EXHIBT 10.3
SETTLEMENT AND RELEASE AGREEMENT
THIS SETTLEMENT AND RELEASE AGREEMENT ("Agreement"), effective as of the
31st day of December 2003 (the "Effective Date") and entered into as of January
23, 2004, by and between Unified Financial Services, Inc., a Delaware
corporation with corporate offices in Lexington, Kentucky ("Unified Financial"),
and Xxxxx X. Xxxxxx, a resident of the State of Missouri ("Executive"). Unified
Financial and Executive are sometimes individually referred to herein as a Party
and collectively as Parties. Each of Unified Trust Company, National
Association, a limited purpose national trust company, Unified Fund Services,
Inc., a Delaware corporation, Unified Financial Securities, Inc., an Indiana
corporation, Fiduciary Counsel, Inc., a Delaware corporation, Commonwealth
Premium Finance Corporation, a Kentucky corporation, Unified Insurance Managers,
Inc., a Kentucky corporation, Unified Employee Services, Inc., a Delaware
corporation, and Equity Insurance Managers of Illinois, LLC, an Illinois limited
liability company, is a party to this Agreement for purposes of Paragraphs 5
through 9, 14 and 16 of this Agreement, and acknowledges and agrees that it is
receiving consideration for its execution of this Agreement by way of the
releases granted by Executive hereunder.
WHEREAS, Executive and Unified Financial are parties to that certain
Employment Agreement, dated as of December 31, 1999, as amended by that certain
Waiver of Provisions of Employment Agreement, dated May 12, 2002 (as amended,
the "Employment Agreement"), whereby Executive has been employed by Unified
Financial as a Senior Vice President and Associate General Counsel since
December 31, 1999; and
WHEREAS, certain disputes have arisen between Executive and Unified
Financial; and
WHEREAS, Executive desires to resign from his employment with Unified
Financial; and
WHEREAS, in order to provide Unified Financial an orderly transition of
Executive's duties, Executive is willing to assist Unified Financial in
transitioning Executive's duties to other employees or representatives of
Unified Financial on the terms set forth in this Agreement; and
WHEREAS, Unified Financial was represented by independent counsel (Xxxxx &
Xxxxxxx LLP) with regard to this Agreement, and this Agreement has been approved
and adopted by the Board of Directors of Unified Financial; and
WHEREAS, Executive was represented by independent counsel (Xxxx Xxxx Xxxxx
and others) with regard to this Agreement; and
WHEREAS, Executive and Unified Financial desire to enter into this
Agreement to resolve all matters and settle any and all claims between them, on
the following terms and conditions.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the Parties agree as follows:
1. Incorporation of Recitals. The Parties agree that the above Recitals
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are hereby agreed to and incorporated in the body of this Agreement as if fully
set forth herein.
2. Termination of Employment. As of the Effective Date, the Employment
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Agreement is hereby terminated, and shall be of no further force or effect, and
no party shall have any obligation under the Employment Agreement. This
Agreement (including the documents and instruments made a part hereof)
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter of this Agreement. Executive's current employment will terminate
on August 30, 2004 (the "Final Termination Date"). During the period between the
Effective Date and February 29, 2004, Executive shall work full-time in a
diligent and professional manner and shall devote himself to handling the
resolution of pending legal matters to which Executive had devoted time prior to
the Effective Date and the transition of work to other counsel, but will not be
expected to take primary responsibility for any new legal matters. Not later
than January 28, 2004, Executive shall deliver to Unified Financial via fax (to
000-000-0000) a written summary prepared in good faith of all pending legal
matters being handled by Executive and Xxxxxxx X. Xxxxxx, and all other legal
matters involving Unified Financial and the Unified Entities of which the
Executive is aware, including a reasonable description of each matter, its
status, pending deadlines, contact persons (including any outside counsel) and
any recommendation for future handling. Said summary will be updated on February
28, 2004. During the period from March 1, 2004 to August 30, 2004 (the
"Transition Period"), Executive shall be on a paid leave of absence, during
which time Executive shall not be expected to undertake any duties for Unified
Financial and/or any other Unified Entities (as such term is defined in
Paragraph 5.A hereof); provided, however, during such period Executive shall
make himself reasonably available (consistent with any other employment
obligations), without additional consideration, to consult with Unified
Financial and/or its legal counsel regarding matters involving the Unified
Entities that occurred while Executive was employed by Unified Financial. Any
and all reasonable expenses incurred by Executive in connection with such
consultations shall be reimbursed promptly by Unified Financial. Expenses in
excess of $500 must be approved in writing by Unified Financial in advance.
After the Effective Date and through the Final Termination Date, Executive shall
retain the titles of Senior Vice President and Associate General Counsel of
Unified Financial. During the Transition Period and thereafter, the Parties
shall not have any obligation to each other that is not set forth in this
Agreement and the documents referenced herein. The Parties agree that the
employment of Executive by Unified Financial shall terminate as of August 30,
2004, unless Executive voluntarily terminates such employment on an earlier date
during the Transition Period. Notwithstanding anything contained herein to the
contrary, at any time after the Effective Date, Executive may: (i) serve on
corporate, civic or charitable boards or committees; (ii) deliver lectures or
fulfill speaking engagements; (iii) manage personal investments for his own
account or those of family members; and (iv) render legal services to or for the
benefit of persons or entities other than the Unified Entities. Executive's
failure to perform any of the duties described above after the Effective Date
shall not excuse Unified Financial from the timely performance of its
obligations and duties under this Agreement or create any right of setoff.
For purposes of qualifying for benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1986, as amended ("COBRA"), the qualifying event
shall be deemed to have occurred on February 29, 2004. After February 29, 2004,
no Unified Entity shall be responsible for payment of any amounts to Executive
or on Executive's behalf or benefit except as otherwise provided in this
Agreement. A copy of Executive's proposed COBRA notice is attached to this
Agreement as Exhibit A. Notwithstanding anything contained herein to the
contrary, Executive's employment with Unified Financial may not be terminated by
Unified Financial prior to August 30, 2004; provided, however, that: (i)
Executive may terminate his employment during the Transition Period for any
reason with five days' written notice to Unified Financial, and (ii) Unified
Financial, upon written notice to Executive, may require Executive to cease
performing any or all of his duties under this Agreement at any time, but
delivery of such notice shall not affect Unified Financial's obligations
hereunder.
3. Salary; Settlement Sum; Other Items.
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A. For the period from January 4, 2004 through August 30, 2004, Unified
Financial shall pay Executive $150,000 (the "2004 Payment"), less usual and
customary withholdings, being paid in bi-weekly installments of $8,824 each,
less usual and customary withholdings, at the same time and frequency as other
employees of Unified Financial; PROVIDED, HOWEVER, in the event Executive shall
terminate his employment on an earlier date during the Transition Period,
Unified Financial shall, on the date Executive's employment terminates or as
promptly thereafter as is reasonably practical, pay to Executive the remaining
portion of the 2004 Payment that remains unpaid as of Executive's date of
employment termination. The Parties acknowledge and agree that Executive had two
weeks' accrued but unused vacation days as of December 31, 2003 and will not
accrue any additional vacation days after December 31, 2003. Executive may use
any accrued but unused vacation days prior to February 29, 2004, or otherwise
shall lose any such unused days.
B. Unified Financial shall pay the Settlement Sum (as provided in this
Paragraph 3.B) to or for the benefit of Executive. The Settlement Sum shall
consist solely of $950,000, which shall be paid in the following two parts
within three business days following the expiration (without revocation) of the
seven (7) day revocation period set forth in Paragraph 11.G (such date, the
"Payment Date").
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(1) The first part of the Settlement Sum shall be $450,000
(the "First Part") and shall be allocated as follows. The amount of
consideration allocated to the stock Unified Fund Services, Inc. purchases from
Executive pursuant to Paragraph 3.B(3) below (such amount, the "Stock Portion")
shall be paid by direct deposit to Executive's account at Unified Banking
Company without withholding or reduction of any sort. The Stock Portion is in
consideration of the stock being sold by Executive as described in Paragraph
3.B(3) below. Such allocation shall not exceed, on a per share basis, the value
per share set forth in the D&P Report, as hereinafter defined. The amount of the
First Part that exceeds the Stock Portion shall be paid by direct deposit to
Executive's account at Unified Banking Company, less usual and customary
employment withholdings. Executive shall have the right to elect or adjust the
amount of such withholdings as permitted by applicable tax rules and
regulations. Unified Financial acknowledges and agrees that after the Effective
Date but before the Payment Date, Executive may change the allocation of the
Settlement Sum between the First Part and the Second Part (as hereinafter
defined), in his sole discretion.
(2) The remainder of the Settlement Sum, $500,000 (such remainder,
the "Second Part"), less those employment withholdings described in the next
sentence, shall be paid by delivery of a check to Executive, which check shall
be payable to PLAZA 2100 SUPPLEMENTAL RETIREMENT INCOME TRUST (the "Trust"). The
Trust shall be established pursuant to the trust agreement attached hereto as
Exhibit B (the "Trust Agreement"). Executive shall notify Unified Financial of
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his final determination of the trustee of the Trust (the "Trustee") by January
28, 2004, and shall present Unified Financial with three copies of the Trust
Agreement executed by the Trustee. Unified Financial subsequently shall execute
and deliver to Executive two of the three copies of the Trust Agreement and the
check on the Payment Date. The Parties acknowledge and agree that the Second
Part of the Settlement Sum is not subject to customary employment withholdings,
except FICA and FUTA withholdings, which amounts shall be withheld solely from
the Second Part. Notwithstanding anything to the contrary in the Trust
Agreement, Executive shall have the sole responsibility to remit the check for
the Second Part to the Trustee for deposit in the Trust, and failure to deliver
such check to the Trustee within 30 days after Unified Financial delivers such
check to Executive on the Payment Date shall render Unified Financial's
obligation to establish a Trust under this Agreement null and void. The parties
acknowledge and agree that the Trust is intended to qualify as a grantor trust,
within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of
the Internal Revenue Code of 1986, as amended (the "Code"). If Unified Financial
and/or any other Unified Entity subsequently reports the transaction to the
Internal Revenue Service ("IRS") or any other taxing authority (whether such
report is on its own tax return(s) or on any information returns) in a manner
inconsistent with this agreed characterization, for any reason whatsoever
(including a subsequent determination by Unified Financial that the agreed
characterization herein was erroneous), Unified Financial shall, from time to
time, hold Executive harmless from and against any increase in Executive's
federal, state or local income taxes, including interest and penalties, together
with Executive's related legal and/or accounting fees. For purposes of the
preceding sentence, Executive shall incur an increase in federal, state or local
income taxes attributable to the Second Part of the Settlement Sum only if
amounts scheduled to be paid in a later calendar year from the Trust become
taxable to Executive in an earlier calendar year, in which case the increase
shall be calculated according to Kentucky law. Unified Financial shall not take
a tax deduction for the Second Part, for federal and/or state income tax
purposes, except with regard to distributions from the Trust that the Trustee
has notified Unified Financial in writing are taxable to Executive.
(3) In connection with the payment by Unified Financial of the
Settlement Sum, Executive shall execute and deliver to Unified Financial a
properly endorsed stock power, in the form attached hereto as Exhibit C, with
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respect to Unified Financial stock certificate no. 459, representing 12,000
shares of Common Stock (the "Certificate"). The Parties acknowledge and agree
that the sale, assignment and transfer hereto is subject to the terms of that
certain Security, Stock Pledge and Escrow Agreement, dated as of May 23, 2000,
by and among Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxx,
Executive, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxx ("Xxxxxxx") and Xxxxx, Xxxxxx &
Park (the "Stock Pledge Agreement"), and, in the event such shares are
foreclosed upon by Xxxxxxx, neither Unified Financial nor Unified Fund Services,
Inc. shall have any right to go against Executive with respect to the shares
represented by the Certificate or the payment made therefor. Concurrent with the
execution of this Agreement, and in accordance with the provisions of Section 5
of the Stock Pledge Agreement, Unified Financial shall deliver to Executive a
written consent of Xxxxxxx with respect to the sale by Executive of the shares
of Common Stock represented by the Certificate. Executive's sale of his Common
Stock shall be reported by Unified Fund Services, Inc. to the IRS as proceeds
from the sale or exchange of stock on IRS Form 1099B. If Unified Fund Services,
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Inc. and/or any other Unified Entity subsequently reports the transaction to the
IRS or any other taxing authority in a manner inconsistent with the foregoing
for any reason whatsoever (including a subsequent determination by Unified Fund
Services, Inc. that the agreed characterization herein was erroneous), Unified
Financial shall, from time to time, hold Executive harmless from and against any
increase in Executive's federal, state or local income taxes, including interest
and penalties, together with Executive's related legal and/or accounting fees,
with such increase to be the difference between the amount that would be then
due from Executive if the payment of the Stock Portion to Executive was solely
in exchange for 12,000 shares of Executive's Common Stock and the actual amount
then due from Executive. Promptly upon issuance of the valuation of Duff &
Xxxxxx with respect to the price per share of the Common Stock, as of December
31, 2003, with respect to shares of Common Stock held by the Unified Financial
Services Equity Participation Plan (the "D&P Report"), Unified Financial shall
issue to Executive non-qualified, 10-year, fully vested options for 12,000
shares of Common Stock, with an exercise price per share equal to the valuation
established by the D&P Report, such options to be in the form attached hereto as
Exhibit D.
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C. Each of the Unified Entities and Executive shall execute and deliver a
Release, on the earlier of the Final Termination Date or the date upon which
Executive voluntarily terminates his leave of absence, in the form attached
hereto as Exhibit E.
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D. During the period between the Effective Date and February 29, 2004,
Executive shall be eligible for participation in and shall receive all benefits
under, or receive cash benefits commensurate with, all fringe benefit plans or
programs, all savings and retirement plans (including, but not limited to, The
Unified Companies Retirement Savings Plan) and all welfare benefit plans,
practices, policies and programs provided by Unified Financial (excluding any
annual or special bonus payments, severance payment benefits and vacation
accrual), in each case to the extent generally available to other employees of
Unified Financial and/or its subsidiaries. In addition, Executive shall be: (i)
entitled to prompt reimbursement of all reasonable and necessary expenses
incurred by Executive on behalf of Unified Financial, in a manner consistent
with expenses reimbursed by Unified Financial prior to the date hereof; (ii)
entitled to prompt reimbursement of all expenses incurred by Executive and
submitted for reimbursement prior to January 9, 2004 (it being understood and
agreed that Executive shall not be entitled to attend the proposed March 2004
M&A seminar at Unified Financial's expense); and (iii) entitled to prompt
reimbursement of all expenses and costs related to or incurred by Executive in
connection with the mediation and/or negotiation sessions held from January 7-9,
2004 (the "Mediation").
E. During the period from the Effective Date to February 29, 2004, Unified
Financial shall continue to lease the current office utilized by Executive
(subject to availability), and shall pay all costs associated therewith
consistent with past practice, including, but not limited to, all equipment,
telephone service (local, long distance and cellular service) and the services
of his current assistant, in each case commensurate with those services received
by Executive, and those services paid by Unified Financial, prior to the date
hereof. From March 1, 2004 through the earlier of August 30, 2004 or the date
Executive obtains other employment, Unified Financial shall continue to lease
the current office utilized by Executive (subject to availability); PROVIDED,
HOWEVER, Executive shall pay the rent expense, telephone service expense,
postage expense, and the expenses of any supplies for such office. During the
period that Unified Financial leases the current office pursuant to this
Paragraph 3.E, Executive shall be entitled to use the office, and Unified
Financial shall continue to employ Executive's current assistant (subject to
said assistant's willingness to continue to be employed), who shall provide
services to Unified Financial in addition to reasonable assistance to Executive.
If Executive does not intend to utilize the current office at any time after the
Effective Date and before August 30, 2004 (or the date Executive obtains other
employment, if earlier), Executive will inform Unified Financial in order to
permit Unified Financial to give notice to the landlord of its intent to
terminate the lease. In any event, Unified Financial intends to notify the
landlord of its intent to terminate the lease on August 30, 2004, if earlier
notice is not given by Executive.
F. Promptly upon submission of invoices (but not later than thirty (30)
business days after submission), Unified Financial shall reimburse Executive's
counsel for all legal fees and expenses paid or payable by Executive to Xxxxx &
Xxx, PC and/or Xxxxx Xxxx LLP for advice received and/or services rendered in
connection with this Agreement, the disputes between Executive and Unified
Financial, the Trust, the Mediation and/or the transactions or documents
contemplated hereby; PROVIDED, HOWEVER, in no event shall Unified Financial be
obligated to reimburse more than $30,000 for legal fees paid or incurred by
Executive and Xxxxxxx X. Xxxxxx, in the aggregate.
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G. Unified Financial hereby authorizes Executive, on behalf of Unified
Financial, to apply for a tail insurance policy for Executive, the premiums and
all other costs for which shall be paid for by Executive, that provides
"employed lawyer" coverage for acts or omissions by Executive prior to March 1,
2004 (such coverage to be comparable to the coverage that existed for Executive
as of November 1, 2003), and which policy shall (i) be a zero dollar cost policy
to Executive (no deductible), (ii) have a $2,000,000 limit, (iii) have an
extended reporting period, which period shall run through January 7, 2007, (iv)
list Executive as a named insured and (v) be non-cancelable by Unified Financial
(unless Executive fails to pay for such policy on or before premium due dates)
or such other terms as Executive is able to negotiate. Promptly upon issuance,
Unified Financial shall provide Executive a copy of the binder of coverage and
the policy with respect to such insurance. Executive hereby unconditionally and
irrevocably indemnifies Unified Financial for any losses, damages, costs or
other expenses incurred in connection with obtaining such tail insurance policy,
including any premiums, surplus lines charges and taxes, and including as a
result of any false statements or other incorrect information or representations
made by Executive in applying for such insurance.
4. Reason For Termination. The Parties agree that Unified Financial
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shall designate Executive's termination as a voluntary resignation, and shall be
described as such by the Parties when communicating with others. Regarding
matters relating to references, and other information and communication, see
Paragraph 9.F below.
5. Release.
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A. Definitions. For all purposes of this Agreement, the term "Unified
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Entities" shall include Unified Financial, each of its subsidiaries and each of
their respective successors and assigns. Each such entity shall be a Unified
Entity and, collectively, they shall be the Unified Entities.
B. General Release by Executive.
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(1) Release by Executive. Executive represents that he has not
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been treated adversely on account of age, nor otherwise been treated wrongfully
in connection with his employment with the Unified Entities. Executive
acknowledges that Unified Financial is relying on the representations and
promises of Executive in this Agreement in agreeing to pay him the benefits
described in Paragraph 3.B(1). In return for such consideration, the adequacy of
which is hereby acknowledged, Executive does hereby for himself and for his
heirs, executors, administrators and assigns release, acquit and forever
discharge each Unified Entity and any and all of their current or former
officers, directors, employees, agents, advisers, affiliated entities,
successors and assigns, from any and all claims, demands, damages, rights,
costs, expenses, compensation, contracts, debts, actions, causes of action, or
suits at law or in equity, of any kind or nature, whether based on contract,
statute, common law, equity or any other theory, and whether or not now known or
contemplated, which Executive ever had, now has, or which his heirs, executors
or administrators hereafter can, shall or may have by reason (in whole or part)
of any fact, matter, cause or thing whatsoever that occurred from the beginning
of the world to the date of Executive's signature of this Agreement (whether or
not related to his employment or termination) including, without limitation:
(a) those in any manner, whether directly or indirectly,
related to or rising out of Executive's equity holdings in Unified Financial,
employment by the Unified Entities, or the termination of his employment by the
Unified Entities, including, but not limited to, matters related to any alleged
employment discrimination, wrongful termination, breach of covenant of good
faith and fair dealing, tortious interference with contract, libel, slander,
breach of implied contract or contract, fraud, promissory estoppel, tortious
interference of contract, retaliation, physical, emotional or psychological
injury, battery, false imprisonment or violation of any applicable state or
federal law, and any other law prohibiting retaliation based on exercise of any
rights under any law, providing whistleblowers protection, mandating leaves of
absence, or prohibiting discrimination based on veteran status or military
services and any federal or state securities or corporate law; and
(b) those in any manner based on or brought pursuant to:
(i) the National Labor Relations Act, as amended, 29 U.S.C.ss.151, et seq.; (ii)
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the Civil Rights Act of 1964, as amended, 42 U.S.C.ss.2000(e), et seq.; (iii)
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the Civil Rights Act of 1991, as amended; (iv) the Civil Rights Act of 1866, 42
U.S.C.ss.1981, et seq.; (v) the Family and Medical Leave Act; (vi) the Americans
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With Disabilities Act, as amended; (vii) the Fair Labor Standards Act of 1938,
as amended, 29 U.S.C.ss.201, et seq.; (viii) the Federal Age Discrimination in
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Employment Act of 1967, as amended, 29 U.S.C.ss.621, et seq.; (ix) the Older
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Workers Benefit Protection Act; (x) the Equal Pay Act of 1963, as amended, 29
U.S.C.ss.206(d)(1); (xi) the Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C.ss.651, et seq.; (xii) the Consolidated Omnibus Budget
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Reconciliation Act of 1986; (xiii) common, case or statutory law, ordinance, and
any other employment or labor law or regulation of the United States of America
or any state or locality, including without limitation, the Commonwealth of
Kentucky, the State of New York, the State of Missouri and the State of Indiana;
and (xiv) the Employment Agreement.
(4) Promise Not to File Claims. Executive does hereby waive all
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right to, and covenants that he will not, file, advance, prosecute, assist or
participate in any action, cause and causes of action, suit, controversy, or any
other claim of any nature whatsoever, in law or at equity, against each Unified
Entity with respect to any claim released under this Agreement, without regard
to whether such action or claim is brought by Executive or any other person or
organization (including any administrative agency) on the Executive's own behalf
or on the behalf of another, except to the extent (and only to the extent) such
waiver and such covenant is prohibited by law. Executive hereby agrees that he
will never seek or accept any damages, remedies or other relief for himself
personally (any right to which Executive hereby waives) by filing, advancing,
prosecuting, assisting or participating in any action, cause and causes of
action, suit, controversy, or any other claim of any nature whatsoever, in law
or at equity against any Unified Entity with respect to any claim released under
this Agreement and agrees to take any actions necessary to forgo and forfeit the
same or, if awarded property, return the same to Unified Financial.
(5) Exceptions to Executive's General Release. Notwithstanding
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the terms of the foregoing release or anything else contained in this Agreement
to the contrary, (i) Executive does not waive any rights he may have against any
Unified Entity with regard to vested amounts owned in Unified Financial's 401(k)
plan, health care reimbursement plan, cafeteria plan or other health welfare or
benefit plans (except any annual or special bonus plan), (ii) Executive does not
waive any rights to indemnification he may have against Unified Financial under
Unified Financial's Amended and Restated Certificate of Incorporation, as
amended, and/or By-laws, (iii) Executive does not waive any rights he may have
against Unified Financial with respect to any unpaid salary due for the period
from December 21, 2003 through January 3, 2004 and any accrued but unused
vacation days for calendar year 2003 (two weeks), (iv) Executive does not waive
any rights or obligations given to him under this Agreement, the Trust, the
Trust Agreement (including Section 7.5 thereof which is hereby incorporated into
this Agreement and made a part of this Agreement) and/or any other documents
executed in connection herewith and (v) Executive shall be entitled to raise any
defense to any claim asserted by Unified Financial and/or any other Unified
Entity.
C. General Release by Unified Entities
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(1) Release by Unified Entities. Each of the Unified Entities
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acknowledges that Executive is relying on the representations and promises of
the Unified Entities in this Agreement, as separate and distinct consideration
in addition to the benefits described in Paragraph 3.B(1). In further
consideration of Executive's promises in this Agreement, the Unified Entities
release, acquit and forever discharge Executive and his heirs, executors,
administrators and assigns from any and all claims, demands, damages, rights,
costs, expenses, compensation, contracts, debts, actions, causes of action, or
suits at law or in equity, of any kind or nature, whether based on contract,
statute, common law, equity or any other theory, and whether or not now known or
contemplated, which the Unified Entities ever had, now have, or hereafter can,
shall or may have by reason (in whole or part) of any fact, matter, cause or
thing whatsoever that occurred from the beginning of the world to the date
hereof (whether or not related to his employment or termination) including,
without limitation:
(a) those in any manner, whether directly or indirectly,
related to or rising out of Executive's employment by the Unified Entities, the
termination of his employment and/or the provision of legal services by
Executive to any Unified Entity, including, but not limited to, any legal
services provided by Executive to any Unified Entity (whether performed while an
employee of Unified Financial or while associated with Xxxxxxxx Xxxxxxxx and/or
Xxxxxxxx Xxxxxx LLP), matters related to any alleged employment discrimination,
wrongful termination, breach of covenant of good faith and fair dealing,
tortious interference with contract, libel, slander, breach of implied contract
or contract, fraud, promissory estoppel, tortious interference of contract,
retaliation, physical, emotional or psychological injury, battery, false
imprisonment or violation of any applicable state or federal law, and any other
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law prohibiting retaliation based on exercise of any rights under any law,
providing whistleblowers protection, mandating leaves of absence, or prohibiting
discrimination based on veteran status or military services; and
(b) those in any manner based on or brought pursuant to:
(i) the National Labor Relations Act, as amended, 29 U.S.C.ss.151, et seq.; (ii)
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the Civil Rights Act of 1964, as amended, 42 U.S.C.ss.2000(e), et seq.; (iii)
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the Civil Rights Act of 1991, as amended; (iv) the Civil Rights Act of 1866, 42
U.S.C.ss.1981, et seq.; (v) the Family and Medical Leave Act; (vi) the Americans
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With Disabilities Act, as amended; (vii) the Fair Labor Standards Act of 1938,
as amended, 29 U.S.C.ss.201, et seq.; (viii) the Federal Age Discrimination in
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Employment Act of 1967, as amended, 29 U.S.C.ss.621, et seq.; (ix) the Older
Workers Benefit Protection Act; (x) the Equal Pay Act of 1963, as amended, 29
U.S.C.ss.206(d)(1); (xi) the Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C.ss.651, et seq.; (xii) the Consolidated Omnibus Budget
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Reconciliation Act of 1986; (xiii) common, case or statutory law, ordinance, and
any other employment or labor law or regulation of the United States of America
or any state or locality, including without limitation, the Commonwealth of
Kentucky, the State of New York, the State of Missouri and the State of Indiana;
and (xiv) the Employment Agreement.
(2) Promise Not to File Claims. Each Unified Entity does hereby
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waive all right to, and covenants that it will not, file, advance, prosecute,
assist or participate in any action, cause and causes of action, suit,
controversy, or any other claim of any nature whatsoever, in law or at equity,
against Executive with respect to any claim released under this Agreement or in
an attempt to reclaim any amount paid by it under Paragraph 3, without regard to
whether such action or claim is brought by any Unified Entity or any other
person or organization (including any administrative agency) on the Unified
Entity's own behalf or on the behalf of another, except to the extent (and only
to the extent) such waiver and such covenant is prohibited by law. Each Unified
Entity hereby agrees that it will never seek or accept any damages, remedies or
other relief for itself personally (any right to which any Unified Entity hereby
waives) by filing, advancing, prosecuting, assisting or participating in any
action, cause and causes of action, suit, controversy, or any other claim of any
nature whatsoever, in law or at equity against Executive with respect to any
claim released under this Agreement or in an attempt to reclaim any amount paid
by it under Paragraph 3 hereof, and each agrees to take any actions necessary to
forgo and forfeit the same or, if awarded property, return the same to
Executive.
(3) Exceptions to Unified Entities' General Release.
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Notwithstanding the terms of the foregoing release, (i) Unified Financial does
not waive any rights it may have against Executive with regards to Executive's
401(k) plan, (ii) each Unified Entity shall be entitled to raise any defense to
any claim asserted by Executive, and (iii) such release shall not apply to any
rights or obligations under this Agreement, the Trust Agreement and/or any other
documents executed in connection herewith.
6. Application. It is understood and acknowledged by Executive, that in
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consideration of this Agreement, that he has waived and hereby waives any right
to reinstatement to any position of employment with Unified Financial after the
Final Termination Date. Executive agrees that he shall not, at any time, apply
for employment with the Unified Entities, and the Unified Entities have the
right to refuse to employ him, without liability.
7. No Admission of Liability. This Agreement is intended to finally and
-------------------------
fully conclude any and all claims that Executive may have against Unified
Financial and/or any other Unified Entity as of the Effective Date and any and
all claims that Unified Financial and/or any other Unified Entity may have
against Executive as of the Effective Date. Unified Financial, each Unified
Entity and Executive agree that the consideration aforesaid is in full
compromise and settlement, extinguishment and bar of doubtful and disputed
claims.
8. Coverage of Release. Unified Financial, each Unified Entity and
--------------------
Executive hereby agree that this Agreement shall apply to all unknown and
unanticipated injuries and damages as well as to those now known.
9. Agreement of Confidentiality and Non-disparagement.
---------------------------------------------------
A. Executive agrees, represents and warrants that this Agreement is
confidential and that Executive will not at any time disclose to anyone other
than his attorneys, financial advisors, spouse, partner or tax return preparer
(hereinafter referred to as the "Authorized Representatives"), or authorize his
Authorized Representatives to disclose to anyone else, any details other than
the fact that a settlement was negotiated and will not disclose the amount or
-7-
terms thereof including the terms of this Agreement, except as may be required
by subpoena, an order of a court of competent jurisdiction or otherwise as
required by law or except unless previously disclosed by Unified Financial in a
filing with the Securities and Exchange Commission or generally to Unified
Financial's stockholders. Furthermore, Executive agrees that he has required and
will continue to require his Authorized Representatives not to disclose the
terms of this Agreement to anyone else.
B. Each of Unified Financial and each of the Unified Entities agrees,
represents and warrants that this Agreement is confidential and that neither
Unified Financial, nor any Unified Entity nor any of their respective directors,
officers or employees will at any time disclose to anyone other than its
employees, attorneys and financial advisors who need to know the existence of
this Agreement (hereinafter referred to as the "Authorized Representatives"), or
authorize its Authorized Representatives to disclose to anyone else, any details
other than the fact that a settlement was negotiated and will not disclose the
amount or terms thereof including the terms of this Agreement, except as may be
required by subpoena, Federal securities law or an order of a court of competent
jurisdiction, generally accepted accounting principles, or otherwise consistent
with a good faith business purpose. Furthermore, Unified Financial and each
Unified Entity agrees that it has required and will continue to require its
Authorized Representatives not to disclose the terms of this Agreement to anyone
else, except as permitted herein.
C. Each of Unified Financial and Executive warrants and represents that if
it or he is served with a subpoena or other discovery notice, or notice from a
governmental body, in any legal proceeding, directly or indirectly involving
Executive or any Unified Entity, as the case may be, that it or he will
immediately notify Executive or Unified Financial, as the case may be, so that
if Executive or Unified Financial, as the case may be, elects to do so, he or it
will have ample opportunity to seek a protective order to prevent a violation of
this Paragraph 9. Such allowed disclosure shall not, however, terminate Unified
Financial's and Executive's continuing confidentiality obligations. Nothing in
this paragraph shall prevent Unified Financial and/or Executive from giving
truthful testimony or information to law enforcement entities, administrative
agencies or courts or in any other legal proceedings as required by law.
Further, notwithstanding any other provision of this Agreement, any party to
this Agreement (and each employee, representative or other agent of such party)
may disclose to any and all persons, without limitations of any kind, the tax
treatment and the tax structure of the transaction and all materials of any kind
(including opinions and other tax analyses) that are provided to the party
relating to such tax treatment and tax structure, provided that in connection
with any such disclosure all references to the amount paid pursuant to this
Agreement, and all other figures from which the settlement may be estimated or
calculated, shall be redacted, except as otherwise permitted herein.
D. Executive agrees that he will not denigrate, defame, disparage or cast
aspersions upon any Unified Entity to anyone, whether in Executive's employ or
elsewhere. In particular, Executive agrees not to make any derogatory statements
about any Unified Entity or its business plans, policies or practices.
E. Unified Financial and each of the Unified Entities agrees that it will
not denigrate, defame, disparage or cast aspersions upon Executive to anyone,
whether in any Unified Entity's employ or elsewhere. In particular, Unified
Financial and each of the Unified Entities agree not to make any derogatory
statements about Executive to employees, customers, competitors, suppliers or
members of the public, members of the media or any other person, nor shall it
harm or in any way adversely affect the reputation of Executive. Unified
Financial and each of the Unified Entities agree that they will not make any
disparaging remarks about Executive or to undertake or make any conduct,
activity, communication or conversation that is intended to interfere with
Executive's ability to obtain employment in the future, and will instruct
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx X. Xxxx, Xxxxxx X. Xxxxxxx, Xxxx X.
Xxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxx and Xxxx Xxxxx of the Unified
Entities' obligations under this Paragraph 9.E. Notwithstanding the foregoing,
neither Unified Financial, any Unified Entity nor any entity with which Unified
Financial or a Unified Entity may affiliate in the future, shall have any
obligation or other duty whatsoever to use (or continue to use) any law firm or
other provider of services with which Executive may then be employed, affiliated
or otherwise associated.
F. All requests for references will be forwarded to Xxxx Xxxxx or her
successor for response. In response to all requests for references for
Executive, Xx. Xxxxx or her successor will state the dates of Executive's
employment, the titles of the positions held with Unified Financial, that he
resigned voluntarily, Executive's most recent annual salary ($225,000 per
annum), and shall inform the inquiring party that she is authorized to send a
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letter of recommendation contained in the Executive's employment folder, and
that such information provided is the only information that Unified Financial
provides on any former employee for whom a reference is requested. Such letter
of recommendation shall be in the form of Exhibit F hereto. Unified Financial
---------
shall provide to Executive ten signed copies of such letter of recommendation on
or before the Payment Date and additional copies upon request.
10. Return of Unified Property and Protection for Proprietary Information.
-----------------------------------------------------------------------
Executive agrees that he will return all keys and property of Unified Financial
and the other Unified Entities in his possession prior to the Final Termination
Date; provided however, in the event Executive's employment is terminated as
provided in this Agreement prior to the Final Termination Date, Executive shall
return all keys and property of Unified Financial and the other Unified Entities
in his possession as of such earlier date. Notwithstanding the foregoing,
Unified Financial hereby grants Executive a non-exclusive right to use documents
created by Executive during his employment with Unified Financial, provided
Executive shall redact from said documents any information confidential or
proprietary to Unified Financial. Upon request by Executive, Unified Financial
shall cooperate with Executive to take such steps (at no cost to Unified
Financial) as are necessary to transfer to Executive the cell phone number
currently used by Executive (314-306-2527).
11. Age Discrimination and Employment Act Acknowledgement. Executive
-----------------------------------------------------------
acknowledges that by signing this document he is expressly waiving any and all
rights or claims he may have arising under the Age Discrimination in Employment
Act of 1967, and for such purpose:
A. He acknowledges and understands that this Agreement refers
to his rights or claims under the Age Discrimination in Employment Act;
B. He acknowledges that this Agreement constitutes a waiver of
rights or claims under the Age Discrimination in Employment Act, is in writing
and is understood by him;
C. He understands that by execution of this Agreement, he is
not waiving any rights or claims that may arise after the date this document is
executed;
D. He acknowledges that this waiver of any rights or claims
arising under the Age Discrimination in Employment Act is in exchange for the
consideration outlined above;
E. He acknowledges that he has had an opportunity to consult
an attorney of his choosing prior to executing this document;
F. He acknowledges that he was also given a period of time of
not less than twenty-one (21) days from January 19, 2004 within which to
consider this Agreement;
G. He acknowledges that he is entitled to revoke (in the event
he executes this document) his waiver of rights or claims arising under the Age
Discrimination in Employment Act within seven (7) days after all Parties have
executed this document, and that said waiver will not and does not become
effective or enforceable until the seven (7) day revocation period has expired
(employee revocation right). Such notice of revocation must be given to Unified
Financial in writing by fax and Federal Express by no later than the end of the
seven (7) day revocation period. If Executive does revoke such waiver, neither
Executive nor Unified Financial will be required to satisfy any of the terms of
this Agreement. If Executive has not revoked his acceptance within said seven
(7) days, this Agreement will become final; and
H. He understands that this release and waiver is not
requested in connection with an existing incentive or other employment
termination program.
12. Notice. For all purposes of this Agreement, except as otherwise
-------
provided in Paragraph 11.G, notices, payments and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given and received when (i) delivered or (ii) mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
-9-
respective addresses as set forth below, or to such other address as may have
been furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
Notice to Executive:
--------------------
Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Notice to Unified Financial
---------------------------
Unified Financial Services, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
13. Time Periods. Unless specifically otherwise provided, any period of
-------------
time measured under this Agreement by days shall refer to calendar days and not
business days. If the last day of any such period falls on a Saturday, Sunday or
holiday observed by commercial banks in Lexington, Kentucky, the last day of
such period, for all purposes of this Agreement (including the determination of
the first day of each succeeding period of time measured by days), shall be
deemed to be the next succeeding business day after such Saturday, Sunday or
holiday. Any period of time measured under this Agreement shall end at midnight,
Lexington, Kentucky time, on the last day of such period.
14. Applicable Law; Venue; Injunctive Relief. The Parties agree and
---------------------------------------------
acknowledge that this Agreement is made and entered into in the State of
Kentucky and shall in all respects be interpreted, enforced and governed by and
under the laws of the State of Kentucky, without reference to its conflict of
law principles. The Parties hereby agree that all claims, actions, suits and
proceedings between the Parties relating to this Agreement shall be filed, tried
and litigated only in the state or federal court in or for Lexington, Kentucky,
and submit to the exclusive jurisdiction of such court. In connection with the
foregoing, the parties hereto consent to the jurisdiction and venue of such
courts and expressly waive any claims or defenses of lack of personal
jurisdiction of or proper venue by such court. Each of the Parties acknowledge
and agree that any violation or breach by it and/or its Representatives of any
provision of this Agreement would cause immediate and irreparable harm to the
other Party, the exact amount of which will be impossible to ascertain, and for
that reason further agrees that the other Party shall be entitled, as a matter
of right, to an injunction out of the appropriate court of competent
jurisdiction (as set forth above), restraining any further violation or breach
of this Agreement by Unified Financial and/or Unified Financial's
Representatives, on the one hand, or Executive and/or Executive's
Representatives, on the other hand, either directly or indirectly, such right to
an injunction being cumulative and in addition to whatever remedies Unified
Financial or Executive may have under applicable law and/or this Agreement. The
remedies of Unified Financial and/or Executive under this Paragraph 14 are not
exclusive, and shall not prejudice any other rights under this Agreement or
otherwise.
15. Full Settlement; Executive Has No Duty of Mitigation. Unified
-------------------------------------------------------------
Financial's obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action that
Unified Financial may have against Executive or others. In no event shall
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to Executive under the provisions of this
Agreement.
16. Attorneys' Fees. Each of the Parties further agrees that in the event
----------------
that this Agreement must be enforced by any Party due to a material breach by
another party, the prevailing Party shall receive its reasonable attorneys' fees
and all related costs. The court shall specifically decide which Party has the
status of the prevailing Party. If the court grants all of the relief sought by
the Party bringing an enforcement action, it shall designate that Party to be
the prevailing Party. If the court grants some relief to both Parties, then it
shall further declare the Party that receives more relief than the other to be
the prevailing Party.
17. Miscellaneous. Separate copies of this document shall constitute
-------------
original documents, which may be signed separately but which together will
constitute one single agreement. The Parties shall be entitled to rely on each
other's original signatures or facsimile signatures. This Agreement will not be
binding on any Party, however, until signed by all Parties and Parties'
representatives. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. In case any part of this Agreement shall be invalid, illegal
-10-
or otherwise unenforceable, the remainder of this Agreement shall, at the option
of the Party adversely affected by such defect, continue to be valid, legal and
enforceable. This Agreement shall be binding upon and inure to the benefit of
Executive and the Unified Entities, and Executive's heirs, administrators,
representatives and executors, and the successors and assigns of the Unified
Entities. Neither this Agreement nor any rights hereunder may be assigned by
Executive or Executive's heirs, administrators, representatives or executors.
18. Authority. Each person signing this Agreement on behalf of Unified
----------
Financial and/or each of the other Unified Entities represents that he has full
legal authority to bind Unified Financial and/or the respective Unified Entity,
as the case may be, to the above terms and agrees that Unified Financial and
each Unified Entity will not assert as a legal defense to any cause of action
brought by Executive to remedy any alleged breach of any defense that he lacked
the authority to agree to its terms, and further acknowledges that he is aware
that Executive is relying on said authority as a material representation to
enter into this Agreement. Executive represents that he has full legal authority
and is competent to execute this Agreement and so bind himself and will not
assert as a legal defense his lack of authority or competency.
[remainder of page intentionally left blank]
-11-
IN WITNESS WHEREOF, Unified Financial, Executive and each of the other
Unified Entities has executed this Agreement on the date written opposite their
authorized signature.
Date:__________________________ /s/ Xxxxx X. Xxxxxx
-----------------------------------------------------
Xxxxx X. Xxxxxx
Date: UNIFIED FINANCIAL SERVICES, INC.
---------------------------------------
By:/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx, Director
Date:
--------------------------------------- UNIFIED FUND SERVICES, INC.
By:/s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxx, Executive
Vice President
Date: UNIFIED TRUST COMPANY, N.A.
---------------------------------------
By:/s/ Xxxx X. Xxxxx
---------------------------------------------------
Xxxx X. Xxxxx, Chief Financial Officer
Date: UNIFIED FINANCIAL SECURITIES, INC.
---------------------------------------
By:/s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxx, Vice President
Date: FIDUCIARY COUNSEL, INC.
---------------------------------------
By:/s/ Xxxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxxx, Treasurer
Date: COMMONWEALTH PREMIUM FINANCE
---------------------------------------
CORPORATION
By:/s/ Xxxx X. Xxxxx
---------------------------------------------------
Xxxx X. Xxxxx, Vice President
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Date: UNIFIED INSURANCE MANAGERS, INC.
---------------------------------------
By:/s/ Xxxx X. Xxxx
---------------------------------------------------
Xxxx X. Xxxx, President
Date: UNIFIED EMPLOYEE SERVICES, INC.
---------------------------------------
By:/s/ Xxxx X. Xxxx
---------------------------------------------------
Xxxx X. Xxxx, President
Date: EQUITY INSURANCE MANAGERS OF
--------------------------------------- ILLINOIS, LLC
By:/s/ Xxxx X. Xxxx
---------------------------------------------------
Xxxx X. Xxxx, Manager
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