SETTLEMENT, NON-SOLICITATION AND RELEASE AGREEMENT
--------------------------------------------------
Harleysville Group, Inc. and Harleysville Mutual Insurance Company, and any
and all of their affiliates, subsidiaries, successors and assigns and, in their
capacity as such, the shareholders, employees, officers, directors and agents
thereof (collectively referred to throughout this Agreement as "Harleysville")
and M. Lee Patkus ("Mr. Patkus"), mutually desire to enter into this Settlement,
Non-Solicitation and Release Agreement ("Agreement") and agree as follows:
The terms of this Agreement are the product of mutual negotiation and
compromise between Mr. Patkus and Harleysville; and
The meaning, effect and terms of this Agreement have been fully explained
to Mr. Patkus and Harleysville. Both Mr. Patkus and Harleysville understand that
this Agreement settles, bars, and waives any and all claims that they have or
could possibly have against each other as of the date of this Agreement; and
Prior to executing this Agreement, Mr. Patkus and Harleysville have
consulted with counsel and each have carefully considered other alternatives to
executing this Agreement.
THEREFORE, intending to be legally bound, Mr. Patkus and Harleysville for
the good and sufficient consideration set forth below, agree as follows:
1. In consideration for the execution of this Agreement by Mr. Patkus and
compliance with his promises made herein, Harleysville shall provide Mr. Patkus
a gross payment of Three Hundred Thirty-Six Thousand Dollars ($336,000.00)
(hereinafter "the settlement amount"), less appropriate tax withholdings, if
any, to be paid to Mr. Patkus within ten (10) business days after the date on
which this Agreement is executed. Payment shall be made in the form of a check
payable to "M. Lee Patkus." Mr. Patkus resides in Florida and state tax will be
withheld only to the extent necessary under applicable law.
2. In consideration for the execution of this Agreement by Mr. Patkus and
compliance with his promises made herein, Harleysville shall pay Forty Thousand
Dollars ($40,000) to Console Law Offices, LLC on account of attorneys' fees and
costs incurred by Mr. Patkus within ten (10) business days of the date on which
this Agreement is executed.
Harleysville shall issue appropriate Internal Revenue Forms 1099 on account of
this payment.
3. Payment under this Agreement shall not be deemed an admission that Mr.
Patkus is a prevailing party under any statute, regulation or contract.
4. Mr. Patkus, of his own free will, knowingly and voluntarily releases
and forever discharges Harleysville, all of its officers, directors, employees,
agents, and the successors and assigns of each (referred to hereinafter
collectively as the "Harleysville Releasees") of and from any and all actions or
causes of action, suits, claims, charges, complaints, contracts (whether oral or
written, express or implied from any source), and promises, whatsoever, in law
or equity, as of the date of execution of this Agreement, which, against the
Harleysville Releasees, Mr. Patkus, his heirs, executors, administrators,
successors, and assigns may now have or hereafter can, shall or may have,
including all unknown, undisclosed and unanticipated losses, wrongs, injuries,
debts, claims, or damages to Mr. Patkus, for, upon, or by reason of any matter,
cause or thing whatsoever including, but not limited to, any and all matters
arising out of his employment by Harleysville and the cessation of said
employment, and including, but not limited to any alleged violation of any
federal, state or local civil or human rights law, or any other alleged
violation of any local, state or federal law, regulation or ordinance, including
but not limited to the Age Discrimination in Employment Act, and/or public
policy, contract or tort or common law having any bearing whatsoever on the
terms and conditions and/or cessation of his employment with Harleysville
including, but not limited to, any allegations for costs, fees, or other
expenses, including attorneys' fees, and including but not limited to all
claims, charges, or complaint raised in his demand for arbitration filed against
Harleysville Group, Inc. on February 18, 2005, which he ever had, now has, or
shall have as of the date of execution of this Agreement. Mr. Patkus is not
releasing any claims under the Age Discrimination in Employment Act that he did
not knowingly and voluntarily waive. Notwithstanding anything to the contrary,
this Agreement has no effect on any vested pension benefits that Mr. Patkus is
entitled to by reason of his employment with Harleysville.
5. Harleysville knowingly and voluntarily releases and forever discharges
Mr. Patkus, his heirs, administrators, successors and assigns of and from any
and all actions or causes of action, suits, claims, charges, complaints,
contracts (whether oral or written, express or implied from any source), and
promises, whatsoever, in law or equity, as of the date of execution of this
Agreement, which Harleysville may now have or hereafter can, shall or may have,
including all unknown, undisclosed and unanticipated losses, wrongs, injuries,
debts, claims, or damages to
Harleysville, for, upon, or by reason of any matter, cause or thing whatsoever
including, but not limited to, any and all matters arising out of Mr. Patkus's
employment by Harleysville and the cessation of said employment, and including,
but not limited to any alleged violation of any federal, state or local civil or
human rights law, or any other alleged violation of any local, state or federal
law, regulation or ordinance, and/or public policy, contract or tort or common
law having any bearing whatsoever on the terms and conditions and/or cessation
of Mr. Patkus's employment with Harleysville including, but not limited to, any
allegations for costs, fees, or other expenses, including attorneys' fees,
including, but not limited to any claims, charges, complaints raised in response
to Mr. Patkus's demand for arbitration filed against Harleysville Group, Inc. on
February 18, 2005, which it ever had, now has, or shall have as of the date of
execution of this Agreement.
6. Upon the execution of this Agreement, Mr. Patkus and Harleysville
shall dismiss with prejudice the demand for arbitration filed by Mr. Patkus
against Harleysville Group, Inc. on February 18, 2005 and all counterclaims or
actions filed by Harleysville against Mr. Patkus.
7. Mr. Patkus and Harleysville acknowledge and agree that, by executing
this Agreement, they are terminating the Employment Agreement entered into on or
about November 17, 1999 (the "Employment Agreement") and, that their respective
rights and obligations under the Employment Agreement are extinguished.
8. Mr. Patkus hereby covenants and agrees that from the date of this
Agreement for a period of one (1) year, Mr. Patkus will not, directly or
indirectly, solicit, try to hire, refer for hire or assist in hiring for
employment or consulting services any employees of Harleysville or encourage
them to leave their positions with Harleysville or aid or assist others with
regard to the foregoing. The obligation in the foregoing sentence shall be
referred to hereafter as the "non-solicitation obligation." The parties
acknowledge and agree that this non-solicitation obligation is an integral part
of this Agreement for which Mr. Patkus is receiving adequate compensation, that
Harleysville would not enter into this Agreement without the inclusion of this
non-solicitation obligation, and that if any Court of competent jurisdiction
shall hold that the scope or duration of the non-solicitation obligation is not
reasonable or otherwise enforceable, then the parties agree that such Court
shall enforce the non-solicitation obligation to the greatest extent permitted
under applicable law. The parties further agree that in the event of a breach of
any term or condition of
the non-solicitation obligation, Harleysville would be irreparably harmed, and,
accordingly, the non-solicitation obligation may be specifically enforced and an
injunction may be issued restraining any breach hereof, without the necessity of
posting a bond.
9. Should Harleysville or Mr. Patkus institute any action or proceeding
at law or in equity to enforce any provision of this Settlement,
Non-Solicitation and Release Agreement, including an action for declaratory
relief, or for damages by reason of an alleged breach of the provisions of this
Settlement, Non-Solicitation and Release Agreement, or any provision thereof,
the prevailing party shall be entitled to recover from the losing party,
reasonable attorneys' fees and costs incurred in such action or proceeding.
10. In consideration of the payments and consideration referenced herein,
Mr. Patkus and Harleysville waive their right to accept any relief or recovery
from any charge or complaint before any federal, state, or local administrative
agency against each other based on any matter released herein. Mr. Patkus and
Harleysville further waive all rights to file any other action before any
federal, state, or local court against each other based on any matter released
herein. Mr. Patkus and Harleysville confirm that no charge, complaint, or action
exists in any forum or form except the American Arbitration Association filings
referenced herein. Except as prohibited by law, and except for any action filed
as a result of any breach of this agreement, in the event that any such claim is
filed, it shall be dismissed with prejudice upon presentation hereof and the
filing party shall reimburse the other for the costs, including attorneys' fees,
of defending any such action.
11. Mr. Patkus and Harleysville agree to release not only any and all
claims, as stated above, which each could make on their own behalf, but also
those which may be made by any other person or organization on their behalf. Mr.
Patkus specifically waives any right to become and promises not to become a
member of any class in a case in which a claim or claims against the
Harleysville Releasees are made involving any events up to and including the
date of this Agreement, except where such waiver is prohibited by law.
12. Mr. Patkus and Harleysville agree that if any action is taken to
enforce the terms of this Agreement, the prevailing party shall be entitled to
all reasonable costs and fees incurred in the enforcement of this Agreement.
13. The parties agree not to make any untrue statements or unfairly
disparage the other to any third party.
14. The language of this Agreement shall be construed as a whole,
according to its fair meaning, and not strictly for or against either party.
Should any provision of this Agreement other than Sections 1 and 2 be declared
illegal or unenforceable by any court of competent jurisdiction and cannot be
modified to be enforceable, including the release language, such provision shall
immediately become null and void, leaving the remainder of this Agreement in
full force and effect.
15. Mr. Patkus and Harleysville agree that neither this Agreement nor the
furnishing of the consideration for this Release shall be deemed or construed at
any time for any purpose as an admission of any liability or unlawful conduct of
any kind. Any liability or unlawful conduct of any kind is expressly denied.
16. Mr. Patkus acknowledges that he has had (or has had the opportunity
to take) 21 calendar days to review this Agreement and discuss it with Mr.
Console before signing it, and if Mr. Patkus signs before the end of that
period, he does so of his own free will and with the full knowledge that he
could have taken the full period.
17. Mr. Patkus has seven calendar days from the date he signs the
Agreement to revoke and cancel it. To do that, a clear written cancellation
letter, sign by Mr. Patkus must be received by Robert A. Kauffman, Esquire, 355
Maple Avenue, Harleysville, PA 19438 before the close of business on the seventh
(7th) calendar day following the date he signs this Agreement. The Company will
make no payment other than those required by law until the end of the seventh
calendar day.
18. This Agreement may not be modified, altered or changed except upon
express written consent of the parties wherein specific reference is made to
this Agreement.
19. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania. Any action arising out of or
relating to any of the provisions of this Agreement may only be brought and
prosecuted in the state or federal courts of, or located in, the Commonwealth of
Pennsylvania. The parties hereto irrevocably consent to the exclusive
jurisdiction and venue of said courts.
20. This Agreement sets forth the entire agreement between the parties
hereto, and fully supersedes any prior agreements or understandings between the
parties.
THE PARTIES HAVE READ AND FULLY CONSIDERED THE AGREEMENT AND ARE MUTUALLY
DESIROUS OF ENTERING INTO SUCH AGREEMENT. THE TERMS OF THIS AGREEMENT ARE THE
PRODUCT OF MUTUAL NEGOTIATION AND COMPROMISE BETWEEN MR. PATKUS AND
HARLEYSVILLE. BOTH MR. PATKUS AND HARLEYSVILLE HAVE CONSULTED WITH ATTORNEYS OF
THEIR CHOICE PRIOR TO EXECUTION OF THIS AGREEMENT. HAVING ELECTED TO EXECUTE
THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THEREBY
THE SUMS AND BENEFITS SET FORTH HEREIN, MR. PATKUS AND HARLEYSVILLE FREELY AND
KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTER INTO THIS AGREEMENT INTENDING TO
WAIVE, SETTLE AND RELEASE ALL CLAIMS EACH HAS OR MIGHT HAVE AGAINST THE OTHER
NOTHING HEREIN IS INTENDED TO NOR SHALL IT BE CONSTRUED AS RELEASING, WAIVING,
OR LIMITING ANY CLAIM ARISING OUT OF A BREACH OF THIS AGREEMENT.
THEREFORE, the Parties now voluntarily and knowingly execute this
Agreement.
HARLEYSVILLE GROUP, INC.
/s/ M. LEE PATKUS By: /s/ ROBERT A. KAUFFMAN
- ---------------------- ----------------------------
M. Lee Patkus Robert A. Kauffman
Dated: 8/17/05 Dated: 8/25/05
---------- -------------
WITNESS: WITNESS:
/s/ Sandra W. Patkus
HARLEYSVILLE MUTUAL INSURANCE
COMPANY
By: /s/ ROBERT A. KAUFFMAN
----------------------------
Robert A. Kauffman
Dated: 8/25/05
------------
WITNESS
/s/ Antoinette E. Smith