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EXHIBIT
10.3
SEPARATION AGREEMENT AND RELEASE
This
Separation Agreement and Release (“Agreement”) is
entered into this 26th day of September, 2007 between DONALD
A. MOLL (“Employee”) on one hand, and ROYAL
FINANCIAL, INC. and ROYAL SAVINGS BANK (collectively, the
“Company”) on the other hand. Employee
and Company
collectively are referred to herein as the
“Parties.” This Agreement is made for good
and valuable consideration, the receipt and sufficiency of which is
acknowledged by the Parties.
RECITALS
WHEREAS,
Employee has been employed as the Chief Executive
Officer/President, and has served as a member of the Board of
Directors, of the Company pursuant to an Executive Employment
Agreement dated January 20, 2005 (“Employment
Agreement”);
WHEREAS,
on June 18, 2007, the Company suspended Employee with pay
as a result of and pending the conclusion of an internal
investigation regarding alleged irregularities with respect to
the Company’s internal controls and allegations of
misconduct on the part of Employee raised by other executive
officers of the Company; and
WHEREAS,
to avoid the potential cost involved with and uncertainty of
litigation, the Parties wish to resolve their dispute as to
Employee’s employment with the Company and have mutually
agreed to terminate the Employment Agreement whereby Employee
will resign all positions of employment he currently holds
with the Company, his membership on the Board of Directors of
each of Royal Financial, Inc. and Royal Savings Bank, and any
positions with any affiliates of the Company, under the terms
set forth in this Agreement.
NOW
THEREFORE, the Parties, desiring to resolve the matters at
issue, agree as follows:
AGREEMENT
1.
Employee’s Resignation and Termination of Employment
Agreement . Employee hereby agrees to resign as
President/Chief Executive Officer and member of the Board of
Directors of each of Royal Financial, Inc. and Royal Savings
Bank and any and all positions with any affiliates of the
Company ( see Schedule A attached hereto),
effective eight (8) days after he executes this Agreement,
assuming he does not revoke this Agreement during that
timeframe. Employee’s Employment Agreement
shall terminate on the date Employee so resigns, and upon such
termination, the Employee and Company shall have no further
rights and obligations under the Employment Agreement except
for those rights and obligations as specifically set forth
herein. Specifically, the vesting rights relating
to any and all stock options and shares of restricted stock
granted to Employee pursuant to the terms of the 2005 Royal
Financial, Inc. Stock Option Plan and the 2005 Royal
Financial, Inc. Recognition and Retention Plan and Trust
Agreement, respectively, shall cease on the effective date of
his resignation; provided, however, Employee shall retain such
rights to any stock options and shares of restricted stock
that have previously vested up to the effective date of his
resignation.
2.
Confidentiality . Except as necessary to
comply with the Company’s reporting obligations to the
Securities and Exchange Commission (“SEC”) or any
state or federal banking
regulators,
to provide relevant information to investors and potential
investors, or to disclose as necessary to its accountants,
attorneys and officers and directors with a need to know,
Company agrees to keep the terms of this Agreement in strict
confidence from all persons not a party to this
Agreement. Likewise, Employee agrees to keep the
terms of this Agreement in strict confidence from all persons
not a party to this Agreement, except that Employee may
disclose the contents of this Agreement to his immediate
family members, attorney(s), accountant(s), and financial
advisor(s), who also agree to keep this information
confidential.
3.
Non-disparagement . Employee agrees that he
shall not disparage the Company nor the Company’s
business, nor any of its officers, directors or employees, nor
otherwise seek to reduce the goodwill of the Company or
diminish or negatively impact the reputation of the Company,
its officers, directors, or employees. The Company,
on behalf of its directors and executive officers, agrees not
to disparage Employee or to act in any way to diminish or
negatively impact Employee’s
reputation. Notwithstanding this provision, the
Company and Employee retain all rights of communication with
respect to Company’s ongoing investigation of:
(a) Employee’s alleged misconduct, and (b) the
conversion of the Company to a publicly traded
entity. The Company also retains all rights of
communication with respect to its reporting requirements to
the SEC and any state and federal banking
regulators.
4.
Releases . (a) In consideration of the
payments and promises made by the Company to Employee herein,
Employee on behalf of Employee and his spouse, heirs,
executors, administrators, children and assigns hereby fully
releases and discharges the Company, its officers, directors,
shareholders, parents, subsidiaries, benefit plans and their
administrators, affiliates, supervisors, managers, employees,
agents, representatives, fiduciaries, insurers and attorneys,
and its and their predecessors, successors, heirs, executors,
administrators, and assigns (“Released Parties”)
from any and all claims, actions, causes of actions,
grievances, suits, charges, or complaints of any kind or
nature whatsoever, that he ever had or now has, whether fixed
or contingent, liquidated or unliquidated, know or unknown,
and whether arising in tort, contract, statute, or equity,
before any federal, state, local, or private court, agency,
arbitrator, mediator, or other entity, regardless of the
relief or remedy, related to his employment with the Company,
the termination of his employment with the Company, the
termination of his Employment Agreement, any claim for
attorneys’ fees and costs related to his present
disputes with the C
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