EMPLOYMENT AGREEMENT
Exhibit 10.12
THIS AGREEMENT (this “Agreement”) is entered into and effective this [day] day of [month,
year] (the “Effective Date”), by and between Madison Bancorp, Inc. (the “Company”) and Xxxxx X.
Xxxxxxx (the “Employee”). The Company and the Employee are each sometimes referred to herein as a
“Party” and are collectively sometimes referred to herein as the “Parties”.
WHEREAS, the Employee currently serves as the [title] of the Company and the Parties wish to
define each of their respective rights and obligations with respect to the Employee’s continued
employment with the Company by executing this Agreement; and
WHEREAS, the Board of Directors (the “Board” or the “Board of Directors”) of the Company
believes it is in the best interests of the Company to enter into this Agreement with the Employee
to assure continuity of management of the Company and to reinforce and encourage the continued
attention and dedication of the Employee to his assigned duties.
NOW, THEREFORE, it is AGREED as follows:
1. Defined Terms. When used anywhere in this Agreement, the following terms shall
have the meaning set forth herein.
(a) “Affiliate” means any “parent corporation” and any “subsidiary corporation” of the
Company, as such terms are defined in Section 424 of the Code.
(b) “Bank” means Madison Square Federal Savings Bank.
(c) “Business Relation” has the meaning given such term in Paragraph (c) of Section 7 hereof.
(d) “Cause” means, in the good faith determination of the Board, the Employee’s personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement.
(e) “Change in Control” means any one of the following events:
(i) The consummation of a transaction in which any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) becomes, within the 12-month period ending on the date of such
person’s most recent acquisition, a “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities representing more than 25% of the voting power of the
then outstanding securities of the Company; provided that a Change of Control shall not be deemed
to occur as a result of a transaction in which the
Company becomes a subsidiary of another corporation and in which the stockholders of the
Company, immediately prior to the transaction, will beneficially own, immediately after the
transaction, securities entitling such stockholders to more than 50% of all votes to which all
stockholders of the other corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a separate class vote); and
provided further that ownership or control of the Company’s voting securities, individually or
collectively, by any Affiliate that is a bank or any benefit plan sponsored by the Company or any
Affiliate shall not constitute a Change of Control;
(ii) The consummation of (1) a merger, consolidation, or similar extraordinary event involving
the Company and another entity where the stockholders of the Company, immediately prior to the
merger, consolidation or similar extraordinary event, will not beneficially own, immediately after
the merger, consolidation or similar extraordinary event, securities entitling such stockholders to
more than 50% of all votes to which all stockholders of the surviving corporation would be entitled
in the election of directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote), or (2) a sale or other disposition of all or substantially all
of the assets of the Company; or
(iii) During any 24-month period, individuals who at the beginning of any such period
constitute the Board cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the Company’s stockholders, of each director of the
Company first elected during such period was approved by a vote of at least two-thirds of the
directors of the Company then still in office who were directors of the Company at the beginning of
any such period.
(f) “COBRA” means the federal Consolidated Omnibus Budget Reconciliation Act.
(g) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
Treasury Regulations thereunder, as interpreted through applicable rulings in effect from time to
time.
(h) “Code § 280G Maximum” means the product of 2.99 and the Employee’s “base amount” as
defined in Section 280G(b)(3) of the Code.
(i) “Confidential Information” has the meaning given such term in paragraph (c) of Section 13
hereof.
(j) Disability” means a physical or mental infirmity which impairs the Employee’s ability to
substantially perform his duties under this Agreement and which results in the Employee becoming
eligible for long-term disability benefits under a long-term disability plan of the Company or the
Bank or, if the Company or the Bank has no such plan in effect, which impairs the Employee’s
ability, in the Board’s sole discretion, to substantially perform his duties under this Agreement
for a period of 180 consecutive days.
2
(k) “Effective Date” has the meaning given such term in the opening paragraph of this
Agreement.
(l) “Employee” has the meaning given such term in the opening paragraph of this Agreement.
(m) “Expiration Date” has the meaning given such term in paragraph (d) of Section 9 hereof.
(n) “FDIA” means the Federal Deposit Insurance Act.
(o) “FDIC” means the Federal Deposit Insurance Corporation.
(p) “Good Reason” means, without the specific written consent of the Employee, any of the
following events that is not cured by the Company within 30 days after it receives written notice
thereof from the Employee:
(i) The assignment by the Company to the Employee of duties and responsibilities materially
different from those normally associated with his position, or a material diminution or reduction
by the Company in the Employee’s responsibilities or authority (including reporting
responsibilities) in connection with his employment with the Company;
(ii) A 10% or greater reduction by the Company in the Employee’s base salary from the base
salary set forth in this Agreement, as the same may be increased from time to time;
(iii) The failure by the Company or any successor to continue in effect any employee benefit
plan or program of the Company (excluding any fringe benefit and any equity compensation plan) in
which the Employee is entitled to participate under this Agreement (or plans providing the Employee
with at least substantially similar benefits in the aggregate) other than as a result of the normal
expiration of any such plan in accordance with its terms as in effect from time to time; or the
taking of any action, or the failure to act, by the Company or any successor which would adversely
affect the Employee’s continued participation in any of such plans or which would materially reduce
his benefits under any of such plans;
(iv) The Company’s requiring the Employee to move his personal residence, or perform his
principal executive functions, more than 30 miles from his primary office as of the later of the
Effective Date and the most recent voluntary relocation by the Employee; or
(v) The failure of the Employee to be reelected to the Board after the Effective Date.
(q) “Intellectual Property” has the meaning given such term in Section 14 hereof.
3
(r) “Parties” and “Party” have the meanings given such terms in the opening paragraph of this
Agreement.
(s) “Payment Date” means each date on which a payment or benefit contemplated under this
Agreement is scheduled to be paid or made available and, additionally in the case of paragraph (h)
of Section 9 hereof, each date on which a waiver of any payment is granted to the Employee.
(t) “Person” has the meaning given such term in paragraph (a) of Section 7 hereof.
(u) “Protected Period” shall mean the period that begins on the date of a Change in Control
and ends on the earlier of the first anniversary of the date of such Change in Control or the
expiration date of this Agreement.
(v) “Term” has the meaning given such term in Section 6 hereof.
2. Employment. During the Term of this Agreement, the Employee shall continue to
serve as the [title] of the Company and shall perform those duties assigned to him by the Board.
During the Term of this Agreement, the Employee shall devote his full time employment and best
efforts to serving as an employee of the Company; provided, however, that during the Term the
Employee may engage in any activity unrelated to his employment hereunder so long as such activity
does not interfere with the performance of his duties hereunder, including, without limitation, the
performance of his covenants contained in Section 7, Section 13 and Section 14 hereof. The
Employee agrees to faithfully and competently perform all of the duties assigned to him, to abide
by all policies and procedures adopted by the Company from time to time, and to report to such
Company representatives as directed.
3. Base Salary. Beginning on the date hereof, the Company shall pay the Employee, and
the Employee hereby agrees to accept, as annual base salary for all services rendered hereunder, a
base salary of One Hundred Fifteen Thousand Dollars ($115,000) per annum, which
shall be paid in accordance with the Company’s normal payroll practices for its salaried employees
from time to time in effect. Such rate of salary may be increased, but not decreased, and any rate
of salary so increased may be further increased, but not decreased, from time to time by such
amount as the Board of Directors may determine.
4. Discretionary Bonuses. The Employee may receive such additional compensation, as
bonuses, as the Board may from time to time determine to grant.
5. Benefits. In addition to the compensation described in Section 3 and Section 4
hereof:
(a) The Employee shall be entitled to continue his participation in all employee benefit
programs in which he participates as of the Effective Date and shall be entitled to participate in
all employee benefit programs for the benefit of any of the Company’s full-time employees that may
be implemented in the future, including, without limitation, retirement plans, disability
insurance, group and other life insurance, sickness, and accident and health insurance programs,
4
provided that, in all cases, the Employee qualifies or is otherwise eligible to participate in
such programs under their terms, rules and regulations. Notwithstanding the foregoing sentence,
the Company does not guarantee the adoption of any particular employee benefit plan or program, or,
subject to the Employee’s right to terminate his employment hereunder for Good Reason, the
continuance of any plan or program, during the Term.
(b) The Employee shall be eligible to participate in any fringe benefits which are or may
become available to the Company’s senior management employees.
(c) If not otherwise provided by the Bank, the Company shall provide the Employee with the use
of a Company vehicle for business purposes. Periodic replacement of such vehicle during the Term
shall be at the sole discretion of Company, without any obligation to transfer title to the vehicle
upon replacement. The Employee shall account for all non-business use of such vehicle and report
such use to the Company. The Employee acknowledges that such non-business use may constitute
income to the Employee for purposes of federal, state, local and/or other tax laws.
(d) The Employee shall be entitled to vacation, leave of absence, and leave for illness or
temporary disability in accordance with the policies of the Company from time to time in effect.
(e) The Employee shall be entitled to reimbursement for properly documented and appropriate
business expenses incurred by the Employee upon terms established by the Company.
6. Term of Agreement. The term of this Agreement shall be three (3) years, commencing
on the Effective Date and terminating on [date] (the “Term”); provided, however, that on or before
each anniversary date of the Effective Date, the Board of Directors shall determine in a duly
adopted resolution whether the then-current Term shall be extended by an additional one-year
period, which determination shall be based upon whether the performance of the Employee has
satisfied the Board’s requirements and standards and the needs of the Company. Only those members
of the Board of Directors who have no personal interest in this Employment Agreement shall discuss
and vote on the review and approval of such an extension. Notwithstanding the foregoing, however,
this Agreement is subject to termination prior to the expiration of the Term in accordance with
Section 9 or Section 10 hereof.
7. Loyalty and Non-Solicitation.
(a) Loyalty to the Company. During the Employee’s employment with the Company, the
Employee shall not, directly or indirectly, as owner, partner, director, officer, employee, agent,
consultant, advisor, contractor or otherwise, whether for consideration or without consideration,
for the benefit of any person, entity or group (a “Person”) other than for the Company or the Bank,
compete with or otherwise engage in the sale of any products or the performance of any services
which are comparable to, or which are intended to substitute for, the products or services offered
by the Company or the Bank. Nothing in this paragraph (a) shall be deemed to prevent or limit the
Employee’s right to invest in the securities of any business
5
dissimilar from that of the Company or the Bank, or, solely as a passive or minority investor,
in any business.
(b) Restrictive Covenants. During the Employee’s employment with the Company and for
18 months after the Employee ceases to be employed with the Company, the Employee shall not,
directly or indirectly, as owner, partner, director, officer, employee, agent, consultant, advisor,
contractor or otherwise, whether for consideration or without consideration, for the benefit of
Person other than for the Company or the Bank, take any of the following actions: (i) solicit any
Business Relation (as hereinafter defined) to purchase, or sell or otherwise provide to any
Business Relation, any products or services which are comparable to, or which are intended to
substitute for, products or services offered by the Company or the Bank during the Employee’s
employment with the Company; (ii) employ, engage or solicit for employment or for engagement as an
independent contractor or consultant, any person who was employed by or any Person who was engaged
as an independent contractor by the Company or the Bank during the preceding 18 months; or (iii)
encourage any Person to reduce its business with the Company or the Bank or to reduce its
employment with or provision of services to the Company or the Bank; provided that an advertisement
in a newspaper or other publication of general circulation that is not targeted at a specific
person shall not constitute a solicitation for purposes of this paragraph (b).
(c) Business Relation Defined. For purposes of this Agreement, the term “Business
Relation” means any Person who, at any time during the Employee’s employment with the Company, was
a Person (i) that is or was a customer of the Company or the Bank, (ii) that had entered into any
contract or other arrangement with the Company or the Bank for the provision of services or the
sale of products, (iii) to whom the Company or the Bank had furnished or planned to furnish a
proposal for the performance of services or the sale of products, or (iv) with whom the Company or
the Bank entered or agreed to enter into any other business relationship such as a joint venture,
collaborative agreement, joint development agreement, teaming arrangement or agreement, or similar
arrangement or understanding for the provision of services or sale of products.
(d) Acknowledgement. The Employee hereby acknowledges and agrees that the
restrictions contained in this Section 7 regarding geographical scope, length of term and types of
activities restricted, are reasonable and will not create a hardship to or burden for him; and that
the Employee has no intention of competing with the Company or the Bank within such limitations.
8. No Disparaging Statements. During the Employee’s employment with the Company and
for 12 months after the Employee ceases to be employed with the Company, except as may be required
by law, (a) the Employee will not make any statements or comments of a disparaging nature to third
parties regarding the Company or its officers, directors, personnel or products and (b) the Company
will not make any statements or comments of a disparaging nature to third parties regarding the
Employee.
6
9. Termination of Employment Prior to Expiration of Term. Subject to Section 10
hereof, the Employee’s employment hereunder may be terminated prior to the expiration of the then
current Term as provided in this Section 9.
(a) Termination Upon Employee’s Death. The Employee’s employment under this Agreement
shall terminate upon his death during the Term, in which event the Employee’s estate shall be
entitled to receive all unpaid base salary, bonus amounts and benefits that have accrued through
the date of death.
(b) Termination Upon Employee’s Disability. The Company may terminate the Employee’s
employment under this Agreement after having established his Disability, in which event the
Employee shall be entitled to the compensation and benefits provided for under this Agreement for
the period that starts on the date the Employee is first unable to perform his services hereunder
(as determined by the Company) due to the physical or mental infirmity that is the basis for the
Disability and ends on the date on which the Employee’s employment is terminated due to such
Disability; provided that the foregoing compensation and benefits shall be reduced dollar for
dollar by any benefits paid to the Employee in respect of such period pursuant to any disability
plan of the Company or the Bank. During any period that the Employee receives benefits pursuant to
this paragraph (b), and to the extent that the Employee shall be physically and mentally able to do
so, (i) he shall furnish such information, assistance and documents so as to assist in the
continued ongoing business of the Company, (ii) he shall make himself available to the Company to
undertake reasonable assignments consistent with his prior position and his physical and mental
health, and (iii) the Company shall pay all reasonable expenses incident to the performance of such
assistance and assignments.
(c) Termination by Company for Cause. The Board may, by written notice to the
Employee, immediately terminate the Employee’s employment under this Agreement at any time for
Cause, in which case the Employee shall be entitled to receive only the unpaid base salary, bonus
amounts, and benefits that have accrued through the date of termination. The Company shall deliver
to the Employee a copy of the resolution duly adopted by the Board (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee’s counsel, to be heard
before the Board, such meeting and the opportunity to be heard to be held prior to, or as soon as
reasonably practicable following, termination, but in no event later than 60 days following such
termination), finding that the Employee was guilty of conduct constituting Cause. The notice
provided to Employee pursuant hereto shall specify in detail the particulars of the conduct
constituting Cause. If the Board thereafter determines that such conduct did not constitute Cause
and the Employee’s employment hereunder is reinstated, then the Employee shall be entitled to
receive back pay for the period following termination and continuing through reinstatement. If the
Employee’s employment is not reinstated as contemplated by the preceding sentence, then the
termination of employment shall be deemed to have occurred pursuant to Section 9(d) hereof and the
Employee shall be entitled to the compensation and benefits provided therein.
(d) Termination by Company Without Cause. The Board may, by written notice to the
Employee, immediately terminate the Employee’s employment under this Agreement at any time and for
any reason other than his Disability or for Cause, in which event
7
the Employee shall be entitled to receive the following compensation and benefits (unless such
termination occurs during the Protected Period, in which event the compensation and benefits
provided for in Section 10 hereof shall apply):
(i) all unpaid base salary, bonus amounts, and benefits that have accrued through the date of
termination of employee; and
(ii) provided that the Employee has complied in all respects, from the Effective Date through
and including each Payment Date, with his obligations hereunder: (A) the continuation of salary,
at the rate provided pursuant to Section 3 hereof (as adjusted to date), from the date of
termination of employment through the expiration date of the Term (the “Expiration Date”), plus, in
the event such termination occurs after the second anniversary of the Effective Date, said salary
for an additional 12-month period; and (B) continued participation through the Expiration Date in
the life insurance programs in which the Employee would have been eligible to participate through
the Expiration Date based upon the benefit levels substantially equal to those that the Company
provided for the Employee at the date of termination of employment to the extent the Employee
continues to qualify for participation therein after such termination; provided that in the event
the Employment does not continue to qualify for participation in any such program, the Company
shall reimburse the Employee for the cost to the Employee of obtaining substantially similar
benefits on his own.
Severance payments due pursuant to item (ii)(A) of this paragraph (d) shall be paid in
accordance with the Company’s normal payroll practices for its salaried employees from time to time
in effect and shall terminate at such time as the Employee obtains employment with another
financial institution comparable in nature to his employment at the Company at the time of
termination.
(e) Termination by Employee for Good Reason. The Employee shall have the right, at
any time within 60 days after an event that constitutes Good Reason, to terminate the Employee’s
employment under this Agreement, in which case the Employee shall be entitled to receive the
compensation and benefits payable under, and in accordance with, paragraph (d) of this Section 9
(unless such termination occurs during the Protected Period, in which event Section 10 hereof shall
apply).
(f) Voluntary Termination by Employee. The Employee may voluntarily terminate
employment with the Company during the Term for any reason other than Good Reason, upon at least 90
days’ prior written notice to the Board. Upon such termination, the Employee shall be entitled to
receive only the unpaid base salary, bonus amounts and benefits that have accrued through the date
of termination. Notwithstanding the foregoing, the Board shall have the option upon receipt of the
Employee’s written notice delivered pursuant to this paragraph (f to pay the Employee 90 days’ base
salary, plus any accrued but unpaid bonus amounts and any other unpaid benefits that have accrued
or would accrue through the 90-day notice period, in lieu of Employee working during such notice
period.
(g) Post-Termination Health Insurance. Except in the cases of (i) a termination of
the Employee’s employment by the Company for Cause, (ii) a termination of the Employee’s
8
employment by the Employee prior to the expiration of the Term for a reason other than Good
Reason, and (iii) a termination of the Employee’s employment pursuant to Section 10 hereof, and
provided in all cases that the Employee has complied in all respects, from the Effective Date
through and including each Payment Date, with his obligations hereunder, for each month following
the termination of the Employee’s employment with the Company that he remains eligible for
continuation coverage under COBRA, the Company will waive any payments that it would otherwise
charge to the Employee for COBRA family coverage; provided, however, that the Company shall have no
obligations under this paragraph (g) if the Employee becomes employed by or an independent
contractor to a party unrelated to the Company or its successor which makes health insurance
available to the Employee (with or without charge). The Company shall have no obligation to pay,
or reimburse the Employee for the payment of, any income or other tax liability owed by the
Employee in connection with any payments made by the Company pursuant to this paragraph (g).
(h) No Mitigation. The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 9 by seeking other employment or otherwise.
10. Termination in Connection with a Change in Control.
(a) Trigger Events. The Employee shall be entitled to collect the severance benefits
set forth in paragraph (b) of this Section 10 in the event that either (i) the Employee voluntarily
terminates his employment within 60 days following an event that both occurs during the Protected
Period and constitutes Good Reason, or (ii) the Company or its successor in interest terminates the
Employee’s employment without the Employee’s written consent for any reason other than Cause during
the Protected Period.
(b) Amount of Severance Benefit. If the Employee becomes entitled to collect
severance benefits pursuant to paragraph (a) of this Section 10, then, in addition to all unpaid
base salary, bonus amounts and benefits that have accrued through the date of termination, the
Company shall pay the Employee an amount equal to the difference between the Code § 280G Maximum
and the sum of any other payments in the nature of compensation to the Employee that are contingent
on the Change in Control. The Employee shall be entitled to determine which and how much of any
other payments shall be reduced, if necessary, to reach the Code § 280G Maximum.
(c) Timing of Payment. The amount payable under this Section 10 shall be paid in one
lump sum within 10 days after the date of the termination of the Employee’s employment.
(d) Exclusive Compensation. The severance benefits provided for in this Section 10
shall be the only compensation and benefits to which the Employee shall be entitled in connection
with the termination following a Change in Control as described in paragraph (a). Without limiting
the foregoing, Section 9 of this Agreement shall not apply to or govern any such termination.
9
11. Compensation and Benefits Subject to Withholding. The Company may withhold all
federal, state, local income or other taxes from any compensation or benefit payable under this
Agreement as shall be required pursuant to any law or government regulation or ruling.
12. Other Provisions Relating to Severance Payments.
(a) Full and Final Compensation. The compensation and other benefits made pursuant to
Sections 9 or 10 hereof following the termination of the Employee’s employment with the Company
shall be considered full compensation in payment for all claims under this Agreement, and the
Employee shall not be entitled to any other compensation or benefits.
(b) Offset. Upon termination of the Employee’s employment with the Company, the
Company shall have the right to deduct from the amount due the Employee any amounts which the
Employee owes the Company.
13. Confidential Information.
(a) Covenant. The Employee acknowledges that his relationship with the Company shall
of necessity provide him with specialized knowledge concerning the Company and the Bank, which, if
used for the benefit of others or disclosed to others, could cause serious harm to the Company and
the Bank. Accordingly, the Employee covenants that he shall not at any time, directly or
indirectly, use, appropriate or disclose to others, or permit the use of or appropriation by or
disclosure to others of, any Confidential Information (as hereinafter defined) except as expressly
provided herein.
(b) Permitted Use. While engaged as an employee of the Company, the Employee may use
Confidential Information only for the purpose that is necessary to the carrying out of the
Employee’s duties as set forth herein or assigned to him by the Company or the Bank, and the
Employee may not make use of any Confidential Information after he is no longer an employee of the
Company.
(c) Confidential Information Defined. For purposes of this Agreement, the term
“Confidential Information” means all information of the Company or the Bank, whether oral, written,
computerized, digitized or otherwise, regarding the Company or the Bank or the Company’s or the
Bank’s business, including, without limitation, information regarding the Company’s or the Bank’s
customers, referral sources, insurance carriers, sales and marketing information, costs, prices,
earnings, business plans, financial information and forecasts, contracts, business arrangements,
methods of operation, business strategies, prospects, and Intellectual Property (as hereinafter
defined), whether or not such information is deemed “trade secrets” under applicable law.
Confidential Information does not include information that (i) becomes generally available to the
public other than as a result of disclosure by the Employee in violation of this Agreement, (ii)
was available to the public on a non-confidential basis from a source other than the Company or the
Bank, (iii) is made available to a third party on a non-confidential basis by the Company or the
Bank, (iv) was already known to the Employee at the time of disclosure by the Company or the Bank,
or (v) is required to be disclosed by legal process or applicable law.
10
14. Intellectual Property. The Employee agrees that any and all information, reports,
other documents and other works (whether in an electronic format or otherwise) created for or on
behalf of the Company by the Employee during the Employee’s employment with the Company, whether or
not developed on Company premises or equipment or during normal Company business hours (the
“Intellectual Property”), are and shall remain works made for hire and the sole and exclusive
property of the Company. To the extent that such Intellectual Property is not considered work made
for hire, the Employee hereby assigns to the Company (or its nominee) any and all interest that the
Employee may now or in the future have in the Intellectual Property. Upon request by the Company,
the Employee shall execute and deliver to the Company any document or instrument that may be
necessary to secure or perfect the Company’s title to or interest in any Intellectual Property so
assigned.
15. Return of Company Property. The Employee agrees that upon termination of
employment the Employee will: (a) promptly return to the Company all Confidential Information, all
Intellectual Property, and all other property of the Company, including but not limited to all
correspondence, manuals, notebooks, lists of customers and suppliers, computer programs, disks and
any documents, materials or property, whether written or stored on computerized medium, and all
copies in the Employee’s possession or control; (b) not take any action to preserve or regain
access to such information through any means, including but not limited to access to the Company’s
facilities or through a computer or other digital or electronic means; and (c) promptly pay all
amounts due, owing or otherwise payable by the Employee to the Company.
16. Employee’s Representations and Warranties.
(a) No Prior Agreements. The Employee represents and warrants that he is not a party
to or otherwise subject to or bound by the terms of any contract, agreement or understanding which
in any manner would limit or otherwise affect his ability to perform his obligations hereunder,
including without limitation any contract, agreement or understanding containing terms and
provisions similar in any manner to those contained in Section 7 of this Agreement.
(b) Information of Others. The Employee represents, warrants and covenants that he
will not disclose to the Company or otherwise use, in the course of his employment with the
Company, any confidential information or intellectual property which he is restricted from
disclosing or using pursuant to any other agreement or duty to any other person.
17. Company’s Remedies for Breach. The Employee recognizes that a violation by him of
any provision of this Agreement may cause irreparable injury to the Company, and there may be no
adequate remedy at law for such violation. Therefore, the Employee agrees that, in addition to any
other remedies available to the Company, including, without limitation, all damages incurred, the
Company shall have the right, in the event of the Employee’s breach or threatened breach of any
provision hereof to obtain an injunction and/or temporary restraining order against such breach or
threatened breach or specifically enforce this Agreement. The Company’s rights and remedies
specified in this Agreement are in addition to and not in lieu of any rights available under
applicable law and regulations, including, without limitation, those laws and regulations governing
trade secrets and other proprietary information.
11
18. Indemnification. The Company agrees that, to the fullest extent permitted by
applicable law, its Bylaws shall provide for indemnification of the Employee during the Term of
this Agreement, and that it will at all times maintain adequate director’s and officer’s liability
insurance covering the Employee.
19. Reimbursement for Enforcement Proceedings. In the event that any dispute arises
between the Parties as to the terms or interpretation of this Agreement, whether instituted by
formal legal proceedings or otherwise, the prevailing Party shall be reimbursed by the other Party
for all costs and expenses, including reasonable attorneys’ fees, arising from such dispute,
provided that the prevailing Party obtains either a written settlement or a final judgment by a
court of competent jurisdiction substantially in such Party’s favor.
20. Miscellaneous.
(a) Complete Agreement. This Agreement is absolute and unconditional and constitutes
the full, complete, and entire understanding between the Parties with respect to the subject matter
of this Agreement. No other promises, representations, statements, warranties, covenants or
undertakings or other prior or contemporaneous agreements, oral or written, respecting such matters
which are not specifically incorporated herein shall be deemed in any way to exist or to bind any
of the Parties hereto.
(b) Amendment; Waiver. No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by both Parties; provided, however, that the Company
may amend this Agreement, without the consent of the Employee, as the Company deems necessary or
appropriate to ensure compliance with any law, rule, regulation or other regulatory pronouncement
applicable to the Agreement, including, without limitation, Section 409A of the Code and any
related regulations or other guidance promulgated with respect to Section 409A of the Code. No
waiver by either Party of any breach by the other Party of any condition or provision contained in
this Agreement to be performed by such other Party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be
in writing and signed by the Party to be charged with the waiver. No delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver or relinquishment or any night or power hereunder at any one instance or instances be deemed
a waiver or relinquishment of such right or power at any other time or times.
(c) Severability; Modification. The Parties agree that the provisions and covenants
contained in each of the Sections of this Agreement, and within the Sections themselves, including,
in particular, Section 7, are intended to be separate and divisible provisions and covenants and
if, for any reason, any one or more of them shall be held to be invalid or unenforceable, in whole
or in part, by a court of competent jurisdiction, then (i) the same shall not be held to affect the
validity of any other provision or covenant contained in this Agreement and (ii) the same shall be
deemed to be modified to the minimum extent necessary for it to be legally enforceable. The
Parties hereby expressly request any court of competent jurisdiction to enforce any such provision
or covenant or to modify any provision thereof so that it shall be enforced by such court to the
fullest extent permitted by applicable law.
12
(d) Governing Law. Except to the extent preempted by federal law, this Agreement has
been made in and shall be governed by and construed in accordance with the laws of the State of
Maryland, without regard to any conflicts of laws principles which would apply the law of another
jurisdiction. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY ACTION ARISING UNDER THIS AGREEMENT.
Any judicial proceeding arising out of or relating to this Agreement (including any declaratory
judgments) shall be filed exclusively in the State and Federal courts located in Maryland, and each
Party hereby consents to, and will submit to, the personal and subject matter jurisdiction of such
courts in any proceeding to enforce any of its obligations under this Agreement and shall not
contend that any such court is an improper or inconvenient venue. The foregoing shall not limit
the right of any Party to obtain execution of judgment in any other jurisdiction.
(e) Binding Effect. The Agreement shall be binding upon and shall inure to the
benefit of the Parties and their successors and assigns and their representatives. This Agreement
may be assigned by the Company to any third party in connection with any sale of the Company’s
business or other extraordinary transaction. This Agreement may not be assigned by the Employee.
(f) Headings. Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.
(g) Notices. All notices and communications hereunder shall be in writing and shall be
deemed given if personally delivered, telecopied (with confirmation) or mailed by registered or
certified mail (return receipt requested) to such Party; if intended for the Company, such notice
or communication shall be addressed to it, to the attention of its Corporate Secretary, at the
principal office of the Company; if intended for the Employee, such notice or communication shall
be addressed to the Employee at the Employee’s address as shown in the Company’s records.
(h) Source of Payments. Notwithstanding any provision in this Agreement to the
contrary, to the extent payments and benefits, as provided for under this Agreement, are paid or
received by the Executive under an employment agreement in effect between the Executive and the
Company, the payments and benefits paid by the Company will be subtracted from any amount or
benefit due simultaneously to the Executive under similar provisions of this Agreement. Payments
will be allocated in proportion to the level of activity and the time expended by the Executive on
activities related to the Company and the Bank, respectively, as determined by the Company and the
Bank.
(i) Counterparts. This Agreement may be executed in counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts together shall constitute
one and the same instrument.
(j) Survival. The provisions of Sections 1 and 7 through 20, inclusive, of this
Agreement shall survive the termination of this Agreement and the Employee’s employment hereunder.
13
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year first
hereinabove written.
| ATTEST: | MADISON BANCORP, INC.: | |||||
| By: | ||||||
Secretary
|
Name: | |||||
| Title: | ||||||
WITNESS:
|
EMPLOYEE: | |||||
| Xxxxx X. Xxxxxxx | ||||||
14
