EXHIBIT 10.5(iii)
Execution Copy
SEPARATION AND RELEASE
AGREEMENT
This Separation and
Release Agreement (“Agreement”) is entered into as of
this 14 th
day of
February, 2007, among HomeBanc Corp., a Georgia corporation (the
“Company”), and Dr. Paul Lopez
(“Executive”).
Executive and the Company agree as
follows:
1. Executive’s position as
Executive Vice President of the Company was terminated on
January 29, 2007. The employment relationship between
Executive and the Company will terminate on February 15, 2007
(the “Termination Date”). Executive’s termination
is a termination by the Company “without Cause” for
purposes of Executive’s Employment Agreement with the
Company, dated as of May 6, 2004 and amended by way of an
Amendment to Employment Agreement dated September 27, 2005
(collectively, the “Employment Agreement”).
2. Except to the extent specifically
provided below in Section 5 of this Agreement, this Agreement
is not intended to and does not modify the terms of the Employment
Agreement, which shall continue to govern the rights and
obligations of Executive and the Company from and after the
Termination Date, to the extent applicable, including without
limitation the post-termination restrictive covenants of Executive
as provided in Section 14 of the Employment Agreement, the
provisions pertaining to a Change in Control of the Company in
Sections 8(a) and 11 of the Employment Agreement, and the Cost of
Enforcement provision in Section 12 of the Employment
Agreement.
3. In accordance with the Employment
Agreement, the Company has agreed to pay Executive certain payments
and to make certain benefits available to Executive after the
Termination Date. Such amounts and benefits are summarized on
Exhibit A hereto and are qualified by the terms of the Employment
Agreement, except as specifically modified by this
Agreement.
4. No payments shall be made to
Executive under this Agreement or the Employment Agreement until
the later of (i) the Termination Date, or (ii) the date
that the Release attached here to as Exhibit B (the
“Release”) shall have been executed and become
irrevocable.
5. Section 8(a)(iv) of the
Employment Agreement requires the Company to provide Executive with
reasonable outplacement services for a period of one year after the
Termination Date, subject to a cap of $68,750. Executive hereby
waives his rights to receive outplacement services provided by the
Company, in exchange for a lump sum payment of $6,875, which
Executive may, but need not, apply to seeking outplacement services
on his own behalf.
6. Executive shall return to the
Company promptly after the Termination Date all the Company
property in Executive’s possession, including, but not
limited to, the Company keys, credit cards, cellular phones,
computer equipment, software and peripherals and originals or
copies of books, records, or other information pertaining to the
Company’s business.
7. The Company shall continue to
satisfy in full any currently existing or hereafter arising
indemnification obligations to Executive (whether arising by law,
the Company’s bylaws or pursuant to separate indemnification
agreements with the Company). The Company hereby acknowledges that
Executive’s service as an officer or other fiduciary of the
Company, any and all current or past subsidiaries and affiliates of
the Company, were made at the request of the Company and are
covered by all the Company’s indemnification obligations.
Executive is deemed to be an “insured person” under the
Company’s existing Directors and Officers liability insurance
for his period of service to the Company prior to the Termination
Date. The Company agrees to maintain D&O insurance coverage in
the future that provides former officers substantially similar
coverage as then current officers until all applicable statutes of
limitations expire and to afford Executive substantially similar
coverage under any D&O insurance arrangement that may be
provided to then current officers of the Company as part of a
Change in Control of the Company (as defined in the Employment
Agreement). All of these obligations shall also apply to any
successor of the Company. Executive’s right to
indemnification and insurance coverage as described in this
Section 7 is conditioned upon his meeting the applicable
standards of conduct and otherwise meeting the qualifications for
indemnification or coverage, as the case may be, under the terms
provided in such arrangements.
8. Agreement Not to Disparage
. Executive and the Company agree that neither shall say, write or
communicate in any manner anything substantially derogatory about
the other, regardless of the truth or falsity of the information;
provided, that nothing contained herein is intended to or shall
limit Executive’s or the Company’s ability to comply
with applicable laws, rules or regulations, to obtain any benefits
under any bond and/or insurance policy, or to commence, institute,
prosecute or defend any lawsuit, action, claim or proceeding before
or in any court, regulatory, governmental, arbitral or other
authority. For purposes this Section 8, the
“Company” means and includes the Company and its
officers, directors, employees, affiliates and
representatives.
9. The Company and Executive agree
that until January 29, 2007, Executive did not have Good
Reason to terminate his employment under the Employment Agreement.
The Company and Executive intend for all payments under this
Agreement to be either exempt from Section 409A of the
Internal Revenue Code of 1986, as amended (“Section
409A”), or to comply with its requirements. Accordingly, to
the extent applicable, this Agreement shall at all times be
operated in accordance with the requirements of Section 409A,
and the regulations and rulings thereunder, including any
transition rules. The Company and Executive shall take action, or
refrain from taking any
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action, with respect to the payments and
benefits under this Agreement that is reasonably necessary to
comply with Section 409A. To the extent necessary to avoid the
imposition of an additional tax under Section 409A, the
payment of any deferred compensation payable or deliverable under
this Agreement or the Employment Agreement shall be delayed for a
period of six months and one day after the Termination Date, and
the Company shall pay interest on such delayed payments at the rate
of 4.70% per annum; provided, however, Executive’s
account in the Company’s Deferred Compensation Plan shall
only earn such interest if the Deferred Compensation Plan does not
otherwise provide a method for calculating earnings during such
six-month period. The Company shall have no liability to Executive
for any later determination b
