Exhibit 10.1

 

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) is made
as of the 10th day of December, 2015, between Old Line Bank (the “Bank” or
“Employer”), a Maryland-chartered commercial bank, and James W. Cornelsen, a
resident of the State of Maryland (the “Employee”).

RECITALS:

The parties hereto entered into an employment agreement dated March 31, 2003
(“Original Agreement”), with several subsequent amendments;

The parties entered into an Amended and Restated Employment Agreement dated
January 28, 2011; and

The parties hereto desire to amend and restate the Amended and Restated
Employment Agreement as provided herein.

In consideration of the above premises and the mutual agreements hereinafter set
forth, the parties hereby agree as follows:

1. DEFINITIONS.  Whenever used in this Agreement, the following terms and their
variant forms will have the meaning set forth below:

1.1 “Agreement” means this Agreement and any exhibits incorporated herein
together with any amendments hereto made in the manner described in this
Agreement.

1.2 “Affiliate” means any business entity which controls the Employer, is
controlled by or is under common control with the Employer.

1.3 “Area” means the geographic area within a radius of 25 miles of Employer’s
corporate headquarters.  It is the express intent of the parties that the Area
as defined herein is the area where the Employee performs or performed services
on behalf of the Employer under this Agreement as of, or within a reasonable
time prior to, the termination of the Employee’s employment hereunder.

1.4 “Board” means the board of directors of the Bank.

1.5 “Business of the Employer” means the business conducted by the Employer,
which is community banking with less than one billion dollars in assets.

1.6 “Cause” means, any of the following events or conduct preceding a
termination of employment initiated by the Employer:

(a) any act that constitutes, on the part of the Employee, fraud or dishonesty
toward the Employer;

1

 

--------------------------------------------------------------------------------

 

(b) the conviction of the Employee of a felony or crime involving moral
turpitude;

(c) the Employee’s entering into any transaction or contractual relationship
(other than this Agreement) with, or diversion of business opportunity from, the
Employer (other than on behalf of the Employer or with the prior written consent
of the Board); provided, however, that in the case of this Clause (c), such
conduct will not constitute Cause unless the Board delivers to the Employee
written notice setting forth (1) the conduct deemed to qualify as Cause,
(2) reasonable remedial action that might remedy such objection, and (3) a
reasonable time (not less than thirty (30) days) within which the Employee may
take such remedial action, and the Employee has not taken the specified remedial
action with the specified reasonable time;

(d) the Employee breaches the covenants contained in Sections 6, 7 or 8 hereof;

(e) conduct by the Employee that results in removal of the Employee as an
officer or employee of the Employer pursuant to a written order by any
regulatory agency with authority or jurisdiction over the Employer; or

1.7 “Company Information” means Confidential Information and Trade Secrets.

1.8 “Confidential Information” means data and information relating to the
business of the Employer (which does not rise to the status of a Trade Secret)
which is or has been disclosed to the Employee or of which the Employee became
aware as a consequence of or through the Employee’s relationship to the Employer
and which has value to the Employer and is not generally known to its
competitors.  Confidential Information does not include any data or information
that has been voluntarily disclosed to the public by the Employer (except where
such public disclosure has been made by the Employee without authorization) or
that has been independently developed and disclosed by others, or that otherwise
enters the public domain through lawful means.

1.9 “Change in Control” means any one of the following events first to occur
after the completion of the initial public offering of the common stock of the
Bank:

(a) the acquisition by any person or persons acting in concert of the then
outstanding voting securities of either the Bank or the Company, if, after the
transaction, the acquiring person (or persons) owns, controls or holds with
power to vote thirty percent (30%) or more of any class of voting securities of
the Bank or the Company, as the case may be, or such other transaction as may be
described under 12 C.F.R. Section 225.41(b)(1) or any successor thereto;

(b) within any twelve-month period (beginning on or after the Effective Date)
the persons who were directors of either the Bank or the Company immediately
before the beginning of such twelve-month period (the “Incumbent Directors”)
cease to constitute at least a majority of such board of directors; provided
that any director who was not a director as of the Effective Date will be deemed
to be an Incumbent Director if that director was elected to such board of
directors by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors;

2614958 v.14

--------------------------------------------------------------------------------

 

(c) the approval by the stockholders of either the Bank or the Company of a
reorganization, merger or consolidation, with respect to which persons who were
the stockholders of either the Bank or the Company, as the case may be,
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than fifty percent (50%) of the combined voting
power entitled to vote in the election of directors of the reorganized, merged
or consolidated company’s then outstanding voting securities; or

(d) the sale, transfer or assignment of all or substantially all of the assets
of the Company or the Bank to any third party.

1.10 “Effective Date” means March 31, 2003.

1.11 “Good Reason” means, any of the following events or conduct preceding a
termination of employment initiated by the Employee:

(a) a material diminution in the powers, responsibilities or duties of the
Employee hereunder or a material change as to whom Employee reports and who
reports to Employee;

(b) the failure of the Board to elect the Employee as the President and Chief
Executive Officer of the Bank and the Company;

(c) a material breach of the terms of this Agreement by the Employer;

(d) the failure of the Board or the board of directors of the Company to
nominate the Employee for re-election following expiration of each of the
Employee’s terms of service on the Board or the board of directors of the
Company that arises during the Term (as defined below);

(e) a change in the location of the principal office of Employee more
than  thirty five (35) miles from its existing location;

 

(f) a material reduction of benefits provided to Employee under Section 4.6 of
this Agreement during the Term or any extensions thereof unless such reduction
is reasonably related to the financial performance of the Employer or the
performance of Employee under this Agreement; or

 

(g) a material reduction in the dollar amount of any bonus paid to Employee
under a Board adopted bonus plan during the Term or any extensions thereof
unless such reduction is reasonably related to the failure of Employee to meet
all or part of the criteria for a bonus under a Board approved bonus plan or the
financial performance of Employer subject to any regulatory restriction on the
payment of a bonus or any portion thereof.

Provided, however, that no termination of employment which is triggered by any
conduct or event described in this Section 1.11 shall constitute a termination
of employment for Good Reason unless the Employee has first provided the
Employer with the opportunity to cure the event or conduct by giving the
Employer a written notice describing in sufficient detail the Employee’s belief
that a

2614958 v.14

--------------------------------------------------------------------------------

 

Good Reason exists, which notice is given within ninety (90) days of the initial
existence of the condition alleged to constitute Good Reason, and the condition
is not cured within thirty (30) days from the date such notice is received by
the Employer.

 

1.12 “Permanent Disability” means the total inability of the Employee to perform
the Employee’s duties under this Agreement for a period of one hundred and
eighty (180) consecutive days as certified by a physician chosen by the Employer
and reasonably acceptable to the Employee or by a physician selected by
Employer’s long term disability insurance carrier in the event Employer has such
insurance coverage.

1.13 “Trade Secrets” means information including, but not limited to, technical
or nontechnical data, formulas, patterns, compilations, programs, devices,
methods, techniques, drawings, processes, financial data, financial plans,
product plans or lists of actual or potential customers or suppliers which:

(a) derives economic value, actual or potential, from not being generally known
to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use; and

(b) is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.

1.14 “Company” means any entity that, on or after the Effective Date, controls
the Bank.

2. DUTIES.

2.1 The Employee is employed as the President and Chief Executive Officer of the
Bank and the Company, subject to the direction of the Board or its designee,
must perform and discharge well and faithfully the duties which may be assigned
to him from time to time by the Employer in connection with the conduct of its
business.  The duties and responsibilities of the Employee are set forth on
Exhibit A attached hereto.

2.2 In addition to the duties and responsibilities specifically assigned to the
Employee pursuant to Section 2.1 hereof, the Employee must:

(a) devote substantially all of the Employee’s time, energy and skill during
regular business hours to the performance of the duties of the Employee’s
employment (reasonable vacations and reasonable absences due to illness
excepted) and faithfully and industriously perform such duties;

(b) diligently follow and implement all management policies and decisions
communicated to him by the Board; and

(c) timely prepare and forward to the Board all reports and accounting as may be
requested of the Employee.

2.3 The Employee must devote the Employee’s entire business, time, attention and
energies to the Business of the Employer and must not during the Term of this
Agreement be

2614958 v.14

--------------------------------------------------------------------------------

 

engaged (whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; but this will not be construed as preventing the
Employee from:

(a) investing the Employee’s personal assets in businesses which are not in
competition with the Business of the Employer and which will not require any
services on the part of the Employee in their operation or affairs and in which
the Employee’s participation is solely that of an investor;

(b) purchasing securities in any corporation whose securities are regularly
traded provided that such purchase will not result in him collectively owning
beneficially at any time five percent (5%) or more of the equity securities of
any business in competition with the Business of the Employer; and

(c) participating in civic and professional affairs and organizations and
conferences, preparing or publishing papers or books or teaching so long as the
Board approves of such activities prior to the Employee’s engaging in them.

2.4 Directorship.  Employee will also be appointed to and serve as a member of
the Board of Directors of the Bank.

3. TERM AND TERMINATION.

3.1 Term.  The initial term and any extensions thereof made pursuant to this
Section 3.1 are referred to as the “Term.” The Term of this Agreement is for
four (4) years. The Term of this Agreement expires on March 30, 2019.  On or
before the 2016 anniversary of the Effective Date and on or before each
succeeding consecutive anniversary of the Effective Date while this Agreement is
in effect the Board shall meet and may, in its sole discretion, extend the Term
for one additional year or such greater Term as the Board deems appropriate.

3.2 Termination.  The employment of the Employee under this Agreement may be
terminated prior to the expiration of the Term only as follows, subject to the
conditions set forth below:

3.2.1By the Employer:

(a) for Cause at any time, upon written notice to the Employee, in which event
the Employer will have no further obligation to the Employee except for the
payment of any amounts due and owing under Section 4 on the effective date of
the termination; or

(b) without Cause or upon the Permanent Disability of Employee at any time,
provided that the Employer gives the Employee sixty (60) days’ prior written
notice of its intent to terminate, in which event the Employer will be required
to make the termination payments under Section 3.7.

2614958 v.14

--------------------------------------------------------------------------------

 

3.2.2By the Employee:

(c) for Good Reason at any time, in which event the Employer will be required to
make the termination payments under Section 3.7 and the payments under Section
6; or

(d) without Good Reason, provided that the Employee gives the Employer sixty
(60) days’ prior written notice of the Employee’s intent to terminate, in which
event:  (1) the Employer will have no further obligation to the Employee except
for future payment of any amounts due and owing under Sections 4 and 6 on the
effective date of the termination and (2) Employee forfeits any stock option
grants that are not vested.

3.2.3By the Employee:

(e) within six (6) months following a Change in Control; provided that the
Employee gives at least thirty (30) days’ prior written notice to the Employer
of the Employee’s intention to terminate this Agreement with such resignation to
be effective immediately, in which event the Employer will be required to make a
termination payment under Section 3.7; or

(f) prior to the date on which a Change in Control occurs if the Employee can
demonstrate that a third party has taken steps reasonably calculated to effect a
Change in Control or in connection with or anticipation of a Change in Control,
in which event the Employer will be required to make a termination payment under
Section 3.7.

3.2.4At any time upon mutual, written agreement of the parties, in which event
the Employer will have no further obligation to the Employee except for the
payment of any amounts due and owing under Section 4 on the effective date of
termination unless otherwise set forth in the written agreement.

3.2.5Immediately upon the Employee’s death, in which event the Employer will
have no further obligation to the Employee except for:  (1) the payment of any
amounts due and owing under Section 4 on the date of Employee’s death; (2) all
non vested stock options shall immediately vest and (3) Employer will pay the
then current Base Salary to Employee’s estate for twelve (12) months after the
date on which Employed died.

3.2.6Upon the Permanent Disability of Employee, provided Employee gives Employer
sixty (60) days or such other notice as may be reasonable under the
circumstance, in which event Employer will be required to make the termination
payments under Section 3.7.

3.3 Effect of Termination.  Termination of the employment of the Employee
pursuant to Section 3.2 will be without prejudice to any right or claim which
may have previously accrued to

2614958 v.14

--------------------------------------------------------------------------------

 

either the Employer or the Employee hereunder and will not terminate, alter,
supersede or otherwise affect the terms and covenants and the rights and duties
prescribed in this Agreement.

3.4 Suspension With Pay.  Nothing contained herein will preclude the Employer
from releasing the Employee of the Employee’s normal duties and suspending
Employee, with pay, during the pendency of any investigation or examination to
determine whether or not Cause exists for termination of employee.

3.5 Suspension Without Pay.  If Employee is suspended and/or temporarily
prohibited from participating in the conduct of the Employer’s affairs by a
notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance
Act, the Employer’s obligations under this Agreement will be suspended as of the
date of service thereof, unless stayed by appropriate proceedings.  If the
charges in such notice are dismissed, the Employer may in its discretion:

(a) pay Employee all or part of the compensation withheld while its contract
obligations were suspended; and/or

(b) reinstate (in whole or in part) any of its obligations which were suspended.

3.6 Other Regulatory Requirements.  If the Bank is in default, as defined in
Section (3)(x)(1) of the Federal Deposit Insurance Act, all obligations under
this Agreement will terminate as the date of such default, but no vested rights
of the Employee will be affected.  Further, all obligations under this Agreement
will be terminated, except, to the extent determined that continuation of the
Agreement is necessary for the continued operation of the Bank:

(a) by the Director (the “Director”) of the Federal Deposit Insurance
Corporation (“FDIC”) or his or her designee, at the time the FDIC enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
of the Federal Deposit Insurance Act; or

(b) by the Director or his or her designee, at the time the Director or his or
her designee approves a supervisory merger to resolve problems relating to the
operation of the Bank or when the Bank is determined by the Director to be in an
unsafe or unsound condition.

3.7 Termination Payments.  In the event the Employee’s employment pursuant to
this Agreement is terminated by the Employer pursuant to Section 3.2.1(b) or by
the Employee pursuant to Section 3.2.2(a) or 3.2.6 and a Change in Control has
not occurred, then commencing with the first payroll date immediately following
the effective date of such termination, the Employer will pay to the Employee as
severance pay and liquidated damages an amount equal to one-twelfth of the
Average Annual Compensation (as defined below) in equal monthly installments for
a period equal to the remaining Term.   In the event a Change in Control has
occurred or in anticipation thereof and the Employee’s employment pursuant to
this Agreement is terminated by Employer pursuant to Section 3.2.1(b) or by
Employee pursuant to Section 3.2.3, the Employee shall be entitled to a lump sum
payment equal to 1.99 times his Average Annual Compensation and shall be paid
such lump sum payment by Employer within 24 hours of the effective date of
termination of the Employee’s employment pursuant to this Agreement.  As used
herein, the term “Average Annual Compensation”

2614958 v.14

--------------------------------------------------------------------------------

 

means the Employee’s average annual taxable compensation (as defined under
Internal Revenue Service regulations promulgated under section 280G of the
Internal Revenue Code to include not only base salary and bonuses but also stock
and stock options and other taxable incentives) paid by the Employer during the
most recent five (5) taxable years ending before the date the Change in Control
occurs (or such portion of such period during which the Employee was employed by
the Employer).

Notwithstanding any other provisions to this Agreement to the contrary, if the
aggregate of the payments provided for in this Agreement and other payments and
benefits which the Employee has the right to receive from the Employer (the
“Total Payments”) would constitute a “parachute payment,” as defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), the
Employee shall receive the Total Payments unless (a) the after tax amount that
would be retained by the Employee (after taking into account all federal, state
and local income taxes payable by the Employee and the amount of any excise
taxes payable by the Employee under Section 4999 of the Code that would be
payable by the Employee (the “Excise Taxes”)) if the Employee were to receive
the Total Payments has an aggregate value less than (b) the after tax amount
that would be retained by the Employee (after taking into account all federal,
state and local income taxes payable by the Employee) if the Employee were to
receive the Total Payments reduced to the largest amount as would result in no
portion of the Total Payments being subject to Excise Taxes(the “Reduced
Payments”), in which case the Employee shall be entitled only to the Reduced
Payments.  If the Employee is to receive the Reduced Payments, the Employee
shall be entitled to determine which of the Total Payments, and the relative
portions of each, are to be reduced.  Also notwithstanding  the foregoing, if
Executive is a specified employee within the meaning of Section 409A of the
Code, no amount payable under Section 3.7 shall be paid before the date that is
six months after the effective date of termination of the Employee’s employment
pursuant to this Agreement, or, if earlier, the date of the Executive’s death,
except to the extent that this Agreement may permit payments within that period
without causing any amount payable pursuant to this Agreement to be included in
the Executive’s gross income pursuant to Section 409A(a)(1)(A) of the Code prior
to the year in which the payments are received by the Executive.  Any payment
deferred under this Section 3.7 shall be paid on the Employer’s first normal
payroll date after the six-month date or the date of the Executive’s death, as
applicable.

 

The provisions of this Agreement providing for payments upon a termination of
the Employee’s employment pursuant to this Agreement are intended to specify a
“separation from service” payment event within the meaning of Section
409A(a)(2)(A)(i) of the Code and the regulations thereunder, and shall be
construed accordingly.

4. COMPENSATION AND BENEFITS.

4.1 Compensation.  The Employee will receive the following salary and benefits:

(a) Base Salary.  During the Term the Employee will receive a base salary at the
rate of $514,500 per annum, payable in substantially equal installments in
accordance with the Bank’s regular payroll practices (“Base Salary”).  The
Employee’s Base Salary will be reviewed by the Board annually, and the Employee
will be entitled to receive annually an increase in such amount, if any, as may
be determined by the Board.

2614958 v.14

--------------------------------------------------------------------------------

 

(b) Incentive Compensation.  

(i) In addition to Employee’s Base Salary under Section 4.1(a), within ninety
(90) days following the end of each fiscal year of the Employer’s operations,
the Employer may pay the Employee a cash or non cash bonus as determined each
year by the Board.

(ii) Provided that sufficient options are available for grant under a
stockholder approved stock option or equity incentive plan, on an annual basis,
the Bank or the Company shall grant options to Employee to purchase not less
than 3,750 shares of stock in the Bank or the Company or such greater amount as
may be determined by the Board of Directors or an appropriate committee of the
Board of Directors of the Bank or the Company.  The exercise price for the
options shall be no less than the fair market value of the Bank’s or the
Company’s common stock on the date the options are granted, the options must be
exercised within ten (10) years of the date of grant and the options shall be
subject to such vesting terms as the Board of Directors or an appropriate
committee of the Board of Directors of the Bank or the Company determines from
time to time.  Notwithstanding anything to the contrary contained in this
Section 4.1.(b)(ii), the options to be granted pursuant to this Section
4.1.(b)(ii) will only be evidenced by, and will be subject to the terms and
conditions of, a stock option agreement to be entered into between the Bank and
Employee or the Company and Employee.

(iii) The Employee will also be entitled to participate in such other bonus,
incentive and other executive compensation programs as are made available to
senior management of the Employer from time to time.

The bonus amounts which may be payable to the Employee pursuant to this Section
4.1(b) is referred to herein as “Incentive Compensation”.

4.2 Compensation as a Director.  The Employee will not be compensated for
attendance at regular and special Board meetings. 

4.3 Automobile.   The Bank will make available to the Employee an automobile
equivalent in value to the vehicle provided to Employee immediately prior to the
date of this Agreement to be utilized by Employee for business and personal use
as is customary for presidents of financial institutions in the Area.

4.4 Business Expenses; Memberships.  The Employer specifically agrees to
reimburse the Employee for (a) reasonable business (including travel) expenses
incurred by the Employee in the performance of the Employee’s duties hereunder,
as approved from time to time by the Board, and (b) the dues and business
related expenditures, including initiation fees, associated with membership in
professional associations which are commensurate with the Employee’s position;
provided, however, that the Employee must, as a condition of reimbursement,
submit verification of the nature and amount of such expenses in accordance with
reimbursement policies from time to time adopted by the Employer and in
sufficient detail to comply with rules and regulations promulgated by the
Internal Revenue Service.

2614958 v.14

--------------------------------------------------------------------------------

 

4.5 Vacation.  On a non-cumulative basis the Employee will be entitled to
vacation in each year of this Agreement in accordance with the Bank’s vacation
policy as then in effect, during which the Employee’s Base Salary will be paid
in full.

4.6 Benefits.  In addition to the Base Salary and Incentive Compensation, the
Employee will be entitled to such benefits as may be available from time to time
for executives of the Employer similarly situated to the Employee or for
Employee individually.  All such benefits will be awarded and administered in
accordance with the Employer’s standard policies and practices.  Such benefits
may include, by way of example only, profit-sharing plans, retirement, life and
disability insurance benefits and such other benefits as the Employer deems
appropriate. Employer shall provide health insurance at its expense and at the
same level of coverage as existed at the time of Employee’s termination of
employment to Employee and his spouse for ___ years after the date of
termination or expiration of this Agreement unless the Employee’s employment
pursuant to this Agreement is terminated for Cause in which event, Employer is
under no obligation to provide health insurance to Employee or his spouse after
termination of Employee’s employment pursuant to this Agreement.

4.7 Withholding.  The Employer may deduct from each payment of compensation
hereunder all amounts required to be deducted and withheld in accordance with
applicable federal and state income, FICA and other withholding requirements.

5. COMPANY INFORMATION.  

5.1 Ownership of Information.  All Company Information received or developed by
the Employee while employed by the Employer will remain the sole and exclusive
property of the Employer.

5.2 Obligations of the Employee.  The Employee agrees (a) to hold Company
Information in strictest confidence, and (b) not to use, duplicate, reproduce,
distribute, disclose or otherwise disseminate Company Information or any
physical embodiments thereof and may in no event take any action causing or fail
to take any action necessary in order to prevent any Company Information from
losing its character or ceasing to qualify as Confidential Information or a
Trade Secret.  In the event that the Employee is required by law to disclose any
Company Information, the Employee will not make such disclosure unless (and then
only to the extent that) the Employee has been advised by the Company’s legal
counsel that such disclosure is required by law and then only after prior
written notice is given to the Employer when the Employee becomes aware that
such disclosure has been requested and is required by law.  This Section 5 will
survive the termination of this Agreement with respect to Confidential
Information for so long as it remains Confidential Information, but for no
longer than three (3) years following termination of this Agreement, and this
Section 5 will survive termination of this Agreement with respect to Trade
Secrets for so long as is permitted by the then-current Maryland Trade Secrets
Act.

5.3 Delivery upon Request or Termination.  Upon request by the Employer, and in
any event upon termination of employment with the Employer, the Employee will
promptly deliver to the Employer all property belonging to the Employer,
including without limitation, all Company Information then in the Employee’s
possession or control.

2614958 v.14

--------------------------------------------------------------------------------

 

6. NON-COMPETITION.    In the event the Employee’s employment pursuant to this
Agreement is terminated by the Employer or by the Employee pursuant to Section
3.2.2 or 3.2.6 and a Change in Control has not occurred, commencing on the
termination date for a period equal to the remaining Term, the Employee will not
(except on behalf of or with the prior written consent of the Employer), within
the Area,  either directly or indirectly, on the Employee’s own behalf or in the
service or on behalf of others, as a principal, partner, officer, director,
manager, supervisor, administrator, consultant, executive employee or in any
other capacity which involves duties and responsibilities similar to those
undertaken for the Employer, engage in any business which is the same as or
essentially the same as the Business of the Employer.  In the event a Change in
Control has occurred or in anticipation thereof and the Employee’s employment
pursuant to this Agreement is terminated by Employer or by Employee pursuant to
Section 3.2.3, commencing on the termination date for a period equal to twelve
months, the Employee will not (except on behalf of or with the prior written
consent of the Employer), within the Area,  either directly or indirectly, on
the Employee’s own behalf or in the service or on behalf of others, as a
principal, partner, officer, director, manager, supervisor, administrator,
consultant, executive employee or in any other capacity which involves duties
and responsibilities similar to those undertaken for the Employer, engage in any
business which is the same as or essentially the same as the Business of the
Employer. Additionally, in the event the Employee’s employment pursuant to this
Agreement is terminated for any reason other than by Employer for Cause, then
Employer agrees to pay Employee 1.00 times his Average Annual Compensation in
equal monthly installments over a twelve month period commencing on the date of
termination as additional consideration for Employee’s agreement in this Section
6.

7. NON-SOLICITATION OF CUSTOMERS.  The Employee agrees that during the Term
hereunder and, in the event of the Employee’s termination of employment for any
reason, thereafter for a period equal to the lesser of (a) eighteen (18) months;
or (b) the period during which the Employee is to be paid monthly termination
payments, if any, in accordance with Section 3.7 hereof, the Employee will not
(except on behalf of or with the prior written consent of the Employer), within
the Area, on the Employee’s own behalf or in the service or on behalf of others,
solicit, divert or appropriate or attempt to solicit, divert or appropriate,
directly or by assisting others, any business from any of the Employer’s
customers, including actively sought prospective customers, with whom the
Employee has or had material contact during the last two (2) years of the
Employee’s employment, for purposes of providing products or services that are
competitive with those provided by the Employer.

8. NON-SOLICITATION OF EMPLOYEES.  The Employee agrees that during the Term
hereunder and, in the event of the Employee’s termination of employment for any
reason, thereafter for a period equal to the lessor of (a) eighteen (18) months;
or (b) the period during which the Employee is to be paid monthly termination
payments, if any, in accordance with Section 3.7 hereof, the Employee will not,
except for Employee’s Administrative Assistant, within the Area, on the
Employee’s own behalf or in the service or on behalf of others, solicit, or
recruit or attempt to solicit or recruit, directly or by assisting others, any
employee of the Employer or its Affiliates, whether or not such employee is a
full-time employee or a temporary employee of the Employer or its Affiliates and
whether or not such employment is pursuant to written agreement and whether or
not such employment is for a determined period or is at will.

2614958 v.14

--------------------------------------------------------------------------------

 

9. REMEDIES.  The Employee agrees that the covenants contained in Sections 5
through 8 of this Agreement are of the essence of this Agreement; that each of
the covenants is reasonable and necessary to protect the business, interests and
properties of the Employer; and that irreparable loss and damage will be
suffered by the Employer should the Employee breach any of the
covenants.  Therefore, the Employee agrees and consents that, in addition to all
the remedies provided by law or in equity, the Employer will be entitled to a
temporary restraining order and temporary and permanent injunctions to prevent a
breach or contemplated breach of any of the covenants.  The Employer and the
Employee agree that all remedies available to the Employer or the Employee, as
applicable, will be cumulative.

10. SEVERABILITY.  The parties agree that each of the provisions included in
this Agreement is separate, distinct and severable from the other provisions of
this Agreement and that the invalidity or unenforceability of any Agreement
provision will not affect the validity or enforceability of any other provision
of this Agreement.  Further, if any provision of this Agreement is ruled invalid
or unenforceable by a court of competent jurisdiction because of a conflict
between the provision and any applicable law or public policy, the provision
will be redrawn to make the provision consistent with and valid and enforceable
under the law or public policy.

11. NO SET-OFF BY THE EMPLOYEE.  The existence of any claim, demand, action or
cause of action by the Employee against the Employer, or any Affiliate of the
Employer, whether predicated upon this Agreement or otherwise, will not
constitute a defense to the enforcement by the Employer of any of its rights
hereunder.

12. NOTICE.  All notices and other communications required or permitted under
this Agreement will be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, will be deemed to have been received
on the earlier of the date shown on the receipt or three (3) business days after
the postmarked date thereof.  In addition, notices hereunder may be delivered by
hand, facsimile transmission or overnight courier, in which event the notice
will be deemed effective when delivered or transmitted.  All notices and other
communications under this Agreement must be given to the parties hereto at the
following addresses:

 

 

(i)

If to the Employer, to it at:

 

 

 

1525 Pointer Ridge Road

 

Bowie, Maryland 20716

 

Attn: Chairman of the Board

 

 

(ii)

If to the Employee, to the Employee at:

 

 

 

4825 Hawksbury Court

 

LaPlata, Maryland 20646

 

2614958 v.14

--------------------------------------------------------------------------------

 

13. ASSIGNMENT.  Neither party hereto may assign or delegate this Agreement or
any of its rights and obligations hereunder without the written consent of the
other party hereto, provided, however, that the Employer may assign this
Agreement to any successor the Bank or to the purchaser of all or substantially
all of the Bank’s assets without the consent of the Employee.

14. WAIVER.  A waiver by the Employer of any breach of this Agreement by the
Employee will not be effective unless in writing, and no waiver will operate or
be construed as a waiver of the same or another breach on a subsequent occasion.

15. ARBITRATION.  Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, except for controversies or claims relating to
Sections 5 through 8 of this Agreement which will be handled pursuant to Section
9 of this Agreement, will be settled by binding arbitration in accordance with
the Employment Rules of the American Arbitration Association using one
arbitrator.  The decision of the arbitration panel will be final and binding on
the parties, and judgment upon the award rendered by the arbitration panel may
be entered by any court having jurisdiction thereof.

16. ATTORNEYS’ FEES.  In the event that the parties have complied with this
Agreement with respect to arbitration of disputes and litigation ensues between
the parties concerning the enforcement of an arbitration award and the Employee
must employ separate legal counsel regarding such litigation, the Employer shall
advance to the Employee, within thirty (30) days after receiving copies of
invoices submitted by Employee, any and all reasonable attorneys’ fees and
expenses incurred with preparing, investigating and litigating such action,
proceeding or suit.  The Employee must reimburse the Employer for any and all
advances that exceed the first $5,000 advanced to the Employee for such legal
expenses only if and to the extent that a final decision by a court of competent
jurisdiction has determined that the Employee is not entitled to receive any
amounts due or to enforce any of the rights under this Agreement.

17. APPLICABLE LAW.  This Agreement will be construed and enforced under and in
accordance with the laws of the State of Maryland.  The parties agree that any
appropriate state court located in Prince George’s County, Maryland, will have
jurisdiction of any case or controversy arising under or in connection with this
Agreement and will be a proper forum in which to adjudicate such case or
controversy.  The parties consent to the jurisdiction of such courts.

18. INTERPRETATION.  Words importing the singular form shall include the plural
and vice versa.  The terms “herein”, “hereunder”, “hereby”, “hereto”, “hereof”
and any similar terms refer to this Agreement.  Any captions, titles or headings
preceding the text of any article, section or subsection herein are solely for
convenience of reference and will not constitute part of this Agreement or
affect its meaning, construction or effect.

19. ENTIRE AGREEMENT.  This Agreement embodies the entire and final agreement of
the parties on the subject matter stated in the Agreement.  No amendment or
modification of this Agreement will be valid or binding upon the Employer or the
Employee unless made in writing and signed by both parties.  All prior
understandings and agreements relating to the subject matter of this Agreement
are hereby expressly terminated.

2614958 v.14

--------------------------------------------------------------------------------

 

20. RIGHTS OF THIRD PARTIES.  Nothing herein expressed is intended to or will be
construed to confer upon or give to any person, firm or other entity, other than
the parties hereto and their permitted assigns, any rights or remedies under or
by reason of this Agreement.

21. SURVIVAL.  The obligations of the Employee pursuant to Sections 5, 6, 7, 8
and 9 will survive the termination of the employment of the Employee hereunder
for the period designated under each of those respective sections.

22. JOINT AND SEVERAL.  The obligation of the Bank and the Company to Employee
hereunder will be joint and several.

IN WITNESS WHEREOF, the Employer and the Employee have executed and delivered
this Agreement as of the date first shown above.

 

 

THE EMPLOYER:

 

 

 

 

OLD LINE BANK

 

 

 

 

 

 

 

By:

 

 

 

 

 

Name:

Craig E. Clark

 

 

 

 

Title:

Chairman

 

 

 

 

 

 

 

 

 

 

THE EMPLOYEE:

 

 

 

 

 

By:

 

 

 

 

 

Name:

James W. Cornelsen

 

 

 

 

2614958 v.14

--------------------------------------------------------------------------------

 

Exhibit A

 

 

OLD LINE BANK

JOB DESCRIPTION

 

 

 

JOB TITLE:

PRESIDENT/CHIEF EXECUTIVE OFFICER

FSLA:

EXEMPT

REPORTS TO:

BOARD OF DIRECTORS

 

 

SUMMARY:

 

Plans, develops, and establishes policies and objectives of business
organization in accordance with Board directives and corporation charter by
performing the following duties personally or through subordinate managers.

 

 

ESSENTIAL DUTIES AND RESPONSIBILITIES: The primary duty and responsibility of
this position is quality service to both internal and external
customers.  Specific duties are listed below.  Other duties may be assigned.

 

Confers with corporate managers to plan business objectives, to develop
organizational policies, to coordinate functions and operations between
divisions and departments, and to establish responsibilities and procedures for
attaining objectives.

 

Provides leadership representations for the bank and holding company board of
directors and its committees.  Contributes to the effective, profitable
operation of the corporation by participation in Liquidity and Asset/Liability
Management, Loan Committee, Public Relations /Marketing Committee, and Asset
Review Committee activities.

 

Ensures that the spirit and intent of regulatory and supervisory trusts and
concerns are met or exceeded.

 

Keeps the Board informed concerning major developments and consults with same
regarding major decisions affecting the bank or holding company.

 

Represents the bank and provides leadership in key community activities,
including business, charitable, civic, and social organizations to maintain a
proper responsible citizen stature for the bank.

 

Reviews activity reports and financial statements to determine progress and
status in attaining objectives and revises objectives and plans in accordance
with current conditions.

 

  8/12/15 3:36 PM

--------------------------------------------------------------------------------

 

Directs and coordinates formulation of financial programs to provide funding for
new or continuing operations to maximize returns on investments and to increase
productivity.

 

Plans and develops labor and public relations policies designed to improve
company’s image and relations with customers, employees, and the public.

 

Evaluates performance of executives for compliance with established policies and
objectives of bank.

 

 

SUPERVISORY RESPONSIBILITY:

 

Manages subordinate supervisors in the Lending/Deposit function, Finance and
Operations function, Human Resources, and Quality Services and Sales
function.  Also, responsible for the direct supervision of the Corporate
Secretary.  Is responsible for the overall direction, coordination, and
evaluation of these units.

 

Provides direct guidance on personnel activities which affect the key bank
management team, including salary administration, management incentive,
performance objectives, and compliance with established policies to ensure solid
team efforts toward the attainment of department, bank, and corporation goals.

 

Carries out supervisory responsibilities in accordance with the organization’s
policies and applicable laws.  Responsibilities include interviewing, hiring,
and training employees; planning, assigning, and directing work; appraising
performance; rewarding and disciplining employees; and addressing complaints and
resolving problems.

 

 

CRA REQUIREMENT:

 

Expected to understand the bank’s obligations under the Community Reinvestment
Act and how to fulfill them.  Expected to cooperate with and support the bank’s
CRA program.  Will be held accountable for any lack of cooperation that weakens
the bank’s CRA performance, as reflected in internal audits, agency
examinations, and/or community projects.

 

 

PRODUCT AND KNOWLEDGE REQUIREMENT:

 

Should know and understand the products and services that are provided by Bank
and give quality service at all times to our customers.

 

QUALIFICATION REQUIREMENTS:

 

To perform this job successfully, an individual must be able to perform each
essential duty satisfactorily.  The requirements listed below are representative
of the knowledge, skill, and/or

2

2614958 v.12

--------------------------------------------------------------------------------

 

ability required.  Reasonable accommodations may be made to enable individuals
with disabilities to perform the essential functions.

 

 

EDUCATION AND/OR EXPERIENCE:

 

College graduate and graduate of recognized graduate banking school or
equivalent; ten years related experience and/or training; or equivalent
combination of education and experience.

 

 

LANGUAGE SKILLS:

 

Ability to read, analyze, and interpret common technical journals, financial
reports, and legal documents.  Ability to respond to common inquiries or
complaints from customers, regulatory agencies, or members of the community.  A
high level of interpersonal skills to effectively communicate policies,
procedures, staff objectives, and information to top management, public groups,
and/or boards of directors.

 

 

ANALYTICAL SKILLS:

 

A high level of analytical, mathematical and reasoning skills to assess and
evaluate the operation of subordinate areas of responsibility, participate in
establishing bank-wide financial goals, and draft operational reports to the
board.

 

 

PHYSICAL DEMANDS:

 

Reasonable accommodations may be made to enable individuals with disabilities to
perform the essential functions.

 

 

WORK ENVIRONMENT:

 

Good.  There is little discomfort from noise, heat, dust, or other adverse
factors.

 

 

PERFORMANCE EXPECTATIONS:

 

 

ORGANIZATIONAL EXPECTATIONS:

 

Understands that the position exists to ultimately serve the customer either
directly or indirectly through assisting front-line personnel to answer customer
inquiries quickly.

 

Practices a high degree of professionalism and sets an example for others to
follow.

3

2614958 v.12

--------------------------------------------------------------------------------

 

 

Demonstrates commitment to and understanding of continuous quality
improvement.  Uses creativity and initiative to recommend quality enhancements
when relevant and appropriate.

 

Has satisfactory attendance within policy guidelines and is punctual.

 

Manages time effectively.  Completes assigned duties within required deadlines.

 

 

FINANCIAL EXPECTATIONS:

 

Makes recommendations to the Board of Directors concerning budgetary needs of
the bank.

 

Within parameters of job, uses good judgment related to Bank income
opportunities and expense control.

 

Is financially responsible.

 

 

RELATIONSHIP EXPECTATIONS:

 

Conducts in-bank and public relationships in a manner that enhances the image
and marketing efforts of the Bank.

 

Participates in community organizations, activities, and projects.

 

Contributes to an overall team effort by being an effective team player.

 

This job description is not intended to be and should not be construed as an
all-inclusive list of the responsibilities, skills, or working conditions
associated with the position.  While this job description is intended to
accurately reflect the position’s activities and requirements, management
reserves the right to modify, add, or remove duties and assign other duties as
necessary.

4

2614958 v.12

--------------------------------------------------------------------------------