Retirement and Non-Competition Agreement
This Retirement and Non-Competition Agreement ("Agreement") is entered into
this 30th day of June, 2003 ("Effective Date") by and between Third Federal
Savings Bank ("Bank"), a federal savings bank having its principal place of
business located in Newtown, Pennsylvania and John R. Stranford ("Employee").
WHEREAS, Employee has previously served the Bank as an employee and its
President, Chief Executive Officer and a member of the Board of Directors;
WHEREAS, the Bank recognizes the specialized knowledge and expertise of the
Employee related to the business affairs of the Bank, and the subsidiaries of
the Bank ("Bank Subsidiaries");
WHEREAS, Employee has advised the Bank that upon his retirement from the
Bank as an officer, employee and director, he shall elect to receive his
retirement benefits under the Bank's defined benefit pension plan in the form of
an annuity benefit and not in the form of a lump-sum payment;
WHEREAS, Employee and the Bank desire to enter into such a retirement and
non-competition agreement upon the terms and conditions hereinafter contained;
NOW, THEREFORE, in consideration of the covenants and terms contained in
this Agreement as set forth herein and of the mutual benefits accruing to Bank
and to Employee from the retirement and non-competition agreement between the
parties as set forth by the terms of this Agreement, the Bank and the Employee
agree as follows:
1. Resignation
-----------
This Agreement shall constitute written notice from the Bank to the
Employee that effective as of the Effective Date, the Employee's resignation as
an officer, employee and director of the Bank and all Bank Subsidiaries
(collectively, the "Companies") effective July 1, 2003 is accepted on behalf of
the Bank and its Board of Directors and shall be effective as of July 1, 2003.
2. Non-Competition and Confidential Business
-----------------------------------------
The Employee hereby agrees that for the period commencing on the Effective
Date and ending April 30, 2006:
(a) Employee will not, without the express written consent of the
Companies, directly or indirectly communicate or divulge to, or use for his own
benefit or for the benefit of any other person, firm, association, or
corporation, any of the trade secrets, proprietary data or other confidential
information communicated to or otherwise learned or acquired by the Employee
from the Companies, except that Employee may disclose such matters to the extent
that disclosure is required by a court or other governmental agency of competent
jurisdiction.
(b) Employee will not contact (with a view toward selling any product or
service competitive with any product or service sold or proposed to be sold by
the Companies during the three year period prior to July 1, 2003) any person,
firm, association or corporation (A) to which the Companies sold any product or
service, (B) which Employee solicited, contacted or otherwise dealt with on
behalf of the Companies, or (C) which Employee was otherwise aware was a client
of the Companies. Employee will not directly or indirectly make any such
contact, either for his own benefit or for the benefit of any other person,
firm, association, or corporation.
(c) Employee hereby agrees that he shall not engage in providing
professional services or enter into employment or other relationship as an
employee, director, consultant, representative, or similar relationship to any
financial services enterprise (including but not limited to a savings and loan
association, bank, credit union or insurance company) whereby the Employee will
have a work location within 50 miles of the home office of the
1
Bank located in Newtown, Pennsylvania, or within 30 miles of any office or
branch of the Companies existing as of the Effective Date.
(d) Employee hereby agrees that he shall not, on his own behalf or on
behalf of others, employ, solicit, or induce, or attempt to employ, solicit or
induce, any employee of the Companies, for employment with any financial
services enterprise (including but not limited to a savings and loan
association, bank, credit union, or insurance company), nor will the Employee
directly or indirectly, on his behalf or for others, seek to influence any
employee of the Companies to leave the employ of the Companies.
(e) Employee will not make any public statements regarding the Companies
without the prior consent of the Companies, and the Employee shall not make any
statements that disparage the Companies or the business practices of the
Companies. The Bank shall not knowingly or intentionally make any statements
that disparage the Employee.
(f) The Employee and the Companies acknowledge and agree that irreparable
injury will result to the parties in the event of a breach of any of the
provisions of this Section 2 (the "Designated Provisions") and that the Employee
and the Companies will have no adequate remedy at law with respect thereto.
Accordingly, in the event of a material breach of any Designated Provision, and
in addition to any other legal or equitable remedy the Employee or the Companies
may have, the Employee or the Companies shall be entitled to the entry of a
preliminary and a permanent injunction (including, without limitation, specific
performance by a court of competent jurisdiction located in Bucks County,
Pennsylvania, or elsewhere), to restrain the violation or breach thereof by
either the Employee or the Companies, and the parties shall submit to the
jurisdiction of such court in any such action.
(g) The Designated Provisions shall survive the termination of the
Agreement.
3. Compensation
------------
(a) The Bank agrees to pay Employee for his commitments and agreements as
contained herein, including Section 2 herein, the remuneration detailed at
Schedule A, attached hereto. The Bank acknowledges that compliance by the
Employee with the requirements set forth at Section 2, herein, is an essential
component of this Agreement, and that such compliance is necessary for the Bank
to obtain the full value of its consideration paid under this Agreement. The
parties agree that Employee shall not be entitled to participate in or receive
benefits under any Bank programs maintained for its employees, except as
specifically agreed to in writing by the parties. Further, as of the Effective
Date, Employee hereby waives any rights, claims and payments that may be due at
any time thereafter, if any, in accordance with the Change in Control Severance
Agreement between the Employee and the Bank, dated January 1, 2003, and such
agreement shall be deemed terminated and of no further legal force and effect as
of the Effective Date.
(b) Nothing contained in this Agreement shall be deemed to modify or amend
any previously awarded options to acquire common stock of TF Financial
Corporation ("TF") held by the Employee.
(c) The Employee hereby acknowledges that upon his retirement from the Bank
as an officer and employee, he shall elect to receive his retirement benefits
under the Bank's defined benefit pension plan in the form of an annuity benefit
and not in the form of a lump-sum payment.
4. Releases
--------
(a) Employee hereby knowingly and voluntarily waives and releases the
Companies and TF, and officers, directors, and employees of the Companies and
TF, from any and all claims or causes of action, known or unknown, arising out
of or in any way relating to: 1)any wrongful discharge from the employ of the
Companies, 2) any rights or claims arising out of title VII of the Civil Rights
Act of 1964, as amended, 3)the Age Discrimination in Employment Act ("ADEA"), 4)
the Americans with Disabilities Act, or 5)any
2
other federal, state or municipal statute or ordinance relating to
discrimination in employment (the "Release"). However, Employee may pursue
claims or institute legal action to enforce the provisions of this Agreement.
(b) Employee further states that he has carefully read the foregoing, has
had sufficient opportunity to review and deliberate the foregoing with or
without counsel of Employee's own choosing, has been advised of the opportunity
to consult with an attorney, knows and understands the contents of this
Agreement and related Release, and signs the same as Employee's free and
independent act. No inducements, representations, or agreements have been made
or relied upon to make this Agreement except as stated in this Agreement.
(c) Employee understands and acknowledges that the Release and waiver of
claims contained herein is exchanged for a portion of the compensation described
at Section 3, herein, and Schedule A, attached hereto, which compensation the
Employee is not otherwise entitled to receive.
(d) Employee understands that he has a period of seven (7) days from the
date of executing this Agreement during which time Employee shall have the right
to revoke this Agreement. Any such revocation shall be in writing and delivered
to the Chief Financial Officer of the Bank.
5. The Complete Agreement
----------------------
This Agreement, and any attachments or exhibits appended hereto, shall
represent the complete Agreement between the Bank and Employee concerning the
subject matter hereof and supersedes all prior agreements or understandings,
written or oral. No attempted modification or waiver of any of the provisions
hereof shall be binding on either party unless made in writing and signed by
both Employee and the Bank.
6. Notices
-------
Any notice required or permitted to be given hereunder shall be in writing
and shall be effective three business days after it is properly sent by
registered or certified mail, if to the Bank, its Chief Financial Officer at the
administrative offices of the Bank, or if to Employee to the address set forth
beneath his signature to this Agreement, or to such other address as either
party may from time to time designate by notice.
7. Assignability
-------------
This Agreement may not be assigned by any party without the prior written
consent of the other parties, except that no consent is necessary for the
Companies to assign this Agreement to a corporation succeeding to substantially
all the assets or business of the Companies whether by merger, consolidation,
acquisition or otherwise. This Agreement shall be binding upon Employee, his
heirs and permitted assigns and the Bank, its successors and permitted assigns.
8. Severability
------------
Each of the sections contained in this Agreement shall be enforceable
independently of every other section in this Agreement, and the invalidity or
non-enforceability of any section shall not invalidate or render non-enforceable
any other section contained herein. If any section or provision in a section is
found invalid or unenforceable, it is the intent of the parties that a court of
competent jurisdiction shall reform the section or provisions to produce its
nearest enforceable economic equivalent.
9. Arbitration
-----------
Except as provided at Section 2(f) herein, any controversy or claim arising
out of or relating to this Agreement or the breach thereof shall be settled by
binding arbitration in accordance with the
3
Commercial Arbitration Rules of the American Arbitration Association, with such
arbitration hearing to be held at the offices of the American Arbitration
Association ("AAA") nearest to Newtown, Pennsylvania, and judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Either the Employee or the Bank may file a request for
such arbitration with the AAA.
10. Applicable Law
--------------
It is the intention of the parties hereto that all questions and
interpretations with respect to the construction and performance of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with the laws of the Commonwealth of Pennsylvania, with
respect to any matter or thing arising out of this Agreement or pursuant
thereto.
4
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Third Federal Savings Bank ("Bank")
By: /s/George A. Olsen
--------------------------------------------
George A. Olsen
/s/John R. Stranford
--------------------------------------------
John R. Stranford, Employee
5
SCHEDULE A
Payment of $17,981 related to unused vacation days.
Payout under Incentive Compensation Plan of $116,799.00.
Continuation of Medical insurance coverage until Employee's attainment of age
65. Such coverage may not be the same as that available to employees of the
Bank.
Continuation of Life and AD&D coverage until Employee's attainment of age 65.
The Employee hereby acknowledges that upon his retirement from the Bank as an
officer and employee, he shall elect to receive his retirement benefits under
the Bank's defined benefit pension plan in the form of an annuity benefit and
not in the form of a lump-sum payment.
ACKNOWLEDGEMENT OF SCHEDULE A:
Third Federal Savings Bank ("Bank")
By: /s/George A. Olsen
--------------------------------------------
George A. Olsen
/s/John R. Stranford
--------------------------------------------
John R. Stranford, Employee
6