Exhibit 10.1
SEPARATION AGREEMENT AND
GENERAL RELEASE
This Separation Agreement and
General Release (this “ Agreement ”) is made and
entered into as of October 3, 2006, by and between Douglas K.
Freeman (“ Executive ”) and NetBank, Inc., a
Georgia corporation (the “ Company
”).
RECITALS
WHEREAS, Executive has been employed
by the Company as its Chief Executive Officer (“ CEO
”) pursuant to that certain Employment Agreement dated
November 18, 2001 by and between Executive and the Company, as
amended on April 1, 2002 and April 30, 2004 (collectively, the
“ Employment Agreement ”).
WHEREAS, Executive recently
initiated discussions with the Board of Directors of the Company
(the “ Board ”) regarding whether, in the
Board’s judgment, a transition in leadership of the Company
at this time is in the best interests of the Company and its
shareholders. As a result of the ensuing discussions between
Executive and the Board, Executive and the Company have reached a
mutual agreement that Executive will, effective as of the close of
business on October 5, 2006 (the “ Separation Date
”), resign from his position as CEO and as Chairman of the
Board and resign as a director of the Company.
WHEREAS, inasmuch as
Executive’s separation is the result of mutual agreement of
the parties hereto, a termination circumstance not contemplated in
the Employment Agreement, the parties hereto desire to (i)
terminate the Employment Agreement and (ii) enter into this
Agreement to define the terms and conditions of Executive’s
separation from the Company, such that this Agreement shall
supersede the Employment Agreement.
NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants and
agreements herein contained, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Executive, intending to be legally
bound, hereby agree as follows:
1)
Recitals . The Recitals above are true and correct and
incorporated by reference as if fully set forth herein.
2)
Termination of Employment Agreement; Other Agreements and
Plans . Executive and the Company mutually acknowledge
and agree that the Employment Agreement is hereby terminated and
superseded by this Agreement. All terms and conditions
relating to Executive’s separation from the Company and the
Company’s entire obligations with respect thereto shall be as
set forth in this Agreement. In addition, and for the
avoidance of doubt, this Agreement supersedes any and all
agreements set forth in the Employment Agreement with respect to
compensation and termination of benefits and the Company’s
obligations with respect thereto, including, but not limited to,
annual base salary, cash bonuses under the Management Incentive
Plan, options to purchase the stock of the Company (“
Stock Options ”), restricted stock of the Company
(“ Restricted Stock ”), and any awards or grants
under the NetBank, Inc. 1996 Stock Incentive Plan and the NetBank,
Inc. Mid-Term Incentive Plan thereunder (“ Plan Awards
”), and any other fringe benefits and perquisite programs
previously provided to Executive; provided ,
however , that Executive’s rights under and
pertaining to the NetBank, Inc. 401(k) Plan (“ 401(k)
Plan ”) will in all respects be governed by the terms of
the 401(k) Plan.
3)
Corporate Positions . Executive hereby resigns from
his positions as CEO and Chairman of the Board of the Company
effective on the Separation Date.
4)
Separation Benefits . Executive’s exclusive
compensation and remedy with respect to his separation from the
Company shall be to receive from the Company the following as set
forth in this Section 4. Executive shall be responsible for
the payment of all applicable income, transfer, sales, use and
other taxes under federal, state, local or other law, due and owing
as a result of the payments or transfers or use of property from
the Company to Executive hereunder.
a)
Payments . The Company shall pay Executive in one lump
sum on the Separation Date the sum of (i) $2,900,000; and (ii) any
unpaid base salary of Executive that is due and owing as of the
Separation Date.
b)
Continuation of Employment Benefits . The
Company shall provide Executive with continued participation in the
medical, dental and vision insurance coverage plans of the Company
(“ Welfare Plans ”) in which Executive is
participating on the Separation Date until the earlier of:
(i) the termination by the Company of Welfare Plans that
permit the participation of former employees; (ii) the end of
the 36-month period following the Separation Date; and (iii) the
date, or dates, Executive receives comparable coverage and benefits
under the plans and programs of any subsequent employer;
provided , however , that the provision of such
benefits to Executive by the Company shall be in accordance with
Welfare Plans as maintained by the Company from time to time for
its then current senior executives.
c)
Equity-based Compensation . All unvested Stock Options
granted, and all unvested and outstanding Restricted Stock awarded,
to Executive by the Company prior to the date hereof shall
immediately vest upon the Separation Date. For the avoidance
of doubt, Executive agrees that he is not entitled to receive
shares of common stock of the Company, if any, which are payable,
or may otherwise be payable, to him under the 2004 and 2006
Mid-Term Incentive Plans. All outstanding Stock Options not
exercised by Executive within ninety (90) days from the Separation
Date shall expire at the end of such ninety (90) day
period.
5)
Withholding Taxes . The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder
all taxes which, by applicable federal, state, local or other law,
the Company is required to withhold therefrom.
6)
Release of Claims . Executive does hereby
unconditionally release, acquit, discharge, and agree to hold the
Company, its parent, subsidiaries and affiliated companies, and its
and their officers, directors, shareholders, employees, agents,
representatives, successors and assigns (collectively referred to
in this paragraph as the “ Releasees ”),
harmless from and against any and all actions, claims, suits,
rights, liabilities, or demands of any kind or nature (each such
action, claim, suit, right, liability, or demand being hereinafter
individually referred to as a “ Claim ” and
collectively referred to as “ Claims ”) that
Executive may now or hereafter have against Releasees, or any one
or group of them, which Claim arose or accrued on or prior to
the
2
Separation Date, including, but not
limited to, (i) any and all Claims in connection with (A) his
employment relationship with the Company, (B) the terms and
conditions of such employment relationship (including compensation
and benefits), (C) his service as a director of the Company (except
for indemnification pursuant to the Company’s Certificate of
Incorporation, bylaws or any director or officer indemnification
agreement between Executive and the Company) or (D) the termination
of such employment or director relationship and the circumstances
surrounding each such termination, and (ii) any and all Claims
arising pursuant to any law, constitution, regulation, or any
statute or common law theory, whether in tort, contract, equity, or
otherwise. Without limiting the generality of the foregoing,
Executive specifically releases, acquits, discharges, waives and
agrees to hold Releasees harmless from and against any and all
Claims (i) arising under the Civil Rights Acts of 1866, 1964, and
1991; the Americans with Disabilities Act; the Older Workers
Benefit Protection Act of 1990, the Family and Medical Leave Act of
1993 and any other federal law, and the laws of the state(s)
governing Executive’s employment with the Company concerning
fair employment practices (which Acts and laws prohibit
discrimination based upon race, religion, sex, national origin,
color, age, disability, and in some jurisdictions, sexual
orientation); and Employee Retirement Income Security Act of 1974,
as amended (other than such rights as are mandated or vested by
law), or (ii) arising under federal, state, or local laws or
regulations, or any common law theories of recovery.
Executive hereby waives all rights to any benefits, including, but
not limited to, monetary recovery and reinstatement, derived from
any actions, suits, or proceedings brought on Executive’s
behalf related to his employment with Employer, including any
action, suit, or proceeding brought by the Equal Employment
Opportunity Commission or anyone else. If Executive files any
action, suit, or proceeding with respect to any Claim released by
him herein, Executive agrees to indemnify Employer against any
damages or judgments arising there from.
7)
No Admission . Executive acknowledges and agrees that
this Agreement i
