxxxx becomes disabled and therefore subject to the terms of Section 6.5.
9.5 Change of Control Defined. For purposes of this Agreement, a
"change of control of the Holding Company" is defined as:
9.5.1 A transaction or series of transactions occurring after
the Bank Opening Date in which any one person (other than any of the Organizers
as defined in an Organizer's Agreement of the Holding Company of the 14th day of
July, 1999), or more than one person acting as a group (excluding for this
purpose any of said Organizers, to the extent they participate in such a group),
acquires during any Twelve (12) month period more than Thirty Three Percent
(33%) of the total voting power of the Holding Company's stock; or,
9.5.2 A merger, consolidation, or other reorganization where
the Holding Company is not the surviving entity and where said Organizers do not
individually or as a group own more than Thirty Three Percent (33%) of the total
voting power of the surviving entity's stock; or,
9.5.3 A transaction or series of transactions occurring after
execution of this Agreement and before the Bank Opening Date in which any one
person (other than any of the Organizers as defined in an Organizer's Agreement
of the Holding Company of the 14th day of July, 1999), or more than one person
acting as a group (excluding for this purpose any of said Organizers, to the
extent they participate in such a group), acquires during any Twelve (12) month
period more than Fifty Percent (50%) of the total voting power of the Holding
Company's stock.
ARTICLE X. INDEMNIFICATION
10.1 Indemnification of the Holding Company and the Bank. Xx. Xxxxxx
agrees to indemnify and hold harmless the holding Company and the Bank from and
against any and all claims made against the Holding Company or the Bank by any
party by virtue of Xx. Xxxxxx'x past employment whether such claims are made by
a past employer or by another party with whom Xx. Xxxxxx has dealt in the past.
10.2 Indemnification of Xx. Xxxxxx. The Holding Company and the Bank
will provide Xx. Xxxxxx with coverage under a standard directors' and officers'
liability insurance policy at its expense, or in lieu thereof, will indemnify
Xx. Xxxxxx to the fullest extent permitted under Maryland law against all
expenses and liabilities reasonably incurred by him in connection with or
arising out of any action, suit, or proceeding in which he may be involved by
reason of having been a director or officer of the Bank or the Holding Company
(whether or not he continues to be a director or officer at the time of
incurring such expenses or liabilities), such expenses and liabilities to
include, but not limited to, judgments, court costs and attorneys' fees, and the
cost of reasonable settlements.
ARTICLE XI. BREACH; REMEDIES
11.1 Right to Cure; Default. In the event that either party shall be
alleged to be in breach of this Agreement, written notice shall be given by the
other party and a Ten (10) day opportunity to cure shall be provided. After such
Ten (10) day cure period, if the breach is not cured and remains as alleged, the
breaching party shall be deemed in default and this Agreement may be terminated
by written notice to the breaching or defaulting party.
11.2 Injunctive Relief. In the event of a breach of this Agreement, the
Holding Company and/or the Bank shall be entitled to injunctive relief
restraining Xx. Xxxxxx from taking or continuing any action which would
constitute a breach of the covenants contained herein. Such injunctive remedies
shall not be exclusive and shall be in addition to any and all other remedies
which may be available to the Holding Company and/or the Bank at law or equity,
including, without limitation, the recovery of direct, indirect, incidental,
consequential and/or punitive damages. If successful in obtaining any injunctive
relief, the Holding Company and/or the Bank shall be entitled to collect from
Xx. Xxxxxx their reasonable respective attorneys' fees and costs. The parties
agree to jurisdiction and venue and service by the Federal District Court of
Maryland and the Circuit Court of Xxxx Arundel County, Maryland.
11.3 Suspension of Benefits. In the event of a breach or default by Xx.
Xxxxxx of the covenants contained in this Agreement, the Holding Company and/or
the Bank shall have the right to suspend the payment of consideration provided
for herein and/or to set-off against such payments the damages claimed to be
suffered by the Holding Company and/or the Bank as result of such breach of this
Agreement.
ARTICLE XII. MISCELLANEOUS
12.1 Entire Agreement. This Agreement represents the entire agreement
of the parties relating to the services of the Xx. Xxxxxx to the Holding Company
and the Bank. All prior negotiations between the parties are merged into this
Agreement and there are no understandings or agreements other than those
incorporated herein.
12.2 Severability; Court Enforcement. The parties hereto covenant and
agree that to the extent any provisions or portion of this Agreement shall be
held, found or deemed to be unreasonable, unlawful or unenforceable, by any
Court of law, then the parties hereto expressly covenant and agree that any such
provision or portion thereof shall be modified to the extent necessary in order
that any such provision or portion thereof shall be legally enforceable to the
fullest extent permitted by applicable law and that any court of competent
jurisdiction shall, and the parties hereto do hereby expressly authorize any
court of competent jurisdiction to, enforce any such provision or portion
thereof or to modify any such provision thereof shall be enforced by such court
to the fullest extent permitted by applicable law.
12.3 Waiver. The Holding Company, the Bank and the President each
reserve the right to waive any of the terms of this Agreement which benefits the
party waiving same. Any such waiver must be in a writing signed by the party
waiving the same.
13.4 Choice of Law. It is the intention of the parties hereto that this
Agreement shall be governed by the laws of the State of Maryland.
12.5 Successors. The terms of this Agreement shall inure to the benefit
of and be binding upon the Holding Company, the Bank, their respective
successors and assigns, and upon the President, his heirs, guardians and
personal and legal representatives.
12.6 Gender. The use of the masculine gender herein shall be deemed to
be or include the feminine gender, wherever appropriate.
12.7 Notices. All notices, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered
personally or if sent registered or certified mail, return receipt requested,
properly addressed and postage prepaid to the addresses set forth hereinabove.
12.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
12.9 Headings. The Article and Section headings used herein are for
convenience and reference only and shall not enter into the interpretation
hereof.
12.10 Representation by Counsel.
12.10.1 Counsel for the Holding Company and the Bank. The
parties hereto acknowledge that Xxxxxxx X. Xxxxx, of the law firm of XxXxxxx,
Xxxxx, Xxxxxxxx & Xxx, P.A., 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx
00000 has been formation and organizational counsel to the Holding Company and
the Bank. The parties hereto further acknowledge that Xxxxxxx X. Xxxxx, and
XxXxxxx, Xxxxx, Xxxxxxxx & Xxx, P.A. are anticipated to continue representation
of the Holding Company and the Bank following the execution of this Agreement.
12.10.2 Counsel for Xx. Xxxxxx. The parties hereto acknowledge
that the President, for the purposes of this Agreement, has sought and obtained,
or acknowledges his right and opportunity to seek and obtain the advice of his
independent legal counsel with regard to the contents and interpretation of this
Agreement and each party hereto is fully and independently apprised of the
meaning and legal effect of this Agreement.
12.11 Amendments. This Agreement may be amended or modified only by a
written instrument signed by both parties.
IN WITNESS WHEREOF, this Agreement has been executed by the Holding
Company and Xx. Xxxxxx as of the day and year first above written.
HOLDING COMPANY:
By:
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Xxxxxx X. Xxxxxxxx, XX, Chairman
XX. XXXXXX:
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Xxxxxxx X. Xxxxxx
