EXHIBIT 10.5(i)
Execution Copy
SEPARATION AND RELEASE
AGREEMENT
This Separation and Release
Agreement (“Agreement”) is entered into as of this 19th
day of January, 2007, among HomeBanc Corp., a Georgia corporation
(the “Company”), and Patrick S. Flood
(“Executive”).
Executive and the Company agree as
follows:
1. Executive’s position as
Chairman and Chief Executive Officer of the Company was terminated
on January 12, 2007. The employment relationship between
Executive and the Company will terminate on January 31, 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 (the “Employment
Agreement”).
2. Except to the extent specifically
provided below in Section 6 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 Mutual Release attached here to as Exhibit B (the
“Mutual Release”) shall have been executed and become
irrevocable.
5. Executive shall promptly pay to
the Company the amount of $12,068, as reimbursement for his private
use of the Company’s aircraft in 2006. This repayment
obligation is not contingent on the execution of the Mutual Release
and shall be deducted from his final paycheck for services through
January 31, 2007.
6. The rights and obligations of
Executive and the Company under the Employment Agreement are hereby
modified as follows:
(a) 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 $218,750. Executive hereby
waives his rights to receive outplacement services provided by the
Company, in exchange for a lump sum payment of $50,000, which
Executive may, but need not, apply to seeking outplacement services
on his own behalf.
(b) Executive hereby waives the
right to have the Company subsidize any cost of his continuation of
group health benefits after the Termination Date as provided in
Section 8(a)(ii) of the Employment Agreement. For a period of
24 months after the Termination Date, Executive and/or his
dependents may continue to participate in any group health benefits
of the Company to which they would otherwise be entitled to
continue under COBRA; provided, however, that
(i) Executive shall pay the full COBRA cost of such coverage,
and (ii) if Executive becomes employed with another employer
(including self-employment) and receives group health benefits
under another employer provided plan, the Company’s
obligation to make such group health benefits available to
Executive shall cease, except as otherwise provided by
law.
7. 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. Executive may retain any leased or
Company automobile after the Termination Date at the sole cost of
Executive. Executive and the Company agree to take such action as
may be required to transfer the existing lease on such automobile
to Executive.
8. 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, director, or other
fiduciary of the Company, any and all current or past subsidiaries
and affiliates of the Company, and Executive’s past service
as a member of any benefit or investment committee related to the
Company’s 401(k) Plan, 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 directors and officers substantially similar coverage as
then current directors and 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 directors and 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
- 2 -
indemnification and insurance coverage as
described in this Section 8 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.
9. 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 9, the
“Company” means and includes the Company and its
officers, directors, employees, affiliates and
representatives.
10. The Company and Executive agree
that until January 12, 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
opera
