Exhibit 10.1

 

SEVERANCE AGREEMENT
AND MUTUAL GENERAL RELEASE OF CLAIMS

 

THIS SEVERANCE AGREEMENT AND MUTUAL GENERAL RELEASE OF CLAIMS (“AGREEMENT”) is
being entered into between and among Pelican National Bank, N.A. (“Employer”),
Pelican Financial, Inc. (“PFI”) and Howard B. Montgomery, Jr. (“Employee)
(collectively the “Parties”) as of February 10, 2006. 

 

Background

 

Employer and Employee are parties to an Employment Agreement dated as of
August 1, 2004 (“Employment Agreement”).  PFI owns all of the issued and
outstanding stock of Employer.  The Parties mutually desire to terminate the
employment of the Employee and the respective obligations of the Parties under
the Employment Agreement on the terms and conditions set forth in this
Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises, agreements and
representations contained herein, and intending to be legally bound hereby, the
Parties agree as follows:

 

1.             TERMINATION OF EMPLOYMENT.  EMPLOYEE’S EMPLOYMENT WITH THE
EMPLOYER SHALL TERMINATE BY MUTUAL CONSENT EFFECTIVE AS OF THE CLOSE OF BUSINESS
ON FEBRUARY 10, 2006 (THE “EFFECTIVE TIME”), AT WHICH TIME THE EMPLOYMENT
AGREEMENT SHALL TERMINATE AND BE NULL AND VOID AND OF NO FURTHER FORCE OR
EFFECT.

 

2.             SEVERANCE.  IN CONSIDERATION FOR THIS AGREEMENT AND EMPLOYEE’S
GENERAL RELEASE OF CLAIMS HEREUNDER, EMPLOYER SHALL DO THE FOLLOWING NO SOONER
THAN THE EIGHTH (8TH) DAY FOLLOWING EMPLOYEE’S SIGNING OF THIS AGREEMENT,
PROVIDING EMPLOYEE DOES NOT REVOKE THIS AGREEMENT:

 

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A.                                       IN LIEU OF AMOUNTS THAT ARE DUE OR
WHICH MAY BECOME DUE UNDER SECTION 3.4, SECTION 8.0 AND SECTION 9.0 OF THE
EMPLOYMENT AGREEMENT, EMPLOYER SHALL PAY TO THE EMPLOYEE A SPECIAL LUMP SUM
SEVERANCE PAYMENT IN THE GROSS AMOUNT OF $482,500 ON OR BEFORE FEBRUARY 24,
2006.  THE EMPLOYER SHALL DEDUCT FROM THIS SEVERANCE PAY ALL NORMAL TAX
WITHHOLDINGS AND DEDUCTIONS WHICH EMPLOYER IS REQUIRED BY LAW TO MAKE.

 

B.                                      EMPLOYER SHALL PAY TO THE EMPLOYEE THE
EMPLOYEE’S BASE SALARY THROUGH THE EFFECTIVE TIME ON OR BEFORE FEBRUARY 24,
2006.  ALL OTHER COMPENSATION DUE TO THE EMPLOYEE PURSUANT TO THE OTHER
PROVISIONS OF THE EMPLOYMENT AGREEMENT (INCLUDING BUT NOT LIMITED TO SECTIONS
3.1, 3.2, 3.3, 3.5 THROUGH 3.7) IS SET FORTH ON EXHIBIT A ATTACHED HERETO AND
SHALL BE PAID TO THE EMPLOYEE ON OR BEFORE FEBRUARY 24, 2006.  THE EMPLOYER
SHALL DEDUCT FROM THIS COMPENSATION ALL NORMAL TAX WITHHOLDINGS AND DEDUCTIONS
WHICH EMPLOYER IS REQUIRED BY LAW TO MAKE.

 

C.                                       EMPLOYER SHALL CONTINUE TO PROVIDE TO
EMPLOYEE ALL BENEFITS AND COMPENSATION TO WHICH EMPLOYEE MAY BE ENTITLED TO
UNDER THE EMPLOYER’S 401(K) PLAN, HEATH INSURANCE PLAN, DEFERRED COMPENSATION
PLAN AND OTHER BENEFIT PLANS TO THE EXTENT REQUIRED UNDER APPLICABLE LAW OR THE
TERMS OF SUCH PLAN.

 

D.                                      EMPLOYEE UNDERSTANDS THAT HE SHALL
RECEIVE NO OTHER  WAGES, BONUS, COMMISSIONS OR ANY OTHER PAYMENTS OR BENEFITS
FROM EMPLOYER OTHER THAN AS SET FORTH IN THIS AGREEMENT.

 

E.                                       ANYTHING IN THIS AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, EMPLOYEE SHALL HAVE THE RIGHT, IN HIS SOLE AND
ABSOLUTE DISCRETION, TO REDUCE THE AMOUNTS PAYABLE HEREUNDER TO THE EXTENT THAT
SUCH PAYMENTS WOULD SUBJECT EMPLOYEE TO EXCISE TAX UNDER SECTION 4999 OF THE
INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER.

 

3.             OPTIONS.  PFI HAS PREVIOUSLY GRANTED EMPLOYEE OPTIONS TO PURCHASE
50,000 SHARES OF PFI COMMON STOCK AT AN EXERCISE PRICE OF $5.07 PER SHARE (THE
“OPTIONS”) PURSUANT TO PFI’S 1997 STOCK OPTION AND INCENTIVE PLAN (THE “PLAN”). 
ANYTHING TO THE CONTRARY NOTWITHSTANDING IN THE PLAN OR THE FORM OF AGREEMENT
EVIDENCING THE OPTIONS, PFI AGREES THAT: (A) THE OPTIONS SHALL NOT EXPIRE PRIOR
TO THE CLOSE OF BUSINESS ON AUGUST 2, 2015, THE ORIGINAL EXPIRATION DATE OF THE
OPTIONS (THE “EXPIRATION DATE”) AND (B) THE OPTIONS SHALL BE EXERCISABLE IN FULL
AT ANY TIME BEGINNING ON THE DATE HEREOF AND ENDING AT THE CLOSE OF BUSINESS ON
THE EXPIRATION DATE.

 

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EMPLOYEE, EMPLOYER AND PFI EACH EXPRESSLY ACKNOWLEDGES AND AGREES TO THE
TERMINATION OF SUCH OPTIONS AND SETTLEMENT IN CASH IN ACCORDANCE WITH AND AS
CONTEMPLATED IN THE AGREEMENT AND PLAN OF REORGANIZATION AMONG STARK BANK GROUP,
LTD, SBG II, LTD., AND PELICAN FINANCIAL, INC. DATED NOVEMBER 30, 2005.

 

4.             EMPLOYEE RELEASE.  IN CONSIDERATION OF THE PAYMENTS AND OTHER
BENEFITS DESCRIBED ABOVE IN PARAGRAPH 2 AND PARAGRAPH 3, EFFECTIVE AT THE
EFFECTIVE TIME, EMPLOYEE HEREBY UNCONDITIONALLY RELEASES AND COMPLETELY AND
FOREVER DISCHARGES EMPLOYER AND PFI, ON BEHALF OF AND FOR THE BENEFIT OF EACH OF
THEM, THEIR OFFICERS, DIRECTORS, PARTNERS, SHAREHOLDERS, AGENTS, ATTORNEYS,
EMPLOYEES, SUCCESSORS AND ASSIGNS (“EMPLOYER RELEASED PARTIES”), FROM ANY AND
ALL RIGHTS AND CLAIMS THAT HE MAY HAVE BASED ON OR RELATING TO THE EMPLOYMENT
AGREEMENT, EMPLOYEE’S EMPLOYMENT WITH THE EMPLOYER OR THE TERMINATION OF THAT
EMPLOYMENT FOR ANY AND ALL REASONS.  EMPLOYEE SPECIFICALLY RELEASES THE EMPLOYER
RELEASED PARTIES FROM ANY RIGHTS OR CLAIMS WHICH EMPLOYEE MAY HAVE BASED UPON
THE AGE DISCRIMINATION IN EMPLOYMENT ACT, WHICH PROHIBITS AGE DISCRIMINATION IN
EMPLOYMENT; TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED, WHICH
PROHIBITS DISCRIMINATION IN EMPLOYMENT BASED ON RACE, COLOR, CREED, NATIONAL
ORIGIN OR SEX; THE EQUAL PAY ACT, WHICH PROHIBITS PAYING MEN AND WOMEN UNEQUAL
PAY FOR EQUAL WORK; THE AMERICANS WITH DISABILITIES ACT OF 1990, WHICH PROHIBITS
DISCRIMINATION AGAINST DISABLED PERSONS; THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT, WHICH REGULATES EMPLOYMENT BENEFITS; THE FLORIDA CIVIL RIGHTS ACT OF 1992;
OR ANY OTHER FEDERAL, STATE OR LOCAL LAWS OR REGULATIONS PROHIBITING EMPLOYMENT
DISCRIMINATION OR WHICH OTHERWISE REGULATE EMPLOYMENT TERMS AND CONDITIONS. 
EMPLOYEE ALSO RELEASES THE EMPLOYER RELEASED PARTIES FROM ANY CLAIM FOR WRONGFUL
DISCHARGE, UNFAIR TREATMENT, BREACH OF PUBLIC POLICY, EXPRESS OR IMPLIED
CONTRACT, OR ANY OTHER CLAIMS ARISING UNDER COMMON LAW WHICH RELATE IN ANY WAY
TO EMPLOYEE’S EMPLOYMENT WITH

 

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THE EMPLOYER OR THE TERMINATION THEREOF.  THIS RELEASE COVERS CLAIMS THAT
EMPLOYEE KNOWS ABOUT AND THOSE THAT  MAY NOT KNOW ABOUT UP THROUGH THE DATE OF
THIS AGREEMENT.  THIS RELEASE SPECIFICALLY INCLUDES ANY AND ALL CLAIMS FOR
ATTORNEY’S FEES AND COSTS WHICH ARE INCURRED BY EMPLOYEE FOR ANY REASON ARISING
OUT OF OR RELATING TO ANY OR ALL MATTERS COVERED BY THIS AGREEMENT. THIS RELEASE
DOES NOT COVER: (A) ANY OBLIGATIONS OF EMPLOYER AND/OR PFI UNDER THIS AGREEMENT
OR THE OPTIONS, (B) ANY OBLIGATIONS OF EMPLOYER AND/OR PFI UNDER BENEFIT PLANS
AND (C) ANY CLAIMS THAT EMPLOYEE MAY MAKE FOR UNEMPLOYMENT COMPENSATION
BENEFITS.

 

5.             EMPLOYER AND PFI RELEASE.  IN CONSIDERATION OF THE EMPLOYEE’S
RELEASE SET FORTH IN PARAGRAPH 4, EFFECTIVE AT THE EFFECTIVE TIME, EMPLOYER AND
PFI, FOR ITSELF AND ITS EMPLOYER RELEASED PARTIES, EACH HEREBY UNCONDITIONALLY
RELEASES AND COMPLETELY AND FOREVER DISCHARGES EMPLOYEE, ON BEHALF OF AND FOR
THE BENEFIT OF EMPLOYEE, HIS ESTATE, EXECUTORS, ADMINISTRATORS, BENEFICIARIES,
HEIRS, SUCCESSORS AND ASSIGNS (“EMPLOYEE RELEASED PARTIES”), FROM ANY AND ALL
RIGHTS AND CLAIMS THAT ANY OF THEM MAY HAVE BASED ON OR RELATING TO THE
EMPLOYMENT AGREEMENT, EMPLOYEE’S EMPLOYMENT WITH THE EMPLOYER OR THE TERMINATION
OF THAT EMPLOYMENT FOR ANY AND ALL REASONS.  THIS RELEASE COVERS CLAIMS THAT ANY
OF THE EMPLOYER RELEASED PARTIES KNOW ABOUT AND THOSE THAT  THEY MAY NOT KNOW
ABOUT UP THROUGH THE DATE OF THIS AGREEMENT.  THIS RELEASE SPECIFICALLY INCLUDES
ANY AND ALL CLAIMS FOR ATTORNEY’S FEES AND COSTS WHICH ARE INCURRED BY ANY OF
THE EMPLOYER RELEASED PARTIES FOR ANY REASON ARISING OUT OF OR RELATING TO ANY
OR ALL MATTERS COVERED BY THIS AGREEMENT. THIS RELEASE DOES NOT COVER ANY
OBLIGATIONS OF EMPLOYEE UNDER THIS AGREEMENT.

 

6.             CERTAIN REPRESENTATIONS.  EACH OF THE PARTIES REPRESENTS AND
WARRANTS TO THE OTHER THAT AS OF THE DATE OF THIS AGREEMENT, SUCH PARTY HAS NOT
FILED ANY CHARGE, CLAIM, COMPLAINT, DEMAND FOR ARBITRATION OR LAWSUIT AGAINST
ANY OF THE OTHER PARTIES NOR HAS SUCH PARTY ALLOWED ANY

 

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OTHER PERSON OR ENTITY ACTING ON SUCH PARTY’S BEHALF TO DO SO BASED ON ANY OF
THE CLAIMS RELEASED HEREIN.

 

7.             ATTORNEY’S FEES.  THE PARTIES RECOGNIZE THAT NOTHING HEREIN IS
MEANT TO PRECLUDE ANY PARTY FROM RECOVERING ATTORNEY’S FEES OR COSTS
SPECIFICALLY AUTHORIZED UNDER FEDERAL OR STATE LAW IN ANY SUBSEQUENT LITIGATION
BETWEEN THE PARTIES.

 

8.             ADDITIONAL OBLIGATIONS OF EMPLOYEE.  IN CONJUNCTION WITH THE
EXECUTION OF THIS AGREEMENT AND FOR THE CONSIDERATION RECEIVED HEREIN, EMPLOYEE
FURTHER AGREES AS FOLLOWS:

 

A.                                       SUBJECT TO HIS AVAILABILITY AND
SCHEDULE, DURING NORMAL BUSINESS HOURS, TO COOPERATE FULLY WITH ANY REASONABLE
REQUEST OF EMPLOYER OR PFI TO PROVIDE TRUTHFUL INFORMATION AND/OR MATERIALS TO
THEM OR TO OTHERWISE ASSIST ANY OF THEM IN MATTERS RELATING TO THE PERFORMANCE
OF HIS FORMER DUTIES AND THE DEFENSE OF ANY LITIGATION OR DISPUTES ARISING OR
BASED UPON ACTIONS OCCURRING DURING THE COURSE OF HIS EMPLOYMENT.  EMPLOYEE
SHALL PROVIDE 80 HOURS OF SUCH SERVICE WITHOUT ADDITIONAL COMPENSATION AND SHALL
BE COMPENSATED AT THE RATE OF $80.00 PER HOUR FOR EVERY HOUR IN EXCESS OF 80
HOURS AND WILL BE PAID ANY REASONABLE, DOCUMENTED EXPENSES WHICH HE INCURS IN
PERFORMING SUCH DUTIES; AND

 

B.                                      TO MAINTAIN THE CONFIDENTIALITY OF ALL
PROPRIETARY INFORMATION OF EMPLOYER IN ACCORDANCE WITH THE TERMS OF  SECTION 4.1
AND SECTION 4.2 OF THE EMPLOYMENT AGREEMENT.

 

9.             ADDITIONAL OBLIGATIONS OF EMPLOYER AND PFI.    IN CONJUNCTION
WITH THE EXECUTION OF THIS AGREEMENT AND FOR THE CONSIDERATION RECEIVED HEREIN, 
EMPLOYER AND PFI EACH AGREE THAT IT SHALL CONTINUE TO INDEMNIFY, DEFEND AND HOLD
HARMLESS EMPLOYEE TO THE FULLEST EXTENT PROVIDED BY  APPLICABLE LAW, THE CHARTER
OR BYLAWS OF EMPLOYER AND/OR PFI AS IN EXISTENCE ON THE DATE HEREOF OR UNDER ANY
AGREEMENT, UNDERSTANDING OR ARRANGEMENT WITH EMPLOYER AND/OR PFI IN EXISTENCE ON
THE DATE HEREOF.

 

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10.           NON-DISPARAGEMENT.  EACH PARTY AGREES NOT TO MAKE ANY STATEMENT,
WHETHER ORAL OR WRITTEN, WHICH IN ANY WAY DISPARAGES THE OTHER.  A VIOLATION OF
THIS PARAGRAPH SHALL CONSTITUTE A MATERIAL BREACH OF THIS AGREEMENT.

 

11.           ADVICE OF COUNSEL.  EACH PARTY REPRESENTS THAT THEY CONSULTED WITH
AN ATTORNEY BEFORE SIGNING THIS AGREEMENT.

 

12.           REVIEW PERIOD.  EMPLOYEE UNDERSTANDS THAT HE IS BEING GIVEN A
PERIOD OF 21 DAYS TO REVIEW AND CONSIDER THIS AGREEMENT BEFORE SIGNING IT. 
EMPLOYEE UNDERSTANDS THAT HE MAY USE AS MUCH OF SUCH PERIOD AS HE WISHES PRIOR
TO SIGNING IT.

 

13.           RIGHT OF RESCISSION.   EMPLOYEE MAY REVOKE THIS AGREEMENT WITHIN
SEVEN (7) DAYS OF HIS SIGNING IT.  REVOCATION CAN BE MADE BY DELIVERING A
WRITTEN NOTICE OF REVOCATION TO PELICAN NATIONAL BANK, N.A. ATTENTION: KEN
ASCHOM  AT  811 ANCHOR ROAD, NAPLES, FLORIDA  34104.   FOR THIS REVOCATION TO BE
EFFECTIVE, WRITTEN NOTICE MUST BE RECEIVED BY MR. ASCHOM NO LATER THAN THE CLOSE
OF BUSINESS ON THE SEVENTH (7TH) DAY AFTER EMPLOYEE SIGNS THE AGREEMENT.  IF
EMPLOYEE REVOKES THIS AGREEMENT, IT SHALL NOT BE EFFECTIVE AND ENFORCEABLE AND
EMPLOYEE WILL NOT RECEIVE THE CONSIDERATION CONTAINED IN PARAGRAPHS 2  OR 3 OR
ANY OTHER CONSIDERATION SET FORTH HEREIN.

 

14.           NO ADMISSION.  BY ENTERING INTO THIS AGREEMENT, NO PARTY ADMITS,
AND EACH PARTY  EXPRESSLY DENIES,  THAT SUCH PARTY HAS VIOLATED ANY CONTRACT,
RULE, LAW OR REGULATION, INCLUDING, BUT NOT LIMITED TO, ANY FEDERAL, STATE OR
LOCAL LAW OR REGULATION RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

 

15.           ENTIRE AGREEMENT.  THIS AGREEMENT, AND THE OPTIONS AS MODIFIED
HEREIN, ARE THE ENTIRE AGREEMENTS BETWEEN EMPLOYEE, PFI AND EMPLOYER AND ANY
OTHER PRIOR AGREEMENTS BETWEEN OR AMONG EMPLOYER AND/OR PFI, ON THE ONE HAND,
AND EMPLOYEE, ON THE OTHER HAND, ARE

 

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HEREBY TERMINATED AND SHALL HAVE NO OTHER FORCE OR EFFECT.  NO PARTY HAS MADE
ANY PROMISES TO THE OTHER PARTIES OTHER THAN THOSE SET FORTH IN THIS AGREEMENT. 
THIS AGREEMENT MAY BE MODIFIED ONLY UPON AN EXPRESS WRITTEN AGREEMENT AMONG THE
PARTIES.

 

16.           GOVERNING LAW.  THIS RELEASE WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS.

 

17.           INVALIDITY OF AGREEMENT PROVISION.  THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT, WHETHER IN WHOLE OR IN
PART, SHALL NOT IN ANY WAY AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER
PROVISION CONTAINED HEREIN.

 

18.           NEUTRAL CONSTRUCTION.  IN VIEW OF THE FACT THAT EACH OF THE
PARTIES HERETO HAVE BEEN REPRESENTED BY THEIR OWN COUNSEL AND THIS AGREEMENT HAS
BEEN FULLY NEGOTIATED BY ALL PARTIES, THE LEGAL PRINCIPLE THAT AMBIGUITIES IN A
DOCUMENT ARE CONSTRUED AGAINST THE DRAFTSPERSON OF THAT DOCUMENT SHALL NOT APPLY
TO THIS AGREEMENT.

 

19.           PARTIES IN INTEREST.  THIS AGREEMENT SHALL BIND, BENEFIT, AND BE
ENFORCEABLE BY PARTIES AND THEIR RESPECTIVE SUCCESSORS, LEGAL REPRESENTATIVES,
PERMITTED ASSIGNS, HEIRS, EXECUTORS, ADMINISTRATORS AND PERSONAL
REPRESENTATIVES.

 

20.           SECTION HEADINGS; REFERENCES.  SECTION AND SUBSECTION HEADINGS IN
THIS AGREEMENT ARE FOR CONVENIENCE OF REFERENCE ONLY, AND SHALL NEITHER
CONSTITUTE A PART OF THIS AGREEMENT NOR AFFECT ITS INTERPRETATION.  ALL WORDS IN
THIS AGREEMENT SHALL BE CONSTRUED TO BE OF SUCH NUMBER AND GENDER AS THE CONTEXT
REQUIRES OR PERMITS.

 

21.           COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH WHEN SO EXECUTED AND DELIVERED SHALL BE AN ORIGINAL
HEREOF, AND IT SHALL NOT BE NECESSARY IN MAKING PROOF OF THIS AGREEMENT TO
PRODUCE OR ACCOUNT FOR MORE THAN ONE COUNTERPART HEREOF.

 

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22.           EMPLOYEE ACKNOWLEDGEMENT.  EMPLOYEE ACKNOWLEDGES THAT HE HAS READ
THIS AGREEMENT, UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT.  EMPLOYEE
UNDERSTANDS AND AGREES THAT THIS AGREEMENT CONTAINS A GENERAL RELEASE OF CLAIMS
RELATING TO HIS EMPLOYMENT AND THE TERMINATION OF THAT EMPLOYMENT AGAINST ALL
EMPLOYER RELEASED PARTIES.

 

IN WITNESS WHEREOF, and intending to be legally bound, the Parties agree to the
terms of this Agreement.

 

Date:

Pelican National Bank, N.A.

 

 

 

 

February 10, 2006

By:

s/s Kenneth Aschom

 

 

Print name and title: Kenneth Aschom, CEO

 

 

 

 

Date:

Pelican Financial, Inc.

 

 

 

 

February 10, 2006

By:

Charles C. Huffman

 

 

Print name and title: Charles C. Huffman,
President and CEO

 

 

 

 

Date:

Employee:

 

 

 

 

February 10, 2006

s/s Howard B. Montgomery,

 

 

Howard B. Montgomery, Jr.

 

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Exhibit A

 

Vacation pay for 2005 - $0.00 (none)

 

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