Agreement, General Release, And Confidentiality Statement
Exhibit 10.1
Agreement,
General Release, And Confidentiality Statement
This
Agreement, General Release, and Confidentiality Statement (“Agreement”), is
between HomeFederal
Bank
(“Bank”) and
S. Xxxxxx
Xxxxxxx
(“Employee”), a
resident of Xxxxxxx County, Indiana.
Recitals
A. Employee’s
positions with the Bank and Home Federal Bancorp, the Bank’s sole shareholder
(the “Corporation”), will end effective February 16, 2007.
B. Bank
enters into this Agreement based solely on Employee’s representation that this
Agreement will resolve any and all claims Employee has or could have against
Bank for any issue relating to her employment or the separation of her
employment and that Employee has waived any right to pursue any claim or lawsuit
against Bank with respect to her employment, the separation of that employment,
or any other issue that arose prior to her execution of this
Agreement.
C. In an
effort to end the employment relationship on an amicable basis, and in
consideration of the mutual covenants, promises, and obligations contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Parties hereby agree as
follows:
Agreement
1. Definition.
Throughout this Agreement, the term “Bank,” when capitalized and used alone,
shall encompass the following:
(a) Bank and
any other subsidiary, parent company, affiliated entity, related entity, or
division of any of the foregoing; and
(b) Any
current or former officer, director, trustee, agent, employee, insurer,
shareholder, representative, or employee benefit or welfare program or plan
(including the administrators, trustees, and fiduciaries of such program or
plan) of an entity referenced in or encompassed by subparagraph 1(a), whether
acting in their representative or individual status.
2. Employment.
Employee’s positions and employment with, and authority to conduct business on
behalf of, the Bank and the Corporation shall terminate effective February 16,
2007. Employee agrees that as a condition of this Agreement, she will not seek
re-employment with Bank or the Corporation at any time and should she apply in
the future, her application for employment will not be considered by Bank or the
Corporation and will be null and void. Effective as of February 16, 2007,
Employee’s Employment Agreement with Bank and the Corporation dated December 17,
1996, as amended prior to the date hereof (the “Employment
Agreement”) shall
be terminated and no longer of any force or effect. Employee hereby waives and
releases any and all claims, demands, or causes of action against the Bank or
the Corporation, or its successors and/or assigns, or against the Bank’s or the
Corporation’s officers, employees, directors or agents, whether acting in their
representative or individual
capacity,
arising out of or in any way related to the Employment Agreement or the
termination of the Employment Agreement or as to any rights or benefits covered
by the Employment Agreement.
3. Lump
Sum Payment. Bank, on
behalf of itself, its officers, directors, employees, and agents, shall pay
Employee (via wire transfer) the gross sum of Seven Hundred Fifty-Three Thousand
Four Hundred Thirty-One Dollars ($753,431.00), less all applicable taxes and
withholdings. The payment reflected in this Paragraph 3 shall be paid to
Employee via wire transfer six (6) months following the Effective Date of this
Agreement.
4. Legal
Fees and Outplacement Services. In
addition, the Bank agrees to reimburse Employee for her attorney’s fees incurred
in connection with the matters that led to this Agreement and the negotiation of
this Agreement as well as for outplacement services utilized by Employee within
12 months following the Effective Date; provided, however, that in no event
shall the Bank be obligated for more than a total of Thirty Five Thousand
Dollars ($35,000.00) under this Paragraph 4.
5. Health
Insurance.
Employee at her cost shall be entitled to any COBRA health benefits to which she
and her children are entitled under law (which would permit her and her
currently covered family members to continue their group health coverage for the
periods specified in COBRA, as a result of her termination of employment as of
the Effective Date). To the fullest extent permitted by law and the terms of the
applicable plans, she will be permitted to convert her Bank life insurance, long
term disability, and accidental death and dismemberment policies to personal
policies.
6. Tax
Consequences and Other Matters. In
paying the amounts and benefits specified in Paragraphs 3, 4, 5, 8 and 9, makes
no representation as to the tax consequences or liability arising from said
payments and benefits. Moreover, the parties understand and agree that any tax
consequences and/or liability arising from the payments and benefits provided to
Employee shall be the sole responsibility of Employee. To this extent, Employee
acknowledges and agrees that she will pay any and all income taxes and
employment taxes which may be determined to be due from Employee in connection
with the payments and benefits described in Paragraphs 3, 4, 5, 8 and
9.
All
payments and benefits described in Paragraphs 3, 4, 5, 8 and 9 reflect
consideration provided to Employee over and above anything of value to which
Employee is already entitled.
7. General
Release and Waiver of Claims.
Employee, for herself, her heirs, executors, and administrators, hereby releases
and discharges Bank, its officers, directors, employees, affiliates, insurers
and agents (either in their representative or individual capacity) from any
claim, demand, action, or cause of action, known or unknown, which arose at any
time from the beginning of time to the effective date of the Agreement and
waives all claims relating to, arising out of or in any way connected with her
employment with Bank or the cessation of that employment including, without
limitation, any claim, demand, action, cause of action, including money damages
and claims for attorneys’ fees, based on but not limited to:
(a) The Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), 29 U.S.C. § 621,
et
seq;
(b) The
Americans With Disabilities Act of 0000 (“XXX”), 00 X.X.X. § 00000, et
seq.;
2
(c) The
Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et
seq.;
(d) The
Family and Medical Leave Act of 1993 (“FMLA”), 29 U.S.C. § 2601, et
seq.;
(e) The Civil
Rights Act of 1866 and 1964, as amended, 42 U.S.C. § 1981;
(f) The
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001,
et
seq.;
(g) Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000(e),
et
seq.;
(h) The Fair
Credit Reporting Act, 15 U.S.C. § 1681 et
seq.;
(i) The
Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et
seq.;
(j) The
Indiana Civil Rights Law, Ind. Code § 22-9-1-1, et
seq., the
Indiana wage payment statute, Ind. Code § 22-2-4-1, et
seq., and any
Indiana wage law;
(k) Any
existing or potential entitlement under any Bank program or plan, including
wages or other paid leave;
(l) Any
existing or potential agreement, contract, representation, policy, procedure, or
statement (whether any of the foregoing are express or implied, oral or
written); and
(m) Claims
arising under any other federal, state and local fair employment practices law,
disability benefits law, and any other employee or labor relations statute,
executive order, law or ordinance, and any duty or other employment-related
obligation, claims arising from any other type of statute, executive order, law
or ordinance, claims arising from contract or public policy, as well as tort,
tortious cause of conduct, breach of implied covenant of good faith and fair
dealing, breach of contract, intentional infliction of emotional distress,
negligence, discrimination, harassment, and retaliation, together with all
claims for monetary and equitable relief, punitive and compensatory relief and
attorneys’ fees and costs.
Employee
understands and agrees that she is releasing Bank from any and all claims by
which she is giving up the opportunity to recover any compensation, damages, or
any other form of relief in any proceeding brought by Employee or on Employee’s
behalf. This Paragraph and this Agreement shall not operate to waive or bar any
claim or right which -- by express and unequivocal terms of law -- may not under
any circumstances be waived or barred. Notwithstanding the foregoing, this
Agreement is not intended to operate as a waiver of any retirement or pension
benefits that are vested (including Employee’s benefits under her Supplemental
Executive Retirement Agreements with the Bank dated April 1, 2001, and November
28, 2005)(collectively “SRP”), the eligibility and entitlement to which shall be
governed by the terms of the applicable plan. Employee shall also be indemnified
under the Bank’s or Home Federal Bancorp’s articles of incorporation, as well as
covered by the Bank’s
3
Directors
and Officers Liability Policy, to the same extent as any other former officer of
the Bank. Moreover, this Agreement shall not operate to waive rights or claims
under the ADEA if those rights or claims arise after the date Employee signs
this Agreement, nor preclude Employee from challenging the validity of the
Agreement under the ADEA. Before December 31, 2007, Bank and Employee agree to
enter into any amendments to the SRP that may be required to avoid adverse tax
consequences under Section 409A of the Internal Revenue Code.
With the
exception of any claims arising under this Agreement or after the Effective Date
of this Agreement, the Bank hereby irrevocably and unconditionally releases and
forever discharges Employee from all claims, liabilities, or obligations arising
out of facts known to the Bank’s Board of Directors as of the date hereof
concerning Employee’s employment by, or service as an officer of, the Bank or
the Corporation.
8. LTIP. The
Bank hereby agrees to pay to Employee the pro rata amount (based on the number
of full months in which she was employed during the Performance Period (as
defined in Home Federal Bancorp’s Long-Term Incentive Plan (the “LTIP”)) of any
Final Award (as defined in the LTIP) attributable to awards made in 2005 and
2006 to which she would have been entitled had she remained employed through
December 31, 2008. Thus, she will be entitled to 25/36 of any Final Award made
with respect to her award made in 2005 and 13/36 of any Final Award made with
respect to her award made in 2006. Those pro rata portions of awards will be
paid in a lump sum in cash at the same time other such awards for such years are
paid under the LTIP to other executive officers of the Bank, with an appropriate
written explanation thereof, and shall be subject to appropriate withholdings
for employment tax purposes.
9. Stock
Options. Employee
acknowledges that she has no right to exercise her non-vested options for 15,406
shares of the Corporation’s common stock. On or before February 16, 2007,
Employee has the right to exercise her stock options for an aggregate of 78,744
shares of the Corporation’s common stock granted to her under the Corporation’s
stock option plans. In order to effect a “cashless exercise” of these options
for 78,744 shares, Employee hereby exercises such options as of February 16,
2007, for the aggregate exercise option price of $1,715,723 and hereby sells the
78,744 shares acquired upon exercise of such options to the Corporation, and the
Corporation hereby accepts such exercise as being a valid exercise under all
relevant plan and grant documents, and hereby purchases such 78,744 shares from
Employee for $28.75 per share, or an aggregate purchase price of $2,263,890. To
effect these two offsetting transactions on a net basis, the Corporation shall
pay Employee a lump sum cash payment of $548,167 (less applicable withholding
and employment taxes), at which point the stock options shall be terminated and
no longer in effect and the 78,744 shares shall be deemed repurchased and
restored to the status of authorized but unissued shares. Such payment shall be
made to Employee by the Corporation, via wire transfer on February 16, 2007.
Employee understands that any taxes required to be withheld as the result of
Employee’s exercise of these stock options will be deducted from the payment to
be made to Employee under Section 0 of this
Agreement. The Corporation represents and warrants to Employee that the
transactions described by this Section 0 have
been approved by the Corporation’s Board of Directors.
10. Disclaimer
of Liability. This
Agreement is not to be construed as an admission of liability or wrongdoing by
either party, but is entered into in an effort to provide Employee with a
severance package and to end the parties’ employment relationship on an amicable
basis.
11. Return
of Property.
Employee certifies and declares that she has returned to the custody of Bank or
will return within two days of the Effective Date hereof, all company
4
property
and documents, as well as any copies of company property and documents, in her
possession. The phrase “company documents” is defined to include any writings,
contracts, records, files, tape recordings, correspondence, photographs,
communications, summaries, data, notes, memoranda, diskettes, or any other
source containing information which relates to or references Bank and which was
provided by Bank or obtained as a result of Employee’s relationship/employment
with Bank.
12. Confidentiality
Obligations. Employee
agrees that the information she obtained as a result of her position with Bank
was sensitive, private, proprietary, and/or confidential information. Employee
hereby agrees that (i) she will keep all such information confidential and (ii)
she will not volunteer or disclose any such information to anyone without first
obtaining express authorization to do so from the undersigned representative of
Bank. For purposes of this Agreement, “proprietary” or “confidential”
information would include, but is not limited to (whether written or not), trade
secrets (as defined by applicable law), all information about Bank’s services
and programs, products, systems, manuals, processes, research, operations,
customers and/or customer or prospective customer lists, personnel, finances,
purchasing, costs, marketing plans, sales plans, sales, formulas, inventions,
vendor lists, contracts, licenses, strategic and financial plans, financial
reports, revenue information, margins, quotations, commission information,
pricing, credit history and credit terms, engineering specifications, business
methods or strategies, future business plans, databases, software, computer
programs and other business aspects of Bank which are not generally known to the
public and/or which provide Bank with a competitive advantage. Employee will not
make any legally impermissible statements or representations that disparage,
demean, or impugn the Bank or the Corporation, including, without limitation,
any legally impermissible statements impugning the personnel or professional
character of any director, officers, employee, or consultant for the Bank. The
Bank will take all reasonable efforts to make certain that its board members and
officers will not make any legally impermissible statements or representations
that disparage, demean, or impugn Employee, including, without limitation, any
legally impermissible statements impugning the personal or professional
character of Employee. Further, the Bank agrees to provide a truthful,
favorable, letter of reference on the letterhead of the Bank, in the form set
forth and attached hereto as “Exhibit A,” to be finalized and signed by a Board
Member and delivered to Employee within ten (10) days of the date of this
Agreement.
13. Covenant
Against Soliciting Employees. From
the date Employee receives this Agreement through a period of twelve (12) months
following the Effective Date of this Agreement, Employee agrees not to employ,
solicit for employment, advise, or recommend to any employee of the Bank or any
person known by Employee to be a prospective employee of the Bank, that the
employee or prospective employee modify his/her employment with or work for any
person, firm, association, syndicate, company, corporation, or other entity
other than the Bank. Employee agrees during the same aforementioned time-frame
not to advise or recommend to any other persons, businesses, or entities that
they hire any current employees of Bank or any persons known by Employee to be a
prospective employee of Bank.
14. Successors. This
Agreement shall apply to, be binding upon, and inure to the benefit of, the
predecessors, successors, and assigns of Bank and each past, present, or future
employee, agent, representative, officer, or director of Bank and any division,
subsidiary, parent, or affiliated entity.
15. Severability. The
parties acknowledge and agree that the provisions of this Agreement are both
reasonable and enforceable. However, the provisions of this Agreement
are
5
severable,
and the invalidity of any one or more provisions shall not affect or limit the
enforceability of the remaining provisions. In the unlikely event, therefore,
that a court of competent jurisdiction determines that any of the terms,
provisions, or covenants of the Agreement are unreasonable, the court shall
limit the application of any such term, provision or covenant, or modify such
term, provision or covenant and proceed to enforce those terms as so limited or
modified.
16. Applicable
Law/Enforcement. This
Agreement shall be interpreted, enforced, and governed under the laws of
Indiana. If any legal action or other proceeding is brought for the enforcement
of this Agreement, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any provisions of this Agreement, the
non-breaching party or parties shall be entitled to recover from the breaching
party any reasonable attorney fees, court costs and all expenses, even if not
taxable as court costs (including, without limitation, all such fees, costs and
expenses incident to appeals) incurred in that action or proceeding, in addition
to any other relief to which such party or parties may be entitled.
17. Nonwaiver. The
waiver by Bank of a breach of any provision of this Agreement by Employee shall
not operate or be construed as a waiver of any subsequent breach by Employee.
The waiver by Employee of a breach of any provision of this Agreement by Bank
shall not operate or be construed as a waiver of any subsequent breach by
Bank.
18. Knowledge
and Understanding.
Employee declares, that:
(a) She has
been and is hereby advised to consult with her attorney prior to executing this
Agreement and she has done so;
(b) She has
been given a period of twenty-one (21) days within which to consider this
Agreement and has waived said time period;
(c) She has
availed herself of all opportunities she deems necessary to make a voluntary,
knowing, and fully informed decision; and
(d) She is
fully aware of her rights and has carefully read and fully understands all
provisions of this Agreement before signing.
This
notice is provided in accordance with the ADEA.
19. Effective
Date. If
Employee consents to and signs this Agreement within twenty-one (21) days of
receipt, Employee shall have an additional seven (7) days after signing the
Agreement to revoke it. Employee expressly states that if she executes this
Agreement before the expiration of the 21-day period, such execution is knowing,
voluntary, and done on the advice of counsel. Any revocation shall be in writing
and faxed to the attention of Xxxx Xxxxxx at 812-522-5640. This Agreement shall
not become effective, therefore, and none of the benefits set forth in this
Agreement shall become effective until the 8th day
after Employee executes this Agreement (the “Effective
Date”).
Because
Employee and her Counsel have reviewed this Agreement, the normal rule that
ambiguity should be construed against the drafting party shall not be employed
in the interpretation of this Agreement.
20. Complete
Agreement. This
Agreement sets forth the complete agreement between the parties. Notwithstanding
the foregoing, nothing in this Agreement is intended to or
6
shall
limit, supersede, nullify, or affect any duty or responsibility Employee may
have or owe to Bank by virtue of any separate agreement or otherwise. Employee
represents and acknowledges that in executing this Agreement she does not rely
and has not relied upon any representations or statements not set forth herein
made by Bank or any of its employees, agents, representatives, officers, or
directors with regard to the subject matter, basis, or effect of this Agreement
or otherwise. Bank hereby represents and warrants that it has authority to sign
on behalf of the Corporation and to bind the Corporation to the Corporation’s
obligations hereunder.
(signature
page follows)
7
BY
SIGNING THIS RELEASE, I STATE THAT: I HAVE READ IT; I UNDERSTAND IT AND KNOW
THAT I AM GIVING UP IMPORTANT RIGHTS; I AGREE TO ALL THE TERMS CONTAINED WITHIN
THE AGREEMENT; I AM AWARE OF MY RIGHT TO CONSULT WITH MY ATTORNEY BEFORE SIGNING
IT; I HAVE SIGNED IT KNOWINGLY AND VOLUNTARILY.
The
parties have each executed this Agreement on the dates indicated
below.
| /s/ S. Xxxxxx Xxxxxxx |
HomeFederal
Bank | ||
|
Employee |
|||
|
By: |
/s/ Xxxxxx Force | ||
|
Its
Authorized Representative | |||
|
Dated:
February 16,
2007 |
Dated:
February 16, 2007 | ||
8
