Document:

exv10w3

Exhibit 10.3

EXECUTION COPY

Exhibit A

RELEASE AGREEMENT

       THIS RELEASE AGREEMENT (the “Release”) is executed as of September 11, 2009, by
and between Terence W. Edwards (“Edwards”) and PHH Corporation (the “Company”).

     WHEREAS, the Company and Edwards entered into a Transition Services and Separation Agreement,
executed as of August 5, 2009 (the “Agreement”) that provides for certain payments and
benefits to be paid only if Edwards has signed and not revoked a general release of claims.

     NOW THEREFORE, intending to be legally bound hereby, the Company and Edwards agree as follows:

Release and Covenant Not to Sue.

     In consideration for the benefits and payments specified in the Agreement, Edwards hereby
fully and forever releases and discharges the Company and each of its subsidiaries and affiliates,
and all of their predecessors and successors, assigns, officers, directors, trustees, employees,
agents and attorneys, past and present (“Releasees”) of and from any and all claims, demands,
liens, agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and liabilities, of whatever kind
or nature, direct or indirect, in law, equity or otherwise, whether known or unknown, arising
through the date of this Release, out of Edwards’ employment with the Company or any Releasee,
including the termination thereof. By this paragraph Edwards waives any claims which Edwards has
or may have against Releasees, or any of them. This includes all rights and obligations under any
federal, state or local laws or ordinances pertaining to employment, including but not limited to
any claims for relief or causes of action under the Age Discrimination in Employment Act, 29 U.S.C.
§621 et seq., or any other federal, state or local statute, ordinance or regulation regarding
discrimination in employment, all claims for wrongful discharge, all claims that Releasees, or any
of them, dealt unfairly with Edwards, in bad faith or in violation of any contract or agreement,
expressed or implied, that may have existed between Releasees, or any of them, and Edwards, and all
claims against Releasees, or any of them, for assault, battery, personal injury, emotional
distress, pain and suffering.

     Edwards expressly represents that he has not filed a lawsuit or initiated any other
administrative proceeding against Releasees, or any of them, and that he has not assigned any claim
against the Releasees, or any of them, Edwards further promises not to initiate a lawsuit or to
bring any other claim against Releasees, or any of them, arising out of or in any way related to
Edwards’ employment by the Company or any Releasee, including the termination of that employment.
This Release will not prevent Edwards from filing a charge with the Equal Employment Opportunity
Commission (or similar state agency) or participating in any investigation conducted by the Equal
Employment Opportunity Commission (or similar state

 

 

EXECUTION COPY

agency); provided, however, that any claims by Edwards for personal relief in connection with
such a charge or investigation (such as reinstatement or monetary damages) would be barred by this
Release.

     The foregoing will not be deemed to release the Company from any of the following claims,
entitlements or rights of Edwards for or to:

	 	1.	 	Claims or actions brought, in good faith, solely to enforce or clarify the
promises, rights, entitlements, obligations, and benefits provided in this Release or
the Agreement;
	 
	 	2.	 	Vested benefits under retirement plans sponsored by the Company in which
Edwards is a participant, based on services performed prior to the Termination Date
(as defined in the Agreement);
	 
	 	3.	 	Rights to convert coverage under an existing life insurance policy provided
by the Company, subject to the conversion rights of such policy;
	 
	 	4.	 	Coverage, if any, under any policy of liability or directors and officers
liability insurance for matters subject to said policies for activities arising out
of or in any way related to Edwards’ employment prior to the Termination Date (as
defined in the Agreement);
	 
	 	5.	 	Any right to indemnification or cost of defense from or by the Company
pursuant to the Company’s by-laws or charter, or duly adopted resolution of the
Company’s Board of Directors for activities and actions by Edwards as an agent,
officer, or employee of the Company, prior to the Termination Date (as defined in the
Agreement);
	 
	 	6.	 	Earned wages and compensation, accrued vacation and accrued fringe
benefits, or reimbursement for authorized expenses acquired or incurred before the
Termination Date (as defined in the Agreement); and
	 
	 	7.	 	Any counterclaims in connection with a lawsuit or administrative proceeding
in which the Company, its successors, assigns or subrogees seek legal or equitable
relief from Edwards provided such counterclaim (i) arises out of the transaction or
occurrence that is the subject matter of the claim raised by the Company in such
lawsuit or proceeding, (ii) does not require for adjudication the joinder or presence
of third parties, and (iii) does not relate to or arise out of the termination of
Edwards’ employment or involve any claim for compensation or benefits for services
rendered to the Company.

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EXECUTION COPY

Rescission Right.

     Edwards expressly acknowledges and recites that (a) he has read and understands the terms of
this Release in its entirety, (b) he has entered into this Release knowingly and voluntarily,
without any duress or coercion; (c) he has been advised orally and is hereby advised in writing to
consult with an attorney with respect to this Release before signing it; (d) he was provided
twenty-one (21) calendar days after the receipt of the Release to consider its terms before signing
it; and (e) he has seven (7) calendar days from the date of signing to terminate and revoke this
Release in which case this Release will be unenforceable, null and void. Edwards may revoke this
Release during those seven (7) days by providing written notice of revocation to the Company. The
revocation must be delivered to the General Counsel of PHH Corporation, 3000 Leadenhall Road, Mail
Stop LGL, Mt. Laurel, NJ 08054.

[signature page to follow]

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EXECUTION COPY

     IN WITNESS WHEREOF, Edwards and the Company have executed this Release as of the date first
above written.

	 	 	 	 	 
	 	 	 
	 	/s/ Terence W. Edwards	 
	 	Terence W. Edwards 	 

  Date: 9/11/09

	 	 	 	 	 
	 	PHH CORPORATION

 	 
	 	By:  	/s/ George Kilroy	 
	 	 	 	 

  Date: 9/14/09

4EX-10.1

UNITED STATES OF AMERICA

BEFORE THE

BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM

WASHINGTON, D.C.

STATE OF

INDIANA DEPARTMENT OF FINANCIAL INSTITUTIONS

INDIANAPOLIS, INDIANA

In the Matter of

			
	 	 	 
	 
	 	Docket Nos. 09-126-B-HC               
	IRWIN FINANCIAL CORPORATION
	 	09-126-B-SM               
	Columbus, Indiana	 	 
	 	 	 
	IRWIN UNION BANK AND TRUST COMPANY	 	 
	Columbus, Indiana	 	 

     WHEREAS, in recognition of their common goal to restore and maintain the financial soundness
of Irwin Financial Corporation, Columbus, Indiana (“Irwin”), a registered bank holding company, and
its subsidiary bank, Irwin Union Bank and Trust Company, Columbus, Indiana (the “Bank”), an Indiana
state chartered bank that is a member of the Federal Reserve System, Irwin and the Bank have
consented to the issuance of a Cease and Desist Order (the “Order”) by the Board of Governors of
the Federal Reserve System (the “Board of Governors”) and the Indiana Department of Financial
Institutions (the “DFI”);

     WHEREAS, on October 10, 2008, Irwin and the Bank entered into a Written Agreement with the
Federal Reserve Bank of Chicago (the “Reserve Bank”) and the DFI designed to correct certain
deficiencies at Irwin and the Bank relating to safety and soundness (the “Written Agreement”);

 

 

     WHEREAS, Irwin and the Bank have taken steps to comply with the Written Agreement but have not
yet fully complied with all of the provisions of the Written Agreement; and

     WHEREAS, on September 11, 2009, the boards of directors of Irwin and the Bank at duly constituted meetings
adopted resolutions authorizing and directing William I. Miller to enter into this Order on behalf
of Irwin and the Bank and consenting to compliance with each and every applicable provision of this
Order by Irwin, the Bank, and their institution-affiliated parties, as defined in sections 3(u) and
8(b)(3) of the Federal Deposit Insurance Act, as amended (the “FDI Act”) (12 U.S.C. §§ 1813(u) and
1818(b)(3)), and waiving any and all rights that Irwin and the Bank may have pursuant to section 8
of the FDI Act (12 U.S.C. § 1818) and to Ind. Code § 28-11-4 et seq. to: (i) a hearing for the
purpose of taking evidence on any matters set forth in this Order; (ii) judicial review of this
Order; (iii) contest the issuance of this Order by the Board of Governors and the DFI; and (iv)
challenge or contest, in any manner, the basis, issuance, validity, terms, effectiveness or
enforceability of this Order or any provisions hereof.

     NOW, THEREFORE, IT IS HEREBY ORDERED that, pursuant to sections 8(b)(1) and (3) of the FDI Act
and Ind. Code § 28-11-4-5, that Irwin and the Bank and their institution-affiliated parties shall
cease and desist and take affirmative action as follows:

Source of Strength

     1. Irwin shall take appropriate steps to fully utilize its financial and managerial
resources to assist the Bank in functioning in a safe and sound manner pursuant to Regulation
Y of the Board of Governors (12 C.F.R. § 225.4) and to ensure that Irwin Union Bank, F.S.B.,
Columbus, Indiana (the “Thrift”), a federally chartered savings association, complies with the
Order to Cease and Desist entered into with the Office of Thrift Supervision (the “OTS”) effective
as of July 24, 2009.

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Minimum Capital Ratios

     2. By September 30, 2009, Irwin shall achieve and maintain a consolidated total risk-based
capital ratio of at least eleven percent (11%), as defined in the Capital Adequacy Guidelines for
Bank Holding Companies: Risk-Based Measure, Appendix A of Regulation Y of the Board of Governors
(12 C.F.R. Part 225, App. A).

     3. By September 30, 2009, the Bank shall achieve and maintain a total risk-based capital ratio
of at least twelve percent (12%), as defined in the Capital Adequacy Guidelines for State Member
Banks: Risk-Based Measure, Appendix A of Regulation H of the Board of Governors (12 C.F.R. Part
208, App. A).

     4. Irwin and the Bank shall notify the Reserve Bank and the DFI, in writing, no more than 10
business days after the end of any month in which Irwin’s consolidated total risk-based capital
ratio or the Bank’s total risk-based capital ratio falls below the capital ratio required by
paragraphs 2 and 3, as appropriate. Together with the notification, Irwin and the Bank shall submit
an acceptable written plan that details the steps Irwin and the Bank, as appropriate, will take to
achieve and maintain the capital ratio required by this Order.

Liquidity/Funds Management

     5. (a) Within 10 days of this Order, Irwin and the Bank shall submit to the Reserve
Bank and the DFI an acceptable plan to reduce the Bank’s reliance on wholesale deposits. The
plan shall reduce the aggregate dollar amount of wholesale deposits from the levels that exist
as of August 17, 2009, in accordance with the following schedule:

(i) By September 30, 2009, reduce aggregate wholesale deposits by 33%
from the levels that exist as of August 17, 2009;

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(ii) By December 31, 2009, reduce aggregate wholesale deposits by 50%from the
levels that exist as of August 17, 2009; and

(iii) By March 31, 2010, reduce
aggregate wholesale deposits by 75% from the levels that exist as of August 17,
2009.

Asset Sales

     6. As of the date of this Order, Irwin and the Bank shall not sell or dispose of any
asset without the prior written approval of the Reserve Bank and the DFI. All requests for prior
written approval shall be received by the Reserve Bank and the DFI at least 5 business days prior
to the proposed sale. All requests shall contain, at a minimum, the terms of the proposed sale and
the projected impact of the proposed sale on the franchise value, strategic plan, capital, and
liquidity of Irwin and the Bank, as applicable.

Compliance with the Agreement

     7. Within 10 days after the end of each month following the date of this Order, Irwin and the
Bank, as applicable, shall submit to the Reserve Bank and the DFI written progress reports
detailing the form and manner of all actions taken to secure compliance with this Order and the
results thereof.

Approval, Implementation, and Progress Reports

     8. (a) Irwin and the Bank shall submit a written plan that is acceptable to the Reserve
Bank and the DFI within the applicable time period set forth in paragraph 5 of this Order.

          (b) Within 10 days of approval by the Reserve Bank and the DFI, Irwin and the Bank shall adopt
the approved plan. Upon adoption, Irwin and the Bank shall promptly implement the approved plan and
thereafter fully comply with it.

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          (c) During the term of this Order, the approved plan shall not be amended or rescinded
without the prior written approval of the Reserve Bank and the DFI.

Communications

     9. All communications regarding this Order shall be sent to:

	 	(a)	 	Ms. Cathy Lemieux

Senior Vice President

Federal Reserve Bank of Chicago

230 South LaSalle Street

Chicago, Illinois 60690
	 
	 	(b)	 	Mr. David Mills

Director

Indiana Department of Financial Institutions

30 South Meridian Street, Suite 300

Indianapolis, Indiana 46204
	 
	 	(c)	 	Mr. William I. Miller, Chairman, and Chief Executive Officer

Irwin Financial Corporation

Irwin Union Bank and Trust Company

500 Washington Street

Columbus, IN 47202-0929

Miscellaneous

     10. Notwithstanding any provision of this Order to the contrary, the Reserve Bank and the DFI
may, in their sole discretion, grant written extensions of time to Irwin and the Bank to comply
with any provision of this Order.

     11. The provisions of this Order shall be binding upon Irwin, the Bank, and their
institution-affiliated parties, in their capacities as such, and their successors and
assigns.

     12. Each provision of this Order shall remain effective and enforceable until stayed,
modified, terminated, or suspended in writing by the Reserve Bank and the DFI.

     13. The provisions of this Order shall not bar, estop or otherwise prevent the Board of
Governors, the Reserve Bank, the DFI or any other federal or state agency from taking any other

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action affecting Irwin, the Bank, any nonbank subsidiaries
of Irwin, or any of their current or
former institution-affiliated parties and their successors and assigns.

     14. This Order does not supersede, stay, terminate, or suspend any provision of the Written
Agreement.

     By Order of the Board of Governors of the Federal Reserve System and the DFI effective this
15th day of September, 2009.

	 	 	 	 	 	 	 	 	 	 	 
	IRWIN FINANCIAL CORPORATION	 	 	 	BOARD OF GOVERNORS OF
THE FEDERAL RESERVE SYSTEM	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William I. Miller	 	 	 	By:
	 	/s/ Jennifer J. Johnson	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William I. Miller
	 	 	 	 	 	Jennifer J. Johnson	 	 
	 

	 	Chairman and Chief Executive Officer
	 	 	 	 	 	Secretary of the Board	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	IRWIN UNION BANK AND TRUST
COMPANY	 	 	 	INDIANA DEPARTMENT OF FINANCIAL
INSTITUTIONS	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ William I. Miller	 	 	 	By:	 	/s/ David Mills	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	William I. Miller
	 	 	 	 	 	David Mills	 	 
	 

	 	Chairman and Chief Executive Officer
	 	 	 	 	 	Director	 	 

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