Exhibit
10.y.


 


SEPARATION AGREEMENT AND
RELEASE


 


This Separation
Agreement and Release (hereinafter “Agreement”) is made and entered into by and
between William Houlihan (hereinafter “Mr. Houlihan”) and Hudson United Bancorp
and Hudson United Bank (hereinafter collectively referred to as “the Bank”) as
of November 5, 2003.


 


WHEREAS, Mr.
Houlihan has been employed by the Bank as Chief Financial Officer; and


 


WHEREAS, Mr.
Houlihan has voluntarily submitted his resignation from his employment with the
Bank and from his position as an officer of the Bank and any affiliates
effective November 5, 2003;  and


 


WHEREAS, Mr.
Houlihan and the Bank wish to enter into this Agreement to provide for certain
consideration to Mr. Houlihan and to address certain rights and obligations
before and following the effective date of his resignation;


 


NOW, THEREFORE, in
consideration of the mutual promises and covenants contained herein, it is
agreed as follows:


 


1.  Upon receipt of a copy of this Agreement
signed by Mr. Houlihan, and upon expiration of the revocation period set forth
in paragraph 10 below, and after the effective date of the resignation, the
Bank agrees to provide Mr. Houlihan with the following consideration:


 


(a)  The Bank will provide Mr. Houlihan with
salary continuation of his current base pay through December 31, 2003, and, if
Mr. Houlihan continues to perform his duties as Chief Financial Officer
(consistent with the limitations contained in this Agreement) through the
effective date of his resignation, the Bank will pay Mr. Houlihan his normal
bonus for 2003, consistent with the 2003 bonuses paid to other executive
officers on the date when bonuses are paid to other executive officers for
2003.  The good faith determination of
the amount of such bonus by the Bank


 

















 


shall be final and
binding.  These payments will be made in
accordance with the Bank’s normal payroll practices and subject to all
applicable withholdings and deductions.


 


(b)   The Bank will pay the premiums for COBRA
coverage for medical benefits for Mr. Houlihan for a period of eighteen (18)
months commencing December 1, 2003.   The obligation of the Bank to make
such payments will terminate if Mr. Houlihan obtains new employment that offers
him medical coverage.  Termination will
be effective as of the date that Mr. Houlihan is first eligible for
commencement of such coverage.  Mr.
Houlihan understands and agrees that it is his obligation to notify the Bank of
any new employment that offers him medical coverage.


 


(c)   Subject to the terms of this Agreement, the
Bank agrees that it will provide to Mr. Houlihan as severance an amount equal
to the in the money market value of  
the unvested stock options granted to Mr. Houlihan and subsequently
transferred by him to the Houlihan Holdings Limited Partnership, including the
grant of 60,000 options by agreement dated January 19, 2001, 12,000 options by
agreement dated December 6, 2001, and 13,000 options by agreement dated August
7, 2002 (hereinafter the “Unvested Option Bonus”), and it is agreed by the
parties that all such stock options previously granted to Mr. Houlihan are
hereby terminated.  The market value of
such options will be determined by subtracting the exercise price of such
options from the New York Stock Exchange closing price on the effective date of
Mr. Houlihan’s resignation.  The good
faith determination of such amount by the Bank shall be final and binding.  The entire amount, less applicable federal
and state withholding taxes, shall be placed in escrow with Hudson United Bank
under the terms of the Escrow Agreement annexed hereto as Exhibit A, and shall
be paid to Mr. Houlihan within ten (10) days of December 31, 2004, subject to
the forfeiture and early payment provisions of paragraph 4(f) and 4(g) of this
Agreement.


 


2.   In exchange for the consideration set forth
in this Agreement, which Mr. Houlihan acknowledges is in addition to that which
he would otherwise be entitled to receive, Mr. Houlihan hereby knowingly and
voluntarily releases and discharges the Bank, its predecessors, successors,
parent corporations, subsidiaries, or affiliates, and each of its or their
employees, officers, directors, attorneys, benefit committees, trustees,
fiduciaries, plans, and trusts, and their respective heirs, executors,
administrators, successors and assigns (hereinafter collectively referred to as
the “Releasees”) from any and all claims, liabilities, demands, and causes of
action, which he


 


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may have or claim to have
against the Bank or any of the Releasees relating to his employment or the
termination of his employment with the Bank. 
The claims released include, but are not limited to:


 


(a) all statutory
claims, including claims arising under the New Jersey Law Against
Discrimination, the New Jersey Conscientious Employee Protection Act, the New
Jersey Family Leave Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the
Sarbanes-Oxley Act, the Family and Medical Leave Act, and the Employee
Retirement Income Security Act;


 


(b) all claims
arising under the United States or New Jersey Constitutions;


 


(c) all claims
arising under any Executive Order or derived from or based upon any state or
federal regulations;


 


(d) all common law
claims, including claims for wrongful discharge, public policy claims,
retaliation claims, claims for breach of an express or implied contract
including claims based upon any employee handbooks, guides, manuals, policies
or procedures in effect at the Bank at any time, claims for breach of an
implied covenant of good faith and fair dealing, intentional infliction of
emotional distress, defamation, conspiracy, loss of consortium, tortious
interference with contract or prospective economic advantage, promissory
estoppel and negligence;


 


(e) all claims for
any compensation, including back wages, front pay, incentive bonuses, stock
awards, car allowance, moving expenses, fringe benefits, insurance benefits,
vacation time or pay, reinstatement, retroactive seniority, pension benefits,
401(k) benefits, restricted stock, stock options, severance pay, or any other
form of economic loss;


 


(f) all claims for
personal injury, including physical injury, mental anguish, emotional distress,
pain and suffering, embarrassment, humiliation, damage to name or reputation,
liquidated damages, and punitive damages; and


 


(g) all claims for
costs and attorneys’ fees.


 


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It is expressly
understood and agreed that this Agreement (i) does not waive or release any
rights or claims which may arise after the date on which the Agreement is
signed by Mr. Houlihan; (ii) does not waive or release any vested benefit
possessed by Mr. Houlihan as a result of his employment with the Bank; and
(iii) does not waive or release any rights which Mr. Houlihan may possess
(pursuant to law or pursuant to the certificate of incorporation or by-laws of
the Bank) for indemnification for lawful conduct undertaken by him within the
scope of his employment as an officer or employee of the Bank .


 


3.   The Bank hereby releases and discharges Mr.
Houlihan from any and all known claims, liabilities, demands, and causes of
action, which the Bank may have or claim to have against him arising from any
lawful conduct undertaken by him within the scope of his employment as an
officer or employee of the Bank. 
Nothing in this paragraph releases Mr. Houlihan from any obligations
under this Agreement or from any claims, liabilities, demands, or causes of
action which may arise after the date of this Agreement.


 


4. (a)  Mr. Houlihan agrees to maintain in
confidence and not to disclose the terms of this Agreement.  It shall not be considered a breach of the
obligation of confidentiality for Mr. Houlihan to make disclosure of the terms
of this Agreement (i) to his immediate family (who shall also maintain the
terms in confidence); (ii) in order to obtain private and confidential legal,
tax or financial advice; or (iii) at any time following the disclosure by the
Bank of the terms of the Agreement in any Securities and  Exchange Commission
filings.  Nothing contained in this
subparagraph shall preclude the Bank from making disclosure of the terms of
this Agreement for purposes of implementing the Agreement, or for purposes of
its reporting obligations under the rules of the Securities and  Exchange
Commission or the New York Stock Exchange or otherwise.


 


(b)  Mr. Houlihan further agrees to keep
confidential and not use or disclose to anyone any information which is the
confidential and proprietary information of the Bank (hereinafter the
“Confidential Information”).  The
Confidential Information includes, but is not limited to, customer lists,
financial information, marketing data, business and operational plans and
systems and other records, reports, proposals, books, memoranda, data, letters
or any writing, documents or computerized records which relate to any of the
Bank’s operations, business, assets, personnel matters, or any other
information which the Bank has provided to Mr. Houlihan in


 


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confidence or which Mr.
Houlihan has received in confidence during the term of his employment.  Consistent with his obligation in this
regard, Mr. Houlihan will continue to act in compliance with the Bank’s “no
comment” policy with respect to rumors regarding Bank policy or
activities.  Notwithstanding the
foregoing, Confidential Information does not include information which becomes
available in the public domain, including information which becomes available
in the public domain by virtue of direct or indirect disclosure by the Bank
(unless it has become public due to Mr. Houlihan’s breach of this
subparagraph), or which Mr. Houlihan may be required to disclose by law or by a
court or other governmental agency of competent jurisdiction, or which was not
provided to or received by Mr. Houlihan. 
It shall not be considered a breach of this subparagraph for Mr.
Houlihan, at any time prior to the effective date of his resignation from
employment with the Bank, to continue to use or disclose Confidential
Information as permitted in connection with the performance of his duties for
the Bank.


 


(c)  Mr. Houlihan further agrees not to make any
statement or issue any communication, whether written or oral, that disparages,
criticizes or otherwise reflects adversely on the Bank or any of the Releasees,
except if testifying truthfully under oath pursuant to a lawful court order or
subpoena or otherwise responding to or providing disclosures to regulatory
authorities as required by law.  In
addition, Mr. Houlihan agrees that he will not provide his views on the Bank’s
performance, outlook or trends or provide his views concerning any other
person’s observations about the Bank’s performance, outlook or trends, except
in connection with his duties as chief financial officer prior to the effective
date of his resignation.  Furthermore,
Mr. Houlihan acknowledges that he is no longer involved in investor relations
or treasury functions for the Bank and consequently will refrain from
interacting with analysts or investment bankers on behalf of the Bank and will
refer such persons to the appropriate Bank officer.  The Bank and Mr. Houlihan will agree on a mutually acceptable
statement about Mr. Houlihan’s resignation from the Bank and Mr. Houlihan will
make no further comment about his resignation except as so agreed to.  Subject to the foregoing limitations, until
the effective date of his resignation, Mr. Houlihan will continue to perform
all of  his duties as Chief Financial
Officer.


 


(d)  The Bank agrees that, following the issuance
of the mutually acceptable statement referred to in subparagraph (c) above, the
persons named below will not make any


 


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statement or issue any
communication, whether written or oral, that disparages Mr. Houlihan, except if
testifying truthfully under oath pursuant to a lawful court order or subpoena
or otherwise responding to or providing disclosures to regulatory authorities
as required by law.  The persons subject
to the requirements of this subparagraph are:


 


	
   

  	
  (i)

  	
  Kenneth Neilson;

  
	
   

  	
  (ii)

  	
  D. Lynn Van Borkulo-Nuzzo;

  
	
   

  	
  (iii)

  	
  James Nall; and

  
	
   

  	
  (iv)

  	
  Current Directors of the Bank.

  



 


(e)  Mr. Houlihan further agrees that he will
not, at any time on or before December 31, 2004, either directly or indirectly,
on behalf of himself or on behalf of any other person, firm, partnership,
corporation, or other entity, act in any way to solicit, encourage or cause any
employee of the Bank to leave his or her employment with the Bank


 


(f)  In the event that Mr. Houlihan breaches any
of the provisions of this paragraph 4 at any time on or before December 31,
2004, he will forfeit the  right to receive payment of the Unvested
Option Bonus. Such forfeiture shall not affect the validity or enforceability
of the release provisions contained in paragraph 2, and shall be in addition to
any other remedies the Bank may seek for breach of the Agreement.


 


(g)  In the event that the Bank breaches any of
the provisions of this paragraph 4 at any time on or before December 31, 2004,
and subject to the condition that there has been no previous forfeiture of the
Unvested Option Bonus by Mr. Houlihan, the Bank shall be required to promptly
pay the Unvested Option Bonus to Mr. Houlihan.


 


5.   In
further exchange for the consideration received by Mr. Houlihan under this
Agreement, he agrees to cooperate fully with the Bank in any matters as
described below in this paragraph.  This
requires Mr. Houlihan, without limitation, to: (1) maintain the confidentiality
of all Bank privileged or confidential information including, without
limitation, attorney-client privileged communications and attorney work
product, unless disclosure is expressly authorized by the Bank; and (2) notify
the Bank promptly of any requests to him for information related to any pending
or potential legal administrative claim or litigation involving the Bank,
reviewing


 


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any
such request with a designated representative of the Bank prior to disclosing
any such information, and permitting a representative of the Bank to be present
during any communication of such information. 
Nothing in this Agreement is intended to prohibit Houlihan from
reporting any accounting, internal accounting control, or auditing matter to
any federal regulatory agency, any federal law enforcement agency, or any
Member of Congress or any committee or subcommittee of Congress.  Nor is this Agreement intended to prohibit
Houlihan from engaging in any activity protected by the Sarbanes-Oxley Act (18
U.S.C. § 1514A).  Mr. Houlihan
represents that he is not aware of any matter that he believes he would need to
communicate to a federal regulatory agency, or any federal enforcement agency,
or any Member of Congress, or any committee or subcommittee of Congress and if
he becomes so aware prior to the effective date of his resignation, he shall
communicate such items to an appropriate officer or director of the Bank.  Mr. Houlihan understands and agrees
that he will not receive any additional consideration or compensation  from the Bank for his cooperation as
described in this paragraph, except that the Bank agrees that it will reimburse
Mr. Houlihan for reasonable out-of-pocket expenses (e.g. travel, parking,
meals) incurred as a result of his compliance with this paragraph 5.


 


6.   Mr. Houlihan agrees that he will not apply
for, nor otherwise seek or accept, employment or re-employment with the Bank or
any of its related or successor companies, and he forever releases and
discharges the Bank and its related or successor companies from any obligation
to consider him for employment or re-employment in any capacity.


 


7.   This Agreement shall not be construed as an
admission or acknowledgment of any wrongdoing or liability by the Bank with
respect to any aspect of Mr. Houlihan’s employment or the termination of that
employment.


 


8.   The only consideration Mr. Houlihan has
received for executing this Agreement is that set forth in paragraph 1 above.  No other promise, inducement, agreement or
understanding of any kind or description has been made with or to Mr. Houlihan
by the Bank to cause him to sign this Agreement.


 


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9.   Mr. Houlihan is hereby advised that he
should consult with an attorney prior to signing this Agreement.  He states that he has had the opportunity to
discuss this Agreement with whomever he wished, including an attorney of his
own choosing.  He also states that he
has had the opportunity to read, review and consider all of the provisions of
this Agreement; that he understands its provisions and its final and binding
effect upon him; and that he is accepting the consideration offered to him and
entering into this Agreement freely, voluntarily, and without duress or
coercion.


 


10.   Mr. Houlihan understands that he has
twenty-one (21) days within which to consider this Agreement before signing it
and returning it to the Bank and that, after signing the Agreement, he may
revoke his signature within seven (7) calendar days by providing written
notification of his decision to revoke his signature to D. Lynn Van
Borkulo-Nuzzo, Corporate Secretary, 
1000 MacArthur Blvd., Mahwah, NJ. 07430.  Such revocation must be received on or before the seventh day
after signing in order to be effective.


 


 


	
  HUDSON UNITED BANCORP and

  	
  WILLIAM HOULIHAN

  
	
  HUDSON UNITED BANK

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  /s/William Houlihan

  	
   

  
	
   

  	
   

  
	
  DATED: 
  November 5, 2003

  	
  DATED: November 5, 2003

  
					



 


 


THIS AGREEMENT IS
NOT BINDING ON EITHER PARTY UNTIL SIGNED BY SUCH PARTY AND THIS REQUIREMENT MAY
NOT BE WAIVED BY EITHER PARTY


 


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