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Exhibit 10.2
SEVERANCE AGREEMENT, WAIVER
AND RELEASE OF CLAIMS
This Severance Agreement, Waiver and Release of Claims ("Agreement") is made
as of September 30, 1996, by and between TFC ENTERPRISES, INC., THE FINANCE
COMPANY ("Employer") and XXXXXXX X. XXXXXX ("Employee").
R E C I T A T I O N S
A. Employee has been employed by Employer pursuant to a written Employment
Agreement made as of January 1, 1995, as amended ("Employment Agreement"), and
has most recently held the position of Executive Vice President and Chief
Operating Officer.
B. The employment relationship between the parties will be ending pursuant
to Employee's retirement effective September 30, 1996.
C. The parties desire a smooth transition and severance of the employment
relationship consistent with the terms of this Agreement.
A G R E E M E N T
NOW, THEREFORE, and in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the sufficiency of
which is hereby acknowledged, Employee and Employer agree as follows:
1. a. Employee shall continue to perform his regular duties and receive
his regular salary and benefits through September 30, 1996, provided however
that notwithstanding paragraph 11 hereof, the termination provisions of the
first and second sentences of paragraph 10 of the Employment Agreement shall
continue in effect. The
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Company may, at any time prior to September 30, 1996, decide to relieve
Employee of the obligation to perform his duties through September 30, 1996, by
providing written notice to Employee to that effect.
b. Employer agrees that provided (i) at least seven (7) days have passed
since Employee signed this Agreement and (ii) Employer has received Employee's
written notice of retirement, Employer shall immediately forward to Employee,
as a severance payment, the sum of $300,000 less mandatory withholdings as
required by federal and state law. The parties agree that no FICA need be
withheld because of Employee's satisfaction of this requirement through earlier
1996 withholding and also under Revenue Rulings 55-520 and 58-301.
c. Employee shall retain all such stock options in the TFC Enterprises,
Inc. 1995 Long-Term Incentive Plan ("Plan") as are vested as of September 30,
1996, but no further stock options in the Plan shall vest. Pursuant to the
Plan and that certain Stock Option Award Agreement dated as of October 27,
1994, by and between TFC Enterprises, Inc., and Employee, Employee's separation
shall be a retirement and thus such options as are vested shall be exercisable
on or before December 31, 1999.
d. The principal and interest amount remaining to be paid on Employee's
promissory note to Employer on his final day of his employment shall be
forgiven by Employer. The parties acknowledge that certain amounts
provisionally credited to Employee from his 1996 bonus earnings have been
applied to reduce his remaining repayment obligation
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under his promissory note. The parties agree that in the event the Company's
year-end accounting shall determine that such amounts as were provisionally
credited were not actually earned resulting in a 1996 bonus overpayment, the
Company shall also forgive such 1996 bonus overpayment and treat the amount
provisionally credited as if fully earned.
e. Employee agrees to and hereby does resign as an officer and as a
director of TFC Receivables Corporation, and as an officer of Employer.
2. Following Employee's last date of employment, Employee shall be given the
opportunity to continue in Employer's group health insurance plan, at his own
expense, for the maximum period allowable pursuant to C.O.B.R.A.
3. Employee shall not be entitled to any compensation or benefits other than
those described in the above paragraphs.
4. Employee recognizes and acknowledges that the identities of Employer's
customers, business or financial contacts, agreements, sales techniques and
practices, business plans or other trade secrets, not of public record or
generally known otherwise (hereinafter collectively "Trade Secrets"), as such
may exist from time to time, are a valuable, special and unique asset of
Employer's business. Employee hereby agrees that following the end of his
employment he will not disclose Employer's Trade Secrets or any part thereof to
any person, firm, corporation, association or other entity without
Employer's prior consent unless such disclosure is required by law or
governmental regulations. Employee hereby further agrees that for a period of
two (2) years after the effective date of this Agreement, he will not use
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any of Employer's Trade Secrets, directly or indirectly, for his or any third
party's benefit or use in any business endeavor not affiliated with Employer.
In the event of a breach or threatened breach by Employee of the provisions of
this Section, Employer shall be entitled to an injunction restraining Employee
from disclosing, in whole or in part, Employer's Trade Secrets, or from
utilizing them for his benefit or that of any unaffiliated person, firm,
corporation, association or other entity to whom such information, in whole or
in part, has been disclosed or is threatened to be disclosed. Nothing herein
shall be construed as prohibiting Employer from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery of
damages. Nothing herein shall be construed as prohibiting Employee from being
employed or retained by any person or firm in the consumer finance industry for
any purpose that does not require Employee to disclose Trade Secrets in
violation of this paragraph.
5. Employee hereby releases and discharges TFC Enterprises, Inc., Employer,
any affiliated or related companies, and their officers, stockholders,
directors, employees and agents and their successors, heirs and assigns, of and
from all claims, causes of action or demands of every kind or character
whatsoever, whether presently known or unknown, suspected or unsuspected,
existing at the time hereof, under state or federal laws.
Specifically included in this release are any claims, causes of action or
demands in connection with Employee's Employment Agreement and the past
employment relationship between the parties, including, but not limited to,
claims, causes of action or demands due to alleged
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breach of contract, libel, slander, wrongful discharge, intentional
infliction of emotional harm, or any other tort, Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, and/or any
other federal or state laws relating to employment rights. The parties
recognize, however, that nothing contained in this release shall
prohibit either party from instituting legal action to enforce any of
the provisions of this Agreement.
6. Employee and Employer agree that they will not do or say anything at any
time that might reasonably be expected to harm the interests of each other, or,
in the case of Employer, any related or affiliated companies, or any of their
employees, officers, directors, shareholders or agents, unless required to do
so by legal process. Nothing herein shall be construed as prohibiting Employee
from being employed or retained by any person or firm in the consumer finance
industry.
7. Employee represents and warrants that he has chosen to execute this
Agreement of his own volition after fully reviewing the Agreement and seeking
the advice of an attorney or if not, anyone else he determines to be
appropriate in this regard.
8. The parties represent and warrant that by this writing Employer has advised
Employee that he may wish to consult an attorney before signing this Agreement
and that Employer has given Employee a period of at least twenty-one (21) days
within which to consider this Agreement, which period may be waived at
Employee's option.
9. The parties agree that Employee shall have seven (7) days after his
execution of this Agreement within which to revoke his signature and consent to
this Agreement. This
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Agreement will not become effective and enforceable until seven (7) days
after Employee has signed this Agreement.
10. This Agreement and the obligations of Employer hereunder in no way
constitute an admission, agreement, consent, statement, acquiescence or
declaration on the part of Employer as to any wrongdoing, breach of contract,
or violation of any law.
11. Subject to the provisions of subparagraph 1(a) hereof, this Agreement
constitutes the entire agreement between the parties pertaining to the matters
with which it deals, and supersedes all prior agreements pertaining to those
matters. No such prior agreement, or understanding in writing or otherwise,
shall be valid or of any force or effect, and this Agreement and the
obligations of the parties hereunder may not be altered or modified in any
respect except by a writing duly executed by the parties to be bound. Nothing
herein shall be construed as affecting Employee's rights, if any, as a
participant in or beneficiary of any pension or benefit plan or program during
his employment by Employer.
12. If any clause or provision of this Agreement is illegal, invalid, or
unenforceable under present or future laws, then the remainder of this
Agreement shall not be affected thereby, and in lieu of each clause or
provision of this Agreement which is illegal, invalid, or unenforceable, there
shall be added, as part of this Agreement, a clause or provision as similar in
terms to such illegal, invalid or unenforceable clause or provision as may be
possible and as may be legal, valid and enforceable.
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13. This Agreement shall be binding upon and inure to the benefit of any
successor or assigns of the parties hereto.
14. The contents of this Agreement shall remain confidential. Employee shall
not disclose any term or condition hereof to anyone other than his spouse,
attorney, tax advisor, accountant, and/or to the government for tax purposes
without Employer's prior written consent or as otherwise required by law. Any
disclosure by Employee other than those permitted herein or further disclosure
by a person permitted to receive disclosure hereof shall be a breach of this
Agreement and shall entitle Employer to seek damages and injunctive relief. In
any action to enforce this paragraph 14, either party shall be entitled to its
costs and reasonable attorneys' fees if it should substantially prevail.
15. This Agreement shall be governed by and construed in accordance with the
laws of Virginia. The parties hereby agree that the Circuit Court of the City
of Norfolk, Virginia, shall have jurisdiction and be an appropriate venue to
determine any rights or claims arising hereunder.
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THE UNDERSIGNED HAVE CAREFULLY READ THE FOREGOING SEVERANCE AGREEMENT, WAIVER
AND RELEASE OF CLAIMS, UNDERSTAND THE CONTENTS, FREELY AND VOLUNTARILY AGREE TO
ALL THE TERMS AND CONDITIONS AND SIGN THIS AGREEMENT ON THEIR OWN VOLITION.
WITNESS the following signatures:
______________________________ _______________________________
Date XXXXXXX X. XXXXXX
THE FINANCE COMPANY
______________________________ By_____________________________
Date
TFC ENTERPRISES, INC.
______________________________ By_____________________________
Date
I am aware that I have the right to consider this Severance Agreement, Waiver
and Release of Claims for twenty-one (21) days before making my decision. I
have considered this right and choose to waive it as indicated by my signature
below.
______________________________ _______________________________
Date XXXXXXX X. XXXXXX
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