Exhibit 10.41
AGREEMENT NOT TO COMPETE
In consideration of their mutual promises and agreements and subject to
the terms and conditions set forth below in this Agreement Not to Compete (this
"Agreement"), National City Corporation, a Delaware corporation ("National
City") and Xxxxxx X. Xxxxxxxx, Executive Vice President of National City
("Executive") hereby agree as follows:
1. DEFINITIONS. Whenever used herein, the following terms shall
have the meanings set forth below, unless otherwise expressly provided. When the
defined meaning is intended, the term is capitalized.
(a) "Confidential Information" has the meaning set forth in
paragraph 3(d) hereof.
(b) "Cause" means that, prior to any termination, the Executive
shall have committed:
(i) an intentional act of fraud, embezzlement or theft in
connection with his or her duties or in the course of his
employment with the Employers,
(ii) an intentional wrongful damage to property of Employers,
(iii) violation of any of the Provisions.
For purposes of this section, no act or failure to act on the
part of the Executive shall be deemed "intentional" if it was
due primarily to an error in judgment or negligence, but shall
be deemed "intentional" only if done or omitted to be done by
the Executive not in good faith and without reasonable belief
that his action or omission was in the best interest of the
Employers.
(c) "Employers" shall mean National City and its affiliates.
(d) "Employers' Businesses" has the meaning set forth in section 5
hereof.
(e) "Provisions" shall mean all provisions, terms, conditions,
representations, warranties, sections, subsections, agreements
and covenants contained in this Agreement.
(f) "Restricted Area" shall mean the States of Ohio, Pennsylvania,
Kentucky, Michigan, Indiana, Illinois, and Missouri.
(g) "Restricted Period" has the meaning set forth in paragraph
3(a) hereof.
(h) "Termination Date" means the later of the Executive's last day
actively at work or the last day the Executive receives salary
continuation.
Except when otherwise indicated by the context, any definition of any term in
the singular shall include the plural and the plural shall include the singular.
2. TERM OF AGREEMENT. The term of this Agreement shall be from
the date hereof through the Restricted Period.
3. NON-COMPETE. Executive acknowledges and agrees that in the
performance of his duties of employment with the Employers he may be in contact
with customers, potential customers and/or information about customers or
potential customers of the Employers either in person, through the mails, by
telephone or by other electronic means. Executive also acknowledges and agrees
that trade secrets and confidential information of the Employers, more fully
described in paragraph 3(d) of this Agreement, gained by Executive during his
employment
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with the Employers, have been developed by the Employers through substantial
expenditures of time, effort and financial resources and constitute valuable and
unique property of the Employers. Executive further understands, acknowledges
and agrees that the foregoing makes it necessary for the protection of the
Employers' businesses that Executive not compete, not divert business or
customers from the Employers, and that the Executive maintain the
confidentiality and integrity of the Confidential Information as hereinafter as
defined:
(a) Executive agrees that he will not, during his
employment by the Employers and for a period of one (1) year after his
Termination Date (the "Restricted Period"), compete with Employers
within the Restricted Area.
(b) Executive and National City agree that the term
"compete" or "competing" shall mean any situation where the Executive:
(i) enters into, engages in, becomes an employee of or
acquires an ownership of more than one percent (1%) of any business
that competes with the Employers' Businesses (as hereinafter defined
below) in the Restricted Area;
(ii) directly or indirectly solicits, diverts, entices or
accepts any customers, clients, business patronage or orders from any
customers, clients, or businesses with whom Executive has had contact,
involvement or responsibility during Executive's employment with the
Employers on behalf of any person (including Executive), firm,
association, or corporation that competes with the Employers'
Businesses;
(iii) directly or indirectly solicits, diverts, entices or
takes away any potential customer identified, selected or targeted by
the Employers with whom the Executive has had contact, involvement or
responsibility during Executive's employment with the Employers, or
attempts to do so, for the sale of any product or service that is the
same as, similar to, or a substitute for, any product or service
offered by the Employers' Businesses; or
(iv) promotes or assists, financially or otherwise, any
person, firm, association or corporation engaged in any business that
is the same as, similar to, or a substitute for, any product or service
offered by the Employers' Businesses.
(c) Executive agrees that he will not directly or
indirectly at any time during or after the term of this Agreement
solicit, induce, confer or discuss with any employee of the Employers
or attempt to solicit, induce confer or discuss with any employee of
the Employers the prospect of leaving the employ of the Employers,
termination of his or her employment with the Employers, or the subject
of employment by some other person or organization. Executive further
agrees that he will not directly or indirectly at any time during or
after the term of this Agreement hire or attempt to hire any employee
of the Employers.
(d) Executive will keep in strict confidence, and will
not, directly or indirectly, at any time during or after the term of
this Agreement, disclose, furnish, disseminate, make available or use
(except in the course of performing his duties of employment with the
Employers) any trade secrets or confidential business or technical
information of the Employers or their customers (the "Confidential
Information"), without limitation as to when or how Executive may have
acquired such information. The Confidential Information shall include
the whole or any portion or phase of any scientific or technical
information, design, process, procedure, formula, pattern, compilation,
program, device, method, technique or improvement, or any business
information or
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plans, financial information, or listing of names, addresses or
telephone numbers, including without limitation, information relating
to the Employers' customers or prospective customers, the Employers'
customer list, contract information including terms, pricing and
services provided, information received as a result of customer
contacts, the Employers' products and processing capabilities, methods
of operation, business plans, financials or strategy, and agreements to
which the Employers may be a party. The Confidential Information shall
not include information that is or becomes publicly available other
than as a result of disclosure by the Executive. Executive specifically
acknowledges that the Confidential Information, whether reduced to
writing or maintained in the mind or memory of Executive and whether
compiled by the Employers and/or Executive, derives independent
economic value from not being readily known to or ascertainable by
proper means by others who can obtain economic value from its
disclosure or use, that reasonable efforts have been put forth by the
Employers to maintain the secrecy of such information, that such
information is the sole property of the Employers and that any
retention and use of such information during or after the Executive's
employment with the Employers (except in the course of performing his
duties of employment with the Employers) shall constitute a
misappropriation of the Employers' trade secrets. Executive further
agrees that, at the time of termination of his employment he will
return to the Employers, in good condition, all property of the
Employers, including, without limitation, the Confidential Information.
In the event that said items are not so returned, the Employers shall
have the right to charge Executive for all reasonable damages, costs,
attorney's fees and other expenses incurred in searching for, taking,
removing, and/or recovering such property. If the Executive is
requested or required (either verbally or in writing) to disclose any
Confidential Information, he shall promptly notify the Employers of
this request and he shall promptly provide the Employers with a copy of
the written request or a description of any verbal request so that the
Employers may seek a protective order or other appropriate remedy. If a
protective order or other appropriate remedy is not obtained in a
reasonable period of time, the Executive may furnish only that portion
of the Confidential Information that he is legally required to
disclose.
4. INDIRECT COMPETITION. For the purposes of section 3 of this
Agreement, Executive understands and agrees that he will be competing if he
engages in any or all of the activities set forth therein directly as an
individual on his own account, or indirectly, including, but not limited to, as
a partner, joint venturer, employee, agent, salesman, consultant, officer and/or
director of any firm or corporation that engages in any or all of the activities
set forth in section 3, or as a equity holder of any entity or corporation that
engages in any or all of the activities set forth in section 3 in which
Executive or his spouse beneficially owns, directly or indirectly, individually
or in the aggregate, more than one percent (1%) of the outstanding equity.
Notwithstanding the above, Executive will not be deemed to be competing as
defined in section 3 and this section 4 by engaging or investing solely as a
venture capitalist in businesses that do not compete with Employers' Businesses.
5. EMPLOYERS BUSINESSES. For the purposes of this Agreement,
"Employers' Businesses" shall mean each and all products and services that
Executive provided or was responsible for providing, directly or indirectly, at
any time during his last 3 years of employment with the Employers.
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6. MODIFICATION. While the restrictions set forth herein are
considered by the parties to be reasonable in all circumstances, it is
recognized that restrictions of this nature may fail for reasons unforeseen, and
accordingly it is hereby agreed and declared that if any of such restrictions
shall be adjudged to be void as going beyond what is reasonable in all the
circumstances, but would be valid if the geographical area or temporal extent
were reduced in part, or the range of activities or area dealt with thereby
reduced in scope, the said restriction shall apply with such modification as may
be necessary to make it valid and effective.
7. CONSIDERATION. Executive acknowledges that his obligations
under this Agreement are reasonable in the context of the nature of Employers'
Businesses and the competitive injuries likely to be sustained by Employers if
Executive violated such obligations. Executive further acknowledges that this
Agreement is made as a condition to, and in consideration of, Executive's early
retirement effective July 31, 2004, and his receiving, upon the execution of
this Agreement, approval by the Compensation and Organization Committee of the
Board of Directors of National City Corporation, or its designee, (a)
accelerated vesting to April 15, 2004 of the special supplemental cash awards
originally scheduled to vest on January 3 and February 26, 2005, respectively,
(b) accelerated vesting to April 15, 2004 of the National City Corporation
Restricted Stock Award granted to Executive on April 22, 2002, (c) approval of
Executive's eligibility for an Early Retirement Benefit pursuant to and as
defined in section 4.3 the National City Corporation Supplemental Executive
Retirement Plan as Amended and Restated July 1, 2002 (the "SERP"), and (d)
release of the restrictions on the Restricted Stock previously granted as an
offset to the SERP as of the retirement date which constitute new and/or good,
valuable and sufficient consideration. Executive acknowledges that his
employment relationships with Employers is and following the execution of this
Agreement shall continue to be "at will," and may be terminated at any time and
for any reason, by Employers or by Executive
8. DISCLOSURE TO SUBSEQUENT EMPLOYERS. During the Restricted
Period Executive agrees to communicate the contents of this Agreement to any
person, firm, association, or corporation that Executive intends to be employed
by, associated with, or represent.
9. INADEQUATE REMEDY. Executive acknowledges and agrees that the
remedy at law available to Employers for breach of any of his obligations under
this Agreement would be inadequate, and agrees and consents that in addition to
any other rights or remedies that Employers may have at law or in equity,
temporary and permanent injunctive relief may be granted in any proceeding that
may be brought to enforce any provision contained in sections 3 through 8 of
this Agreement, without the necessity of proof of actual damage.
10. FORFEITURE. Notwithstanding any Provisions to the contrary, in
the event that the Employers make the reasonable determination that the
Executive has violated any of the Provisions, then any amounts owed under this
Agreement to the Executive or his beneficiaries, excluding any vested benefits
under the SERP, vested special supplemental cash awards, and vested Restricted
Stock awards described in section 7 (a) though (d), shall be forfeited and no
longer payable to such Executive or to any person claiming by or through the
Executive. The Executive will, however, continue to be obligated to comply with
the Provisions through the term of this Agreement.
11. WITHHOLDING TAXES. National City may withhold from any amounts
payable under this Agreement such federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
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12. SEVERABLE PROVISIONS. All Provisions are severable and, in the
event any one of them shall be held to be invalid by any competent court, this
Agreement shall be interpreted as if such Provision was not contained herein,
and such determination shall not otherwise affect the validity of any other
Provision. The Provisions shall be applicable irrespective of whether
termination of Executive's employment shall be by National City or by the
Executive, whether voluntary or involuntary, whether for cause or without cause,
and whether by reason of the expiration any other written or oral agreement or
arrangement (or any extensions thereof) with National City.
13. FAILURE TO ENFORCE. The failure of National City to enforce
any of the Provisions shall not be construed to be a waiver of such Provision or
of the right of National City thereafter to enforce each and every Provision.
14. ASSIGNMENT. National City may sell, transfer or assign this
Agreement or any rights, title, interest or obligation under this Agreement to
any third party without the prior consent of the Executive. Executive may not,
however, sell, transfer or assign this Agreement or any rights, title and
interest under this Agreement or delegate any obligations under this Agreement
without the prior written consent of National City. Any such purported
assignment or delegation by the Executive made without prior written consent of
National City shall be null and void.
15. EFFECTIVENESS, GOVERNING LAW, JURISDICTION. This Agreement
shall take effect upon execution by Executive and National City and, except as
preempted by the laws of the United States, shall be governed by, and construed
in accordance with, the internal, substantive laws of the State of Ohio. The
Executive agrees that any action, claim, counterclaim, cross claim proceeding,
or suit, whether at law or in equity, whether sounding in tort, contract, or
otherwise at any time arising under or in connection with this Agreement, the
administration, enforcement, or negotiation of this Agreement, or the
performance of any obligations in respect of this Agreement (each such action,
claim, counterclaim, cross claim, proceeding, or suit, an "Action") shall be
brought exclusively in a federal court or state court located in the city of
Cleveland, Ohio. Each of the parties hereby unconditionally submit to the
jurisdiction of any such court with respect to each such Action, consents to
service of process in connection with any Action and waives any objection each
of the parties may now or hereafter have to the venue of any such Action brought
in any such court.
16. CAPTIONS AND SECTIONS. The captions to the sections and
subsections of this Agreement are inserted for convenience only and shall be
ignored in interpreting the Provisions. Each reference to a section includes a
reference to each and all subsections thereof except where the context clearly
does not so permit.
17. COUNTERPARTS. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
18. SURVIVAL. The Provisions of sections 3, 4, 6, 9 and 15 of this
Agreement shall survive the term of this Agreement and continue indefinitely.
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19. KNOWLEDGEABLE EXECUTION. Executive represents that, prior to
signing this Agreement, he has read, fully understands and voluntarily agrees to
the terms and conditions as stated above, that he was not coerced to sign this
Agreement, that he was not under duress at the time he signed this Agreement and
that, prior to signing this Agreement, he had adequate time to consider entering
into this Agreement, including without limitation, the opportunity to discuss
the terms and conditions of this Agreement, as well as its legal consequences,
with an attorney of his choice.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement dated
the ________ day of _________________, 2004.
EXECUTIVE:
_____________________________________
NATIONAL CITY
By: _________________________________
__________________________
__________________________
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