Exhibit 10.1
February 12, 1997
Xx. Xxxxxx X. Xxxxx
0000 Xxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Dear Xxxxx:
This letter sets forth our agreement concerning your retention as a
consultant to First Central Financial Corporation (the "Company") and First
Central Insurance Company ("First Central Insurance"), the termination of the
Employment Agreement between First Central Financial Corporation and you dated
as of March 18, 1994 (the "Employment Agreement") and your resignation as
Chairman and Chief Executive Officer of the Company and First Central Insurance.
1. CONSULTING SERVICES. The Company and First Central Insurance hereby
retain you as a consultant to render such consulting services as you may from
time to time be called upon to render, not to exceed 50 hours in any calendar
year. In consideration thereof, the Company or First Central Insurance will pay
you compensation at the rate of $104,000 per annum during the period from March
1, 1997 through December 31, 1999, payable monthly on or before the fifth
business day of each month but the Company and First Central Insurance reserve
the right to make payment more frequently. The Company's obligation to pay such
compensation is unconditional and will be payable to you or to your estate,
without offset or counterclaim, notwithstanding your death, disability or
inability to render any requested consulting services. You shall be free to
render services, whether or not of a competitive nature, on your own behalf or
on behalf of any other person, firm or corporation. Payments or items of value
provided to you pursuant to this Paragraph 1 or Paragraph 8 below shall be
subject to all applicable federal, state and local taxes and withholding
requirements. If the Company or First Central Insurance shall fail to make any
required payment of compensation hereunder, which default shall not be cured by
the expiration of five days after written notice thereof to the Company and
First Central Insurance, the entire unpaid amount of compensation payable under
this Paragraph 1 shall be forthwith due and payable. The Company and First
Central Insurance shall not be entitled to more than one notice of default and
opportunity to cure in any calendar year. Interest on amounts not paid when due
shall accrue at the rate of 9% per annum.
2. GROUP MEDICAL INSURANCE. Through December 31, 1999, at no cost to
you, the Company shall provide group medical insurance coverage for you and your
family, to the extent previously required under Paragraph 4(b) of the Employment
Agreement.
3. ELECTION TO BOARD OF DIRECTORS. The Board of Directors of the
Company will nominate you and will recommend to shareholders your election to
the Company's Board of Directors at the 1998 Annual Meeting of Shareholders,
provided that you shall be physically and mentally sound and provided also, that
you shall be the beneficial owner, directly or indirectly, of at least 75% of
such number of shares of common stock of the Company as you beneficially own at
this time.
4. INDEMNITY AGREEMENT. The Company hereby confirms the Indemnity
Agreement dated and effective as of January 26, 1994 between the Company and you
and agrees that such agreement is and will remain in full force and effect.
5. PRESS RELEASE, DEROGATORY STATEMENTS. The Company will issue a press
release relating to your resignation, retention as a consultant and continued
status as a member of the Company's Board of Directors which press release shall
be subject to your reasonable approval. Neither you on the one hand nor the
Company on the other shall make any derogatory statements concerning the other.
6. RESIGNATION. You hereby resign from the offices of Chairman and
Chief Executive Officer of each of First Central Financial Corporation and First
Central Insurance Company effective immediately.
7. TERMINATION OF EMPLOYMENT AGREEMENT. The Employment Agreement is
hereby terminated and all obligations of each of the Company and you under the
Employment Agreement are terminated.
8. OFFICE. Until December 31, 1999, the Company or First Central
Insurance will provide you, at the Company's option with:
8.1 rent free use of an approximately 150 square foot office
to be designated by the Company located at the First Central Insurance building;
or
8.2 the rental cost not to exceed $20.00 per square foot, of
an approximately 150 square foot office selected and rented by you at a facility
other than the First Central Insurance building.
All expenses incurred by you in the use of such office, other
than rent, shall be at your expense. The Company or First Central Insurance will
reimburse you for the reasonable cost of moving the furniture which you own
personally to your new office.
9. ATTORNEYS' FEES. The Company shall reimburse to you your reasonable
attorneys' expenses in connection with the negotiation and execution of this
agreement up to a maximum of $7,500. The Company will pay such amount upon
submission of a copy of the xxxx from your attorney.
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10. RELEASE. You hereby forever release and discharge the Company, all
its subsidiaries and affiliates, and all of their respective shareholders,
officers, directors, agents, attorneys, servants and employees, and, without
limiting your rights as set forth in the Indemnity Agreement referred to in
Paragraph 4 above or under the Company's Certificate of Incorporation, the
Company hereby releases you, from any and all claims, demands, debts,
liabilities, accounts, obligations, costs, expenses, liens, actions, causes of
action and remedies of any nature whatsoever, known or unknown, arising from the
beginning of time until the date of this release, but not including acts
constituting willful misconduct, intentionally wrongful acts, or conduct
constituting criminal behavior.
11. MISCELLANEOUS. The foregoing constitutes the entire agreement
between the Company and you and supersedes any prior agreement or understanding
with respect to your employment by the Company or the termination thereof,
including the Employment Agreement. You acknowledge that the Company has not
made and in executing this agreement, you have not relied upon, any
representations, promises or inducements, except to the extent that the same are
expressly set forth in this agreement. This agreement and all of its terms shall
be binding upon the parties, their heirs, spouses, estates, personal
representatives, executors, successors and assigns (to the extent that any of
the foregoing succeed to the interest of the parties hereunder). This agreement
shall be governed and construed under New York law applicable to agreements to
be performed entirely therein.
If the foregoing is in accordance with your understanding and
agreement, kindly sign this letter below under the words "Agreed To and
Accepted".
Sincerely,
FIRST CENTRAL FINANCIAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxxxx, President
FIRST CENTRAL INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxxxx, President
AGREED TO AND ACCEPTED:
/s/ Xxxxxx X. Xxxxx
-----------------------
Xxxxxx X. Xxxxx
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