Document:

Exhibit 10.2

 

 

     

     

    

 

	 	Quality
                                         Agreement

 

 

 

Approvals

 

The
signatures below certify that this document has been reviewed and accepted, and demonstrates that the signatories are aware of
all the requirements contained herein and are committed to ensuring their provision.

 

	 	Name	Signature	Position	Date
	Pocono
    Coated Products, LLC	Michael
                                         Myer

	/s/
    Michael Myer	CQO	07/19/2016
	Nutriband,
    Inc.	Gareth
                                         Sheridan

	/s/
    Gareth Sheridan	CEO	07/19/2016

 

Amendment
Record

 

This
Quality Agreement is reviewed to ensure its continuing relevance to the systems and processes that it describes. A record of contextual
additions or omissions is given below:

 

	Page
    No.	Context	Revision	Date
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

Document
Control

 

The
electronic version of this document is the latest revision. It is the responsibility of the individual to ensure that any paper
material is the current revision. The printed version of this manual is uncontrolled, except when provided with a document number
in the field below:

 

	Document
    No	Pocono-Nutriband-QA	 	 
	 	 	 	 
	Uncontrolled
    Copy	 ☐	 	Controlled
    Copy	☒	 	Date	07/19/2016

 

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	 	Quality
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Contents

 

	CONTENTS	 
	 	 	 	 	 
	QUALITY AGREEMENT	3
	 	 	 	 	 
	 	1.	Administrative
    Elements	4
	 	 	1.1	Scope	4
	 	 	1.2	Parties
    to the Agreement and Their Responsibilities	4
	 	 	1.2.1	Responsibilities
    – CUSTOMER	4
	 	 	1.2.2	Responsibilities
    – POCONO	5
	 	 	1.3	Devices
    Covered by This Agreement	6
	 	 	1.4	Site(s)
    Involved	6
	 	 	1.5	Quality
    Management Systems	6
	 	 	1.6	Term
    of Agreement	6
	 	 	1.7	Assignment	6
	 	2.	Compliance	7
	 	 	2.1	Specification
    Changes	7
	 	 	2.2	Activity
    by Regulators, Notified Bodies, or Certification Bodies	7
	 	 	2.3	Third-Party
    Quality Agreements	7
	 	3.	Change
    Control	8
	 	 	3.1	Change
    Requests	8
	 	 	3.2	Deviations	8
	 	 	3.3	Other
    Changes	8
	 	4.	Non-Conformance,
    CAPA, and
    Complaints	9
	 	 	4.1	Non-Conformances	9
	 	 	4.2	Corrective
    Action	9
	 	 	4.2.1	POCONO
    Initiated Corrective Action	9
	 	 	4.2.2	CUSTOMER
    Initiated Corrective Action	9
	 	 	4.3	Complaints	9
	 	 	4.3.1	POCONO
    Received Complaints	9
	 	 	4.3.2	CUSTOMER
    Received Complaints	10
	 	5.	Audits	11
	 	6.	Debarment	12

 

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	 	Quality
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Quality
Agreement

 

	1.	Administrative
    Elements

 

	1.1	Scope

 

This
Quality Agreement is a comprehensive written agreement that defines and establishes the obligations and responsibilities of the
Quality Units of each party involved in the contract manufacturing of transdermal patches subject to cGMP. This Quality Agreement
clarifies which of the cGMP activities are to be carried out by each party. This agreement is not a commercial or business agreement;
it does not cover issues such as general business terms and conditions, confidentiality, pricing or cost issues, delivery terms,
or liquidated damages.

 

This
agreement, solely, defines the Quality Agreement between the parties identified below. It defines the commitment the parties make
to ensure their respective processes and services satisfy the quality and regulatory requirements called out in this agreement.
Each party agrees to cooperate in the success of this agreement.

 

Pocono
Coated Products, LLC does not participate in any marketing claims made by the customer. Furthermore, Pocono Coated Products, LLC
prohibits the use of the Facility Establishment Identifier (FEI) for which Pocono Coated Products, LLC is registered too to be
used without prior written consent.

 

	1.2	Parties to the
    Agreement and Their Responsibilities

 

This
Quality Agreement is executed between Pocono Coated Products, LLC with business address at 100 Sweetree Street, Cherryville, NC
28021, hereafter referred to as ‘POCONO’ and Nutriband, Inc with business address at 309 Celtic Court, Oviedo, FL,
32765 hereafter referred to as ‘CUSTOMER’.

 

All
parties, collectively herein referred to as ‘the parties’, agree to provide the goods or services defined below in
full conformance with the requirements of this agreement.

 

Quality
Unit Responsibilities

 

The
Quality Unit of each party is responsible for the process or service it performs. The assignment of particular responsibilities
to either party does not relieve any party from compliance with cGMP requirements that are not specifically set forth in this
agreement. The CUSTOMER is ultimately responsible for approving or rejecting product(s) mentioned in section 1.3 of this agreement,
manufactured, processed, packed, or held under contract by POCONO. Although the Quality Unit of POCONO is responsible for release
of the device from the operations it performs, final device release of finished goods for distribution must be carried out by
the CUSTOMER and the responsibility cannot be delegated to another party under the cGMP regulations or any terms of the Quality
Agreement. All parties will comply with cGMP’s and applicable local (state and national) authorities as agreed by the parties.

 

Points
of Contact at CUSTOMER:

 

	Gareth
    Sheridan	phone:
    (887) 616-0959	email:
    gareth@nutriband.com

 

Points
of Contact at POCONO:

 

	Rick
    Myer	phone:
    (704) 445-7891	email:
    rgmyer@poconoctd.com
	 	 	 
	Mike
    Myer	phone:
    (980) 202-0429	email:
    mrmyer@poconoctd.com

 

	1.2.1	Responsibilities
    – CUSTOMER

 

		●	Final
                                         approval of any/all final product change request(s);
	 	 	 
		●	Final
                                         product formulation percentage approval;
	 	 	 
		●	Ultimately
                                         responsible for approving or rejecting devices manufactured, processed, packed, or held
                                         under contract by another company;

 

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	 	Quality
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		●	Final
                                         product approval and release of finished goods for distribution;
	 	 	 
		●	Maintenance
                                         of regulatory status, and communication of any changes;
	 	 	 
		●	Determining
                                         suitability for warehousing device, and performance and documentation of due diligence;
	 	 	 
		●	Approve
                                         all CAPAs;
	 	 	 
		●	Approve
                                         master labels and/or artwork;
	 	 	 
		●	Responsible
                                         for complaints, communications with the regulatory authorities and product recalls;
	 	 	 
		●	Ensure
                                         personnel participate in on-going training to facilitate conformance through their required
                                         activities;
	 	 	 
		●	All
                                         required documentation pertinent to their activities.

 

	1.2.2	Responsibilities
    – POCONO

 

		●	Procurement
                                         of primary packaging;
	 	 	 
		●	Procurement
                                         of secondary labelling and packaging;
	 	 	 
		●	Procurement
                                         of all materials needed for the manufacturing, packaging, and shipping of device(s) covered
                                         in this Quality Agreement, excluding materials for which CUSTOMER is responsible to procure.
	 	 	 
		●	Final
                                         product inspection;
	 	 	 
		●	Receiving,
                                         inspecting/approval of use, and storage of incoming raw materials for use in manufacturing
                                         processes;
	 	 	 
		●	Receiving,
                                         inspecting/approval of use, and storage of incoming raw materials for use in order fulfilment,
                                         packaging;
	 	 	 
		●	Ensure
                                         personnel participate in on-going training to facilitate conformance through their required
                                         activities.

 

Facilities
and Equipment

 

		●	Maintaining
                                         a facility free of infestation;
	 	 	 
		●	Maintaining
                                         programs to ensure required equipment is calibrated and maintained properly;
	 	 	 
		●	Maintain
                                         environmental conditions free from extreme climate change.

 

Materials
Management

 

		●	Sourcing
                                         of required material(s) and vendor due diligence;
	 	 	 
		●	Receiving,
                                         inventory control, product labelling, and storage to prevent mix-ups and cross-contamination;
	 	 	 
		●	Sampling,
                                         and approving or rejecting all incoming receivables used in any aspect of the device
                                         manufacture, or packaging.

 

Sampling
Controls

 

		●	Maintain
                                         trained personnel necessary for proper sample testing;
	 	 	 
		●	Ensure
                                         all monitoring and measuring equipment are calibrated and maintained properly.

 

Documentation

 

		●	Ensure
                                         all required documentation pertaining to the quality management systems, training, manufacture
                                         process, packaging process are written and followed.

 

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	 	Quality
                                         Agreement

 

 

 

	1.3	Devices Covered
    by This Agreement

 

This
agreement pertains to the device(s) listed in the table below.

 

	Device	Description
	Slimline
    Patch	Die-cut,
    individually sealed, and boxed in 5 packs and 30 packs
	Vitamin
    Patch	Die-cut,
    individually sealed, and boxed in 5 packs and 30 packs
	Energy
    Patch	Die-cut,
    individually sealed, and boxed in 5 packs and 30 packs

 

	1.4	Site(s) Involved

 

Laboratory
testing is conducted at the site(s) listed below.

 

	Testing
    Facility	Site
    address
	None
    listed	None
    listed

 

Third
Party logistics and storage is conducted at the site(s) listed below.

 

	Warehousing
    Facility	Site
    address
	None
    listed	None
    listed

 

	1.5	Quality Management
    Systems

 

CUSTOMER
should maintain a Quality Management System (QMS) that minimally conforms to the requirements of their activities outlined in
section 1.2.1 of this Quality Agreement and ensures full traceability.

 

POCONO
shall maintain a Quality Management System (QMS) that minimally conforms to the requirements of their activities outlined in section
1.2.2 of this Quality Agreement and ensures full traceability.

 

	1.6	Term of Agreement

 

This
Agreement shall become effective and binding upon the date of the final signature and shall remain in effect for 2 years after
the last delivery of any product by POCONO and CUSTOMER, unless either party specifically requests an extension of the Agreement.
Either party may terminate the Agreement by giving 6 months written notice to the other parties.

 

	1.7	Assignment

 

None
of the parties shall have the right to assign any or all of its rights or obligations under this agreement without the other parties’
prior written consent, which shall not unreasonably be withheld. The foregoing notwithstanding, prior to written consent shall
not be required in connection with a merger, consolidation, or a sale of all or substantially all of a party’s assets to
a third party, except if such merger, consolidation or sale is with a competitor of the other parties.

 

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	2.	Compliance

 

	2.1	Specification
    Changes

 

Changes
to specifications are made and documented by mutual agreement between the parties. In addition to agreement of the change POCONO
and CUSTOMER will determine the date when the change becomes effective. When the specifications include references to brand names
POCONO and CUSTOMER will mutually agree on the implementation of any changes made in the brand device. The changes will be documented,
signed, and dated by representatives of both parties.

 

	2.2	Activity by Regulators,
    Notified Bodies, or Certification Bodies

 

Any
audited party shall promptly notify the other party of any inspections, audits, formal visits, etc. of any regulator, notified
body, or certification body acting in a formal capacity. In the US this includes, but is not limited to the Food and Drug Administration,
the Environmental Protection Agency, the Occupational Safety and Health Administration, and the Drug Enforcement Agency. It also
includes corresponding State Agencies. Upon written request from either party, the audited party shall disclose the results of
any regulatory inspections or audits and the associated cause and corrective action. The audited party shall promptly notify the
other parties of any inspection or audit findings that affect the safety, effectiveness, conformity, or availability of device(s)
provided.

 

This
section does not extend the results of internal audits, or audits conducted by other clients of audited parties.

 

	2.3	Third-Party Quality
    Agreements

 

All
parties utilizing Third Party Suppliers must instate a Quality Agreement with those suppliers used for production, packaging,
testing, processing, or release. Upon written request a copy of the Quality Agreement must promptly be presented.

 

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	3.	Change Control

 

	3.1	Change Requests

 

Changes
may be requested by either party, for any reason, but must go through the appropriate initiation and approval/rejection process.
Any party requesting a change must fill out a change request form, and submit it for review. The request shall include the specific
change, the reason for the change, the benefit from approving the request, the loss incurred from disapproving the request, and
the anticipated lead-time before the change is reflected in the product. All parties must approve change requests prior to implementation,
then work in collaboration to develop a plan of implementation. Either party can use their own change request forms.

 

The
receiving party shall promptly acknowledge receipt of each change request.

 

	3.2	Deviations

 

If
any party needs to deviate from a document, specification, drawing, etc. under another party’s control, that party will
document the deviation request including the specific deviation, the reason for the deviation, and the period (time, lots, etc.)
the deviation will be in effect.

 

	3.3	Other Changes

 

POCONO
will promptly notify CUSTOMER of changes in the product or service so the CUSTOMER may determine whether the changes may affect
the quality of the finished product.

 

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	4.	Non-Conformance,
    CAPA, and Complaints

 

	4.1	Non-Conformances

 

The
parties must have standard operating procedures (SOPs) on how to handle all Non-Conformances. POCONO is authorized to make rework
and scrap dispositions without authorization from CUSTOMER. Concession or repair dispositions require CUSTOMER written authorization.

 

If
POCONO requests authorization for a repair or concession disposition, POCONO will document the disposition request including the
inspection or test conducted, the actual results, and, if applicable, the proposed repair using a Non-Conformance Report (NCR).

 

Any
non-conformance found outside of POCONO activities warrants an initiation of a NCR to the third party with which the activity
pertains. This, depending on material(s) disposition, may initiate a Corrective Action Report (CAR).

 

	4.2	Corrective Action

 

	4.2.1	POCONO Initiated
    Corrective Action

 

Corrective
Action shall include the following steps.

 

		1.	Determine
                                         the cause(s) of nonconformity
	 	 	 
		2.	Evaluate
                                         the need for action to ensure the nonconformity doesn’t recur
	 	 	 
		3.	Determine
                                         the action needed to prevent recurrence
	 	 	 
		4.	Implement
                                         the action needed to prevent recurrence
	 	 	 
		5.	Review
                                         the effectiveness of the corrective action

 

The
receiving party must report the results of the corrective action to the initiating party within 15 working days of initiation.
When the Corrective Action is not completed within 15 days, the receiving party will provide a status report every 5 working days
until the corrective action is completed. The receiving party must document this information regarding these activities and provide
availability upon written request.

 

	4.2.2	CUSTOMER Initiated
    Corrective Action

 

CUSTOMER
may initiate corrective action for POCONO when non-conformances are identified after receipt of POCONO product. POCONO will investigate
a corrective action upon receipt of the request. POCONO corrective action will include the same steps mentioned in subsection
4.2.1 of this agreement. POCONO will report the results of the corrective action to the initiating party within 15 working days
of initiation. When the corrective action is not completed within 15 days, POCONO will provide a status report every 5 working
days until the corrective action is completed. POCONO keeps documented information regarding these activities and will provide
availability to CUSTOMER upon written request.

 

	4.3	Complaints

 

Whichever
party is listed on the product labelling will make record all serious, unexpected adverse experiences associated with the use
of the. These concerning experiences are defined and explained in 21 CFR 310.305.

 

	4.3.1	POCONO Received
    Complaints

 

If
POCONO receives a complaint related to the product supplied to the CUSTOMER, POCONO will promptly forward those complaints to
CUSTOMER, enter the complaint into the Customer Complaint Management System and review and evaluate the complaint. CUSTOMER will
notify POCONO of the result of the review and evaluation. If CUSTOMER requires POCONO assistance in the investigation, CUSTOMER
will follow the steps for CUSTOMER initiated corrective action described above in subsection 4.2.2.

 

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	4.3.2	CUSTOMER Received
    Complaints

 

If
CUSTOMER receives a complaint related to the product supplied, the receiving party will enter the complaint into the Customer
Complaint Management System, review and evaluate the complaint and notify POCONO in writing. If the receiving party requires POCONO
assistance in the investigation, the receiving party will follow the steps for CUSTOMER initiated corrective action described
above in subsection 4.2.2.

 

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	 	Quality
                                         Agreement

 

 

 

	5.	Audits

 

This
agreement provides the parties with the opportunity, at their expense, to evaluate and/or audit the other party to ensure cGMP
compliance for manufacturing processes occurring at the audited site(s). If objectionable conditions are found through conducting
an audit, the Quality department of the audited party must send an audit report to the audited party. The auditing party must
submit an Audit Report within 30 calendar days. The auditing/audited parties must follow the guidelines of section 4.

 

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                                         Agreement

 

 

 

	6.	Debarment

 

All
parties are required to follow all laws and regulations set in place by the Generic Drug Enforcement act of 1992

 

		●	All
                                         parties will not employ persons that have been convicted of a crime for which they could
                                         be debarred.
	 	 	 
		●	All
                                         parties will not use in any capacity the services of any person, or entity, that has
                                         been or can be debarred under the Generic Drug Enforcement Act of 1992.

 

 

  

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    1Exhibit

Exhibit 10.1

AGREEMENT

This AGREEMENT (the “Agreement”) is made and entered into on the 21st day of July, 2016, by and between ERIE INDEMNITY COMPANY, a Pennsylvania corporation with its principal place of business in Erie, Pennsylvania (the “Company”), and JOHN F. KEARNS, residing at 5804 Wind Chime Lane, Erie, Pennsylvania (the “Executive”).

RECITALS:

WHEREAS, the Executive has tendered his resignation as an employee and as an officer of the Company and as a director, officer, and employee of each of the Company’s affiliated companies effective  July 1, 2016 (the “Resignation Date”), and the Company and each of its affiliated companies have accepted such resignations; and

WHEREAS, the Executive Compensation and Development Committee of the Board of Directors of the Company recognizes and appreciates that during his career with the Company the Executive has demonstrated commitment to the Company and its goals and made valuable contributions to the Company’s growth and development; and

WHEREAS, the Company and the Executive each agree that it is in their respective best interests to make certain provisions related to the termination of the Executive's employment as a result of his resignation from the Company,

NOW, THEREFORE, in consideration of the premises and mutual covenants contained in this Agreement, and intending to be legally bound, the parties agree as follows:

1.Effective Date.  This Agreement will become effective on the eighth day after the date on which the Executive signs a waiver and release in the form attached as Exhibit I to this Agreement (the “Release”), but only if the Executive has signed this Agreement and the Release within the timeframe described in Section 3(a) and has not revoked the Release during the seven-day revocation period described in the Release.
2.Consideration.  
a.In consideration of the execution and performance of this Agreement by the Executive, and subject to the remaining provisions of this Section 2 and to Section 3, the Company shall make the following payments to the Executive, which include amounts to which the Executive would not otherwise be entitled:
(i) With respect to the Company's Annual Incentive Plan (“AIP”) and the award made to the Executive for the 2016 performance period under the AIP:

	
			
	 
	 
	 

(A)   In accordance with the terms of the AIP, for the 2016 performance period, the Committee: (1) will measure the Company’s performance for the performance period against the performance goals set out in the Executive’s award agreement for the performance period and will calculate the Company incentive award that would have been earned by the Executive for the performance period had the Executive remained employed through the last day of the performance period, based on the Company’s achievement of the applicable performance goals (the “earned Company incentive award” for the performance period), and (2) will calculate the amount of the Executive’s target award based on his individual performance goals for the 2016 performance period and multiply that amount by 150 percent (the “individual incentive award” for the performance period).  
(B)  If the Committee exercises its discretion to reduce or eliminate Company incentive awards that would otherwise have been earned by executive vice presidents as a class under the AIP for the 2016 performance period, the Committee may reduce the Executive’s earned Company incentive award for the performance period by a percentage reduction that is not more than the average of the percentage reductions applied to the Company incentive awards of the executive vice presidents.  
(C)  The Executive will have a vested interest of 50 percent in his earned Company incentive award for the 2016 performance period and a vested interest of 100 percent in his individual incentive award for the 2016 performance period.  The earned Company incentive award taken into account in calculating the Executive’s vested interest in that award will be after any reduction imposed under paragraph (B).
(D)  The Company shall pay to the Executive his vested interest in his earned Company incentive award for the 2016 performance period and his vested interest in his individual incentive award for the 2016 performance period at the time awards for the performance period are paid to other AIP participants, in accordance with the AIP, which will be no later than December 31, 2017.  
(E)  The Committee's determination of the amount of award to be paid will be in accordance with the terms of the AIP and will be final and binding on all interested parties.
(ii)  With respect to the Company's Long Term Incentive Plan (“LTIP”) and the award made to the Executive for the 2014‐2016 performance period under the LTIP:  
(A)   In accordance with the terms of the LTIP, for the 2014-2016 performance period, the Committee will measure the Company’s performance for the performance period against the performance goals set 

2
	
			
	 
	 
	 

out in the Executive’s award agreement for the performance period and will calculate the award that would have been earned by the Executive for the performance period had he remained employed through the end of the performance period, based on the Company’s achievement of the applicable performance goals (the “earned LTIP award” for the performance period). 
(B)  If the Committee exercises its discretion to reduce or eliminate awards that would otherwise have been earned by executive vice presidents as a class under the LTIP for the 2014-2016 performance period, the Committee may reduce the Executive’s earned LTIP award for the performance period by a percentage reduction that is not more than the average of the percentage reductions applied to the awards of the executive vice presidents.  
(C)  The Executive will have a vested interest of 83.33 percent in his earned LTIP award for the 2014-2016 performance period.  The earned LTIP award taken into account in calculating the Executive’s vested interest will be after any reduction imposed under paragraph (B).
(D)  The Company shall pay to the Executive his vested interest in his earned LTIP award for the 2014-2016 performance period at the time awards for the performance period are paid to other LTIP participants, in accordance with the LTIP, which will be no later than December 31, 2017.  
(E)  The Committee's determination of the amount of award to be paid will be in accordance with the terms of the LTIP and will be final and binding on all interested parties.
(iii)  The Company shall pay to the Executive the amount of $250,000.00 (two hundred fifty thousand dollars) within 21 calendar days of the effective date of this Agreement as described in Section 1.
(iv)  The Company shall also reimburse the Executive for any legal fees and related expenses he incurs in connection with his entry into this Agreement, provided however that the reimbursement will not exceed, in the aggregate, $7,500 (seven thousand five hundred dollars), and provided further that the Executive provides the Company with reasonable substantiating documentation by November 30 of the calendar year following the calendar year in which such fees and expenses were incurred.  The Company shall pay the amount to be reimbursed under this paragraph within thirty days after receipt of such documentation.
b.If the Executive dies before payment of a benefit described in Section 2(a)(i) or (ii), the Company shall pay the benefit at the scheduled time to the beneficiary or beneficiaries designated by the Executive in accordance with the terms of the AIP or LTIP, as applicable; provided, however, that if the Executive has not designated a beneficiary in 

3
	
			
	 
	 
	 

accordance with the terms of the applicable plan, or if no designated beneficiary with respect to the applicable plan survives the Executive, the Company shall pay the benefit to the default beneficiary indicated in the applicable plan.  If the Executive dies before payment of the benefit described in Section 2(a)(iii), the Company shall pay the benefit at the scheduled time to the executor of the Executive’s estate.
c.Payments under this Section 2 will be subject to applicable deductions.  For the purposes of this Agreement, “applicable deductions” will include but not be limited to any federal, state, or local taxes determined by the Company to be required to be withheld from amounts paid to the Executive pursuant to this Agreement.
d.Except as provided in this Agreement, the Executive agrees that he is not entitled to any other compensation (including, but not limited to, salary or bonuses), perquisites, or benefits of any kind or description from the Company, or from or under any employee benefit plan or fringe benefit plan sponsored by the Company, other than as described above and other than (i) his regular salary through the Resignation Date; (ii) payment for his unpaid vacation time of $71,337.69 (seventy-one thousand three hundred thirty seven dollars and sixty-nine cents), which has been computed in accordance with the Company’s past practices for departing employees and will be paid as soon as administratively practical; (iii) his accrued benefits under the Erie Insurance Group Employee Savings Plan; (iv) his accrued benefits under the Erie Insurance Group Retirement Plan for Employees; (v) his accrued benefit under the Supplemental Executive Retirement Plan for Certain Members of the Erie Insurance Group Retirement Plan for Employees (“SERP”);  (vi) any benefit the Executive may have accrued under the Company’s Deferred Compensation Plan; (vii) any rights the Executive may have under COBRA on account of the termination of his employment;  (viii) the right to continued participation through December 31, 2016, in the Company’s Ayco Comprehensive Counseling Service; (ix), with respect to any of the capacities in which the Executive served the Company or any of its Affiliated Companies (as defined below), and with respect to any service of the Executive as a fiduciary or trustee of any employee benefit plans or trusts or other trusts maintained or sponsored by the Company or its subsidiaries or affiliated companies, any rights the Executive may have for indemnity in relation to any acts or omissions of the Executive or a claim for coverage under any applicable insurances; and (x) any claim relating to enforcement of the Agreement.
e.The parties acknowledge and agree that the Executive is not releasing any rights he may have as an owner or holder of the Company’s common stock and stock options or any rights he has to enforce this Agreement.  In addition, the Executive is not releasing any rights that he has to be indemnified (including any right to reimbursement of expenses) arising under applicable law, the certificate of incorporation or by-laws (or similar constituent documents of the Company), any indemnification agreement between him and the Company (including, without limitation, the Indemnification Agreement entered into between the parties on April 1, 2011), or any directors’ and officers’ or other liability insurance policy of the Company.  Furthermore, the Company agrees to provide indemnification to the Executive, in the same manner and to the same extent as the highest-level officers of the Company, through the Ongoing Cooperation Period (as defined below) and for any claim that may arise relating to or arising out 

4
	
			
	 
	 
	 

of any matters occurring through the Ongoing Cooperation Period, and for a period of at least three years thereafter.
f.For the purposes of this Agreement and the Release, “Affiliated Company” will refer to each of the following:  Erie Insurance Exchange and each entity that is a subsidiary or affiliate of the Company or of Erie Insurance Exchange.

3.Executive's Waiver and Release.  

a.After executing this Agreement and after the termination of his employment with the Company, the Executive shall sign a waiver and release in the form attached as Exhibit I to this Agreement (the “Release”).  If the Executive fails to sign this Agreement and the Release on or before July 26, 2016, then the Executive will forfeit all rights to payment under Section 2(a)(i) (AIP), (ii) (LTIP), (iii) (lump sum), and (iv) (legal fees), and this Agreement will be null and void.  

b.Notwithstanding any contrary provision of this Agreement, the benefits described  in Section 2(a)(i), (ii), (iii), and (iv) will not be paid if the Executive does not sign the Release by the date described in Section 3(a) or if he revokes the Release during the seven-day revocation period described in the Release.   

c.The Executive acknowledges that the Release and the proposed form of this agreement were first presented to him for his consideration on June 30, 2016, and that the Company has encouraged and advised the Executive in writing, prior to his signing this Agreement, to consult with an attorney of the Executive's choosing concerning all of the terms of this Agreement and the Release.

d.The Company hereby represents and warrants that, as of the date of this Agreement, it does not have knowledge of any claim or action against the Executive.

4.Non-disparagement.  The Executive shall not disparage the Company or its officers, directors, or employees in any way orally or in writing, and the directors and executive and senior officers of the Company shall likewise not disparage the Executive, provided, however, that nothing in this Section will prohibit: (a) the Executive or the Company from disclosing truthful information if required by law (whether by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or similar process); or (b) either party from acting in good faith to enforce the party’s rights under this Agreement. 

5.Covenants as to Confidential Information.  The Executive acknowledges and agrees as follows:  (i) this Section 5 is necessary for the protection of the legitimate business interests of the Company, (ii) the restrictions contained in this Section 5 with regard to geographical scope, length of term and types of restricted activities are reasonable; (iii) the Executive has received adequate and valuable consideration for entering into this Agreement, 

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and (iv) the Executive's expertise and capabilities are such that his obligations under and the enforcement of this Section 5 by injunction or otherwise will not adversely affect the Executive's ability to earn a livelihood.

                                (a)        Confidentiality of Information and Nondisclosure.  The Executive agrees that the Executive will not, directly or indirectly, without the express written approval of the Company, unless directed by applicable legal authority (including any court of competent jurisdiction, governmental agency having supervisory authority over the business of the Company or an Affiliated Company, or any legislative or administrative body having supervisory authority over the business of the Company or an Affiliated Company) having jurisdiction over the Executive, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself, any person, corporation or other entity other than the Company, (i) any non-public information concerning any financial matters, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, an Affiliated Company, or any of its insurance agents, (ii) any proprietary management, operational, trade, technical or other secrets or any other proprietary information or other proprietary data of the Company, an Affiliated Company, or any of its insurance agents, (iii) any non-public personal confidential information concerning any of the Company’s employees or any of its insurance agents or customers, or (iv) any other information related to the Company, an Affiliated Company, or any of its insurance agents, or which the Executive should reasonably believe will be damaging to the Company, an Affiliated Company, or any of its insurance agents, which has not been published and is not generally known outside of the Company.  The Executive acknowledges that all of the foregoing constitutes confidential and proprietary information, which is the exclusive property of the Company.  Nothing in this Agreement, including the obligations under Section 4, or any other agreement with the Company prohibits or prevents the Executive from filing a complaint or charge with or participating, testifying, or assisting in any investigation, hearing, or other proceeding before any federal, state, or local government agency.  Notwithstanding the non-disclosure, non-disparagement or any other provision of this Agreement, the Executive acknowledges and affirms his understanding that nothing in this Agreement is intended to preclude, prohibit, or otherwise limit, in any way, his rights and abilities to contact, communicate with, or report matters to any government entity or agency including but not limited to the United States Department of Justice, the Equal Employment Opportunity Commission, any Office of Inspector General of any United States agency, the United States Securities and Exchange Commission, or Congress, regarding possible violations of laws or regulations.  However, to the maximum extent permitted by law, the Executive agrees that if such an administrative claim is made, the Executive will not be entitled to recover any individual monetary relief or other individual remedies, except that this provision is not applicable to any bounty that may be recoverable by the Executive as a result of participating in the Securities and Exchange Commission’s whistleblower program. 

6.Breach of Agreement. Executive agrees that if he breaches any of the terms of this Agreement, the Company may pursue whatever rights it has under this Agreement, whether in law or in equity, without affecting the validity and enforceability of the Release contemplated by Section 3 of this Agreement. The Executive agrees that any breach of this Agreement may result 

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in immediate and irreparable harm to the Company, and that the Company may not be reasonably or adequately compensated by damages in an action at law. The Executive agrees that if he breaches Section 5 of this Agreement, the Company will be entitled, to the extent permitted by law, immediately to cease to pay or provide the Executive or the Executive's dependents any compensation or benefit being, or to be, paid or provided pursuant to this Agreement, and also to obtain immediate injunctive relief restraining the Executive from conduct in breach of this Agreement.  In addition, the Executive agrees that if he breaches Section 5 of this Agreement, the Executive shall reimburse the Company and its Affiliated Companies for their costs and expenses (including, without limitation, all reasonable fees and expenses, including the costs of any computer forensics imaging and analysis, etc., as well as reasonable attorney’s fees) incurred by the Company and its Affiliated Companies in connection with the breach.  The Executive agrees that the incurrence of such fees and expenses will be necessary for the Company’s and its Affiliated Companies’ protection of its valuable confidential information, trade secrets, and business relationships.  Nothing in this Agreement may be construed as prohibiting the Company from pursuing any other remedies available to it for a breach of this Agreement, including the recovery of damages from the Executive.  

7.Company Property, Records, Files and Equipment.  By the date of this Agreement, the Executive shall return all Company property he then has in his possession or control, including but not limited to all equipment, confidential information, records, and files, regardless of format or storage location. 

8.Ongoing Cooperation.  For a period of two years (the “Ongoing Cooperation Period”) following the Resignation Date, the Executive agrees to use his best efforts to assist, advise, and cooperate with the Company if the Company so requests on issues that arose or were in any way developing during his employment with the Company, subject to Executive’s availability given his employment and personal obligations, if any, at that time.  The Executive shall furnish such assistance, advice or cooperation to the Company as the Company may reasonably request and as is within the Executive's reasonable capability.  Such assistance, advice and cooperation may include, but will not be limited to the preparation for, or the conduct of, any litigation, investigation, or proceeding involving matters or events which occurred during the Executive's employment by the Company as to which the Executive's knowledge or testimony may be important to the Company.  In connection with the preparation for, or the conduct of such litigation, investigation or proceeding as described in the preceding sentence, the Executive shall promptly provide the Company with any records or other materials in his possession that the Company requests in connection with the defense or prosecution of such litigation, investigation or proceeding.  If and to the extent that the Company requests that the Executive provide assistance, advice, or cooperation to the Company, as described above, or it requests that he attend a meeting, deposition, or trial at any time during the Ongoing Cooperation Period, the Company shall compensate the Executive for his time at the rate of $600.00 for each hour during which Executive complies with such request. The Company shall also pay or reimburse the Executive for (i) his reasonable legal fees and expenses incurred in the course of providing such cooperation, provided that the Company agrees that the Executive’s engagement of his own counsel is necessary and appropriate, and (ii)  his travel expenses reasonably incurred in the course of providing such cooperation, provided that the Executive provides reasonable 

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substantiating documentation by November 30 of the calendar year following the calendar year in which the fee or expense was incurred; the Company shall make any payment required under this sentence within thirty days after receipt of such documentation.

9.Notice of Immunity from Liability for Confidential Disclosure of a Trade Secret to the Government or in a Court Filing.  Notwithstanding the foregoing, the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.   If the Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, a trade secret may be disclosed to his attorney and used in the court proceeding, if the Executive (c) files any document containing the trade secret under seal; and (d) does not disclose the trade secret, except pursuant to court order.

10.Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania applicable to contracts executed in and to be performed in that commonwealth without regard to its conflicts of laws provisions.  Each of the parties irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the Commonwealth of Pennsylvania located in the County of Erie, Pennsylvania, and of the United States for the Western District of Pennsylvania for any litigation arising out of or relating to this Agreement or the transactions contemplated by this Agreement.  Any legal action relating to this Agreement shall be brought in the courts of the Commonwealth of Pennsylvania located in the County of Erie, Pennsylvania, and of the United States for the Western District of Pennsylvania and the parties irrevocably and unconditionally waive and shall not plead or claim in any such court that venue is improper or that such litigation has been brought in an inconvenient forum. 

11.Waiver.  The waiver by a party of any breach by the other party of any provision of this Agreement will not operate or be construed as a waiver of any other or subsequent breach by a party.

12.Assignment.  This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company, and the Company shall be obligated to require any successor to expressly acknowledge and assume its obligations under this Agreement.  This Agreement will inure to the extent provided under this Agreement to the benefit of and be enforceable by the Executive or the Executive's legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  The Executive may not delegate any of the Executive's duties, responsibilities, obligations or positions under this Agreement to any person and any such purported delegation will be void and of no force and effect.

13.Severability.  Whenever possible, each provision of this Agreement will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid under applicable law, such provision will be 

8
	
			
	 
	 
	 

ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

14.Notices.  Any notices required or permitted to be given under this Agreement will be sufficient if in writing, and if personally delivered or when sent by first class certified or registered mail, postage prepaid, return receipt requested − in the case of the Executive, to his principal residence address, and in the case of the Company, to the address of its principal place of business as set forth above, to the attention of the General Counsel of the Company.

15.Entire Agreement.  This Agreement constitutes the entire agreement of the parties relating to the subject matter of this Agreement, and supersedes any obligations of the Company under any previous agreements or arrangements, except as otherwise provided in this Agreement.  This Agreement does not supersede the Company’s Policy Regarding the Recoupment of Officer Bonuses in Certain Instances, as adopted on December 9, 2008, and as it may be amended.  The provisions of this Agreement may not be amended, modified, repealed, waived, extended or discharged except by an agreement in writing signed by the party against whom enforcement of any amendment, modification, repeal, waiver, extension or discharge is sought.  

16.Code Section 409A.  It is intended that this Agreement comply with the provisions of section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Department regulations relating thereto (“Code Section 409A”), or an exemption to Code Section 409A.  Payments, rights and benefits may only be made, satisfied or provided under this Agreement upon an event and in a manner permitted by Code Section 409A, to the extent applicable, so as not to subject the Executive to the payment of taxes and interest under Code Section 409A.  In furtherance of this intent, this Agreement will be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Executive being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree, to the extent possible, to amend this Agreement to maintain to the maximum extent practicable the original intent of this Agreement while avoiding the application of such taxes or interest under Code Section 409A.   All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” as defined under Code Section 409A.  Notwithstanding any provision of this Agreement to the contrary, if, as of the date of the Executive's separation from service, the Executive is a “specified employee” as defined under Code Section 409A, then, except to the extent that this Agreement does not provide for a “deferral of compensation” within the meaning of Code Section 409A of the Code, no payments may be made and no benefits may be provided to the Executive during the period beginning on the date of the Executive's separation from service and ending on the last day of the sixth month after such date.  In no event may the Executive, directly or indirectly, designate the calendar year of any payment under this Agreement.

17.Headings.  The descriptive headings used in this Agreement are used for convenience of reference only and do not constitute a part of this Agreement. 

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18.Counterparts.  This Agreement may be executed in separate counterparts, both of which taken together will constitute one and the same Agreement.
 
THE EXECUTIVE EXPRESSLY WARRANTS AND REPRESENTS THAT, BEFORE ENTERING INTO THIS AGREEMENT, HE HAS RECEIVED A REASONABLE PERIOD OF TIME WITHIN WHICH TO CONSIDER ALL OF THE PROVISIONS CONTAINED IN THIS AGREEMENT, THAT HE HAS FULLY READ, INFORMED HIMSELF OF AND UNDERSTANDS ALL THE TERMS, CONTENTS, CONDITIONS AND EFFECTS OF ALL PROVISIONS OF THIS AGREEMENT, AND THAT HE CONSIDERS ALL SUCH PROVISIONS TO BE SATISFACTORY. 

THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT NO PROMISE OR REPRESENTATION OF ANY KIND HAS BEEN MADE, EXCEPT THOSE EXPRESSLY STATED IN THIS AGREEMENT. 
 
THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT THE COMPANY HAS ENCOURAGED AND ADVISED HIM IN WRITING, PRIOR TO HIS SIGNING THIS AGREEMENT, TO CONSULT WITH AN ATTORNEY OF THE EXECUTIVE’S CHOOSING CONCERNING ALL OF THE TERMS OF THIS AGREEMENT AND THE RELEASE.    

THE EXECUTIVE FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT HE ENTERS INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY.

IN WITNESS WHEREOF, the Executive and the Company, by its duly authorized representative, have signed this Agreement as of the date set forth above.

    
WITNESS:                        THE EXECUTIVE:

/s/ Deirdre Kearns                    /s/ John F. Kearns
____________________                __________________________
John F. Kearns

THE COMPANY:

ATTEST:                        ERIE INDEMNITY COMPANY
/s/ Brian W. Bolash                    /s/ Timothy G. NeCastro
____________________                _________________________
Brian W. Bolash                    Timothy G. NeCastro
Corporate Secretary                    President & CEO Designate

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EXHIBIT I

Executive's Waiver and Release

John F. Kearns (the “Executive”) for himself, his heirs, successors and assigns and in consideration of the payments to be made by or on behalf of Erie Indemnity Company (the “Company”) pursuant to Section 2 of the Agreement made and entered into on the 21st day of July, 2016,  by and between the Company and the Executive (“the “Agreement”), does hereby forever discharge and release the Company and its shareholders, subsidiaries, affiliated companies, companies with common management, ownership or control, successors, assigns, insurers and reinsurers, attorneys, and agents, and all of their officers, directors, shareholders, employees, agents and representatives, in their official and individual capacities (collectively referred to as “Releasees”) from any and all claims, demands, causes of action, damages, charges, complaints, grievances, expenses, compensation and remedies that the Executive now has or may in the future have on account of or arising out of any matter or thing that has happened, developed or occurred before the date of this Release (collectively “Claims”), including, but not limited to, all Claims arising from the Executive's employment with the Company or any Affiliated Company (as defined in the Agreement), the termination of such employment, any and all relationships or dealings between the Executive and the Company or any of the other Releasees, the termination of any such relationships and dealings, and any and all other Claims the Executive may have against the Company or any of the other Releasees.  The Executive waives any and all such Claims including, but not limited to, all charges or complaints that were or could have been filed with any court, tribunal or governmental agency, and any and all Claims not previously alleged, including, but not limited to, any Claims under the following: (a) Title VII of the Civil Rights Act of 1964, as amended; (b) the Age Discrimination in Employment Act (ADEA), as amended; (c) the Federal Employee Retirement Income Security Act of 1974 (ERISA), as amended; (d) the Americans With Disabilities Act (ADA), as amended; (e) the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended; (f) section 806 of the Sarbanes-Oxley Act of 2002, as amended; (g) the Equal Pay Act of 1963; (h) any other federal statutes, rules, regulations, executive orders or guidelines of any description; (i) any and all statutes of similar nature or purpose under Pennsylvania law, or the law of any other state, including, but not limited to, the Pennsylvania Human Relations Act, as amended, the Pennsylvania Equal Pay Law, and the Pennsylvania Wage Payment and Collection Law; (j) any and all local laws, rules, regulations, executive orders or guidelines of any description including, but not limited to, the Erie County Human Relations Ordinance; and (k) any rule or principle of equity or common law, or any Claim of defamation, conversion, interference with a contract or business relationship, or any other intentional or unintentional tort, or any Claim of loss of consortium, or any Claim of harassment or retaliation, or breach of contract or implied contract, or breach of covenant of good faith and fair dealing, or any whistle-blower Claim.  This release, discharge and waiver will be referred to here and in the Agreement as the “Release.”

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The Executive specifically understands and agrees that the termination of his employment does not violate or disregard any oral or written promise or agreement, of any nature whatsoever, express or implied.  If any contract or agreement of employment exists concerning the employment of the Executive by the Company or the terms and conditions of such employment or the termination of such employment, whether oral or written, express or implied (excepting the Agreement), that contract or agreement is terminated and is null and void.

The Executive agrees that this Release may be enforced in federal, state or local court, and before any federal, state or local administrative agency or body.

This Release does not prohibit the Executive from filing an administrative charge of alleged employment discrimination, harassment or retaliation under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans With Disabilities Act or the Equal Pay Act of 1963; however, the Executive represents that he has not to date filed or cause to be filed any such administrative charge, and further agrees that he waives any right to monetary or other recovery should any federal, state or local administrative agency pursue any Claim on his behalf and will immediately request in writing that the Claim or matter on his behalf be withdrawn.  Thus, by signing this Release, the Executive waives any right he had to obtain a recovery if an administrative agency pursues a Claim against the Company or any of the other Releasees based on any action taken by the Company or any of the other Releasees up to the date of this Release, and acknowledges that he will have released the Company and the other Releasees of any and all Claims, and of the continuing effect of any and all Claims of any nature up to the date of this Release.  This Release does not affect (i) any of the Executive's vested rights under the Erie Insurance Group Retirement Plan for Employees, the Erie Insurance Group Employee Savings Plan, the Supplemental Executive Retirement Plan for Certain Members of the Erie Insurance Group Retirement Plan for Employees (“SERP”), and the Company’s Deferred Compensation Plan; nor (ii) any rights the Executive may have under COBRA on account of the termination of his employment; nor (iii) the Executive’s right to continued participation through December 31, 2016, in the Company’s Ayco Comprehensive Counseling Service; (iv), with respect to any of the capacities in which the Executive served the Company or any Affiliated Company, and with respect to any service of the Executive as a fiduciary or trustee of any employee benefit plans or trusts or other trusts maintained or sponsored by the Company or an Affiliated Company, does it bar any claim the Executive may have for indemnity in relation to any acts or omissions of the Executive or a claim for coverage under any applicable insurances; or (v) any claim relating to enforcement of the Agreement.

The Executive represents and warrants that the Company has given the Executive a reasonable period of time, of at least twenty-one days, for the Executive to consider all the terms of the Agreement and this Release and for the purpose of consulting with an attorney if the Executive so chooses.  A copy of this Release was first given to the Executive on June 30, 2016.  If this Release has been signed by the Executive before the end of the twenty-one day period, the Executive represents that he has freely and willingly elected to do so.

This Release may be revoked by the Executive within seven days after the date this Release is signed by the Executive, by giving notice of revocation to the Executive Vice 

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President and General Counsel of the Company.  No consideration described in Section 2(a) of the Agreement will be paid unless the Executive has signed this Release and the revocation period has expired with no revocation. 

IN WITNESS WHEREOF, the Executive has signed this Release this 21st day of July, 2016.

WITNESS:                        THE EXECUTIVE:

/s/ Deirdre Kearns                    /s/ John F. Kearns
________________________________        ________________________________
John F. Kearns

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