Exhibit 10.2
SEVERANCE AND RELEASE AGREEMENT
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This Severance and Release Agreement (the "Agreement") is entered into
this 19th day of March, 2001, by and between Thomas P. Baker ("Employee") and
Guaranty Financial Corporation ("Guaranty"):
WHEREAS, the Employer desires to sever Employee's employment with
Guaranty pursuant to Section 10(e) of the Employment Agreement between Employee
and Guaranty dated February 26, 1999 (the "Employment Agreement"), on the terms
and conditions set forth herein and, for the purpose of effecting the same,
Guaranty has approved this Severance and Release Agreement; and
WHEREAS, Guaranty is not opposed to attempts by the Employee to compete
in the financial industry, but is opposed to the solicitation by Employee of
Guaranty's customers, and Employees.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy whereof each party hereby acknowledges, Guaranty and the Employee
hereby covenant and agree as follows:
1. Termination of Employment; Severance Benefits.
A. Employee Resignation: Employee's employment is
terminated effective March 12, 2001, pursuant to Section 10(e) of the Employment
Agreement. In addition, Employee hereby resigns as a Director of Guaranty and
Guaranty Bank and agrees to execute promptly any other documents required to
effect such resignations.
B. Payments to Employee: Guaranty agrees to pay Employee
the gross sum of One Hundred Fifty-Seven Thousand Dollars ($157,000.00). This
sum shall be paid to Employee in regular installments on a semi-monthly or
monthly basis, each coinciding with Guaranty's regularly scheduled pay days and
commencing with the first pay day following the Effective
Date of this Agreement. Employee acknowledges that the amounts payable hereunder
are all Employee is entitled to receive from Guaranty except for qualified
pension or other retirement benefits, if any, to which Employee may be entitled
under Guaranty's standard retirement program and that are protected by ERISA.
Employee further understands and agrees that the approval of all applicable
state and federal regulators shall be a condition precedent to Guaranty's
obligation to make the payments described in this section. Guaranty will
recommend that the state and federal regulators approve such payments. In the
event that any regulatory agency fails to approve the payments described in this
Section, Guaranty shall not be obligated to make the payments to Employee and
such payments shall cease. However, Guaranty shall make a payment to Employee in
such lesser amount as is approved by all applicable regulating bodies.
C. Withholding: Employee understands that prior to
payment of the amounts described in Section 1(B) above, Guaranty will deduct
from the gross sum all federal, state and local withholding taxes and other
payroll deductions Guaranty is required by law to make from wage payments to
employees.
D. Termination of Employment Agreement: Employee agrees
that upon execution of this Agreement, all rights and responsibilities of
Employee and Guaranty pursuant to the Employment Agreement are hereby
extinguished and terminated and can not be relied upon by the parties. All
rights of Employee to nonqualified deferred compensation or retirement benefits
are extinguished and terminated by this Agreement. Guaranty shall have the right
to surrender any policy of insurance on the life of Employee that it or any of
its subsidiaries may own and to retain the proceeds thereof.
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2. No Obligation to Make Payment under Normal Policies.
Employee agrees that the payment to be made hereunder is more than
Guaranty is required to pay under its normal policies and procedures and that it
is in addition to anything of value to which Employee already is entitled.
Furthermore, such payments are more than Guaranty is required to pay Employee
under the Employment Agreement.
3. Complete Release.
Employee hereby releases Guaranty, its subsidiary Guaranty Bank, and
any other related companies, and the employees, officers, attorneys, agents and
directors of any of them from all liabilities, claims or demands Employee may
have against any of them. This includes, but is not limited to, a release of any
rights or claims Employee may have under Title VII of the Civil Rights Act of
1964, which prohibits discrimination in employment based on race, color,
national origin, religion or sex; the Americans With Disabilities Act, which
prohibits discrimination against otherwise qualified disabled individuals, or
any other federal, state or local laws or regulations prohibiting employment
discrimination. This also includes, but is not limited to, a release by Employee
of any state common law claims for wrongful discharge or breach of contract,
including but not limited to any claim that Guaranty has breached the Employment
Agreement. This release covers both claims that Employee knows about and those
the Employee may not know about that arose prior to the date of the execution of
this Agreement.
This release does not include, however, a release of Employee's right,
if any, to payments from Guaranty's 401(K) plan, or similar ERISA benefits under
Guaranty's benefit plans, and the right to continuation in Guaranty's medical
plans as provided by the Consolidated Omnibus Budget Reconciliation Act of 1986.
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4. No Future Lawsuits.
Employee promises never to file a lawsuit asserting any claims that are
released in Section 3.
5. Non-Solicitation.
The Employee agrees that for a period of one (1) year after the
termination of his employment, he will not, on behalf of himself or on behalf of
any other person, firm, or corporation that is in the financial services
business, call on any customers of Guaranty, nor will he in any way, directly or
indirectly, for himself or on behalf of any other person, firm or corporation,
solicit, direct, or take away any business from any customer of Guaranty, or any
of its subsidiaries or affiliates. This Agreement does permit Employee to work
in the financial services industry and compete for business as long as such
competition is consistent with the covenants stated herein.
Employee also agrees that to the extent that this provision is
reasonable in light of the consideration provided to Employee in Section 1 of
this Agreement, and that such forbearance on the part of Employee is not a
restraint against trade. Employee fully understands the rights he is waiving and
hereby covenants that such a waiver will not affect his ability to earn a
living.
The invalidity or unenforceability of any portion of this Section shall
not affect the validity or enforceability of any other portion of this Section,
which shall remain in full force and effect. Any portion in this Section which
is prohibited or unenforceable may be excised by the finder of fact reviewing
this Section and the remaining portions of this Section shall be valid and
enforceable.
6. Right to Injunctive Relief.
The Employee agrees and acknowledges that a violation of the covenants
contained in Sections 5 and 8 of this Agreement will cause irreparable damage to
Guaranty, and that it is and will be impossible to estimate or determine the
damages that will be suffered by Guaranty in the event of a breach by the
Employee of such covenants. Therefore, Employee further agrees that in the event
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of such violation or threatened violation of such covenants, Guaranty shall be
entitled to an injunction, without posting bond, out of any court of competent
jurisdiction, restraining such violation or threatened violation by Employee.
Such right to an injunction is cumulative and in addition to whatever other
remedies Guaranty may have.
7. Disclaimer of Liability.
This Agreement and the payments and performances hereunder are made
solely to assist Employee in making the transition from employment with
Guaranty, and are not and shall not be construed to be an admission of
liability, an admission of the truth of any fact, or a declaration against
interest on the part of Guaranty.
8. Confidential Information.
Employee shall not use or divulge, publish or disclose to any person or
organization, information obtained by Employee during the course of Employee's
employment, which Guaranty, in its sole discretion, determines to be of a
confidential or sensitive nature. Such information expressly includes, but is
not limited to, this Agreement itself, information concerning Guaranty's
financial status, methods of business, trade secrets, business strategy,
business operations, business records, customer lists and other customer
information. Employee further agrees to immediately return to Guaranty all of
Guaranty's property, including but not limited to all cellular phones, computer
equipment, keys, credit cards, access cards, records, files, and other
documentation of whatever nature relating to Guaranty's business or to the
business of any of Guaranty's customers.
9. Statements Regarding Guaranty And/Or Employment.
Employee agrees not to make any derogatory statement with regard to the
performance, character, or reputation of Guaranty, its personnel and any and all
related companies, or assert that any employee, agent, director or officer of
same has acted improperly or unlawfully with respect to
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Employee or his employment with Guaranty. Employee further agrees: (i) not to
solicit Guaranty proxies or participate in an election contest for Guaranty
directors; (ii) not to deposit Guaranty voting shares in a voting trust or
subject Guaranty shares to a voting agreement; (iii) not to initiate or solicit
shareholder proposals and not to participate in, assist, or support any effort
to do so; and (iv) not to take, participate in, or support any action to acquire
or affect control of the Guaranty or to encourage or assist any other person or
entity to do so. However, nothing in this Section shall prohibit you from voting
or selling any Guaranty shares that you own on the date hereof.
10. Continued Payments Conditional on Performance of Promises.
Employee understands and agrees that Employee's continued entitlement
to the payments provided for in Section 1 above and to the other benefits
provided for in this Agreement is expressly conditioned upon Employee keeping
all of the promises Employee makes herein. Guaranty's obligation to make further
payments to Employee or to do anything else for Employee will cease immediately,
if Employee takes any action or engages in any conduct that violates any
provision of this Agreement.
11. Claim for Reinstatement
Employee agrees to waive and abandon any claim to reinstatement or
rehire by Guaranty.
12. Acknowledgement.
Employee acknowledges that he has signed this Agreement freely and
voluntarily without duress of any kind.
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13. Entire Agreement.
This Agreement contains the entire understanding of Employee and
Guaranty concerning the subjects it covers and it supersedes all prior
understandings and representations. Guaranty has made no promises to Employee
other than those set forth herein. This Agreement may not be modified or
supplemented except by a subsequent written agreement signed by all parties.
14. Successorship.
It is the intention of the parties that the provisions hereof be
binding upon the parties, their employees, affiliates, agents, heirs, successors
and assigns forever.
15. Governing Law.
This Agreement shall be governed by the laws of the Commonwealth of
Virginia.
EMPLOYEE ACKNOWLEDGES THAT HE HAS READ THIS AGREEMENT, UNDERSTANDS IT,
AND IS VOLUNTARILY ENTERING INTO IT. PLEASE READ THIS AGREEMENT CAREFULLY. IT
CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
March 19, 2001 /s/ Thomas P. Baker
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Date THOMAS P. BAKER
STATE OF VIRGINIA
County of Albemarle, to-wit:
The foregoing Severance and Release Agreement was acknowledged to
before me this 19th day of March, 2001 by Thomas P. Baker.
/s/
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Notary Public
My Commission expires: 3/31/03
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GUARANTY FINANCIAL CORPORATION
By: /s/ Richard L. Saunders
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March 19, 2001 Its: Senior Vice President
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Date
STATE OF VIRGINIA
County of Albemarle, to-wit:
The foregoing Severance and Release Agreement was acknowledged to
before me this 19th day of March, 2001, by Richard L. Saunders,(Name) Senior
Vice President (Title) of Guaranty Financial Corporation.
/s/
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Notary Public
My Commission expires: 3/31/03