AGREEMENT
AND
RELEASE
E. XXX XXXXX ("Employee"), NORTHEAST PENNSYLVANIA FINANCIAL CORP. (the
"Company") and FIRST FEDERAL BANK (the "Bank") agree as follows:
1. Payments and Benefits
In exchange for the execution by Employee of this Agreement and Release
and of an Employment Termination Certificate in the form attached to this
Agreement and Release as Appendix A, the Company and/or the Bank will provide to
Employee the payments and benefits listed at the end of this Paragraph 1 (the
"Listed Payments and Benefits") to which she is not otherwise entitled due to
her voluntary resignation. Employee may revoke this Agreement and Release within
seven (7) days after she signs it. The cash payment portion of her Listed
Payments and Benefits, less applicable taxes, will be paid to Employee in a
single lump sum on September 20, 2003. The Listed Payments and Benefits will not
be used for purposes of calculating the benefits to which she is entitled under
any employee benefit program sponsored by the Company or any of its affiliates,
including the Bank, except as provided below. The Listed Payments and Benefits
are comprised of the following:
An amount equal to $859,595, which will be paid to Employee in
cash in a single lump sum, less applicable taxes.
Continuation of health (including dental and vision) and life
insurance coverage substantially identical to the coverage currently
provided to Employee by the Company or its affiliates; provided that
she must continue to pay any premiums, co-payments, or deductibles
currently in effect. Health and life insurance coverage will continue
for a period of three years from the date of this Agreement. If health
coverage should become unavailable to Employee because she relocates to
an area not covered by the Company's health insurance plan, the Company
will pay her an amount equal to the premiums it would pay for
comparable coverage for the remaining period of time specified herein.
Accelerated vesting, effective as of 12:01 a.m. EDT on
September 13, 2003, of the 32,137 unvested stock options granted to
Employee under the Northeast Pennsylvania Financial Corp. 1998
Stock-Based Incentive Plan (the "Incentive Plan") and the 2,250
unvested stock options granted to Employee under the Northeast
Pennsylvania Financial Corp. 2000 Stock Option Plan (the "Stock Option
Plan") which were otherwise scheduled to become exercisable on October
27,2003, and January 28, 2004, respectively. All stock options will
remain exercisable, in accordance with the Incentive
Plan and the Stock Option Plan; provided, however, that all stock
options will remain exercisable for three years from September 13,
2003.
Accelerated vesting, effective as of 12:01 a.m. EDT on
September 13, 2003, of the 400 shares of restricted stock granted to
Employee under the Incentive Plan which were otherwise scheduled to
vest on November 30,2003.
Accelerated vesting, effective as of 12:01 a.m. EDT on
September 13,2003, of the 400 shares of restricted stock granted to
Employee under the Incentive Plan which were otherwise scheduled to
vest on November 30, 2004.
2. Employment Termination
Employee agrees that her employment with the Company and the Bank has
ended or will end as of 12:01 a.m. EDT on September 13,2003, and that she will
not seek employment with the Company or any of its affiliates, including the
Bank, in the future. Employee further agrees that her resignation from the
boards of directors of the Company and the Bank will be effective as of 12:01
a.m. EDT on September 13, 2003, and that she will take any action required to
make such resignations effective as of that date. Employee understands that as a
result of her termination of employment, the employment agreement she entered
into with the Company, made effective as of January 1, 2002, and the employment
agreement she entered into with the Bank, made effective as of January 1, 2002,
are terminated and that any notice requirements under either agreement regarding
termination of employment are satisfied by the delivery and execution of this
Agreement and Release. Employee acknowledges that she has voluntarily resigned
from employment and board service in exchange for the Listed Payments and
Benefits.
3. Claims Released
In exchange for the Listed Payments and Benefits, Employee irrevocably
and unconditionally releases the Company and the Bank and their current and
former affiliates, and their employees, directors, officers and/or agents and
their respective successors and assigns (individually, each a "Released Party"
and collectively, the "Released Parties"), from all known and unknown claims
that she presently may have arising out of her employment and/or board service
with or separation from, the Company and/or the Bank (except for any claims
arising from an alleged breach of this Agreement and Release and an
indemnification claim as described in paragraph 15) ("Claims"). The Claims
Employee is releasing include, without limitation, the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act and Executive Order
11141, which prohibit age discrimination in employment; Title VII of the Civil
Rights Acts of 1964, Section 1981 of the Civil Rights Act of 1966 and Executive
Order 11246, which prohibit discrimination based on race, color, national
origin, religion, or sex; the Equal Pay Act, which prohibits paying men and
women unequal pay for equal work; the Americans with Disabilities Act and
Sections 503 and 504 of the Rehabilitation Act of 1973, which prohibit
discrimination against the disabled; the Family and Medical Leave Act of 1993;
the Employee Retirement Income Security
Act of 1974; and any other federal, state, or local common law, statute,
regulation, or law of any other type and any claims for attorneys' fees and
costs, except as set forth above.
4. Acknowledgment of Understanding
Employee acknowledges that she is releasing Claims she knows about as
well as Claims she may not know about. Employee understands the significance of
releasing Claims she may have.
5. Pursuit of Released Claims
Employee agrees to withdraw with prejudice all complaints or charges,
if any, she has filed against any Released Party with any agency or court. She
agrees that she will never file any lawsuit, complaint, or charge against them
based on the Claims released in this Agreement and Release.
6. Arbitration of Disputes
The parties hereto agree to use final and binding arbitration to
resolve any dispute (an "Arbitrable Dispute") they may have regarding this
Agreement and Release. This arbitration agreement applies, for example, to
disputes about the validity, interpretation, or effect of this Agreement and
Release or alleged violations of it. Any controversy or claim arising out of or
relating to this Agreement and Release, or the breach thereof, will be settled
by arbitration administered by the American Arbitration Association under its
National Rules for the Resolution of Employment Disputes, and judgment on the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Arbitration in this manner will be the exclusive remedy
for any Arbitrable Dispute. Should any party hereto attempt to resolve an
Arbitrable Dispute by any method other than arbitration pursuant to this
Paragraph 6, the responding party will be entitled to recover from the
initiating party all damages, expenses, and attorneys' fees incurred as a result
of that breach.
7. Nonadmission of Liability
Employee agrees that this Agreement and Release is not an admission of
guilt or wrongdoing by the Released Parties and she acknowledges that the
Released Parties do not believe or admit that they have done anything wrong. She
further acknowledges that she has not suffered any discrimination or wrongful
treatment by any Released Party.
8. Non-competition, Non-disclosure and Confidentiality
Employee acknowledges that she possesses secret, confidential, or
proprietary information or trade secrets concerning the operations, future plans
or business methods of the Company and its affiliates. She agrees that the
Company and its affiliates would suffer irreparable harm if she used or
disclosed this information. To prevent this harm, Employee has made the
following
promises and further acknowledges that the Company would be irreparably harmed
if she broke any of them:
(i) Promise Not to Disclose. Employee promises that she will not
directly or indirectly use or disclose any confidential, proprietary information
which she has acquired during her tenure at the Company or any of its
affiliates. She understands the disclosure of such information would diminish
the Company's goodwill and devalue its trade secrets causing irreparable harm to
the Company and its affiliates.
(ii) Promise Not to Solicit. Employee further agrees that, for a period
of one year from the date she signs this Agreement and Release: (I) as to any
customer of the Company or an affiliate with whom she has had dealings or about
whom she has acquired proprietary information during her employment, she will
not solicit or attempt to solicit the customer to do business with any other
person or entity who or which provides financial services; and (2) she will not
solicit for employment any person who is, or within the preceding six months
was, an officer, manager or employee of the Company or its affiliates, unless
the individual no longer served in such capacity before her solicitation.
(iii) Promise Not to Engage in Certain Employment. Employee agrees
that, for a period of one year from the date she signs this Agreement and
Release, she will not compete with the Company or its affiliates in any city,
town or county in which the Company or its affiliates has an office or has filed
an application for regulatory approval to establish an office, determined as of
the date of this Agreement and Release. Employee further agrees that, during
this one-year period and within said cities, towns and counties, she will not
work for or advise, consult or otherwise serve with, direcdyor indirectly, any
entity whose business competes with the depository, lending or other business
activities of the Company or its affiliates. She understands that doing so would
cause irreparable injury to the Company.
(iv) Promise Not to Discuss Proposed Actions in Advance. Before
Employee discloses or uses information or commences employment, solicitations,
or any other activity that could possibly violate the preceding promises, she
agrees that she will discuss her proposed actions with the Chief Executive
Officer of the Company, who will advise her in writing whether her proposed
actions would violate these promises.
(v) Confidentiality of Agreement and Release. Employee agrees that she
will not communicate or disclose the terms of this Agreement and Release to or
with any person( s), with the exception of her immediate family members, her
lawyers, her accountants and her financial advisors. With respect to any
communications regarding this Agreement and Release with her immediate family,
her lawyers, her accountants and her financial advisors, she will inform the
recipient of the information that she is providing the information in a
confidential manner and subject to the requirement of confidentiality.
Notwithstanding the foregoing, nothing herein will preclude the disclosure of
the terms of this Agreement and Release by Employee if, in the opinion of her
legal counsel, the failure to do so could subject her to penalty or sanction.
9. Consequences of Violation of Promises
Employee agrees to pay reasonable attorneys' fees, costs, and any
damages Released Parties may incur as a result of her breaching a promise she
made in this Agreement and Release (such as by suing the Released Parties over a
released Claim) or if any representation she made in this Agreement and Release
is false.
10. Challenges to Validity
Should Employee attempt to challenge the enforceability of this
Agreement and Release, she agrees first to deliver a certified check to the
Company for all amounts she has received because she signed this Agreement and
Release, plus ten (10) percent per annum, and to invite the Company and the Bank
to cancel this Agreement and Release. If both the Company and the Bank accept
Employee's offer, this Agreement and Release will be canceled. If the Company
and/or the Bank rejects Employee's offer, the Company will notify her and
deposit the amount she repaid in an interest-bearing account pending
determination of the enforceability of this Agreement and Release. If the
Agreement and Release is determined to be enforceable, the Company will pay her
the amount in the account, less any amounts she owes the Company. If the
Agreement and Release is determined to be unenforceable, the Company or its
designee will retain the account. This paragraph 10 does not apply to actions
under Paragraph 6 regarding interpretations as to the scope, meaning or effect
of this Agreement and Release, nor to challenges to the enforceability of this
Agreement and Release arising under the Age Discrimination in Employment Act
(ADEA).
11. Consideration of Agreement and Release
Employee acknowledges that, before signing this Agreement and Release
and the Employment Termination Certificate, she was not provided with the
opportunity to consider this Agreement and Release for twenty-one (21) calendar
days before her termination date and that she has voluntarily waived such
twenty-one (21) day consideration period. Employee further acknowledges that: (
a) she carefully read this Agreement and Release; (b) she fully understood what
this Agreement and Release means; and (c) she is entering into this Agreement
and Release voluntarily. Employee further acknowledges that the Company strongly
encouraged her to discuss this Agreement and Release with her attorney (at her
own expense) before signing this Agreement and Release and that she did so, if
at all, to the extent she deemed appropriate.
12. Notification to Public of Employee's Termination
The Company will issue a statement to the public and the employees of
the Company and of the Bank, on or about the date of Employee's termination of
employment, as set forth in Appendix B attached hereto.
13. No Disparagement
(a) Employee agrees that she will not make, or cause to be made, any
statement or communicate any information (whether oral or written) that
disparages or reflects negatively on the Company or the Bank or any of the
Released Parties. Nothing herein precludes Employee from complying with a
subpoena or other lawful process.
(b) The Company and the Bank agree that they will not make, or cause to
be made, any statement or communicate any information (whether oral or written)
that disparages or reflects negatively on Employee. The Company and the Bank
also agree that they will not interfere with Employee's efforts to obtain
subsequent employment. It will not be a violation of this paragraph 13(b) if an
employee or independent contractor of the Company and the Bank disparages
Employee or interferes with her efforts to obtain subsequent employment and such
actions are outside the scope of his or her employment or without the authority
of the Company and the Bank. Nothing herein precludes the Company and the Bank
from complying with a subpoena or other lawful process.
14. Merger
Notwithstanding the payments and benefits set forth in Paragraph I of
this Agreement, if the Company should enter into a definitive agreement and plan
of merger with Patriot Bank Corp. within one hundred and eighty (180 days) from
the date of this Agreement, then Employee will receive the payments and benefits
she would have otherwise received under Section 5 of her employment agreement
with the Company, less payments or benefits already provided for under this
Agreement.
15. Indemnification
The Company will provide Employee (including her heirs, executors and
administrators) with coverage under the Company's directors' and officers'
liability insurance policy at its expense and will indemnify Executive (and her
heirs, executors and administrators) to the fullest extent permitted under
Delaware law against all expenses and liabilities reasonably incurred by her in
connection with or arising out of any action, suit or proceeding in which she
may be involved by reason of her having been a director or officer of the
Company, such expenses and liabilities to include, but not be limited to,
judgments, court costs and attorneys' fees and the cost of reasonable
settlements.
16. Miscellaneous
This Agreement and Release and the Employment Termination Certificate
set forth the entire agreement between Employee and the Company and the Bank
pertaining to the subject matter of this Agreement and Release. The Agreement
and Release may not be modified or canceled in any manner, except in a written
document signed by both Employee and an authorized Company and Bank official.
Employee acknowledges that the Company and the Bank have made no promises to her
other than those set forth in this Agreement and Release. If any provision of
this Release is found unenforceable, all other provisions will remain fully
enforceable. It is necessary that the Company and the Bank sign this Agreement
and Release for it to become binding upon both Employee and the Company and the
Bank. This Agreement and Release binds the successors and assigns of the Company
and the Bank and Employee's heirs, administrators, representatives, executors,
successors, and assigns, and will inure to the benefit of the Released Parties
and their heirs, administrators, representatives, executors, successors, and
assigns and to Employee and her heirs, administrators, representatives,
executors, successors and assigns. This Agreement and Release will be construed
as a whole according to its fair meaning. It will not be construed strictly for
or against Employee or the Released Parties. Unless the context indicates
otherwise, the term "or" will be deemed to include the term "and" and the
singular or the plural number will be deemed to include the other. This Release
will be governed by the common law and statutes of the State of Pennsylvania,
excluding any choice of laws statutes or common law.
TAKE THIS AGREEMENT AND RELEASE HOME, READ IT IN ITS ENTIRETY, AND CAREFULLY
CONSIDER ALL OF ITS PROVISIONS BEFORE SIGNING IT. THIS AGREEMENT AND RELEASE
INCLUDES A RELEASE OF KNOWN AND UNKNOWN CLAIMS. YOU SHOULD CONSULT YOUR ATTORNEY
BEFORE SIGNING THIS RELEASE.
September 12, 2003 /s/ E. Xxx Xxxxx
-------------------------------------- ----------------------------------
Date Signature of E. Xxx Xxxxx
/s/ Xxx Xxx Xxxxx /s/ E. Xxx Xxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of Print Name
E. Xxx Xxxxx
September 12, 2003 /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Date For Northeast Pennsylvania
Financial Corp.
/s/ Xxxxxx Primerau /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of the Print Name
Representative of
Northeast Pennsylvania Financial Corp.
September 12, 2003 /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Date For First Federal Bank
/s/ Xxxxxx Primerau /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of the Print Name
Representative of
First Federal Bank
Appendix A
(General Release of E. Xxx Xxxxx)
Employment Termination Certificate
THIS CERTIFICATE MUST BE SIGNED AFTER TERMINATION OF EMPLOYMENT AND MUST BE
RETURNED TO THE CHIEF EXECUTIVE OFFICER OF NORTHEAST PENNSYLVANIA FINANCIAL
CORP. BY SEPTEMBER 20, 2003.
I entered into an Agreement and Release with Northeast Pennsylvania
Financial Corp. (the "Company") and First Federal Bank (the "Bank") dated the
l2th day of September, 2003. I hereby acknowledge that:
(1) A blank copy of this Employment Termination Certificate was
attached as an Appendix to the Agreement and Release when it was given to me for
review. I have had more time to consider signing this Certificate than the time
I was given to consider signing the Agreement and Release. I may revoke this
Certificate within seven (7) days after I sign it. I was advised to discuss the
Agreement and Release, including this Certificate, with an attorney before
executing either document.
(2) The benefits payable or provided under the Agreement and Release
(my Remaining Payments) become payable or will be provided only if I sign this
Certificate and do not revoke it within seven (7) days after I sign it.
(3) My employment with the Company and the Bank actually terminated
before I signed this Certificate and, in exchange for my Remaining Payments, I
hereby agree that this Certificate will be a part of my Agreement and Release
and that my Agreement and Release is to be construed and applied as if I signed
it on the day I signed this Certificate. This extends my release of Claims under
the Agreement and Release to any Claims that arose during the remainder of my
employment through the date my employment terminated.
September 15, 2003 /s/ E. Xxx Xxxxx
-------------------------------------- ----------------------------------
Date Signature of E. Xxx Xxxxx
/s/ Xxxxxxx X. Xxxxx /s/ E. Xxx Xxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of Print Name
E. Xxx Xxxxx
ADDENDUM TO AGREEMENT AND RELEASE
This serves as an addendum to the Agreement and Release between E. Xxx
Xxxxx ("Employee") and Northeast Pennsylvania Financial Corp ("the Company") and
First Federal Bank ("the Bank") signed and dated September 12, 2003:
The following paragraph is considered as being part of section 1.
Payments and Benefits.
Accelerate vesting, effective as of 12:01 am EDT on September 13, 2003,
of the 11,825 shares of restricted stock granted to Employee under the Incentive
Plan that were otherwise scheduled to vest on October 27, 2003.
September 24, 2003 /s/ E. Xxx Xxxxx
-------------------------------------- ----------------------------------
Date By E. Xxx Xxxxx
/s/ Xxxxxxx X. Xxxxx /s/ E. Xxx Xxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of Print Name
E. Xxx Xxxxx
September 26, 2003 /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Date Signature of the Representative of
Northeast Pennsylvania
Financial Corp.
/s/ Xxxxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of the Print Name
Representative of
Northeast Pennsylvania Financial Corp.
September 26, 2003 /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Date Signature of the Representative of
First Federal Bank
/s/ Xxxxxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxxx
-------------------------------------- ----------------------------------
Witness to the Signature of the Print Name
Representative of
First Federal Bank
