SETTLEMENT AND RELEASE AGREEMENT 

This Settlement and Release Agreement ("Agreement") is made by, between, and among 

the following undersigned parties: 

The Plaintiff Federal Deposit Insurance Corporation as Receiver for Integrity Bank, 

Alpharetta, Georgia ("FDIC-R"), and Steven M. Skow, Alan K. Arnold, Douglas G. Ballard, 

Clinton M. Day, Joseph J. Ernest, Donald C. Hartsfield, JackS. Murphy, and Gerald 0. 

Reynolds (collectively the "Settling Defendants"), (individually, the FDIC-R and the Settling 

Defendants may be referred to herein as "Party" and collectively as the "Parties"). 

RECITALS 

WHEREAS: 

Prior to August 29, 2008, Integrity Bank ("Bank") was a depository institution organized 

and existing under the laws of Georgia. 

On August 29,2008, the Georgia Department of Banking and Finance closed the Bank 

and pursuant to 12 U.S.C. § 1821(c), the Federal Deposit Insurance Corporation was appointed 

Receiver. In accordance with 12 U.S.C. § 1821(d), the FDIC-R succeeded to all rights, titles, 

powers and privileges of the Bank, including those with respect to its assets. 

Among the assets to which the FDIC-R succeeded were all of the Bank's claims, 

demands, and causes of action against its former directors, officers, and employees arising from 

the performance, nonperformance, and manner of performance of their respective functions, 

duties and acts as directors, officers, and employees of the Bank. 

On January 14, 2011, the FDIC-R filed a complaint for money damages against the 

Settling Defendants, each of whom served at various times as a director and/or officer of the 

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Bank. Those claims for damages are now pending in the United States District Court for the 

Northern District of Georgia in FDIC-R v. Skow, et al., Case Number 1:11-cv-00111-SCJ 

("D&O Action"). The Settling Defendants have denied liability in the D&O Action. 

The Settling Defendants were issued a director and officer liability policy ("Policy"), 

which insured the directors and officers of the Bank according to the terms, provisions, and 

conditions of the Policy. The Settling Defendants asserted claims for coverage under the Policy. 

The undersigned Parties deem it in their best interests to enter into this Agreement to 

avoid the uncertainty and expense of further litigation. 

NOW, THEREFORE, in consideration of the promises, undertakings, payments, and 

releases stated herein, the sufficiency of which consideration is hereby acknowledged, the 

undersigned Parties agree, each with the other, as follows: 

SECTION 1: Payment to FDIC-R 

A. As an essential covenant and condition to this Agreement, on or before thirty (30) 

calendar days following the date all Parties execute this Agreement, the sum of three million 

seven hundred thousand dollars ($3.7 million) ("the Settlement Payment") shall be paid by or on 

behalf of the Settling Defendants to the FDIC-R. 

B. The Settling Defendants or their insurer shall deliver the Settlement Payment to 

the FDIC-R by direct wire transfer or check. 

If by direct wire transfer, into the account below: 

"Federal Home Loan Bank ofNew York, Routing No. 026-009-739, for credit to FDIC 

National Receivership Account, Account No. 1076010, "OBI" Line: Receiver No. 100 12; ALIS 

100021096, Attn: Steven C Morrison; 703-516-5029; Professional Liability lawsuit (37100); 

DIF Fund; D&O lawsuit settlement." 

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If by check, via overnight delivery to: 

Steven C. Morrison, Counsel 

Professional Liability Unit, FDIC 

3501 N. Fairfax Drive, Suite B7024 

Arlington, Virginia 22226 

FDIC-R's Tax ID number is 58-2505656. 

In the event that the Settlement Payment is not delivered to the FDIC-R by the due date, 

interest shall accrue on all unpaid amounts at the rate of 5% per annum from the due date until 

the date of payment. 

C. If the FDIC-R does not receive the Settlement Payment on or before the date 

determined by subsection A above, then the FDIC-R, in its sole discretion, shall have the right at 

any time prior to receipt of the Settlement Payment (including all accrued interest) to: 

1. Extend the period of time for the Settlement Payment, including interest 

accruing from the date determined by subsection A above, through the date of payment at a rate 

calculated in accordance with 26 U.S.C. § 6621(a)(3); or 

2. Enforce this Agreement, in which event the Settling Defendants agree to 

jurisdiction in United States District Court in the Northern District of Georgia and to pay all of 

the FDIC-R's reasonable attorney's fees and costs expended in enforcing the terms of this 

Agreement; or 

3. Terminate the Agreement, move to vacate any dismissal order, to which 

the Settling Defendants agree to consent, and continue the D&O Action. The Settling Defendants 

further agree to waive any defense based on any statute of limitations defense that would bar any 

of the FDIC-R's claims and waive all objections, defenses, claims or counterclaims based on or 

arising out of this Agreement, and covenant and agree not to assert any objections, defenses, 

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claims or counterclaims that did not exist or were otherwise unavailable as of the date this 

Agreement was fully executed; and/or 

4. Seek any other relief available to it in law or equity. 

Any extension of time under Section I.C.l for delivery of the Settlement Payment or 

acceptance of a portion of the Settlement Payment shall not prejudice the FDIC-R's rights to take 

any of the actions set forth in Section I.C.2 through I.C.4 at any time prior to receipt of 

Settlement Payment (including all accrued interest). 

SECTION II: Stipulation and Dismissal 

Within ten ( 1 0) business days after the latter of (i) full execution of this Agreement by all 

of the Parties, and (ii) receipt of the Settlement Payment, plus any accrued interest, the FDIC-R 

shall file a stipulation of dismissal with prejudice, executed by the attorneys for all Parties 

hereto, in the form attached hereto as Exhibit A, in the D&O Action. 

SECTION III: Releases 

A. The FDIC-R's Releases. 

Upon receipt of the Settlement Payment and except as provided in Section III.C., the FDIC-R, 

for itself and its successors and assigns, hereby releases and discharges the Settling Defendants 

and their respective heirs, executors, trustees, insurers, administrators, agents, representatives, 

attorneys, successors, and assigns, from any and all claims, demands, obligations, damages, 

actions, and causes of action, direct or indirect, in law or in equity, belonging to the FDIC-R, that 

arise from, or relate to, the performance, nonperformance, or manner of performance of the 

Settling Defendants' respective functions, duties and actions as officers and/or directors of the 

Bank, including, without limitation, the causes of action alleged in the D&O Action. 

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B. The Settling Defendants' Release. 

Effective simultaneously with the release granted in Section liLA., above, the Settling 

Defendants, on behalf of themselves individually, and their respective heirs, executors, trustees, 

insurers, administrators, agents, representatives, attorneys, successors, and assigns, hereby 

release and discharge the FDIC-R, and its employees, officers, directors, representatives, 

attorneys, successors and assigns, from any and all claims, demands, obligations, damages, 

actions, and causes of action, direct or indirect, in law or in equity, that arise from or relate to, 

the Bank or to the performance, nonperformance, or manner of performance of the Settling 

Defendants' respective functions, duties and actions as officers and/or directors of the Bank 

including without limitation the causes of action alleged in the D&O Action. 

C. Exceptions from Releases by FDIC-R. 

1. Notwithstanding any other provision of this Agreement, the FDIC-R does 

not release, and expressly preserves fully and to the same extent as if this Agreement had not 

been executed, any claims or causes of action: 

a. Against the Settling Defendants or any other person or entity for 

liability, if any, incurred as the maker, endorser or guarantor of any promissory 

note or indebtedness payable or owed by them to FDIC-R, the Bank, other 

financial institutions, or any other person or entity, including without limitation 

any such claims acquired by FDIC-R as successor in interest to the Bank or any 

person or entity other than Bank; and 

b. Against any person or entity not expressly released by the FDIC-R 

in this Agreement. 

2. Notwithstanding any other provision of this Agreement, nothing in this 

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Agreement shall be construed or interpreted as limiting, waiving, releasing, or compromising the 

jurisdiction and authority ofthe Federal Deposit Insurance Corporation in the exercise of its 

supervisory or regulatory authority or to diminish its ability to institute administrative 

enforcement or other proceedings seeking removal, prohibition, or any other relief it is 

authorized to seek pursuant to its supervisory or regulatory authority against any person. 

3. Notwithstanding any other provision of this Agreement, this Agreement 

does not purport to waive, or intend to waive, any claims that could be brought by the United 

States through the Department of Justice, the United States Attorney's Office for any federal 

judicial district, or any other department or agency of the United States as defined by 18 U.S.C. § 

6. In addition, the FDIC-R specifically reserves the right to seek court-ordered restitution 

pursuant to the relevant provisions of the Mandatory Victims Restitution Act, 18 U.S.C. §§ 3322 

and 3663 et. seq., if appropriate. 

SECTION IV: Waiver of Dividends and Proceeds from Litigation 

To the extent, if any, that Settling Defendants are or were shareholders of the Bank's 

holding company and by virtue thereof are or may be entitled to a dividend, payment, or other 

distribution upon resolution of the receivership of the Bank or proceeds in any litigation that has 

been or could be brought against the Federal Deposit Insurance Corporation in any capacity or 

against the United States based on or arising out of, in whole or in part, the closing of the Bank, 

or any alleged acts or omissions by the Federal Deposit Insurance Corporation in any capacity, 

the United States government, or any agency or department of the United States government in 

connection with the Bank, its conservatorship, or receivership, Settling Defendants hereby 

knowingly assign to the FDIC-R any and all rights, titles, and interest in and to any and all such 

dividends, payments, or other distributions, or proceeds. 

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SECTION V: Representations and Acknowledgements 

A. Authorized Signatories. All of the undersigned persons represent and warrant that 

they are Parties hereto or are authorized to sign this Agreement on behalf of the respective Party, 

and that they have the full power and authority to bind such Party to each and every provision of 

this Agreement. This Agreement shall be binding upon and inure to the benefit of the 

undersigned Parties and their respective heirs, executors, trustees, insurers, administrators, 

representatives, successors and assigns. 

B. Advice of Counsel. Each Party hereby acknowledges that he, she, or it has 

consulted with and obtained the advice of counsel prior to executing this Agreement, and that 

this Agreement has been explained to that Party by his or her counsel. 

C. Financial Disclosure Representation. Each Settling Defendant that submitted 

financial information to the FDIC herein affirms that his/her financial information was true and 

accurate as ofthe date of its submission to the FDIC. Each Settling Defendant expressly 

acknowledges that, in determining to settle the claims released herein, the FDIC-R has 

reasonably and justifiably relied upon the accuracy of the financial information submitted by the 

Settling Defendants. The FDIC-R has no obligation to independently verify the completeness or 

accuracy of that financial information. 

SECTION VI: Reasonable Cooperation 

A. The Parties agree to cooperate in good faith to effectuate all the terms and 

conditions of this Agreement, including doing, or causing their agents and attorneys to do, 

whatever is reasonably necessary to effectuate the signing, delivery, execution, filing, recording, 

and entry, of any documents necessary to perform the terms of this Agreement and conclude the 

D&O Action. 

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SECTION Vll: Other Matters 

A. No Admission of Liability. The undersigned Parties each acknowledge and agree 

that the matters set forth in this Agreement constitute the settlement and compromise of disputed 

claims and defenses, that this Agreement is not an admission or evidence of liability or infirmity 

by any of them regarding any claim or defense, and that the Agreement shall not be offered or 

received in evidence by or against any Party except to enforce its terms. 

B. Execution in Counterparts. This Agreement may be executed in counterparts by 

one or more of the Parties and all such counterparts when so executed shall together constitute 

the final Agreement, as if one document had been signed by all Parties; and each such 

counterpart, upon execution and delivery, shall be deemed a complete original, binding the 

Parties subscribed thereto upon the execution by all Parties to this Agreement. 

C. Choice of Law. This Agreement shall be interpreted, construed and enforced 

according to applicable federal law, or in its absence, the laws of the State of Georgia. 

D. Notices. Any notices required hereunder shall be sent by registered mail, first 

class, return receipt requested, and by email, to the following: 

If to the FDIC-R: 

Steven C. Morrison 

Counsel 

Federal Deposit Insurance Corporation 

3501 Fairfax Dr. 

Arlington VA 22226 

Phone: (703) 516-5029 

stemorrison@fdic. gov 

Kyle Keegan 

Keegan, DeNicola, Kiesel, Bagwell 

Juhan & Lowe, LLC 

5555 Hilton Avenue, Suite 205 

Baton Rouge, Louisiana 70808 

Phone: (225) 364-3600 

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kmk@keegandenicola.com 

If to the Settling Defendants: 

Robert R. Ambler, Jr. 

Womble Carlyle Sandridge & Rice, LLP 

271 17th Street, NW, Suite 2400 

Atlanta, Georgia 30363-1017 

Phone: (404) 872-7000 

rambler@wcsr.com 

Attorney for Alan K. Arnold 

Tracy Klingler 

King & Spalding, LLP 

1180 Peachtree Street, N .E. 

Atlanta, GA 30309-3521 

Phone: (404) 572-2804 

tklingler@kslaw .com 

Attorney JackS. Murphy 

James B. Manley 

McKenna Long & Aldridge 

303 Peachtree Street, N.E. 

One Peachtree Center, Suite 5300 

Atlanta, Georgia 30308 

Phone: (404) 527-4912 

jmanley@mckennalong.com 

Attorney for Joseph J. Ernest, Donald C. Hartsfield, and Gerald 0. Reynolds 

Richard A. Mitchell 

Arnall Golden Gregory LLP 

171 17th Street, NW 

Atlanta, GA 30363 

Phone: (404) 873-8792 

richard.mitchell@agg.com 

Attorney for Douglas G. Ballard 

Richard R. Edwards, III 

Cochran & Edwards 

2950 Atlanta Road, SW 

Smyrna, GA 30080 

Phone: (770) 435-2131 

randy@cochranedwardslaw .com 

Attorney for Steven M. Skow 

Frank M. Young, III 

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Young Law, LLC 

Red Mountain Law Group 

2100 First Avenue North, Suite 600 

Birmingham, AL 35203-4272 

Phone: (205) 254-1423 

frank@younglawllc.com 

Attorney for Clinton M. Day 

E. Entire Agreement and Amendments. This Agreement constitutes the entire 

agreement and understanding between and among the undersigned Parties concerning the matters 

set forth herein and supersedes any prior agreements or understandings. This Agreement may not 

be amended or modified, nor may any of its provisions be waived, except in writing signed by 

the Parties bound thereby, or by their respective authorized attorney(s), or other 

representative(s). 

F. Titles and Captions. All section titles and captions contained in this Agreement 

are for convenience only and shall not affect the interpretation of this Agreement. 

G. No Confidentiality. The undersigned Parties acknowledge that this Agreement 

shall not be confidential and will be disclosed pursuant to the Federal Deposit fusurance 

Corporation's applicable policies, procedures, and other legal requirements. 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed 

by each of them or their duly authorized representatives on the dates herein subscribed. 

Date: 6/26/15 

FEDERAL DEPOSIT INSURANCE CORPORATION 

AS RECENE~BANK 

By: s~ ~ Title: Counsel - Professional Liability Unit 

PrintName: Steven C. Morrison 

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Date: c;-Jo-rr 

Date: ___ _ ALAN K. ARNOLD 

Date: ---- DOUGLAS G. BALLARD 

Date: ---- CLINTON M. DAY 

Date: ·---- JOSEPH J. ERNEST 

Date:. ___ _ DONALD C. HARTSFIELD 

Date: ---- JACKS. MURPHY 

Date: ---- GERALD 0. REYNOLDS 

11 
Date: ---- STEVEN M. SKOW 

Date 1\~\1':>. 

Date: ---- DOUGLAS G. BALLARD 

Date: ---- CLINTON M. DAY 

Date: JOSEPH J. ERNEST ----

Date: DONALD C. HARTSFIELD ----

Date: ___ _ JACKS. MURPHY 

Date: ---- GERALD 0. REYNOLDS 

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Date: ALAN K. ARNOLD 

Date: ___________ _ 

Date: ___ _ JOSEPH J. ERNEST 

Date: _____ _ DONALD C. HARTSFIELD 

Date: JACKS. MURPHY --------,--

-----------------------------·-----------

Date: -----~------ GERALD 0. REYNOLDS 

11 
Date: ---- STEVEN M. SKOW 

Date: ---- ALAN K. ARNOLD 

Date: ___ _ DOUGLAS G. BALLARD 

Date: 7/~/, C 

I I 

Date: ---- JOSEPHJ. 

Date: ---- DONALD C. HARTSFIELD 

Date: ---- JACKS. MURPHY 

Date: GERALD 0. REYNOLDS ----

11 
Date: ___ _ STEVEN M. SKOW 

--·-·····---

Date: ___ _ /\LAN K. ARNOLD 

Date: ---- DOUGLAS G. BALLARD 

Date: CLINTON M. DAY ----

Date: ___ _ 

.JOSEPH~~~ 

Dale: . ___ _ DONALD C. HARTSFIELD 

Date: ---- JACK S. MURPHY 

Date: ---- GERALD 0. REYNOLDS 

1 I 
Date:. ___ _ STEVEN M. SKOW 

Date: ---- ALAN K. ARNOLD 

Date: ·---- DOUGLAS G. BALLARD 

Date: ·---- CLINTON M. DAY 

Date:. ___ _ JOSEPH l ERNEST 

Date: 

Date: ___ _ JACKS. MURPHY 

Date: ___ _ GERALD 0. REYNOLDS 

11 
..rw LL r o uo :ooa ~enator JacK. Murphy f!Uf819;j19 p.:.! 

Date: ___ _ STEVEN M. SKOW 

Date; ---- ALAN K. ARNOLD 

Date: ·---- DOUGLAS G. BALLARD 

Date: ---- CLINTON M. DAY 

Date: JOSEPH J. ERNEST ----

Date:. ___ _ DONALD C. HARTSFIELD 

Date:~~ 

Date: ___ _ 

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Date: ---- STEVENM. SKOW 

Date: ---- ALAN K. ARNOLD 

Date: DbUGLASG.BALLARD ----

Date: ---- CLINTON M. DAY 

Date: ---- JOSEPH J. ERNEST 

Date: ___ _ DONALD C. HARTSFIELD 

Date: ---- JACKS. MURPHY 

Date: 4{!Jtl/f21JJ;;- GERALD 0. REYNOLDS 

~0,~ 

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EXHIBIT A 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF GEORGIA 

ATLANTA DIVISION 

Federal Deposit Insurance Corporation, 

in its Capacity as Receiver of Integrity 

Bank of Alpharetta, Georgia, 

) 

) 

) 

) 

Plaintiff, 

v. 

) Civil Action No.: 1:11-CV-0111-SCJ 

) 

) 

) 

Steven M. Skow, Alan K. Arnold, 

Douglas G. Ballard, Clinton M. Day, 

Joseph J. Ernest, Donald C. Hartsfield 

JackS. Murphy, and Gerald 0. Reynolds 

) 

) 

) 

) 

) 

Defendants. ) 

NOTICE OF VOLUNTARILY DISMISSAL 

Plaintiff, Federal Deposit Insurance Corporation as Receiver For Integrity 

Bank ("FDIC-R"), by and through its undersigned attorneys, pursuant to FCRP 

41(a)(1) and agreement with counsel for Steven M. Skow, Alan K. Arnold, 

Douglas G. Ballard, Clinton M. Day, Joseph J. Ernest, Donald C. Hartsfield, Jack 

S. Murphy, and Gerald 0. Reynolds ("Defendants"), voluntarily dismisses its 

Complaint in the matter, ECF Doc. No. 1, with prejudice and without costs. 

Respectfully submitted, 

/s/ Dustin R. Bagwell 

Kyle M. Keegan (LA Bar #19942) 

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Dustin R. Bagwell (LA Bar #27366) 

Keegan, DeNicola, Kiesel, Bagwell, 

Juhan & Lowe, LLC 

5555 Hilton Ave., Suite 205 

Baton Rouge, Louisiana 70808 

Phone: (225) 364-3600 

Fax: (225) 364-3608 

Jeanne Simkins Hollis (GA Bar# 646890) 

Simkins Hollis Law Group, P.C. 

1924 Lenox Road, NE 

Atlanta, Georgia 30306 

Phone: (404) 474-2328 

Fax: (770) 587-0726 

Attorneys for the FDIC, as Receiver of 

Integrity Bank of Alpharetta, Georgia 

/s/ Robert R. Ambler 

Robert R. Ambler, Jr. 

Womble Carlyle Sandridge & 

Rice, PLLC 

271 17th Street, NW, Suite 2400 

Atlanta, GA 30363 

Attorney for Alan K Arnold 

/s/ Tracy Klingler 

David L. Balser 

Tracy Klingler 

King & Spalding, LLP 

1180 Peachtree Street, N.E. 

Atlanta, GA 30309-3521 

Attorneys for JackS. Murphy 

/s/ Jim Manley 

James B. Manley 

McKenna Long & Aldridge 

303 Peachtree Street, N.E. 

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One Peachtree Center, Suite 5300 

Atlanta, Georgia 30308 

Attorneys for Defendants Joseph J. Ernest, Donald 

C. Hartsfield, and Gerald 0. Reynolds 

/s/ Richard A. Mitchell 

Edward A. Marshall 

Richard A. Mithcell 

Arnall Golden Gregory LLP 

171 17th Street, NW 

Atlanta, GA 30363 

Attorneys for Douglas G. Ballard 

/s/ Richard R. Edwards 

Richard R. Edwards, III 

Cochran & Edwards 

2950 Atlanta Road, SW 

Smyrna, GA 30080 

Attorney for Steven M Skow 

/s/ Frank M. Young 

Frank M. Young, III 

Young Law, LLC 

Red Mountain Law Group 

2100 First Avenue North, Suite 600 

Birmingham, AL 35203-4272 

Attorney for Clinton M Day 

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