SEPARATION AGREEMENT AND GENERAL RELEASE
SEPARATION AGREEMENT AND
GENERAL RELEASE
This
Separation Agreement and General Release (hereinafter "Agreement") is entered
into by and among Penn Treaty Network America Insurance Company (hereinafter
"PTNA"), Penn Treaty American Corporation (hereinafter "PTAC") and Xxxxxxx Xxxx,
Jr. (hereinafter "Xxxx").
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1. Termination
Date. Xxxx'x
employment with PTNA was terminated effective March 27, 2009 (the "termination
date").
x. Xxxxxxxxx
Pay Benefit. In consideration for
Xxxx'x execution of this Agreement and his fulfillment of the promises made in
this Agreement, PTNA and PTAC agree to provide Xxxx with compensation for twelve
(12) months beyond his March 27, 2009 termination date from PTNA, at his final
regular rate of pay. This payment will be made as follows: within thirty (30)
days of the execution of this Agreement by Xxxx: (1) PTNA will pay Xxxx the
xxxxx sum of Three Hundred Thirty-Five Thousand Nine Hundred Fourteen dollars
and Thirty-Five cents ($335,914.35), less standard payroll taxes and authorized
deductions, which represents eleven (11) months' gross pay; and (2) PTAC will
pay the gross sum of Thirty Thousand, Five Hundred Thirty-Seven dollars and
Sixty-Five cents ($30,537.65), less standard payroll taxes and authorized
deductions, which represents one (1) month's gross pay. These payments are
subject to Xxxx'x obligation to comply with his obligations as set forth in this
Agreement. Should Xxxx materially violate his obligations, the General Release
in section 5 below shall remain in full force and effect. Should either PTNA or
PTAC materially violate their obligations under this Agreement, the General
Release in section 5 below shall be void.
b. Outplacement
Assistance. In further consideration
for Xxxx'x execution of this Agreement and his fulfillment of the promises made
in this Agreement, PTNA will make outplacement services available to Xxxx
through Right Management, at
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PTNA's
cost. Xxxx shall be entitled to make use of these outplacement services for a
period of six (6) months following the execution of this
Agreement.
3. Unemployment
Compensation. In further consideration
for Xxxx'x execution of this Agreement and his fulfillment of the promises made
in this Agreement, neither PTNA nor PTAC will contest Xxxx'x eligibility for
unemployment compensation benefits.
4. References. If PTNA receives a
request for a reference concerning Xxxx from prospective, future employers, PTNA
will provide only the following information: verification of Xxxx'x employment
dates, title, and duties, and that it is PTNA's policy not to release any
further information regarding former employees. This obligation is conditioned
on all such requests for references being made to the PTNA Vice President of
Human Resources.
a. In
consideration of the benefits described in Sections 2 and 3 above, Xxxx, on his
own behalf and that of his heirs, executors, administrators, agents,
representatives, and assigns, hereby forever releases PTNA, PTAC, and their
parents, subsidiaries, or related companies (collectively referred to as the
"Penn Treaty Companies"), including all of their shareholders, officers,
directors, owners, employees, staff members, agents, representatives,
predecessors, insurers, successors, and assigns (collectively referred to as
"the Released Parties"), from any and all claims, demands, suits, or causes of
action of any nature whatsoever, whether known or unknown,
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including,
without limitation, those relating in any way to Xxxx'x Employment Agreement
with PTNA, his employment with PTNA and the termination thereof, and the Change
of Control Agreement with PTAC, claims under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act ("ADEA"), the Older Workers
Benefit Protection Act, the Americans with Disabilities Act, the Family and
Medical Leave Act, the Pennsylvania Human Relations Act, the Pennsylvania Wage
Payment and Collection Law, and all other federal, state or local laws, all tort
claims, all claims for breach of contract, claims for wrongful discharge, claims
for emotional distress, defamation, fraud, misrepresentation or other personal
injury, claims for unpaid compensation, claims relating to benefits, claims for
attorneys' fees and costs, and claims under any federal, state, or local law
through the date this Agreement is signed by Xxxx.
x. Xxxx
hereby waives and relinquishes each and every right or benefit that Xxxx might
now have under his Employment Agreement with PTNA, the Change of Control
Agreement with PTAC, and any other prior or existing contract or agreement with
any of the Penn Treaty Companies, as well as under the common law or any
statutory or regulatory provision to the fullest extent that Xxxx may lawfully
waive such right or benefit. In furtherance of such waiver and relinquishment,
Xxxx expressly warrants and represents that Xxxx intends that the release given
herein shall be and remain in effect as a full and complete release,
notwithstanding the discovery or existence of any additional claims or facts
predating the date of the execution of this Agreement.
c. Notwithstanding
any other provision of this Agreement, Xxxx shall retain the right to seek
indemnification pursuant to, and in accordance with, the
provisions
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of PTNA's
and PTAC's By-Laws and Article 10 of his Employment Agreement with PTNA, for any
claims asserted against Xxxx for acts or omissions during the time of Xxxx'x
employment or service with PTNA or PTAC.
d. In
addition, for so long as PTAC continues to purchase Directors' and Officers
Liability Insurance for the directors and officers of itself and its
subsidiaries, Xxxx will continue to receive the same coverage any such policy or
policies provide to the other directors and officers of PTAC and its covered
subsidiaries.
x. Xxxx
agrees to resign, effective upon the date of his execution of this Agreement,
from the following positions: (1) Chairman of the Board of PTNA; (2) President,
CEO and Chairman of the Board of American Network Insurance Company; (3)
President, CEO and Chairman of the Board of American Network Insurance Company
of New York; and (4) Chairman of the Board of Network Insurance Senior Health
Division, Inc.
x. Xxxx
further forever waives and relinquishes any right that Xxxx may have to
reinstatement or reemployment with PTNA, agrees not to seek employment with PTNA
now or in the future, and recognizes that PTNA has no obligation to reinstate or
reemploy him.
g. This
release and waiver shall not be applicable to any claims which cannot be waived
by law, including, but not limited to claims relating to the validity of
enforcement of this Agreement, claims for unemployment compensation, or Xxxx'x
right to file a charge of discrimination with or to testify, assist or
participate in a discrimination
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investigation
conducted by the Equal Employment Opportunity Commission ("EEOC") or similar
governmental agencies, commissions, or bodies. In this regard, however, Xxxx is
waiving his right to any monetary recovery should he or any such entity (such as
the EEOC) pursue any claim on Xxxx'x behalf.
6. No
Existing Claims. Xxxx hereby confirms
that no claim, charge, or complaint filed by Xxxx against the Released Parties
presently exists before any federal, state, or local court or administrative
agency.
7. Return of
PTNA Property. Within three (3) days of
the effective date of this Agreement, Xxxx shall return to PTNA all property of
any Penn Treaty Company, including without limitation, all lists, reports,
files, memoranda, records, computer hardware, software, credit cards, door and
file keys, computer access codes or disks, instructional manuals, financial
records, cell phones and any other physical or personal property which Xxxx
received or prepared or helped prepare in connection with Xxxx'x employment with
PTNA. Xxxx further agrees that Xxxx will not retain any copies, duplicates,
reproductions or excerpts thereof.
8. Confidentiality. Xxxx shall hold in
strict confidence and not divulge to any person or firm without the prior
written consent of PTNA any non-public information concerning the business
operations, financial condition, correspondence, documents, and records relating
to the Penn Treaty Companies, except to the extent Xxxx is subject to legal
process or otherwise legally required to do so. Xxxx will only disclose such
information after providing PTNA with 10 days prior notice and giving PTNA
the
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opportunity
to object to such disclosure unless any governmental or law enforcement agency
requests that he not provide such notice or the giving of such notice is
prohibited by law. Xxxx will not issue any press releases or other written
communications for public dissemination or participate in any interviews with
members of the journalistic or broadcast media regarding Xxxx'x past employment
and/or relationship with the Penn Treaty Companies. Xxxx agrees to refer to the
period, terms, conditions and all other aspects of Xxxx'x employment in a
friendly manner. Except to the extent that PTNA or PTAC are subject to legal
process or otherwise legally required to do so, or it is necessary to do so in
good faith in managing PTNA and PTAC's businesses, no officer or board member of
PTNA or PTAC shall comment, publish or communicate disparaging or derogatory
statements or opinions, directly or indirectly, to any third party, including to
the public or members of the journalistic or broadcast media or to any
prospective future employer of Xxxx regarding Xxxx of any nature, including
regarding Xxxx'x job performance at or service for PTNA or
PTAC.
9. Cooperation. Xxxx shall cooperate
with any of the Penn Treaty Companies with respect to prior or pending business
matters with which Xxxx is or was involved. This cooperation includes but is not
limited to making available to any of the Penn Treaty Companies such
correspondence, documents and records as have applicability to the past, present
and future business operations of such companies and making full and adequate
disclosure to any of the Penn Treaty Companies of all matters involving any of
them of which Xxxx has knowledge. In addition, Xxxx shall cooperate with and be
available upon request to any of the Penn Treaty Companies in
connection
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with any
investigation, litigation, arbitration or other proceeding initiated or brought
by or against any of the Penn Treaty Companies, whether or not Xxxx is a party
in such matter or in connection with any threatened or potential investigation,
litigation, arbitration or other proceeding by or against any of the Penn Treaty
Companies, including being available to answer questions by any of the Penn
Treaty Companies and appearing as necessary to give testimony, either at trial,
hearing, or in a deposition. Furthermore, Xxxx shall cooperate in executing
documents required to effectuate the purpose and intent of this paragraph and
this Agreement. The Penn Treaty Companies shall attempt to schedule such
cooperation at mutually convenient times and places taking into account any
employment constraints that Xxxx may have. The Penn Treaty Companies shall
reimburse Xxxx for reasonable expenses incurred by Xxxx in such cooperation,
such as telephone, travel, lodging, and meal expenses, consistent with generally
applicable policies for reimbursement of employee expenses. In addition, the
Penn Treaty Companies shall pay Xxxx'x reasonable legal fees incurred in
connection with such cooperation and the parties further agree that, in the
event of a conflict requiring Xxxx to secure separate counsel while providing
such cooperation, Xxxx may select his own counsel. Notwithstanding the above,
Xxxx'x selection of counsel and an appropriate fee structure for such legal
services are subject to approval by the Penn Treaty Companies (with such
approval not to be unreasonably withheld). Such services shall be reimbursed by
the Penn Treaty Companies at a rate no greater than $350 per hour. Nothing in
this Agreement shall require Xxxx to fail or refuse to cooperate with any legal
process or with any request for information of any governmental or law
enforcement agency. Xxxx will only respond to such legal process or governmental
or law enforcement request for
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information
after providing the Penn Treaty Companies with 10 days prior notice and giving
the Penn Treaty Companies the opportunity to object to such disclosure, unless
any governmental or law enforcement agency requests that he not provide such
notice or the giving of such notice is prohibited by law.
10. Non-interference. For one (1) year from
Xxxx'x execution of this Agreement, Xxxx shall not, without the prior written
consent of PTNA, (1) interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise, between any of the Penn Treaty Companies
and any insurance broker, insurance agent, program manager, managing general
underwriter, managing general agent, insured, reinsurer, supplier, vendor or
employee of any of the Penn Treaty Companies or any other person or entity with
which any of the Penn Treaty Companies maintains a business relationship, or (2)
hire or attempt to hire directly or indirectly any employee of any of the Penn
Treaty Companies.
11. Confidentiality
of Agreement. Xxxx, PTNA and PTAC
shall keep secret and strictly confidential the existence of this Agreement and
further shall not disclose, make known, discuss, or relay any information
concerning this Agreement, or any of the discussions leading up to this
Agreement, to anyone other than officers and directors of PTNA and PTAC who have
a legitimate business reason to know, tax advisors and accountants, members of
Xxxx'x immediate family, and/or his tax advisor or attorney, provided that those
to whom any party makes such disclosure agree to keep said information
confidential and not disclose it to others. The foregoing shall not prohibit
disclosure (i) as may be ordered by any regulatory agency or court or as
required by other
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lawful
process, (ii) as may be necessary for the prosecution of claims relating to the
performance or enforcement of this Agreement; or (iii) as may be requested by
any governmental or law enforcement agency.
12. Non-Disparagement. Except to the extent
Xxxx is subject to legal process or otherwise legally required to do so or
required by this Agreement to do so, Xxxx shall not make, or cause to be made,
any statement or communicate any information (whether oral or written) that
disparages or reflects negatively on any of the Penn Treaty Companies or any of
their directors, officers or shareholders.
13. Iniunctive
and Other Relief. Xxxx, PTNA and PTAC
shall be entitled to have the provisions of Sections 7, 8, 9,10,11 and 12
specifically enforced through injunctive relief, without having to prove the
adequacy of the available remedies at law, and without being required to post
bond or security, it being acknowledged and agreed that such breach will cause
irreparable injury to Xxxx, PTNA and/or PTAC and that money damages will not
provide an adequate remedy to them. Moreover, Xxxx, PTNA and PTAC understand and
agree that if they breach any provision of this Agreement, in addition to any
other legal or equitable remedy the non-breaching party shall be entitled to
recover all their reasonable attorneys' fees and costs incurred by them arising
out of any such breach.
14. No
Admission of Wrongdoing. Xxxx hereby acknowledges
and agrees that neither this Agreement nor the furnishing of the consideration
for the general release set forth in this Agreement shall be deemed or construed
at any time for any purpose as
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an
admission by any of the Penn Treaty Companies or the Released Parties of any
liability or unlawful conduct of any kind.
15. Consultation
of Counsel. PTNA recommends to Xxxx
that Xxxx consult with legal counsel prior to executing this Agreement and Xxxx
acknowledges that he has done so.
16. Consideration
Period. Xxxx
acknowledges that he has been given at least forty-five (45) days from his
receipt of this Agreement to consider whether or not to sign this Agreement.
Xxxx agrees that if he signs this Agreement before the expiration of this
forty-five (45) day period, he has done so voluntarily.
17. Revocation
Period. Xxxx
is aware that he may change his mind and revoke this Agreement at any time
during the seven (7) day period immediately after the date upon which this
Agreement is signed, in which case none of the provisions of this Agreement will
have effect. In the event that Xxxx elects to revoke this Agreement, Xxxx must
do so in writing. Such revocation must be delivered by hand or sent by certified
mail, post-marked before the end of the seven-day revocation period, to Xxxx
Xxxxxxxx, Vice President, Human Resources, Penn Treaty Network America Ins. Co.,
0000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx. In the event that Xxxx exercises
his right of revocation, Xxxx agrees to immediately repay to PTNA and/or PTAC
any amounts previously paid to Xxxx or on Xxxx'x behalf pursuant to this
Agreement.
18. Governing
Law. This
Agreement shall be construed exclusively in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to the
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principles
of conflicts of laws therein. In the event that a dispute arises under this
Agreement and legal action is instituted, the parties agree that such action may
be maintained in any court of competent jurisdiction.
19. Declaration
of Invalidity. The parties hereby
acknowledge and agree that if any provision or term of this Agreement be
declared void or to no effect by a competent tribunal, it is the intent of the
parties that said declaration shall not operate to void any other provision or
term of this Agreement and that those provisions and terms not declared void or
to no effect shall continue in full force and effect and be binding on the
parties.
20. Entire
Agreement. The parties hereby
acknowledge and agree that this Agreement constitutes and contains the exclusive
and entire agreement and understanding between them concerning Xxxx'x Employment
Agreement with PTNA, his employment with PTNA, the termination thereof, the
circumstances attendant thereto, the Change of Control Agreement with PTAC, and
the other subject matters addressed herein between the parties, and supersedes
and replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters
hereof.
21. Modifications. This Agreement may not
be waived, changed, modified, abandoned, or terminated, in whole or in part,
except by an instrument signed by authorized representatives of PTNA, PTAC, and
Xxxx.
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22. Receipt
and Effective Date. Xxxx hereby acknowledges
that this Agreement was presented to him on September 30, 2009. Additionally,
Xxxx further acknowledges that PTNA and PTAC have provided to Xxxx, in
conjunction with and attached to this Agreement as Exhibit A, a list of the job
titles and ages of all individuals selected by PTNA at this time for the
separation program and a list of the job titles and ages of all individuals in
the same job classifications not selected by PTNA at this time for the
separation program. This Agreement shall not become effective or enforceable
until the expiration of the seven-day revocation period set forth in Section 17
above.
Xxxx
has had an opportunity to carefully review and consider this Agreement. After
such careful consideration, Xxxx knowingly and voluntarily enters into this
Agreement with full understanding of its meaning.
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/s/ Xxxxxxx Xxxx, Jr.
Date:
October 9, 2009
XXXXXXX
XXXX, JR.
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PENN
TREATY NETWORK AMERICA INSURANCE COMPANY
By: /s/ Xxxx
Xxxxxxxx
Title: Vice
President, Human Resources Date:
October
9, 2009
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PENN
TREATY AMERICAN CORPORATION
By: /s/ Xxxxxx
Xxxxxxxx
Title:
Chairman and CEO
Date:
October 9, 2009
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