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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers
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(b)(c)(e)
On June 10, 2019, Paul B. Susie resigned as
Executive Vice President and Chief Financial Officer of Severn Bancorp, Inc. (the “Company”), and its savings bank subsidiary, Severn Savings Bank, FSB (the “Bank”). The Bank has entered into a Separation Agreement and Release (the “Agreement”)
with Mr. Susie, under which the Bank will pay or provide Mr. Susie: (1) a gross amount of $50,188.68 to be paid in six equal bi-weekly installments beginning on the first regularly scheduled pay date that occurs at least seven days after the
Agreement becomes irrevocable (“Separation Pay”); (2) a lump sum payment of $16,938.68 representing his accrued personal time off to be paid on the first regularly scheduled pay date that occurs at least seven days after the Agreement becomes
irrevocable; (3) up to a gross amount of $50,188.68 to be paid in six equal bi-weekly installments following the completion of the Separation Pay (“Additional Pay”) if Mr. Susie is actively seeking new employment and assists the Bank in requested
matters until the earlier of his obtaining new employment or the receipt of the full Additional Payment; and (4) with continued participation in the Bank’s benefit plans such as medical, dental and 401(k) plans for the period during which he is
receiving the Separation Pay. The Agreement, a copy of which is enclosed as Exhibit 10.1 hereto and incorporated herein by reference, includes a release of claims, non-disparagement and confidentiality provisions.
As
required by applicable law, the Agreement is subject to a seven-day revocation period and unless revoked will become irrevocable on June 17, 2019.
The foregoing summary is qualified in its entirety by the full text of the Agreement.
The Company and the Bank have appointed Marc Winkler, age 63, Interim Chief Financial Officer effective June 10, 2019. During 2019, Mr. Winkler has
worked as a consultant with CFO Consulting Partners, LLC (“CFO Consulting Partners”). From 2015 until 2019, Mr. Winkler worked as a consultant for the P&G Group, which included P&G Associates and GRC Risk Solutions. From 2018 until 2019, he
was the Director of Strategic Advisory Consulting Services for GRC Risk Solutions, which included managing the Sarbanes-Oxley compliance consulting practice. Mr. Winkler’s consulting work in the banking industry includes strategic planning, risk
assessments, Sarbanes-Oxley compliance, internal audit function, due diligence, and merger project management. Mr. Winkler also has served in various management positions in banks, including President and Chief Executive Officer of Woodlands Bank
in Williamsport, Pennsylvania, Asian Bank in Philadelphia, Pennsylvania and Twin Rivers Community Bank in Easton, Pennsylvania.
Mr. Winkler provided consulting services to the Company and the Bank during 2019 and CFO Consulting Partners received fees and expenses that totaled
$115,268 and $6,302, respectively.
Mr. Winkler’s services to the Company and the Bank are being furnished pursuant to a Management Consulting Agreement between CFO
Consulting Partners and the Company, effective June 10, 2019 (the “Consulting Agreement”). Under the terms of the Consulting Agreement, CFO Consulting Partners will be compensated for its services, including the services of Mr. Winkler in his
capacities as Interim Chief Financial Officer of the Company and the Bank, at the rate of $7,000 per week. CFO Consulting Partners will also be entitled to reimbursement of its necessary and reasonable expenses. Neither the Company nor the Bank
will be responsible for payment of any compensation or benefits to Mr. Winkler, all of which will be the sole responsibility of CFO Consulting Partners.
The Company may terminate the Consulting Agreement at any time upon two (2) weeks notice.