RELEASE AGREEMENT

 

1.

 

2.

 

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4.

This Agreement shall in no way be construed as an admission by HDC that it has acted wrongfully with respect to Mr. Tobin or any other person or that Mr. Tobin has any rights whatsoever against HDC.  HDC specifically disclaims any liability to or wrongful acts against Mr. Tobin or any other person on the part of itself, its employees or its agents.

 

5.

As a material inducement to HDC to enter into this Agreement, Mr. Tobin hereby irrevocably releases HDC and each of the owners, stockholders, predecessors, successors, directors, officers, employees, representatives, attorneys, affiliates (and agents, directors, officers, employees, representatives and attorneys of such affiliates) of HDC, including Stephen Barnhill and Tom Gallagher in their representative and personal capacities, and all persons acting by, through, under or in concert with them (collectively, the “HDC Releasees”), from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on HDC’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991 (race, color, religion, sex, and national origin discrimination); (2) the Employee Retirement Income Security Act (“ERISA”); (3) 42 U.S.C. § 1981 (discrimination); (4) the Americans with Disabilities Act (disability discrimination); (5) the Equal Pay Act; (6) the Age Discrimination in Employment Act; (7) the Older Workers Benefit Protection Act; (8) Executive Order 11246 (race, color, religion, sex, and national origin discrimination); (9) Executive Order 11141 (age discrimination); (10) Section 503 of the Rehabilitation Act of 1973 (disability discrimination); (11) the Sarbanes-Oxley Act of 2002 and any other whistleblowing claims under federal, state or local law; (12) negligen ce; (13) negligent hiring and/or negligent retention; (14) intentional or negligent infliction of emotional distress or outrage; (15) defamation; (16) interference with employment; (17) wrongful discharge; (18) invasion of privacy; or (19) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which Mr. Tobin now has, or claims to have, or which Mr. Tobin at any time heretofore had, or claimed to have, or which Mr. Tobin at any time hereinafter may have, or claim to have, against each or any of the HDC Releasees, in each case as to acts or omissions by each or any of the HDC Releasees occurring up to and including the Effective Date, provided that this Release shall not apply to any rights provided for in this Agreement.

 

6.

As a material inducement to Mr. Tobin to enter into this Agreement, HDC, for itself and on behalf of the other HDC Releasees (including without limitation Stephen Barnhill and Thomas Gallagher in their representative and personal capacities) hereby irrevocably releases Mr. Tobin, his heirs, executors, attorneys, accountants, administrators, agents and representatives, and their predecessors and successors in interest (collectively the “Tobin Releasees”) from any and all charges, claims, liabilities, agreements, damages, causes of action, suits, costs, losses, debts and expenses (including attorneys’ fees and costs actually incurred) of any nature whatsoever, known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort or any federal, state or other gove rnmental statute, regulation, or ordinance, including, without limitation:  (1) the Sarbanes-Oxley Act of 2002 and any other whistleblowing claims under federal, state or local law; (2) negligence; (3) intentional or negligent infliction of emotional distress or outrage; (4) defamation; (5) interference with employment; (6) invasion of privacy; or (7) violation of any other legal or contractual duty arising under the laws of the State of Georgia or the laws of the United States (“Claim” or “Claims”), which HDC and the HDC Releasees now have, or claim to have, or which HDC and the HDC Releasees at any time heretofore had, or claimed to have, or which HDC and the HDC Releasees at any time hereinafter may have, or claim to have, against each or any of the Tobin Releasees, in each case as to acts or omissions by each or any of the Tobin Releasees occurring up to and including the Effective Date, provided that this Release shall not apply to any rights provided for in this Agreem ent.

 

7.

The release in Section 5 of this Agreement does not apply to (a) all benefits and awards (including without limitation cash and stock components) which pursuant to the terms of any compensation or benefit plans, programs, or agreements of HDC are earned or become payable, but which have not yet been paid, and (b) pay for accrued but unused vacation that HDC is legally obligated to pay Mr. Tobin, if any, and only if HDC is so obligated, (c) unreimbursed and substantiated business expenses, for which Mr. Tobin is entitled to reimbursement under HDC’s policies and for which Mr. Tobin will submit receipts and provide dates when such expenses occurred in accordance with HDC’s policies, a complete list of which expenses is set forth in the letter agreement by and between the parties dated as of the date hereof and (d) any rights to indemnification that Mr. Tobin has under any directors and officers or othe r insurance policy HDC maintains or under the bylaws and articles of incorporation of the Company, and under any indemnification agreement, if any.  HDC acknowledges that Mr. Tobin is covered under existing indemnification commitments and under an existing Director and Officer Insurance policy. HDC agrees that it shall maintain such insurance policy through its full current term and in any event will indemnify Mr. Tobin to the fullest extent permitted by law for all actions and /or omissions committed in the course and scope of Mr. Tobin’s responsibilities with HDC including as President, General Counsel, Principal Financial Officer, Principal Accounting Officer, and member of the HDC Board of Directors.

 

8.

Mr. Tobin agrees to resign as President, General Counsel, Principal Financial Officer, and Director on HDC’s Board of Directors on the Effective Date.  In addition, HDC acknowledges that Mr. Tobin has no further responsibility as its Principal Accounting Officer as of the Effective Date.

 

 

(a)      Mr. Tobin’s original option agreement as amended as of the Effective Date in the form attached hereto as Exhibit A (the “Tobin Option Agreement”).

 

 

(b)     a check made payable to the order of “R. Scott Tobin” in the amount of $271,973.07, subject to W-2 reporting which will include all applicable deductions and withholdings.

 

 

The parties acknowledge and agree that the form and timing of the consideration provided pursuant to this Agreement are intended to be exempt from or to comply with one or more exceptions to the requirements of Section 409A of the Internal Revenue Code of 1986 (“Section 409A”), including the exception from the anti-acceleration provisions of Section 409A for bona fide disputes as to a right of payment provided by IRS Regulation § 1,409A(j)(4)(xiv).  The parties further acknowledge and agree that for purposes of Section 409A Mr. Tobin does not have discretion with respect to the timing of the payment of any amounts provided under or related to this Agreement. Notwithstanding such acknowledgment and agreement, HDC does not represent nor warrant any particular tax treatment of the settlement payment d escribed in this Section 10.

 

11.

Mr. Tobin further agrees to indemnify and hold harmless HDC from and against any tax or tax withholdings claims, amounts, interest, penalties, fines or assessments related to Section 409A brought or sought by any taxing authority or government agency, with regard to the settlement payment described in Section 10.

 

12. 

Mr. Tobin promises that he will not make statements, either verbally or in writing (including electronically), disparaging to any of the HDC Releasees.  HDC, on behalf of the HDC Releasees, promises that neither it nor they will make statements, either verbally or in writing (including electronically), disparaging to any of the Tobin Releasees.  Mr. Tobin and the Tobin Releasees, and HDC and the HDC Releasees agree not to make any statements about any of the other party’s Releasees to the press (including without limitation any newspaper, magazine, radio station or television station) without the prior written consent of the other party.  Similarly, Mr. Tobin promises that he will make no statements concerning the governance, operations, policies, or practices of HDC, nor any statements relating to th e roles and responsibilities of any Tobin Releasee with HDC.  Mr. Tobin acknowledges that this prohibition includes the use of any facts and circumstances used on a “no names” or anonymous basis in any presentation related to corporate governance matters or any other matters, including any presentation given by Mr. Tobin in connection with his relations with CB Excellence.  In addition, in response to inquiries from prospective employers or others, HDC agrees to provide only Mr. Tobin’s name, his dates of employment, his position(s) held and will offer only statements regarding his employment or its termination which are consistent with its public filings.  The obligations set forth in the six immediately preceding sentences will expire two years after the Effective Date.  Mr. Tobin acknowledges that HDC will be required to file public disclosures with the Securities and Exchange Commission regarding the termination of his employment and his resignati on as an officer and director of HDC.  Mr. Tobin agrees that his resignation from HDC’s board of directors is not related to any disagreement with HDC on any matter relating to HDC’s governance, operations, policies or practices.  A copy(s) of the public disclosure(s) reporting the settlement and/or Mr. Tobin’s resignation from HDC’s board of directors and management positions has been attached to the letter agreement between the parties dated as of an even date herewith.  Mr. Tobin agrees that (i) he will not furnish a letter to HDC containing assertions contrary to the foregoing or (ii) he will not attempt to cause HDC to file with the Securities and Exchange Commission any letter purporting to describe circumstances regarding his resignation.  Mr. Tobin will also cooperate with HDC and its affiliates if HDC requests Mr. Tobin’s testimony.  To the extent practicable and within the control of HDC, HDC will use reasonable efforts to schedule the timing of Mr. Tobin’s participation in any such witness activities in a reasonable manner to take into account Mr. Tobin’s then current employment, and will pay the reasonable and properly documented out-of-pocket expenses that HDC pre-approves and that Mr. Tobin incurs for travel required by HDC with respect to those activities.

 

13.

Except as set forth in this Section, Mr. Tobin agrees that he will not disclose the existence or terms of this Agreement to anyone.  He agrees that in response to any inquiries, he will state only that the contractual dispute has been resolved. However, Mr. Tobin may disclose it to a member of his immediate family or legal or financial advisors if necessary and on the condition that the family member or advisor similarly does not disclose these terms to anyone.  Mr. Tobin understands that he will be responsible for any disclosure by a family member or advisor as if he had disclosed it himself.  This restriction does not prohibit Mr. Tobin’s disclosure of this Agreement or its terms to the extent necessary during a legal action to enforce this Agreement or to the extent Mr. Tobin is legally compelled to make a disclosure.  However, Mr. Tobin will notify HDC promptly u pon becoming aware of that legal necessity, provide HDC with reasonable details of that legal necessity and cooperate with HDC to seek legal protection from and/or limitations on any legally compelled disclosure.  Mr. Tobin further agrees that for a period of three years following the execution of this Agreement, he will not (i) solicit proxies or consents to vote any securities of HDC, (ii) engage in short selling the common stock of HDC, (iii) act alone or in concert with others to seek to control or influence the management, board of directors or policies of HDC, and (iv) cooperate with any party seeking to do any of the foregoing.

 

14.

Before any payments are made under this Agreement, Mr. Tobin shall return to HDC in good working order all HDC property and documents within his or his agents’ possession, custody, and control and shall certify that he has returned all HDC property and documents.  Such property and documents includes, but is not limited to, computers, keys, software, calculators, equipment, credit cards, forms, files, manuals, correspondence, business cards, personnel data, lists of or other information regarding contacts and/or employees, contracts, contract information, agreements, leases, plans, brochures, catalogues, training materials, computer tapes, diskettes or other portable media.  Documents means any written, recorded or graphic material in Mr. Tobin’s possession, custody, or control, regardless of its location (including at Mr. Tobin’s home or on Mr. Tobin’s personal comput er), whether produced, reproduced, or on paper, cards, tapes, film, electronic facsimile, computer storage device or any other media.

 

15.

No party to this Agreement has filed or caused to be filed any lawsuit, complaint or charge with respect to any Claim released in this Agreement.  Mr. Tobin and HDC (on its own behalf and that of the HDC Releasees) promise never to file or pursue a lawsuit, complaint or charge based on any Claim released by this Agreement, except that any party may participate in an investigation or proceeding conducted by an agency of the United States Government or of any state.  No party has assigned or transferred any Claim released hereunder nor has any party purported to do so.