CONFIDENTIAL
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February 18, 2003
BY HAND DELIVERY
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Xx. Xxxxxxx X. XxXxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Dear Xx. XxXxxx:
This letter sets forth the terms and conditions of your separation as an
employee of HCB Bancshares, Inc. (the "Company") and HEARTLAND Community Bank
(the "Bank"). Upon your acceptance of the terms and conditions set forth in this
letter agreement and general release (referred to herein as the "Letter
Agreement"), the Company and the Bank will provide you with the severance
package described below pursuant to the conditions set forth in this Letter
Agreement. Please review this document carefully and, if you choose, consult an
attorney of your choice. Your signing of this Letter Agreement also constitutes
an acknowledgement by you that there is consideration from the Company and the
Bank to you for the provisions contained in this Letter Agreement.
1. LAST DATE OF EMPLOYMENT.
------------------------
Your last date of employment with the Company and the Bank is February 17,
2003 (the "Termination Date"). You will be paid your salary through February 17,
2003, in accordance with Bank's regular payroll practices. In addition, you will
be paid for your unused vacation time accrued through the date of this Letter
Agreement in accordance with the Company's and the Bank's policies on payment of
unused vacation time. All other monies due and owing have been paid to you.
Effective as of the date of this Letter Agreement, you acknowledge that you have
resigned as an officer of the Company and the Bank and of any of their
respective divisions, parent corporations, subsidiaries, related companies and
affiliates. You further acknowledge that you previously resigned as a director
of the Company and the Bank effective February 7, 2003.
2. OTHER HEALTH AND INSURANCE BENEFITS.
------------------------------------
You are entitled to participate in the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") relating to the continuation of medical and dental
insurance benefits for you. The Bank will pay 70% of your entire COBRA premium
for the current medical and dental benefits (for family coverage) for COBRA
continuation coverage for the period from February 17, 2003 through February 28,
2003. Thereafter (if you elect COBRA coverage), you will be responsible for the
entire cost of the coverage. The Bank will send you a notice specifically
relating to these COBRA benefits under separate cover.
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 2
All other employee benefits not specifically continued by this Letter
Agreement terminated effective February 17, 2003. The provisions contained in
this paragraph are not intended to extend your COBRA continuation coverage
beyond the otherwise applicable COBRA period. The benefits set forth in this
paragraph are conditioned on your signing this Letter Agreement.
3. ADDITIONAL COMPENSATION.
------------------------
The Bank will pay you no later the tenth day following the date on which
you execute this Letter Agreement the gross sum of $75,000.00. The Bank will
withhold from this amount all applicable federal, state and local taxes, and
other designated or required withholdings.
In addition, the Bank will pay you no later the tenth day following the
date on which you execute this Letter Agreement the gross sum of $5,922.19. The
Bank will withhold from this amount all applicable federal, state and local
taxes, and other designated or required withholdings.
In addition, the Bank will, at its expense, continue to provide you with
the life insurance you currently receive for the period from February 17, 2003
through November 30, 2003. Your disability insurance will be discontinued
effective February 17, 2003.
You agree that the consideration set forth in paragraph 3 of this Letter
Agreement constitutes an enhanced separation package to which you would not
otherwise be entitled, and you agree that this consideration is adequate and
satisfactory to you.
4. PARTICIPATION IN COMPANY AND BANK BENEFIT PLANS
-----------------------------------------------
(a) You shall be entitled to receive payments, benefits, distributions and
awards, to the extent such payments, benefits, distributions and awards are
vested as of February 17, 2003, from the following Company and Bank benefit
plans in which you currently participate: (i) the HCB Bancshares, Inc. Employee
Stock Ownership Plan (the "ESOP"); (ii) the HCB Bancshares, Inc. 1998 Stock
Option Plan; and (iii) the First Federal Savings and Loan Association Directors'
Retirement Plan (such benefit plans are collectively referred to herein as the
"Plans"). Such payments, benefits, distributions and awards will be made at such
times and in such forms, and in all other manners will be effected, in
accordance with the terms of the Plans as are currently in effect and pursuant
to such election forms, most currently in effect, as you have completed pursuant
to such Plans as of the date of this Letter Agreement.
(b) You agree that you will forfeit unvested benefits or awards previously
made to you under the Plans. In addition, you acknowledge that you will forfeit
5,290 unvested shares of restricted Company Common Stock awarded to you under
the HCB Bancshares, Inc. Management Recognition Plan, which shares have not
vested as of the date of this Letter Agreement.
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 3
5. DELIVERY OF PAYMENTS.
---------------------
Any payments made in connection with this Letter Agreement will be made
pursuant to the Company's and the Bank's standard practices and pursuant to the
terms of the applicable benefit plan under which payment is made. Your pay
statement will be sent to your home address, by United States first class mail.
6. RETURN OF COMPANY AND BANK PROPERTY.
------------------------------------
You hereby represent and warrant that you have returned to the Company and
the Bank any and all of their property and documents you may have in your
possession, custody or control, including but not limited to any keys to any
Company or Bank office or to the office of any subsidiary of the Company or the
Bank.
7. CONFIDENTIALITY.
----------------
The terms and conditions of this Letter Agreement shall be kept
confidential by you until such time as the Company files this Agreement pursuant
to the Securities Exchange Act of 1934, as amended, except that you may disclose
the terms and conditions of this Letter Agreement to your spouse, attorney(s)
and/or tax advisor provided that they also agree to keep this Letter Agreement
and its terms and conditions confidential.
8. GENERAL RELEASE.
----------------
(a) In consideration for the above payments, and all of the terms of this
Letter Agreement, you, Xxxxxxx X. XxXxxx, for yourself, your agents,
representatives, executors, administrators, heirs, successors and assigns, and
all persons connected therewith who might claim by, through or under them or any
of them (individually and collectively referred to as "Releasors"), do hereby
release, remise and forever discharge HCB Bancshares, Inc., HEARTLAND Community
Bank, and all of their respective divisions, parent corporations, subsidiaries,
related companies and affiliates, and all of their present and former officers,
directors, employees, predecessors, successors, heirs, assigns, agents,
attorneys, representatives, executors and administrators and any other person,
firm, corporation or other entity charged or chargeable with responsibility or
liability for the actions of any of them (individually and collectively referred
to as "Releasees") of and from any and all claims, demands, causes of action,
actions, rights, damages, judgments, costs, compensation, suits, debts, dues,
accounts, bonds, covenants, agreements, expenses, attorneys' fees, damages,
penalties, punitive damages and liability of any nature whatsoever, in law or in
equity or otherwise, which the Releasors have had, now have, shall or may have
in the future, whether known or unknown, foreseen or unforeseen, suspected or
unsuspected, by reason of any cause, matter or thing whatsoever from the
beginning of time up to and including the date that this Letter Agreement
becomes effective.
(b) By the release set forth above, you, Xxxxxxx X. XxXxxx, acknowledge
that you and all Releasors are giving up all claims and causes of action against
Releasees,
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 4
including but not limited to all claims and causes of action related to your
employment with the Company and the Bank and the termination of that employment,
including claims for breach of contract or implied contract, wrongful,
retaliatory or constructive discharge, negligence, misrepresentation, fraud,
detrimental reliance, promissory estoppel, defamation, invasion of privacy,
impairment of economic opportunity, intentional or negligent infliction of
emotional distress, any and all other torts, and claims for attorneys' fees and
costs, as well as the following statutory claims described below.
(c) You, Xxxxxxx X. XxXxxx, further acknowledge that various local, state
and federal laws prohibit discrimination based on age, gender, race, color,
national origin, religion, disability, veterans' status or other protected
classifications. These include, but are not limited to, Title VII of the Civil
Rights Act of 1964, 42 U.S.C. section 2000e et seq., the Civil Rights Act of
1866 and 1870, and the Civil Rights Act of 1991 (relating to gender, national
origin, religion, race and certain other kinds of job discrimination); the Age
Discrimination in Employment Act, 29 U.S.C. section 621 et seq., and the Older
Worker Benefit Protection Act, 29 U.S.C. section 626(f) (relating to age
discrimination in employment); the Rehabilitation Act of 1973, 29 U.S.C. section
701 et seq., and the Americans with Disabilities Act, 42 U.S.C. section 12101 et
seq. (relating to discrimination on the basis of disability); Arkansas Civil
Rights Act of 1993, section 00-000-000 et seq. (state law prohibiting
discrimination in employment on various bases). You also understand and
acknowledge that there are various federal and state laws governing employee
benefit issues, wage and hour issues, and other employment issues, including,
but not limited to, the Employee Retirement Income Security Act of 1974, the
National Labor Relations Act, the Fair Labor Standards Act, 29 U.S.C. section
201 et seq., the Equal Pay Act of 1963, the Family and Medical Leave Act of
1993, the Arkansas Equal Pay Law, Arkansas wage and hour laws, and various state
wage payment and/or hour laws. You acknowledge that you are giving up any claims
you may have under any of these statutes and under any other federal, state or
municipal statute, ordinance, executive order, rule or regulation relating to
discrimination in employment, wage and hour issues, or in any way pertaining to
employment relationships.
(d) You further agree that neither you, nor anyone on your behalf shall or
may seek, make application for, or be entitled to recover attorneys' fees and
costs pursuant to any of the aforementioned federal, state, municipal statutes,
orders, rules or regulations, or any other such laws. You understand and
acknowledge that the release set forth in this paragraph applies to all causes
of action or claims against Releasees, including but not limited to,
employment-related claims, which you now have or may have had from the beginning
of time up to the date that this Letter Agreement becomes effective.
(e) You further acknowledge and represent as follows:
(i) You have carefully read and fully understand all of the provisions
of this Letter Agreement, including the fact that you have agreed to
release and forever discharge the Releasees from any legal action arising
out of your employment with the Company and the Bank, the terms and
conditions of such employment, and the termination of that employment;
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 5
(ii) You waive all rights or claims against Releasees under the Age
Discrimination and Employment Act, 29 U.S.C. section 621 et seq. ("ADEA")
or otherwise, knowingly and voluntarily in exchange for consideration of
value to which you are not otherwise entitled;
(iii) You have been advised in writing by the Company and the Bank,
and you have been given a reasonable opportunity, to consult with an
attorney or advisor of your choice in connection with this Letter
Agreement, and your decision to waive any rights or claims you may have
against Releasees under the ADEA or otherwise;
(iv) You have been given a period of at least twenty-one (21) days
within which to consider this Letter Agreement and your decision to enter
into this Letter Agreement;
(v) You have been informed by the Company and the Bank, that you have
a period of seven (7) days from the date of execution to revoke this Letter
Agreement, which shall not become effective or enforceable until this
revocation period has expired;
(vi) You understand that any revocation you make shall be in writing,
sent by facsimile, hand delivery or overnight mail to Xxxxx Xxxxxxxxx,
Corporate Secretary for the Bank, at HEARTLAND Community Bank, 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxx 00000; and
(vii) You further understand that if you revoke your acceptance as
described above, this Letter Agreement shall be null and void in its
entirety.
9. RESTRICTIONS ON USE OF CONFIDENTIAL INFORMATION.
------------------------------------------------
During your employment by the Company and the Bank, you acquired
information concerning the Company's and the Bank's business plans, methods of
doing business, trade secrets, financial affairs, financial and other record
systems, pricing, computer programs and system documentation, and computer
hardware and software programs, as well as information concerning the business
and affairs of the Company's and the Bank's present affiliates, and information
concerning their clients, potential clients, and other confidential or
proprietary information belonging to or relating to the Company or the Bank or
any present affiliate (any of the foregoing to be referred to as "Confidential
Information" herein). You agree that you always will maintain as secret and will
not disclose any Confidential Information to any third party without the prior
express written authorization of one of the Company's or the Bank's officers.
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 6
10. NO RE-EMPLOYMENT.
-----------------
You agree that your employment relationship with the Company and the Bank
has been permanently and irrevocably severed as of February 17, 2003, and you
release any right or claimed right to re-employment or reinstatement with the
Company and the Bank. You further agree that you will not seek employment in the
future with the Company and the Bank or any of their divisions, parent
corporations, affiliates, subsidiaries or related companies.
11. UNEMPLOYMENT COMPENSATION.
--------------------------
The Company and the Bank will not contest or object to any application you
may make for unemployment compensation.
12. INFORMATION TO FUTURE EMPLOYERS.
--------------------------------
The Company and the Bank will provide, if requested, confirmation of the
dates of your employment, your job title and your salary.
13. NO ADMISSION.
-------------
This Letter Agreement is not, and shall not be construed to be, an
admission of liability, culpability or any other legal conclusion. You and the
Company and the Bank expressly agree and understand that no party to this Letter
Agreement is to be considered the "prevailing" or "successful" party within the
meaning of any federal, state or local statute, ordinance, rule or regulation.
14. SATISFACTORY AND COMPLETE PACKAGE.
----------------------------------
The compensation package described in this Letter Agreement is an enhanced
salary continuation and benefits package that you acknowledge is adequate and
satisfactory to you. You further acknowledge and agree that you are not entitled
to and will not seek payment of any other compensation or benefits from the
Company or the Bank or any of Releasees, including but not limited to, salary,
vacation or sick pay, bonus, reimbursement of expenses, or payment for various
employee benefits.
15. COOPERATION ON PUBLIC ANNOUNCEMENTS
-----------------------------------
You and the Company and the Bank agree to cooperate in the preparation of
any public announcements to be made regarding your termination of service with
the Company and the Bank and of any of their respective divisions, parent
corporations, subsidiaries, related companies and affiliates and this Letter
Agreement.
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 7
16. NO DISPARAGING COMMENTS OR RELATED ACTIVITIES
---------------------------------------------
(a) You shall not make any comment or remark, or give any advice or
opinion, at any time, that impugns the integrity or xxxxx the financial position
of the Company or the Bank and/or the Company's or the Bank's current or prior
directors, officers, employees, agents or customers. The Company and the Bank
will not disparage or make any derogatory comments about you to any prospective
employers. The Company's and the Bank's stated position with regard to your
departure from the Company and the Bank will be that you voluntarily resigned.
(b) Xx. XxXxxx agrees that he will not (a) solicit proxies, or participate
in any manner in the solicitation of proxies, from the Company's stockholders to
elect persons to the Board of Directors or to approve shareholder proposals, or
(b) make any public statement critical of the Company, its Board of Directors or
management.
17. ASSIGNMENT, SUCCESSORS, ETC.
----------------------------
This Letter Agreement may be assigned by the Company and the Bank and will
take effect for the benefit of any successors or assigns of the Company and the
Bank created by merger, reorganization, sale of assets or otherwise. You hereby
consent and agree to such assignment and enforcement of such rights and
obligations by the Company's and the Bank's successors or assigns.
18. ENTIRE AGREEMENT.
-----------------
You acknowledge that this Letter Agreement is our entire agreement. You
acknowledge that there are no representations by the Company or the Bank, oral
or written, which are not set forth in this Letter Agreement upon which you
relied in signing this Letter Agreement. You further acknowledge that the
headings in this Letter Agreement are for convenience only and have no bearing
on the meaning of this Letter Agreement. You and the Company and the Bank also
agree that this Letter Agreement cannot be altered, modified or otherwise
changed except by a writing signed by all of us.
19. ACKNOWLEDGMENT.
---------------
YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY READ AND FULLY UNDERSTAND ALL OF
THE PROVISIONS OF THIS LETTER AGREEMENT AND THAT YOU HAD THE OPPORTUNITY TO
DISCUSS THIS LETTER AGREEMENT WITH AN ATTORNEY OF YOUR CHOICE. YOU FURTHER
UNDERSTAND THAT BY SIGNING THIS LETTER AGREEMENT WHICH CONTAINS A GENERAL
RELEASE, YOU ARE GIVING UP YOUR RIGHT TO BRING ANY CLAIMS, COMPLAINTS OR OTHER
LEGAL ACTION AGAINST THE COMPANY AND THE BANK OR ANY OF THEIR RELATED COMPANIES
DESCRIBED ABOVE. YOU ACKNOWLEDGE THAT YOU ARE ENTERING INTO THIS
Xx. Xxxxxxx X. XxXxxx
February 18, 2003
Page 8
LETTER AGREEMENT KNOWINGLY, VOLUNTARILY AND OF YOUR OWN FREE WILL, AND INTENDING
TO BE LEGALLY BOUND THEREBY.
If you choose to accept the terms of this Letter Agreement, you must sign
it and return it to me by Tuesday, March 11, 2003. If you do not return it to us
signed and notarized by that date, we shall assume that you have elected not to
accept the terms and conditions of this Letter Agreement and it shall be
considered null and void. Your signature below indicates your acceptance of this
Letter Agreement and shall cause this Letter Agreement to be binding upon you,
your heirs, representatives and assigns.
We wish you success in the future.
Very truly yours,
HCB BANCSHARES, INC.
By:/s/ Xxxx X. Xxxxxxx
--------------------------------------
Xxxx X. Xxxxxxx
Chairman of the Board
HEARTLAND COMMUNITY BANK
By:/s/ Xxxx X. Xxxxxxx
-------------------------------------
Xxxx X. Xxxxxxx
Chairman of the Board
Accepted and Agreed to on
this 19 day of February, 2003.
-- --------
By:/s/ Xxxxxxx X. XxXxxx
---------------------------------------
Xxxxxxx X. XxXxxx
Sworn to and subscribed before me
this 19 day of February, 2003.
-- --------
/s/ Xxxxxxxx Xxxxxxxxx
--------------------------------------
Notary Public
