Exhibit 10(f)
EMPLOYMENT AGREEMENT
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THIS AGREEMENT (the "Agreement"), made this 30th day of January 1997,
by and among ▇▇▇▇▇ Spring Bancorp, Inc., a registered bank holding company
("Bancorp"), ▇▇▇▇▇ 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 ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Officer").
W I T N E S S E T H
WHEREAS, the Officer is employed as the Senior Vice President and Chief
Financial Officer of the Bank and the Vice President and Treasurer of Bancorp.
WHEREAS, as a result of the skill, knowledge, and experience of the
Officer, the Board of Directors ("Board") of the Bank and the Board of Bancorp
each desires to retain the services of the Officer.
WHEREAS, the Officer desires to continue to serve as an officer of
Bancorp and the Bank.
WHEREAS, the Officer and the respective Boards of the Bank and 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 Vice President and Treasurer
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of Bancorp and the Senior Vice President and Chief Financial Officer of the
Bank, reporting to the President and Chief Executive Officer. Subject to
direction of the President and Chief Executive Officer, the Officer shall have
responsibility for the financial affairs of Bancorp, the Bank, and their
respective subsidiaries, and shall perform all duties and shall have all powers
which are commonly incident to the offices of Chief Financial Officer or which,
consistent with those offices, 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 of the Bank. The Officer's
duties include, but are not limited to:
a. Making recommendations to the President and Chief
Executive Officer concerning the financial
strategies, capital structure, and operations of
Bancorp and the Bank;
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b. Management oversight of the accounting, budgeting, planning
and financial reporting operations of the Bancorp and the
Bank, including supervision of the officers and
employees engaged in these functions;
c. Management oversight of the compliance, security,
purchasing, and facilities management functions of Bancorp
and the Bank, including supervision of the officers and
employees engaged in these functions;
d. Promoting Bancorp and the Bank and their services;
e. Managing the efforts of Bancorp and the Bank to comply
with applicable laws and regulations relating to financial
reporting, accounting, and capital structure of Bancorp and
the Bank; and
f. Providing complete, timely, and accurate reports to the
President and Chief Executive Officer of Bancorp and the Bank
regarding the financial condition, performance, and budget of
Bancorp and the Bank, respectively.
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 Bancorp and 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 Bancorp or the Bank, on the one hand,
nor the Officer, on the other, 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 Boards of Bancorp and the Bank 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.
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4. Base Compensation.
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a. Bancorp and the Bank agree to pay the Officer during the term
of this Agreement a salary at the rate of $110,000 per annum,
payable in cash not less frequently than monthly, as may be
adjusted in accordance with this Section 4.
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 Boards of Bancorp and the Bank the salary
rate to be paid beginning on the next April 1 following such
review. The Boards of Bancorp and the Bank 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 $110,000 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 of both Bancorp and the
Bank, the Officer shall continue to receive salary at the
$110,000 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 of
Bancorp or the Bank 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 Bancorp or 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 their respective employees. 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
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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
taken at reasonable times and in reasonable periods as the
Officer and Bancorp or 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 Bancorp or 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 Bancorp or 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.
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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 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. Bancorp, the Bank, or the Officer may terminate
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the 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
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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 or policy
maintained by Bancorp or the Bank, and (B) benefits
pursuant to Section 6 of this Agreement.
The Boards of Bancorp and the Bank 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 they reasonably believe 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 of Bancorp or the Bank may, by written
notice to the Officer in the form and manner
specified in this paragraph, immediately terminate
his employment with Bancorp or the Bank,
respectively, 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 Bancorp's or the Bank's 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 Bancorp or the Bank 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 by
Bancorp or the Bank unless there shall have been
delivered to the Officer a copy of a resolution duly
adopted by
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the affirmative vote of not less than a majority of
the entire membership of the Board of Bancorp or the
Bank at a meeting of such Board 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
such 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) 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 of Bancorp or the Bank
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 and Bancorp during the term of this Agreement upon at
least sixty days' prior written notice to each of them, 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 of Bancorp or the Bank may, by
written notice to the Officer, immediately terminate his
employment with Bancorp or the Bank, respectively, at any time
for a reason other than Just Cause (a termination "Without
Just Cause"); and the
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Officer may, by written notice to the Boards of Bancorp and
the Bank, 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.
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 Officers's
responsibilities or authority in connection
with his employment with Bancorp or 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 ▇▇▇▇▇▇▇▇▇▇
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
▇▇▇▇▇▇▇▇▇▇ 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
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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 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;
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)
Bancorp or the Bank shall terminate the Officer's employment
Without Just Cause, or (ii) the Officer shall voluntarily
terminate his employment With Good Reason, Bancorp or 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
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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 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
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the 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 Bancorp
or 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, judgements,
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, 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
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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
-----------------
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 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.
----------------------
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
--------------
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:
▇▇▇▇▇ Spring Bancorp, Inc.
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▇▇▇▇▇ Spring National Bank of Maryland
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Executive Officer
Copy to: Corporate Secretary
b. If to the Officer:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
19. Joint and Severally Liability; Payments by Bancorp and the Bank. To the
---------------------------------------------------------------
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 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
----------
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, 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
--------
only.
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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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
▇▇▇▇▇ SPRING NATIONAL BANK OF MARYLAND
By: /s/ Hunter ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
▇▇▇▇▇ SPRING BANCORP, INC.
By: /s/ Hunter ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
OFFICER
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
15
