Exhibit 10.25

 

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of the 1st
day of November, 2014, by and between EagleBank, a Maryland chartered commercial
bank (the “Bank”), and Charles C. Brockett (“Executive”).

 

RECITALS:

The Bank has retained Executive as Executive Vice President and Director of
Operations of the Bank and the parties desire to state their agreement in its
entirety.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:

 

1.     Employment. The Bank agrees to employ Executive, and Executive agrees to
be employed as Executive Vice President and Director of Operations of the Bank,
subject to the terms and provisions of this Agreement.

 

2.     Certain Definitions. As used in this Agreement, the following terms have
the meanings set forth below:

 

2.1     “Affiliate” means, with respect to any Person, (i) any Person directly
or indirectly controlling, controlled by or under common control with such
Person, (ii) any Person owning or controlling fifty percent (50%) or more of the
outstanding voting interests of such Person, (iii) any officer, director,
general partner, managing member, or trustee of, or Person serving in a similar
capacity with respect to, such Person, or (iv) any Person who is an officer,
director, general partner, member, trustee, or holder of fifty percent (50%) or
more of the voting interests of any Person described in clauses (i), (ii), or
(iii) of this sentence. For purposes of this definition, the terms
"controlling," "controlled by," or "under common control with" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

 

2.2     “Bancorp” means Eagle Bancorp, Inc., a Maryland corporation.

 

2.3     “Bank” is defined in the Recitals. If the Bank is merged into any other
Entity, or transfers substantially all of its business operations or assets to
another Entity, the term “Bank” shall be deemed to include such successor Entity
for purposes of applying Article 8 of this Agreement.

 

2.4     “Bank Entities” means and includes any of the Bank, Bancorp and their
Affiliates.

 

2.5     “Bank Regulatory Agency” means any governmental authority, regulatory
agency, ministry, department, statutory corporation, central bank or other body
of the United States or of any other country or of any state or other political
subdivision of any of them having jurisdiction over the Bank or any transaction
contemplated, undertaken or proposed to be undertaken by the Bank, including,
but not necessarily be limited to:

 

(a)     the Federal Deposit Insurance Corporation or any other federal or state
depository insurance organization or fund;

 

(b)     the Federal Reserve System, the Maryland Division of Financial
Institutions, or any other federal or state bank regulatory or commissioner’s
office;

 

(c)     any Person established, organized, owned (in whole or in part) or
controlled by any of the foregoing; and

 

(d)     any predecessor, successor or assignee of any of the foregoing.

 

 

 

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EagleBank Employment Agreement

November 1, 2014

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2.6     “Board” means the Board of Directors of the Bank.

 

2.7     “Code” means the Internal Revenue Code of 1986, as amended.

 

2.8     “Competitive Business” means the banking and financial services
business, which includes, without limitation, consumer savings, commercial
banking, the insurance and trust business, the savings and loan business and
mortgage lending, or any other business in which any of the Bank Entities is
engaged or has invested significant resources within the prior six (6) month
period in preparation for becoming actively engaged.

 

2.9     “Competitive Products or Services” means, as of any time, those products
or services of the type that any of the Bank Entities is providing, or is
actively preparing to provide, to its customers.

 

2.10     “Disability” means a mental or physical condition which, in the good
faith opinion of the Board, renders Executive, with or without reasonable
accommodation, unable or incompetent to carry out the essential functions of the
position or the material job responsibilities which Executive held or the
material duties to which Executive was assigned at the time the disability was
incurred, which has existed for at least three (3) months and which in the
opinion of a physician mutually agreed upon by the Bank and Executive (provided
that neither party shall unreasonably withhold such agreement) is expected to be
permanent or to last for an indefinite duration or a duration in excess of nine
(9) months.

 

2.11     “Expiration Date” means August 31, 2017.

 

2.12     “Person” means any individual or Entity.

 

2.13     “Section 409A” means Section 409A of the Code and the regulations and
administrative guidance promulgated thereunder.

 

2.14     “Termination Date” means the Expiration Date or such earlier date on
which the Term expires pursuant to Section 3.1 or is terminated pursuant to
Section 7.2, 7.3, 7.4, 7.5, 9.2 or 9.3, as applicable.

 

Other terms are defined throughout this Agreement and have the meanings so given
them.

 

3.     Term; Position.

 

3.1     Term. Executive’s employment hereunder shall continue until the
Expiration Date, unless extended in writing by both the Bank and Executive or
sooner terminated in accordance with the provisions of this Agreement (the
“Term”).

 

3.2     Position. The Bank shall employ Executive to serve as Executive Vice
President and Director of Operations of the Bank.

 

3.3     No Restrictions. Executive represents and warrants to the Bank that
Executive is not subject to any legal obligations or restrictions that would
prevent or limit Executive’s entering into this Agreement and performing
Executive’s responsibilities hereunder.

 

4.     Duties of Executive.

 

4.1      Nature and Substance. Executive shall report directly to and shall be
under the direction of the Chairman of the Board or the Chairman’s designee. The
specific powers and duties of Executive shall be established, determined and
modified by and within the discretion of the Board.

 

 
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4.2     Performance of Services. Executive agrees to devote Executive’s full
business time and attention to the performance of Executive’s duties and
responsibilities under this Agreement, and shall use Executive’s best efforts
and discharge Executive’s duties to the best of Executive’s ability for and on
behalf of the Bank and toward its successful operation. Executive agrees that,
without the prior written consent of the Board, he will not during the Term,
directly or indirectly, perform services for or obtain a financial or ownership
interest in any other Entity (an “Outside Arrangement”) if such Outside
Arrangement would interfere with the satisfactory performance of Executive’s
duties to the Bank, present a conflict of interest with the Bank and/or Bancorp,
breach Executive’s duty of loyalty or fiduciary duties to the Bank and/or
Bancorp, or otherwise conflict with the provisions of this Agreement. Executive
shall promptly notify the Board of any Outside Arrangement, provide the Bank
with any written agreement in connection therewith and respond fully and
promptly to any questions that the Board may ask with respect to any Outside
Arrangement. If the Board determines that Executive’s participation in an
Outside Arrangement would interfere with Executive’s satisfactory performance of
Executive’s duties to the Bank, present a conflict of interest with the Bank
and/or Bancorp, breach Executive’s duty of loyalty or fiduciary duties to the
Bank and/or Bancorp, or otherwise conflict with the provisions of this
Agreement, Executive shall not undertake, or shall cease, such Outside
Arrangement as soon as feasible after the Board notifies him of such
determination. Notwithstanding any provision hereof to the contrary, this
Section 4.2 does not restrict Executive’s right to own securities of any Entity
that files periodic reports with the Securities and Exchange Commission under
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; provided
that Executive’s total ownership constitutes less than two percent (2%) of the
outstanding securities of such company.

 

4.3     Compliance with Law. Executive shall comply with all laws, statutes,
ordinances, rules and regulations relating to Executive’s employment and duties.

 

5.      Compensation; Benefits. As full compensation for all services rendered
pursuant to this Agreement and the covenants contained herein, the Bank shall
pay to Executive the following:

 

5.1     Salary. Through the end of the Term, Executive shall be paid a salary
(“Salary”) of Two Hundred and Eighty-Five Thousand Dollars ($285,000) on an
annualized basis. The Bank shall pay Executive’s Salary in equal installments in
accordance with the Bank’s regular payroll periods as may be set by the Bank
from time to time. Executive’s Salary may be further increased from time to
time, at the discretion of the Board. Executive may also be entitled to certain
incentive bonus payments as determined by Board approved incentive plans.

 

5.2     Withholding. Payments of Salary shall be subject to the customary
withholding of income and other employment taxes as is required with respect to
compensation paid by an employer to an employee.

 

5.3     Vacation and Leave. Executive shall be entitled to such vacation and
leave as may be provided for under the current and future leave and vacation
policies of the Bank for executive officers.

 

5.4     Office Space. The Bank will provide customary office space and office
support to Executive.

 

5.5     Parking. Paid parking at Executive’s regular worksite will be provided
by the Bank at its expense.

 

5.6     Car Allowance. The Bank will pay Executive a monthly car allowance of
Seven Hundred fifty Dollars ($750).

 

5.7     Non-Life Insurance. The Bank will provide Executive with group health,
disability and other insurance as the Bank may determine appropriate for all
employees of the Bank.

 

5.8     Life Insurance.

 

 
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EagleBank Employment Agreement

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5.8.1     Executive may obtain a term life insurance policy (the “Policy”) on
Executive in the amount of Seven Hundred Fifty Thousand Dollars ($750,000.00),
the particular product and carrier to be chosen by Executive in Executive’s
discretion. Executive shall have the right to designate the beneficiary of the
Policy. If the Policy is obtained, Executive shall provide the Bank with a copy
of the Policy, and the Bank will pay, during the Term of this Agreement, the
premiums for the Policy upon submission by Executive to the Bank of the invoices
therefor. In the event Executive is rated and the premium exceeds the standard
rate for a Seven Hundred Fifty Thousand Dollar ($750,000.00) policy, the Policy
amount shall be lowered to the maximum amount that can be purchased at the
standard rate for a Seven Hundred Fifty Thousand Dollar ($750,000.00) policy.
For example, if Executive is rated and the standard rate for a Seven Hundred
Fifty Thousand Dollar ($750,000.00) policy would acquire a Five Hundred Thousand
Dollar ($500,000.00) policy, the Bank would only be required to pay the premium
for a Five Hundred Thousand Dollar ($500,000.00) policy. If a Policy is obtained
and it is cancelled or terminated, Executive shall immediately notify the Bank
of such cancellation or termination.

 

5.8.2     The Bank may, at its cost, obtain and maintain "key-man" life
insurance and/or Bank-owned life insurance on Executive in such amount as
determined by the Board from time to time. Executive agrees to cooperate fully
and to take all actions reasonably required by the Bank in connection with such
insurance.

 

5.9     Expenses. The Bank shall, promptly upon presentation of proper expense
reports therefor, pay or reimburse Executive, in accordance with the policies
and procedures established from time to time by the Bank for its officers, for
all reasonable and customary travel (other than local use of an automobile for
which Executive is being provided the car allowance) and other out-of-pocket
expenses incurred by Executive in the performance of Executive’s duties and
responsibilities under this Agreement and promoting the business of the Bank,
including approved membership fees, dues and the cost of attending business
related seminars, meetings and conventions.

 

5.10     Retirement Plans. Executive shall be entitled to participate in any and
all qualified pension or other retirement plans of the Bank which may be
applicable to personnel of the Bank.

 

5.11      Other Benefits. While this Agreement is in effect, Executive shall be
entitled to all other benefits that the Bank provides from time to time to its
officers and such other benefits as the Board may from time to time approve for
Executive, subject to applicable eligibility requirements.

 

5.12      Eligibility. Participation in any health, life, accident, disability,
medical expense or similar insurance plan or any qualified pension or other
retirement plan shall be subject to the terms and conditions contained in such
plan as amended from time to time in the Bank’s sole discretion. All matters of
eligibility for benefits under any insurance plans shall be determined in
accordance with the provisions of the applicable insurance policy issued by the
applicable insurance company.

 

5.13     Equity Compensation. Executive shall be eligible to receive awards of
options, SARs and /or Restricted Stock under the 2006 Stock Plan of Bancorp,
from time to time, at the discretion of the 2006 Plan Committee or Compensation
Committee of the Board of Directors of Bancorp.

 

6.     Conditions Subsequent to Continued Operation and Effect of Agreement.

 

6.1     Continued Approval by Bank Regulatory Agencies. This Agreement and all
of its terms and conditions, and the continued operation and effect of this
Agreement and the Bank’s continuing obligations hereunder, shall at all times be
subject to the continuing approval of any and all Bank Regulatory Agencies whose
approval is a necessary prerequisite to the continued operation of the Bank.
Should any term or condition of this Agreement, upon review by any Bank
Regulatory Agency, be found to violate or not be in compliance with any
then-applicable statute or any rule, regulation, order or understanding
promulgated by any Bank Regulatory Agency, or should any term or condition
required to be included herein by any such Bank Regulatory Agency be absent,
this Agreement may be rescinded and terminated by the Bank if the parties hereto
cannot in good faith agree upon such additions, deletions or modifications as
may be deemed necessary or appropriate to bring this Agreement into compliance.

 

7.     Termination of Agreement. Prior to the Expiration Date, the Term of this
Agreement may be terminated as provided below in this Article 7.

 

 
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7.1     Definition of Cause. For purposes of this Agreement, “Cause” means:

 

(a)     any act of theft, fraud, intentional misrepresentation of a material
matter, personal dishonesty or breach of fiduciary duty or similar conduct by
Executive with respect to any of the Bank Entities or the services to be
rendered by him under this Agreement;

(b)     any failure of this Agreement to comply with any Bank Regulatory Agency
requirement which is not cured in accordance with Section 6.1 within a
reasonable period of time after written notice thereof;

 

(c)     any Bank Regulatory Agency action or proceeding against Executive as a
result of Executive’s negligence, fraud, malfeasance or misconduct;

 

(d)     indictment of Executive for, or Executive’s conviction of or plea of
nolo contendere at the trial court level to, a felony, or any crime of moral
turpitude, or involving dishonesty, deception or breach of trust;

 

(e)     any of the following conduct on the part of Executive that has not been
corrected or cured by Executive within thirty (30) days after having received
written notice from the Bank describing such conduct (provided, however, that
the Bank shall not be required to provide Executive with notice and opportunity
to cure more than two (2) times in any twelve (12) month period):

 

(i)     habitual absenteeism, or the failure by or the inability of Executive to
devote full time and attention to the performance of Executive’s duties pursuant
to this Agreement (other than by reason of Executive’s death or Disability); or

 

(ii)     intentional material failure by Executive to carry out the stated
lawful and reasonable directions, instructions, policies, rules, regulations or
decisions of the Board which are consistent with Executive’s position; or

 

(iii)     any action (including any failure to act) or conduct by Executive in
violation of a material provision of this Agreement (including but not limited
to the provisions of Article 8 hereof, which shall be deemed to be material); or

 

(f)     the use of drugs, alcohol or other substances by Executive to an extent
which materially interferes with or prevents Executive from performing
Executive’s duties under this Agreement;

 

(g)     the determination by the Board, in the exercise of its reasonable
judgment and in good faith, that Executive’s job performance is substantially
unsatisfactory and that he has failed to cure such performance within a
reasonable period (but in no event more than thirty (30) days) after written
notice specifying in reasonable detail the nature of the unsatisfactory
performance; or

 

(h)     Executive’s commission of unethical business practices, acts of moral
turpitude, financial impropriety, fraud or dishonesty in any material matter
which the Board in good faith determines could adversely affect the reputation,
standing or financial prospects of the Bank or its Affiliates; or

 

(i)     willful or intentional misconduct on the part of Executive that results,
or that the Board in good faith determines may result, in substantial injury to
the Bank or any of its Affiliates.

 

7.2     Termination by the Bank for Cause. After the occurrence of any of the
conditions specified in Section 7.1, the Bank shall have the right to terminate
the Term for Cause on written notice to Executive, effective immediately.

 

7.3     Termination by the Bank without Cause. The Bank shall have the right to
terminate the Term at any time on written notice without Cause, for any or no
reason, such termination to be effective on the date on which the Bank gives
such notice to Executive or such later date as may be specified in such notice.

 

7.4     Termination for Death or Disability. The Term shall automatically
terminate upon the death of Executive or upon the Board’s determination that
Executive is suffering from a Disability.

 

 
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7.5     Termination by Executive. Executive shall have the right to terminate
the Term at any time, such termination to be effective on the date ninety (90)
days after the date on which Executive gives such notice to the Bank unless
Executive and the Bank agree in writing to a later date on which such
termination is to be effective the “Notice Period”). After receiving notice of
termination, the Bank may require Executive to devote Executive’s good faith
energies to transitioning Executive’s duties to Executive’s successor and to
otherwise helping to minimize the adverse impact of Executive’s resignation upon
the operations of the Bank. If Executive fails or refuses to fully cooperate
with such transition, the Bank may immediately terminate Executive, in which
case it shall no longer have any obligation to pay any Salary or provide any
benefits to him, but solely for purposes of Sections 8.5 and 8.6 below, the
Termination Date shall be the date ninety (90) days after the date on which
Executive gives notice of termination to the Bank pursuant to the first sentence
of this Section 7.5, or the later date referred to therein, whichever is later.
At any time during the Notice Period, the Bank may elect to relieve Executive of
some or all of Executive’s duties, responsibilities, privileges and positions
for the remainder of the Notice Period, in its sole discretion.

 

7.6     Pre-Termination Salary and Expenses. Without regard to the reason for,
or the timing of, the termination or expiration of the Term: (a) the Bank shall
pay Executive any unpaid Salary due for the period prior to the Termination
Date; and (b) following submission of proper expense reports by Executive, the
Bank shall reimburse Executive for all expenses incurred prior to the
Termination Date and subject to reimbursement pursuant to Section 5.9 hereof.
These payments shall be made promptly upon termination and within the period of
time mandated by law.

 

7.7     COBRA if Termination by the Bank without Cause. If the Term is
terminated by the Bank during the Term without Cause, and provided that
Executive signs and delivers to the Bank no later than twenty-one (21) days
after the Termination Date (the “Submission Period”), a General Release and
Waiver in the form attached to as Exhibit A to the supplemental Non-compete
Agreement (the “Release”), the Bank shall, for a period of one (1) year
following the date on which the Release is executed and delivered to the Bank,
if Executive timely elects to continue Executive’s health insurance benefits
under COBRA, pay to the insurer or, at the Bank’s election, to Executive a gross
monthly amount equal to the Employer’s share of Executive’s premiums for health
insurance benefits continuation (for so long as Executive remains qualified for
such continuation under COBRA). Notwithstanding the foregoing: (a) if the
twenty-one (21) day period in which Executive may deliver the Release begins in
one calendar year and ends in the following calendar year, the date on which
payments will commence under this Section 7.7 shall be the first day of such
following calendar year or, if later, the date on which the Release is delivered
to the Bank; and (b) Executive shall not be entitled to any payments pursuant to
this Section 7.7 if he is otherwise entitled to payments pursuant to Section 9.4
in relation to a Change in Control. In the event Executive breaches any
provision of Article 8 of this Agreement, Executive’s entitlement to any
payments payable pursuant to Section 7.5 during the Notice Period or this
Section 7.7, if and to the extent not yet paid, shall thereupon immediately
cease and terminate as of the date of such breach, with Executive having the
obligation to repay to the Bank any payments for salary or for health insurance
or other benefits pursuant to Section 7.5, 7.6 or 7.7 with respect to the period
after such breach occurred and before such breach became known to the Bank.
Furthermore, if termination was initially not for Cause but the Bank thereafter
determines in good faith that, during the Term, Executive had engaged in conduct
that would have constituted Cause, Executive’s entitlement to any payments
pursuant to Section 7.5 or 7.7 shall terminate retroactively to the Termination
Date, with Executive having the obligation to repay to the Bank any payments for
salary subsequent to the occurrence of the event(s) constituting Cause or for
health insurance benefits continuation pursuant to this Section 7.7, and, upon
the return of all such payments, said General Release and Waiver shall be deemed
rescinded and of no force or effect. Notwithstanding anything to the contrary in
this Section 7.7, any payment pursuant to this Section shall be subject to (i)
any delay in payment required by Section 10.2 hereof and (ii) any reduction
required pursuant to Section 10.1.2 hereof.

 

7.8     Termination After Change in Control. Sections 9.2 and 9.3 set out
provisions applicable to certain circumstances in which the Term may be
terminated after Change in Control.

 

8.     Confidentiality; Non-Competition; Non-Interference.

 

 
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8.1     Confidential Information. Executive, during employment, will have, and
has had, access to and become familiar with various confidential and proprietary
information of the Bank Entities and/or relating to the business of the Bank
Entities (“Confidential Information”), including, but not limited to: business
plans; operating results; financial statements and financial information;
contracts; mailing lists; purchasing information; customer data (including
lists, names and requirements); feasibility studies; personnel related
information (including compensation, compensation plans, and staffing plans);
internal working documents and communications; and other materials related to
the businesses or activities of the Bank Entities which is made available only
to employees with a need to know or which is not generally made available to the
public. Failure to mark any Confidential Information as confidential,
proprietary or protected information shall not affect its status as part of the
Confidential Information subject to the terms of this Agreement.

 

8.2     Nondisclosure. Executive hereby covenants and agrees that he shall not,
directly or indirectly, disclose or use, or authorize any Person to disclose or
use, any Confidential Information (whether or not any of the Confidential
Information is novel or known by any other Person); provided however, that this
restriction shall not apply to the use or disclosure of Confidential Information
(i) to any governmental entity to the extent required by law, (ii) which is or
becomes publicly known and available through no wrongful act of Executive or any
Affiliate of Executive or (iii) in connection with the performance of
Executive’s duties under this Agreement.

 

8.3     Nondisclosure of this Agreement. The terms, conditions and fact of this
Agreement are strictly confidential. From and after the date of execution of
this Agreement, Executive agrees not to disclose, directly or indirectly, the
existence of this Agreement or any of the terms and conditions herein to any
Person except that Executive may disclose the existence of this Agreement or the
terms and conditions herein to Executive’s immediate family, tax, financial or
legal advisers, any taxing authority, or as required by law, and Executive shall
disclose the provisions of Articles 8 and 9 to prospective employers during the
Restricted Period. Except as provided in this Section, if Executive is asked
about the existence and/or terms and conditions of this Agreement, Executive is
permitted to state only that “the terms of my employment are a confidential
matter that I am not able to disclose.” Executive acknowledges that the terms of
this Section 8.3 are a material inducement for the Bank to enter into this
Agreement. Notwithstanding the foregoing, Executive may disclose such
information regarding this Agreement as may be disclosed by the Bank Entities in
any document filed with the Securities and Exchange Commission.

 

     8.4     Documents. All files, papers, records, documents, compilations,
summaries, lists, reports, notes, databases, tapes, sketches, drawings,
memoranda, and similar items (collectively, “Documents”), whether prepared by
Executive, or otherwise provided to or coming into the possession of Executive,
that contain any Confidential or proprietary information about or pertaining or
relating to the Bank Entities (the “Bank Information”) shall at all times remain
the exclusive property of the Bank Entities. Promptly after a request by the
Bank or the Termination Date, Executive shall take reasonable efforts to (i)
return to the Bank all Documents in any tangible form (whether originals, copies
or reproductions) and all computer disks or other media containing or embodying
any Document or Bank Information and (ii) purge and destroy all Documents and
Bank Information in any intangible form (including computerized, digital or
other electronic format) as may be requested in writing by the Chief Executive
Officer of the Bank or Chairman of the Board of the Bank, and Executive shall
not retain in any form any such Document or any summary, compilation, synopsis
or abstract of any Document or Bank Information.     

 

8.5     Non-Competition. Executive hereby acknowledges and agrees that, during
the course of employment, in addition to Executive’s access to Confidential
Information, Executive has become, and will become, familiar with and involved
in all aspects of the business and operations of the Bank Entities. Executive
hereby covenants and agrees that during the Term until the later to occur of the
date one (1) year after the Termination Date, or the Expiration Date (the
“Restricted Period”), Executive will not at any time (except for the Bank
Entities), directly or indirectly, in any capacity (whether as a proprietor,
owner, agent, officer, director, shareholder, organizer, partner, principal,
manager, member, employee, contractor, consultant or otherwise):

 

 
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(a) provide any advice, assistance or services of the kind or nature which he
provided to any of the Bank Entities or relating to business activities of the
type engaged in by any of the Bank Entities within the preceding two years, to
any Person who owns or operates a Competitive Business or to any Person that is
attempting to initiate or acquire a Competitive Business (in either case, a
“Competitor”) if (i) such Competitor operates, or is planning to operate, any
office, branch or other facility (in any case, a “Branch”) that is (or is
proposed to be) located within a fifty (50) mile radius of the Bank’s
headquarters or any Branch of the Bank Entities and (ii) such Branch competes or
will compete with the products or services offered or planned to be offered by
the Bank Entities during the Restricted Period; or

 

(b) sell or solicit sales of Competitive Products to Persons within such 50 mile
radius, or assist any Competitor in such sales activities.

 

Notwithstanding any provision hereof to the contrary, this Section 8.5 does not
restrict Executive’s right to (i) own securities of any Entity that files
periodic reports with the Securities and Exchange Commission under Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended; provided that
Executive’s total ownership constitutes less than two percent (2%) of the
outstanding securities of such company and that such ownership does not does not
violate: (A) the Code of Conduct or any other policy of the Bank, including any
policy related to inside information; (B) any applicable securities law; or (C)
any applicable standstill or other similar contractual obligation of the Bank.
The parties have also entered into that certain Non-Compete Agreement as of even
date herewith (the “Non-Compete”).

 

8.6     Non-Interference. Executive hereby covenants and agrees that during the
Restricted Period, he will not, directly or indirectly, for himself or any other
Person (whether as a proprietor, owner, agent, officer, director, shareholder,
organizer, partner, principal, member, manager, employee, contractor, consultant
or any other capacity):

 

(a)     induce or attempt to induce any customer, supplier, officer, director,
employee, contractor, consultant, agent or representative of, or any other
Person that has a business relationship with, any Bank Entity, to discontinue,
terminate or reduce the extent of its or his relationship with any Bank Entity
or to take any action that would disrupt or otherwise damage any such
relationship;

 

(b)     solicit any customer of any of the Bank Entities for the purpose of
providing any Competitive Products or Services to such customer (other than any
solicitation to the general public that is not disproportionately directed at
customers of any Bank Entity); or

 

(c)     solicit any employee of any of the Bank Entities to commence employment
with, become a consultant or independent contractor to or otherwise provide
services for the benefit of any other Competitive Business.

 

In applying this Section 8.6:

 

(i)     the term “customer” shall be deemed to include, at any time, any Person
to which any of the Bank Entities had, during the six (6) month period
immediately prior to such time, (A) sold any products or provided any services
or (B) submitted, or been in the process of submitting or negotiating, a
proposal for the sale of any product or the provision of any services;

 

(ii)     the term “supplier” shall be deemed to include, at any time, any Person
which, during the six (6) month period immediately prior to such time, (A) had
sold any products or services to any of the Bank Entities or (B) had submitted
to any of the Bank Entities a proposal for the sale of any products or services;

 

(iii)     for purposes of clause (c), the term “employee” shall be deemed to
include, at any time, any Person who was employed by any of the Bank Entities
within the prior six (6) month period (thereby prohibiting Executive from
soliciting any Person who had been employed by any of the Bank Entities until
six (6) months after the date on which such Person ceased to be so employed);
and

 

 
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(iv)     If during the Restricted Period any employee of any of the Bank
Entities accepts employment with or is otherwise retained by any Competitive
Business of which Executive is an owner, director, officer, manager, member,
employee, partner or employee, or to which Executive provides material services,
it shall be presumed that such employee was hired in violation of the
restriction set forth in clause (c) of this Section 8.6, with such presumption
to be overcome only upon Executive’s showing by a preponderance of the evidence
that he was not directly or indirectly involved in the hiring, soliciting or
encouraging such employee to leave employment with the Bank Entities.

 

8.7     Injunction. In the event of any breach or threatened or attempted breach
of any provision of this Article 8 by Executive, the Bank shall, in addition to
and not to the exclusion of any other rights and remedies at law or in equity,
be entitled to seek and receive from any court of competent jurisdiction (i)
full temporary and permanent injunctive relief enjoining and restraining
Executive and each and every other Person concerned therein from the
continuation of such violative acts and (ii) a decree for specific performance
of the applicable provisions of this Agreement, without being required to
furnish any bond or other security.

 

8.8     Reasonableness.

 

8.8.1     Executive has carefully read and considered the provisions of this
Article 8 and, having done so, acknowledges that he fully understands them, that
he has had an opportunity to consult with counsel of Executive’s own choosing
regarding the meaning and effect of such provisions, at Executive’s election,
and he agrees that the restrictions and agreements set forth in this Article 8
are fair and reasonable and are reasonably required for the protection of the
interests of the Bank Entities and their respective businesses, shareholders,
directors, officers and employees. Executive agrees that the restrictions set
forth in this Agreement will not impair or unreasonably restrain Executive’s
ability to earn a livelihood. Executive further acknowledges that the
Executive’s services have been and shall continue to be of special, unique and
extraordinary value to the Bank.

 

8.8.2     If any court of competent jurisdiction should determine that the
duration, geographical area or scope of any provision or restriction set forth
in this Article 8 exceeds the maximum duration, geographic area or scope that is
reasonable and enforceable under applicable law, the parties agree that said
provision shall automatically be modified and shall be deemed to extend only
over the maximum duration, geographical area and/or scope as to which such
provision or restriction said court determines to be valid and enforceable under
applicable law, which determination the parties direct the court to make, and
the parties agree to be bound by, such modified provision or restriction.

 

8.9     Additional Obligations.

 

8.9.1     Non-disparagement. Executive shall not during or after the Executive’s
employment disparage any officers, directors, employees, business, products, or
services of the Bank, except when compelled to do so in connection with a
government investigation or judicial proceeding, or as otherwise may be required
or protected by law.

 

8.9.2     Cooperation. During and after Executive’s employment, Executive shall
fully cooperate with the reasonable requests of the Bank, including providing
information, with regard to any matter that the Executive has knowledge of as a
result of the Executive’s employment or prior employment with the Bank.
Executive further agrees to comply with any reasonable request by the Bank to
assist in relation to any investigation into any actual or potential
irregularities, including without limitation assisting with any threatened or
actual litigation concerning the Bank, giving statements/affidavits, meeting
with legal and/or other professional advisors, and attending any legal hearing
and giving evidence; provided that the Bank shall reimburse the Executive for
any reasonable out-of-pocket expenses properly incurred by the Executive in
giving such assistance. Executive agrees to notify the Bank immediately if the
Executive is contacted by any third parties for information or assistance with
any matter concerning the Bank and agrees to co-operate the Bank with regard to
responding to such requests.

 

9.     Change in Control.

 

 
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9.1     Definition. “Change in Control” means and shall be deemed to have
occurred if:

 

(a)      there shall be consummated (i) any consolidation, merger, share
exchange, or similar transaction relating to Bancorp, or pursuant to which
shares of Bancorp’s capital stock are converted into cash, securities of another
Entity and/or other property, other than a transaction in which the holders of
Bancorp’s voting stock immediately before such transaction shall, upon
consummation of such transaction, own at least fifty percent (50%) of the voting
power of the surviving Entity, or (ii) any sale of all or substantially all of
the assets of Bancorp, other than a transfer of assets to a related Person which
is not treated as a change in control event under §1.409A-3(i)(5)(vii)(B) of the
U.S. Treasury Regulations;

 

(b)     any person, entity or group (each within the meaning of Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) shall become the beneficial owner (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of securities of Bancorp
representing more than fifty percent (50%) of the voting power of all
outstanding securities of Bancorp entitled to vote generally in the election of
directors of Bancorp (including, without limitation, any securities of Bancorp
that any such Person has the right to acquire pursuant to any agreement, or upon
exercise of conversion rights, warrants or options, or otherwise, which shall be
deemed beneficially owned by such Person); or

 

(c)     over a twelve (12) month period, a majority of the members of the Board
of Directors of Bancorp are replaced by directors whose appointment or election
was not endorsed by a majority of the members of the Board of Directors of
Bancorp in office prior to such appointment or election.

 

Notwithstanding the foregoing, if the event purportedly constituting a Change in
Control under Section 9.1(a), Section 9.1(b), or Section 9.1(c) does not also
constitute a “change in ownership” of Bancorp, a “change in effective control”
of Bancorp or a “change in the ownership of a substantial portion of the assets”
of Bancorp within the meaning of Section 409A, then such event shall not
constitute a “Change in Control” hereunder.

 

9.2     Change in Control Termination. For purposes of this Agreement, a “Change
in Control Termination” means that while this Agreement is in effect:

 

(a)     Executive’s employment with the Bank is terminated without Cause (i)
within one hundred twenty (120) days immediately prior to and in conjunction
with a Change in Control or (ii) within twelve (12) months following
consummation of a Change in Control; or

 

(b)     Within twelve (12) months following consummation of a Change in Control,
Executive’s title, duties and or position have been materially reduced such that
Executive is not in a comparable position (with materially comparable
compensation, benefits and responsibilities and is located within twenty-five
(25) miles of Executive’s primary worksite) to the position he held immediately
prior to the Change in Control, and within thirty (30) days after notification
of such reduction he notifies the Bank that he is terminating Executive’s
employment due to such change in Executive’s employment unless such change is
cured within thirty (30) days of such notice by providing him with a comparable
position (including materially comparable compensation and benefits and is
located within twenty-five (25) miles of Executive’s primary worksite). If
Executive’s employment is terminated under this Section, Executive’s last day of
employment shall be mutually agreed to by Executive and the Bank, but shall be
not more than sixty (60) days after such notice is given by Executive.

 

9.3     Window Period Resignation After Change in Control. If at the expiration
of the twelve (12) month period following consummation of a Change in Control
(the “Action Period”), Executive’s employment by the Bank has not been
terminated, Executive may, by giving written notice to the Bank within the
thirty (30) day period immediately following the last day of the Action Period,
elect to terminate the Term, in which event Executive’s last day of employment
will be as mutually agreed to by the Bank and Executive but which shall be not
more than sixty (60) days after such notice is given by Executive.

 

 
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November 1, 2014

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9.4     Change in Control Payment. If there is a Change in Control Termination
pursuant to Section 9.2 or Executive resigns after the Action Period pursuant to
Section 9.3, Executive shall be paid a lump-sum cash payment (the “Change
Payment”) equal to 1.99 times (the “Multiplier”) the sum of (a) Executive’s
Salary at the highest rate in effect during the twelve (12) month period
immediately preceding Executive’s Termination Date and (b) Executive’s cash
bonus(es) paid in the most recent twelve (12) months, such Change Payment to be
made to Executive on the date forty-five (45) days after the later of (i) the
Termination Date or (ii) the date of the Change in Control; provided, however,
that the Bank shall be relieved of its obligation to pay the Change Payment if
Executive fails to sign and deliver to the Bank no later than twenty-one (21)
days after the Termination Date a General Release and Waiver in the form
attached to this Agreement as Exhibit A. To the extent the Executive’s
Multiplier is 0.99 and during the Term Executive’s tenure with the Bank is five
years or greater, the Multiplier shall change as of such anniversary and be 1.99
as of such date. In addition, and subject to the timely execution and delivery
of the General Release and Waiver as aforesaid, Executive shall continue to
receive for three (3) years after a Change in Control Termination the benefits
provided above under Sections 5.7, 5.8.1 and 5.11. Notwithstanding anything to
the contrary in this Section 9.4, (y)any payment pursuant to this Section 9.4
shall be subject to (i) any delay in payment required by Section 10.2 hereof and
(ii) any reduction required pursuant to Section 10.1.2 hereof, as applicable and
(z) shall not include any equity awards pursuant to Section 5.13 above or
otherwise.

 

10.     Compliance with Certain Restrictions.

 

10.1     Section 280G.

 

10.1.1     For purposes of this Agreement, the following terms are defined as
follows:

 

(a)     “Additional 280G Payments” means any distributions in the nature of
compensation by any Bank Entity to or for the benefit of Executive (including,
but not limited to, the value of acceleration in vesting in restricted stock,
options or any other stock-based compensation), whether or not paid or payable
or distributed or distributable pursuant to this Agreement, which is required to
be taken into consideration in applying Section 280G(b)(2)(A) of the Code;

 

(b)     “Parachute Payment” is defined as set forth in Section 280G(b)(2) of the
Code; and

 

(c)      “Total Change in Control Payments” means the total amount of the Change
Payment together with all Additional 280G Payments that are required to be paid
because of a Change in Control.

 

10.1.2      Notwithstanding anything in this Agreement to the contrary, if the
Determining Firm determines that any portion of the Total Change in Control
Payments would otherwise constitute a Parachute Payment, the amount payable to
Executive shall automatically be reduced by the smallest amount necessary so
that no portion of the Total Change in Control Payments will be a Parachute
Payment. . If Total Change in Control Payments are to be paid in other than a
lump sum, such reduction shall be applied in such order as the Executive
designates, subject to the approval of Bank, not to be unreasonably withheld,
conditioned or delayed. If, despite the foregoing sentence, a payment shall be
made to Executive that would constitute a Parachute Payment, Executive shall
have no right to retain such payment and, immediately upon being informed of the
impropriety of such payment, Executive shall return such payment to the Bank or
other Bank Entity that was the payer thereof, together with interest at the
applicable federal rate determined pursuant to Section 1274(d) of the Code.

 

 

10.2     Section 409A.

 

10.2.1     It is the intention of the parties hereto that this Agreement and the
payments provided for hereunder shall not be subject to, or shall be in
accordance with, Section 409A, and thus avoid the imposition of any tax and
interest on Executive pursuant to Section 409A(a)(1)(B) of the Code, and this
Agreement shall be interpreted and construed consistent with this intent.
Executive acknowledges and agrees that he shall be solely responsible for the
payment of any tax or penalty which may be imposed or to which he may become
subject as a result of the payment of any amounts under this Agreement.

 

 
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10.2.2     Notwithstanding any provision of this Agreement to the contrary, if
Executive is a “specified employee” at the time of Executive’s “separation from
service”, any payment of “nonqualified deferred compensation” (in each case as
determined pursuant to Section 409A) that is otherwise to be paid to Executive
within six (6) months following Executive’s separation from service, then to the
extent that such payment would otherwise be subject to interest and additional
tax under Section 409A(a)(1)(B) of the Code, such payment shall be delayed and
shall be paid on the first business day of the seventh calendar month following
Executive’s separation from service, or, if earlier, upon Executive’s death. Any
deferral of payments pursuant to the foregoing sentence shall have no effect on
any payments that are scheduled to be paid more than six (6) months after the
date of separation from service.

 

10.2.3     The parties hereto agree that they shall take such actions as may be
necessary and permissible under applicable law, regulation and guidance to amend
or revise this Agreement in order to ensure that Section 409A(a)(1)(B) does not
impose additional tax and interest on payments made pursuant to this Agreement.

 

11.      Assignability. Executive shall have no right to assign this Agreement
or any of Executive’s rights or obligations hereunder to another party or
parties. The Bank may assign this Agreement to any of its Affiliates or to any
Person that acquires a substantial portion of the operating assets of the Bank.
Upon any such assignment by the Bank, references in this Agreement to the Bank
shall automatically be deemed to refer to such assignee instead of, or in
addition to, the Bank, as appropriate in the context.

 

12.      Governing Law; Venue. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland applicable to contracts
executed and to be performed therein, without giving effect to the choice of law
rules thereof. Any action to enforce any provision of this Agreement may be
brought only in a court of the State of Maryland or in the United States
District Court for the District of Maryland. Accordingly, each party (a) agrees
to submit to the jurisdiction of such courts and to accept service of process at
its address for notices and in the manner provided in Section 13 for the giving
of notices in any such action or proceeding brought in any such court and (b)
irrevocably waives any objection to the laying of venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient or inappropriate forum.

 

13.     Notices. All notices, requests, demands and other communications
required to be given or permitted to be given under this Agreement shall be in
writing and shall be conclusively deemed to have been given as follows: (a) when
hand delivered to the other party; (b) when received by facsimile at the
facsimile number set forth below, provided, however, that any notice given by
facsimile shall not be effective unless either (i) a duplicate copy of such
facsimile notice is promptly given by depositing the same in a United States
post office first-class postage prepaid and addressed to the applicable party as
set forth below or (ii) the receiving party delivers a signed, written
confirmation of receipt for such notice either by facsimile or by any other
method permitted under this Section; or (c) when deposited in a United States
post office with first-class certified mail, return receipt requested, postage
prepaid and addressed to the applicable party as set forth below; or (d) when
deposited with a national overnight delivery service reasonably approved by the
parties (Federal Express and DHL WorldWide Express being deemed approved by the
parties), postage prepaid, addressed to the applicable party as set forth below
with next-business-day delivery guaranteed; provided that the sending party
receives a confirmation of delivery from the delivery service provider. Any
notice given by facsimile shall be deemed received on the date on which notice
is received except that if such notice is received after 5:00 p.m. (recipient’s
time) or on a non-business day, notice shall be deemed given the next business
day). Any notice sent by Untied States mail shall be deemed given three (3)
business days after the same has been deposited in the United States mail. Any
notice given by national overnight delivery service shall be deemed given on the
first business day following deposit with such delivery service. For purposes of
this Agreement, the term “business day” shall mean any day other than a
Saturday, Sunday or day that is a legal holiday in Montgomery County, Maryland.
The address of a party set forth below may be changed by that party by written
notice to the other from time to time pursuant to this Article.

 

 
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EagleBank Employment Agreement

November 1, 2014

Page 13 of 16

 

 

To:          Executive at set forth by Executive’s signature below

 

To:          EagleBank

c/o Ronald D. Paul

7815 Woodmont Ave.

Bethesda, MD 20814

Fax No.: 301-986-8529

 

cc:           Laurence E. Bensignor

EagleBank

7815 Woodmont Avenue

Bethesda, Maryland 20814

Fax: 301-841-9872

 

14.     Entire Agreement. This Agreement and the Non-Compete and, other than
with respect to the term of employment, the letter agreement dated September 15,
2014 from Susan G. Riel, Senior Executive Vice President of EagleBank, to
Executive, which is incorporated by reference, contain all of the agreements and
understandings between the parties hereto with respect to the employment of
Executive by the Bank, and supersede all prior agreements, arrangements and
understandings related to the subject matter hereof. No oral agreements or
written correspondence shall be held to affect the provisions hereof. No
representation, promise, inducement or statement of intention has been made by
either party that is not set forth in this Agreement or the Non-Compete, and
neither party shall be bound by or liable for any alleged representation,
promise, inducement or statement of intention not so set forth. Not in
limitation of the foregoing, this Agreement supersedes and replaces the
Executive’s employment arrangement with the Bank in effect prior to the date
hereof, except that Executive shall remain entitled to receive any compensation
earned but not yet paid thereunder.

 

15.     Headings. The Article and Section headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.

 

16.     Severability. Should any part of this Agreement for any reason be
declared or held illegal, invalid or unenforceable, such provision or portion of
such provision shall be deemed severed herefrom and such determination shall not
affect the legality, validity or enforceability of any remaining portion or
provision of this Agreement, which remaining portions and provisions shall
remain in force and effect as if this Agreement has been executed with the
illegal, invalid or unenforceable portion thereof eliminated.

 

17.     Amendment; Waiver. Neither this Agreement nor any provision hereof may
be amended, modified, changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which enforcement of the
amendment, modification, change, waiver, discharge or termination is sought. The
failure of either party at any time or times to require performance of any
provision hereof shall not in any manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term, provision
or covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term, provision or covenant contained in this Agreement.

 

18.     Gender and Number. As used in this Agreement, the masculine, feminine
and neuter gender, and the singular or plural number, shall each be deemed to
include the other or others whenever the context so indicates.

 

19.     Binding Effect. This Agreement is and shall be binding upon, and inures
to the benefit of, the Bank, its successors and assigns, and Executive and
Executive’s heirs, executors, administrators, and personal and legal
representatives.

 

[signatures on following page]

 

 
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EagleBank Employment Agreement

November 1, 2014

Page 14 of 16

 

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the date first written above.

 

EAGLEBANK  

 

 

 

 

 

 

By:     Name: Ronald D. Paul   Title: Chief Executive Officer         Executive
                       

 

  

Notice Address:  

 

 

 

 

 

 

 

Fax No. 

 

 

 

 
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EagleBank Employment Agreement

November 1, 2014

Page 15 of 16

 

   

Attachment A

 

 

Form of

General Release and Waiver of All Claims

 

____________ ("you") executes this General Release And Waiver of All Claims (the
"Release") as a condition of receiving certain payments and other benefits in
accordance with the terms of Section 7.7 of your Employment Agreement dated
___________, 20__. All capitalized terms used but not otherwise defined herein
shall have the same meaning as in your Employment Agreement.

 

1.

RELEASE.

 

You hereby release and forever discharge EagleBank and Eagle Bancorp, Inc.
[modify to specifically include any additional Affiliates] and each and every
one of their former or current subsidiaries, parents, affiliates, directors,
officers, employees, agents, parents, affiliates, successors, predecessors,
subsidiaries, assigns and attorneys (the "Released Parties") from any and all
charges, claims, damages, injury and actions, in law or equity, which you or
your heirs, successors, executors, or other representatives ever had, now have,
or may in the future have by reason of any act, omission, matter, cause or thing
through the date of your execution of this Release. You understand that this
Release is a general release of all claims you may have against the Released
Parties based on any act, omission, matter, case or thing through the date of
your execution of this Release.

 

2.

WAIVER.

 

You realize there are many laws and regulations governing the employment
relationship. These include, but are not limited to, Title VII of the Civil
Rights Acts of 1964 and 1991; the Age Discrimination in Employment Act of 1967;
the Americans with Disabilities Act; the National Labor Relations Act; 42 U.S.C.
§ 1981; the Family and Medical Leave Act; the Employee Retirement Income
Security Act of 1974 (other than any accrued benefit(s) to which you have a
non-forfeitable right under any pension benefit plan); the Maryland Civil Rights
Act, the Maryland Wage Payment and Collection Law, Maryland Occupational Safety
and Health Act, the Maryland Collective Bargaining Law, and any other state,
local and federal employment laws; and any amendments to any of the foregoing.
You also understand there may be other statutes and laws of contract and tort
that also relate to your employment. By signing this Release, you waive and
release any rights you may have against the Released Parties under these and any
other laws based on any act, omission, matter, cause or thing through the date
of your execution of this Release. You also agree not to initiate, join, or
voluntarily participate in any action or suit in any court or to accept any
damages or other relief from any such proceeding brought by anyone else based on
any act, omission, matter, cause or thing through the date of your execution of
this Release.

 

 
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EagleBank Employment Agreement

November 1, 2014

Page 16 of 16

 

 

 

3.

NOTICE PERIOD.

 

This document is important. We advise you to review it carefully and consult an
attorney before signing it, as well as any other professional whose advice you
value, such as an accountant or financial advisor. If you agree to the terms of
this Release, sign in the space indicated below for your signature. You will
have twenty-one (21) calendar days from the date you receive this document to
consider whether to sign this Release. If you choose to sign the Release before
the end of that twenty-one day period, you certify that you did so voluntarily
for your own benefit and not because of any coercion.

 

4.

RETURN OF PROPERTY.

 

You certify that you have fully complied with Section 8.4 of your Employment
Agreement.

 

5.

REVOCATION.

 

You should also understand that even after you have signed this Release, you
still have seven (7) days to revoke it. To revoke your acceptance of this
Release, the Chairman of the Bank’s Board of Directors must receive written
notice before the end of the seven (7)-day period. In the event you revoke or do
not accept this Release, you will not be entitled to any of the payments or
benefits that you would have been entitled to under your Employment Agreement by
virtue of executing this Release. If you do not revoke this Release within seven
(7) days after you sign it, it will be final, binding, and irrevocable.

 

IN WITNESS WHEREOF, the Parties have knowingly and voluntarily executed this
Release, as of the day and year first set forth below.

 

 

 

 

 

 

 

 

Executive

 

 

Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

      Date  

 

 

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