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EXHIBIT 10.13.1
EMPLOYMENT, CONFIDENTIALITY, NON-SOLICITATION
AND NON-COMPETITION AGREEMENT
This EMPLOYMENT, CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION
AGREEMENT ("Agreement") made as of the 3rd day of August,1999, by and between
Xxxx X. Xxxxx ("Xx. Xxxxx" or "Employee"), and FirstMerit Corporation, its
subsidiaries and affiliates ("FirstMerit" or "Employer").
W I T N E S S E T H:
WHEREAS, FirstMerit Corporation is an Ohio corporation, and registered
as a bank holding company under the Bank Holding Company Act of 1956, as
amended;
WHEREAS, prior to February 1, 2000, Xx. Xxxxx was employed by
FirstMerit Corporation as President, Services Company and Chief Technology
Officer;
WHEREAS, Xx. Xxxxx requested of FirstMerit permission to voluntarily
relinquish his prior position effective January 31, 2000, and has negotiated and
executed a Reassignment Agreement and Release in conjunction with his decision;
and
WHEREAS, FirstMerit and Xx. Xxxxx desire to enter into a relationship
whereby Xx. Xxxxx will remain employed by FirstMerit under the terms of this
Agreement.
WHEREAS, as a condition of continued employment, FirstMerit has
required that Xx. Xxxxx agree to refrain from competing with FirstMerit or
disseminating or improperly using confidential information of FirstMerit and Xx.
Xxxxx is willing to make such a commitment, in accordance with the provisions of
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements set forth in this Agreement, and other good
and valuable consideration, the receipt of which is hereby acknowledged by Xx.
Xxxxx, the parties agree as follows:
1. EMPLOYMENT. FirstMerit agrees to employ Xx. Xxxxx as Chairman
of Mobile Consultants, Inc. ("MCI") and Xx. Xxxxx accepts
employment according to the terms and conditions set forth in
this Agreement, to perform those duties and assume those
duties and responsibilities as reasonably assigned from time
to time by the Chairman and Chief Executive Officer.
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2. TERM OF AGREEMENT.
a. The term of this Agreement shall commence as of
February 1, 2000, and shall terminate January 31,
2002 unless terminated earlier as provided herein.
Xx. Xxxxx and FirstMerit agree that Xx. Xxxxx'x
retirement shall become effective on February 1,
2002.
b. Should Employee exercise his right to revoke
and/or cancel the Reassignment Agreement and Release
executed contemporaneously with this Agreement
pursuant to paragraph 18 of said Reassignment
Agreement and Release, then upon such revocation
and/or cancellation, this Employment,
Confidentiality, Non-Solicitation, and
Non-Competition Agreement shall also be revoked and
canceled and all parties shall be released of all
obligations imposed upon each other under the terms
of this Agreement.
3. TERMINATION OF EMPLOYMENT.
3.1 TERMINATION BY THE FIRSTMERIT FOR JUST CAUSE.
The Employer may terminate the employment of the Employee
under the Agreement without notice for Just Cause.
Notwithstanding anything to the contrary contained herein, it
shall be considered Just Cause to terminate the Employee's
employment upon the happening of any of the following:
a. The retirement or death of the Employee;
b. Felonious criminal activity whether or not
affecting the Employer;
c. Disclosure to unauthorized persons of
Employer information which is considered by
FirstMerit to be confidential;
d. Breach of any contract with, or violation
of any legal obligation to, the Employer or
dishonesty; or
x. Xxxxx negligence or insubordination in the
performance of duties of the position held
by the Employee.
3.2 EFFECT OF TERMINATION UPON COMPENSATION.
In the event of termination by the Employer for Just Cause,
the Employee shall not be entitled to receive salary or other
benefits beyond the date of termination. However, in the event
that Xx. Xxxxx engages in conduct identified in paragraph
3.1(e), then termination of employment will not ensue if Xx.
Xxxxx cures the
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condition within fourteen (14) days after notice has been
given by FirstMerit. In the event of termination by the
Employer for reasons other than Just Cause or expiration of
the term, all of the Unvested Options pursuant to the Stock
Option Agreement dated August 3, 1999 shall vest on the
effective date of the termination.
4. DUTIES. Xx. Xxxxx shall serve FirstMerit, under the direction
of the Chairman and Chief Executive Officer as set forth in
Schedule A.
5. TOTAL COMPENSATION. While employed under the Agreement, the
Employee shall receive as his sole and total compensation for
the performance of his duties and obligations under this
Agreement the following amounts:
a. SALARY. During the term of this Agreement, Xx. Xxxxx
shall receive a salary of Three Hundred Ten Thousand
Dollars ($310,000.00) per year. Compensation payable
to Employee shall be subject to standard payroll
deductions and paid in semi- monthly or more frequent
installments as may be agreed upon by FirstMerit and
Xx. Xxxxx.
b. BONUS. Xx. Xxxxx shall not be eligible for any bonus
or other incentive compensation.
c. BENEFIT PACKAGE. During the term of this agreement,
Xx. Xxxxx shall be entitled to participate in such
medical and health benefit plans as maintained for
executive officers from time to time, may participate
in FirstMerit's 401(k) Plan, and shall earn pension
credits.
d. EXECUTIVE LIFE INSURANCE. If Xx. Xxxxx elects to
continue as a participant in the Executive Life
Insurance Program, the Employer will, until such time
as the premium obligations have been fulfilled,
continue payment of the premium plus an additional
forty percent (40%) of the premium, providing life
insurance in the amount of $500,000 on the life of
Xx. Xxxxx (Xx. Xxxxx shall be personally obligated to
pay any and all taxes associated with this life
insurance benefit).
e. COUNTRY CLUB DUES. During the term of this Agreement,
FirstMerit shall reimburse Xx. Xxxxx for monthly dues
to Fairlawn Country Club and shall designate Xx.
Xxxxx as the company representative at Xxxxxx Country
Club. Xx. Xxxxx shall be responsible for the payment
of any assessments and charges associated with
personal use. FirstMerit agrees to reimburse Xx.
Xxxxx for approved charges incurred for the purposes
of FirstMerit.
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f. EXPENSES. FirstMerit agrees to reimburse Xx. Xxxxx
for approved expenses incurred by Macso for the
purposes of FirstMerit and in performance of Macso's
duties.
g. NO OTHER COMPENSATION OR REMUNERATION. Other than Xx.
Xxxxx'x pension rights and any stock option rights
which he may have, Xx. Xxxxx acknowledges and agrees
that he is not entitled to any other compensation or
remuneration pursuant to the employment relationship,
policies, or practices. Futher, Xx. Xxxxx
acknowledges and agrees that he is not entitled to
any severance pay under the terms of any FirstMerit
agreement, policy, practice, or plan.
6. COVENANT NOT TO COMPETE AND NON-SOLICITATION.
a. During the term of this Agreement and for a period of
two (2) years thereafter, Xx. Xxxxx shall not, on his
own behalf or with others, directly or indirectly, as
a shareholder, partner, director, officer, employee,
agent or otherwise, manage, operate, control, own,
provide services to, participate in, consult with or
be connected in manner with any corporation,
partnership, proprietorship or other business entity
that engages in any business activity in which
FirstMerit is now engaged or otherwise provides
banking, financial or related services in locations
identified in Section 7, "Geographic Region".
Further, Xx. Xxxxx is prohibited from engaging in the
above activities for entities located outside of the
Geographic Region, if that entity conducts business
within the Geographic Region. However, this shall not
prevent Xx. Xxxxx from moving his own personal
accounts from FirstMerit and placing them with a
competitor.
b. Xx. Xxxxx hereby further agrees and covenants that
during the aforementioned period, he shall not,
directly or indirectly, on his own behalf or with
others (i) induce or attempt to induce any employee
of FirstMerit to leave the employ of FirstMerit, or
in any way interfere with the relationship between
FirstMerit and any employee, (ii) knowingly hire any
such employee of FirstMerit, or (iii) induce or
attempt to induce any referral source, customer, or
other business relation of FirstMerit not to do
business with FirstMerit, or to cease doing business
with FirstMerit, or in any way interfere with the
relationship between any such referral source,
customer, or business relation and FirstMerit.
7. GEOGRAPHIC REGION. As for FirstMerit's banking and financial
business, the Covenant Not to Compete and Non-Solicitation
provisions contained in Section 6 of this Agreement shall be
in force and binding upon Xx. Xxxxx in all counties in the
state of Ohio in which FirstMerit currently has offices, and
in Xxxxxxxx County,
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Pennsylvania. As for the manufactured housing business, the
Covenant Not to Compete and Non-Solicitation Agreement
provisions contained in Section 6 shall be binding upon Xx.
Xxxxx in all states where MCI currently does business
("Geographic Region").
8. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Xx. Xxxxx
acknowledges that, as President, Services Company, he has had
extensive access to and has acquired various confidential
information relating to the Business, including, but not
limited to, financial and business records, customer lists and
records, business plans, corporate strategies, information
disclosed or discussed during any exit conference, employee
information, wage information, and related information and
other confidential information (collectively, the
"Confidential Information"). Xx. Xxxxx also acknowledges and
agrees that the facts relevant to his reassignment, the
existence of the Reassignment Agreement and Release dated
August 3, 1999(the "Release") and the terms contained in the
Release are Confidential Information. Xx. Xxxxx agrees that
the Confidential Information is and will be of special and
unique value to FirstMerit. Xx. Xxxxx further acknowledges and
covenants that, at all times, the Confidential Information is
the sole property of FirstMerit and will constitute trade
secrets and confidential information of FirstMerit, and that
his knowledge of the Confidential Information will enable him
to compete with FirstMerit in a manner likely to cause
FirstMerit irreparable harm upon the use or disclosure of such
matters. Therefore, Xx. Xxxxx hereby irrevocably covenants
that he shall not, at any time after the date of this
Agreement, use or disclose to any third party, directly or
indirectly, any of the Confidential Information, except as
permitted by this Agreement. This paragraph shall not be
limited by the time periods contained in Section 6 of this
Agreement. Excluded from the definition of Confidential
Information is (a) information which is publicly available,
other than as a result of actions by Xx. Xxxxx in breach of
this Agreement; and (b) information which is disclosed by
FirstMerit to third parties on a non-confidential basis.
9. PERMITTED DISCLOSURES. In the event Xx. Xxxxx becomes legally
compelled (by oral questions, interrogatories, requests for
information or documents, subpoena, investigative demand or
similar process) to disclose any of the Confidential
Information, Xx. Xxxxx will provide the FirstMerit with prompt
written notice thereof so that FirstMerit may seek a
protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. In the event
that such protective order or other remedy is not obtained, or
that FirstMerit waives compliance with the provisions of this
Agreement, Xx. Xxxxx covenants to furnish only that portion of
the Confidential Information which he is legally required to
disclose and will exercise his best efforts to obtain reliable
assurance that confidential treatment will be accorded the
Confidential Information. In addition, Xx. Xxxxx may
communicate information relating to the Reassignment Agreement
and Release only to his attorney and accountant, provided
however, that he first obtain reliable assurance that
confidential treatment will be accorded by such individuals.
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10. PAYMENT OF CONSIDERATION. Xx. Xxxxx agrees that the
compensation set forth in Section 5 above shall constitute
consideration of the covenants and agreements hereunder and
employment is conditioned upon Xx. Xxxxx'x continued
compliance with the terms and conditions contained in this
Agreement.
11. BREACH AND CURE PERIOD. In the event that Xx. Xxxxx violates
any provision of this Agreement or otherwise fails to fulfill
any of the covenants herein, FirstMerit shall provide Xx.
Xxxxx of written notice of such breach. Xx. Xxxxx shall then
have fourteen (14) days to provide FirstMerit with written
explanation that the breach has been cured ("Cure Period"). If
the breach is not cured to FirstMerit's satisfaction after the
expiration of fourteen (14) days after the receipt of
FirstMerit's written notice by any person identified in
Section 24 of this Agreement, then FirstMerit may exercise any
and all of its rights at law and equity to enforce this
Agreement.
The parties acknowledge that subject to the above Cure Period,
any material breach by Xx. Xxxxx of any of the provisions of
Sections 6 through 9 of this Agreement shall discharge
FirstMerit from any obligation to make payments under Section
5 of this Agreement. The parties further agree that whether a
breach is "material," so as to discharge FirstMerit from is
obligation to make any payment after the date of the breach,
will be abjudicated by a court of competent jurisdiction.
FirstMerit's right to discontinue payments after the date of
material breach shall not limit FirstMerit from seeking any
other damages to which it is entitled as a result of any
breach by Xx. Xxxxx. Further, the parties acknowledge that a
breach by Xx. Xxxxx of any of the provisions of Sections 6
through 9 of this Agreement shall cause irreparable damage to
FirstMerit, the extent of which may be difficult to ascertain,
and that the award of damages for such a breach shall not be
adequate relief. Consequently, Xx. Xxxxx covenants that a
breach or threatened breach by Xx. Xxxxx, may entitle
FirstMerit to injunctive relief to prevent or end such breach,
that Xx. Xxxxx shall waive the defense as to irreparable harm
and adequate remedy at law. Such a remedy is not exclusive,
but shall be in addition to any other remedies available to
FirstMerit at law or in equity. In the event that either party
hereto files a lawsuit to enforce the terms of this Agreement,
the successful party shall, in addition to the other remedies,
be entitled to all costs of litigation, including reasonable
attorneys' fees.
12. EXTENSION OF TERM. In the event of the violation of any of the
covenants contained in Section 6 by Xx. Xxxxx, Xx. Xxxxx
agrees that the term of the covenants shall be automatically
extended for a period equal to the duration of the violation.
The extension of term provided for in this Section 12 shall be
in addition to, and not in lieu of, any other remedies
available to FirstMerit at law or in equity.
13. REPRESENTATIONS; PRIOR AGREEMENTS. Each party hereby
represents and warrants that (i) the execution, delivery and
performance of this Agreement does not and will not conflict
with, breach, violate or cause a default under any contract,
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agreement, instrument, order, judgment or decree to which any
party is bound, (ii) upon the execution and delivery of this
Agreement, this Agreement shall be the valid and binding
obligation of the parties, enforceable in accordance with its
terms, and (iii) all parties are familiar with restrictive
covenants, fully understands the obligations imposed on him by
this Agreement, and has been represented by and has consulted
with legal counsel in connection with the preparation and
execution of this Agreement.
14. REASONABLENESS OF PROVISIONS. Each party acknowledges that the
terms of this Agreement are reasonable, fair and just and are
necessary for the protection of the legitimate interests of
the parties. In the event that any provision of this Agreement
is determined by any court of competent jurisdiction to be
unenforceable by reason of it being extended over too great a
period of time or too large a geographic area or range of
activities, it shall be interpreted to extend only over the
maximum period of time, geographic area, or range of
activities deemed reasonable under the circumstances.
15. WAIVER OF BREACH. The waiver by a party of a breach of any
provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach of the same or any other
provision of this Agreement.
16. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of the heirs, legal representatives,
successors and permitted assigns of the parties.
17. ASSIGNMENT. No assignment or transfer of this Agreement by Xx.
Xxxxx, including assignment or transfer by operation of law,
shall be valid without the prior written consent of
FirstMerit. FirstMerit may freely assign this Agreement
without Xx. Xxxxx'x consent.
18. COMPLETE AGREEMENT. This Agreement, those documents expressly
referred to herein, and other documents of even date herewith
contain the entire agreement of the parties and supersede any
prior understandings, agreements or representations which may
be related to the subject matter hereof in any way.
19. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule
in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any
other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been
contained herein.
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20. AMENDMENTS. No amendment or variation of the provisions of
this Agreement shall be valid unless the same is in writing
and signed by both parties to this Agreement.
21. AFFILIATES DEFINED. For purposes of this Agreement, an
"affiliate" is defined as any business entity which, directly
or indirectly is owned or controlled by, or is under common
ownership or control with, FirstMerit.
22. CHOICE OF LAW AND JURISDICTION. This Agreement is made and
entered into in the state of Ohio, and shall in all respects
be interpreted, enforced and governed under the laws of said
state notwithstanding its conflict of laws rules. In the event
of any dispute or controversy arising under or in connection
with this Agreement, the parties consent to the jurisdiction
of the Common Pleas Court of the State of Ohio (Summit County)
or The United States District Court for the Northern District
of Ohio, Eastern Division.
23. COMMUNICATION AND NOTICES. All communications or notices
required or permitted by this Agreement shall be in writing
and shall be deemed to have been given at the earlier of the
date when actual delivery to a party by personal delivery or
when deposited in the United States mail, postage prepaid, and
the addressees and addresses are as follows, unless and until
any such party notifies the other of a change of addressee and
address:
To: Xxxxx X. Xxxxxx, Esq.
Executive Vice President, Corporate Secretary, and
Chief Legal Counsel
FirstMerit Corporation
III Xxxxxxx Xxxxx
Xxxxx, Xxxx 00000
To: Xxxx X. Xxxxx
At: 000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxx, Xxxx 00000
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25. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
August 5, 1999 /s/ Xxxx X. Xxxxx
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Date Xxxx X. Xxxxx
FIRSTMERIT CORPORATION
AUGUST 5, 1999 By: /s/ Xxxxxxxxxxx X. Xxxxxx
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Date Its: Executive Vice President of Human
Resources
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