Exhibit 10.2
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(“Agreement”) is made and entered into as of the 28th
day of September 2009, by and among Frederick County
Bancorp, Inc., a Maryland corporation (the
“Company”), Frederick County Bank, a Maryland
corporation and the wholly owned subsidiary of the Company (the
“Bank”), and William R. Talley, Jr.
(“Mr. Talley”).
RECITAL
The Company and the Bank each
desires to retain Mr. Talley as Executive Vice President and
Chief Financial Officer. Mr. Talley desires to accept
such employment, all upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of
the recital, the mutual covenants and agreements herein contained,
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this
Agreement, intending to be legally bound, agree as
follows:
1.
Certain Definitions.
As used in this Agreement, the
following terms have the meanings set forth below:
1.1
“Commencement Date”
means October 1, 2009.
1.2
“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
Company or the Bank or any transaction contemplated, undertaken or
proposed to be undertaken by the Company or the Bank, including,
but not necessarily limited to:
(a) the Federal Deposit
Insurance Corporation or any other federal or state depository
insurance organization or fund;
(b) the Board of Governors of
the Federal Reserve System, the Federal Reserve Bank of Richmond,,
the Maryland Division of Financial Institutions, or any other
federal or state bank regulatory or commissioner’s office;
or
(c) any predecessor or
successor of any of the foregoing, or any Bank Regulatory Agency
regulatory agency which the Company or Bank may become subject to
supervision by as a result of a change in chartering agency or
membership status in the Federal Reserve System.
1.3
“Bank Board” means the
Board of Directors of Frederick County Bank.
1.4
“Bank Bylaws” means the
Bylaws of Frederick County Bank as in effect from time to
time.
1.5
“Bank Chairman” means
the Chairman of the Board of Frederick County Bank.
1.6
“Code” means the
Internal Revenue Code of 1986, as amended.
1.7
“Company Board” means
the Board of Directors of Frederick County
Bancorp, Inc.
1.8
“Company Bylaws” means
the Bylaws of Frederick County Bancorp, Inc. as in effect from
time to time.
1.9
“Company Chairman” means
the Chairman of the Board of Frederick County
Bancorp, Inc.
1.10
“Compensation Committee”
means the Corporate Governance and Compensation Committee of the
Company Board, or such other or successor committee of the Board of
the Directors of the Company
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delegated to establish or approve
executive officer compensation, and that meets the requirements for
independence for such committees established under applicable law,
regulation and the listing requirements of any exchange on which
the Company’s securities are traded (“Listing
Requirement”).
1.11
“Person” means any
individual, firm, association, partnership, corporation, limited
liability company, group, governmental agency or other authority,
or other organization or entity.
2.
Employment; Term.
2.1 Position. The Company and
Bank each hereby employs Mr. Talley to serve as its Executive
Vice President and Chief Financial Officer, and Mr. Talley
accepts such employment.
2.2 Term. The term of this
Agreement and Mr. Talley’s employment hereunder shall
commence with the Commencement Date and continue until
October 1, 2013 (the “Term”), unless sooner
terminated in accordance with the provisions of this
Agreement.
3 .
Duties of Executive Vice
President .
3.1 Nature and Substance.
Mr. Talley shall report directly to the President and
Chief Executive Officer and shall be under the direction of the
President and Chief Executive Officer. The specific powers
and duties of the Executive Vice President and Chief Financial
Officer shall be established, determined and modified by and within
the discretion of the President and Chief Executive Officer
including (but not necessarily limited to):
(a) the coordination of the
efforts of the Company and the Bank to achieve and maintain any and
all necessary and/or appropriate Bank Regulatory Agency approvals
and permissions prerequisite to its successful continued operation,
including coordination of the professional services of counsel,
accountants and bank consultants;
(b) the preparation and
presentation to the Company Board and Bank Board of budgets and
adherence of the Bank to those approved by the Company Board and
Bank Board;
(c) the provision of such
reports, updates and other data and information as may be
reasonably required by the Company Board or Bank Board and Bank
Regulatory Agencies;
(d) manage the Company’s
and Bank’s investment portfolios in accordance with the
Company’s and Bank’s investment policies approved by
the Company Board and Bank Board;
(e) the formulation and
implementation of the Company’s and Bank’s employee
personnel policies and benefits in coordination with the President
and Chief Executive Officer, subject to approval by the Company
Board or Bank Board, as appropriate;
(f) the promotion of the
reputation and business of the Company and Bank within the
community;
(g) participation in and
service upon such committees and subcommittees as may be directed
by the Company Board or Bank Board without additional compensation
to that set forth herein below;
(h) supervision of the
maintenance of the books and accounts and the supervision and
maintenance of accounts payable and expenses of the Company and
Bank and the reporting of the status thereof at each scheduled or
called meeting of the Company Board or Bank Board or any committee
thereof; provided, however, that all expenditures on behalf of the
Company or Bank shall be approved in accordance with the terms and
conditions of procedures established by the Company Board or Bank
Board, as appropriate;
(i) such other duties and
responsibilities as are normally incident to the subject position
of Executive Vice President and Chief Financial Officer, including
assisting, directing and/or supervising the operations and
other
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employees of the Company or Bank
upon such terms, conditions, rules, policies and regulations as may
be established by the Company Board or Bank Board, as appropriate,
from time to time.
3.2 Performance of Services.
Mr. Talley agrees to devote his full business time and
attention to the performance of his duties and responsibilities
under this Agreement, and shall use his best efforts and discharge
his duties to the best of his ability for and on behalf of the
Company and Bank and to their successful operation.
Mr. Talley shall comply with all laws, statutes, ordinances,
rules and regulations relating to his employment and duties.
During the Term of this Agreement, Mr. Talley shall not at any
time or place directly or indirectly engage or agree to engage in
any business or practice related to the banking business with or
for any other Person to any extent whatsoever, other than to the
extent required by the terms and conditions of this
Agreement. Mr. Talley agrees that while employed by the
Company and Bank he will not, without the prior written consent of
the Company Board, engage, or obtain a financial or ownership
interest, in any other business, employment, consulting or similar
arrangement, or other undertaking (an “Outside
Arrangement”) if such Outside Arrangement would interfere
with the satisfactory performance of his duties to the Company or
Bank, present a conflict of interest with the Company or Bank,
breach his duty of loyalty or fiduciary duties to the Company or
Bank, or otherwise conflict with the provisions of this Agreement;
provided, however, that Mr. Talley shall not be prevented from
investing his assets in such form or manner as would not require
any services on the part of Mr. Talley in the operation or the
affairs of the entities in which such investments are made and
provided such investments do not present a conflict of interest
with the Company or Bank. Mr. Talley shall promptly
notify the Company Board of any Outside Arrangement and provide the
Company Board with any written agreement in connection
therewith.
4.
Compensation and
Benefits. As full
compensation for all services rendered pursuant to this Agreement
and the covenants contained herein, the Bank shall pay to
Mr. Talley the following:
4.1 Salary. Beginning on the
Commencement Date, Mr. Talley shall be paid a salary
(“Salary”) of One Hundred Sixty-Five Thousand Four
Hundred Thirty-Five Dollars ($165,435) on an annualized basis. The
Bank shall pay Mr. Talley’s Salary in equal installments
in accordance with the Bank’s regular payroll periods.
Mr. Talley’s Salary shall be further increased from time
to time at the discretion of the Company Board based upon the
recommendation of the Compensation Committee (or other approval
procedure required by applicable law regulation or Listing
Requirement). Mr. Talley shall not be entitled to any
separate compensation for service as an employee of the
Company.
4.2 Bonus . During the
Term, Mr. Talley shall be paid a bonus (“CFO
Bonus”) as approved by the Company Board based upon the
recommendation of the Compensation Committee (or other approval
procedure required by applicable law regulation or Listing
Requirement).
4.3 Withholding. Payments of
Salary and CFO Bonus 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.
4.4 Vacation and Leave.
Mr. Talley shall be entitled to twenty-five (25) days
vacation and leave annually, of which twelve and one-half (12.5)
days may be carried over to the following year. Sick leave
may be provided for under the current and future sick leave
policies of the Company and Bank for executive officers.
4.5 Automobile Allowance.
The Bank shall provide Mr. Talley an automobile
allowance of $5,000 annually, which shall be paid in quarterly
payments of $1,250, payable on the last day of each calendar
quarter. This allowance is in lieu of any automobile expense
reimbursement.
4.5 Non-Life Insurance.
The Bank will provide Mr. Talley with group health,
disability and other insurance as the Company Board may determine
appropriate based upon the recommendation of the Compensation
Committee (or other approval procedure required by applicable law
regulation or Listing Requirement).
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4.6 Life
Insurance.
4.6.1 The Bank will obtain, and
maintain at all times while this Agreement is in effect, a term
life insurance policy (the “Policy”) on Mr. Talley
in the amount of $600,000, the particular product and carrier to be
chosen by the Bank in its discretion. Mr. Talley shall
have the right to designate the beneficiary of the Policy.
The Bank will pay the premium for the Policy at the standard rate.
In the event Mr. Talley is rated and the premium exceeds the
standard rate, Mr. Talley shall be responsible for paying the
excess, which shall be deducted from his Salary.
4.6.2 The Company or Bank may, at
its cost, obtain and maintain “key-man” life insurance
on Mr. Talley in such amount as determined by the Company
Board or Bank Board from time to time. Mr. Talley agrees
to cooperate fully and to take all actions reasonably required by
the Company or Bank in connection with such insurance.
4.7 Expenses. The
Company and Bank shall promptly upon presentation of proper expense
reports therefor reimburse Mr. Talley, in accordance with the
policies and procedures established from time to time by the
Company Board and/or Bank Board for its senior executive officers,
for all reasonable and customary travel and other out-of-pocket
expenses incurred by Mr. Talley in the performance of his
duties and responsibilities under this Agreement and promoting the
business of the Company or Bank, including appropriate membership
fees, dues and the cost of attending meetings and
conventions.
4.8 Retirement Plans.
Mr. Talley shall be entitled to participate in any and all
qualified pension or other retirement plans of the Company or Bank
which may be applicable to executive personnel of the Company or
Bank.
4.9 Options.
Mr. Talley may be issued options to acquire shares of Bank
stock from time to time (or to participate in and receive grants
under any other equity based compensation program which the Company
may at the discretion of the Company Board may determine
appropriate based upon the recommendation of the Compensation
Committee (or other approval procedure required by applicable law
regulation or Listing Requirement).Bank Board.
4.10 Other Benefits. While
this Agreement is in effect, Mr. Talley shall be entitled to
all other benefits that the Company or Bank provides from time to
time to its senior executive officers, including, but not limited
to, any equity compensation, or other incentive plans.
4.11 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. 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.
Conditions Subsequent to
Continued Operation and Effect of Agreement.
5.1 Continued Approval by Bank
Regulatory Agencies. This Agreement and all of its terms and
conditions, and the continued operation and effect of this
Agreement, 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 Company
and 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 either party 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.
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6.
Termination of
Agreement. This Agreement
may be terminated prior to expiration of the Term as provided
below.
6.1
Definition of Cause.
For purposes of this Agreement,
“Cause” means:
(a) any act of theft, fraud,
intentional misrepresentation or similar conduct by Mr. Talley
in connection with or associated with the services rendered by
Mr. Talley to the Bank 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 5.1 within a
reasonable period of time after written notice thereof;
(c) any Bank Regulatory Agency
action or proceeding against Mr. Talley as a result of his
negligence, fraud, malfeasance or misconduct;
(d) material failure of
Mr. Talley to achieve budget requirements, performance
standards or targets established annually by the Company Board or
Bank Board, where such failure is not the result of economic
conditions or lack of appropriate effort and/or due diligence by
Mr. Talley; or
(e) any of the following
conduct on the part of Mr. Talley that has not been corrected
or cured within thirty (30) days after having received written
notice from the Company Board or Bank Board detailing and
describing such conduct:
(i)
the use of drugs, alcohol or other
substances by Mr. Talley to an extent which materially
interferes with or prevents Mr. Talley from performing his
duties under this Agreement;
(ii)
failure by or the inability of
Mr. Talley to devote full time, attention and energy to the
performance of his duties pursuant to this Agreement (other than by
reason of his death or disability);
(iii)
intentional material failure by
Mr. Talley to carry out the explicit lawful and reasonable
directions, instructions, policies, rules, regulations or decisions
of the Company Board or Bank Board, which are consistent with his
position as Executive Vice President and Chief Financial Officer;
or
(iv)
willful or intentional misconduct on
the part of Mr. Talley that results in substantial injury to
the Company or Bank or any of its subsidiaries or
affiliates.
6.2
Termination by Company and
Bank.
6.2.1
For Cause.
The Company and Bank shall
have the right to cancel and terminate this Agreement and
Mr. Talley’s employment for Cause immediately on written
notice, with his compensation and benefits
