Form 8-K COMMUNITY FINANCIAL CORP For: Dec 08

December 8, 2021 11:53 AM EST

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

Exhibit 10.1

 

RETIREMENT AND CONSULTING AGREEMENT

 

THIS RETIREMENT AND CONSULTING AGREEMENT (the “Agreement”) is made and entered into effective as of December 8, 2021 (the “Effective Date”), by and between THE COMMUNITY FINANCIAL CORPORATION, (the “Company”), and WILLIAM J. PASENELLI (the “Executive”).

 

WHEREAS, the Executive intends to retire from the Company and its affiliates effective August 31, 2022 (“Retirement Date”), and the parties mutually desire to arrange for his retirement from the Company and its affiliates, including without limitation, Community Bank of the Chesapeake (the “Bank”), under certain terms;

 

WHEREAS, in connection with Executive’s retirement from the Company and its affiliates, the Executive will resign from the boards of directors of the Bank and the Company (collectively the “Board”) as of his Retirement Date;

 

WHEREAS, in order to provide for continuity, and to assure that Executive’s knowledge and business expertise remain available to the Company and the Bank, and are not provided to other banks and financial services companies competing with the Company and the Bank, the Company desires to engage Executive as a consultant on the terms set forth in this Agreement; and

 

WHEREAS, the Executive wishes to provide consulting services to the Company and its affiliates under the terms set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein, the mutual benefits to be gained by the performance thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.Retirement, Resignation from the Board and Employment Until Retirement Date.

 

A.       Retirement. As of August 31, 2022, the Executive shall retire from all his officer and employee positions with the Company and its affiliates, including but not limited to the Bank and thereafter serve as a consultant to the Company. Executive acknowledges and agrees that, following the Retirement Date, he will remain subject to all policies of general applicability to retired senior executives of the Company and the Bank. In connection with the Executive’s retirement and in recognition of his long-standing service with the Company and its affiliates the Board hereby gifts the Executive his bank-owned car, a 2020 Acura RDX. The Executive will be taxed on the Kelley Blue Book value of the 2020 Acura RDX as of the Retirement Date.

 

B.       Resignation from the Board. Effective as of the Retirement Date, Executive shall resign from the boards of directors of the Company and the Bank.

 

 

 

 

C.       Employment Until Retirement Date. Pending the Retirement Date, the Executive will continue in his current role as Chief Executive Officer of the Company and the Bank and will continue to: (i) receive his regular base salary and (ii) be eligible to participate in the Company health and welfare plans in which he is currently participating on the terms stated in such plans. Executive shall not be eligible for a cash bonus under the Bank’s 2022 short-term incentive plan and shall not be eligible to participate in the Company’s 2022 long-term executive incentive program (“LTEIP”).

 

D.       As of the date of this Agreement, the Executive’s employment agreement with the Company and the Bank dated April 30, 2018 (the “Employment Agreement”) shall terminate and shall thereafter be without force or effect.

 

E.       The execution of this Agreement and the attached Waiver and Release (Appendix A) shall not affect the Executive’s rights and entitlements (including the timing, form and amount of payments) under the Company and Bank plans and programs in which he participates prior to the Retirement Date and, in each case, such rights and entitlements shall be determined solely by reference to the terms of such plans and programs and any individual award agreement provided to the Executive thereunder.

 

F.       10,010 shares of unvested awards granted under the Company’s LTEIP and the Company’s 2015 Equity Compensation Plan (“the 2015 Plan”) shall continue to vest until the Retirement Date and during the Consulting Period and the remaining 5,024 shares of unvested awards that remain unvested as of the end of the Consulting Period under the LTEIP and the 2015 Plan shall be cancelled. If this Agreement is terminated pursuant to a change in control, death or disability the 10,010 shares of unvested awards that would have become fully vested on the Retirement Date or the end of the Consulting Period and remain unvested shall be accelerated.

 

2.       Engagement as Consultant. Commencing on September 1, 2022, the Company agrees to retain the Executive as an independent consultant, and the Executive agrees to render consulting services to the Company for a term expiring on August 31, 2023 (the “Consulting Period”), unless such consulting arrangement is terminated earlier pursuant to Section 2C hereof.

 

A.       During the Consulting Period, the Executive shall provide consulting and/or advisory services as defined below (“Services”), as the Company may reasonably request. The Executive will provide the Chief Executive Officer of the Company with a monthly status report during the Consulting Period on the status of his consulting assignments.  The consulting and/or advisory Services to be provided by the Executive to the Company that the Company may reasonable request include, but will not be limited to, providing consulting and advice on the ALCO process and ALCO strategy and results; the budget process; any investor presentations; any capital plan; merger and acquisition matters and related strategic options; core system vendor relationships; an information technology strategic plan; other fintech partnerships; transitioning services to outside vendors; and other reasonable and related tasks that the Executive and the Chief Executive Officer agree to. The parties expect that the Executive will devote less than twenty (20) percent of the average amount of time devoted during the last three (3) years of his employment with the Company and its affiliates to performing Services for the Company hereunder each month. The Executive shall act solely in a consulting and advisory capacity hereunder and shall not have authority to act for the Company or to give instructions or orders on behalf of the Company or otherwise to make commitments for or on behalf of the Company and its affiliates.

 

2

 

 

The Executive shall not be an employee of the Company during the Consulting Period, but shall act in the capacity of an independent contractor and the Company will provide the Executive with a Form 1099 for compensation related to the consulting and advisory Services. The Executive shall be responsible for filing all federal income tax returns and for paying all income taxes and self-employment taxes, if applicable. The Company shall not exercise control over the detail, manner or methods of the performance of the Services by the Executive during the Consulting Period or have control over the location at which the Executive performs Services. The Executive shall be subject to the Company’s Insider Trading Policy during the Consulting Period.

 

B.       As full and complete compensation for any and all Services which the Executive renders during the Consulting Period and the Executive’s other promises and obligations herein, including those in Section 3 below, and provided that the Executive is at all times in compliance with such other promises and obligations:

 

i.                  The Company shall pay the Executive a quarterly fee of $259,517 payable on each of December 31, 2022, March 31, 2023, June 30, 2023 and August 31, 2023 (“Fees”).

 

ii.                  Except as is expressly provided in this Agreement, the Executive shall not receive nor be entitled to participate in any Company or Bank benefits or benefit plans with respect to the work done during the Consulting Period.

 

iii.                During the Consulting Period, the Executive shall be provided reasonable access to office space and secretarial services at the Company’s headquarters, and shall be reimbursed for reasonable pre-approved expenses directly related to his consulting assignments, subject to applicable Bank policies on expense reimbursement.

 

C.       Either the Company or the Executive may terminate the Consulting Period at any time and for any reason (or no reason) by providing the other party with thirty (30) days advance written notice of such termination, except in the case of a termination of the Consulting Period by the Company for “Cause” (as defined below), which shall be effective immediately. In addition, the Consulting Period shall terminate upon the occurrence of a “change in control” of the Company (as defined for purposes of Section 409A(a)(2)(A)(v) of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder). For purposes of this Agreement, “Cause” shall mean (i) the Executive’s willful failure to perform his consulting assignments (other than any such failure resulting from incapacity due to physical or mental illness); (ii) the Executive’s willful engagement in dishonesty, illegal conduct, or gross misconduct, which is, in each case, materially injurious to the Company or its affiliates; (iii) the Executive’s embezzlement, misappropriation, or fraud, whether or not related to the Executive’s employment with the Company; (iv) the Executive’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) (v) the Executive’s willful unauthorized disclosure of Confidential Information (as defined below); or (vi) any material breach of this Agreement by the Executive (including, without limitation, the restrictive covenants set forth in Section 3). No act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Except for a failure, breach, or refusal which, by its nature, cannot reasonably be expected to be cured, the Executive shall have ten (10) business days from the delivery of written notice by the Company within which to cure any acts constituting Cause.

 

 

3

 

 

D.       Upon termination of the Consulting Period for any reason, the Company shall pay to the Executive any unpaid Fees for Services rendered pursuant to the terms set forth in this Section 2D and shall reimburse the Executive for any pre-approved business expense incurred prior to such termination and for which the Executive would be entitled to reimbursement. Upon an early termination of the Consulting Period (i) by the Company without Cause or (ii) as a result of the Executive’s death or disability (as defined below) or the occurrence of a change in control (as defined above), the Executive shall be entitled to a lump sum cash payment equal to the Fees otherwise payable through the expiration of the Consulting Period but for its early termination. Any amounts payable upon termination shall be paid within ten (10) business days of the date of termination. Except as provided in the immediately preceding two sentences, upon any termination of the Consulting Period, the Company shall have no further obligation to the Executive under this Agreement and the Executive shall be paid through the end of the calendar quarter preceding such termination date. In addition, upon early termination of the Consulting Period for any reason, the obligations of Sections 3, 4, 5, 8, 18, 19, and Exhibit A shall survive such termination. For purposes of this Agreement, “disability” shall have the same meaning as under Section 409A(a)(2)(C) of the Code.

 

3.Restrictive Covenants.

 

A.       This Consulting Agreement is intended to secure for the Company the Executive’s advisory and/or consulting services and shall operate to preclude the Executive from performing services for others during the Consulting Period which would result in a conflict of interest with the contractual relationship represented by this Agreement. Therefore, during the Consulting Period, the Executive shall not, without the prior written consent of the Chief Executive Officer of the Company, within the United States, engage in directly or indirectly competition with the Company. For purposes of this Agreement, competition by the Executive shall mean the Executive’s:

 

(i) engaging in, including without limitation, consulting or start-up activities for Executive’s own account or any third party, the business of banking or financial services that provides products or services in direct or indirect competition with the products or services provided by the Company; or

 

(ii) acquiring an economic ownership interest in, or otherwise directly or indirectly being employed by or acting as a consultant, or rendering any services to, or being a director, officer, employee, principal, agent, stockholder, manager, member, owner or partner of, employer of, or permitting his name to be used in connection with the activities of any other business or organization (a “Competing Business”) which engages in, or is preparing to engage in, the business of banking or the provision of financial services that provides products or services in direct or indirect competition with the products and services provided by the Company; provided, however, that, notwithstanding the foregoing, it shall not be a violation of this paragraph for the Executive to become the registered or beneficial owner of up to two (2%) percent of any class of the capital stock of a Competing Business registered under the Securities Exchange Act of 1934, as amended, provided that the Executive does not otherwise participate in the business of such corporation.

 

 

4

 

 

B.        During the Consulting Period, the Executive will not in any manner, directly or indirectly:

 

(i) solicit (or cause, or authorize, to be solicited), divert or otherwise attempt to obtain the business of any person or entity who or which is, or has at any time within one year prior to the date of such action been, a customer, supplier, licensee or business relation of the Company or the Bank for any purpose which is competitive with the Company’s or an affiliate’s business;

 

(ii) intentionally disturb or attempt to disturb in any adverse respect any business relationship between any person or entity and the Company or any affiliate;

 

(iii) seek or attempt to persuade, induce or encourage any director, officer, employee, consultant, advisor or other agent of the Company or the Bank to discontinue their employment therewith or to become employed or otherwise engaged in a Competing Business; and

 

(iv) solicit or employ, or otherwise hire or engage as an employee, independent contractor, consultant, advisor or otherwise, any person at any time within six (6) months following the date of cessation of employment of such person or the termination of such person’s other status, as the case may be, with the Company or the Bank.

 

C.       During the Consulting Period and at all times thereafter, the Executive shall keep secret and retain in strictest confidence, any and all Confidential Information (as defined below) relating to the Company and its affiliates, and shall use such Confidential Information only in furtherance of the performance by him of his duties as a consultant and not for personal benefit or the benefit of any interest adverse to the interests of the Company. For purposes of this Agreement, “Confidential Information” shall mean any confidential or proprietary information including, without limitation, plans, specifications, models, samples, data, customer lists and customer information, computer programs and documentation, and other technical and/or business information, in whatever form, tangible or intangible, printed, electronic or magnetic, that can be communicated by whatever means available at such time, that relates to the Company’s and its affiliates current business or future business contemplated during the period the Executive serves as a consultant, products, services and/or developments, or information received from others that the Company or its affiliate’s treats as confidential or proprietary, and the Executive shall not disclose such Confidential Information to any person other than the Company or its employees, directors or agents, except as may be required by law or court or administrative order (in which event the Executive shall so notify the Company as promptly as practicable). For the avoidance of doubt, Confidential Information shall also include Confidential Information made available to the Executive prior to his Retirement Date.

 

 

5

 

 

D.       The Executive hereby acknowledges that the business of the Company is highly competitive. the Executive further acknowledges that his service to the Company will be of a special and unique character, and that he will continue to be identified personally with the Company. The Executive also acknowledges that service as a consultant of the Company may require that he have access to the Company’s confidential business information, trade secrets and proprietary information. The parties therefore acknowledge that the restrictions contained in this Section 3 are a reasonable and necessary protection of the immediate interests of the Company, and any violation of these restrictions would cause substantial injury to the Company and that the Company would not have entered into this Agreement without receiving the additional consideration offered by the Executive in binding himself to these restrictions.

 

4.       Mutual Nondisparagement. The Executive agrees that at all times he shall refrain from making, and shall not cause any other person or entity to publicly make, any disparaging statements about the Company or its affiliates or any of its or their directors, shareholders, advisors, representatives, officers, partners, agents or current or former employees. The Company agrees to direct its officers and directors (as such terms are used for purposes of Section 16 of the Securities Exchange Act of 1934) to refrain from making any disparaging statements about the Executive. Nothing in this provision shall be construed as preventing any party from testifying truthfully under oath in a deposition or other legal proceeding or filing or governmental investigation.

 

5.       Confidentiality of Agreement. The Executive and the Company recognize that the Company will file this Agreement as an exhibit to public securities filings, and may also disclose this Agreement and the exhibits hereto as may be required by law or legal proceedings. The parties mutually agree that they, and each of them, will keep the circumstances underlying the negotiation and/or drafting of this Agreement, including Exhibit A, strictly confidential, will not disclose any such information in any way other than as provided herein, and will not make any representation or other communication (orally or in writing) regarding any such information to anyone, for any reason whatsoever, without the express written consent of the other, unless the disclosure, representation or communication: (A) is to counsel or financial or other professional advisors of the Executive or the Company, as applicable, and is necessary for the rendition of professional advice to the Executive or the Company, as applicable (the restrictions stated in this Section 5 shall automatically apply to the applicable counsel, financial and/or professional advisor, and the Executive or the Company, as applicable, shall so advise such attorney, financial and/or professional advisor); (B) if by the Executive, is to a member of his immediate family (the restrictions stated in this Section 5 shall automatically apply to such immediate family member and the Executive shall so advise such immediate family member); (C) if by the Company, is to its employees who have a business need to know such information, to any insurer or, consistent with business necessity, to any other individual or entity (the restrictions stated in this Section 5 shall automatically apply to such employees, insurer or any other such individual or entity and the Company shall so advise such individuals or entities); or (D) is for the purpose of enforcing this Agreement or any other agreement between the Executive and the Company or any of its affiliates.

 

 

6

 

 

6.       Condition of Waiver and Release. Executive agrees, in exchange for the consideration provided under this Agreement, to execute, and not subsequently revoke, except as statutorily permitted pursuant to the Age Discrimination in Employment Act the waiver that is attached hereto as Exhibit A, covering all claims arising through the Retirement Date.

 

7.       Indemnification. The Executive shall be entitled to the protection of the Company's By-Laws and Certificate of Incorporation and any insurance and corporate indemnification policies the Company shall elect to maintain generally for the benefit of its directors and officers against or with respect to all costs, charges and expenses incurred or sustained by the Executive in connection with any action, suit or proceeding to which the Executive may be made a party by reason of having been a director or officer of the Company or any of its affiliates.

 

8.       Nonassignability. Except for those rights that may accrue to the Executive’s family or estate in the event of his death or disability, neither this Agreement nor any right or interest hereunder shall be subject, in any manner, to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, whether voluntary or involuntary, by operation of law or otherwise, and any attempt at such shall be void; provided, that any such benefit shall not in any way be subject to the debts, contract, liabilities, engagements or torts of the Executive, nor shall it be subject to attachment or legal process for or against the Executive.

 

9.       Entire Agreement; Modification. Except as provided herein, this Agreement sets forth the entire agreement and understanding of the parties concerning the subject matter hereof, and supersedes all prior agreements, arrangements and understandings relative to that subject matter including, without limitation, the Employment Agreement. No term or provision hereof may be modified or extinguished, in whole or in part, except by a writing which is dated and signed by the parties to this Agreement. No representation, promise or inducement has been made to or relied upon by or on behalf of either party concerning the subject matter hereof which is not set forth in this Agreement.

 

10.       Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be an estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.

 

11.       Notices. All notices or communications hereunder shall be in writing, addressed as follows or to such other address as either party may designate from time to time by written notice so given:

 

  To the Company: 3035 Leonardtown Road
    Waldorf, Maryland 20601
    Austin J. Slater, Jr.
    Chairman of the Board
     
  To the Executive, at the address of record in the Company’s personnel files.

 

All such notices shall be conclusively deemed to be received and shall be effective; (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy or facsimile transmission, upon confirmation of receipt by the sender of such transmission, or (iii) if sent by registered or certified mail, on the fifth day after the day on which such notice is mailed.

 

 

7

 

 

12.       Source of Payments. All cash payments provided in this Agreement will be paid from the general funds of the Company. The Executive’s status with respect to amounts owed under this Agreement will be that of a general unsecured creditor of the Company.

 

13.       Income Tax Withholding. The Executive acknowledges that payments made to him by the Company or the Bank after his Retirement Date, other than in his capacity as a consultant, may be subject to withholding of federal, state, or local taxes to the extent required by applicable law.

 

14.       Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable, in whole or part, the provision will be automatically amended to the minimum extent necessary to cure the invalidity, illegality or unenforceability and permit enforcement, and such invalidity will not affect any otherwise valid provision, and all other valid provisions will remain in full force and effect.

 

15.       Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and all of which together will constitute one document.

 

16.       Titles. The titles and headings preceding the text of the paragraphs and subparagraphs of this Agreement have been inserted solely for convenience of reference and do not constitute a part of this Agreement or affect its meaning, interpretation or effect.

 

17.       Section 409A. It is intended that this Agreement shall comply with the provisions of Section 409A of the Code and the Treasury Regulations relating thereto, or an exemption to Section 409A of the Code. Any payments that qualify for the “short-term deferral” exception shall be paid under such exception. For purposes of Section 409A of the Code, each payment under this Agreement shall be treated as a separate payment for purposes of the exclusion for certain short-term deferral amounts. In no event may the Executive, directly or indirectly, designate the calendar year of any payment under this Agreement. Within the time period permitted by the applicable Treasury Regulations (or such later time as may be permitted under Section 409A of the Code or any Internal Revenue Service or Department of Treasury rules or other guidance issued thereunder), the Company may, in consultation with the Executive, modify this Agreement in order to cause the provisions of this Agreement to comply with the requirements of Section 409A of the Code. Notwithstanding anything to the contrary in this Agreement, all reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (A) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement); (B) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (C) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (D) the right to reimbursement is not subject to liquidation or exchange for another benefit. The Company acknowledges and agrees that a “separation from service” within the meaning of Section 409A will occur upon the Executive’s retirement and that such retirement will also constitute a “separation from service” for purposes of the non-qualified deferred compensation arrangements maintained by the Bank and the Company. If the Executive is determined by the Company to be a “specified employee” as defined in Code Section 409A, then payments under this Agreement shall be delayed for six months if necessary to comply with Code Section 409A. Any such payments will be aggregated and paid to the Executive on the first day of the 7th month following the start of the delay.

 

 

8

 

 

18.       Arbitration. Any dispute or controversy based on, arising under or relating to this Agreement shall be settled exclusively by final and binding arbitration, conducted before a single neutral arbitrator in Baltimore, Maryland in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association (the “AAA”) then in effect. Arbitration may be compelled, and judgment may be entered on the arbitration award in any court having jurisdiction. Notwithstanding the foregoing, the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any violation of or continuation of any violation of the provisions of Section 3, and the Executive hereby consents that such restraining order or injunction may be granted without requiring the Company to post a bond or prove that money damages for violations of the restrictive covenants in Section 3 would be difficult to calculate and that remedies at law would be inadequate. Only individuals who are (i) lawyers engaged full-time in the practice of law and (ii) on the AAA roster of arbitrators shall be selected as an arbitrator. Within twenty (20) days following the conclusion of the arbitration hearing, the arbitrator shall prepare written findings of fact and conclusions of law. Each party shall bear its own costs and attorneys' fees in connection with an arbitration, and the costs of the arbitrator and the AAA's administrative fees shall be split evenly between the parties.

 

19.       Governing Law. This Agreement will be construed and enforced in accordance with the laws of the State of Maryland without regard to conflict of law principles.

 

20.       Terms/Survival of Certain Provisions.

 

A.         For purposes of this Agreement, the term “affiliate” means any subsidiary of the Company, including the Bank, or any subsidiary of the Bank and all references to “Company” herein shall be deemed to include all affiliates.

 

B.         The provisions set forth in Sections 2(C) and (D), 4, 5 7, 18 and 19, will survive the termination of this Agreement.

 

21.       Successor Obligations. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise. The Executive’s obligations hereunder shall be binding upon his successors, heirs, administrators and executors.

 

 

 

9

 

 

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

 

  THE COMMUNITY FINANCIAL CORPORATION  
       
  By: /s/ Austin J. Slater, Jr.  
    Austin J. Slater, Jr.  
  Its: Chairman of the Board  
       
       
  /s/ William J. Pasenelli  
  William J. Pasenelli  
       
       

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

Exhibit A

 

Dated: December 8, 2021

 

WAIVER AND RELEASE

 

In exchange for the consideration (the “Benefits”) offered under the Retirement and Consulting Agreement between me and The Community Financial Corporation, (the “Company”) dated December 8, 2021 (the “Agreement”), which were offered to me in exchange for my agreement, among other things, to waive all of my claims against and release The Community Financial Corporation and its predecessors, successors and assigns (collectively referred to as the “Company”), all of the affiliates (including parents and subsidiaries) of the Company (collectively referred to as the “Affiliates”) and the Company’s and Affiliates’ directors and officers, employees, agents and the employee benefit plans and programs (“Employee Benefit Plans”), administrators and fiduciaries of Employer and each of the entities affiliated with Employer, (collectively, with the Company and Affiliates, referred to herein as the “Corporate Group”) from any and all claims, demands, actions, liabilities and damages arising out of or relating in any way to my employment with or separation from the Company or the Affiliates; provided, however, that this Waiver and Release shall not apply to (1) any existing right I have to indemnification, contribution and a defense, (2) any directors and officers and general liability insurance coverage, (3) any rights I may have as a shareholder of the Company, (4) any rights under any equity plans of the Company, (5) any rights to payments under any Employee Benefit Plans, (6) rights under the Agreement and (7) any rights which cannot be waived or released as a matter of law.

 

I understand that signing this Waiver and Release is an important legal act. I acknowledge that the Company has advised me in writing to consult an attorney before signing this Waiver and Release and has given me at least 21 days from the day I received a copy of this Waiver and Release to sign it.

 

In exchange for the Benefits, I, among other things, (1) agree not to sue in any local, state and/or federal court regarding or relating in any way to my employment with or separation from the Company or the Affiliates and (2) knowingly and voluntarily waive all claims and release the Corporate Group from any and all claims, demands, actions, liabilities, and damages, whether known or unknown, arising out of or relating in any way to my employment with or separation from the Company or the Affiliates. This Waiver and Release includes, but is not limited to, claims and causes of action under: Title VII of the Civil Rights Act of 1964, as amended (“Title VII”); the Age Discrimination in Employment Act of 1967, as amended, including the Older Workers Benefit Protection Act of 1990 (“ADEA”); the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of 1990 (“ADA”); the Energy Reorganization Act, as amended, 42 U.S.C. §§ 5851; the Workers Adjustment and Retraining Notification Act of 1988; the Sarbanes-Oxley Act of 2002; the Employee Retirement Income Security Act of 1974, as amended; the Family and Medical Leave Act of 1993; the Fair Labor Standards Act; claims in connection with workers’ compensation or “whistle blower” statutes; and/or contract, tort, defamation, slander, wrongful termination or any other state or federal regulatory, statutory or common law. Further, I expressly represent that no promise or agreement which is not expressed in the Agreement has been made to me in executing this Waiver and Release, and that I am relying on my own judgment in executing this Waiver and Release, and that I am not relying on any statement or representation of the Company, any of the Affiliates or any other member of the Corporate Group or any of their agents. I agree that this Waiver and Release is valid, fair, adequate and reasonable, is entered into with my full knowledge and consent, was not procured through fraud, duress or mistake and has not had the effect of misleading, misinforming or failing to inform me.

 

 

 

 

 

I understand and agree that I would not receive the Benefits specified above, except for my signing and non-revocation of this Waiver and Release.

 

Notwithstanding the foregoing, nothing contained in this Waiver and Release is intended to prohibit or restrict me in any way from (1) bringing a lawsuit against the Company to enforce the Company’s obligations under the Agreement; (2) making any disclosure of information required by law; (3) providing information to, or testifying or otherwise assisting in any investigation or proceeding brought by, any federal, state or local regulatory or law enforcement agency or legislative body, any self-regulatory organization, or the Company’s legal, compliance or human resources officers; (4) testifying or participating in or otherwise assisting in a proceeding relating to an alleged violation of any federal, state or municipal law relating to fraud or any rule or regulation of the Securities and Exchange Commission or any self-regulatory organization; or (5) filing any claims that are not permitted to be waived or released under applicable law (although my ability to recover damages or other relief is still waived and released to the extent permitted by law).

 

Should any of the provisions set forth in this Waiver and Release be determined to be invalid by a court, agency or other tribunal of competent jurisdiction, it is agreed that such determination shall not affect the enforceability of other provisions of this Waiver and Release. If the general release language is found to be illegal or unenforceable, I agree to execute a binding replacement release.

 

I acknowledge that this Waiver and Release and the Agreement set forth the entire understanding and agreement between me and the Company or any other member of the Corporate Group concerning the subject matter of this Waiver and Release and supersede any prior or contemporaneous oral and/or written agreements or representations, if any, between me and the Company or any other member of the Corporate Group.

 

I understand that for a period of 7 calendar days following the date that I sign this Waiver and Release, I may revoke my acceptance of the offer, provided that my written statement of revocation is received on or before that seventh day by email (or, in the event of mailing, postmarked on or before the seventh day), in which case the Waiver and Release will not become effective. In the event I revoke my acceptance of this offer, the Company shall have no obligation to provide me with the Benefits. I understand that failure to revoke my acceptance of the offer within 7 calendar days from the date I sign this Waiver and Release will result in this Waiver and Release being permanent and irrevocable.

 

 

 

 

 

I acknowledge that I have read this Waiver and Release, have had an opportunity to ask questions and have it explained to me and that I understand that this Waiver and Release will have the effect of knowingly and voluntarily waiving any action I might pursue, including breach of contract, personal injury, retaliation, discrimination on the basis of race, age, sex, national origin, or disability and any other claims arising prior to the date of this Waiver and Release. By execution of this document, I do not waive or release or otherwise relinquish any legal rights I may have which are attributable to or arise out of acts, omissions, or events of the Company or any other member of the Corporate Group which occur after the date of the execution of this Waiver and Release.

 

 

/s/ William J. Pasenelli  /s/ Austin J. Slater, Jr.  
William J. Pasenelli  Austin J. Slater, Jr.  
   Chairman of the Board  
      
December 8, 2021  December 8, 2021  
Execution Date  Execution Date  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT 99.1

The Community Financial Corporation Announces CEO Succession Plan

WALDORF, Md., Dec. 08, 2021 (GLOBE NEWSWIRE) -- The Community Financial Corporation (NASDAQ: TCFC) (the “Company”), the holding company for Community Bank of the Chesapeake (the “Bank”), today announced the appointment of James (“Jimmy”) M. Burke, President of the Company and the Bank, as President and Chief Executive Officer of both the Company and the Bank, effective August 31, 2022. After many years of dedicated service, William (“Bill”) J. Pasenelli, Chief Executive Officer of the Company and the Bank, will retire from those positions, and as a member of the Boards of Directors of the Company and the Bank, on that date.

“We are incredibly grateful to Bill for his 21 years of distinguished service to the Bank and the Company,” said Austin J. Slater, Jr., Chairman of the Boards of Directors of the Company and the Bank. “In his tenure as Chief Executive Officer, he has overseen a period of significant growth, particularly in our Virginia markets, the acquisition of County First Bank, the development of our relationship banking focus, significantly improved asset quality, earnings and expense management, and the expansion of the products and services that we offer our customers. In September 2021, the Company was also recognized by the Piper Sandler Bank & Thrift SM-ALL Stars Class of 2021 as one of the top-performing publicly traded small-cap banks and thrifts in the country. We believe that Bill and the management team have positioned the Company well for the future. We are confident that the management team, led by Jimmy, will continue to lead us forward. We could not be more pleased to appoint him as Bill’s successor. Jimmy joined the Bank in 2005 as Executive Vice President and Chief Risk Officer, was appointed President of the Bank in 2016 and President of the Company early in 2021, and was elected to the Company’s and the Bank’s Boards of Directors in 2021. The Board of Directors believes that Jimmy will continue to leverage the capabilities and efficiencies we have achieved to date, and pursue the strategic vision we have for the Company’s future. We are also pleased to announce that Jimmy and Bill, who have worked together for many years, and will continue to do so through and after Bill’s retirement. To this end, we have entered into a consulting arrangement with Bill that will take effect on August 31, 2022 and he has agreed to serve as a consultant to the Company through August 31, 2023. This is a win-win situation for all of us.”

Mr. Pasenelli noted, “I would like to thank the Board, our customers and most of all our dedicated employees. I am excited about retiring on a high note of record earnings and efficiency. It has been an honor to serve as CEO of such a dedicated group. I think that Jimmy will lead the Company to even greater success. The Board’s confidence in him is rightly placed.”

Mr. Burke said, “It has been an honor working with Bill Pasenelli for 16 years, and I look forward to continuing to work with Bill through his retirement date and his consulting period. I am honored by the trust that the Board of Directors has placed in me by appointing me to be our next Chief Executive Officer. I am excited to lead a very gifted management team that continually looks for opportunities to enhance our performance while remaining true to our community values. I look forward to continue working with our team, and all of our constituents, to execute our business strategy with a focus on increasing shareholder value.”

About The Community Financial Corporation - Headquartered in Waldorf, MD, The Community Financial Corporation is the bank holding company for Community Bank of the Chesapeake, a full-service commercial bank with assets of approximately $2.3 billion. Through its branch offices and commercial lending centers, Community Bank of the Chesapeake offers a broad range of financial products and services to individuals and businesses. The Company’s branches are located at its main office in Waldorf, Maryland, and branch offices in Bryans Road, Dunkirk, Leonardtown, La Plata, Charlotte Hall, Prince Frederick, Lusby and California, Maryland; and downtown Fredericksburg, Virginia. More information about Community Bank of the Chesapeake can be found at www.cbtc.com.

Forward-looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements can generally be identified by the fact that they do not relate strictly to historical or current facts. They often include words like "believe," "expect," "anticipate," "estimate" and "intend" or future or conditional verbs such as "will," "would," "should," "could" or "may." Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends, changes in earnings, changes in interest rates, loss of deposits and loan demand to other financial institutions, substantial changes in financial markets, changes in real estate value and the real estate market, regulatory changes, possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, the outcome of pending litigation, and market disruptions and other effects of terrorist activities. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required under the rules and regulations of the Securities and Exchange Commission.

CONTACTS: 

William J. Pasenelli, Chief Executive Officer 
James M. Burke, President  
888.745.2265 



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings