SEPARATION AGREEMENT AND RELEASE
This
Separation Agreement and Mutual
Release (“Agreement”) is made this 15th day of June, 2007, by and between
Harleysville Management Services, LLC (“HMS”), on its own behalf and on behalf
of Harleysville National Bank and Trust Company (the “Bank”) and Harleysville
National Corporation (“HNC”) and Xxxx Xxxxxx (“Executive”).
WITNESSETH:
WHEREAS,
HMS
is a
subsidiary of the Bank; and
WHEREAS,
the Bank is a
subsidiary of HNC; and
WHEREAS,
HMS employed
Executive to serve in the capacity of Executive Vice President of the Bank
and
HNC and President of Millennium Wealth Management and Private Banking, under
the
terms of an Employment Agreement between HMS and Executive (“Employment
Agreement); and
WHEREAS,
HMS desires
to end its relationship with Executive, effective June 15, 2007, pursuant to
the
terms of Article 7 of Executive’s Employment Agreement (Termination without
Cause and no Change in Control).
NOW,
THEREFORE, in
consideration of the mutual promises and agreements hereinafter set
forth and intending to be legally bound hereby, HMS and Executive agree as
follows:
1. Termination
of Employment Agreement and of Employment
HMS
and executive hereby acknowledge
and affirm the termination of Executive’s Employment Agreement (other than as
specified in this Agreement) and Executive’s employment with HMS, effective June
14, 2007. Executive hereby acknowledges and agrees that he will no
longer hold any offices or director or officer position which he has had with
the
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Bank,
HNC
or any Affiliated Company, effective as of the Termination Date, and HMS, HNC
and the Bank each hereby acknowledges that Executive will no longer hold and
offices or director or officer position with HNC or the Bank.
2. Payments
and Benefits to Executive
Upon
the execution and delivery of a
Mutual Release of All Claims (attached, Exhibit “A”), and as soon as practicable
following the associated revocation period, HNC agrees to make or provide to
Executive the following payments:
(a) Payment
of an amount equal to Executive’s Annual Base Salary, payable in twelve (12)
approximately equal monthly installments through June, 15, 2008, less any
deductions required by law;
(b) Reimbursement
of any expenses incurred by Executive in accordance with Section 4(e) of the
Employment Agreement at any time through June 14, 2007; and
(c) Continuation
of Executive’s benefits through June
30, 2008, or an amount equal to twelve (12) months of employee benefits, except
to the extent that the payments would result in tax implications referenced
in
Section 3 of his Employment Agreement.
3. Covenants
(a) Executive
hereby acknowledges and agrees to abide by all of the covenants relating to
the
Covenant Not to Compete contained in Section 8 of his Employment
Agreement, all of which shall survive in full force and effect for one (1)
full
year following termination of Executive’s Employment.
(b) Executive
hereby acknowledges and agrees to abide by the covenants relating to
Unauthorized Disclosure contained in Section 9 of the Employment
Agreement, which covenants shall survive in full force and effect on and after
the termination of his
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Employment
with HMS. Executive further acknowledges and agrees that the identity
of customers of HNC and/or the Bank is confidential information subject to
his
non-disclosure obligation in Section 9 of the Employment Agreement.
(c) Executive
hereby acknowledges and agrees to abide by his covenants relating to Work
Made for Hire contained in Section 10 of the Employment Agreement, which
covenants shall survive in full force and effect on and after the termination
of
his Employment.
4. Remedies
(a) Executive
acknowledges and agrees that HMS, HNC and the Bank’s remedies at law for a
breach or threatened breach of any of the provisions of Section 3 would be
inadequate; and, in recognition of this fact, HMS and Executive, agree that
in
the event of a breach or threatened breach, in addition to any remedies at
law,
HMS, HNC or the Bank, as the case may be, without posting any bond, shall be
entitled to obtain equitable relief in the form of a temporary restraining
order, temporary or permanent injunction or any other equitable remedy, which
may then be available.
(b) It
is expressly understood and agreed that, although Executive and HMS consider
the
restrictions contained in Section 3 to be reasonable, if a judicial
determination is made by a court of competent jurisdiction, that the time or
any
other restriction contained in this Agreement, is an unenforceable restriction
against Executive, the provisions of this Agreement shall not be rendered void
but shall be deemed amended to apply as to such maximum time and to such other
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction
finds that any restriction contained in this Agreement in unenforceable and
that
such restriction cannot be amended in this Agreement is unenforceable and that
such restriction cannot be amended so as to make it
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enforceable,
such finding shall not affect the enforceability of any of the other
restrictions contained herein.
5. Arbitration
HMS,
the Bank and HNC and Executive
recognize that in the event a dispute should arise between them concerning
the
interpretation or implementation of this Agreement, lengthy and expensive
litigation will not afford a practical resolution of the issues within a
reasonable period of time. Consequently, each party agrees that all
disputes and disagreements concerning this Agreement or Executive’s employment
(except for any enforcement sought with respect to Section 3, which may be
litigated in court through an action for an injunction or other relief) are
to
be submitted for resolution, in Xxxxxxxxxx County, Pennsylvania, to the American
Arbitration Association (the “Association”) in accordance with the Association’s
National Rules for the Resolution of Employment Disputes or other applicable
rules then in effect (“Rules”). HMS, the Bank or HNC or Executive may
initiate an arbitration proceeding at any time by giving notice to the other
in
accordance with the rules. HMS, the Bank and HNC and Executive may,
as a matter or right, mutually agree on the appointment of a particular
arbitrator from the Association’s pool. The arbitration shall not be
bound by the rules of evidence and procedure of the courts of the Commonwealth
of Pennsylvania but shall be bound by the substantive law applicable to this
Agreement. The decision of the arbitrator, absent fraud, duress,
incompetence or gross and obvious error of fact, shall be final and binding
upon
the parties and shall be enforceable in courts of proper
jurisdiction. Following written notice of a request for arbitration,
HMS, the Bank and HNC and Executive shall be entitled to an injunction
restraining all further proceedings in any pending or subsequently filed
litigation concerning this Agreement, except as
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otherwise
provided herein or any enforcement sought with respect to Section 3, which
may
be litigated through an action for injunction or other relief.
6. Miscellaneous
(a) Confidentiality Executive
agrees to keep confidential and shall not disclose or reveal, the existence
or
the terms and conditions of this Agreement, except to his spouse, counsel,
personal tax or financial advisor, on whose behalf he also promises
confidentiality.
(b) Return
of Property Executive shall
return to HMS any property of it or its Affiliated Companies of whatever kind
in
his possession or under his control and shall confirm that he has not kept
copies or extracts of any documents, lists or records, in any medium (including
electronic) relating to the HMS, HNC, the Bank or any Affiliated
Company.
(c) Non-Disparagement Executive
hereby agrees that he shall not make negative statements or representations,
or
otherwise communicate negatively, directly or indirectly, in writing, orally
or
otherwise, or take any action which may, directly or indirectly, disparage
or be
damaging to HMS, the Bank or any Affiliated Company, their predecessors,
successors, shareholders, directors, officers, employees or agents or their
respective business or reputation. HMS hereby agrees that neither it
nor any Affiliated Company or their respective directors or officers shall
make
negative statements or representations, or otherwise communicate negatively,
directly or indirectly, in writing, orally or otherwise, or take any action
which may, directly or indirectly, disparage or be damaging to Executive or
his
reputation.
(d) Entire
Agreement/Amendment This
Agreement shall supersede the Employment Agreement in its entirety and any
and
all existing agreements between Executive and HMS and any and all Affiliated
Companies relating to the terms of Executive’s employment
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and/or
non-renewal of his Employment Agreement with HMS, HNC and the Bank and contains
the entire understanding of the parties with respect to the matters contained
herein. It may not be altered, modified or amended except by a
written agreement signed by the parties.
(e) No
Waiver The failure of a party to
insist upon strict adherence to any term of this Agreement on any occasion
shall
not be considered a waiver of such party’s rights or deprive such party of the
right thereafter to insist upon strict adherence to that term or any other
term
of this Agreement.
(f) Severability In
the event that any one or more of the provisions of this Agreement shall be
or
become invalid, illegal or unenforceable in any respect, the validity, legality
or enforceability of the remaining provisions of this Agreement, shall not
be
affected thereby.
(g) Assignment This
Agreement shall inure to the benefit of and be binding upon the parties and
their respective heirs, representatives, successors and assigns. This
Agreement shall not be assignable by Executive and may be assignable by HMS
to
any successor, to all or substantially all of the business or assets of HNC
or
the Bank.
(h)
Affiliated
Company In this Agreement,
“Affiliated Company”
means
any company which from time-to-time, directly or indirectly, owns, is owned
by,
or is under common ownership with HMS.
(i) Notices All
notices, demands and other communications which are required to be given, served
or sent pursuant to this Agreement, shall be in writing and shall be delivered
personally, or by facsimile or sent by air courier or first-class, certified
or
registered mail, return receipt requested and postage prepaid, addressed as
follows:
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If
to Executive:
Xxxx
Xxxxxx
000
Xxxxx Xxxx Xxx
Xxxx
Xxxxxx,
XX 00000
If
to HMS:
Harleysville
Management Services,
LLC
Attn: Xxxxxxxxx
Xxxxxx
Senior
Vice President, Human
Resources
Harleysville
National
Corporation
XX
Xxx 000 – 000 Xxxx
Xxxxxx
Xxxxxxxxxxxx,
XX 00000
(j) Withholding Except
where prohibited by applicable law, any and all payments or benefits, made
or
provided to Executive under this Agreement, shall be subject to tax withholding
to the extent required by applicable law.
(k) No
Other Representation No
representation, promise or inducement has been made by either party that is
not
embodied in the Agreement, and neither party shall be bound by or be liable
for
any alleged representation, promise or inducement not so set forth.
(l) Acknowledgment Executive
acknowledges that he has carefully read this Agreement, fully understands and
accepts all of its provisions and signs it voluntarily of his own free
will. Executive and HMS each hereby acknowledge and agree that this
Agreement was fully negotiated by both parties and is the final product of
discussions and negotiations between themselves and/or their
counsel. The parties further acknowledge that each has had an
opportunity to obtain the advice of legal counsel of their own choosing prior
to
signing this Agreement. The parties therefore agree that no provision
is to be interpreted or enforced for or against either party because a party
or
that party’s legal representative or counsel drafted such
provision. The language used in this Agreement shall be deemed to be
the language chosen by
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the
parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any part.
(m) Counterparts This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same
instrument.
IN
WITNESS WHEREOF, the parties hereto have duly executed this
Agreement of the day and year first above written.
/s/
Xxxx Xxxxxx
XXXX
XXXXXX
HARLEYSVILLE
MANAGEMENT
SERVICES,
LLC
By: /s/ Xxxxxxxxx
Xxxxxx
Title: Senior
Vice
President
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EXHIBIT
“A” - MUTUAL RELEASE OF ALL
CLAIMS
NOTICE: This
is a very important document and Xxxx Xxxxxx (“Executive”) should thoroughly
review and understand the terms and effect of this document before signing
it. By signing this Mutual Release of All Claims (“Release”),
Executive will be releasing Harleysville Management Services, LLC (“HMS”) and
its Affiliated Companies from all liability to him. Therefore,
Executive should consult with an attorney before signing the
Release. Executive has twenty-one (21) days to consider this
Release. If Executive has not returned a signed copy of the Release
by that time, the Company will assume that Executive has elected not to sign
the
Release. If Executive chooses to sign the Release, Executive will
have an additional seven (7) days following the date of his signature to revoke
his release (“Revocation Period”) and the Release shall not become effective or
enforceable under the Revocation Period has expired. Any revocation
must be in writing and must be received by the Company within the seven (7)
day
Revocation Period.
In
consideration of the benefits and
forbearance offered to Executive by HMS under the Agreement dated as of
__6/15/07___ (the “Agreement”), Executive, on behalf of himself, and his
heirs, executors and assigns, hereby releases and discharges HMS, the
Harleysville National Bank and Trust Company (the “Bank”) and Harleysville
National Corporation (“HNC”) and each and all of its and their Affiliated
Companies (collectively the “HNC Companies”), and its and their successors,
predecessors and assigns and, in their capacities as such, all of its and their
employees, agents, officers and directors (for purposes of this Release,
hereinafter collectively referred to as “the Releasees”) from any and all claims
and/or causes of action, known or unknown, which Executive may have or could
claim to have against any Releasee up to an including the date Executive signs
this Release.
This
Release includes, but is not
limited to, all claims arising out of the Agreement, the Employment Agreement,
Executive’s employment, the non-renewal of Executive’s Employment Agreement, and
all claims arising under federal, state or local laws, prohibiting employment
discrimination based upon age, race, sex, religion, disability, national origin
or any other protected characteristic, including but not limited to, any and
all
claims arising under the Age Discrimination in Employment Act (“ADEA”), Title
VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the Pennsylvania Human Relations Act
and claims growing out of any legal restrictions, expressed or implied, on
any
HNC Company’s right to control or terminate the employment of its employees and
claims arising out of any employment agreement between Executive and any HNC
Company.
This
Release does not include or affect
Executive’s ability to apply for unemployment compensation or worker’s
compensation benefits and does not affect Executive’s rights to vested benefits
under any HNC employee benefit plan.
Executive
represents and warrants that
he has not filed any complaints or charges against any Releasee with any court
or administrative or adjudicative agency.
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Executive
intends for his Release to
comply with Section 201 of the Olders Workers Benefit Protection Act of
1990. Accordingly, Executive acknowledges and represents as
follows:
a. Executive
waives his claims under the ADEA knowingly and voluntarily in exchange for
consideration of value to which he is not otherwise
entitled;
b. Executive
does not waive any rights or claims that may arise after the date he signs
this
Release;
c. Executive
has been advised by HMS to consult an attorney in connection with this
Separation Agreement and he has done so;
d. Executive
has been given a period of at least twenty-one (21) days within which to
consider this Release; and
e. Executive
has been informed by HMS that he may revoke this Release for a period of seven
(7) days after signing it and that this Release shall not become effective
or
enforceable until the Revocation Period has expired.
By
signing below, Executive agrees to
be legally bound by the terms of this Release and acknowledges that he has
carefully read and completely understands the terms of this Release and is
signing it knowingly, voluntarily and without duress, coercion, or undue
influence.
The
undersigned, intending to be
legally bound hereby, has executed this Release on this
11th
day of ___July____, 2007.
/s/
Xxxx Xxxxxx
XXXX
XXXXXX
/s/
Xxxxxxxxx Xxxxxx
FOR: HARLEYSVILLE
MANAGEMENT
SERVICES,
LLC
|
THIS
IS A RELEASE - READ CAREFULLY BEFORE
SIGNING
|
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