Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

 

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into
as of the 15th day of July, 2020 (“Effective Date”), by and between MAINSTREET
BANCSHARES, INC., a Virginia chartered company (“Company”) and parent
corporation of MainStreet Bank, a Virginia chartered bank (the “Bank”), and
CHARLES C. BROCKETT  (the “Executive”).  This Agreement collectively refers to
the Company and the Executive as the “Parties,” and separately may refer to
either one of them as a “Party.”

RECITALS

R-1.The Company is a registered bank holding company and is engaged in the
ownership of the Bank with headquarters in Fairfax, Virginia, serving the
Washington D. C. Metropolitan area.

R-2.The Executive has been involved in the management of the business and
affairs of the Company and the Bank since 2016, and, therefore, possesses
managerial experience, knowledge, skills and expertise in such type of business.

R-3.The continued employment of the Executive by the Company is in the best
interests of the Company, the Bank and the Executive.

R-4.The Parties have mutually agreed upon the terms and conditions of the
Executive’s continued employment with the Company as hereinafter set forth
effective as of July 15, 2020, as follows:

TERMS OF AGREEMENT

NOW, THEREFORE, for and in consideration of this Agreement’s Recitals, the
mutual promises and undertakings of the Parties as hereinafter set forth, and
other good and valuable consideration which the Parties hereby agree is
sufficient, the Parties covenant and agree as follows:

Section 1.  Employment.

(a)The Executive shall continue to be employed as the President of the Company
(“Executive Position”) on the Effective Date.   The Executive shall report to
the Chief Executive Officer of the Company and shall continue to be managed by
the Chief Executive Officer consistent with the terms of this Agreement.  The
Executive’s duties, responsibilities and authority as the President of the
Company shall be as set forth at Exhibit A to this Agreement.  Additionally, in
exercising his duties, the Executive shall have such authority and discretion to
make decisions binding upon the Company as are reasonable and consistent with
the good faith discharge of duties set forth in this Agreement and the policies
established by the Board of Directors or the Company’s Chief Executive Officer
from time to time.  The Company shall cover as an insured person the Executive
for all applicable director and officer liability insurance provided to other
similarly situated executives of the Company.

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(b)References in this Agreement to services rendered for the Company and
compensation and benefits payable or provided by the Company shall include
services rendered for and compensation and benefits payable or provided by any
Affiliate.  References in this Agreement to the “Company” also shall mean and
refer to each Affiliate for which the Executive performs services on behalf of
the Company.  References in this Agreement to an “Affiliate” shall mean any
business entity that, directly or indirectly, through one or more
intermediaries, controls, or is controlled by the Company.

 

(c)The relationship between the Company and the Executive shall be that of an
employer and an employee.  The Board of Directors and the Chief Executive
Officer shall have the sole authority to set and establish terms, conditions and
standards of employment applicable to the Executive subject to the terms and
conditions of this Agreement.  Effective as of July 15, 2020, the Executive
shall resign as a member of the Board of Directors of the Bank and as President
and an employee of the Bank.  Effective as of July 15, 2020, the Executive shall
continue to serve as a member of the Board of Directors of the Company with a
term expiring in 2021and as an employee and President of the Company.    

 

(d)Executive shall perform his duties at the Company’s offices in Fairfax
County, Virginia or remotely as may be agreed upon between the Executive and the
Chief Executive Officer. The Executive shall travel for business reasons from
time to time as is reasonably necessary for the performance of his duties
hereunder.

 

(e)Upon the resignation or termination of employment of the Executive as an
officer and employee of the Company for any reason, the Executive hereby agrees
and acknowledges that this Agreement shall constitute such individual’s letter
of resignation as a member of the Board of Directors of the Company and all
related entities of the Company and the Bank, effective as of the date of such
termination of employment.

 

Section 2.  Term.  The Term of this Agreement shall commence on July 15, 2020,
and shall continue until December 31, 2021, unless sooner terminated or extended
under the terms of this Agreement (the “ Term”).  

 

Section 3.  Exclusive Service. The Executive shall devote his best efforts and
substantial time and attention to rendering services on behalf of the Company in
furtherance of its best interests, except for any period or periods of time
during which the Executive’s ability to discharge any of such duties and
responsibilities and devote such time and attention are impaired as a result of
a mental or physical disability of his, or he is on vacation, holiday or other
leave, or as otherwise agreed by the Chief Executive Officer. It is anticipated
that the Executive shall render professional services to the Company regularly
approximating twenty hours or more per week.  The Executive shall comply with
all written policies, standards and regulations of the Company now or hereafter
promulgated and communicated to the Executive, and shall perform his duties
under this Agreement to the best of his abilities and in accordance with
standards of conduct generally applicable to senior executive officers of
similarly situated companies.  The obligations of this Section 3 shall not be
construed to mean that the Executive shall not be a director of any other
corporation, or be associated in any way whatsoever with any educational,
charitable, civic,

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social, recreational, youth, sports or other organization or endeavor; provided,
however, during the time of his employment under this Agreement, the Executive
shall not serve as an employee, officer or director of any other entity or
corporation without the affirmative and prior approval of the Board of Directors
in its discretion after full disclosure provided by the Executive, which
approval shall not be unreasonably withheld in the absence of the Board’s
identification of concern regarding the existence of an inherent conflict or
potential conflict.  

 

Section 4.  Salary and Other Compensation.

(a)Base Salary. As compensation while employed hereunder, the Executive, during
his faithful performance under this Agreement, shall receive an initial annual
base salary of $160,004.00 (the “Base Salary”).

(b)Clawback.  Executive agrees that any incentive compensation (as determined by
the Company) that Executive receives from the Company or any Affiliate pursuant
to this Agreement or otherwise is subject to repayment to (i.e., clawback or
recoupment) the Company or any Affiliate as required by federal law and on such
basis as the Company determines.  Except where offset of, or recoupment from,
compensation covered by Code Section 409A (as defined in Section 21) is
prohibited by Code Section 409A, to the extent allowed by law and as determined
by the Company, Executive agrees that such repayment may, in the discretion of
the Company, be accomplished by withholding of future compensation to be paid to
Executive by the Company or any Affiliate.  Any recovery of compensation covered
by Code Section 409A shall be implemented in a manner which complies with Code
Section 409A.

 

(c)The Company will pay to the Executive the Base Salary as provided in Section
4(a) in appropriate installments to conform to the Company’s regular payroll
dates which shall be at least monthly.  Further, the Company will pay to the
Executive the Base Salary and all other amounts set forth in this Agreement less
appropriate deductions as required by law, or otherwise permitted by the
Executive.  The Company shall also withhold and remit to the proper party any
amounts agreed to in writing by the Company and the Executive for participation
in any corporate sponsored benefit plans for which a contribution is required.

 

(d)Except as otherwise expressly set forth hereunder, no compensation shall be
paid pursuant to this Agreement in respect of any month or portion thereof
subsequent to any termination of the Executive’s employment by the Company.

 

Section 5.  Corporate Benefit Plans.

(a)General.  In addition to those matters set forth in this Agreement, during
his employment hereunder, the Executive and, to the extent applicable,
Executive’s spouse, legal dependents and beneficiaries shall be entitled to
participate in or become a participant in all employee benefit plans and
programs, including improvements or modifications of the same, maintained by the
Company (including but not limited to the benefits of certain pension and other
retirement benefit plans, profit sharing, stock option, or other plans,
benefits, and privileges) and available to other employees of the Company.    

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(b)Vacation and Other Leave.  Upon execution of this Agreement, the Executive
shall be entitled to accrue and receive compensation for paid vacation leave at
the rate of four hours per day for each of twenty-five (25) days of paid
vacation annually (the “Vacation Leave”).  The Executive shall further be
entitled to paid leave of four hours per day for the number of paid holidays and
leaves for illness or temporary disability in accordance with the Company’s
leave policies.  

(c)Health and Disability Insurance.  During the term of his employment, the
Executive shall be entitled to participate in the medical (including
hospitalization), dental, life and disability plans, to the extent offered by
the Company, and in amounts consistent with the Company’s policy, for other
senior executive officers of the Company, with premiums for all such insurance
for the Executive and his dependents to be paid by the Company in accordance
with normal payroll practices, but at least monthly.

(d)Life Insurance.  The Company will obtain, and maintain at all times during
the term of the Executive’s employment, a group term insurance policy on the
Executive’s life in an amount equal to two times his base salary under the
Virginia Bankers Association group term life insurance program.  The Company
will pay the premiums on this policy in accordance with normal payroll practices
but at least monthly.  The Executive will have the right to designate the
beneficiary of the policy.

Section 6.  Expense Reimbursement.

(a)General. The Company shall reimburse the Executive for all reasonable and
documented business expenses incurred in the conduct of the Company’s
business.  Such expenses will include business meals, out-of-town lodging and
travel expenses, excluding travel between Virginia and Florida and lodging in
Virginia, and memberships in professional organizations and costs to attend
meetings and conventions of business-appropriate organizations and associations
necessary to promote the business affairs of the Company.  The Executive agrees
to timely submit records and receipts and, as may be required by the Board of
Directors, explanations of reimbursable items and agrees that the Company can
adopt reasonable rules and policies regarding such reimbursement.  The Company
agrees to make prompt payment to the Executive following receipt and
verification of such reports.  

(b)Reimbursements and In-kind Benefits.  All reimbursements and in-kinds
benefits payable under this Agreement shall be made in accordance with the
Company’s written policies.  If any reimbursement or in-kind benefit is subject
to Internal Revenue Code (the “Code”) Section 409A (as defined in Section 21),
then such reimbursement or in-kind benefit shall comply with the applicable
requirements of Section 21, including the timing of payment and other provisions
set forth in Section 21(d).

Section 7.  Termination and Termination Benefits.  Notwithstanding the
provisions of Section 2, the Executive’s employment hereunder shall terminate
under the following circumstances and shall be subject to the following
provisions:

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(a)Death.  If the Executive dies during the term of this Agreement, the Company
shall continue to pay to the Executive’s estate an amount equal to the
Executive’s then current Base Salary for one month after the Executive’s death
with such payments to be made on the same periodic dates as salary payments
would have been made to the Executive had he not died.  In addition, the Company
shall pay to the estate of the Executive within 60 days of the Executive’s
death, any unpaid compensation or benefits, including accrued annual bonus, if
any, which otherwise would have been payable to the Executive through the end of
the month in which his death occurs. In addition, upon the death of the
Executive during the term of this Agreement, all of Executive’s unvested equity
awards that were granted to the Executive by the Company as compensation and
that have not previously been forfeited, exercised or settled will immediately
vest upon the Executive’s death notwithstanding any provision in an equity award
agreement to the contrary.

(b)Disability.  The Company may terminate the Executive’s employment hereunder,
after having established the Executive’s Disability, by giving to the Executive
written notice of the Company’s intention to terminate the Executive’s
employment for Disability.  The Executive’s employment with the Company shall
terminate effective on the 90th day after the Executive’s receipt of such notice
if within 90 days after such receipt the Executive shall fail to return to the
substantial performance of the time requirements and essential functions of his
position.  If the Executive’s employment hereunder is terminated due to the
Executive’s Disability, then all compensation and benefits payable to the
Executive shall cease on the date of termination; provided, however, that the
Company shall pay to the Executive within 60 days of the date of termination any
accrued but unpaid compensation, including accrued annual bonus, if any, which
otherwise would have been payable to the Executive through the date of
termination. In addition, all of Executive’s unvested equity awards that were
granted to the Executive by the Company as compensation and that have not
previously been forfeited, exercised or settled will immediately vest on the
date of termination notwithstanding any provision in an equity award agreement
to the contrary.

(c)Termination by the Company For Cause.  The Company may terminate the
Executive’s employment hereunder For Cause, in which event the Company may elect
to terminate the Executive’s employment immediately or upon the expiration of a
set period not to exceed 30 days, as set forth in a written notice to the
Executive.  During any such period between the Executive’s receipt of such
notice and the date of termination, the Executive may be relieved of his duties
as specified herein and assigned alternate duties by the Board of Directors. If
the Executive’s employment hereunder is terminated by the Company For Cause,
then all compensation and benefits payable to the Executive shall cease on the
date of termination; provided, however, that the Company shall pay to the
Executive within 60 days of the date of termination any accrued but unpaid
compensation, including accrued annual bonus, if any, which otherwise would have
been payable to the Executive through the date of termination.

(d)Termination by the Company Without Cause.  The Company may terminate the
Executive’s employment hereunder Without Cause, in which event the Company may
elect to terminate the Executive’s employment immediately or upon the expiration
of a set period not to exceed 30 days, as set forth in a written notice to the
Executive.  During any period between the

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Executive’s receipt of such notice and the date of termination, the Executive
may be relieved of his duties as specified herein and assigned alternate duties
by the Board of Directors.

(i) If the Company terminates the Executive’s employment hereunder Without Cause
and not within one year following a Change of Control, then, subject to Section
7(f), the Executive shall receive, in a lump sum on the 60th day following the
date of termination, an amount equal to his then current Base Salary for the
remaining term of the Agreement, but in no event for a period of less than six
months.   In addition, all of Executive’s unvested equity awards that were
granted to the Executive by the Company as compensation and that have not
previously been forfeited, exercised or settled will immediately vest on the
date of termination notwithstanding any provision in an equity award agreement
to the contrary.  All benefits shall cease on the date of termination.  

(ii)  If the Company terminates the Executive’s employment hereunder Without
Cause within one year following a Change of Control, then, subject to Section
7(f), the Executive shall receive, in a lump sum on the 60th day following the
date of termination, an amount equal to 200% of his then current Base Salary
following such date of termination of employment.  In addition, all of
Executive’s unvested equity awards that were granted to the Executive by the
Company as compensation and that have not previously been forfeited, exercised
or settled will immediately vest on the date of termination notwithstanding any
provision in an equity award agreement to the contrary. All benefits shall cease
on the date of termination.

(e)Termination by the Executive.  The Executive may terminate his employment
hereunder by written notice to the Company effective not less than 60 days after
the Company’s receipt of such notice; provided, however, that subsequent to
receipt of such notice, the Executive may be relieved of his duties and assigned
alternate duties by the Board of Directors.

(i)Termination by the Executive For Good Reason and Not Within One Year
Following Change of Control.  If the Executive terminates his employment
hereunder For Good Reason and not within one year following a Change of Control,
then he shall receive the same compensation and benefits upon termination
(including accelerated vesting of equity awards) that he would receive if he
were terminated Without Cause and not within one year following a Change of
Control as specified in Section 7(d)(i).

(ii)Termination by the Executive For Good Reason Within One Year Following
Change of Control.  If the Executive terminates his employment hereunder For
Good Reason within one year following a Change of Control, he shall receive the
same compensation and benefits upon termination (including accelerated vesting
of equity awards) that he would receive if he were terminated Without Cause
within one year following a Change of Control as specified in Section 7(d)(ii).

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(iii)Termination by the Executive other than For Good Reason. If the Executive
terminates his employment hereunder other than For Good Reason, then all
compensation and benefits payable to the Executive shall cease on the date of
termination; provided, however, that the Company shall pay to the Executive
within 60 days of the date of termination any accrued but unpaid compensation,
including accrued annual bonus, if any, which otherwise would have been payable
to the Executive through the date of termination.  

(f)Limitations on Termination Compensation.  Notwithstanding anything in this
Agreement to the contrary:

 

(i)

If the Executive is at anytime in breach of either Section 10 or Section 11 of
this Agreement, then the Executive shall not thereafter be entitled to receive
any amounts payable pursuant to Section 7(d)(i), 7(d)(ii), 7(e)(i) or 7(e)(ii)
(“Termination Compensation”), and none of the Executive’s unvested equity awards
will be subject to accelerated vesting.  In addition, if such breach occurs
within 12 months following the date of termination, the Executive shall repay to
the Company any Termination Compensation received and all vested stock
previously received as compensation, and any outstanding equity awards that were
granted to the Executive by the Company as compensation will be forfeited to the
Company.

 

(ii)

If the Executive engages in any activity seeking to establish a Competitive
Business in the Trade Area during the Non-Compete Period (as defined in Section
11(a) below), the Executive shall not be entitled to any Termination
Compensation, the Executive shall repay to the Company any Termination
Compensation received and all vested stock previously received as compensation,
and any outstanding equity awards that were granted to the Executive by the
Company as compensation will be forfeited to the Company.

 

(iii)

The Company shall not be required to make payment of the Termination
Compensation or any portion thereof to the extent such payment is prohibited by
applicable banking regulations or to the extent that any other governmental
approval of the payment required by law is not received.

(g)Definitions. For purposes of this Agreement, the following terms have the
following meanings:

(i)“Cause” shall mean:

 

 

(1)

Gross incompetence, gross negligence, willful misconduct, or breach of a
material fiduciary duty owed to the Company;

 

 

(2)

Conviction of a felony, a crime of moral turpitude, commission of an act of
embezzlement or fraud against the Company or any subsidiary

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or Affiliate thereof, the commission of repeated misdemeanors, or other willful
misconduct that materially adversely affects the business or reputation of the
Company;

 

 

(3)

Failure to cure a material breach by the Executive of a material term of this
Agreement within 10 days after written notice of the breach;

 

 

(4)

Deliberate dishonesty of the Executive with respect to the Company or any
subsidiary or Affiliate thereof; or

 

 

(5)

Permanent disbarment or suspension of the Executive by any regulatory body or
agency lasting more than sixty (60) days.

 

 

(ii)

Change of Control.  “Change of Control” shall mean the occurrence of any of the
following events:

 

(1) Merger: The Bank or the Company merges into or consolidates with another
entity, or merges another bank or corporation into the Bank or the Company, and
as a result, less than a majority of the combined voting power of the resulting
corporation immediately after the merger or consolidation is held by persons who
were stockholders of the Bank or the Company immediately before the merger or
consolidation;

 

(2) Acquisition of Significant Share Ownership: A person or persons acting in
concert has or have become the beneficial owner of 25% or more of a class of the
Bank’s or the Company’s voting securities; provided, however, this clause (2)
shall not apply to beneficial ownership of the Bank’s or the Company’s voting
shares held in a fiduciary capacity by an entity of which the Bank or the
Company directly or indirectly beneficially owns 50% or more of its outstanding
voting securities;

 

(3) Change in Board Composition: Individuals who constitute the Bank’s or the
Company’s Board of Directors on the Effective Date hereof (the “Incumbent
Board”) cease for any reason to constitute at least a majority thereof, provided
that any person becoming a director subsequent to the Effective Date whose
election was approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board shall be considered, for purposes of this clause
(3), as though he or she was a member of the Incumbent Board; or

 

(4) Sale of Assets: The Bank or the Company sells to a third party all or
substantially all of its assets.

 

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The definition of Change of Control shall be construed to be consistent with the
requirements of Section 409A of the Code, and Treasury Regulations promulgated
thereunder.

 

(iii)

“Disability” means either (i) disability which after the expiration of more than
13 consecutive weeks after its commencement is determined to be total and
permanent by a physician selected and paid for by the Company or its insurers,
and acceptable to the Executive or his legal representative, which consent shall
not be unreasonably withheld or (ii) disability as defined in the policy of
disability insurance maintained by the Company or its Affiliates for the benefit
of the Executive, whichever may be more favorable to the
Executive.  Notwithstanding any other provision of this Agreement, the Company
shall comply with all requirements of the Americans with Disabilities Act, 42
U.S.C. § 12101 et seq.

(iv)“For Good Reason” shall mean:

(1)Except as provided herein, the assignment of duties and responsibilities to
the Executive by the Company which are inconsistent with the position referred
to in Section 1(a) above or which result in the Executive’s having significantly
less authority or responsibility than he has on the date hereof as set forth at
Exhibit A, without his advanced and express written consent;

 

(2)

A reduction by the Company of the Executive’s Base Salary unless salaries for
all employees are reduced, and the Executive’s salary is reduced
proportionately;

 

(3)

Failure to cure a material breach by the Company of a material term of this
Agreement after 30 days written notice of the breach;

 

(4)

Failure by any successor entity (an entity that assumes the assets or business
of the Company pursuant to an acquisition of any kind including, without
limitation, acquisition of assets or merger) to assume and agree to perform this
Agreement in its entirety; or

(8)The occurrence of a Change of Control.  

 

 

(v)

“Without Cause” shall mean termination of the Executive’s employment hereunder
by the Company for any reason other than upon Disability or Termination For
Cause.

 

Section 8.Other Provisions Relating to Termination.

 

(a)Notwithstanding the termination of the Executive’s employment pursuant to any
provision of this Agreement, the Parties shall be required to carry out any
provisions of this Agreement which contemplate performance by them subsequent to
such termination.  In addition,

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no termination shall affect any liability or other obligation of either Party
which shall have accrued prior to such termination, including, but not limited
to, any liability, loss or damage on account of breach, subject to the
limitation on damages set forth below.  Except as otherwise provided herein, no
termination of employment shall terminate the obligation of the Company to make
payments of any vested benefits provided hereunder or the obligations of the
Executive under Sections 10, 11, and 12.

 

(b)Notwithstanding anything herein to the contrary, the Executive acknowledges
and agrees that the payment by the Company of the Termination Compensation shall
constitute liquidated damages for, and shall be the Executive’s sole and
exclusive remedy for, (1) the termination of the Executive by the Company
Without Cause or (2) the occurrence of any fact or circumstance constituting
Good Reason, including without limitation any breach of this Agreement by the
Company.  The Parties agree that it would be difficult or impossible to
ascertain damages in the event of a breach by the Company and, accordingly, the
Parties have, through negotiation of this Agreement, established liquidated
damages which they agree are a fair estimate of damages and not a penalty.

 

(c)It is the intention of the Parties that no payment be made or benefit
provided to the Executive pursuant to this Agreement that would constitute an
“excess parachute payment” within the meaning of Section 280G of the Code and
any regulations thereunder, thereby resulting in a loss of an income tax
deduction by the Bank or the Company, or the imposition of an excise tax on the
Executive under Section 4999 of the Code.  If the independent accountants
serving as auditors for the Company on the date of a Change of Control (or any
other accounting firm designated by the Company only because such determination
by the auditors would be violative of auditor independence rules) determine that
some or all of the payments or benefits scheduled under this Agreement, as well
as any other payments or benefits on a Change of Control, would be nondeductible
by the Bank or the Company under Section 280G of the Code, then the payments
scheduled under this Agreement will be reduced to one dollar less than the
maximum amount which may be paid without causing any such payment or benefit to
be nondeductible.  The determination made as to the reduction of benefits or
payments required hereunder by the independent accountants shall be binding on
the Parties.  Any reduction of benefits or payments required to be made under
this Section 8(c) will be taken pro rata in the following order: first from
payments or benefits that are equity compensation and, if necessary, second from
payments or benefits that are cash compensation.

 

(d)Notwithstanding any other provision of this Agreement, no payments or
benefits under this Agreement that are subject to Code Section 409A (as defined
in Section 21) and that are to be paid upon the Executive’s termination of
employment shall be paid or provided to the Executive until the Executive has
experienced a “separation from service”, as described in Section 21(c).  Any
such payments or benefits shall also be subject to the delay provisions in
Section 21(c), if applicable.

 

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Section 9.  Suspension.

 

If the Executive is suspended and/or temporarily prohibited from participating
in the conduct of the Company’s affairs by a notice served pursuant to the
Federal Deposit Insurance Act, then the Company’s obligations under this
Agreement shall be suspended as of the date of service unless the Executive’s
suspension or prohibition is stayed by appropriate proceedings.  If the charges
in the notice are dismissed, then the Company (i) will pay to the Executive all
of the compensation withheld while the Company’s contract obligations were
suspended, and (ii) reinstate (in whole) any of its obligations which were
suspended.  Nothing in this Section 9 shall be construed to limit the Company’s
right, pursuant to Section 7(g)(i)(5) to declare a suspension of the Executive
lasting longer than sixty (60) days as Cause for termination.

 

Section 10.  Confidentiality/Nondisclosure. The Executive covenants and agrees
that any and all information concerning the customers, businesses and services
of the Bank or the Company of which he has knowledge or access as a result of
his association with the Bank or the Company in any capacity (including, without
limitation, information concerning the Company’s or the Bank’s trade secrets,
business operations and operating methods, business records, customer lists or
other customer information, research projects, costs, pricing, financial data,
business plans and proposals, data and information the Bank or the Company
receives in confidence from any other party and, or any other information which
is treated as confidential by the Bank or the Company) (“Confidential
Information”) is the sole and exclusive property of the Bank or the
Company.  The Executive shall not, without the prior written consent of the
Company, directly or indirectly use, disseminate, disclose or publish  such
Confidential Information to third parties other than in connection with the
usual conduct of the business of the Bank or the Company.  Such information
shall expressly include, but shall not be limited to, information concerning the
Company’s or the Bank’s trade secrets, business operations, business records,
customer lists or other customer information.  Upon termination of employment,
the Executive shall deliver to the Company all originals and copies of
documents, forms, records or other information in Executive’s possession, in
whatever form it may exist, concerning the Company, the Bank or their  business,
customers, products or services, without retaining any copies.  The Company
shall have the right to review the Executive’s personal files, on demand, to
evaluate compliance with this provision.  In construing this provision it is
agreed that it shall be interpreted broadly so as to provide the Company and the
Bank with the maximum protection.  This Section 10 shall not be applicable to
any information which, through no misconduct or negligence of the Executive, has
previously or subsequently been disclosed to the public by anyone other than the
Executive.  The provisions of this Section 10 shall expressly survive
termination of this Agreement for any reason, including breach of this Agreement
by the Bank or the Company.

 

Section 11.  Covenants Not to Compete and Not to Solicit.

(a)The Executive covenants and agrees that during the term of his employment,
and for a period of twelve (12) months from and after the date that the
Executive ceases to be employed by the Company (the “Non-Compete Period”) for
any reason other than for “cause”, he will not, directly or indirectly,  in any
individual or representative capacity whatsoever  be directly or indirectly
employed by a Competitive Business as an employee, consultant or in any other
capacity to provide or undertake those duties customarily performed by any
executive, including,

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but not limited to a president, chief executive officer, vice-president, or
senior loan officer of the Bank anywhere within a thirty-five (35) air mile
radius of any office operated by the Bank on the date the Executive’s employment
terminates (the “Trade Area”);  Additionally, the Executive covenants and agrees
that during the term of his employment, and for a period of twelve (12) months
from and after the date that the Executive ceases to be employed by the Company
for any reason, during the Non-Compete Period, he will not, directly or
indirectly, in any individual or representative capacity whatsoever:   (i)
solicit, or assist any other person or business entity in soliciting, any
depositors or other customers of the Bank to make deposits in or to become
customers of any other financial institution conducting a Competitive Business;
or (ii) knowingly induce any individuals to terminate their employment with the
Company or its Affiliates, each of the aforesaid activities described in this
paragraph 11(a) being deemed a “Competitive Activity”.  The term “Competitive
Business” means provision of those banking products and services that are
substantially similar to those offered by the Bank on the date that the
Executive’s employment terminates.  The Executive further agrees that if the
Executive violates this Section 11 during the Non-Compete Period, the
Non-Compete Period shall be extended by an amount of time equal to the length of
the period of any such violation(s).

(b)The Executive hereby covenants and warrants that the covenants and
restrictions set forth in Section 11(a) are the product of negotiation between
the Executive and the Company and, in light of the Executive’s position, are
reasonable (as to geographic scope, scope of activity, and duration) and
necessary for the protection of the Company’s legitimate business interests,
including the protection of the significant investment of the Company in
developing, maintaining and expanding its business.  The Executive represents
and warrants to the Bank and the Company that the covenants and restrictions set
forth in Section 11(a) do not and will not unreasonably interfere with the
Executive’s ability to earn a livelihood.  

 

Section 12.  Injunctive Relief, Damages, Etc.

(a) The Parties agree that in the event of any breach by the Executive of any of
the provisions of Sections 10 or 11 that monetary damages alone will not
adequately compensate the Company for its losses and, therefore, that it may
seek any and all legal or equitable relief available to it, specifically
including, but not limited to, injunctive relief.  The covenants contained in
Sections 10 and 11 shall be construed and interpreted in any judicial proceeding
to permit their enforcement to the maximum extent permitted by law.  Should a
court of competent jurisdiction determine that any provision of the covenants
and restrictions set forth in Section 11 is unenforceable as being overbroad as
to time, area or scope, then the Parties agree that they shall enter into an
amendment to this Agreement for the purpose of rendering such provision
enforceable to the maximum extent permitted by law.  The Parties acknowledge and
agree that the foregoing obligation to amend this Agreement shall survive the
entry of any order or decree finding Section 11 to be unenforceable.

(b)Nothing in this Section 12 will limit the right of a Party to obtain from a
court of competent jurisdiction any equitable relief such as an injunction, nor
shall this Section 12 be construed to impair or otherwise affect any
indemnification rights either Party may have against the other arising under the
Company’s articles of incorporation or bylaws or pursuant to any other written
agreement between the Parties not superseded by this Agreement.

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Section 13.  Binding Effect/Assignability. This Agreement shall be binding upon
and inure to the benefit of the Company and the Executive and their respective
heirs, legal representatives, executors, administrators, successors and assigns,
but neither this Agreement, nor any of the rights hereunder, shall be assignable
by the Executive or any beneficiary or beneficiaries designated by the
Executive.  The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation, share exchange or otherwise) to all or
substantially all of the business, stock or assets of the Company (a “Successor
Entity”), by agreement in form and substance reasonably satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in its
entirety.

Section 14.  Governing Law. This Agreement shall be subject to and construed in
accordance with the laws of the Commonwealth of Virginia, without giving effect
to its principles of conflict of laws.

Section 15.  The parties may enter into a separate indemnification agreement
regarding the Executive’s status as a Company director and officer.

 

Section 16.  Invalid Provisions.  The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the validity or
enforceability of any other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provisions were
omitted.

Section 17.  Notices. Any and all notices, designations, consents, offers,
acceptance or any other communications provided for herein (“Notices”) shall be
given in writing and shall be deemed properly delivered if delivered in person
or (i) in the case of Notices deliverable to the Company, by overnight delivery
by a reputable carrier or in person to Corporate Counsel for MainStreet
Bancshares, Inc., Edward Crosland, Esq., Special Counsel, Jones Walker LLP, 499
S Capitol St, SW, #600, Washington DC 20003; FAX # 202-434-4661 , and (ii) in
the case of Notices to the Executive, by overnight delivery by a reputable
carrier, addressed  to his last known address.

Section 18.  Entire Agreement.

(a)This Agreement constitutes the entire agreement among the Parties with
respect to the subject matter hereof and supersedes any and all other
agreements, either oral or in writing, among the Parties with respect to the
subject matter hereof.  Upon the Effective Date of this Agreement, the
Employment Agreement between the Executive and MainStreet Bank dated November
15, 2016 shall be deemed cancelled and nullified and of no further force and
effect, and Executive shall be deemed to have resigned as a director of the Bank
and as an officer and employee of the Bank without any requirement for the
receipt of additional compensation with respect to such resignations.

(b)This Agreement may be executed in one or more counterparts, each of which
shall be considered an original copy of this Agreement, but all of which
together shall evidence only one agreement.

 

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Section 19.  Amendment and Waiver. This Agreement may not be amended except by
an instrument in writing signed by or on behalf of each of the Parties.  No
waiver of any provision of this Agreement shall be valid unless in writing and
signed by the person or Party to be charged.

Section 20.  Interpretation.  The meaning assigned to each term defined in this
Agreement will be equally applicable to both the singular and the plural forms
of the term.  Whenever the context may require, any pronoun will include the
corresponding masculine, feminine and neuter forms.  The headings in this
Agreement are for reference only and will not affect this Agreement’s
interpretation.  Underscored references to Articles, Sections, Subsections,
clauses, Exhibits or Schedules refer to those portions of this Agreement, and
any underscored references to a Subsection or clause, unless otherwise
identified, refer to the appropriate Subsection or clause within the same
Section in which the reference occurs.  The Parties have participated jointly in
the negotiation and drafting of this Agreement.  In the event an ambiguity or
question of intent or interpretation arises, then this Agreement will be
construed as if drafted jointly by the Parties, and no presumption or burden of
proof will arise favoring or disfavoring any Party by virtue of the authorship
of any provisions of this Agreement.

Section 21.  Code Section 409A Compliance.

(a)The intent of the parties is that payments and benefits under this Agreement
comply with Section 409A of the Internal Revenue Code of 1986, as amended, and
applicable guidance thereunder (“Code Section 409A”) or comply with an exemption
from the application of Code Section 409A and, accordingly, all provisions of
this Agreement shall be construed in a manner consistent with the requirements
for avoiding taxes or penalties under Code Section 409A.

(b)Neither the Executive nor the Company shall take any action to accelerate or
delay the payment of any monies and/or provision of any benefits in any matter
which would not be in compliance with Code Section 409A.

(c)A termination of employment shall not be deemed to have occurred for purposes
of any provision of this Agreement providing for the form or timing of payment
of any amounts or benefits upon or following a termination of employment unless
such termination is also a “separation from service” (within the meaning of Code
Section 409A) and, for purposes of any such provision of this Agreement under
which (and to the extent) deferred compensation subject to Code Section 409A is
paid, references to a “termination” or “termination of employment” or like
references shall mean separation from service.  A “separation from service”
shall not occur under Code Section 409A unless such Executive has completely
severed his relationship with the Company or the Executive has permanently
decreased his services to 20% or less of the average level of bona fide services
over the immediately preceding 36 month period (or the full period if the
Executive has been providing services for less than 36 months).  A leave of
absence shall only trigger a termination of employment that constitutes a
separation from service at the time required under Code Section 409A.  If the
Executive is deemed on the date of separation from service with the Company to
be a “specified employee”, within the meaning of that term under Code Section
409A(a)(2)(B) and using the identification methodology selected by the Company
from time to time, or if none, the default methodology, then with regard to any
payment or

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benefit that is required to be delayed in compliance with Code Section
409A(a)(2)(B), such payment or benefit shall not be made or provided prior to
the earlier of (i) the expiration of the six-month period measured from the date
of the Executive’s separation from service or (ii) the date of the Executive’s
death.  In the case of benefits required to be delayed under Code Section 409A,
however, the Executive may pay the cost of benefit coverage, and thereby obtain
benefits, during such six-month delay period and then be reimbursed by the
Company thereafter when delayed payments are made pursuant to the next
sentence.  On the first day of the seventh month following the date of the
Executive’s separation from service or, if earlier, on the date of the
Executive’s death, all payments delayed pursuant to this Section 21 (whether
they would have otherwise been payable in a single sum or in installments in the
absence of such delay) shall be paid or reimbursed to the Executive in a lump
sum, and any remaining payments and benefits due under this Agreement shall be
paid or provided in accordance with the normal payment dates specified for them
herein.  If any cash payment is delayed under this Section 21, then interest
shall be paid on the amount delayed calculated at the prime rate reported in The
Wall Street Journal for the date of the Executive’s termination to the date of
payment.

(d)With regard to any provision herein that provides for reimbursement of
expenses or in-kind benefits subject to Code Section 409A, except as permitted
by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit, and (ii) the amount of
expenses eligible for reimbursement, or in-kind benefits, provided during any
taxable year shall not affect the expenses eligible for reimbursement, or
in-kind benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated with regard to expenses reimbursed
under any arrangement covered by Code Section 105(b) solely because such
expenses are subject to a limit related to the period the arrangement is in
effect.  All reimbursements shall be reimbursed in accordance with the Company’s
reimbursement policies but in no event later than the calendar year following
the calendar year in which the related expense is incurred.

(e)If under this Agreement, an amount is to be paid in two or more installments,
for purposes of Code Section 409A, each installment shall be treated as a
separate payment.

(f)When, if ever, a payment under this Agreement specifies a payment period with
reference to a number of days (e.g., “payment shall be made within ten (10) days
following the date of termination”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

(g)Notwithstanding any of the provisions of this Agreement, the Company shall
not be liable to the Executive if any payment or benefit which is to be provided
pursuant to this Agreement and which is considered deferred compensation subject
to Code Section 409A otherwise fails to comply with, or be exempt from, the
requirements of Code Section 409A.

 

[Signatures appear on the following page]

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IN WITNESS WHEREOF, the Company has caused this Agreement to be signed and
sealed by its duly authorized officer and the Executive has hereunto set his
hand and seal on the day and year first above written.

 

 

COMPANY:

 

 

MAINSTREET BANCSHARES, INC.

 

 

 

 

By: _/s/ Jeff W. Dick__________________ (SEAL)

         Jeff W. Dick

Its:  Chairman & CEO

 

 

ATTEST: _______________________

 

 

 

EXECUTIVE:

 

 

 

 

__/s/ Charles C. Brockett___________(SEAL)

CHARLES C. BROCKETT

 

 

WITNESS: ______________________

 

 

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EXHIBIT A:  

OUTLINE OF DUTIES AND RESPONSIBIITIES OF THE SENIOR EXECUTIVE OFFICER:

 

•         MainStreet Bancshares, Inc. (“Company”) representative and voting
member on MainStreet Bank management Officer’s Loan Committee (OLC)

•         Company representative and voting member on Bank management
Asset/Liability Management Committee (ALCO)

•         Assist Executive Team with capital/debt raises

•         Assist Executive Team with analysis and assessment of corporate
opportunities

•         Review Company Financial Reporting, including on Form 10-K’s and Form
10- Q’s

•         Participate in investor calls with CEO as and when available

•         Attend investor conferences with CEO as and when available

•         Attend combined Bank and Company board meetings and attend the
following Board committee meetings:

o   Loan Committee (meets monthly)

o   Technology Committee (meets quarterly)

o   Executive Committee (meets when required)

•         Other duties and Special projects as assigned by the Chief Executive
Officer.  

 

 

 

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