 

Exhibit 10.5

 

AMENDED AND RESTATED

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made as of
the 20th day of March, 2019, between Howard Bank (the “Bank” or “Employer”), a
Maryland-chartered trust company, and Steven M. Poynot, a resident of the State
of Maryland (the “Executive”).

 

RECITALS:

 

WHEREAS, the Executive is currently employed as an Executive Vice President with
the Employer and has been an employee of the Employer since January 31, 2005;
and

 

WHEREAS, the Employer and the Executive entered into an Employment Agreement
dated as of March 12, 2017, as amended by the First Amendment thereto dated as
of May 24, 2017, and both parties desire to amend and restate such agreement, as
amended, as provided herein.

 

In consideration of the above premises, the mutual agreements hereinafter set
forth and the continued employment by the Employer of the Executive, the parties
hereby agree as follows:

 

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

 

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

 

1.2         “Affiliate” means any business entity that controls, is controlled
by, or is under common control with the Employer. Unless the context requires
otherwise, the term “Employer” used in this Agreement shall include all
Affiliates.

 

1.3         “Area” means the geographic area within a radius of 20 miles of any
office or facility maintained by the Employer from time to time. It is the
express intent of the parties hereto that the Area as defined herein is the area
where the Executive performs or performed services on behalf of the Employer
under this Agreement as of, or within a reasonable time prior to, the
termination of the Executive’s employment hereunder.

 

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

 

1.5         “Business of the Employer” means the business conducted by the
Employer.

 

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

 

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(a)       any act on the part of the Executive that constitutes, in the
reasonable judgment of the Board after consultation with legal counsel, fraud or
dishonesty toward the Employer, toward any employee, officer or director of the
Employer, or toward any person doing business with the Employer;

 

(b)       the conviction of the Executive of any felony or any other crime
involving moral turpitude;

 

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

 

(d)       the Executive breaches any of the covenants contained in Sections 5,
6, 7 or 8 hereof;

 

(e)       the Executive fails to discharge his material duties and obligations
contained in this Agreement; or

 

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

 

1.7         “Change in Control” means the first to occur of any one of the
following events:

 

(a)       the acquisition by any person, persons acting in concert or by an
entity of the then outstanding voting securities of either the Bank or the
Company if, as the result of the transaction, the acquiring person, persons or
entity owns securities representing more than 50% of the total voting power of
the Bank or the Company, as the case may be;

 

(b)       within any 12-month period (beginning on or after the Effective Date)
the persons who were directors of either the Bank or the Company immediately
before the beginning of such 12-month period (the “Incumbent Directors”) cease
to constitute at least a majority of such board of directors; provided that any
director who was not a director as of the Effective Date will be deemed to be an
Incumbent Director if that director was elected to such board of directors by,
on the recommendation of, or with the approval of at least two-thirds of the
directors who then qualified as Incumbent Directors;

 

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

 

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

 

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

 

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

 

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

 

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

 

1.12       “Effective Date” means March 20, 2019.

 

1.13       “Good Reason” means the existence of any of the following conditions
preceding a termination of the Executive’s employment initiated by the
Executive:

 

(a)       a material diminution in the powers, responsibilities or duties of the
Executive hereunder;

 

(b)       the failure to elect the Executive, or the removal of the Executive,
as Executive Vice President of the Bank;

 

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

 

(d)       a change in the location of the principal office of the Executive more
than 20 miles from its existing location, which the Employer and the Executive
hereby agree to be a material change in the location at which the Executive
provides services under this Agreement;

 

(e)       a material reduction in the Executive’s Base Salary, as defined in
Section 4.l(a) hereof; or

 

(f)       the Bank’s provision to the Executive of a notice that this Agreement
shall not be extended in accordance with Section 3.1 hereof;

 

provided, however, that no termination of the Executive’s employment that is
triggered by any conduct or event described in this Section 1.13 shall
constitute a termination of the Executive’s employment for Good Reason unless
the Executive has first provided the Employer with the opportunity to cure the
event or conduct by giving the Employer a written notice within 90 days of the
initial existence of one or more of the conditions set forth above describing in
sufficient detail the Executive’s belief that a Good Reason exists, and the
Employer fails to cure the condition prior to the expiration of a 30-day cure
period, beginning with the date such notice is received by the Employer.

 

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1.14       “Permanent Disability” means that the Executive is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, as
certified by a physician chosen by the Employer and reasonably acceptable to the
Executive. Permanent Disability shall also include a determination of disability
that qualifies the Executive for receiving payments under any long-term
disability insurance policy maintained by the Employer under which the Executive
is entitled to benefits, provided that the definition of disability applied
under that policy complies with the requirements of Treasury Regulation §
1.409A-3(i)(4).

 

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

 

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

 

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

 

1.16       “Treasury Regulations” means 26 C. F. R., the regulations promulgated
under the Code.

 

2.DUTIES.

 

2.1         The Executive is employed as an Executive Vice President and Chief
Information Officer of the Bank, reports to and is subject to the direction of
the Chief Financial Officer, and must perform and discharge well and faithfully
the duties that may be assigned to the Executive from time to time by the
Employer in connection with the conduct of its business.

 

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

 

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

 

(b)       diligently follow and implement all management policies and decisions
communicated to the Executive by the Chief Financial Officer and the Board; and

 

(c)       timely prepare and forward to the Chief Financial Officer and to the
Board all reports and accounting as may be requested of the Executive.

 

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2.3         The Executive must devote the Executive‘s entire business time,
attention and energies to the Business of the Employer and must not during the
Term (as defined in Section 3.1 hereof) be engaged (whether or not during normal
business hours) in any other business or professional activity, whether or not
such activity is pursued for gain, profit or other pecuniary advantage; but this
will not be construed as preventing the Executive from:

 

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

 

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

 

(c)       participating in civic and professional affairs and organizations and
conferences, preparing or publishing papers or books, or teaching, subject to
any directions or limitations that might be established by the Chief Financial
Officer and the Board from time to time.

 

3.TERM AND TERMINATION.

 

3.1         Term. The current term of this Agreement will conclude on March 30,
2021. Commencing on March 31, 2021, and continuing on each March 31 thereafter
(in each case an “Anniversary Date”), this Agreement shall be extended for one
additional year unless written notice that this Agreement shall not be extended
is provided by the Employer to the Executive at least 60 days prior to such
Anniversary Date. The initial term and any extensions thereof made pursuant to
this Section 3.1 are referred to herein as the “Term.” The Employer’s election
not to extend this Agreement shall not constitute termination of the Executive’s
employment for purposes of this Agreement but may constitute “Good Reason” as
set forth herein.

 

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

 

3.2.1       By the Employer:

 

(a)       for Cause at any time, upon written notice to the Executive, including
the notice provided for in Section 1.6(c), in which event the Employer shall
have no further obligation to the Executive except for the payment of any
amounts due and owing under Section 4 on the effective date of the termination;
or

 

(b)       without Cause at any time, upon written notice to the Executive, in
which event the Employer shall be required to make the termination payments (i)
under Section 3.7(b) if the termination is effective within 12 months following
a Change in Control or (ii) otherwise under Section 3.7(a).

 

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3.2.2       By the Executive:

 

(a)       for Good Reason as provided in Section 1.13, in which event the
Employer shall be required to make the termination payments (i) under Section
3.7(b) if the termination is effective within 12 months following a Change in
Control or (ii) otherwise under Section 3.7(a); or

 

(b)       without Good Reason, in which event the Employer shall have no further
obligation to the Executive except for payment of any amounts due and owing
under Section 4 on the effective date of the termination.

 

3.2.3       By the Executive within 12 months following a Change in Control;
provided that the Executive gives at least 30 days’ prior written notice to the
Employer of the Executive’s intention to terminate employment with such
resignation to be effective immediately at the end of such 30-day period, in
which event the Employer shall have no further obligation to the Executive
except for payment of any amounts due and owing under Section 4 on the effective
date of the termination.

 

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

 

3.2.5       Immediately upon the Executive’s death, in which event the Employer
shall have no further obligation to the Executive except for the payment of any
amounts due and owing under Section 4 on the effective date of the termination.
Additionally, in such event all of the Executive’s stock awards and stock
options shall immediately vest upon the effective date of such termination.

 

3.2.6       By either the Employer or the Executive upon the Permanent
Disability of the Executive, in which event the Employer shall be required to
make the termination payments under Section 3.7(c).

 

3.3         Effect of Termination. Termination of the employment of the
Executive pursuant to Section 3.2 shall be without prejudice to any right or
claim that may have previously accrued to either the Employer or the Executive
hereunder and shall not terminate, alter, supersede or otherwise affect the
terms and covenants and the rights and duties prescribed in this Agreement.

 

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

 

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

 

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

 

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

 

3.6         Other Regulatory Requirements.

 

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

 

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

 

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

 

If any payment hereunder is determined to violate any regulatory requirement
applicable to the Employer, the Employer may decline to make such payment or
amend the amount or timing of such payment to comply with such regulatory
requirements.

 

3.7         Termination Payments.

 

(a)       In the event and only in the event that the Executive’s employment is
terminated by the Employer pursuant to Section 3.2.1(b) or by the Executive
pursuant to Section 3.2.2(a) and a Change in Control has not occurred, then, in
addition to any amounts due and owing to the Executive under Section 4,
commencing with the first payroll date immediately following the effective date
of such termination the Employer shall pay to the Executive as severance pay and
liquidated damages a monthly amount equal to 1/12th of the sum of (i) the
Executive’s average Base Salary (as defined below) during the current and two
prior fiscal years and (ii) the average bonus paid to the Executive by the
Employer during the current and two prior fiscal years, in accordance with the
Employer’s normal payroll practices for a period equal to the greater of (A) the
remaining Term or (B) one year.

 

(b)       In the event and only in the event that a Change in Control has
occurred and within 12 months of such Change in Control the Executive’s
employment is terminated by the Employer pursuant to Section 3.2.1(b) or by the
Executive pursuant to Section 3.2.2(a), the Executive shall be entitled to
payment of any amounts due and owing to the Executive under Section 4 on the
effective date of such termination and a lump sum payment equal to two times the
sum of (i) the Executive’s average Base Salary (as defined below) during the
current and two prior fiscal years and (ii) the average bonus paid to the
Executive by the Employer during the current and two prior fiscal years, and
shall be paid such lump sum payment by the Employer within ten days of the
effective date of termination of employment. In addition: (i) all of the
Executive’s stock awards shall immediately vest; (ii) all of the Executive’s
unexercised stock options shall become immediately exercisable; and (iii) the
Employer shall continue the Executive’s medical coverage for the greater of (A)
the remaining Term or (B) a period of 18 months following the termination of the
Executive’s employment, in each case at the same level as available to employees
of the Employer generally.

 

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(c)       In the event and only in the event that the Executive’s employment is
terminated by the Employer or the Executive pursuant to Section 3.2.6, then the
Employer will pay to the Executive any amounts due and owing under Section 4 on
the effective date of the termination and, commencing with the first payroll
date immediately following the effective date of such termination, the Employer
shall pay to the Executive as severance pay and liquidated damages: (i) a
one-time payment of an amount equal to the greater of the Executive’s target or
actual bonus for the year in which the Executive’s employment terminates,
pro-rated for the months elapsed in the annual bonus period at the time
employment terminates; and (ii) a monthly amount equal to 1/12th of the
Executive’s then-current Base Salary (as defined below) in accordance with the
Employer’s normal payroll practices for a period equal to the lesser of (A) the
remaining Term or (B) the date on which the Executive begins to receive payments
under any disability insurance or other program maintained by the Employer. The
Employer shall also continue all health, dental, vision and disability
insurance, profit-sharing plans, retirement, and all other benefits that the
Executive was receiving at the time the Executive’s employment is terminated
pursuant to Section 3.2.6 or pay to the Executive, in accordance with the
Employer’s normal payroll practices, the value thereof for a period equal to the
lesser of (i) the remaining Term or (ii) the date on which the Executive begins
to receive payments under any disability insurance or other program maintained
by the Employer. Additionally, in such event all of the Executive’s stock awards
shall immediately vest and all of the Executive’s unexercised stock options
shall become immediately exercisable.

 

(d)       Notwithstanding the foregoing, if the Executive is a specified
employee within the meaning of Section 409A of the Code, no amount payable under
Section 3.7(a), (b) or (c) shall be paid before the date that is six months
after the effective date of termination of the Executive’s employment or, if
earlier, the date of the Executive’s death, except to the extent that this
Agreement may permit payments within that period without causing any amount
payable pursuant to this Agreement to be included in the Executive’s gross
income pursuant to Section 409A(a)(1)(A) of the Code prior to the year in which
the payments are received by the Executive. Any payment deferred under this
Section 3.7(d) shall be paid on the Employer’s first normal payroll date after
the six-month date or the date of the Executive’s death, as applicable.

 

3.8         Calculation of Payment Amount; Certain Adjustments of Payment
Amount. If it is determined that any payment or distribution by the Employer to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise) is subject
to the limitations of Section 280G of the Code (a “Parachute Payment”), the
following provisions shall apply:

 

(a)       If the aggregate present value of Parachute Payments is less than or
equal to the 280G limit, then no adjustment to the amount of such Parachute
Payments shall be made.

 

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(b)       If the aggregate present value of Parachute Payments is greater than
the 280G limit, such Parachute Payments shall be reduced to an amount, the
present value of which maximizes the aggregate present value of Parachute
Payments without causing such Parachute Payments to exceed the 280G limit.

 

For purposes of this Section 3.8, “present value” shall be determined in
accordance with Code Section 280G(d)(4), and the “280G limit” is the amount that
can be paid under this Agreement or otherwise without causing any amount to be
nondeductible under Code Section 280G or subject to excise tax under Code
Section 4999.

 

4.COMPENSATION AND BENEFITS.

 

4.1         Compensation. The Executive shall receive the following salary and
benefits:

 

(a)       Base Salary. During the Term, the Executive shall receive a base
salary at the rate of $250,000.00 per annum, payable in substantially equal
installments in accordance with the Bank’s regular payroll practices (“Base
Salary”). The Executive’s Base Salary shall be reviewed by the Board (or a
committee of the Board comprised solely of disinterested members, hereinafter
the “Committee”) annually, and the Executive shall be entitled to receive
annually an increase in such amount, if any, as may be determined by the Board
or the Committee.

 

(b)       Incentive Compensation. The Executive shall also be entitled to
participate in such bonus, incentive and other executive compensation programs
as are made available to executive management of the Employer from time to time
including the Bank’s Executive Incentive Plan (collectively, “Incentive
Compensation”).

 

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

 

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

 

4.4         Benefits. In addition to the Base Salary and Incentive Compensation,
the Executive shall be entitled to such benefits as the Employer may make
available from time to time to its employees. All such benefits shall be awarded
and administered in accordance with the Employer’s standard policies and
practices. Such benefits may include, by way of example only, health, dental,
vision, profit-sharing plans, retirement, and disability insurance benefits and
such other benefits as the Employer deems appropriate. In addition to the
benefits described in this Section 4.4, the Employer shall provide to the
Executive life insurance equal to $500,000 payable to a beneficiary or
beneficiaries selected by Executive.

 

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4.5         Car Allowance. Employer shall pay the Executive $750.00 per month as
a car allowance.

 

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

 

5.COMPANY INFORMATION.

 

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

 

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

 

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

 

6.            NON -COMPETITION. The Executive agrees that during the Term and,
in the event of the termination of the Executive’s employment, by the Employer
for Cause or by the Executive without Good Reason, during the period of one year
from and after the effective date of such termination, the Executive shall not
(except on behalf of or with the prior written consent of the Employer), within
the Area, either directly or indirectly, on the Executive’s own behalf or in the
service or on behalf of others, as a principal, partner, officer, director,
manager, supervisor, administrator, consultant, executive employee or in any
other capacity that involves duties and responsibilities similar to those
undertaken for the Employer, engage in any business that is the same as or
essentially the same as the Business of the Employer. In the event that the
employment relationship is terminated by the Employer without Cause or by the
Executive for Good Reason, the duration of the non-competition obligation set
forth in this Paragraph 6 shall be equal to the number of months of any
severance pay and/or liquidated damages that the Employer may, in its sole
discretion, pay to the Executive.

 

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7.            NON-SOLICITATION OF CUSTOMERS. The Executive agrees that during
the Term and, in the event of the termination of the Executive’s employment for
any reason, during the period of one year from and after the effective date of
such termination, the Executive shall not (except on behalf of or with the prior
written consent of the Employer), within the Area, on the Executive’s own behalf
or in the service or on behalf of others, solicit, divert or appropriate or
attempt to solicit, divert or appropriate, directly or by assisting others, any
business from any of the Employer’s customers, including actively sought
prospective customers, with whom the Executive has or had material contact
during the last two years of the Executive’s employment by the Employer, for
purposes of providing products or services that are competitive with those
provided by the Employer.

 

8.            NON-SOLICITATION OF EMPLOYEES. The Executive agrees that during
the Term and, in the event of the termination of the Executive’s employment for
any reason, during the period of one year from and after the effective date of
such termination, the Executive shall not, except for the Executive’s
Administrative Assistant, within the Area, on the Executive’s own behalf or in
the service or on behalf of others, solicit, recruit or hire away or attempt to
solicit, recruit or hire away, directly or by assisting others, any employee of
the Employer, whether or not such employee is a full-time employee or a
temporary employee of the Employer and whether or not such employment is
pursuant to written agreement and whether or not such employment is for a
determined period or pmack@example.com.

 

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

 

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

 

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

 

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12.          NOTICE. All notices and other communications required or permitted
under this Agreement shall be in writing and, if mailed by prepaid first-class
mail or certified mail, return receipt requested, shall be deemed to have been
received on the earlier of the date shown on the receipt or three business days
after the postmarked date thereof. In addition, notices hereunder may be
delivered by hand, facsimile transmission or overnight courier, in which event
the notice shall be deemed effective when delivered or transmitted. All notices
and other communications under this Agreement shall be given to the parties
hereto at the following addresses, or to such other address or addresses as the
party to be given notice may have furnished in writing to the party seeking or
desiring to give notice, as a place for the giving of notice; provided that no
change in address shall be effective until three business days after being given
to the other party in the manner provided for above:

 

If to the Employer:

 

Howard Bank/Howard Bancorp, Inc.
3301 Boston Street
Baltimore, MD 21224

 

Attn: Chief Executive Officer, Lead Independent Director, and Governance and
Nominating Committee Chair

 

With copy to:

 

Frank C. Bonaventure, Jr.
Baker Donelson
100 Light Street
Baltimore, Maryland 21202

 

If to the Executive:

 

Steven M. Poynot
2419 Valley View Way
Ellicott City, MD 21043

 

13.          ASSIGNMENT. Neither party hereto may assign or delegate this
Agreement or any of its rights and obligations hereunder without the written
consent of the other party hereto.

 

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

 

15.          ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled by binding arbitration
before a single arbitrator in accordance with the Employment Arbitration Rules
of the American Arbitration Association. The decision of the arbitrator shall be
final and binding on the parties hereto, and judgment upon the award rendered by
the arbitrator may be entered by any court having jurisdiction thereof.

 

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

 

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

 

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

 

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

 

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

 

21.          SURVIVAL. The obligations of the Executive pursuant to Sections 5,
6, 7, 8 and 9 hereof, the obligations of the Employer pursuant to Section 3.7
hereof, the right of the Executive to terminate his employment for Good Reason
within the 90-day period following notice that this Agreement shall not be
extended as described in Section 1.13 hereof, and Section 3.8 hereof, shall
survive the termination of the Executive’s employment hereunder for the period
designated under each of those respective sections, except with respect to
Section 3.8 hereof, which shall survive for as long as any termination payments
are being made hereunder.

 

[Signature Page Follows]

 



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

 

  Employer:         HOWARD BANK         By:       Mary Ann Scully     Chief
Executive Officer         Executive:             Steven M. Poynot

 

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