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Exhibit
10.2
SEPARATION AND RELEASE
AGREEMENT
THIS SEPARATION AND
RELEASE AGREEMENT (this “Agreement” ) is
entered into as of the 12 th day
of April, 2008, by and between PULASKI FINANCIAL CORP. , a
Missouri corporation (“PFC”), and WILLIAM A.
DONIUS (the “Executive”).
WHEREAS, PFC and the
Executive are parties to an amended and restated Employment
Agreement dated February 1, 2002, (the “Employment
Agreement”);
WHEREAS, the Executive
has indicated his intention to terminate his employment with PFC;
and
WHEREAS, the Executive
and PFC intend the terms and conditions of this Agreement to govern
all issues related to the Executive’s employment and
separation from PFC.
NOW, THEREFORE, in
consideration of the covenants and mutual promises contained in
this Agreement, the Executive and PFC agree as follows:
1. Resignation;
Termination of Employment .
a. Resignation
. The Executive hereby agrees that, effective as of
April 30, 2008 (the “Resignation Date”), he will
resign from his positions as President and Chief Executive Officer
of PFC and Chief Executive Officer of Pulaski Bank (the
“Bank”). The Executive will execute the resignation
attached as Exhibit A contemporaneously with his execution of this
Agreement. Executive further acknowledges that upon the Effective
Date (as defined in Section 17), the Employment Agreement and
his employment agreement with the Bank dated February 1, 2000
(the “Bank Agreement”) shall terminate and, thereafter,
shall be without force or effect, except to the extent that a
provision of either agreement is expressly continued in effect by a
provision of this Agreement.
b. Termination of
Employment . The parties agree that the Executive’s
employment with PFC and the Bank will terminate on April 30,
2008 (the “Termination Date”). On and after the
Termination Date, the Executive acknowledges and agrees that he
will not represent himself as being an employee of PFC or any
company affiliated with PFC (each an “Affiliate”) for
any purpose.
2. Post-Termination
Benefits . In consideration of the termination of the
Employment Agreement and the Bank Agreement and in consideration of
the releases provided by the Executive herein, PFC will make the
payments and provide the benefits set forth in this Section 2.
Subject to the terms and conditions of this Agreement, including
the Executive’s executing (and not revoking) this Agreement
and the Supplemental General Release (as described in
Section 22), the Executive acknowledges and agrees that he
will not be eligible for any compensation or benefits after the
Termination Date except for the following:
a. Lump Sum Payment
. A lump sum cash payment equal to $1,450,000 within five
(5) business days after the date the revocation period
applicable to the Supplemental General Release (as described in
Section 22) lapses, provided that the Executive has not prior
thereto revoked the execution of this Agreement or the Supplemental
General Release.
b. Insurance
Benefits . The Bank will continue, at the Bank’s
expense, the Executive’s participation in the Bank’s
health, life and disability insurance programs, as the same may be
in effect from time to time, for a period of 36 months from the
Termination Date. Notwithstanding the foregoing, if, under the
terms of the applicable policy or policies for such insurance
programs, it is not possible to continue the Executive’s
coverage after the Termination Date by reason of his not being an
employee, PFC shall pay to the Executive in a single lump sum an
amount in cash equal to the present value (determined by applying a
six percent discount rate) of the Employer’s projected cost
to maintain that particular insurance benefit (and associated
income tax gross-up benefit, if applicable) had the
Executive’s employment not terminated and assuming continued
coverage for 36 months. Such payment, to the extent necessary,
shall be made at the same time as the payment due under
Section 2(a).
c. Stock Compensation;
Tax-Qualified Plans . The Executive shall be eligible to
receive any vested benefits to which he is otherwise entitled under
the tax-qualified retirement plans and stock compensation plans of
PFC and its Affiliates in accordance with the terms of such plans
and in the case of the stock compensation plans, the terms of any
applicable award or grant agreements. Notwithstanding anything in
this Agreement to the contrary, (i) all stock options held by
the Executive as of the Termination Date shall continue to be
exercisable through and including the 90 th day after the expiration of the
consulting period described in Section 5(e) below and
(ii) this Section 2(c) shall, for all purposes, be deemed
an amendment of the Executive’s stock option agreements with
PFC under any PFC stock compensation plan.
3. Return of
Property . The Executive represents to PFC that he has
destroyed or returned to PFC any and all files or other property
(both tangible and intellectual) of PFC and any Affiliate without
retaining any copies or extracts thereof. Notwithstanding the
foregoing, the Executive has no duty with respect to any
information that has been or is generally available to the
public.
4. Full Discharge
. The Executive agrees and acknowledges that the payments and
benefits provided in this Agreement: (a) are in full discharge
of any and all liabilities and obligations of PFC to the Executive,
monetarily or with respect to employee benefits or otherwise,
including any and all obligations arising under any alleged written
or oral employment agreement, policy, plan or procedure of PFC or
any Affiliate, including the Employment Agreement, the Bank
Agreement and/or any alleged understanding or arrangement between
the Executive and PFC or any of its officers or directors; and
(b) exceed any payment, benefit, or other thing of value to
which the Executive might otherwise be entitled but for this
Agreement under any policy, plan or procedure of PFC or any prior
agreement between the Executive and PFC or any Affiliate, except
for accrued, vested amounts under any tax-qualified retirement
plans and stock-based compensation plans maintained by PFC or any
Affiliate which amounts will be paid in accordance with the terms
of such plans.
5. Future Conduct and
Obligations .
a. The Executive, for himself
and for his family (i.e., parents and sibling), heirs, dependents,
assigns, agents, executors, administrators, trustees and legal
representatives agrees that he will not (and will use his best
efforts to cause such affiliates to not) at any time engage in any
form of conduct, or make any statements or representations, that
disparage or otherwise impair the reputation, goodwill, or
commercial interests of PFC, any Affiliates or any of their agents,
officers, directors, employees and/or stockholders. PFC and the
Bank and their directors agree to not issue any press
release
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or other statement that disparages or
otherwise impairs the Executive’s business reputation. The
foregoing shall not be violated by: (i) truthful statements by
either party in response to legal process or required governmental
testimony or filings; (ii) statements by PFC or the Bank that
they in good faith believe are necessary or appropriate to make in
connection with performing their duties to PFC and/or the Bank; or
(iii) statements by the Executive that he in good faith
believes are necessary or appropriate to make to refute statements
of PFC, the Bank, or the officers or directors of either PFC or
Bank.
b. The Executive agrees to
reasonably assist and cooperate with PFC (and its outside counsel)
in connection with the defense or prosecution of any claim that may
be made or threatened against or by PFC or any Affiliate, or in
connection with any ongoing or future investigation or dispute or
claim of any kind involving PFC or any Affiliate, including any
proceeding before any arbitral, administrative, judicial,
legislative, or other body or agency, including preparing for and
testifying in any proceeding to the extent such claims,
investigations or proceedings relate to services performed by the
Executive, pertinent knowledge possessed by the Executive, or any
act or omission by the Executive. The Executive’s agreement
under this Section 5(b) is limited such that any assistance
and cooperation shall not unreasonably interfere with
Executive’s subsequent employment. PFC will reimburse the
Executive for the reasonable out-of pocket expenses incurred as a
result of such cooperation.
c. The Executive and the Bank
hereby agree that the termination of the Executive’s
employment and the termination of the Employment Agreement and the
Bank Agreement will not affect or diminish in any way the
provisions of the Employment Agreement which impose continuing
obligations on him following such termination, and he specifically
agrees to treat his termination of employment as an Event of
Termination (as defined in Section 4 of the Employment
Agreement) and, accordingly, he acknowledges and agrees that he
will be subject to the restrictions set forth in Sections 10 and 11
of the Employment Agreement on the terms stated therein.
d. The Executive hereby
agrees that for a period of 36 months from and after the Effective
Date (as defined in Section 17), neither the Executive nor any
of his Affiliates or Associates (as defined below) will, without
the written consent of PFC, directly or indirectly, solicit,
request, advise, assist or encourage others to (i) effect or
seek, offer or propose (whether publicly or otherwise) to effect,
or cause or participate in or in any way assist any other person to
effect or seek, offer or propose (whether publicly or otherwise) to
effect or participate in, (A) any acquisition of any assets of
PFC; (B) any tender or exchange offer, merger or other
business combination involving PFC; (C) any recapitalization,
restructuring, liquidation, dissolution or other extraordinary
transaction with respect to PFC; or (D) any
“solicitation” of “proxies” (as such terms
are used in the proxy rules of the Securities and Exchange
Commission the (“SEC”)); (ii) form, join or in any
way participate in a “group”, as defined under the
Securities Exchange Act of 1934 (the “Exchange Act”);
(iii) act, alone or in concert with others, to seek to control
or influence the management, the composition of the Board of
Directors or the policies of PFC; (iv) nominate any person as
a director of PFC or propose any matter to be voted on by
stockholders of PFC; (v) take any action which would
reasonably be expected to force PFC to make a public announcement
regarding any of the types of matters set forth in (i) above;
or (vi) enter into any discussions or arrangements with any
third party with respect to any of the foregoing. The Executive
also agree not to request PFC (or its directors, officers,
employees or agents), directly or indirectly, to amend or waive any
provision of this paragraph (including this sentence). For purposes
of this paragraph, the term “Affiliate” and
“Associate” shall have the respective meanings set
forth in Rule 12b-2 promulgated by the SEC under the Exchange
Act.
e. From and after the
Resignation Date, the Executive will continue to serve as a member
of the Board of Directors of PFC and the Board of Directors of the
Bank, in each case, through the expiration of his term as a
director, and beginning May 1, 2008, will receive compensation
for such service in the same manner and to the same extent as other
non-employee directors. The Executive
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further agrees to serve, and the Board
of Directors of the Bank will take such action as may be necessary
to appoint Executive, as Chairman of the Bank from the Resignation
Date through April 30, 2009. In addition, for a period of 36
months beginning on the Termination Date, Executive hereby agrees
to serve as a consultant to PFC with regard to matters relating to
the Bank’s operations. During this period, the Executive
shall be available for consultation with the board of directors and
management of the Bank by teleconference or in person at such times
as the parties may mutually agree upon. In consideration of the
Executive’s consulting services, he shall receive a retainer
of $100,000 for each 12 months of service, payable in monthly
installments. For purposes of Section 409A of the Internal
Revenue Code of 1986, as amended, each retainer payment shall be
considered a separate payment. In his capacity as a consultant,
Executive acknowledges that he will (i) be an independent
contractor, (ii) be solely responsible for all taxes due with
respect his compensation and (iii) have no authority to bind
PFC or the Bank. In the event that, during the consulting period,
there occurs a “Change in Control” (as such term is
defined in the Employment Agreement), the Executive shall be paid
the balance of the consulting retainer otherwise payable over the
remaining consulting period in a lump sum within three
(3) business days of the Change in Control effective date and,
thereafter, the Executive shall continue to provide consulting
services on the terms set forth herein through the expiration of
the consulting period.
6. General Release
.
a. For and in consideration
of the payments to be made and the promises set forth in this
Agreement, the Executive, for himself and for his heirs,
dependents, assigns, agents, executors, administrators, trustees
and legal representatives (collectively, the
“Releasors”) hereby forever releases, waives and
discharges the Released Parties (as defined below) from each and
every claim, demand, cause of action, fees, liabilities or right of
any sort (based upon legal or equitable theory, whether
contractual, common-law, statutory, federal, state, local or
otherwise), known or unknown, which Releasors ever had, now have,
or hereafter may have against the Released Parties by reason of any
actual or alleged act, omission, transaction, practice, policy,
procedure, conduct, occurrence, or other matter from the beginning
of the world up to and including the Effective Date (as defined in
Section 17), including without limitation, those in connection
with, or in any way related to or arising out of, the
Executive’s employment or termination of employment or any
other agreement, understanding, relationship, arrangement, act,
omission or occurrence, with the Released Parties.
b. Without limiting the
generality of the previous paragraph, this Release is intended to
and shall release the Released Parties from any and all claims,
whether known or unknown, which Releasors ever had, now have, or
may hereafter have against the Released Parties including, but not
limited to: (1) any claim of discrimination or retaliation
under the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act, the Americans with Disabilities Act, the Fair
Labor Standards Act, the Employee Retirement Income Security Act of
1974, as amended (excluding claims for accrued, vested benefits
under any employe
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