SEPARATION
AGREEMENT WITH RELEASE OF ALL CLAIMS (the “Agreement”) between
Xxxxx Xxxxxxxx (“Employee”), Entrust Financial Services, Inc.
(“Entrust”) and Entrust Mortgage, Inc. (“Company”).
RECITALS
WHEREAS,
Employee is employed by the Company under an Employment Agreement dated March
19, 1999 (the “Employment Agreement”) which agreement extends through
April 30, 2004 by Addendum dated May 20, 1999, and acts as an Officer and
Director of Entrust; and
WHEREAS,
Employee and the Company and Entrust have mutually agreed to terminate
Employee’s employment with the Company and relationship with Entrust
effective June 30, 2002 subject to the terms herein; and
WHEREAS,
Employee is owed or will be owed $478,907 for unpaid base salary, cost of living
increases over the base salary pursuant toP. 4.1 the Employment Agreement as
amended, additional compensation based upon sales for 1999, 2000, and 2001
pursuant toP. 4.1.a of the Employment Agreement as amended, and an undetermined
amount for contingent bonuses pursuant toP. 4.1.a. as amended.
WHEREAS,
Employee and the Company and Entrust wish to resolve the status of all issues
concerning or related in any way to Employee’s relationship with Entrust
and employment with the Company, including but not limited to, the Employment
Agreement, including any amounts due under the Employment Agreement or
otherwise.
NOW,
THEREFORE, in consideration of the mutual promises in this Agreement and
intending to be legally bound hereby, the parties hereto agree as
follows:
| 1. |
Recitals and Final Payment. The above recitals are incorporated by
reference herein. The parties hereby agree to incorporate into this Agreement
all payments of any kind or amount whatsoever which may now be, or at any time
in the future will be, owed to the Employee as a result of his employment with
the Company or his relationship with Entrust. |
| 2. |
Importance of Agreement. Employee recognizes that (i) by signing this
Agreement, Employee compromises and extinguishes some of his legal rights; (ii)
this Agreement may have important legal and economic consequences; and (iii) the
Company and Entrust have advised Employee to consult his legal counsel
concerning this Agreement prior to acting on it. |
| 3. |
Termination of Employment. Effective June 30, 2002 (“Separation
Date’), Employee’s employment with the Company and relationship with
Entrust shall be terminated. All parties agree that the separation is
appropriate and that termination is a mutual decision. On the Effective Date in
paragraph 13 below, the Employment Agreement will become invalid and will be
replaced by this Separation Agreement with Release of All Claims, which will be
the only document, which governs Employee’s relationship with either the
Company or Entrust. On the Separation Date, Employee will resign as an employee
of the Company and from all offices of Entrust and all of Employee’s
authority to discharge contracts, agreements, personnel activities, and to
perform any duties as an employee or Officer or Director will end. |
| 4. |
Separation Benefits. In return for Employee’s agreeing to the terms
of this Agreement, the Company and Entrust agree to provide the following
separation benefits to Employee: |
| a) |
Total Payments in Settlement of All Payments Due. Beginning in July, 2002 and
continuing for a period of forty-eight (48) months, Employee shall be entitled
to an amount equivalent to 15 basis points on the first $12,500,000 in monthly
fundings and 5 basis points on the remaining monthly fundings on wholesale and
retail loans funded by the Company or the Company’s lenders on behalf of
the Company. Payments shall be made by Company and/or Entrust on August 15 and
on the 15th day of each month thereafter for forty-eight (48)
consecutive months. Employee shall have the right, at his own expense and not
more than once in any six (6) month period, to inspect at reasonable times the
relevant accounting records of Company and Entrust to verify the accuracy of the
aforesaid payments. If the audit correctly reveals that Company or Entrust has
underpaid Employee by three percent (3%) or more, then Company or Entrust shall
reimburse Employee for the cost of the audit, in addition to the amount of
underpayment. |
| b) |
Withholding. Company shall deduct normal withholding taxes and other payroll
deductions as would be proper for any sums paid to Employee as set forth in this
Agreement. |
| a) |
Insurance Premiums. The Company will pay the total monthly premium as is
necessary to add Employee as a covered dependant under the coverage of Xxxxxxxx
X Xxxxxxxx, who is also an employee of the Company, each month of
Employee’s Group Health coverage under the Company’s existing plan, or
as the plan may be changed over time. These payments will continue as long as
Separation Benefits or other compensation is paid hereunder, or until such
coverage is no longer offered to any employee of the Company, if earlier. |
| 5. |
Intellectual Property. Any technologies that Employee developed or
created for Company or Entrust during his employment with Company shall be the
sole property of Company or Entrust, and Company or Entrust, as may be
applicable shall be the sole owner of such technologies and any patents,
copyrights and other property rights in connection therewith. |
| 6. |
Confidential Information. Employee understands and agrees that in the
course of his employment with Company and his relationship with Entrust, he
received and became aware of business, financial and personnel information,
practices, marketing plans, customer contacts, and other confidential
information related to the Company’s or Entrust’s business. Employee
agrees that he will not reveal such information, or any part of it, to any
person, firm, corporation, or association without the written consent of Entrust
or the Company. In the event of such disclosure, or threatened disclosure,
Company or Entrust will be entitled to an injunction restraining Employee from
disclosing such information, or rendering any services to any entity to which
the information has been or is threatened to be disclosed. The right to secure
an injunction is not exclusive, and Company or Entrust may pursue any other
remedies it has against Employee, including the recovery of damages from
Employee. |
| 7. |
Non-compete. For a one-year period after Separation Date, Employee shall
not, without prior written consent of the Company, provide services, similar to
those preformed during his employment with Company, to third parties, that
provide products and services competing with Company. Employee agrees that this
restriction is necessary to protect Company’s business and that
Employee’s violation of this clause would result in irreparable harm to
Company. In the event Employee breaches this clause, Company shall be entitled
to injunctive relief prohibiting Employee from any violation of this clause
during the period described above in addition to any other remedies legally
available. |
| 8. |
Return of Other Company Property. Upon separation, Employee shall return
to the Company or Entrust any records, reports, proposals, customer vendor and
other lists, correspondence, specifications, drawings, blueprints, sketches,
materials, equipment, program code, documents, property, and reproductions of
any aforementioned items belonging to Company or Entrust or which the Company or
Entrust uses or intends to use in the conduct of its business. |
| 9. |
Waiver and Indemnification By Employee. |
| a) |
As a material inducement for the Company and Entrust to enter into this
Agreement, Employee hereby irrevocably and unconditionally releases, acquits,
and forever discharges the Company and Entrust from any and all claims, demands,
or causes of action, whether known or unknown, and whether or not in litigation,
which Employee has or which could be asserted in any way by another on his
behalf based on any action, omission, or event that occurred on or before the
date this Agreement is executed, relating to any claim arising out of his
employment or termination of employment, including each and every claimed
violation of the AGE DISCRIMINATION IN EMPLOYMENT ACT, 29 U.S.C. Section 623 et
seq., the EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, as amended, 29 U.S.C.
Section 1001 et seq., THE AMERICANS WITH DISABILITIES ACT OF 1990,42 U.S.C.
Section 12101 et seq., or all other federal, state or local laws, orders, and
regulations, or any cause of action or claim of violation of common law.
Included in this Waiver are any and all claims for attorney’s fees and
costs and for future damages allegedly arising from the alleged continuation of
the effects of any action, omission or event taking place prior to the execution
of this Separation Agreement with Release of All Claims. |
| b) |
The Waiver set forth in subparagraph (a), above, is for any relief including,
but not limited to, injunctive relief and monetary relief, including back pay,
front pay, incentive/bonus pay, severance pay, compensatory damages, punitive
damages, liquidated damages or damages from emotional distress, personal injury,
and. pain and suffering. Employee further covenants and agrees that he will not
file or permit any action to be filed on his behalf, will not permit himself to
be a member of any class or group seeking relief, and will not counsel or assist
in the prosecution of claims against the Company or Entrust relating to his
employment by the Company, his relationship with Entrust, or the termination of
his employment or relationship, whether on behalf of himself or others, except
as he may be compelled to do pursuant to subpoena. |
| 10. |
Indemnification by Company and Entrust. The Company and Entrust, and each
of them, (each, an “Indemnifying Party”) agrees to indemnify Employee
and his successor and assigns (the “Indemnified Parties”) and to hold
them harmless from and against all losses, claims, costs, demands, damages,
deficiency, liabilities, actions, suits, proceedings, assessments, judgments,
and expenses of whatever kind or nature which they may sustain or to which they
might become subject arising out of or relating in any way to authorized acts
while an employee, officer or director of Entrust, the Company or any
predecessor in interest or any subsidiaries, parents, or business combinations
both now and in the future, or resulting from being a guarantor on any loans,
leases, credit cards, lines of credit, warehouse lines of credit or any other
agreements entered into as of the date of this indemnification by or related to
or associated with the Company or Entrust or any predecessor in interest or any
subsidiaries, parents, or business combinations both now and in the future, or
resulting from any misrepresentations, breach of covenant or warranty or
non-fulfillment of this Separation Agreement with Release of Claims by Company
or Entrust or any predecessor in interest or any subsidiaries, parents, or
business combinations both now and in the future, including without any
limitation in each case, attorney’s fees, costs, damages and expenses
actually incurred in defending against the same or as a result of enforcing this
agreement. This section shall survive the completion any other duties or
payments of Company and Entrust set forth in this agreement. |
| 11. |
Enforcement of Agreement. Notwithstanding ¶¶9&10 above, the
parties have the right to bring an action to enforce this Agreement in a court
of law. In such an event, the prevailing party will be entitled to recover
reasonable attorneys’ fees and costs incurred in the bringing of such an
action. Employee specifically agrees that if he breaches any provision of this
Agreement, the damages arising from said breach shall be a set off against any
amounts owed to him under this Agreement. |
| 12. |
Acknowledgment By Employee. Employee acknowledges and agrees that he has
read carefully this entire Agreement and the attached Statistical Information
with details of the benefits to which he is entitled. Employee further
acknowledges and agrees that he fully understands his rights to discuss all
aspects of this Agreement with counsel of his choice and that he has fully
availed himself of this opportunity. Employee represents and agrees that he
fully understands this Agreement, has been offered a period of time of at least
forty-five (45) days to consider this Agreement, is satisfied with it, and has
signed his name of his own free will. |
| 13. |
Revocation Period and Effective Date. This Agreement shall become
effective on the Employee’s Separation Date or the eighth (8th) day
following Employee’s acceptance of this Agreement, whichever is later (the
“Effective Date”). For seven (7) days after signing this Agreement,
Employee may revoke this Agreement, by delivering an executed written statement
of revocation to the Company. Any amounts due Employee upon execution of this
Agreement or after execution of this Agreement shall be paid no earlier than the
Effective Date. |
| 14. |
No Other Agreements. This Agreement and any document referenced herein
constitute the entire and only agreement regarding the subject matter covered
herein and supersedes any prior negotiations, promises, representations, or
agreements between the parties, whether written or oral. This Agreement may not
be altered or amended except by a written document executed by all of the
parties. |
| 15. |
Severability. The various provisions of this Agreement, including this
Section, are intended to represent a single, integrated bargain. Accordingly,
the provisions of this Agreement are not severable unless the beneficiary of a
term or provision that is determined to be unlawful or unenforceable agrees that
such term or provision may be severed. |
| 16. |
Confidentiality. Except as may be required by law or court order, Employee
and Company agree that the terms, amounts, and facts of this Agreement will be
kept completely confidential and that no disclosure of any information
concerning this Agreement will be made except to legal counsel, accountants and
other advisors. |
| 17. |
Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of Colorado. The execution of this
Agreement shall not be construed as an admission of a violation of any statute
or law or a breach of and duty or obligation by either party to this agreement. |
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have executed this Separation Agreement with Release of All Claims.
ACCEPTED AND
AGREED:
XXXXX XXXXXXXX
ENTRUST MORTGAGE, INC.
/s/ Xxxxx Xxxxxxxx
6-30-02
/s/ Xxxxx Xxx
6-30-02
Date
By Xxxxx Xxx President Date
ENTRUST
FINANCIAL SERVICES, INC.
/s/ Xxxxx Xxx
6-30-02
By Xxxxx Xxx President Date
Entrust Financial Services, Inc.
Special Severance Program
Statistical Information
Eligibility:
o Executive employee of Entrust Financial Services, Inc.
The following positions are affected by this program
Position/ Employee
Separation Agreement Offered
Number of
Employees
Eligible 1
Number of Employees
Not Eligible 0
ACKNOWLEDGMENT OF RECEIPT
OF OFFER
I hereby acknowledge that
on May 13, 2002, I have received the Separation Agreement with Release of All
Claims between Entrust Mortgage, Inc. Entrust Financial Services, Inc. and
myself.
Xxxxx Xxxxxxxx
/s/ Xxxxx Xxxxxxxx
6-30-02
Signature
Date
