Exhibit 10.1
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 Martin S. Lapera
(“Mr. Lapera”).
RECITAL
The Company and the Bank each
desires to retain Mr. Lapera as President and Chief Executive
Officer. Mr. Lapera 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. Lapera to serve as its President and
Chief Executive Officer, and Mr. Lapera accepts such
employment.
2.2 Term. The term of this
Agreement and Mr. Lapera’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 President
.
3.1 Nature and Substance.
Mr. Lapera shall report directly to the Chairman of the
Board of the Company and the Bank. The specific powers and
duties of the President and Chief Executive Officer shall be
established, determined and modified by and within the discretion
of the Company Board or Bank Board, as appropriate including (but
not necessarily limited to):
(a) the coordination and leadership
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) subject to guidelines and/or
criteria established by the Company Board and Bank Board, the
hiring, promotion, supervision, retention and discharge of all
employees, except at or above the level of Senior Vice
President.
(e) the formulation and
implementation of the Company’s and Bank’s employee
personnel policies and benefits, 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) the advancement of the business
purposes of the Company and Bank, including, but not limited to,
business development and customer, depositor and public
relations;
(h) 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;
(i) 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;
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(j) such other duties of the
President and Chief Executive Officer of the Company and Bank as
may be enumerated in the Company Bylaws or Bank Bylaws;
(k) such other duties and
responsibilities as are normally incident to the subject position
of President, including assisting, directing and/or supervising the
operations and other 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. Lapera 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.
Lapera shall comply with all laws, statutes, ordinances, rules and
regulations relating to his employment and duties. During the Term
of this Agreement, Mr. Lapera 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. Lapera
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. Lapera shall not be
prevented from investing his assets in such form or manner as would
not require any services on the part of Mr. Lapera 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. Lapera 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.
Lapera the following:
4.1 Salary. Beginning on the
Commencement Date, Mr. Lapera shall be paid a salary
(“Salary”) of Two Hundred Seven Thousand Five Hundred
Seventy-Three Dollars ($207,573) on an annualized basis. The Bank
shall pay Mr. Lapera’s Salary in equal installments in
accordance with the Bank’s regular payroll periods. Mr.
Lapera’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. Lapera shall not be entitled to any
separate compensation for service as an employee of the
Company.
4.2 Bonus . During the
Term, Mr. Lapera shall be paid a bonus (“CEO 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 CEO 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. Lapera shall be entitled to thirty (30) days vacation
and leave annually, of which fifteen (15) 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. Lapera an automobile allowance of
$10,000 annually, which shall be paid in quarterly payments of
$2,500, payable on the last day of each calendar quarter.
This allowance is in lieu of any automobile expense
reimbursement.
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4.5 Non-Life Insurance.
The Bank will provide Mr. Lapera 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).
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. Lapera in
the amount of $800,000, the particular product and carrier to be
chosen by the Bank in its discretion. Mr. Lapera 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. Lapera is rated and the premium exceeds the standard
rate, Mr. Lapera 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. Lapera in such amount as determined by the Company Board or
Bank Board from time to time. Mr. Lapera 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. Lapera, 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. Lapera 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. Lapera 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.
Lapera 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. Lapera 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
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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.
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. Lapera in
connection with or associated with the services rendered by Mr.
Lapera 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. Lapera as a result of his
negligence, fraud, malfeasance or misconduct;
(d) material failure of Mr. Lapera
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. Lapera;
or
(e) any of the following conduct on
the part of Mr. Lapera 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. Lapera to an extent which materially interferes
with or prevents Mr. Lapera from performing his duties under this
Agreement;
(ii)
failure by or the inability of Mr.
Lapera 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.
Lapera 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 President and Chief Executive Officer; or
(iv)
willful or intentional misconduct on
the part of Mr. Lapera 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 C
