AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of the 30th day
of September, 1997, is made by and between Trans Financial, Inc., on its own
behalf and on behalf of its subsidiaries (collectively, "Trans Financial"), and
Xxxxxx Xxxxxxx ("Xxxxxxx").
RECITALS
X. Xxxxxxx is employed by Trans Financial as Executive Vice
President and Chief Trust Officer, and as President of Trans Financial
Investment Services, Inc. ("TFIS"). Xxxxxxx also serves as a director of TFIS.
B. The parties hereto have reached an agreement on the terms of
separation of Szejner's employment with Trans Financial and desire to set forth
the terms of that agreement in a written instrument.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, the parties hereby agree as follows:
1. Continued Employment and Resignation.
X. Xxxxxxx hereby tenders his resignation from his employment
with Trans Financial, effective March 31, 1998 (the "Termination Date"). Xxxxxxx
will resign as Chief Trust Officer of Trans Financial, Inc. and of Trans
Financial Bank, N.A., as a Trust Officer of Trans Financial Bank, N.A., and as
an officer and director of TFIS, as requested by Trans Financial, but in no
event later than the Termination Date, or may be removed from or replaced in any
one or more of such positions at any time in the discretion of Trans Financial.
X. Xxxxxxx shall be employed as Executive Vice President
of Trans Financial, Inc. through the Termination Date and shall perform such
duties for Trans Financial between the date of this Agreement and the
Termination Date as he may be assigned from time to time by Trans Financial.
2. Termination of Employment. Notwithstanding the provisions of Section
1 above, Szejner's employment with Trans Financial may be terminated completely
by the Board of Directors of Trans Financial, Inc. at any time prior to March
31, 1998 if the Board determines, by a unanimous vote of the directors present
and voting at a duly and properly called meeting at which a quorum is present,
that any of the following causes for terminating his employment exists:
X. Xxxxxxx has appropriated Trans Financial's funds,
rights or property to Szejner's personal use, or has appropriated the funds,
rights or property of any of Trans Financial's customers to Szejner's personal
use;
X. Xxxxxxx has engaged in any other act of substantial
dishonesty in the performance of his duties and responsibilities;
X. Xxxxxxx has substantially failed to perform or discharge
those duties or responsibilities reasonably assigned to him hereunder and fails
or refuses to correct such failings within 30 days of receipt of written notice
to Xxxxxxx of such failings, which notice shall specifically describe such
failings and the steps necessary to remedy them;
X. Xxxxxxx is guilty of gross professional misconduct
of such a serious nature as would render his service unacceptable to
reasonable persons in the position of the Board of Directors of Trans
Financial, Inc.; or
X. Xxxxxxx has breached any of his obligations,
covenants or promises set forth in this Agreement.
If the Board determines that any one or more of such causes exists, then Trans
Financial may, without prior written notice, terminate Szejner's employment
hereunder. In the event of termination of Szejner's employment prior to March
31, 1998 pursuant to the terms of this Section 2, the "Termination Date" shall
be deemed, for all purposes under this Agreement, to be the actual date of such
termination, and Trans Financial shall not be required thereafter to make any of
the payments or provide any of the benefits provided for in Sections 3, 4, or 5
below.
3. Compensation. Trans Financial shall pay Xxxxxxx at the rate of
$150,000 per year (subject to all applicable withholdings) and will receive all
fringe benefits generally available to the employees of Trans Financial through
and including the Termination Date, in accordance with Trans Financial's
policies and typical pay schedule and methods. Prior to the Termination Date,
Xxxxxxx shall take all vacation days to which he is entitled as of the
Termination Date, and Trans Financial shall not be required to pay for any
earned but unused vacation days as of the Termination Date. No vacation days
shall accrue or be earned after the Termination Date.
4. Bonus. Xxxxxxx shall be paid a bonus for 1997 under the
1997 Trans Financial Leadership Incentive Plan (the "Bonus Plan") as follows:
X. Xxxxxxx shall receive $26,145.84 (equal to 5/6ths of
the maximum potential award) for the "Individual Goals" component under
the Bonus Plan, regardless of the actual performance of trust and
investment services for 1997; and
X. Xxxxxxx shall receive the amount to which he otherwise
would have been entitled under the "Corporate Goals" component under the Bonus,
had he remained in his current position through December 31, 1997.
The amount provided for in A. above shall be paid on the next reasonably
practicable payday of Trans Financial. The amount provided for in B. above will
be paid in 1998 at the time of the payment of bonuses by Trans Financial to
executive officer participants in its bonus plans.
5. Severance Pay.
A. In consideration for the release from any claims against
Trans Financial by Xxxxxxx set forth in this Agreement, Trans Financial shall
pay Xxxxxxx a lump sum amount of $15,000 (subject to all applicable
withholdings) which shall be payable on the next regularly scheduled pay day
after the Termination Date. This amount shall be paid on the next reasonably
practicable payday of Trans Financial.
B. Trans Financial shall also pay Xxxxxxx three months
severance pay at the rate of $150,000 per year (subject to all applicable
withholdings) for the period beginning April 1, 1998 and ending June 30, 1998
(the "Severance Period"), in accordance with Trans Financial's typical pay
schedule and methods.
C. Except as otherwise provided herein, Trans Financial shall
continue Szejner's coverage under Trans Financial's group health insurance plan
through the Severance Period, subject to the continuation of Szejner's payroll
deductions for such plan. Xxxxxxx will be responsible for any increase that may
occur in his share of the premiums under such plan. Except as otherwise provided
herein, Szejner's election period for continuance coverage (commonly referred to
as COBRA coverage) shall commence on June 30, 1998. In the event Xxxxxxx obtains
other employment during the Severance Period, Xxxxxxx shall notify Trans
Financial immediately, and Szejner's participation in Trans Financial's group
health insurance plans shall cease on the date Xxxxxxx becomes eligible to
participate in his new employer's health insurance plan (but in no event later
than June 30, 1998), and Szejner's election period for COBRA coverage shall
commence on that date.
X. Xxxxxxx shall receive any pension or retirement benefits to
which he is entitled under the terms of any such pension or retirement plans as
of the Termination Date. Xxxxxxx acknowledges and agrees that no further
contributions will be made to such pension or retirement plans after the
Termination Date.
6. Loans. Trans Financial has extended to Xxxxxxx and his spouse (i) an
unsecured line of credit in the face amount of $70,000, evidenced by the
Commercial Note in the face amount of $70,000 and the Loan Agreement executed by
the Szejners, both dated February 20, 1996 (the "Unsecured Line"), and (ii) a
home equity line of credit in the amount of $100,000, evidenced by the Equiline
executed by the Szejners, dated June 19, 1995 (the "Home Equity Line"). The
parties hereby agree that Xxxxxxx shall not be entitled to receive, and Trans
Financial shall not be required to make, any advances under the lines of credit
after March 31, 1998. Xxxxxxx shall make a reasonable reduction in the principal
balance on the lines of credit out of any proceeds he receives upon the exercise
of options for the common stock of Trans Financial. All reductions in principal
(in excess of payments required pursuant to the terms of the lines of credit)
may, at the discretion of Trans Financial, be applied first to reduce the
principal balance of the Unsecured Line, to the extent thereof, and then to
reduce the principal balance of the Home Equity Line. The parties hereto shall
execute or cause to be executed such note amendments or other documents as Trans
Financial deems necessary to document the modifications to the Unsecured Line
and the Home Equity Line contemplated by this Section.
7. Non-competition.
A. During the period from the date of this Agreement through
March 31, 1998, Xxxxxxx shall not, directly or indirectly through any
affiliates, (i) conduct any business, that is in direct competition with any
business conducted by Trans Financial, within the state of Kentucky or within a
radius of 50 miles of the location of any Trans Financial Office or operation;
(ii) assist any other individual in conducting any business, that is in direct
competition with any business conducted by Trans Financial, within the state of
Kentucky or within a radius of 50 miles of the location of any Trans Financial
Office or operation; or (iii) own, manage, operate, control or participate in
the ownership, management, operation or control of, or be connected as an
officer, employee, partner, director or otherwise with, or have any financial
interest in (other than the ownership of less than 1% of the outstanding capital
stock of any company publicly traded on a national exchange or market), or aid
or assist any entity in the conduct of any business, that is in direct
competition with any business conducted by Trans Financial, within the state of
Kentucky or within a radius of 50 miles of the location of any Trans Financial
Office or operation.
B. Trans Financial acknowledges that from the date hereof
through March 31, 1998, Xxxxxxx may perform services as a consultant, for a fee,
for other entities or individuals, and Xxxxxxx agrees that such services shall
not violate the provisions of this Section, nor interfere with Szejner's
performance of the duties and responsibilities as an employee of Trans Financial
as may be assigned to him as provided in Section 1 above. Szejner's rendering of
such consulting services shall not be deemed to violate the provisions of this
Section 7 to the extent that Xxxxxxx provides consulting services to:
(i) any existing customer of Trans Financial who
initiates contact with Xxxxxxx with respect to providing consulting
services, so long as such consulting services consist of providing
general investment advice that is not intended to induce such
customer(s) to terminate any existing transaction or relationship with
Trans Financial;
(ii) any open-end investment company;
(iii) any vendor who provides goods or services to
Trans Financial (other than a vendor of the type described in (iv) or
(v) below who has an office in Kentucky or Tennessee);
(iv) any registered broker-dealer, money manager,
trust company, bank, savings bank, savings and loan association or
other depository institution, that has no office in Kentucky or
Tennessee;
(v) any bank holding company or savings and loan
holding company, or any of their direct or indirect subsidiaries, so
long as the holding company and its direct and indirect subsidiaries
have no office(s) in Kentucky or Tennessee.
8. Non-solicitation. From the date of this Agreement through September
30, 1998, Xxxxxxx shall not (i) solicit or accept business from any Customer (as
defined below) of Trans Financial; (ii) recruit or hire, or attempt to recruit
or hire any Employee (as defined below) of Trans Financial; or (iii) assist any
other individual or any entity in doing any of the foregoing. For purposes of
this section, "Customer" shall mean any individual or entity that was a customer
of Trans Financial at any time from the date hereof through the Termination
Date, and any individual or entity that, to the knowledge of Xxxxxxx, was a
prospective customer of Trans Financial as of the Termination Date; and
"Employee" shall mean any individual who is employed by Trans Financial as of
the date of this Agreement or who becomes an employee of Trans Financial prior
to June 30, 1998. Xxxxxxx shall not be in violation of this section in the event
that Xxxxxxx or any individual or entity with whom Xxxxxxx is employed after the
Termination Date (i) accepts business from any Customer who initiates contact
with Xxxxxxx or his employer, or (ii) employs any Employee who initiates contact
with Xxxxxxx or his employer.
9. Confidentiality and Non-disclosure . Xxxxxxx acknowledges that
during the course of his employment with Trans Financial, Xxxxxxx was and will
be exposed to confidential and proprietary information of Trans Financial.
Xxxxxxx shall not without the prior written consent of the Board of Directors or
the Chief Executive Officer of Trans Financial (i) disclose to any third party,
including future employers, any Confidential Information (as defined below) the
disclosure of which would damage Trans Financial or be beneficial to any entity,
person or group of persons in competition with or adverse to Trans Financial, or
(ii) use any Confidential Information for his own benefit or the benefit of
others. Xxxxxxx shall return to Trans Financial on or before the Termination
Date any and all documents containing any confidential or proprietary
information, including all interoffice correspondence from or to Xxxxxxx as an
employee, or officer of Trans Financial. Nothing in this section shall prevent
Xxxxxxx from disclosing Confidential Information as may be required by law. For
purposes of this section, "Confidential Information" shall mean any and all
confidential or proprietary information of Trans Financial obtained by Xxxxxxx
as a result of his employment with Trans Financial, including without limitation
information with respect to Trans Financial's financial status, business,
products, services, customers, customer lists, prospective customers, vendors,
vendor relationships, trade secrets, marketing plans, business plans, proposals,
policies or strategies.
10. Communications.
X. Xxxxxxx shall not make any written or oral statements to or
participate in discussions with any other person (including without limitation
the media; actual or potential customers of Trans Financial; potential
directors, officers or employees of Trans Financial; actual or potential
competitors of Trans Financial; or regulatory officials) which are critical,
disparaging or injurious to the reputation or business of Trans Financial or any
of its directors, officers or employees, which cast Trans Financial or any of
its directors, officers or employees in an unfavorable light, or which would
negatively influence any party in the transaction of business with Trans
Financial. Xxxxxxx shall not be in violation of this subsection A. to the extent
that he (i) communicates his opinions regarding the strategic direction of trust
and investments, the reorganization of the corporation and the reassignment of
Szejner's duties to any of the directors of Trans Financial, Inc., or (ii)
informs any prospective employer or client that he resigned from Trans Financial
as a result of a disagreement with the CEO of Trans Financial over the strategic
direction of trust and investments, the reorganization of the corporation and
the reassignment of Szejner's duties
B. Trans Financial shall instruct its directors, executive
officers and senior officers within the Trust Department to not make any written
or oral statements to or participate in discussions with any other person
(including without limitation the media; actual or potential employers or
clients of Xxxxxxx; or regulatory officials) which are critical, disparaging or
injurious to the reputation of Xxxxxxx, which cast Xxxxxxx in an unfavorable
light, or which would negatively influence any party in the transaction of
business with Xxxxxxx. Trans Financial shall not be in violation of this section
B (i) as a result of any discussions among the directors and counsel for Trans
Financial with respect to the strategic direction of trust and investments, the
reorganization of the corporation and the reassignment of Szejner's duties, or
(ii) as a result of communications made by Trans Financial in compliance with
Section 12 below.
11. Breach of Confidentiality, Non-solicitation, Non-competition
or Communication Provisions.
A. In the event of any breach by Xxxxxxx of any of the
provisions contained in Sections 7, 8, 9 or 10.A. of this Agreement, Trans
Financial shall have the right to discontinue any payments under this Agreement,
as well as to seek any and all legal and equitable remedies available to it,
including the recovery of any amounts already paid to Xxxxxxx under this
Agreement, and injunctive relief against any further violations of this
Agreement.
B. In the event of any breach by Trans Financial of any of the
provisions contained in Sections 9 or 10.B. of this Agreement, Xxxxxxx shall
have the right to seek any and all legal and equitable remedies available to
him, including injunctive relief against any further violations of this
Agreement.
12. References. In response to any inquiry from any prospective
employer or client of Xxxxxxx, Trans Financial shall provide a reference, and
shall provide as the explanation (if one is requested) for the separation of
Szejner's employment that he resigned as a result of a disagreement with the CEO
of Trans Financial over the strategic direction of trust and investments, the
reorganization of the corporation and the reassignment of Szejner's duties.
13. Release of Claims. In consideration for the payment of severance by
Trans Financial and other commitments as set forth in this Agreement, Xxxxxxx,
for himself and his heirs, personal representatives, successors and assigns,
hereby releases and forever discharges, and agrees to hold harmless forever,
Trans Financial, its subsidiaries, business units, affiliates, parent companies,
past and present, predecessors and successors, and their respective officers,
directors, employees, agents, stockholders, successors and assigns
(collectively, the "Released Parties") from any and all known claims, demands
and causes of action that he may have against any or all of the Released Parties
arising from, or in connection with the terms, conditions and separation of, his
employment, including without limitation, any and all claims under any federal,
state or local discrimination law or regulation, including specifically, but not
limited to, the Age Discrimination in Employment Act, as amended, or any claim
under federal or state laws alleging actual or constructive termination in
violation of any public policy, and any actual or alleged breach of contract,
breach of any covenant of good faith and fair dealing, or wrongful discharge
under state law. Xxxxxxx further waives any rights he may have under the
Retention Agreement dated December 16, 1996. Should Xxxxxxx pursue any claim
which he releases herein, because of invalidity or nonenforceability of this
Agreement or for any other reason, Xxxxxxx agrees that, as a prerequisite, he
shall return all moneys paid under Sections 5.A. and 5.B. of this Agreement,
with interest at 10% per annum.
14. Representations. Xxxxxxx hereby warrants and represents that:
A. he has carefully read and fully understands the
comprehensive terms and conditions of this Agreement and the release of claims
set forth herein;
B. he is executing this Agreement knowingly and
voluntarily, without any duress, coercion or undue influence by Trans
Financial, its representative or any other person;
C. he had ample opportunity to consult with legal
counsel of his own choice before executing this Agreement, and, in fact,
has done so;
D. he has filed no charge, claim, complaint or any
document with any federal or state agency or any court complaining of unlawful,
harassing or discriminatory treatment by Trans Financial;
E. he is fully satisfied with the terms and
conditions of this Agreement, including without limitation the consideration
paid him by Trans Financial as part of this comprehensive settlement and the
consideration stated herein is the only consideration offered or accepted by him
as consideration for his release of claims;
F. he is entitled to 21 days to consider the terms of
this Agreement but has agreed to waive this time period and sign the Agreement
immediately;
G. he has the right to revoke this Agreement within
seven calendar days after he signs it;
H. he understands that if he revokes this Agreement
during the seven day period, it becomes null and void in its entirety; and
I. he is receiving payment and other consideration
under this Agreement from Trans Financial to which he would not otherwise be
entitled.
15. Confidentiality of Agreement. Trans Financial and Xxxxxxx, and
their respective agents and representatives, shall keep the fact and terms and
conditions of this Agreement in strict confidence, and without the prior written
consent of the other party, shall not disclose this Agreement, its contents or
subject matter to any person other than their spouse (in the case of Xxxxxxx),
attorneys, income tax preparers, or accountants. Any violation of this covenant
of confidentiality may be specifically enforced by a court of law or equity. The
parties hereto acknowledge and agree that this Agreement does not constitute and
shall not be construed as an admission by either party of any violation of law
or of any right of any party hereto.
16. Payments in Event of Death. In the event of the death of Xxxxxxx on
or before June 30, 1998, then Trans Financial's obligations to make payments or
provide health insurance benefits hereunder shall terminate as of the date of
death, except as provided in this section. In the event of such death, Trans
Financial shall pay to Szejner's spouse, estate or other party as designated by
Xxxxxxx (or if not so designated then to Szejner's spouse, if any, or to
Szejner's estate if there is no spouse) those payments that would otherwise be
payable under Section 5 above absent such death.
17. Status of Prior Agreements. This Agreement supersedes in its
entirety any prior agreement, written or oral, concerning Szejner's employment
with Trans Financial; provided, however, that this Agreement shall not supersede
any stock option agreement between Xxxxxxx and Trans Financial, or Trans
Financial's savings incentive plan or employee stock ownership plan, each of
which shall be applied and enforced according with their respective terms.
Xxxxxxx acknowledges that his employment with Trans Financial terminates, for
all purposes, as of the close of business on the Termination Date.
18. Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties as to the subject matter
hereof, and the terms of this Agreement may not be waived, modified or
supplemented except in writing signed by both parties hereto.
19. Severability. If any provision of Agreement is
determined to be invalid or otherwise unenforceable (in whole or in part),
such invalidity or unenforceability shall not effect any other provision of
this Agreement, which shall continue in full force and effect.
20. Choice of Law. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Kentucky. Any action brought by
either party to enforce any provision of this Agreement shall be brought in
Bowling Green, Kentucky. By entering into this Agreement, Xxxxxxx agrees to
accept service of process in any action brought by Trans Financial in Xxxxxx
County, Kentucky, or in the United States District Court for the Southern
District of Kentucky based on any alleged breach of any term or provision of
this Agreement.
21. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
representatives and assigns.
EXECUTED as of the date first set forth above.
/s/ Xxx Xxxxxxx
XXX XXXXXXX
Date:9/30/97
TRANS FINANCIAL, INC.
By: /s/ Xxxxx Xxxxxx
Date:9/30/97
