EXHIBIT 10.1
SEVERANCE AGREEMENT AND RELEASE
THIS SEVERANCE AGREEMENT AND RELEASE (this "AGREEMENT") is made and
entered into by and among XXXXXX X. XXXXXX ("XX. XXXXXX"), ST. XXXXXX CAPITAL
CORPORATION, a Delaware corporation (the "COMPANY"), and ST. XXXXXX CAPITAL BANK
(the "BANK"), an Indiana state bank, and this Agreement is effective as of the
Effective Date (as defined in SECTION 15).
WHEREAS, Xx. Xxxxxx has been employed by the Company and the Bank; and
WHEREAS, Xx. Xxxxxx'x employment with the Company and the Bank
terminated by mutual agreement; and
WHEREAS, the parties are desirous of effecting an amicable separation,
and to effect such desire, the Company offers Xx. Xxxxxx a severance amount if
Xx. Xxxxxx agrees to settle, compromise and dispose of any and all claims and
issues of any kind and nature that Xx. Xxxxxx has, or may have, or may claim to
have against the Company and the Bank, including, but not limited to, any claims
arising out of, or in any way related to, Xx. Xxxxxx'x employment or Xx.
Xxxxxx'x separation from employment with the Company and the Bank; and
NOW, THEREFORE, the parties agree as follows:
SECTION 1. RESIGNATION FROM EMPLOYMENT AND OFFICER POSITIONS. Xx.
Xxxxxx hereby resigns from his employment with both the Company and the Bank and
from his officer positions with both the Company and the Bank, all such
resignations effective October 9, 2003, and his last date of employment shall be
October 9, 2003.
SECTION 2. SEVERANCE. In consideration for the promises made in this
Agreement, the Company agrees to pay Xx. Xxxxxx xxxxxxxxx pay in the aggregate
sum of one hundred and twenty-six thousand two hundred and ninety-five dollars
($126,295), less applicable withholding taxes, employment taxes, and other
deductions properly chargeable to Xx. Xxxxxx to the extent required by law,
representing salary for a twelve (12) month period and a bonus. The Company
agrees that Xx. Xxxxxx has the option of requesting that all or any portion of
the $126,295.00 shall be paid to Xx. Xxxxxx before December 31, 2003. Any
portion of the severance pay of $126,295.00 that is not paid by December 31,
2003, shall be paid to Xx. Xxxxxx on January 2, 2004. Xx. Xxxxxx expressly
agrees, understands, and acknowledges that the severance pay provided to him
under this SECTION 2 and the rights and benefits conferred in SECTION 5 and
SECTION 6 constitute amounts and rights in excess of that to which a separated
employee of the Company or the Bank would be entitled without entering into this
Agreement and are being provided by the Company as consideration for Xx. Xxxxxx
entering into this Agreement, including, but not limited to, the provisions of
SECTION 10 and SECTION 12 and the release of claims and waiver of rights
provided for in SECTION 11.
SECTION 3. ACCRUED COMPENSATION AND VACATION PAY. Xx. Xxxxxx will be
provided a final pay check on October 15, 2003, for all salary and vacation pay
earned through his last date of employment in accordance with Company and Bank
policies. No later than October 10,
2003, Xx. Xxxxxx shall provide to management his accounting of any vacation pay
earned but not taken as of October 9, 2003.
SECTION 4. COBRA RIGHTS. The Bank shall provide Xx. Xxxxxx with an
opportunity to continue, at Xx. Xxxxxx'x expense, health insurance for eighteen
(18) months in accordance with the provisions of COBRA.
SECTION 5. STOCK OPTIONS. The Company agrees to take all actions
necessary to cause Xx. Xxxxxx'x unvested stock options, as set forth below, to
vest and become fully exercisable as of the Effective Date (as defined in
SECTION 15 below). Xx. Xxxxxx agrees and acknowledges that all stock options
held by him must be exercised within ninety (90) days of October 9, 2003, and
shall remain subject to the terms and conditions of the St. Xxxxxx Capital
Corporation 1996 Stock Incentive Plan and the applicable grant agreements by and
between Xx. Xxxxxx and the Company.
UNVESTED STOCK OPTIONS
GRANT DATE EXERCISE PRICE NUMBER OF UNVESTED OPTIONS
---------- -------------- --------------------------
February 22, 1999 $16.75 1,000
November 1, 2001 $11.60 4,000
September 30, 2002 $19.00 1,382.50
SECTION 6. TAG ALONG RIGHTS UPON CHANGE OF CONTROL. If at any time
after October 9, 2003, and through April 9, 2005, there is a public announcement
by the Company of a "Change of Control of Company" (as defined below) and that
publicly-announced Change of Control of Company closes, and if (a) Xx. Xxxxxx
has fully complied with all provisions of SECTION 9, SECTION 10 and SECTION 12
of this Agreement through the closing of the Change of Control of Company, and
(b) Xx. Xxxxxx has, during the period commencing on October 9, 2003, and ending
on the date of the public announcement of the Change of Control of Company,
sold, in a bona fide, arm's length transaction, any Company common stock
acquired pursuant to the exercise of a stock option granted by the Company
("OPTION SHARES"), then the Company, or its successor, agrees to pay to Xx.
Xxxxxx within ten (10) days of Xx. Xxxxxx'x written demand an amount equal to:
(i) the per share price received by the Company's stockholders as a result of
the Change of Control of Company minus the per share price, excluding any
commissions, at which Xx. Xxxxxx sold the Option Shares; times (ii) the number
of Option Shares sold. Within three (3) business days of the sale of any Option
Shares, Xx. Xxxxxx shall provide the Company with a signed written notice of the
number of Option Shares sold, the date of sale and the per share price at which
they were sold, and a copy of any trade confirmation statement. For purposes of
this Section, a "Change of Control of Company" shall mean the acquisition by any
person or entity of: (y) legal or beneficial ownership (as defined by Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) of greater
than 51% of the then issued and outstanding voting stock of the Company through
any transaction; or (z) all or substantially all of the assets of the Company.
If Xx. Xxxxxx breaches any of his obligations under SECTION 9, SECTION 10 or
SECTION 12 of this Agreement, then he automatically forfeits his tag along
rights under this SECTION 6. In addition, the tag along rights provided in this
SECTION 6 shall not attach to any shares of the Company's common stock that Xx.
Xxxxxx purchases in the open market.
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SECTION 7. EXPENSE REIMBURSEMENT. The Company agrees to reimburse Xx.
Xxxxxx for all appropriate business expense reimbursements incurred through
October 9, 2003, and submitted in accordance with the Company's policy regarding
expense reimbursements. Xx. Xxxxxx agrees to submit such expenses for
reimbursement no later than October 10, 2003.
SECTION 8. REPRESENTATIONS AND WARRANTIES.
(a) Xx. Xxxxxx hereby represents and warrants that any
business information that he has acquired during his employment and
that he reasonably believes is or would be of significance to the
Company or the Bank and that is not otherwise known to the Company or
the Bank has been conveyed to either Mr. Xxxx Xxxxxxxxx, Mr. Xxxxx
Xxxxx or Mr. Xxxx Xxxxxx.
(b) Xx. Xxxxxx further represents and warrants to the Company
and the Bank that he has not said or done anything, or omitted to say
or do anything, that: violates any law, regulation or policy and
procedure of the Company or the Bank; or would give rise to any claim,
suit or action by either the Company or the Bank against him.
SECTION 9. CONDUCT. The Company, the Bank and Xx. Xxxxxx agree that, at
all times following the signing of this Agreement, they shall not engage in any
vilification of or slander against the other, and shall refrain from making any
false, negative, critical or disparaging statements, implied or expressed,
concerning the other, including, but not limited to, management style,
performance, capability, methods of doing business, the quality of products and
services, role in the community or treatment of employees. The parties further
agree to do nothing that would damage the other's business reputation or good
will. For purposes of this SECTION 9, the persons whose actions may be
attributable to the Company or the Bank are limited to each director of the
Company and each director and the current three Senior Vice Presidents of the
Bank. The Company and the Bank agree that, if called by any prospective employer
of Xx. Xxxxxx for a reference, the Company and the Bank shall simply confirm Xx.
Xxxxxx'x dates of employment and his job titles. Xx. Xxxxxx agrees that he shall
direct all communications for references to Xx. Xxxxxxxxx, Chairman of the Board
of the Company.
SECTION 10. EMPLOYMENT AGREEMENT TERMINATION. The Company and Xx.
Xxxxxx agree and acknowledge that the certain Employment Agreement between Xx.
Xxxxxx and the Company dated October 1, 2002, as amended (the "Employment
Agreement"), shall terminate as of the Effective Date, provided, however, that
SECTION 3 and SECTION 5 of the Employment Agreement shall survive the
termination of the Employment Agreement and those sections are expressly
incorporated herein by reference.
SECTION 11. RELEASE AND WAIVER OF ALL CLAIMS.
(a) Xx. Xxxxxx, on his own behalf and that of his heirs,
representatives, executors, attorneys, administrators, successors, and
assigns, fully releases and discharges the Company, the Bank, their
predecessors, successors, subsidiaries, affiliates, and assigns, and
its and their directors, officers, employees and agents, whether in
their individual or official capacities, and the current and former
trustees or administrators of any retirement or other benefit plan
applicable to the employees or former employees of
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the Company, in their official and individual capacities, from any and
all liability, claims and demands, including, but not limited to,
claims, demands or actions arising under the Company's and the Bank's
policies and procedures, whether formal or informal; the United States
or State of
Indiana Constitutions; Title VII of the Civil Rights Act of
1964, as amended; the Civil Rights Act of 1991; the
Indiana Civil
Rights Act; the Employee Retirement Income Security Act of 1974, as
amended; the Age Discrimination in Employment Act, as amended; the
Americans With Disabilities Act, as amended; Executive Order 11246; and
any other federal, state or local statute, ordinance or regulation with
respect to employment, and in addition thereto, from any other claims,
demands or actions with respect to Xx. Xxxxxx'x employment with the
Company or the Bank or other association with the Company or the Bank,
including, but not limited to, Xx. Xxxxxx'x termination from employment
with the Company and the Bank, the Employment Agreement, any right of
payment for disability or any other statutory or contractual right of
payment or any claim for relief on the basis of any alleged tort or
breach of contract under the common law of the State of
Indiana or any
other state including, but not limited to, defamation, intentional or
negligent infliction of emotional distress, breach of the covenant of
good faith and fair dealing, promissory estoppel and negligence. This
release shall not apply to any claim based on any act that occurs after
the Effective Date or to bar any claim for enforcement of the rights
under this Agreement.
(b) Based on Xx. Xxxxxx'x representations and warranties
contained in SECTION 8, the Company and the Bank, on behalf of
themselves and their respective directors, officers, successors and
assigns, hereby release and discharge Xx. Xxxxxx and his heirs,
representatives, executors, attorneys, administrators, successors and
assigns, from any and all liability, claims and demands, including, but
not limited to, claims, demands or action arising under the Company's
and the Bank's policies and procedures, whether formal or informal; the
United States or State of
Indiana Constitutions; and Xx. Xxxxxx'x
employment with the Company or the Bank or other association with the
Company or the Bank. This release shall not apply to any claims based
on any act that occurs after the Effective Date or to bar any claim for
enforcement of the rights under this Agreement. This release shall be
considered null and void if any of the representations and warranties
made by Xx. Xxxxxx in SECTION 8 are, or are proven to be, untrue or
inaccurate.
SECTION 12. COVENANT NOT TO XXX.
(a) Xx. Xxxxxx represents and warrants that he has not
assigned or filed any claim, demand or charge to date against the
Company or the Bank or any of their respective directors, officers or
employees. Xx. Xxxxxx further represents and warrants that he will not
xxx the Company or the Bank, or its or their officers, directors,
shareholders, employees, or agents with respect to any action of the
Company, the Bank or their directors, officers or employees related to
anything that has occurred or failed to occur from the inception of the
Company or the Bank until the Effective Date. This covenant shall not
bar any suit to enforce the rights under this Agreement.
(b) Based on Xx. Xxxxxx'x representations and warranties
contained in SECTION 8, the Company and the Bank represent and warrant
that they have not assigned or
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filed any claim, demand or charge to date against Xx. Xxxxxx or any of
his heirs or agents. The Company and the Bank further represent and
warrant that they will not xxx Xx. Xxxxxx or his heirs or agents with
respect to any action by Xx. Xxxxxx related to anything that has
occurred or failed to occur from the inception of the Company or the
Bank until the Effective Date. This covenant shall not bar any suit to
enforce the rights under this Agreement. This covenant shall be
considered null and void if any of the representations and warranties
made by Xx. Xxxxxx in SECTION 8 are, or are proven to be, untrue or
inaccurate.
SECTION 13. RETURN OF COMPANY PROPERTY AND PROVISION OF PASSWORDS. Xx.
Xxxxxx represents that he has returned all property of the Company and the Bank
that is in his possession, custody or control, including all documents, records
and tangible things that are not publicly available and reflect, refer or relate
to the Company and the Bank's business affairs, operations or customers, and all
copies of the foregoing. In addition, Xx. Xxxxxx hereby provides the following
passwords to the following systems and programs:
System: Password:
--------------------------- ------------------
System: Password:
--------------------------- ------------------
SECTION 14. UNEMPLOYMENT. Xx. Xxxxxx acknowledges that the Company is
providing Xx. Xxxxxx with the severance pay and benefits provided hereunder as a
financial bridge during a possible period of unemployment for Xx. Xxxxxx.
Therefore, Xx. Xxxxxx agrees that, if he applies for unemployment compensation
under the
Indiana unemployment insurance law or any other state or federal
unemployment compensation law at any time prior to the date that is twelve (12)
months after the date the severance payment is made hereunder, then in such
event: (a) the Company shall provide the agency investigating that claim with a
copy of this Agreement; and (b) Xx. Xxxxxx shall immediately repay all payments
made to him under SECTION 2 and he shall forfeit entitlement to any payments yet
outstanding under SECTION 2.
SECTION 15. REPRESENTATIONS. Xx. Xxxxxx acknowledges that, in
accordance with the Age Discrimination in Employment Act, as amended by the
Older Workers Benefit Protection Act of 1990, he has been advised to seek, and
has been advised by, legal counsel regarding the terms of this Agreement,
including the release of all claims and waiver of rights set forth in SECTION
11. Xx. Xxxxxx acknowledges that he has been offered at least twenty-one (21)
days to consider this Agreement, and further acknowledges that any revisions to
this Agreement will not restart the twenty-one (21) day period. After having
been so advised, and without coercion of any kind, Xx. Xxxxxx FREELY, KNOWINGLY,
and VOLUNTARILY enters into this Agreement. Xx. Xxxxxx further acknowledges that
he may revoke this Agreement within seven (7) days after execution and further
understands that this Agreement shall not become effective or enforceable until
seven (7) days after execution (the "EFFECTIVE DATE"). Any revocation must be in
writing and directed to St. Xxxxxx Capital Corporation, 0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxx 00000, Attention: Chairman of the Board. If sent by
mail, any revocation must be postmarked within such seven (7) day period and
sent by certified mail, return receipt requested. If Xx. Xxxxxx revokes this
Agreement, then all obligations of the Company and the Bank under this
Agreement, including, but not limited to, SECTION 2, SECTION 5 and SECTION 6 are
also revoked.
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SECTION 16. NO ADMISSIONS. The Company and the Bank deny that they or
any of their directors, officers, employees or agents have taken any improper
action against Xx. Xxxxxx, and Xx. Xxxxxx agrees that this Agreement shall not
be admissible in any proceeding as evidence of improper action by the Company or
the Bank or any of its respective directors, officers, employees or agents.
SECTION 17. CONFIDENTIALITY. Xx. Xxxxxx and the Company and the Bank
agree to keep the existence and the terms of this Agreement confidential, except
as may be required by law or in connection with the preparation of tax returns,
or as may be required to be disclosed by the Company in accordance with
applicable federal securities laws.
SECTION 18. INFORMATION REQUESTS. Xx. Xxxxxx acknowledges and agrees
that, if he has any questions regarding the terms of this Agreement or needs to
contact the Bank relative to any issues in this Agreement, he shall direct all
questions and inquiries to the Chairman of the Human Resources Committee of the
Board of Directors of the Company.
SECTION 19. NON-WAIVER. The Company's or the Bank's waiver of a breach
of this Agreement by Xx. Xxxxxx shall not be construed or operate as a waiver of
any subsequent breach by Xx. Xxxxxx of the same or of any other provision of
this Agreement.
SECTION 20. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement of the parties, and shall be final and binding as to all claims that
have been or could have been advanced by or on behalf of Xx. Xxxxxx pursuant to
any claim arising out of or related in any way to Xx. Xxxxxx'x employment with
the Company and the Bank and the termination of that employment.
SECTION 21. GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement, and the performance of the
obligations imposed by this Agreement shall be governed by the internal laws of
the State of
Indiana applicable to contracts made and wholly to be performed in
such state without regard to conflicts of laws, except that the law of the state
of Delaware shall apply to all matters of corporate law and except to the extent
superseded by federal law.
SECTION 22. ASSIGNMENT. Other than the obligations of the Company under
SECTION 6 of this Agreement, neither this Agreement nor any of the rights or
obligations hereunder may be assigned, in whole or in part, by any of the
parties to this Agreement without the prior written consent of the other parties
to this Agreement and any purported assignment in violation hereof shall be void
and of no effect.
SECTION 23. JURISDICTION AND SERVICE OF PROCESS. Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement shall be brought against any of the parties in the courts
of the State of
Indiana, County of St. Xxxxxx or, if it has or can acquire
jurisdiction, in the United States District Court serving the County of St.
Xxxxxx and each of the parties consents to the exclusive jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
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SECTION 24. NOTICES. Except as otherwise specifically provided in this
Agreement, all notices, consents, waivers and other communications under this
Agreement must be in writing and will be deemed to have been duly given if
delivered by hand or by nationally recognized overnight delivery service
(receipt requested) or if mailed by registered or certified mail (return receipt
requested) to a party at his or its address set forth on the signature page of
this Agreement or to such other place as such party shall furnish to the other
party in writing. Except as otherwise provided herein, all such notices,
consents, waivers and other communications shall be effective: (a) if delivered
by hand, when delivered; (b) if mailed in the manner provided in this Section,
five (5) Business Days after deposit with the United States Postal Service; or
(c) if delivered by overnight express delivery service, on the next Business Day
after deposit with such service.
SECTION 25. BINDING ON HEIRS. The rights and obligations of the parties
under SECTION 2 and SECTION 6 of this Agreement shall inure to, and be binding
upon, the heirs, representatives, executors and successors of the parties.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF each of the parties has executed this Agreement as
of the dates set forth below each party's respective signature.
ST. XXXXXX CAPITAL CORPORATION
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxx X. Xxxxxx
------------------------------------- -----------------------------------
By: Xxxx X. Xxxxxxxxx Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
0000 Xxxxxx Xxxxx Xxxxxxx 00000 Xxxx Xxx Xxxxx
------------------------------------- -----------------------------------
Xxxxxxxxx, Xxxxxxx 00000 Xxxxxxx, XX 00000
------------------------------------- -----------------------------------
Address Address
Date: October 15, 2003 Date: 10/15/03
------------------------------ ----------------------------
ST. XXXXXX CAPITAL BANK
/s/ Xxxx X. Xxxxxxxxx
-------------------------------------
By: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
0000 Xxxxxx Xxxxx Xxxxxxx
-------------------------------------
Xxxxxxxxx, Xxxxxxx 00000
-------------------------------------
Address
Date: October 15, 2003
------------------------------
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