RETIREMENT AGREEMENT
This Agreement is made as of July 19, 2001, by and between Nazareth
National Bank & Trust Co., a banking association organized under the laws of the
United States ("Bank"), First Colonial Group, Inc., a Pennsylvania corporation
("FCG"), and S. Xxxx Xxxxxxx ("Xxxxxxx").
Background
Xxxxxxx is the President and Chief Executive Officer ("CEO") of the
Bank and FCG, and a member of the Board of Directors of both the Bank and FCG
(collectively the "Board"), having served faithfully, diligently and to the best
of his ability since he was hired by the Bank on July 5, 1977.
Xxxxxxx and the Bank have agreed that he will retire from employment
with the Bank and FCG effective December 31, 2001.
Xxxxxxx the Bank and FCG wish to provide for a smooth transition in the
leadership of the Bank and FCG, and for fair and reasonable retirement terms.
Terms
Accordingly, in consideration of the mutual covenants and agreements
set forth below, and intending to be legally bound, the parties agree as
follows:
1. Xxxxxxx will resign as President, CEO, and an employee of the Bank
and FCG and of all affiliated entities, effective at the close of
business on December 31, 2001. He will continue to perform all his
duties and responsibilities through that date; provided, however, that
the Board may relieve him of his duties and responsibilities and place
him on leave of absence earlier in its discretion. His current total
compensation package, including bonus (which will be awarded consistent
with past practice), will remain in place through December 31, 2001,
regardless of whether he is relieved of duties earlier, provided
however that any bonus will be in the form of cash rather than stock
options.
2. Xxxxxxx will remain and serve as a member of the Boards of Directors
of the Bank, FCG and of all affiliated entities, until December 31,
2001 or until such earlier time as the Bank and/or FCG requests him to
resign from those positions. Simultaneously with Xxxxxxx'x resignation
from the Board of Directors of the Bank, FCG and of all affiliated
entities, Xxxxxxx shall resign as a trustee of all employee benefit
trusts and other trusts sponsored by or otherwise related to the Bank
or FCG or any of their affiliated entities. Xxxxxxx agrees that he will
execute the undated letter of resignation attached hereto as Exhibit A,
contemporaneously with the execution of this Agreement. For so long as
he remains a member of the Board, or until December 31, 2001, whichever
is later, Bank and FCG will pay Xxxxxxx monthly directors' fees
consistent with past practice.
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3. Xxxxxxx'x resignation shall be deemed to be an election by Xxxxxxx
to terminate his employment, as that phrase is used in Section I.C. of
the Executive Benefit Agreement dated October 9, 1985. Bank agrees that
it has no right to terminate its obligations with respect to Xxxxxxx
under this agreement. Xxxxxxx shall receive benefits under that
agreement in accordance with its terms, and as supplemented as provided
in P. 5.a., below.
4. For the purposes of the Severance Agreement between the parties
dated January 1, 2001 (Severance Agreement), Xxxxxxx'x employment will
be deemed to have been terminated by the Bank without cause effective
at the close of business on December 31, 2001. Accordingly,
x. Xxxxxxx will receive Termination Payments as set forth in P. 3 of
the Severance Agreement, provided, however, that (i) Xxxxxxx
shall not have any duty to seek substantially equivalent
employment, (ii) in no event will payments be reduced, on a
dollar-for-dollar basis or otherwise, by any income or earnings
received by Xxxxxxx from any other employer or from any other
working activity in which Xxxxxxx may engage during the Severance
Period, and (iii) Xxxxxxx shall have no obligation to notify the
Bank of his receipt of any income or earnings during the
Severance Period.
x. Xxxxxxx shall be reimbursed for all reasonable expenses incurred
as set forth in, and subject to the limits contained in, P. 4(a)
of the Severance Agreement, which payments shall be deemed
reimbursement of employment related expenses not subject to
payroll or withholding taxes.
c. During the Severance Period, Xxxxxxx shall remain a participant
in, and receive the benefits set forth in and upon the terms
stated in P. P. 4(b) and (c) of the Severance Agreement. The
parties expressly agree the Medical Expense Reimbursement Plan in
which Xxxxxxx currently participates is among the benefits
encompassed by P. 4(b). The parties also agree that, to the
extent permitted by the relevant Plans, Xxxxxxx will receive ESOP
contributions and 401(k) matching contributions during the
Severance Period.
d. In all other respects, the Severance Agreement will remain in
full force and effect.
5. As further consideration for Xxxxxxx agreeing to continue in the
active employ of the Bank and FCG and its affiliated entities until
December 31, 2001, or such earlier date as the Board may place him upon
leave of absence, and agreeing to resign from the Bank's Board of
Directors and of the Board of Directors of FCG, upon request as set
forth in P. 2, above, and in consideration of Xxxxxxx'x performance of
all such agreements, Bank agrees to provide the following additional
benefits:
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a. Bank agrees to calculate the monthly benefit to which Xxxxxxx is
entitled under the Executive Benefit Agreement dated October 9,
1985 without taking the percentage deduction provided in Section
I, P. C.3.
b. Bank will transfer to Xxxxxxx all of its right, title and
interest in Xxxxxxx'x long term care policy, which Xxxxxxx
thereafter will be permitted to continue to maintain at his
expense.
c. All of Xxxxxxx'x stock options which have not vested as of the
close of business on December 31, 2001, will be deemed to vest on
that date. Thereafter, Xxxxxxx'x rights to exercise such options
shall be governed by the Plans pursuant to which the options were
granted.
6. A press release, in the form attached hereto as Exhibit B, will be
issued at such time as the Board determines to be appropriate.
7. Xxxxxxx and Bank are parties to a Deferred Compensation Agreement
dated December 31, 1993. Pursuant to that agreement, Xxxxxxx has
deferred 100% of his director's compensation into the Defined Benefit
"Directors' Deferred Compensation Plan." In accordance with P. 3(a) of
that agreement, distribution of the amounts deferred shall begin at the
beginning of the month following termination of Xxxxxxx'x service as a
director of the Bank. Xxxxxxx hereby elects to defer zero percent (0%)
of his director's compensation effective January 1, 2002, and the Bank
agrees that receipt of this Agreement constitutes filing by Xxxxxxx of
such election.
8. Each party will bear his/its own attorneys' fees and costs in
connection with the negotiation, execution and implementation of this
Agreement.
9. Xxxxxxx agrees that the monetary terms of this Agreement are
confidential. He will not disclose or publicize the amounts paid or
agreed to be paid pursuant to this Agreement to any person or entity,
except as required by law or to his spouse, attorney or accountant, or
to a government agency for the purposes of the payment or collection of
taxes, all of whom he shall request and, to the extent he legally can
do so, shall obligate them to maintain the confidentiality of this
Agreement.
10. Each of the parties agrees that he/it will make no comments, either
orally or in writing, or take other actions which tend to publicly
disparage the personal or professional reputation of the other.
11. Xxxxxxx hereby releases and forever discharges Bank, FCG, its
predecessors, successors, assigns, and all of its affiliated entities,
directors, officers, employees, shareholders, agents, accounting firm,
law firms and each of the members thereof (in both their individual and
official capacities) (all such entities and persons hereafter being
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referred to collectively in this Agreement as "Releasees"), and each of
them, from any and all claims, debts, agreements (excluding only this
Agreement and the agreements specifically referred to herein as the
same may be modified by this Agreement), complaints or causes of action
(hereinafter, collectively, "Claims"), whether known or unknown,
whether suspected or unsuspected, that he ever had, now has, or may
have against any or all of the Releasees, for, upon, or by reason of
any cause, matter, thing or event whatsoever occurring at any time up
to and including the date and time he signs this Agreement. This means
that Xxxxxxx is waiving and giving up any right he may have to xxx Bank
and any other Releasee on or for any Claims within the scope of this
paragraph. The Claims within the scope of this paragraph and covered by
this release and waiver include, but are not limited to, (i) any Claim
at common law, such as any Claim for breach of an express or implied
contract, estoppel, defamation, or any other tort; (ii) any Claim based
on or arising under any employment statutes or ordinances, such as the
federal Age Discrimination in Employment Act, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act, the
Pennsylvania Human Relations Act; (iii) any Claim based on or arising
out of Xxxxxxx'x employment and association with Bank and/or the
termination thereof; and (iv) any Claims for compensatory, liquidated
or punitive damages, damages for emotional distress, damages to
reputation, back pay, front pay, attorneys' fees, expenses, and
benefits. Xxxxxxx understands that, by signing this Agreement, he is
waiving all Claims he ever had or now has against Bank and against all
other Releasees that arose or may have arisen before he signs this
Agreement, and that such waiver also waives any right to a remedy or
recovery in an action that may be brought on his behalf by any
government agency or other person based on any Claims released herein.
Xxxxxxx further promises not to commence a lawsuit against Bank or
against any other Releasee based on or asserting any Claims described
in this paragraph.
12. Bank and FCG hereby release and forever discharges Xxxxxxx, his
heirs, administrators, successors and assigns (collectively referred to
in this subparagraph as "Xxxxxxx"), and each of them, from any and all
claims, debts, agreements, complaints or causes of action (hereinafter,
collectively, "Claims"), whether known or unknown, whether suspected or
unsuspected, that they ever had, now have, or may have against Xxxxxxx,
for, upon, or by reason of any cause, matter, thing or event whatsoever
occurring at any time up to and including the date and time it signs
this Agreement. Bank and FCG understand that, by signing this
Agreement, they are waiving all Claims they ever had or now have
against Xxxxxxx that arose or may have arisen before they sign this
Agreement. Bank and FCG further promise not to commence a lawsuit
against Xxxxxxx based on or asserting any Claims described in this
paragraph.
13. Notwithstanding anything in this Agreement to the contrary, Bank
and FCG shall remain obligated to defend and/or indemnify Xxxxxxx and
hold him harmless from any claims made against him arising out of his
activities as a director, officer or employee of Bank or FCG, to the
same extent as Bank and FCG are or may be obligated to defend and/or
indemnify and hold harmless any other director, officer or employee.
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14. The following provisions of the Severance Agreement are
incorporated herein by reference and made fully applicable to this
Xxxxxxxxx:X.X. 0, 00, 00, 00, 00(x), (x), (x) and (g).
15. All provisions of this Agreement are severable, and if any of them
is determined to be invalid or unenforceable for any reason, the
remaining provisions and portions of this Agreement shall be unaffected
thereby and shall remain in full force to the fullest extent permitted
by law.
16. Xxxxxxx acknowledges that he has been advised of his right to
consult with an attorney before signing this Agreement and represents
that he in fact has done so. Xxxxxxx further acknowledges that he has
been given a period of at least twenty-one (21) days to consider the
Agreement before signing it. Xxxxxxx represents that he has read the
Agreement and understands it, that he is signing this Agreement
voluntarily and of his own free will, without any duress or coercion,
and that he has had a reasonable time to consider the agreement before
signing it.
17. This Agreement will not become effective or enforceable until seven
(7) days after Xxxxxxx signs it. Xxxxxxx may revoke this Agreement at
any time within that seven (7) day period, by sending a written notice
to Bank. If a written revocation is received within that seven (7) day
period, this Agreement shall be null and void for all purposes.
18. In view of the fact that each of the parties hereto has 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. Any claim or controversy arising out of or relating to this
Agreement or any breach thereof shall be settled by arbitration. Any
such arbitration shall take place in Philadelphia, Pennsylvania in
accordance with the rules of the American Arbitration Association.
Judgment upon the written award rendered by the arbitrator may be
entered in the Court of Common Pleas having jurisdiction thereof. The
written decision of an arbitrator shall be valid and binding, and final
and non-appealable.
20. All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and
assigns of the parties hereto, except that the duties and
responsibilities of Xxxxxxx as an employee, officer and director are of
a personal nature and shall not be assignable or delegatable in whole
or in part by Xxxxxxx.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
by signing it below.
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THIS AGREEMENT CONTAINS A RELEASE OF CLAIMS. READ
CAREFULLY BEFORE SIGNING.
NAZARETH NATIONAL BANK & TRUST CO.
By:_________________________________
Title:______________________________
FIRST COLONIAL GROUP
By:_________________________________
Title:______________________________
S. XXXX XXXXXXX
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EXHIBIT A
RESIGNATION
S. Xxxx Xxxxxxx hereby resigns as a member of the Board of Directors of
First Colonial Group, Inc., Nazareth National Bank and Trust Company and all of
their affiliated entities (including, but not limited to, any employee benefit
trusts sponsored by or related to First Colonial Group, Inc. or Nazareth
National Bank and Trust Company), effective __________________, 2001.
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S. Xxxx Xxxxxxx
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EXHIBIT B
PRESS RELEASE
XXXX XXXXXXX TO LEAVE NAZARETH NATIONAL BANK
Nazareth, Pa. 19, July 2001. In a joint announcement made today by S. Xxxx
Xxxxxxx, President and Chief Executive Officer, First Colonial Group, Inc. and
Nazareth National Bank, Xx. Xxxxxxx announced his plans to retire from his
position by the end of this year.
Xx. Xxxxxxx joined the Bank as a Trust Officer in 1977. He was promoted to
Senior Trust Officer in 1979, to Vice-President in 1981 and to Senior
Vice-President later that same year. He was elected to the Board of Directors in
1982. He was named President and Chief Operating Officer in 1984, adding the
title of Chief Executive Officer in 1987.
During this period, Xx. Xxxxxxx has guided First Colonial Group, Inc. and
Nazareth National Bank to considerable growth in key areas:
o Assets have grown from $73 million to almost $450 million
o Shareholders' equity has grown from $6.5 million to over $35
million
o The Bank has grown from four branches to 17 branches.
In addition, the Bank services a $143,000,000 secondary-market mortgage
portfolio.
Xx. Xxxxxxx stated, "I'm pleased with what we've been able to achieve, which is
the result of superb teamwork from a first-class group of banking professionals.
We have actively sought, identified and captured a niche unique in the banking
industry where we do business, becoming the most regional of local banks and the
most local of regional banks. We've expressed this in our marketing as "Not just
in Nazareth, but not at all national". "I've been at the Bank for almost 25
years, and have been its president for 17 of those years. In spite of what we've
been able to achieve, it's time for some new blood at the helm. And it's time
for me to pursue a variety of other interests I have".
"I will leave the Bank at the end of the year knowing that our strategic
direction and the niche we occupy continue to provide a strong foundation for
future growth and profitability. During this time period, I will do my best to
achieve a smooth transition."
Xx. Xxxxxxx is well know in the area for his considerable contributions to many
organizations in the communities served by the Bank, including as Board member
of the Lehigh Valley Economic Development Corporation, Board member of the
Lehigh Valley Partnership, Chairman of the Moravian Hall Square Retirement
Community, Trustee of the Nazareth YMCA, Board member of the Northampton
Community College Foundation, Board member of the Northampton County Industrial
Development Commission, Past Chairman of the Distinguished Citizen Dinner for
Minsi Trials Council, Boy Scouts of America, Chairman of the Calvary Baptist
Church, and other activities.
The Board of Directors of Nazareth National Bank expressed their gratitude to
Xx. Xxxxxxx for his many years of service and contributions to the Bank and
wished him well in his new ventures.
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