EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of February 26, 1999, between COLUMBIA
BANCORP, a Maryland corporation (the "Corporation"), THE COLUMBIA BANK, a
Maryland trust company and a principal subsidiary of the Corporation (the
"Bank"), and Xxxxxx X. Xxxxx (the "Executive"). The Severance Agreement dated as
of February 26, 1996 and as amended December 16, 1997, between the Corporation,
the Bank and the Executive, is hereby terminated effective with the execution of
this Employment Agreement.
W I T N E S S E T H:
The Executive will serve as the Executive Vice President of the Bank
and possesses an intimate knowledge of the business and affairs of the
Corporation and the Bank (each, a "Company" and collectively, the "Companies").
The Companies recognize the Executive's contribution to the organization, growth
and success of the Companies and desire to enter into an employment agreement
with the Executive in order to assure to the Companies the benefits of the
Executive's expertise and knowledge. The Executive, in turn, desires to enter
into full-time employment with the Companies on the terms provided herein.
Accordingly, in consideration of the mutual covenants and
representations contained herein and the mutual benefits derived herefrom, the
parties hereto agree as follows:
1. Full-Time Employment of Executive.
1.1. Duties and Status.
(a) The Companies hereby engage the Executive as a
full-time executive employee for the period (the "Employment
Period") specified in paragraph 4.1, and the Executive accepts
such employment, on the terms and conditions set forth in this
Agreement. During the Employment Period, the Executive shall
exercise authority and perform executive duties as an Executive
Vice President of the Bank.
(b) During the Employment Period, the Executive shall (i)
not engage in consulting work or any trade or business for his own
account or for or on behalf of any other person, firm or
corporation which competes, conflicts or materially interferes
with the performance of his duties hereunder in any way and (ii)
accept such additional office or offices to which he may be
elected by the Board of Directors of either of the Companies,
provided that the performance of the duties of such office or
offices shall be consistent with the scope of the duties provided
for in paragraph 1.1(a).
(c) The Executive shall be required to perform the
services and duties provided for in paragraph 1.1(a) only at the
principal office of either of the
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Companies in Columbia, Maryland, or at such other locations
acceptable to the Executive. The Executive shall be entitled to
vacation, leave of absence, and leave for illness or temporary
disability in accordance with the policies to be established for
the Companies, which shall be similar to those commonly offered at
comparable banking institutions, and any leave on account of
illness or temporary disability shall not constitute a breach by
the Executive of his agreements hereunder.
1.2. Compensation and General Benefits. As compensation for his
services under this Agreement, the Executive shall be compensated as
follows:
(a) The Companies shall pay the Executive an annual salary
which is not less than the greater of (i) a base salary of
$125,500.00 per annum, or (ii) any subsequently established higher
annual base salary. Such salary shall be payable in periodic equal
installments which are no less frequent than monthly. Such salary
shall be subject to normal periodic review at least annually for
increases based on the salary policies of the Companies and
contributions to the enterprises.
(b) The Executive shall be entitled to participate in such
pension, profit sharing, stock incentive, stock option, stock
purchase, incentive, group and individual disability, group and
individual life, survivor income, sickness, accident, dental,
medical or health insurance and other plans of the Companies which
are in effect immediately prior to the effective date of this
Agreement or in any other or additional benefit programs, plans or
arrangements of the Companies which may be established by the
Companies, as and to the extent any such benefit programs, plans
or arrangements are or may from time to time be in effect, as
determined by the Companies and terms hereof. The Companies shall
neither (i) terminate or amend any benefit program, plan or
arrangement of the Companies pursuant to which the Executive, or
his dependents, beneficiaries or estate, is or shall be entitled
to benefits, nor (ii) terminate or amend any formula or method set
forth in any benefit program, plan or arrangement of the Companies
pursuant to which the amount and type of benefits to which the
Executive, or his dependents, beneficiaries or estate, is or shall
be entitled thereunder are determined, if such termination or
amendment would in any way modify or deprive the Executive, or his
dependents, beneficiaries or estate, of any benefits to which he,
or his dependents, beneficiaries or estate, is or shall be
entitled under any benefit program, plan or arrangement of the
Companies, unless (a) the Executive expressly consents in writing
to such termination or amendment or (B) the amendment is required
by law or regulation and the Companies shall, to the extent
necessary, provide, pay or provide for payment of amounts equal to
any benefits lost or reduced by such amendment. Throughout the
period of his employment hereunder, the Executive shall be
entitled to the receipt of any personal benefits from the
Companies at the Companies' expense including, but not limited to,
any other perquisites provided by the Companies to executives with
comparable authority or duties. The term "benefit programs, plans,
or arrangements of the Companies" as used in this Agreement refers
to the matters in this paragraph 1.2(b).
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2. Competition; Confidential Information. The Executive and the
Companies recognize that due to the nature of his association with the Companies
and of his engagements hereunder, and the relationship of the Executive to the
Companies, both in the past as an organizer and in the future hereunder, the
Executive has had access to and has acquired, will have access to and will
acquire, and has assisted in and may assist in developing, confidential and
proprietary information relating to the business and operations of the Companies
and their affiliates, including, without limiting the generality of the
foregoing, information with respect to its present and prospective systems,
customers, agents, accounts, deposits, loans, and sales and marketing methods.
The Executive acknowledges that such information has been and will continue to
be of central importance to the business of the Companies and their affiliates
and that disclosure of it to or its use by others could cause substantial loss
to the Companies. The Executive and the Companies also recognize that an
important part of the Executive's duties will be to develop good will for the
Companies and their affiliates through his personal contact with customers,
agents and others having business relationships with the Companies and their
affiliates, and that there is a danger that this good will, a proprietary asset
of the Companies and their affiliates, may follow the Executive if and when his
relationship with the Companies is terminated. The Executive accordingly agrees
as follows:
2.1. Non-Competition.
(a) During the Non-Competition Period, the Executive will
not, directly or indirectly, either individually or as owner,
partner, agent, employee, consultant or otherwise, except for the
account of and on behalf of the Corporation or its affiliates
("affiliates" is defined solely for purposes of this paragraph 2
as "Columbia Bancorp and its subsidiaries"), engage in any
activity competitive with the business of the Companies or their
affiliates, nor during the Non-Competition Period will he, in
competition with the Companies or their affiliates, solicit or
otherwise attempt to establish for himself or any other person,
firm or entity, any business relationships with any person, firm
or corporation which was, at any time during the Non-Competition
Period, (i) a state or national bank, (ii) a bank holding company,
or (iii) a direct or indirect subsidiary of a state or national
bank or a bank holding company, in each case which has its
principal operations located in Xxxxxx County, Maryland or within
a 15 mile radius of the principal office of the Corporation in
Columbia, Maryland, excepting both the City of Baltimore and
Washington, D.C.
(b) The Non-Competition Period shall commence on the date
of this Agreement and shall terminate on:
(i) The date of the termination of the Employment
Period; or
(ii) If the Executive resigns in circumstances other
than those described in paragraph 4.3(a)(ii), two years
after the date of such resignation; provided, however,
that if the Executive resigns during a Change in Control
Period in
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circumstances other than those described in paragraph
4.3(a)(ii), the Non-Competition Period shall terminate on
the date of such resignation; or
(iii) If the Executive is terminated for cause (as
defined in paragraph 4.3(b)), two years after the date of
such termination for cause.
(c) Nothing in this paragraph 2 shall be construed to
prevent the Executive from owning, as an investment, not more than
1% of a class of equity securities issued by any issuer and
publicly traded and registered under Section 12 of the Securities
Exchange Act of 1934.
2.2. Trade Secrets. The Executive will keep confidential any trade
secrets or confidential or proprietary information of the
Corporation and its affiliates which are now known to him or which
hereafter may become known to him as a result of his employment or
association with the Companies and shall not at any time directly
or indirectly disclose any such information to any person, firm or
corporation, or use the same in any way other than in connection
with the business of the Companies or their affiliates during and
at all times after the expiration of the Employment Period. For
purposes of this Agreement, "trade secrets or confidential or
proprietary information" means information unique to the Companies
or any of their affiliates which has a significant business
purpose and is not known or generally available from sources
outside the Companies or any of their affiliates or typical of
industry practice.
3. Companies' Remedies for Breach. It is recognized that damages
in the event of breach of paragraph 2 by the Executive would be difficult, if
not impossible, to ascertain, and it is therefore agreed that the Companies, in
addition to and without limiting any other remedy or right they may have, shall
have the right to an injunction or other equitable relief in any federal or
state court of competent jurisdiction in the State of Maryland, enjoining any
such breach, and the Executive hereby waives any and all defenses he may have on
the ground of lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief. The existence of this right shall not
preclude any other rights and remedies at law or in equity which the Companies
may have. In the event the Companies seek an injunction against the Executive
and lose, then the Companies shall be liable for damages and for any legal fees
incurred by the Executive in defending the action.
4. Employment Period.
4.1. Duration. The Employment Period shall commence on the date of
this Agreement (the "Effective Date") and shall continue until the
earlier of (i) the close of business on the date which is two
years after the date on which, during the Employment Period,
either of the Companies gives written notice of termination to the
Executive or the Executive gives written notice of termination to
either of the Companies, as applicable, but not later than the
close of business on May 12, 2010, (ii) termination of this
Agreement (as defined in paragraph 4.3(a)), (iii) death of the
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Executive, (iv) total disability of the Executive (as defined in
paragraph 4.3(c)), (v) resignation of the Executive in
circumstances other than those described under paragraph
4.3(a)(ii), or (vi) discharge of the Executive for cause (as
defined in paragraph 4.3(b)).
4.2. Payments after Employment Period.
(a) In the event of a termination of this Agreement under
paragraph 4.1(ii), the Companies shall pay to the Executive
and provide him with the following:
(i) During the remainder of the Employment Period
(determined without regard to paragraph 4.1(ii)), but not
less than one year following the occurrence of any event
of termination under paragraph 4.1(ii), the Companies
shall continue to pay the Executive his salary at the rate
and as required by paragraph 1.2(a) and in effect
immediately prior to the date of termination plus (in any
year after the first year) an annual bonus payable at the
time or times customary during the Employment Period,
which bonus shall be equivalent to a certain percentage of
his salary paid to him by the Companies for each such year
during the remainder of the Employment Period (determined
without regard to paragraph 4.1(ii) but with regard to
paragraphs 4.1(iii) and (iv)), such percentage to be equal
to the average of the percentage of his salary which his
annual bonus represented during each of the three years
immediately preceding termination of this Agreement.
(ii) During the remainder of the Employment Period
(determined without regard to paragraph 4.1(ii) but with
regard to paragraphs 4.1(iii) and (iv)), the Executive
shall continue to be treated as an executive (at the level
provided for in paragraph 1.1(a)) under all of the benefit
programs, plans or arrangements of the Companies described
in paragraph 1.2(b). In addition, the Executive shall
continue to be entitled to all benefits and service
credits for benefits under all of the benefit programs,
plans or arrangements of the Companies described in
paragraph 1.2(d) as if he were still employed during such
period under this Agreement.
(iii) If, despite the provisions of subparagraph (ii)
above, benefits, service credits, or the right to accrue
further benefits or service credits under any benefit
programs, plans or arrangements of the Companies described
in paragraph 1.2(b) shall not be payable or provided to
the Executive, or his dependents, beneficiaries and
estate, because he is not longer an employee of one or
both of the Companies, the Companies shall, to the extent
necessary, provide, pay or provide for payment of
equivalent benefits, service credits and rights to accrue
further benefits or service credits to or for the benefit
of the Executive, his dependents, beneficiaries and
estate.
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(b) In the event of a termination of this Agreement under
paragraph 4.1(ii), the Executive in his discretion may elect,
within 60 days after such termination, to be paid a lump sum
or other agreed severance allowance in lieu of termination
payments provided for in paragraph 4.2(a) in an amount of cash
which shall be negotiated and agreed upon in writing between
the Executive and the Companies. Among the forms which the
severance allowance may take, if negotiated and agreed upon in
writing between the Executive and the Companies, shall be
payment of equal installments to the Executive the present
value of which, computed at the time required by Section 4999
of the Internal Revenue Code of 1986 (the "Code"), is below
the threshold necessary to trigger applicability of Section
4999 of the Code which imposes a nondeductible excise tax on
any recipient of an "excess parachute payment" equal to 20% of
the amount of such payment. In the event that the Executive
makes an election pursuant to this paragraph 4.2(b), the
severance allowance shall represent the present fair market
value of the amount of salary, bonuses and all benefit
programs, plans and arrangements of the Companies which the
Executive would be entitled to during the Employment Period
(determined without regard to paragraph 4.1(iii)) under this
Agreement. Upon the date that the Companies and the Executive
enter into a written agreement providing for a severance
payment, the Companies' obligations to the Executive pursuant
to paragraph 4.2(a) shall terminate. In the event that the
Executive and the Companies are unable to negotiate a mutually
satisfactory agreement concerning the amount of a severance
payment pursuant to this paragraph 4.2(b), then the Executive
shall receive termination payments and benefits as provided in
paragraphs 4.2(a). Payments made under this paragraph 4.2(b)
shall continue notwithstanding the subsequent death or
disability of the Executive.
(c) In the event of a termination of this Agreement under
paragraph 4.1(iii), (i) the Companies shall pay the
Executive's estate an amount equal to six months' salary at
the rate and as required by paragraph 1.2(a) and in effect
immediately prior to the date of death, (ii) the Companies
shall continue benefits under the Companies' sickness,
accident or health insurance for a period of six months
following death of the Executive for those dependents and
beneficiaries of the Executive who were covered by such
programs, plans or arrangements at the date of the Executive's
death, and (iii) the Executive's dependents, beneficiaries and
estate, as the case may be, will receive such survivor and
other benefits as they may be entitled under the terms of the
benefit programs, plans, and arrangements described in
paragraph 1.2(b) which provide benefits upon death of the
Executive.
(d) In the event of a termination of this Agreement under
paragraph 4.1(iv), (i) the Companies shall pay the Executive
an amount equal to six months' salary at the rate and as
required by paragraph 1.2(a) and in effect immediately prior
to the date of total disability, (ii) the Companies shall
continue benefits under the
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Companies' sickness, accident and health insurance for two
years following the date of total disability for the Executive
and his dependents and beneficiaries who are covered by such
programs, plans and arrangements during the two-year period;
and (iii) the Executive, and his dependents, beneficiaries and
estate, as the case may be, will receive such benefits as they
may be entitled under the terms of the benefit programs,
plans, and arrangements described in paragraph 1.2(b) which
provided benefits upon total disability of the Executive.
(e) In the event of a termination of this Agreement under
paragraph 4.1(v) or (vi), the Executive, and his dependents,
beneficiaries and estate, as the case may be, will receive
such benefits as they may be entitled under the terms of the
benefit programs, plans, and arrangements of the Companies
described in paragraph 1.2(b) which provide benefits upon
retirement, resignation or discharge for cause, as the case
may be.
(f) The Executive shall not be required to mitigate the
amount of any payment provided for in this paragraph 4.2 by
seeking employment or otherwise, nor shall the amount of any
payment provided for in this paragraph 4.2 be reduced by any
compensation or remuneration earned by the Executive as the
result of employment by another employer, or self-employment,
or as a partner, after the date of termination or otherwise.
Any payment provided for in this paragraph 4.2 shall be deemed
"liquidated damages" rather than a "penalty."
4.3. Definitions. The following words shall have the specified
meanings when used in the paragraphs specified:
(a) In paragraphs 4.1(ii), 4.2(a) and (b) and 5, the term
"termination" means termination (i) by either of the Companies
of the employment of the Executive with either of the
Companies for any reason other than death or total disability
of the Executive or other than for cause, or (ii) by
resignation of the Executive due to a significant change in
the nature or scope of his authorities or duties from those
contemplated in paragraph 1.1, a reduction in total
compensation from that provided in paragraph 1.2, or the
breach by either of the Companies of any other provision of
this Agreement.
(b) In paragraphs 4.1(vi) and 4.3(a)(i), the term "cause"
means (i) substantiated fraud, or substantiated
misappropriation resulting in material damage to the property
or business of either of the Companies; conviction for
commission of a felony; (ii) continuance of either willful and
repeated failure or grossly negligent and repeated failure by
the Executive to perform his duties in compliance with this
Agreement after written notice to the Executive by the Board
of Directors specifying such failure, provided that such
"cause" shall have been found by a majority vote of the Board
of Directors of each of the Companies (who are not serving as
a designee of a person having an interest in excess of 25% of
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the outstanding stock of the Corporation) after at least 10
days' written notice to the Executive specifying the cause
proposed to be claimed and after an opportunity for the
Executive to be heard at meetings of such Board of Directors;
or (iii) a continued violation of paragraph 2 after written
notice to the Executive by the Board of Directors specifying
such violation and providing the Executive the opportunity to
cease such violation within 20 days from the date of receipt
by the Executive of such notice.
(c) In paragraphs 1.1(c), 4.1(iv), 4.2(d) and 4.3(a)(i),
the term "total disability" means total disability as defined
in the Companies' group and individual disability plans. If
there is no such plan, then "total disability" means total
disability as defined in the Executive's individual disability
policy, and if there is no such policy, as defined in the
group disability plan for the law firm of Piper & Marbury
L.L.P., 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
5. Payments for Termination or Resignation after a Change in
Control.
5.1. Definitions.
(a) A "Change in Control," as used in this Agreement,
shall be deemed to have occurred when:
(i) Any person (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder) is or becomes the beneficial
owner, directly or indirectly, of 25% or more of the voting equity
stock of the Corporation, or any person (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended, and the regulations promulgated thereunder) other than
the Corporation is or becomes the beneficial owner, directly or
indirectly, of 25% or more of the Common Stock of the Bank; or
(ii) Any person (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and
the regulations promulgated thereunder) gains control of the
election of a majority of the Board of Directors of the
Corporation, or any person (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and
the regulations promulgated thereunder) other than the Corporation
gains control of the election of a majority of the Board of
Directors of the Bank; or
(iii) Any person (as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended, and
the regulations promulgated thereunder) gains control of the
management or policies of either of the Companies; or
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(iv) either of the Companies consolidates with, or merges
with or into, another entity (including a corporation, bank,
partnership, trust, association, joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form
of entity not specifically listed herein) or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets, or another such entity
consolidates with, or merges with or into, such Company, in any
such event pursuant to a transaction in which the issued and
outstanding shares of the voting equity stock of such Company are
converted into or exchanged for cash, securities or other
property; or
(v) during any consecutive two-year period, individuals
who at the beginning of such period constituted the Board of
Directors of either Company (together with any directors who are
members of the Board of Directors on the date hereof and any new
directors whose election by such Board of Directors or whose
nomination for election by the stockholders of such Company was
approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period
of whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of Directors of such Company then in office.
(b) A "Change in Control Period" shall mean the period
commencing 90 days before a Change in Control and ending 365 days
after such Change in Control.
5.2. Amount of Payments. Except as provided in paragraph 5.2(e),
and in lieu of amounts payable under paragraph 4, the Companies will
pay the Executive the following amounts in the following circumstances:
(a) (i) If the Executive is terminated by either of the
Companies in the circumstances described under paragraph
4.3(a)(i), or if the Executive resigns during a Change in Control
Period in the circumstances described under paragraph 4.3(a)(ii),
or if during a Change in Control Period the Executive resigns in
circumstances other than those described under paragraph
4.3(a)(ii) without having been offered an employment agreement the
terms of which are comparable to those of this Agreement, the
Companies will pay, or cause to be paid, to the Executive: (a) if
the Executive's termination or resignation occurs before the
Executive has attained the age of 63 years, an amount equal to two
times the sum of (i) the Executive's annual base salary
immediately before the Change in Control and (ii) the average of
the bonuses paid to the Executive over the past three years
(including years in which no bonus was awarded); or (b) if the
Executive's termination or resignation occurs on or after the
Executive has attained the age of 63 years, an amount equal to the
amount set forth in paragraph 5.2(a)(i)(a) multiplied by a
fraction, the numerator of which shall be 730 minus the number of
days which have passed since the Executive's 63rd birthday, and
the denominator of which shall be 730.
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(ii) Such payment shall be made in one lump sum
within 15 business days after the Executive's termination or
resignation.
(b) (i) If the Executive resigns during a Change in
Control Period in circumstances other than those described under
paragraph 4.3(a)(ii) after having been offered an employment
agreement the terms of which are comparable to those of this
Agreement, the Companies will pay, or cause to be paid, to the
Executive: (a) if the Executive's resignation occurs before the
Executive has attained the age of 64 years, an amount equal to the
sum of (i) the Executive's annual base salary immediately before
the Change in Control and (ii) the average of the bonuses paid to
the Executive over the past three years (including years in which
no bonus was awarded); or (b) if the Executive's resignation
occurs on or after the Executive has attained the age of 64 years,
an amount equal to the amount set forth in paragraph 5.2(b)(i)(a)
multiplied by a fraction, the numerator of which shall be 365
minus the number of days which have passed since the Executive's
64th birthday, and the denominator of which shall be 365.
(ii) Such payment shall be made in one lump sum
within 15 business days after the Executive's resignation.
(c) Except as provided in paragraph 5.2(e), if the
Executive is terminated by the Companies or resigns as described
in paragraph 5.2(a), or resigns as described in paragraph 5.2(b),
the Executive shall continue to receive all health, life, and
disability insurance benefits available to him pursuant to
paragraph 1.2(b) of this Agreement immediately before such
termination or resignation. The Executive shall continue to
receive such benefits until the earliest of (a) such time as the
Executive shall have been receiving substantially similar
insurance benefits for six months under subsequent employment, (b)
24 months after the date of a termination or resignation described
in paragraph 5.2(a) or 12 months after the date of a resignation
described in paragraph 5.2(b), or (c) such date as the Executive
shall have attained the age of 65 years.
(d) All options granted to the Executive under the
Corporation's stock option award arrangements providing for the
granting of options to acquire common stock to founders, directors
and key employees shall immediately become fully vested in the
event of a Change in Control.
(e) The Executive is to receive no payments under
paragraph 5.2(a) or (b) and no benefits under paragraph 5.2(c) if
the Executive is terminated during a Change in Control Period
after having already attained the age of 65 years, or if the
Executive is terminated by either of the Companies during a Change
in Control Period upon the death or total disability of the
Executive or for cause. In an instance of death or total
disability of the Executive, however, the Executive and his
dependents, beneficiaries
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and estate shall receive any benefits payable to them under
paragraphs 4.2 (c) and 4.2 (d).
(f) Notwithstanding the foregoing, in the event that any
of the amounts payable to the Executive under paragraph 5.2 would,
if made, cause the Executive to have tax under Section 4999 of the
Code, the Executive may elect, at his discretion, to reduce the
amount payable to him under paragraph 5.2(a) or (b) by an amount
such that the aggregate after-tax amounts the Executive will
receive under paragraph 5.2 will be equal to the aggregate
after-tax amounts the Executive would receive without the
reduction he elected (i.e., the aggregate amounts after the
application of the tax under Section 4999 of the Code and other
taxes)."
6. Legal Costs. If (i) either of the Companies shall fail to
pay or provide for payment of any amounts required to be paid or provided for
hereunder at any time, (ii) the Executive desires to consult with or retain
counsel as to any possible breach by the Companies of this Agreement or as to
any of his rights under this Agreement, or (iii) the Executive desires to retain
counsel to review or negotiate the terms of this Agreement prior to the
effective date of this Agreement, the Executive shall be entitled to consult
with counsel, and the Companies agree to pay the reasonable fees and expenses of
independent counsel for the Executive in reviewing or negotiating this
Agreement, advising him or in bringing any proceedings, or in defending any
proceedings, involving the Executive's rights under this Agreement, such right
to reimbursement to be immediate upon the presentment by Executive of written
xxxxxxxx for such reasonable fees and expenses. The Executive shall be entitled
to receive interest (at the prime rate of interest established from time to time
at The First National Bank of Maryland) on any payments of such expenses, or any
other payments under this Agreement, that are overdue.
7. Notices. Any notice, requests, demands and other
communications provided for by this Agreement shall be sufficient if in writing
and if sent by registered or certified mail/return receipt to the Executive at
the last address he has filed in writing with either of the Companies or, in the
case of either of the Companies, at its principal executive offices.
8. Binding Agreement. This Agreement shall be effective as of
the date hereof and shall be binding upon and inure to the benefit of the
Executive, his executors, administrators and personal representatives. The
rights and obligations of the Corporation and of the Bank under this Agreement
shall inure to the benefit of and shall be binding upon the Companies, and shall
be transferred to and be binding upon any successor of either of the Companies
including, but not limited to, any successor of either of the Companies pursuant
to a merger, conversion, consolidation, or transfer of assets; provided, that
this Agreement may not be assigned by either of the Companies without the
consent of the Executive, and in the case of a successor by transfer of all or
substantially all of the assets of either of the Companies, or any other
successor in which either of the Companies does not cease to exist by operation
of the transaction in question as a matter of law, neither of the Companies
shall be relieved of its obligations hereunder; provided further, that in the
case of dissolution and winding up of the business of either of the Companies,
this Agreement and the obligations hereunder shall be
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binding upon the trustee of either of the Companies' assets. It is recognized
that, as parent and subsidiary, the Companies are closely related and that all
provisions for compensation and benefits hereunder refer to compensation and
benefits from the Bank and the Corporation in the aggregate. The Bank and the
Corporation shall be free, without violating this Agreement, to provide salary
and other benefits from either of them in their full discretion, provided that
in the aggregate such salary and benefits comply with this Agreement; provided,
however, that all stock options and provisions for compensation measured by the
performance of stock shall relate to the Corporation's capital stock. The
Companies shall be jointly and severally liable to the Executive for all of the
obligations of either of them under this Agreement and any violation by either
the Bank or the Corporation of any of its obligations hereunder shall be deemed
to be a violation by the other of them. Any legal finding that either the Bank
or the Corporation is not legally required to fulfill any of its obligations
under this Agreement shall not be deemed to relieve the other of them from
fulfilling such obligations.
9. Entire Agreement. This Agreement constitutes the entire
understanding of the Executive and the Companies with respect to the subject
matter hereof and supersedes any and all prior understandings, written or oral,
including any prior employment agreements between the Companies and the
Executive. This Agreement may not be changed, modified, or discharged orally,
but only by an instrument in writing signed by the parties. This Agreement shall
be governed by the laws of the State of Maryland and the invalidity or
unenforceability of any provisions hereof shall in no way affect the validity or
enforceability of any other provision.
IN WITNESS WHEREOF, the parties have executed and delivered
this Agreement on March 23, 1999.
ATTEST: COLUMBIA BANCORP
/S/ Jindy Noor /S/ Xxxx X. Xxxx, Xx.
----------------------------- -------------------------------------
Xxxx X. Xxxx, Xx.
President and Chief Executive Officer
ATTEST: THE COLUMBIA BANK
/S/ Jindy Noor /S/ Xxxx X. Xxxx, Xx.
----------------------------- -------------------------------------
Xxxx X. Xxxx, Xx.
President and Chief Executive Officer
WITNESS:
/S/ Jindy Noor /S/ Xxxxxx X. Xxxxx
----------------------------- -------------------------------------
Xxxxxx X. Xxxxx
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