SEVERANCE, SEPARATION AND RELEASE AGREEMENT
SEVERANCE,
SEPARATION AND RELEASE AGREEMENT
This
Severance, Separation and Release Agreement (“Agreement”) is entered into as of
this 4th
day of
November, 2005, between Matrix Bancorp, Inc. (the ‘Company”), Matrix Capital
Bank, Matrix Bancorp Trading, Inc., First Matrix Investment Services Corp.,
Matrix Financial Services Corporation, MTXC Realty Corp., The Vintage Group,
Inc., Sterling Trust Company and Matrix Funding Corp. (collectively, the
“Employers”) and Xxxxxxx X. Xxxxxxx (the “Employee”).
RECITALS
WHEREAS,
the
Employee has elected to terminate his employment relationship with the Employers
in consideration of the severance payment set forth herein, the Employers accept
Employee’s decision and, as a result, the Employers and the Employee have
mutually agreed to terminate their existing employment relationships and to
release each other as set forth herein from claims arising from or related
to
such employment relationships.
NOW,
THEREFORE,
in
consideration of the mutual promises and the terms and conditions set forth
below and other obligations under this Agreement, the Employers and the Employee
(collectively referred to as the “‘Parties”) hereby agree as
follows:
AGREEMENT
1. Termination
of Employment Relationships.
Subject
to Section 16 hereof, the employment relationships between the Employee and
the
Employers shall terminate on the date the closing of the Company’s private
placement offering of common stock (the “Offering”) which has commenced as of
the date first set forth above (the “Termination Date”); provided, however, to
the extent the private placement offering is not consummated, this Agreement
shall be null and void and of no further effect. Effective as of the Termination
Date, the Employee hereby resigns all officer and employee positions (including
all responsibilities attendant thereto) with each of the Employers, his
membership on all Boards of Directors and Committees of each of the Employers
and his positions as trustee or administrator with respect to any statutory
business trusts formed by the Company.
2. Severance
Payment.
Subject
to Section 16 hereof, at the close of business on the Termination Date, the
Employee shall receive from the Company (i) a severance payment amounting to
one
million dollars ($1,000,000.00), less any applicable income and employment
taxes
required to be withheld therefrom pursuant to Section 13 hereof (the “Severance
Payment”), (ii) all salary and wages owed to Employee, less any applicable
income and employment taxes required to be withheld therefrom pursuant to
Section 13 hereof and (iii) reimbursement for all reasonable and documented
business expenses submitted to the Employers, including but not limited to
business expenses on Employee’s American Express corporate card.
3. Benefits.
(a) For
a period of twelve (12) months from the Termination Date, which Termination
Date
shall be the “qualifying event” date under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), the Employee shall have the
right to continue coverage under the Company’s medical and dental insurance
programs as provided by COBRA, which coverage shall be provided at the Company’s
expense.
(b) Except
as
set forth in this Section 3 and as required by applicable law, the Employee
shall not be entitled to participate in any benefit plans or programs provided
to employees of the Employers following the Termination Date.
4. No
Other Payments Due.
Except
as provided in Section 2 and Section 3 hereof, the Employee shall not be
entitled to any payments or other benefits following the Termination Date.
The
Employee further acknowledges that, subject to the above-referenced exceptions,
he has received payment in full for all outstanding wages, accrued but unused
vacation and all other compensation arising out of or as a result of his
employment by the Employers.
5. Release
and Indemnification.
(a) In
consideration of the above, the sufficiency of which the Employee hereby
acknowledges, the Employee, on behalf of the Employee and the Employee’s heirs,
executors and assigns, hereby releases and forever discharges the Employers
and
each of the Employers’ shareholders, parents, affiliates, subsidiaries,
divisions, any and all current and former directors, officers, employees,
agents, and contractors and their heirs and assigns, and any and all employee
pension benefit or welfare benefit plans of the Employers, including current
and
former trustees and administrators of such employee pension benefit and welfare
benefit plans (the “Released Parties”), from all claims, charges, or demands, in
law or in equity, whether known or unknown, which may have existed or which
may
now exist from the beginning of time to the date of this Agreement, including,
without limitation, any claims the Employee may have arising from or relating
to
the Employee’s employment relationships or termination from such relationships
with the Employers, including a release of any rights or claims the Employee
may
have under Title VII of the Civil Rights Act of 1964, as amended, and the Civil
Rights Act of 1991 (which prohibit discrimination in employment based upon
race,
color, sex, religion and national origin); the Age Discrimination in Employment
Act; the Americans with Disabilities Act of 1990, as amended, and the
Rehabilitation Act of 1973 (which prohibit discrimination based upon
disability); the Family and Medical Leave Act of 1993 (which prohibits
discrimination based on requesting or taking a family or medical
leave); Section
1981 of the Civil Rights Act of 1866 (which prohibits discrimination based
upon
race); Section 1985(3) of the Civil Rights Act of 1871 (which prohibits
conspiracies to discriminate); the National Labor Relations Act; the Colorado
Labor Peace Act; the Employee Retirement Income Security Act of 1974, as amended
(other than any accrued benefit(s) to which the Employee has a non-forfeitable
right under any pension benefit plan)(which prohibits discrimination with regard
to benefits); the Worker Adjustment and Retraining Notification Act; the
Colorado Anti-Discrimination Act; the Fair Labor Standards Act; the Colorado
Wage Claim Act; and
any
other federal, state or local laws against discrimination; or any other U.S.
federal, state, or local statute, or common law relating to employment, wages,
hours, or any other terms and conditions of employment. The release provided
for
herein includes a release by the Employee of any claims for wrongful discharge,
breach of contract, torts or any other claims in any way related to the
Employee’s employment relationships with or resignation or termination from each
of the Employers. The
Employee understands that this is a general waiver and release of all claims,
known or unknown, that the Employee may have against the Released Parties based
on any act, omission, matter, cause or thing that occurred through the date
the
Employee signs this Agreement.
This
release does not release the Employers from any obligations due to the Employee
under this Agreement, or from any rights, claims or coverages to which Employee
may be entitled in respect of or under any former, current or future insurance
policies of the Employers and their affiliates; provided, however, that Employee
specifically agrees to waive all rights, claims and coverages to which Employee
may be entitled under the Bank Owned Life Insurance and/or Company Owned Life
Insurance policies.
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(b)
In
consideration of the above, the sufficiency of which the Employers hereby
acknowledge, the Employers and their successors and assigns hereby release
and
forever discharge the Employee and the Employee’s heirs, executors and assigns,
from all claims, charges, or demands, in law or in equity, whether known or
unknown, which may have existed or which may now exist from the beginning of
their period of employment with the Employers to the Termination Date, except
for breaches regarding disclosure of confidential information or for conduct
involving theft, fraud or embezzlement.
(c) It
is a
condition hereof, and it is the Parties’ intention in the execution of the
general release in this Section 5, that the same shall be effective as a bar
to
each and every claim hereinabove specified.
(d)
From
and
after the Termination Date, the Employers shall indemnify and hold harmless
the
Employee against any costs or expenses (including reasonable attorney’s fees),
judgments, fines, losses, claims, damages or liabilities incurred in connection
with any claim, action, suit, proceeding or investigation, arising out of
matters existing or occurring at or prior to the Termination Date, whether
asserted or claimed prior to, at or after the Termination Date, arising in
whole
or in part out of or pertaining to the fact that he was a director, officer,
manager, trustee, administrator or employee of the Employers or any affiliate
thereof, to the fullest extent which such Employee would be entitled under
the
Amended and Restated Articles of Incorporation and
Bylaws (or similar charter or other organizational documents) of the Employers
or any such affiliate thereof, and the corporate laws of the respective
jurisdictions of the Employers and such affiliates thereof as in effect on
the
date hereof.
6. No
Admission.
This
Agreement is not an admission by either the Employee or the Employers of any
wrongdoing or liability.
7. No
Authority to Bind the Employers.
As of
the Termination Date, neither the Employee, nor any partner, agent or employee
of the Employee, has authority to enter into any contracts that bind one or
more
of the Employers or create obligations on the part of any of the
Employers.
8. Non-Disparagement.
The
Employee agrees not to make any oral or written statements or otherwise engage
in any act that is intended or may reasonably be expected to harm the
reputation, business, prospects or operations of the Employers or any of their
respective directors or executive officers or any persons related to the
foregoing. The Employers further agree not to, and to use their reasonable
best
efforts to ensure that their directors and executive officers will not, make
any
oral or written statements to employees of the Company or other outside
individuals or otherwise engage in any act which is intended or may reasonably
be expected to harm the reputation, business or prospects of the
Employee.
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9. Confidentiality;
No Solicitation.
(a) The
Employee recognizes and acknowledges that the Employers’ and their affiliates’
trade secrets and confidential or proprietary information, are valuable, special
and unique assets of their respective businesses. For purposes of this
Agreement, a trade secret or confidential or proprietary information shall
mean
and include information treated as confidential or as a trade secret by the
Employers or their affiliates, including but not limited to information
regarding contemplated products, business and financial methods or practices,
marketing techniques, customers, vendors, suppliers, trade secrets, training
programs, manuals or materials, technical information, contracts, systems,
procedures, mailing lists, know-how, trade names, improvements, pricing, price
lists, or other data, business plans, litigation, regulatory investigations,
strategy, code books, invoices and other financial statements, computer
programs, software systems, databases, discs and printouts, other plans
(technical or otherwise), customer and industry lists, supplier lists,
correspondence, internal reports, personnel files, employee compensation, sales
and advertising material which is or was used in the business of the Employers
or their affiliates.
(b)
The
Employee will not, in whole or in part, disclose such trade secrets or
confidential or proprietary information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever, or make use
of
any such property for his own purposes or for the benefit of any person, firm,
corporation or other entity (except the Employers) under any circumstances
unless compelled to do so by applicable law. The Employee’s obligation under
this Section shall not apply to any information that is generally available
to
the public, hereafter becomes available to the public without the fault of
the
Employee or is considered to be generic industry practice. The Employee agrees
and acknowledges that all of such information, in any form, and copies and
extracts thereof, are and shall remain the sole and exclusive property of the
Employers and the Employee shall return to the Employers the originals and
all
copies of any such information provided to or acquired by the Employee in
connection with the performance of his duties for the Employers, and shall
return to the Employers all files, correspondence and/or other communications
received, maintained and/or originated by the Employee during the course of
his
relationship with the Employers, and no copy of any such information shall
be
retained by him.
(c)
The
Employee acknowledges that the agreements and covenants contained in this
Section are essential to protect the value of the Employers’ respective
businesses and assets and by virtue of his relationship with the Employers,
the
Employee has obtained knowledge, contacts, know-how, training, experience and
other information relating to the Employers’ business operations, and there is a
substantial probability that such knowledge, know-how, negative know-how,
contacts, training, experience and information could be used to the substantial
advantage of a competitor of the Employers and to the Employers’ substantial
detriment. Accordingly, the Employee agrees that for a period of twelve (12)
months from the Termination Date, the Employee will not directly or indirectly,
by or for himself, or as the agent of another:
(i) In
any
way solicit, induce or hire or attempt to solicit, induce or hire any employee,
officer, representative, consultant, or other agent of the Employers or any
of
their affiliates (whether such person is presently employed by the Employers
or
any such affiliate or may hereinafter be so employed), to leave the employ
of
the Employers or any such affiliate or otherwise interfere with the employment
or business relationship between any such person and the Employers;
4
(ii) In
any
way solicit, induce or hire or attempt to solicit, induce or hire any former
employee, officer, representative, consultant or other agent of the Employers
or
any of their affiliates, except for any employee, officer, representative,
consultant or agent who is terminated by the Employers or any of their
affiliates for other than cause; or otherwise interfere with the employment
or
business relationship between any such person and the Employers;
(iii) In
any
way solicit or attempt to divert any clients or customers of the Employers
or
any of their affiliates as of or prior to the Termination Date for the purpose
of obtaining an economic benefit; or
(iv) In
any
way engage in the states of Colorado, Arizona, Texas, Tennessee or California
in
any business, directly or through any enterprise or other entity, that conducts
the same business conducted by the Employers or any affiliate thereof. You
warrant that these provisions will not unreasonably interfere in your ability
to
earn a living or to pursue your occupation after the Termination
Date.
(d) It
is the
desire and intent of the Parties that the provisions of this Section shall
be
enforced to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. Accordingly, if
any
particular portion of this Section shall be adjudicated to be invalid or
unenforceable, this Section shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of this Section in the particular
jurisdiction in which such adjudication is made.
(e)
If
there
is a breach or threatened breach of the provisions of this Section, the
Employers or their affiliates shall be entitled to an injunction restraining
the
Employee from such breach. Nothing herein shall be construed as prohibiting
the
Employers from pursuing any other remedies for such breach.
(f) The
Parties agree that Employee shall not be in violation of Section 9(c) hereof
merely by maintaining his status as a member of the Board of Directors of
Citywide Banks of Colorado, Inc. or any of its subsidiary banking or other
institutions.
10. Return
of Property.
Except
with respect to the office furniture and personal computer of the Employee,
the
Employee shall promptly return all the Employers’ property in the Employee’s
possession, including, but not limited to, the Employers’ keys, credit cards,
computer software and peripherals and originals or copies of books, records,
or
other information pertaining to the Employers’ businesses, including any
Employer information regarding Employers on Employee’s personal
computers.
11. Cooperation
in Legal and Other Matters.
The
Employee shall, at the request of the Employers, reasonably assist and cooperate
with the Employers in the defense and/or investigation of any third party claim
or any investigation or proceeding, whether actual or threatened, including,
without limitation, participating as a witness in any litigation, arbitration,
hearing or other proceeding between the Employers and a third party or any
government body. The Employers shall reimburse the Employee for all reasonable
expenses incurred by him in connection with such assistance including, without
limitation, travel expenses.
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12. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Colorado, without reference to the principles of conflict of
laws.
13. Taxes.
All
payments to be made hereunder shall be net of all applicable income and
employment taxes required to be withheld therefrom.
14. Complete
Agreement; Amendments.
This
Agreement represents the complete agreement between the Employee and the
Employers concerning the subject matter in this Agreement and supersedes all
prior agreements or understandings, written or oral, including without
limitation the terms of any and all prior employment agreements. In executing
this Agreement, none of the Parties has relied or is relying on any
representation with respect to the subject matter of this Agreement or any
representation inducing the execution of this Agreement except those
representations as are expressly set forth in this Agreement, and the Parties
acknowledge that each has relied on their own judgment in entering into this
Agreement. This Agreement may not be amended or modified otherwise than by
a
written agreement executed by the parties hereto or their respective successors
and legal representatives.
15. Severability.
Each of
the sections contained in this Agreement shall be enforceable independently
of
every other section in this Agreement, and the invalidity or nonenforceability
of any section shall not invalidate or render unenforceable any other section
contained in this Agreement.
16. Age
Discrimination.
Pursuant to the Older Workers Benefit Protection Act, the Parties acknowledge
and agree that (i) the Employee has twenty-one (21) days from his receipt of
this Agreement in which to consider the terms of this Agreement (including,
without limitation, each party’s release and waiver of any and all claims under
the Age Discrimination in Employment Act) before executing it, (ii) changes
to
the terms of this Agreement, whether material or immaterial, will not restart
this twenty-one (21) day period, (iii) Employee will have seven (7) days after
his execution of this Agreement in which to revoke this Agreement, in which
event a written notice of revocation must be received by the Company on or
before the seventh day, and (iv) this Agreement will not become effective and
enforceable until the seven (7) day revocation period has expired without
revocation of the Agreement by the Employee. If you choose to sign the Agreement
before the end of the twenty-one (21) day period referenced in the prior
sentence, you certify that you did so voluntarily for your own benefit and
not
because of coercion.
17. Counterparts.
This
Agreement may be executed in counterparts, and each counterpart shall have
the
same force and effect as an original and shall constitute an effective, binding
agreement on the part of each of the undersigned.
18. Arbitration.
Before
beginning the binding arbitration mechanism set forth in this Section 18, the
Parties shall first participate in mediation of any dispute arising under this
Agreement. The mediator shall be chosen by the Parties, or, if the parties
cannot agree, by the American Arbitration Association. At least ten (10) days
before the mediation, each side shall provide the mediator with a statement
of
its position and copies of all supporting documents. Each party shall send
to
the mediation, a person who has authority to bind the party. Once the Parties
have participated in the mediation, and in the event the dispute between the
Parties has not been settled, either Party may invoke the binding arbitration
provisions in this Section 18.
6
Each
of
the Parties to this Agreement hereby voluntarily and knowingly waives any and
all rights to civil trial by jury as to any dispute or claim arising out of
or
relating to this Agreement, except when temporary or preliminary injunctive
relief is necessary as a result of a breach or threatened breach of Section
9
above or other situation where injunctive relief is necessary in order to
prevent irreparable harm, either party may seek injunctive relief from a court
of competent jurisdiction in the county of Denver, in the State of Colorado
and
the parties consent to personal jurisdiction in such court. Each of the Parties
further agrees that any such dispute or claim will be exclusively and finally
settled by binding arbitration in accordance with the rules of the American
Arbitration Association by one arbitrator appointed in accordance with said
rules. The exclusive venue for any such arbitration shall be the county of
Denver, in the State of Colorado. The arbitrator shall apply Colorado law,
without reference to rules of conflicts of law or rules of statutory
arbitration, to the resolution of any dispute. Judgment on any award rendered
by
the arbitrator may be entered in any court having jurisdiction
thereof.
The
decision of the arbitrator shall be binding upon the Parties. The Employers
shall bear the fees of the arbitrator and the fee of the American Arbitration
Association. Other costs and attorneys’ fees will be borne by the party that
incurs them. The arbitrator shall award the prevailing party reasonable attorney
fees and costs in such proportion as the arbitrator decides. Notwithstanding
anything to the contrary, either party may no more than 90 nor less than 30
days
before the arbitration, serve a discovery request seeking any document that
would be discoverable in civil litigation. Responses to such requests shall
be
due 20 days after service. Thereafter, each party shall be allowed to take
three
(3) depositions of no more than four (4) hours each. The arbitrator may resolve
any discovery disputes as they would be resolved in civil
litigation.
19. Notices.
All
notices, requests, claims, demands or other communications hereunder shall
be in
writing and shall be deemed given when delivered personally, upon receipt of
a
transmission confirmation if sent by telecopy or like transmission and on the
next business day when sent by a reputable overnight carrier service to the
Parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If
to the
Employers:
Matrix
Bancorp, Inc.
000
00xx
Xxxxxx,
Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000
Attention:
Corporate Secretary
Fax:
(000) 000-0000
7
With
a
copy to:
Xxxxxx
Xxxxx LLP
0000
X
Xxxxxx, XX
Xxxxxxxxxx,
XX 00000
Attention: Xxxxxx
X.
Xxxxx, Esq.
Xxxxxxx
X. Xxxx, Esq.
Fax:
(000) 000-0000
If
to the
Employee:
Xxxxxxx
X. Xxxxxxx
2
University
Xxxxxxxxx
Xxxxxxx, XX 00000
20. Press
Releases.
The
Parties shall consult with each other before issuing any press release with
respect to the subject matter of this Agreement and shall not issue any such
press release or make any such public statements without the prior consent
of
the other Parties, which shall not be unreasonably withheld; provided, however,
that the Company may, without the prior consent of the Employee (but after
consultation, to the extent practicable under the circumstances), issue such
press release or make such public statements as may be required by law or the
rules and regulations of the Nasdaq Stock Market.
21. Voluntary
Execution of Agreement.
This
Agreement is executed voluntarily and without any duress or undue influence
on
the part or on behalf of the parties hereto, with the full intent of releasing
all claims. Each party acknowledges that (i) they have been advised by the
other
to consult an attorney regarding any potential claims as well as the terms
and
conditions of this Agreement before executing it, (ii) they have read the
Agreement and they fully understand the terms of this Agreement including,
without limitation, the significance and consequences of the general release
in
Section 5 hereof, (iii) they are executing this Agreement in exchange for
consideration in addition to anything of value to which they are entitled,
and
(iv) they are fully satisfied with the terms of this Agreement and are executing
this Agreement voluntarily, knowingly and willingly and without
duress.
[Signature
Page Follows]
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The
parties to this Agreement have executed this Agreement as of the day and first
written above.
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MATRIX
BANCORP, INC.
By: /s/
D. XXXX
XXXXXXX
Name:
D. Xxxx Xxxxxxx
Title:
President
MATRIX
CAPITAL BANK
By: /s/
D. XXXX
XXXXXXX
Name:
D. Xxxx Xxxxxxx
Title:
President
MATRIX
BANCORP TRADING, INC.
By: /s/
T. XXXXX
XXXXXXXX
Name:
T. Xxxxx XxXxxxxxx
Title:
Secretary
FIRST
MATRIX INVESTMENT SERVICES CORP.
By: /s/
T. XXXXX
XXXXXXXX
Name:
T. Xxxxx XxXxxxxxx
Title:
Secretary
MATRIX
FINANCIAL SERVICES CORPORATION
By: /s/
XXXXXXX
XXXXXX
Name:
Xxxxxxx Xxxxxx
Title:
President
MATRIX
FUNDING CORP.
By: /s/
XXXXX X.
XXXXX
Name:
Xxxxx X. Xxxxx
Title:
Vice President
MTXC
REALTY CORP.
By: /s/
XXXXX X.
XXXXX
Name:
Xxxxx X. Xxxxx
Title:
Vice President
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|
STERLING
TRUST COMPANY
By: /s/
XXXX
XXXXXXX
Name:
Xxxx Xxxxxxx
Title:
President
THE
VINTAGE GROUP, INC.
By: /s/
XXXXX X.
XXXXX
Name:
Xxxxx X. Xxxxx
Title:
Vice President
XXXXXXX
X. XXXXXXX
/s/
XXXXXXX X.
XXXXXXX
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