Document:

Exhibit
10.7

 

EMPLOYMENT
AGREEMENT

 

EMPLOYMENT AGREEMENT (the “Agreement”),
dated as of March 18, 2005, between TRC Companies, Inc., a Delaware Corporation
(the “Company”) and Christopher P. Vincze (the “Executive”).

 

1.             Effective
Date and Employment Term.

 

(a)           Effective
Date.  This Agreement
shall become effective upon the execution hereof by both parties hereto (the “Effective
Date”).

 

(b)           Employment
Term.  The initial term of
the Executive’s employment under this Agreement shall commence on May 2, 2005 (the
“Start Date”), and continue for a period of three (3) years from the Start Date
(the “Initial Term”), unless sooner terminated pursuant to Section 4.  Upon the expiration of such initial term, it
is anticipated that Executive will continue as an employee-at-will upon terms
and conditions generally available to individuals at his level in the Key
Person Group of the Company, subject, however, to the provisions of Subsections
4 (d) and 4 (e) hereof.  The initial term
and any successive term shall hereinafter be referred to as the “Employment
Term.”

 

2.             Position,
Reporting, and Other Activities.

 

(a)           Position.  The Executive hereby accepts employment with
the Company as its Chief Operating Officer in accordance with the terms and
conditions herein.  The Executive shall
devote and his full professional time and attention (except for vacation, sick
leave, and other excused leaves of absence) to the performance of the services
customarily incident to such office, and of such other duties as may be
reasonably assigned to the Executive from time to time by the Company’s Chief
Executive Officer (“CEO”) or Board of Directors.  The Company will provide office facilities,
secretarial, and clerical support consistent with customary practices of the
Company.  Within eighteen (18) months
from the Start Date and contingent on Executive meeting mutually agreeable
Operational Goals determined by Executive and the CEO within thirty (30) days
from the Start Date, and subject to the approval of the Company’s Board of
Directors, Executive shall be promoted to President of the Company.  Attachment A illustrates the types of
Operational Goals to be considered.

 

(b)           Reporting.  During the Employment Term, the Executive
shall be required to report to the Company’s Chairman and Chief Executive
Officer.

 

(c)           Other
Activities.  Except upon the
prior written consent of the Board of Directors of the Company (the “Board”),
during the Employment Term, the Executive will not: (i) accept any other
employment; or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that is competitive
with, or that places him in a competing position to, the Company.  Personal passive investments and personal business
affairs not inconsistent with this Agreement, or teaching, writing or publicly
speaking 

 

 

are
permitted, so long as these activities do not interfere or conflict with the
Executive’s duties hereunder.

 

3.             Compensation
and Other Benefits.

 

(a)           Base
Salary.  In consideration of
the services to be rendered hereunder, the Executive shall be paid a base
salary of $297,500.00 per year, payable in accordance with the Company’s
payroll practices in effect during the course of this Agreement.  Upon the earlier of Executive’s promotion to
President of the Company or eighteen (18) months from the Start Date, Executive’s
salary shall increase to $350,000.00 per year. 
The compensation payable under this Section 3(a) shall be Executive’s “Base
Salary” hereunder.

 

(b)           Initial
Bonus.  Executive shall be
paid an initial bonus of $50,000 on July 1, 2005 provided he is employed by the
Company at that time.

 

(c)           Annual
Bonuses.  As further
compensation for the services of the Executive, the Executive shall be eligible
and payable, during the Employment Term, for an annual bonus from the Company
determined as follows.

 

(I)            Financial
Performance Bonus.  Each year during
the Employment Term, the Executive shall receive a guaranteed bonus of $50,000
payable within thirty (30) days of the anniversary of the Start Date.  For each fiscal year of the Company during
the Employment Term, the Executive will also receive an additional Performance
Bonus of up to $100,000 based on the degree to which mutually agreeable
Operational Goals, as determined by the CEO and the Executive annually within
thirty (30) days from the close of the Company’s fiscal year, and in the case
of the initial Operational Goals within thirty (30) days from the Start Date,
are achieved by Executive.  The Executive
and CEO shall further agree to specific criteria, benchmarks, milestones and
ranges of success with respect to each Operational Goal.  The initial four (4) categories of
Operational Goals will consist of:  A) improving
the Company’s profit margins; B) improving the time period in which the Company
collects its accounts receivables and outstanding payments; C) improving the
Company’s sales growth; and D) improving and optimizing the information
technology (IT) program for the Company. 
In such first 30 days, the Executive and CEO will divide these topics
into subtopics and place priorities which will focus on the most important
operational requirements.  The processes
and approaches used to achieve these agreed-upon objectives will not
significantly change or conflict with TRC’s basic cultural and organizational
characteristics.  The Performance Bonus
shall be paid on a pro rata basis with respect to the achievement of
Operational Goals set for the preceding year. 
For example, in year one where there are four (4) initial Operational
Goals, the Executive can earn up to $25,000 for each Operational Goal and in
the aggregate earn up to the entire $100,000 Performance Bonus.  Executive shall be paid the entire pro rata
portion of the Performance Bonus with respect to each Operational Goal, if Executive
substantially completes or achieves the Operational Goal or be paid a
reasonable pro rated portion of such pro rata portion of the Performance Bonus
in order to fairly compensate Executive to the extent of the portion of the
Operational Goal that Executive has achieved. 
In addition, the Executive shall participate in the Company’s Key Person
Bonus Plan and be given consideration thereunder in accordance with Executive’s
role in the Company, with the understanding that other bonuses paid to Employee
will be taken into consideration in 

 

2

 

determining
any bonus under the Key Person Bonus Plan. 
It is generally anticipated that, except for any bonuses awarded to
executive officers for extraordinary performance and assuming Executive
substantially completes or achieves the Operational Goals, Executive’s bonus
will be the second highest awarded to any executive officer of the Company,
subject to Compensation Committee Approval.

 

(II)           Periodic
Options.  The Executive will
be eligible to receive stock options under the Company’s Restated Stock Option
Plan and will be given consideration thereunder in accordance with Executive’s
role in the Company.  It is generally
anticipated that, except for any awards made to executive officers for
extraordinary performance and assuming Executive substantially completes or
achieves the Operational Goals, Executive’s option grant will be the second
highest amount awarded to any executive officer of the Company, subject to Compensation
Committee Approval.

 

(d)           Benefits.
Executive shall have the right to participate in and to receive benefits from
all present and future life, vacation, accident, disability, medical, pension,
and savings plans and all similar benefits made available generally to
executives of the Company.  The amount
and extent of benefits to which the Executive is entitled shall be governed by
any applicable benefit plan, as it may be amended from time to time.  Executive shall receive no less than three
(3) weeks paid vacation each year which shall accrue if not used in any year
and be paid to Executive or carried forward to subsequent years consistent with
Company policy.  The Company shall also
carry D&O Liability Insurance coverage for the benefit of its officers and
directors including Executive.

 

(e)           Automobile
Allowance.  During the
Employment Term, the Company shall provide the Executive with an automobile
allowance of $700 per month to be increased consistent with policies applicable
to other executives of the Company. 
Executive will also receive a Company gasoline credit card pursuant to
its standard practice for officers.

 

(f)            Expenses.  The Company shall reimburse the Executive for
reasonable travel and other business expenses incurred by the Executive in the
performance of his duties hereunder in accordance with the Company’s general
policies, as they may be amended from time to time during the course of this
Agreement including, but not limited to, the cost of Executive’s Country Club
expenses up to $10,000 per year.

 

(g)           Options.  The Company shall grant to the Executive
ten-year options to purchase 60,000 shares the Company’s common stock, par
value $0.01 per share (the “Options”), pursuant to the Company’s Restated Stock
Option Plan (the “Plan”).  The exercise
price of such Options shall be the closing price of the Company’s common stock
on the trading day immediately preceding the Start Date.  In the event the Executive’s employment with
the Company is terminated, the Executive will only be permitted to exercise
such vested Options within ninety (90) day period following such
termination.  The options will vest in
equal one-third increments upon the date of grant and on the next two
anniversaries of such grant, and to the extent unvested, shall vest in their
entirety upon a Change of Control, as defined, or upon termination of
employment pursuant to Subsections 4(d) or 4(e) hereof.

 

3

 

4.             Termination
of Employment.

 

(a)           By
Death.  If the Executive
dies prior to the expiration of the Employment Term, his bonuses pursuant to
Section 3(c) (if any), and accrued but unused vacation will be prorated through
the day of his death and shall be paid to his beneficiaries or estate within
thirty (30) days of the Executive’s death; provided that the manner and time
frame in which the bonuses will be paid shall be pursuant to Section 4(f).  In addition, Executive agrees to enroll in
the Company’s life insurance plan, and Company will provide a benefit to
Executive’s estate equal to the amount, if any, such life insurance benefit is
less than Executive’s Annual Base Salary hereunder.  Thereafter, the Company’s obligations
hereunder shall terminate.

 

(b)           By
Disability.  If the Executive
becomes “Permanently Disabled” (as defined below) prior to the expiration of
the Employment Term, then the Company shall be entitled to terminate his
employment, subject to the requirements of applicable law, and the Executive
shall be entitled to receive disability benefits in accordance with any
applicable disability policy maintained by the Company as of the date of such
disability, in which policy Executive agrees to enroll.  In the event of such termination, the
Executive will be paid an amount, if any, by which amounts paid under such disability
policy are less than Executive’s Annual Base Salary hereunder, and his bonuses
pursuant to Section 3(c) (if any) will be prorated through the date of
termination and paid to him on the date of termination.  Additionally the Executive shall receive a
cash lump sum payment on the date of termination for accrued but unused
vacation for the year of termination, and thereafter the Company shall have no
further obligations to the Executive hereunder other than to provide the
Executive with the benefits as set forth in this subparagraph.  For the purposes of this subparagraph, the
Executive shall be deemed “Permanently Disabled” when, and only when, the
Company determines, after consultation with the Executive’s physician, that the
Executive suffers a physical or mental disability that prevents the Executive
from performing the essential duties of his position with reasonable
accommodations as may be required by law: (i) for a period of one hundred
twenty (120) consecutive days; or (ii) for an aggregate of one hundred fifty
(150) business days in any twelve (12) month period.

 

(c)           By the
Company For Cause.  If the Company
terminates the Executive for “Cause” (as defined below), then the Company shall
pay to the Executive within ten (10) days his accrued Base Salary and accrued
but unused vacation plus all business expenses and the car allowance through
the date of such termination, and thereafter the Company shall have no
obligations to the Executive hereunder. 
For purposes of this Agreement, “Cause” shall mean: (i) any act or
omission that constitutes a material breach by the Executive of any of his
obligations under this Agreement, or under any other material agreement with,
or material written policy of the Company, which act or omission is not cured within
thirty (30) days of the Company providing the Executive with notice of the act,
omission, or failure deemed to constitute Cause; (ii) the failure or refusal by
the Executive to follow any lawful reasonable written direction of the Board of
Directors or Chief Executive Officer, which failure or refusal is not cured
within thirty (30) days of the Company providing the Executive with reasonably
detailed written notice of the failure or refusal deemed to constitute Cause;
(iii) the conviction of the Executive of a felony or a crime involving moral
turpitude, or the perpetration by the Executive of a fraud; or (iv) any other
willful act or omission by the Executive, which is or will be materially
injurious to the financial 

 

4

 

condition
or business reputation of, or is otherwise materially injurious to, the
Company, which act or omission is not cured within thirty (30) days of the
Company providing the Executive with reasonably detailed written notice of the
act or omission deemed to constitute Cause.

 

(d)           By the
Executive For Good Reason. 
The Executive may terminate, without liability, the Employment Term for “Good
Reason” (as defined below) upon advance written notice of thirty (30) business
days to the Company if such circumstance claimed to constitute Good Reason is
not cured within such 30-day period. 
Within ten (10) days after termination, the Company shall then pay to
the Executive a lump sum payment equal to one times his Annual Base Salary to
which he is entitled pursuant to Section 3(a).  In addition, the Company shall pay to the
Executive within ten (10) days of termination his accrued Base Salary, accrued
but unused vacation, outstanding business expenses, and pro-rated bonuses
pursuant to Section 3(c) (if any) through the date of such termination. The
Company will also provide the Executive with continued coverage under the
Company’s benefit plans and the benefits described in Sections 3(d), 3(e) and
3(f) herein for a period of one (1) year or at Executive’s option solely with
respect to automobile and related expenses and country club memberships a lump
sum payment in such amount equal to said benefits for a twelve (12) month
period to be paid on the date of termination. 
Notwithstanding anything herein to the contrary, if such coverage cannot
be continued to the Executive after such termination of employment, the Company
shall, within ten (10) days of such termination, pay the Executive in a lump
sum an amount equivalent to the value of such coverage.  Thereafter, the Company’s obligations
hereunder shall terminate.  For purposes
of this Agreement, Good Reason shall exist if: (i) there is a permanent
assignment to the Executive of a role materially inconsistent with, or which
constitutes a material adverse diminution in, the Executive’s position, duties,
responsibilities, or status with the Company, or a material adverse diminution
in the Executive’s reporting responsibilities, title, or offices; or (ii) there
is a material breach by the Company of this Agreement or any other material
agreement between the Company and the Executive or (iv) Executive is required
to relocate his principal place of employment to a location outside a radius of
50 miles from Company’s offices, in Lowell, Massachusetts headquarters.

 

(e)           By the
Company other than by Reason of Death, Disability, or Cause.  If the Company terminates the Executive’s
employment for any reason other than death, disability, or Cause, the Company
shall pay to the Executive on the date of termination a lump sum payment equal
to the greater of (i) the compensation due Executive under this Agreement for
the remainder of the Initial Term if terminated during the Initial Term but not
exceed 24 months; or (ii) one (1) year of Base Salary.  In addition, the Company shall pay to the
Executive his accrued Base Salary, accrued but unused vacation, and pro-rated
bonuses pursuant to Section 3(c) (if any) through the date of such termination
plus reimbursement for all business expenses. 
Further, the Company shall pay all of the benefits described in Sections
3(d), 3(e) and 3(f) herein for the period described in the first sentence of
this Subsection 4(e) following such termination or at Executive’s option solely
with respect to automobile and related expenses and country club memberships in
a lump sum payment equal to such amount to be paid on the date of
termination.  Notwithstanding anything
herein to the contrary, if such coverage cannot be continued to the Executive
after such termination of employment, the Company shall, within ten (10) days
of such termination, pay the Executive in a lump sum an amount equivalent to
the value of such coverage.  Thereafter,
the Company’s obligations hereunder shall terminate.

 

5

 

(f)            Bonus
Calculation.  The pro rata
bonuses pursuant to Section 3(c) payable to the Executive pursuant to Section
4(a), (b), (d), or (e) shall include any unpaid bonuses for the prior fiscal
year.  The pro rata bonuses for the
fiscal year in which the termination occurs will be calculated at the end of
the fiscal year in question according to the following methods.  With respect to the guaranteed $50,000 bonus,
it shall be calculated on a pro rata basis by multiplying $50,000 by the number
of days of such fiscal year during which the Executive was employed by the
Company divided by 365 days.  With
respect to the Performance Bonus in which the Executive may earn up to $100,000
annually based on substantially completing or achieving certain Operational
Goals, it shall be calculated in accordance with Section 3(b)(I) of this
Agreement.  With respect to the Key
Person Bonus Plan bonus, the Company and/or Board shall determine the amount
that would have been paid to the Executive as if he had remained employed through
the end of the fiscal year and multiply that amount by the number of days of
such fiscal year during which the Executive was employed by the Company divided
by 365 days.

 

5.             Proprietary
Information.

 

(a)           Defined.  “Proprietary Information” is all proprietary,
secret, or confidential information pertaining to the business of the Company.

 

(b)           General
Restrictions on Use. 
The Executive agrees to hold all Proprietary Information in strict
confidence and trust for the sole benefit of the Company, and not, directly or
indirectly, to disclose, use, copy, publish, summarize, or remove from the
Company’s premises any Propriety Information except: (i) during the Employment
Term to the extent necessary to carry out the Executive’s responsibilities
under this Agreement; (ii) to the extent that such Proprietary Information is
generally available to the public other than as a result of disclosure by the
Executive; and (iii) after termination of the Employment Term as specifically
authorized in writing by the Board.

 

6.             No
Assignment.

 

(a)           Neither this Agreement nor any
right or interest hereunder shall be assignable by the Executive, his
beneficiaries, or legal representatives without the Company’s prior written
consent; provided that nothing in this subsection 6(a) shall preclude the
Executive from designating a beneficiary to receive, upon his death, any
benefit payable hereunder, or the executors, administrators, or other legal
representatives of the Executive’s estate from assigning any rights hereunder
to the person or persons entitled thereto.

 

(b)           Except as otherwise required by
law, without the Company’s prior written consent, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment, encumbrance, charge, pledge, or hypothecation, or to
exclusion, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void, and of no effect.

 

(c)           Company agrees that in any
Change of Control the terms of this Agreement will survive and will be assumed
by any successor to Company in such Change of Control.

 

6

 

7.             Change
of Control.  For purposes of
this Agreement, Change of Control shall mean (i) the merger or consolidation of
Company with another entity, as a result of which Company will not be the
surviving entity; (ii) the sale of all or substantially all of Company’s assets
or all or substantially all of the assets of Company’s wholly-owned
subsidiaries; or (iii) the acquisition, by an entity, person or group of
beneficial ownership (as defined in Rule 13d-3 under the Securities and
Exchange Act of 1934) of the capital stock of Company if, immediately after
such acquisition, such entity, person or group is entitled to exercise more
than 25% of the outstanding voting power of all capital stock of the Company
entitled to vote at elections of directors.

 

8.             Non-Interference.  Executive agrees that during any period for
which or related to which Executive is receiving payments pursuant to Section 4
hereof, Executive will not, without the prior written consent of the Company,
directly or indirectly, solicit, induce or attempt to solicit or induce any
employee, agent or other representative or associate of the Company, to
terminate its relationship with the Company or in any way interfere with such a
relationship.

 

9.             Notices.  All notices, requests, claims, demands, and
other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such
address for a party as shall be specified by like notice):

 

If to the Company

 

TRC Companies, Inc.

5 Waterside Crossing

Windsor, Connecticut 06095

Attn: 
General Counsel

 

If to the Employee:

 

Christopher P. Vincze

1 Eisenhaure Lane

North Reading, Massachusetts 01864

 

With a copy to:

 

Frank A. Segall

Burns & Levinson, LLP

125 Summer Street

Boston, Massachusetts 02110

 

10.           Entire
Agreement.  The terms of this
Agreement are intended by the parties to be the final expression of their
agreement with respect to the employment of the Executive by the Company and
may not be contradicted by evidence of any prior or contemporaneous
agreement.  The parties further intend
that this Agreement shall constitute the complete and exclusive 

 

7

 

statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement.

 

11.           Amendments;
Waivers.  This Agreement may
not be modified, amended, or terminated except by an instrument in writing,
signed by the Executive and by a duly authorized representative of the Company
other than the Executive.  By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform; provided that such waiver shall not
operate as a waiver of, or estoppel with respect to, any other or subsequent
failure.  No failure to exercise and no
delay in exercising any right, remedy, or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power hereunder preclude any other or further exercise thereof, or the
exercise of any other right, remedy, or power provided herein, or by law or in
equity.

 

12.           Confidentiality.  The Executive agrees that the terms and
conditions of this Agreement are confidential and shall not be disclosed by the
Executive to any third parties, other than the Executive’s lawyers and other
professional advisors, unless such disclosure is required by law.

 

13.           Governing
Law.  The validity, interpretation, enforceability,
and performance of this Agreement shall be governed by and construed in
accordance with the law of the State of Massachusetts without giving effect to
its conflict of laws principles.

 

14.           Executive
Acknowledgment.  The Executive
acknowledges: (i) that he has consulted with or has had the opportunity to
consult with independent counsel of his own choice concerning this Agreement
and has been advised to do so by the Company; and (ii) that he has read
and understands the Agreement, is fully aware of its legal effect, and has
entered into it freely based on his own judgment.

 

15.           Binding
Effect.  This Agreement
shall be binding upon and shall inure to the benefit of the Company and its
respective successors and assigns, but the rights and obligations of the
Executive are personal and may not be assigned or delegated without the Company’s
prior written consent.

 

16.           Arbitration.  Any dispute or controversy between the
parties arising out of or under this Agreement, the Executive’s employment with
the Company, or the termination thereof, including without limitation, claims
under any federal, state, or local statute preventing discrimination, shall not
be decided in court, but instead shall be submitted to final, binding
arbitration before the American Arbitration Association (the “AAA”) in Boston,
Massachusetts.  The National Rules for
Resolution of Employment Disputes shall be used by the AAA to resolve any
disputes between the parties.  Each party
shall bear its own expenses arising under this arbitration provision.

 

17.           Legal
Fees.  The Company shall
pay all legal fees plus and disbursements incurred by the Executive in
connection with the negotiation and preparation of this Agreement not to exceed
$15,000.

 

8

 

The parties have duly executed this
Agreement as of the date first written above.

 

 

	
   

  	
  TRC
  COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Richard D. Ellison

  
	
   

  	
  Chairman, Chief
  Executive Officer, and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Christopher P. Vincze

  

 

9

 

ATTACHMENT A

(For President)

 

•                  Initiate Programs to Optimize all
Business Entities

 

•                  Optimize the GFM / BEM / Regional
Integration Program

 

•                  Establish Program for appropriate
communication with CEO and procedures for getting his involvement, where
appropriate.

 

•                  Establish Program to optimize ARs

 

•                  Become lead communicator with Board
on normal business activities

 

•                  Be able to fully represent TRC
business and strategy to analysts and existing and potential shareholders

 

•                  Maintain TRC entrepreneurial spirit

 

•                  Optimize company and Business Entity
IT Program

 

•                  Assure SOX program is followed by all
appropriate operations personnel

 

10Exhibit
10.2

 

March 17, 2005

 

Mr. Raymond H.
Melcher, Jr.

37 Michigan
Drive

Sinking
Spring, PA  19608

 

Dear Mr. Melcher:

 

This letter is
being written to you on behalf of Leesport Bank (the “Bank”) and its sole
shareholder Leesport Financial Corp. (the “Holding Company”) (the Holding
Company and the Bank sometimes will be referred to collectively as “Leesport”),
as a result of recent discussions, between you and Leesport, relating to your
resignation from your Board and officer positions with Leesport to pursue other
interests.  The following is intended to
set forth the terms and conditions of our agreement relating to such employment
(the “Agreement”).

 

1.  Resignations.

 

You confirm
that, effective March 17, 2005, you have resigned as a member of the Board
of Directors and as Chairman, President and Chief Executive Officer of the
Holding Company and the Bank and as a director and officer of any other direct
or indirect subsidiaries of the Holding Company or the Bank.  The parties agree that the resignations
effected by this paragraph do not result from any disagreement with Leesport on
any matter relating to Leesport’s operations, policies or practices.

 

2.  Continued Payments;
Termination of Employment Agreement.

 

A.  You and Leesport agree that, effective on the
date hereof, except as otherwise specifically provided herein, the employment
agreement between you and Leesport dated as of January 1, 2005 (the “2005
Employment Agreement”) (as the same may have been further amended, modified, or
restated) and all subsequent understandings or agreements relating to your
employment, if any, shall be null and void and of no further force and effect
and that you shall not be entitled to any compensation or benefits under such
agreements or understandings for services rendered, whether prior to or after
the date hereof, except as otherwise specifically provided herein.

 

B.  Notwithstanding Section 2A above, you
shall be entitled to a lump sum payment equal to 18 months of your monthly base
salary as in effect on the date of your resignation.  You also shall be entitled to a lump sum
payment of $11,000 to compensate you for any bonuses you may have earned in
2005.  The payments described in this
paragraph, less deductions required by law, will be made within 30 days after
the date you properly execute and deliver this Agreement to Leesport.

 

C.  Any earnings that you receive from any other
employment or services you provide shall not reduce or otherwise affect the
payments to be made to you by Leesport under this Agreement.  Although you may accept other employment, you
are under no obligation to do

 

 

so, and the payments and benefits to be provided by Leesport under this
Agreement shall be provided irrespective of whether you secure other
employment.

 

3.  Other Benefits.

 

Any benefits
payable to you under Leesport’s other plans and arrangements, including options
granted under Leesport’s 1999 Stock Option Plan, your directors deferred
compensation arrangement, and your supplemental executive retirement agreement,
will be paid to you in accordance with the terms of such plans and
arrangements, as if your employment had been terminated by the Company without
cause (as defined under any of such plans or arrangements).

 

4.  Public Statements.

 

Except for the
public announcement released by Leesport following the execution of this
letter, neither you nor the Bank, the Holding Company, any of their controlled
affiliated companies, or their directors or officers shall make or cause to be
made any public statements, orally or in writing, to any third person
concerning your resignation from your positions with the Bank, the Holding
Company or any of their controlled affiliated companies, this Agreement, your
contracts with Leesport or any discussion or negotiations relating to this Agreement,
unless (i) the statement is approved by the other party in writing in
advance of its release; (ii) the statement is compelled by judicial
process; (iii) the statement is required by Leesport’s regulators;
(iv) the statement is required by generally accepted accounting principles
or Regulation S-X (promulgated by the Securities and Exchange Commission (“SEC”)),
in the opinion of Leesport’s independent public accountants; (v) the
statement is required by the rules or regulations of the SEC or the rules or
regulations of NASD, in the opinion of Leesport’s counsel; or (vi) the
statement is made in connection with a due diligence examination involving
Leesport.

 

5.  Nondisparagement.

 

You will not,
at any time on or following the date hereof, make any remarks to any person,
orally or in writing, which are intended to defame or disparage Leesport or its
controlled affiliated companies or any of its or their officers, directors, or
subsidiaries.  Leesport agrees that, at
any time on or following the date hereof, neither it nor its controlled
affiliated companies will make or cause to be made any remarks to any person,
orally or in writing, which are intended to defame or disparage you or your
reputation.  Leesport will inform its
directors, executive officers and current members of the Senior Management
Committee of Leesport’s obligations under this Section 5.

 

6.  Covenants.

 

A.  For 18 months following the date of this
Agreement, you agree to assist and cooperate with Leesport’s directors,
officers, lawyers, accountants, consultants or other persons it may designate
in the investigation, defense and/or settlement of any asserted or threatened
litigation, administrative or regulatory proceeding or investigation against or
concerning Leesport, or any of its affiliated companies, concerning matters in
which you were involved or have knowledge as a result of your employment with
Leesport.  You also agree to cooperate
with and respond to inquiries from members of the Board of Directors or the
Chief Executive Officer

 

 

of Leesport from time to time with respect to Leesport’s ongoing
business and operations.  Unless
otherwise advised in writing, your contact for general business communications
shall be the Chief Executive Officer or the Chairman of the Board of Leesport.  You will be reimbursed for any reasonable
out-of-pocket expenses you incur in providing such services requested by
Leesport.

 

B.  Notwithstanding anything contained herein to
the contrary, the provisions of the 2005 Employment Agreement and the other
plans and agreements referred to in Section 3 above relating in each case
to covenants not to compete and non-solicitation of customers and employee
shall continue to apply.

 

C.  You recognize and acknowledge that during
your employment with Leesport you had and will have access to certain
confidential and proprietary business information and trade secrets
(collectively, “Information”), including but not limited to client and customer
Information, Leesport’s strategic and business plans, and Leesport’s financial
Information, all of which are of substantial value to Leesport in its
business.  You agree that you will not,
without Leesport’s permission, use Information for your benefit or for the
benefit of any third parties, or disclose to any third party in any manner,
directly or indirectly, any Information, unless such Information is already in
the public domain through no fault of your own. 
You agree to return to Leesport promptly following execution of this Agreement  any documents (including electronically
stored documents) which contain Information.

 

7.  Release of Claims.

 

A.  You, for yourself and on behalf of your
personal and legal representatives, executors, administrators, successors,
heirs, distributees and legatees, intending to be legally bound, hereby
forever:

 

(i)             release, waive and discharge the Holding
Company and its subsidiaries and the Bank and its subsidiaries and their
respective present and former officers, directors, stockholders, attorneys,
agents, contractors and employees, both in their official and individual
capacities, of and from any and all claims, causes of action, suits,
proceedings, debts, judgments, damages, contracts, agreements, claims for
attorneys’ fees, costs and demands whatsoever, in law or in equity, which you now
have or may have, arising from, or connected with any act, omission or deed
taken, done or occurring up to the date you execute this letter (“Claims”),
including but not limited to Claims related to your employment or any other
relationship with the Holding Company or the Bank (including but not limited to
Claims under the Age Discrimination in Employment Act of 1967, the Older
Workers Benefit Protection Act, the Americans with Disabilities Act, as
amended, Title VII of the Civil Rights Act of 1964, as amended, and the
2005 Employment Agreement, and all amendments, modifications, restatements
or clarifications to the 2005 Employment Agreement, whether oral or
written), but excluding claims arising under this Agreement; and

 

 

(ii)          except for Claims arising under this
Agreement, agree not to sue for any reason, or cooperate in any way, in any
suit or proceeding, or the preparation therefor against the Holding Company or
its subsidiaries, the Bank or its subsidiaries, or their respective present and
former officers, directors, stockholders, attorneys, agents and employees, both
in their official and individual capacities, arising from, or connected with
any Claim (including but not limited to Claims under the Age Discrimination in
Employment Act of 1967, as amended, the Older Workers Benefit Protection Act,
the Americans with Disabilities Act, and Title VII of the Civil Rights Act
of 1964, as amended, the 2005 Employment Agreement or your employment or
other relationship with the Holding Company or the Bank), including but not
limited to, furnishing information of any kind, or testifying, unless compelled
to by judicial process.

 

B.  The Holding Company, the Bank, their
subsidiaries, and their controlled affiliated companies, for themselves and on
behalf of their directors and officers (in their capacity as officers but not
in their individual capacity), and their respective successors and assigns,
intending to be legally bound, hereby forever:

 

(i)             release, waive and discharge you and your
personal and legal representatives, executors, administrators, successors,
heirs, distributees and legatees of and from any claims, causes of action,
suits, proceedings, debts, judgments, damages, contracts, agreements, claims
for attorneys’ fees, costs and demands whatsoever, in law or in equity, which
any of them now have or may have, arising from, or connected with, any act,
omission or deed taken, done or occurring up to the date you execute this
letter, including but not limited to claims arising from your employment or any
other relationship with the Holding Company or the Bank, but excluding claims
arising under this Agreement; and

 

(ii)          except for claims arising under this
Agreement, agree not to sue for any reason, or cooperate in any way, in any
suit or proceeding, or the preparation therefor, against you or your personal
or legal representatives, executors, administrators, successors, heirs,
distributees and legatees arising from, or connected with any claim released by
Section 13B(i), including your resignation from your positions with the
Holding Company and the Bank, the 2005 Employment Agreement or your
employment or any other relationship with the Holding Company or the Bank,
including, but not limited to, furnishing information of any kind, or
testifying, unless compelled to by judicial process.

 

You
acknowledge that with respect to claims for age discrimination waived by
Section 7A(i) you have had at least 21 days to consider such waiver
and may revoke such waiver by delivering written notification to Alfred J.
Weber at Leesport within seven days after you sign this letter.  If you do not agree to the waiver of age
discrimination claims or if you revoke such claims, the waiver and release of
all claims against you by Leesport in Section 7B will be null and void.

 

 

8.  Miscellaneous.

 

A.  Assignment.  This Agreement shall not be assigned, pledged
or transferred in any way by either party without the prior consent of the
other party, except that Leesport may assign or transfer this agreement in
connection with its sale or merger. 
Leesport will require any successor or assignee, whether direct or
indirect, or by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Holding Company or the
Bank to assume and agree to perform this Agreement in the same manner and to
the same extent that the Holding Company or the Bank, as the case may be, would
have been required to perform as if no succession or assignment had taken
place.

 

B.  Entire Agreement.  This Agreement and the attached exhibits and
the employee benefit plans referenced in Section 3 above, contain the
entire understanding among you, on the one hand, and the Holding Company and
the Bank, on the other hand, with respect to the subject matter hereof, and may
be amended only by a writing signed by each of the parties.  All prior or contemporaneous understandings,
discussions, or agreements, made orally or in writing, including without
limitation, the 2005 Employment Agreement, and any Leesport severance
policy, are expressly superseded by this agreement.

 

C.  Headings.  The headings in this letter are for
convenience of reference only and shall not be considered as part of this
Agreement nor limit or otherwise affect the meaning hereof.

 

D.  Arbitration.  Any dispute relating to this Agreement
between you, on the one hand, and the Holding Company or the Bank, on the other
hand, shall, at the election of either party, be subject to arbitration in
accordance with the rules of the American Arbitration Association then in
effect.  Unless otherwise agreed by the
parties, the arbitration shall take place in Reading, Pennsylvania.  The decision of the arbitration panel will be
binding on the parties and may be enforced in any court having
jurisdiction.  Pending the resolution of
any arbitration, Leesport will not cease making any payments or providing any
benefits required to be made under this Agreement, and any court of competition
jurisdiction may issue injunctive or equitable relief pending arbitration to
protect your rights to such continued payments or benefits.

 

E.  Specific Performance.  If any party fails to comply with provisions
of this Agreement, any other party will be entitled, upon application to any
court of competent jurisdiction, to specific performance or injunctive or other
equitable relief in order to enforce or prevent violation of such provision or
provisions.

 

F.  Waiver.  No failure or delay on the part of any party
in exercising any right under this Agreement shall operate as a waiver of such
right; nor shall any single or partial exercise or the exercise of any other
right hereunder preclude any other or further exercise of any right.

 

G.  Severability.  If one or more of the provisions contained in
this Agreement shall be determined illegal or unenforceable by a court, no
other provision shall be affected by such holding.

 

 

H.  Choice of Law.  This Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without regard to its conflicts of law principles.

 

If the
foregoing is acceptable to you, please acknowledge your agreement, by signing
and dating three (3) copies of this letter and returning two of them to me.

 

	
   

  	
  LEESPORT
  FINANCIAL CORP.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Alfred
  J. Weber

  	
   

  
	
   

  	
   

  	
  Alfred J. Weber

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEESPORT
  BANK

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Alfred
  J. Weber

  	
   

  
	
   

  	
   

  	
  Alfred J.
  Weber

  	
   

  

 

Agreed to and
accepted, intending to be legally bound:

 

	
  /s/
  Raymond H. Melcer, Jr.

  	
   

  
	
  Raymond H.
  Melcher, Jr.

  

 

Dated:  March 23, 2005

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