EXHIBIT
10.13
SEVERANCE AGREEMENT AND
RELEASE
This Severance Agreement and Release
(“Agreement”) is between 1 st Independence Bank
(“Bank”), a banking corporation chartered by the
Commonwealth of Kentucky, and 1 st Independence Financial Group, Inc.
(“1 st Independence”), a Delaware
corporation (collectively, “Employer”), and Arthur L.
Freeman (“Executive”), a resident of the Commonwealth
of Kentucky:
I.
Recitations
1.01. Executive currently serves as
the Chairman and Chief Executive Officer of 1
st
Independence and
Chairman of the Bank.
1.02. Executive is party to that
certain Employment Agreement, dated July 9, 2004, by and between
the Executive, 1 st Independence and the Bank (the
“Employment Agreement”).
1.03 Executive desires to retire as
an officer and employee of 1 st Independence and the Bank and resign
as a director for 1 st Independence and the Bank, effective
as of April 29, 2005.
1.04. In recognition of the service
provided by Executive to 1 st Independence and the Bank, 1
st
Independence and the
Bank believe it would be in their best interest to continue certain
benefits to Executive on the terms and conditions set forth in this
Agreement.
1.05. Executive agrees to resign his
employment with Employer and his service as a Director on 1
st
Independence and
Bank’s Board of Directors in consideration of the payment and
benefits set forth in Section IV of this Agreement.
II. Intention of the
Parties
2.01. Employer and Executive intend
and expect that Executive shall surrender and renounce all
privileges and rights that derive from his employment by Employer
(including, but not limited to, the privileges and rights derived
under the Employment Agreement), and the separation thereof, and
service as a Director of 1 st Independence and the Bank, except
any and all rights Executive has pursuant to any pension or other
retirement benefit plan, profit sharing, stock option, employee
stock ownership, or other plans (the “Plans”) in which
Executive participated as of the Resignation Date shall be provided
subject to and in accordance with the applicable provisions
thereof.
III. Agreements of
Executive
3.01. Resignation.
Executive’s employment with employer will terminate on April
29, 2005 (the “resignation date”). Effective on the
resignation date, executive will be relieved of all
duties for and responsibilities with employer.
Executive hereby resigns any and all officer, director and other
positions with employer or any of its affiliates or plans effective
on the resignation date.
3.02. Consideration. The
severance payment and benefits set forth in Section IV of this
Agreement are in addition to whatever is otherwise owed to
Executive by Employer and shall be the only payment and benefits
stemming from Executive’s employment with Employer to which
he shall be entitled following his resignation.
3.03. No Admission of
Liability. Executive agrees that the payment and benefits set
forth in Section IV of this Agreement shall not be deemed or
construed at any time for any purpose as an admission of liability
or violation of any applicable law by Employer. Liability for any
and all claims is expressly denied by Employer.
3.04. Release. Executive
agrees that in consideration of the payment and benefits set forth
in Section IV of this Agreement, Executive hereby releases and
forever discharges Employer and its officers, directors,
representatives, successors and assigns, and all persons acting by,
through, under, or in concert with any of them, from all legal and
equitable causes of action, that exist or have accrued as of the
date of this Agreement, whether known or unknown, suspected or
unsuspected including, but not limited to, all charges, complaints,
claims, demands, liabilities, and obligations of any kind or nature
that could be asserted against Employer by reason of
Executive’s employment relationship with Employer, or
separation thereof, or by Executive’s shareholder
relationship with Employer. This irrevocable and unconditional
release includes, but is not limited to, claims arising pursuant to
the Civil Rights Act of 1866; Title VII of the Civil Rights Act of
1964, as amended; the Age Discrimination in Employment Act, as
amended (“ADEA”); the Older Workers Benefit Protection
Act (“OWBPA”); the Americans with Disabilities Act; the
Family and Medical Leave Act; the Employee Retirement Income
Security Act of 1974, as amended; the Kentucky Civil Rights Act;
the Kentucky Equal Opportunities Act; any state wage and hour laws;
any state contract or tort law including, but not limited to,
wrongful termination, breach of contract, breach of fiduciary duty,
and infliction of emotional distress; any claims for
attorneys’ fees; or claims for any rights to future
employment, wages and benefits with Employer other than those set
forth herein. This is not a release or discharge of any of
Employer’ continuing obligations set forth in this Agreement.
This release does not relieve Employer of any obligations to
indemnify Executive or advance costs under any indemnification
agreement or provision of Employer’s Articles of
Incorporation or Bylaws.
3.05. Non-Disparagement.
Executive agrees that for the period beginning on the date of
execution of this Agreement and ending on July 9, 2007, he shall
make no disparaging comments about Employer or any of its officers
or directors to any third parties.
3.06. Voluntary Execution.
Executive acknowledges and agrees that he is executing this
Agreement of his own free will and is not executing this Agreement
under any type of coercion or duress.
3.07. Consideration and Waiver
Period. Executive acknowledges and agrees that
Employer has informed him that he has a period
of time of not less than twenty-one (21) days within which to
consider this Agreement or a reasonable facsimile thereof.
Executive acknowledges that he has been advised by Employer that,
in the event he executes this document, he is entitled to revoke
his waiver of rights or claims arising under the ADEA and OWBPA
within seven (7) days after executing this document and that this
Agreement will not and does not become effective or enforceable
until the seven (7) day revocation period has expired. This
revocation must be in writing and personally delivered, or sent by
certified mail, postmarked no later than the seventh (7
th
) day following the
execution of this Agreement, to N. William White, President,
1 st Independence Bank, P.O. Box 1433,
New Albany, IN 47151.
IV. Agreements of
Employer
4.01. Severance payment.
Provided executive has not made a revocation pursuant to section
3.07 hereof, and in consideration of executive’s resignation
and the surrender of all rights executive may have against employer
that stem from his employment with or service as an officer or
director of employer, or the termination thereof, or as a
shareholder of employer, all pursuant to this agreement, employer
shall pay executive in a lump sum in cash an amount equal to
executive’s base compensation, as defined in the employment
agreement, from the resignation date until July 9, 2007, which lump
sum amount is $285,000. Employer shall pay that lump sum amount,
less required withholding for income and employment taxes, on or
before may 13, 2005.
4.02. Benefits. Except as
otherwise provided herein, Executive’s participation in
Employer’s employee and director benefit plans in which
Executive was entitled to participate immediately prior to the
Resignation Date shall terminate in accordance with the provisions
of such plans.
4.03 Health Insurance.
Executive is entitled, under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), to
continue his coverage under the Employer’s group health plan
for a period 18 months following his Resignation Date. If the
Executive elects to continue this coverage under COBRA, the
Employer will reimburse the Executive for all premiums paid by the
Execu
