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AMENDED AND RESTATED
RETIREMENT RELEASE AND SETTLEMENT AGREEMENT
THIS AMENDED AND RESTATED RETIREMENT RELEASE AND SETTLEMENT AGREEMENT
(this "Agreement") is made and executed as of the 20th day of May, 2002, by and
among Heritage Financial Holding Corporation, a Delaware corporation (the
"Corporation"), Heritage Bank, an Alabama banking corporation and a wholly-owned
subsidiary of the Corporation (the "Bank"), and Xxxxxxxx X. Xxxxxxx, an
individual resident of the state of Alabama ("Xx. Xxxxxxx").
W I T N E S S E T H
WHEREAS, on May 13, 1999, the Bank and Xx. Xxxxxxx entered into an
employment agreement pursuant to which Xx. Xxxxxxx was employed by the Bank as
President and Chief Executive Officer (the "Employment Agreement"), and
subsequent to the execution of the Employment Agreement, Xx. Xxxxxxx has
continued to serve in that capacity;
WHEREAS, the Corporation, the Bank and Heritage Interim Corporation
entered into a Plan of Reorganization and Agreement of Merger (the
"Reorganization Agreement"), dated March 14, 2000, whereby the Corporation
became a bank holding company and all of the stockholders of the Bank became
stockholders of the Corporation;
WHEREAS, Xx. Xxxxxxx elected to voluntarily retire as an employee of
the Bank and sever his relationships with both the Bank and the Corporation
effective as of March 25, 2002;
WHEREAS, the Corporation, the Bank and Xx. Xxxxxxx each have agreed to
settle fully and finally all issues and obligations between and among them
arising out of Xx. Xxxxxxx'x employment or association with the Corporation and
the Bank and to terminate the Employment Agreement;
WHEREAS, the terms and conditions of Xx. Xxxxxxx'x voluntary retirement
were spelled out and agreed to at a Board of Directors meeting of the
Corporation held in Decatur, Alabama on
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Tuesday, March 12, 2002, during which
meeting the Corporation, the Bank and Xx. Xxxxxxx each agreed to enter into that
certain Retirement, Release and Settlement Agreement;
WHEREAS, the Corporation, the Bank and Xx. Xxxxxxx each recognizes that
each party has an interest in (a) maintaining the confidentiality of the
settlement of this matter, (b) minimizing discussion and disclosure of the
underlying facts concerning Xx. Xxxxxxx'x retirement, and (c) maintaining, to
the fullest extent possible in the future, cordial and professional
relationships so as to mutually endeavor to enhance the underlying value of the
Corporation's common stock and the Bank's business;
WHEREAS, the parties hereto entered into that certain Retirement,
Release and Settlement Agreement dated March 25, 2002; and
WHEREAS, the Corporation, the Bank and Xx. Xxxxxxx, after further
extensive discussions, each have further agreed in good faith to amend and
restate the Retirement, Release and Settlement Agreement, and carry out the
terms herein, in order to clarify and amend certain terms of such previous
agreement that will be in the best interest of the parties hereto and the
stockholders of the Corporation and the Bank, it being intended that this
Agreement will supersede and replace that certain Retirement, Release and
Settlement in its entirety.
NOW THEREFORE, for and in consideration of the premises stated, the
amended and restated agreements herein contained and the payments to be made
hereunder, the receipt and sufficiency of which is hereby further acknowledged
and agreed to by each of the Corporation, the Bank and Xx. Xxxxxxx, each party
hereby agrees, covenants, represents and acknowledges as follows:
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1. Compensation. In consideration for all of Xx. Xxxxxxx'x retirement,
his years of service and his agreements contained herein, the Corporation
hereby agrees to provide the following considerations to Xx. Xxxxxxx:
(a) the Corporation or the Bank shall pay Xx. Xxxxxxx the amount of
$375,000 in cash on or before April 24, 2002;
(b) the Corporation or the Bank shall also pay Xx. Xxxxxxx the
amount of $375,000 on the date of execution by all parties of this Agreement;
(c) the Bank shall pay Xx. Xxxxxxx'x normal salary through March 25,
2002, at which time such salary and associated benefits shall terminate in
accordance with Xx. Xxxxxxx'x resignation as set forth herein;
(d) as promptly as possible, but not later than the close of business
on April 19, 2002, Xx. Xxxxxxx shall (i) submit to the Corporation and the Bank
his final expense report covering any and all of his expenses on behalf of
such entities prior to the execution date of this Agreement, with such expenses
to be promptly paid by either the Corporation or the Bank to Xx. Xxxxxxx, and
(ii) return any and all credit cards, keys, security documents, bank
identification cards or other property in his personal possession belonging
to the Corporation or the Bank;
(e) on the Effective Date (as hereinafter defined), the Corporation
shall cause to vest, in whole, one year of options to purchase common
stock of the Corporation in the amount of 60,000 shares currently held by Xx.
Xxxxxxx under an August 24, 1998 option grant (the "April 1, 2002 Options").
The Corporation shall further cause to vest, in whole, on January 1, 2003,
one year of options to purchase common stock of the Corporation in the
amount of 60,000 shares currently held by Xx. Xxxxxxx under the August 24,
1998 option grant (the "January 1, 2003 Options").
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Pursuant to Section
2.2 of the Reorganization Agreement, the Corporation assumed the Heritage
Bank Stock Compensation Plan, and the Reorganization Agreement provided
that all outstanding options to purchase shares of Bank common stock
were converted automatically into substitute options to acquire the same
number of shares of Corporation common stock. All of Xx. Xxxxxxx'x stock
option agreements have been amended, as set forth on Exhibit A hereto (which
has been amended and restated to conform to the amended and restated terms and
conditions in this Agreement), to reflect the aforementioned reorganization,
the fact that the stock options are options to purchase common stock of the
Corporation and not the Bank and that all such vested stock options, with the
specific exceptions of (1) such options under the August 28, 1998 option grant
cancelled as prescribed in this Section 1(e), (2) the April 1, 2002 Options,
and (3) the January 1, 2003 Options, shall remain outstanding until June 23,
2002, after which all unexercised options to purchase common stock of the
Corporation thereunder shall expire and be cancelled. The April 1, 2002
Options shall remain outstanding for one year after April 1, 2002, after which
all unexercised options to purchase common stock of the Corporation
thereunder shall expire and be cancelled. The January 1, 2003 Options shall
remain outstanding for one year after January 1, 2003, after which all
unexercised options to purchase common stock of the Corporation thereunder shall
expire and be cancelled. With the exception of the vesting of those stock
options provided for in this Section 1(e), all remaining unvested stock options
under the August 24, 1998 option grant, an amount totaling 240,000 shares of
Corporation common stock, are hereby cancelled with no further rights therein to
be held by Xx. Xxxxxxx. If Xx. Xxxxxxx does not exercise all of his stock
options within the aforementioned prescribed time periods, then such options
shall expire and be cancelled with no further rights therein to be held by Xx.
Xxxxxxx;
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(f) the Corporation or the Bank shall pay Xx. Xxxxxxx $169,000
(or such pro-rated dollar amount as further set forth in this Section 1(f)) upon
his submission to the Corporation of a completed Option Exercise Form, a form of
which is attached as Exhibit A to Xx. Xxxxxxx'x Stock Option Agreements, and the
payment of such consideration required to exercise and purchase all of his
currently vested options, with the specific exceptions of the April 1, 2002
Options and the January 1, 2003 Options. If Xx. Xxxxxxx should decide to utilize
Corporation common stock to pay for the exercise price of the number of options
to be exercised, then such payment amount shall be calculated using the current
fair market value of the Corporation common stock as of Friday, May 17, 2002,
$11.50 per share, as recorded in the Decatur Daily, Alabama newspaper. If Xx.
Xxxxxxx fails to submit a completed Option Exercise Form to the Corporation
before 5 p.m., C.D.T, Monday, May 20, 2002, or if he does not exercise all of
his currently vested options as prescribed in this Section 1(f), then (1) the
price of any Corporation common stock utilized by him to pay for the subsequent
exercise of such options not exercised on May 20, 2002, shall be the fair market
price of Corporation common stock on the exercise date of such options, and (2)
in the event that Xx. Xxxxxxx does not exercise all of his currently vested
options on May 20, 2002, then the $169,000 payment referenced in this Section
1(f) shall be reduced, on May 20, 2002 and on the date of each exercise of
currently vested options made by Xx. Xxxxxxx until June 23, 2002, to an amount
calculated by multiplying $169,000 by a fraction (i) the numerator of which is
the number of options exercised by Xx. Xxxxxxx on May 20, 2002 or subsequent
exercise date, and (ii) the denominator of which is the number of currently
vested options as of the date of execution of this Agreement. The
Corporation, the Bank and Xx. Xxxxxxx each hereby agrees that, notwithstanding
the terms or conditions of any prior agreement or contract between himself and
either or both of the Corporation and the Bank relating to the exercise of
options to purchase Corporation common stock, each Option Exercise Form
submitted by Xx. Xxxxxxx shall be non-revocable and binding in all respects on
each of the parties thereto.
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(g) the Corporation or the Bank shall pay Xx. Xxxxxxx an
amount sufficient to cover his monthly COBRA premiums, as determined by the
Corporation's or the Bank's current health care insurance provider, including a
"gross up" amount to account for any federal, state or local taxes related
thereto, for 18 months following the Effective Date (the "COBRA Premium"). The
Corporation or the Bank shall pay the COBRA Premium to Xx. Xxxxxxx no later than
10 days prior to the COBRA Premium due date as determined by the Corporation's
or the Bank's health care insurance provider. Xx. Xxxxxxx understands,
acknowledges and agrees that it is his sole responsibility to timely apply for
and otherwise secure such COBRA coverage. Xx. Xxxxxxx further understands,
acknowledges and agrees that it is solely his responsibility to make timely
payment of the full amount of the COBRA Premium each month, and neither
Corporation nor the Bank assumes any responsibility for such payment or
liability for failure to make such payment. Xx. Xxxxxxx hereby agrees to notify
the Corporation immediately if he becomes ineligible for COBRA coverage prior to
the expiration of the aforesaid 18-month period, and to return any unused
amounts designated by the Corporation or the Bank for payment of the COBRA
Premium; and
(h) Xx. Xxxxxxx understands, acknowledges and agrees that the
amounts referenced in Sections 1(a), (b) and (f) hereof are not intended as tax
qualified retirement plan distributions, and that he will be solely responsible
for the payment of any federal, state and local taxes payable thereon.
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2. Automobile. The Corporation shall transfer to Xx. Xxxxxxx
on the Effective Date (as hereinafter defined) the title to the automobile he
has used heretofore on behalf of the Corporation and the Bank described as
follows: 2001 Toyota Landcruiser, champagne color, VIN# XXXXX00X000000000,
free and clear of any liens or encumbrances. The automobile shall be
transferred "as is" without any warranties as to merchantability of fitness
or purpose, and Xx. Xxxxxxx shall be responsible for all related automobile
insurance after the Effective Date.
3. Effective Date. This Agreement shall be effective seven
calendar days after its full execution by the Corporation, the Bank and Xx.
Xxxxxxx (the "Effective Date"). The Corporation, the Bank and Xx. Xxxxxxx each
hereby agrees that the Effective Date shall be April 1, 2002. Xx. Xxxxxxx
understands and acknowledges that under applicable law, he is entitled to 21
days within which to consider this Agreement, and that the execution hereof
terminates that 21-day period. Xx. Xxxxxxx further understands and acknowledges
that this Agreement is revocable for a period of seven days after the execution
hereof and will not be effective until the expiration of seven days after
execution. The Corporation, the Bank or Xx. Xxxxxxx may not shorten this
seven-day period. In the event Xx. Xxxxxxx decides to rescind this Agreement, he
shall provide written notice to the Corporation and the Bank of such decision
before the expiration of such seven-day period. For the rescission to be
effective, Xx. Xxxxxxx understands and acknowledges that the rescission must be
in writing, and delivered to the Corporation either by hand delivery or by mail
within such seven-day period. If sent by mail, the rescission must be (i)
postmarked within such seven-day period, (ii) properly addressed to the
Corporation and the Bank, and (iii) sent by certified mail, return receipt
requested. The Corporation, the Bank and Xx. Xxxxxxx each hereby agrees that the
predecessor to this
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Agreement, the Retirement, Release and Settlement Agreement,
was executed by all parties on March 25, 2002. Xx. Xxxxxxx agrees and represents
to the Corporation and the Bank that the seven-day revocable period as described
in this Section 3 and which would have concluded on April 1, 2002, has expired,
and he has no further right of rescission under this Agreement.
4. Securities Laws and Sale of Common Stock of the
Corporation. Xx. Xxxxxxx understands and acknowledges that he shall remain
subject to and agrees to comply with all federal and state securities laws
relating to his shares of common stock of the Corporation and his options to
purchase shares of common stock of the Corporation, either beneficially owned by
him or as provided for under this Agreement. Xx. Xxxxxxx hereby agrees to
cooperate with the Corporation in the execution of all required documentation
and filings with the Securities Exchange Commission and any state securities
commission necessary to effectuate such action and to comply with federal and
state securities laws.
5. Non-competition. In specific consideration of the vesting
of stock options to purchase shares of common stock of the Corporation as
specified in Section 1(e) hereof, Xx. Xxxxxxx hereby agrees to the
following non-competition provisions:
(a) For two years following the Effective Date, Xx. Xxxxxxx
shall not, in Xxxxxx County, Alabama with respect to any financial holding
company, bank holding company, bank or other financial institution, a material
portion of any of whose business involves commercial or retail banking, (i)
physically work or perform any services whatsoever as a consultant or contractor
therefor, (ii) serve as a member of management, director or advisor thereto, or
(iii) be an employee of nor directly or indirectly render any services to or
solicit the banking business of any person or entity in association therewith.
The intent of this provision is for Xx. Xxxxxxx to totally refrain from any
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involvement with any financial institution in Xxxxxx County, Alabama which could
directly or indirectly be in competition with the banking services of the
Corporation or the Bank for the two-year period specified hereinabove. The
vesting and expiration of Xx. Xxxxxxx'x options to purchase common stock of the
Corporation as set forth in Section 1(e) hereof is specific consideration for
this non-competition provision.
(b) For a period of five years following the Effective Date,
Xx. Xxxxxxx shall not, in Xxxxxx County, Alabama, directly or indirectly through
himself or any family member, engage in any activity or perform any services
incident to or designed to initiate or form any new or "start up" financial
holding company, bank holding company, bank or other financial institution, a
material portion of any of whose business involves commercial or retail banking.
Xx. Xxxxxxx hereby agrees not to invest in, serve on the board of or consult
with any of the aforementioned contemplated entities in Xxxxxx County, Alabama,
during such five-year period, with it being the specific intent of this
provision for Xx. Xxxxxxx not to engage in any start up banking activities or to
be associated therewith during such five-year term. Notwithstanding the
foregoing, Xx. Xxxxxxx shall not be prohibited from investing in a financial
holding company, bank holding company, bank or other financial institution that
is a public company reporting under the federal securities laws as of the
Effective Date. The vesting and expiration of Xx. Xxxxxxx'x options to purchase
common stock of the Corporation as set forth in Section 1(e) hereof is specific
consideration for this non-competition provision.
(c) If the Corporation, the Bank or Xx. Xxxxxxx is required
to seek remedies under this Section 5 and is successful, then the non-prevailing
party hereby agrees to pay all of the prevailing party's attorneys' fees, costs
and expenses in connection therewith. The Corporation, the
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Bank and Xx. Xxxxxxx
each have entered into this Section 5 in good faith and for the reasons set
forth in the recitals hereto and each hereby agrees that this Agreement is
reasonable, supported by independent consideration, and legally binding and
enforceable within the geographical scope of Xxxxxx County, Alabama.
(d) Xx. Xxxxxxx hereby acknowledges that the rights and
privileges granted to the Corporation and the Bank in this Section 5 are of a
special and unique character, which gives them a peculiar value, the loss of
which may not be reasonably or adequately compensated for by damages in an
action of law. Accordingly, a breach of this Section 5 by Xx. Xxxxxxx shall
cause the Corporation and the Bank great and irreparable injury and damage, and
Xx. Xxxxxxx hereby agrees that the Corporation and/or the Bank shall be entitled
to remedies of injunction, specific performance or other equitable relief to
prevent a breach of this Section 5 by Xx. Xxxxxxx. This Section 5 shall not be
construed as a waiver of any other rights or remedies that Corporation or the
Bank may have for damages or otherwise.
6. Resignation. The Corporation and the Bank each hereby
agrees that Xx. Xxxxxxx has voluntarily resigned as an officer and director of
the Corporation and the Bank. Accordingly, Xx. Xxxxxxx'x employment and
association with the Corporation and the Bank is hereby terminated and the
Employment Agreement is hereby terminated. By execution of this Agreement, Xx.
Xxxxxxx hereby resigns any and all positions and directorships he may have with
the Corporation, the Bank and any and all of their respective subsidiaries and
affiliates, including any position he may have as a trustee or fiduciary, or
similar position with any benefit plan, trust or the like. If any additional
documentation is necessary to complete those resignations, then Xx. Xxxxxxx
hereby agrees to cooperate with the Corporation and the Bank in completing such
documentation.
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7. Confidential Information. (a) Xx. Xxxxxxx shall not,
directly or indirectly, disclose to others, or use, any secret or confidential
data (oral, written or in machine-readable form), information or knowledge of
the Corporation or the Bank including, but not limited to, data, information or
knowledge concerning (i) the business, affairs, customers or operations of the
Corporation or the Bank, (ii) any trade secrets, new product developments,
special or unique process or methods of the Corporation or the Bank (the
"Confidential Material"). The Confidential Material shall include all such data,
information or knowledge, whether developed by Xx. Xxxxxxx or by others under
his direction or obtained by the Corporation or the Bank from third parties, and
irrespective of whether such data, information or knowledge have been identified
by the Corporation or the Bank as secret or confidential, unless and until, and
then only to the extent that, such data, information or knowledge become
generally available to the public otherwise than by the act or omission of Xx.
Xxxxxxx or such data, information or knowledge are required by law or the valid
order of a court of competent jurisdiction to be disclosed. All Confidential
Material, including without limitation, documents, records, notes, computer
software, computer programs, source codes, object codes, magnetic tapes,
printouts, samples, reports, customer lists, referral sources, photographs,
catalogs and other writings, whether copyrightable or not, relating to or
dealing with the business or customers of the Corporation or the Bank and those
of other entrusted to the Corporation or the Bank which were or are prepared or
created by Xx. Xxxxxxx or which have or may come into his possession, are the
property of the Corporation or the Bank. Xx. Xxxxxxx covenants that all such
matters are writings and copies thereof that were in his possession or under his
control or dominion have been returned to the Corporation or the Bank, and Xx.
Xxxxxxx agrees to return to the Corporation promptly
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all such matters and
writings and copies thereof that may in the future come into his possession or
under his control or dominion.
(b) The Corporation, the Bank and Xx. Xxxxxxx each hereby
agrees that it/he shall not, at any time, directly or indirectly, except as
expressly authorized in writing by each of the parties hereto, publicize,
divulge or disclose to any person, entity, or media representative, the
background concerning the terms of this settlement, except that the parties may
disclose the fact of and Xx. Xxxxxxx'x retirement and resignation and the
payment under this Agreement to their legal and financial advisors, accountants
and regulators to the extent necessary. The Corporation and the Bank each shall
instruct the members of their respective Boards of Directors, and the
Corporation, the Bank and Xx. Xxxxxxx each shall in good faith instruct their
respective legal and financial representatives and agents, to comply with the
provisions of the previous sentence. The Corporation, the Bank and Xx. Xxxxxxx
each may each disclose the fact of, payments and specific terms and conditions
of this Agreement to any governmental authorities to whom disclosure is required
by law. Should Xx. Xxxxxxx and/or his legal or financial advisors be required to
release information concerning this Agreement in response to a valid discovery
order of a court of competent jurisdiction, such persons shall give an officer
of the Corporation and an officer of the Bank reasonable advance written notice
of any such proposed release. Xx. Xxxxxxx hereby acknowledges that the damages
for a breach of this Section 7 would be difficult to ascertain for the purpose
of obtaining equitable relief for the Corporation and/or the Bank.
In the event that Xx. Xxxxxxx is requested or required (by
oral questions, interrogatories, requests for information or documents,
subpoena, civil investigator demand or similar process) to disclose any
Confidential Material, then Xx. Xxxxxxx shall provide to the
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Corporation and the
Bank prompt notice of such request(s) so that the Corporation or the Bank may
seek an appropriate protective order or other remedy and/or waive Xx. Xxxxxxx'x
compliance with the provisions of this Agreement. In the event that such
protective order or other remedy is not obtained or the Corporation or the Bank
waives compliance and Xx. Xxxxxxx is compelled to disclose Confidential
Material, which in the written opinion of Xx. Xxxxxxx'x counsel is legally
required to be disclosed, and, upon the Corporation's request, use Xx. Xxxxxxx'x
best efforts to obtain assurances that confidential treatment shall be accorded
to such information, Xx. Xxxxxxx may disclose such data, information or
knowledge.
8. No Disparaging Remarks. The Corporation, the Bank and Xx.
Xxxxxxx have each agreed not to disparage each other in the future. The
Corporation and the Bank each shall instruct the members of their respective
Boards of Directors, and the Corporation, the Bank and Xx. Xxxxxxx each shall in
good faith instruct their legal and financial representatives and agents, to
comply with the provisions of this Sections 8. Accordingly, the Corporation, the
Bank and Xx. Xxxxxxx each hereby agrees that, except as required by applicable
law, the Corporation, the Bank and Xx. Xxxxxxx shall not originate or comment
negatively, either directly or indirectly, upon any written or oral statement,
news release or other public announcement or publication, relating to this
Agreement, any matter concerning Xx. Xxxxxxx'x retirement or any matter
concerning any party to this Agreement. Xx. Xxxxxxx hereby agrees not, at any
time or in any manner, to disparage or take any action detrimental or
disrespective to the Corporation or the Bank or any of the Corporation's or the
Bank's officers, directors or employees, representatives, successors or assigns.
The Corporation and the Bank each hereby agrees, and shall instruct their
respective directors, not, at any time or in any manner, to disparage Xx.
Xxxxxxx.
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9. Release. (a) In specific consideration of the amounts to be
paid hereunder and the mutual covenants contained herein, Xx. Xxxxxxx, on behalf
of himself, his heirs, legal representatives, successors, representatives,
agents and attorneys, and each and all of them, hereby forever releases and
discharges the Corporation and the Bank and their respective predecessors,
successors, representatives, parent companies, subsidiaries and affiliates,
along with the current and former officers, directors, employees, shareholders,
attorneys, agents, predecessors, successors, assigns and heirs of all such
persons, from any and all claims, demands, causes of action, rights to any
relief in any court of law or equity, damages, liabilities, back pay, expenses,
fees and costs, including attorneys' fees, which Xx. Xxxxxxx ever had, now has,
or which although now unknown accrued prior to the date of this instrument,
against any one or more of the Corporation and/or the Bank or such predecessors,
successors, representatives, parent companies, subsidiaries and affiliates,
along with the current and former officers, directors, employees, shareholders,
attorneys, agents, heirs, predecessors, successors and assigns of all such
persons or entities relating, directly or indirectly, to (i) Xx. Xxxxxxx'x
employment and association with the Corporation or the Bank; (ii) the
termination of such relationship and the Employment Agreement; (iii) Title VII
of the Civil Rights Act of 1964, as amended; (iv) 42 U.S.C. 1981; (v) the Civil
Rights Act of 1991; (vi) the Rehabilitation Act of 1973; (vii) the Age
Discrimination in Employment Act (including the Older Workers Benefits
Protection Act); (viii) the Employment Retirement Security Act; (ix) the Fair
Labor Standards Act; (x) Executive Orders 11246 and 11357; (xi) the Americans
with Disabilities Act; (xii) the Family Medical Leave Act; (xiii) the
Occupational Safety and Health Act; (xiv) the National Labor Relations Act; (xv)
any other federal, state, or local law, ordinance, or administrative regulation,
or any other common law or case law theory of liability or damage; and (xvi) any
other
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claims that Xx. Xxxxxxx may have against the Corporation and/or the Bank
or such predecessors, successors, representatives, parent companies,
subsidiaries and affiliates, along with the current and former officers,
directors, employees, shareholders, attorneys, agents, heirs, predecessors,
successors and assigns of all such persons or entities, without regard to
whether such claims are now known so long as the basis of said claim has
occurred on or before the execution date of this Agreement including
specifically any claims Xx. Xxxxxxx or any of his representatives heirs or
family members may have as a stockholder of the Bank or the Corporation.
(b) In consideration of the mutual covenants contained herein,
the Corporation and the Bank hereby forever releases and discharges Xx. Xxxxxxx,
his heirs, legal representatives, successors, representatives, agents and
attorneys, from any and all claims, causes of action, damages, liabilities,
expenses, fees and costs, including attorneys' fees, which the Corporation or
the Bank ever had, now have, or which although now unknown accrued prior to the
date of this instrument, against Xx. Xxxxxxx relating, directly or indirectly,
to Xx. Xxxxxxx'x employment or association with or retirement from the
Corporation and the Bank or termination of that relationship, the Employment
Agreement and/or any other claims the Corporation and the Bank may have against
Xx. Xxxxxxx without regard to whether such claims are now known so long as the
basis of said claim has occurred on or before the execution date of this
Agreement.
10. Actions Against the Corporation and the Bank. (a) Xx.
Xxxxxxx hereby agrees, except as is prohibited by statute, never to commence,
encourage, prosecute or cause to be prosecuted, or to advise any entity or
person in bringing or prosecuting any complaint, suit or proceedings against the
Corporation, the Bank or any member of their respective Boards of Directors
based on a claim, demand, cause of action, damage or liability which is the
subject matter of this
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Agreement, or upon any other fact or assertion relating
to any aspect of claims which Xx. Xxxxxxx could assert, against the Corporation,
the Bank or any member of their respective Boards of Directors. Unless otherwise
required by law, Xx. Xxxxxxx hereby agrees not to testify against the
Corporation, the Bank or any member of their respective Boards of Directors in
any proceeding or to contract, or have contract with, any present, former or
future directors, officers, managers, supervisors, employees, shareholders, or
agents of the Corporation for any purpose relating to the employment or
cessation or termination of employment of any other employee or former employee
of the Corporation or for shareholder actions or complaints. Nothing herein
shall be construed so as to violate Alabama Rule of Professional Conduct 5.4 or
any other ethical rule or applicable statute.
(b) Unless specifically allowed by applicable state and
federal law, Xx. Xxxxxxx shall not in any way voluntarily assist, aid or
participate in the pursuit of any claims or actions brought against the
Corporation, the Bank or any members of their respective Boards of Directors,
provided that this Agreement shall not apply to actions or claims relating to
enforcement of Xx. Xxxxxxx'x rights under this Agreement or which accrue or
arise out of Corporation's actions following the execution date of this
Agreement.
11. Breach. Should the Corporation, the Bank or Xx. Xxxxxxx
breach any one or more of the terms and conditions of this Agreement, the
non-breaching party shall be entitled, at its/his option, to take such action as
it/he may deem necessary including, but not limited to, seeking whatever relief
is available at law and/or in equity. Failure of the non-breaching party to
exercise any of its/his rights under this Agreement in the event any other party
breaches this Agreement shall not be construed as a waiver of such breach or
prevent the non-breaching party from later enforcing strict compliance with the
promises in this Agreement.
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12. Careful Review of Agreement and Understanding of Release.
Xx. Xxxxxxx hereby represents that he has refully read this Agreement,
and understands all of its terms and conditions without reservation. Xx. Xxxxxxx
acknowledges that he has consulted with legal counsel of his choice regarding
this Agreement and the terms hereof and has not relied on any
representations or statements of the Corporation or the Bank or their legal
counsel with respect to the subject matter of this Agreement or the fairness
thereof. Xx. Xxxxxxx understands fully that this is a Release, relinquishing and
releasing in their entirety all claims Xx. Xxxxxxx has or may have against the
Corporation and the Bank as described in Section 9 hereof. The Corporation, the
Bank and Xx. Xxxxxxx each acknowledges and agrees that the terms of this
Agreement were drafted by and are the product of mutual negotiations and
compromise. Xx. Xxxxxxx further acknowledges that the Corporation and the Bank
are not warranting or representing any tax consequences of this Agreement, and
that Xx. Xxxxxxx is relying on his own legal and/or tax advisors and not on the
Corporation and the Bank in that regard to any extent.
13. Notice. All notices hereunder shall be in writing and
served either by hand delivery or by United States Mail, certified, return
receipt requested, properly addressed to the following:
If the Corporation and/or the Bank:
000 Xxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
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with a copy (which shall not constitute notice):
Xxxxx X. Xxxxx, III, Esq.
Xxxxxxx Xxxxxxxxx Young & Xxxxxxx, LLC
0000 XxXxxxx/Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
If to Xx. Xxxxxxx:
0000 Xxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
with a copy to (which shall not constitute notice):
J. Xxxxxx Xxxxxxxx, Xx., Esq.
Xxxxx, Xxxxxxxx & Xxxxxx LLP
0000 00xx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
14. Severability. If any portion of this Agreement may be held
by a court of competent jurisdiction to conflict with any federal, state or
local law, and as a result such portion or portions are declared to be invalid
and of no force or effect in such jurisdiction, all remaining provisions of this
Agreement shall otherwise remain in full force and effect and be construed as if
such invalid portion or portions had not been included herein.
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15. Assignment. Xx. Xxxxxxx hereby agrees not to assign this Agreement or any
portions thereof to any person or entity. The Corporation and the Bank may
assign this Agreement or any portion thereof to any subsidiary, successor,
affiliate or related entity.
16. Entire Agreement.The Corporation, the Bank and Xx. Xxxxxxx
each hereby acknowledges and agrees that no representations or promises have
been made to or relied upon by him/it or by any person acting for or on him/its
behalf in connection with the subject matter of this Agreement which is not
specifically set forth herein. All prior representations and promises made by
any party to another, whether orally or in writing, are understood by each of
the Corporation, the Bank and Xx. Xxxxxxx to be merged in this Agreement.
17. Amendments. This Agreement and all documents and
instruments executed in connection herewith or in furtherance hereof may not
be amended, modified or supplemented except by an instrument in writing
signed by each of the Corporation, the Bank and Xx. Xxxxxxx.
18. Binding Effect. This Agreement shall be binding upon and
shall inure to the
benefit of each of the Corporation, the Bank and Xx. Xxxxxxx, their respective
heirs, estates, beneficiaries, personal representatives, and successors.
19. Applicable Law. The provisions of this Agreement
shall be governed and construed in accordance with the laws of the State of
Alabama, and Xx. Xxxxxxx hereby agrees and consents that any suit to enforce
the provisions hereof shall and may be brought in Xxxxxx County, Alabama.
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20. Professional Fees. The Corporation or the Bank shall pay
Xx. Xxxxxxx'x reasonable professional fees and expenses incurred solely as such
fees relate to time spent revising this Agreement and advising Xx. Xxxxxxx
regarding this Agreement. Such professional fees shall relate only to Xx.
Xxxxxxx'x legal counsel and certified public accountant, each as formally
retained by him. Xx. Xxxxxxx or each of his aforementioned professionals shall
submit a written invoice to the Corporation detailing the fees incurred and time
spent. After such submission, the Corporation or the Bank shall pay within ten
days after receipt of such invoice each of the aforementioned professionals the
stated amounts on the invoices.
21. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
HERITAGE FINANCIAL HOLDING CORPORATION
By: __________________________________________
Its: ____________________________________
By: __________________________________________
Its: ___________________________________
HERITAGE BANK
By: __________________________________________
Its: ____________________________________
By: __________________________________________
Its: ___________________________________
____________________________________________(L.S.)
Xxxxxxxx X. Xxxxxxx
34003.2
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STATE OF ALABAMA )
:
___________ COUNTY )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that ___________, whose name as
____________________ of Heritage Financial Holding Corporation, a Delaware
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of such
instrument, as such officer and with full authority, executed the same
voluntarily for and as the act of said corporation.
GIVEN under my hand and seal, this ______ day of May, 2002.
[ NOTARIAL SEAL ]
Notary Public
Print Name:
My Commission Expires:
348003.2
22
23
STATE OF ALABAMA )
:
___________ COUNTY )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that ___________, whose name as
____________________ of Heritage Financial Holding Corporation, a Delaware
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of such
instrument, as such officer and with full authority, executed the same
voluntarily for and as the act of said corporation.
GIVEN under my hand and seal, this ______ day of May, 2002.
[ NOTARIAL SEAL ]
Notary Public
Print Name:
My Commission Expires:
348003.2
23
24
STATE OF ALABAMA )
:
___________ COUNTY )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that ___________, whose name as
____________________ of Heritage Bank, an Alabama banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of such instrument, as such
officer and with full authority, executed the same voluntarily for and as the
act of said corporation.
GIVEN under my hand and seal, this ______ day of May, 2002.
[ NOTARIAL SEAL ]
Notary Public
Print Name:
My Commission Expires:
348003.2
24
25
STATE OF ALABAMA )
:
___________ COUNTY )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that ___________, whose name as
____________________ of Heritage Bank, an Alabama banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of such instrument, as such
officer and with full authority, executed the same voluntarily for and as the
act of said corporation.
GIVEN under my hand and seal, this ______ day of May, 2002.
[ NOTARIAL SEAL ]
Notary Public
Print Name:
My Commission Expires:
349003.1
25
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STATE OF ALABAMA )
:
___________ COUNTY )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Xxxxxxxx X. Xxxxxxx, is signed to the
foregoing instrument and who is known to me, acknowledged before me on this day
that, being informed of the contents of such instrument, as such officer and
with full authority, executed the same voluntarily for and as the act of said
corporation.
GIVEN under my hand and seal, this ______ day of May, 2002.
[ NOTARIAL SEAL ]
Notary Public
Print Name:
My Commission Expires:
348003.2
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EXHIBIT A
TO THE RETIREMENT RELEASE AND SETTLEMENT AGREEMENT
BY AND AMONG
HERITAGE FINACIAL HOLDING CORPORATION,
HERITAGE BANK AND XXXXXXXX X. XXXXXXX
See attached.
384003.1
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SCHEDULE 1(e)
TO THE RETIREMENT RELEASE AND SETTLEMENT AGREEMENT
BY AND AMONG
HERITAGE FINACIAL HOLDING CORPORATION,
HERITAGE BANK AND XXXXXXXX X. XXXXXXX
Xxxxxxxx X. Xxxxxxx
Options to Purchase Shares of Common Stock of Heritage Financial Holding
Corporation Currently Held as of Effective Date (split-adjusted):
Grant Date Number Vesting Schedule Expiration
June 10, 1995 75,000 All on December 10, 1995 June 10, 2000
(exercised 40,016 on 12/28/99; exercised 34,984 on 6/9/00)
January 1, 1997 15,000 All on July 1, 1997 January 1, 2002
(exercised 15,000 on 12/28/01)
April 17, 1998 63,000 1/3 on April 17, 1998, April 17, 2003
1/3 on January 1, 1999
1/3 on January 1, 2000
July 14, 1998 30,000 All on January 14, 1999 July 14, 2003
August 24, 1998 600,000 1/10 every year for 10 years August 24, 2008
beginning January 1, 1999
December 28, 1999 40,016 All on December 28, 1999 December 28, 2004
348003.2
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