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Exhibit 4.3
CONSULTING AND NON-COMPETITION AGREEMENT
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This Consulting and Non-Competition Agreement, made and
entered into this __ day of August, 1998, by and between Second Bancorp
Incorporated (the "Company"), and Xxxxx X. Xxxxx ("Consultant");
WITNESSETH:
WHEREAS, the Company is a bank holding company operating in
Ohio and Western Pennsylvania; and
WHEREAS, Consultant has extensive business contacts,
experience and expertise as an executive officer and director in the financial
institution industry; and
WHEREAS, the Company and Consultant desire that Consultant
assist in certain activities of the Company as described herein if and when the
Company and Trumbull Financial Corporation merge; and
WHEREAS, Consultant, by reason of his extensive business
contacts, experience and expertise, would be able to compete with the Company
and its affiliates, thereby materially harming their business; and
WHEREAS, the parties desire to provide that Consultant will
not compete with the business of the Company and its affiliates as set forth
herein in accordance with the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants contained herein, Consultant and the Company hereby agree as
follows, intending to be legally bound:
I. CONSULTING SERVICES. The Company shall engage Consultant to
provide services and advice to the Company's business and to promote the best
interests of the Company during the Term of this Agreement (as defined below).
Consultant shall perform his duties hereunder faithfully, to the best of his
ability, realistically gauged to conform with the time limitations governing the
consulting services to be provided by the Consultant and in the furtherance of
the best interests of the Company in conformity with the policies of the Company
and under and subject to such direction, instruction, and oversight as the
Chairman of the Board of
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Directors of the Company (the "Chairman") may reasonably issue in furtherance of
the business objectives of the Company from time to time. Specifically,
Consultant shall:
A. Serve on the Board of Directors of Second Bancorp
Incorporated so long as he shall be nominated by the Board and elected as a
director by the shareholders. So long as Consultant is not in breach of this
Agreement and acts in conformity to his fiduciary obligations as a Director, the
Company shall exercise its reasonable best efforts to have the Consultant
nominated by the Board and elected as a Director by the Shareholders during the
Term of this Agreement;
B. Advise the Company regarding conversion issues in
connection with the merger of Trumbull Savings and Loan Association ("Trumbull")
into Second National Bank of Warren (the "Bank"), thrift financial institutions
practices and procedures, consolidation issues related to the merger and
business development;
C. Assist in the preservation of customer relations with the
Company and the attraction of new customers to the Company;
D. Assist the Company in attracting and retaining high quality
employees;
E. Provide general consulting services on the request of the
Chairman for up to forty-five (45) hours per month.
II. NON-COMPETITION.
A. During the Term of this Agreement, Consultant shall not
become a shareholder, employee, officer, director, partner, lender, investor,
advisor, agent, consultant or (whether or not being compensated in any way in
any such capacity) otherwise engaged directly or indirectly in any Banking or
Financial Industry Business in which the Company is engaged at the time or to
which the Company has devoted resources for possible participation, within the
State of Ohio, in the area of the Commonwealth of Pennsylvania west of a
north/south line through the center of Kittaning, Pennsylvania, or in the area
of the State of West
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Virginia north and west of a line connecting the cities of Morgantown, and
Charleston in West Virginia, such line extending to the borders of West Virginia
(the "Trade Area"). For purposes of this Agreement, Banking or Financial
Industry Business shall mean engaging in or rendering services as a bank,
savings association, holding company, mortgage company, finance company, loan
company, brokerage company, insurance agency of Company or other financial
institution or business which is in competition with the Company (or its
subsidiaries or affiliates or their successors or assigns) and which bank,
savings association, holding company, mortgage company, finance company, loan
company, financial institution, brokerage company, insurance agency or company
or other business has a main office, branch office, loan production office or
which otherwise solicits business directly or indirectly within the Trade Area.
Notwithstanding the foregoing, nothing herein contained shall prevent Consultant
from purchasing and holding for investment less than 3% of the securities of any
publicly-held corporation which is in direct or indirect competition with the
Company, the shares of which are regularly traded on a national securities
exchange. Consultant shall remove himself from any meeting involving any
consideration by the Board of Directors of any activity in the event Consultant
has a conflict of interest. Further, Consultant shall not:
1. Request or advise any customer, client, or other
person, firm, partnership, association, corporation or business organization,
entity or enterprise having business dealings with the Bank or its affiliates or
the business of the Bank to withdraw, curtail or cancel such business or such
business dealings; or
2. Induce or attempt to influence any employee of the
Company or any of its subsidiaries or affiliates to terminate the employee's
employment.
B. To ensure the greatest likelihood of enforceability of the
covenant not to compete in this section (the "Covenant"), the parties agree that
(i) the duration and area for which the Covenant is to be effective are
reasonable; (ii) if any court determines that the time period or the area, or
both of them, are unreasonable and that the Covenant is to that extent
unenforceable, then the Covenant shall remain in full force
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and effect for the greatest time period and in the greatest area that would not
render it unenforceable; and (iii) the Covenant shall be deemed to be a series
of separate covenants, one for each and every county in the Trade Area.
III. CONFIDENTIALITY.
A. Consultant agrees and acknowledges that the results and
proceeds of his consultation services, and any data, ideas, plans or other
information disclosed directly or indirectly to him by the Company or its
affiliates in the course of his engagement with the Company and in the course of
providing the consulting services hereunder shall be considered confidential and
proprietary information of the Company. During the Term of this Agreement and
thereafter, Consultant agrees to maintain such confidential and proprietary
information in confidence, in the absence of written authority to the contrary
by the Company. The foregoing obligation to maintain information in confidence
shall not apply to any information which is or becomes part of the public
domain, other than by or through the actions of Consultant. Upon the termination
of this Agreement, Consultant shall deliver to the Company all documents,
information, drawings, blueprints, reports, manuals, letters, notes, notebooks,
and all copies of the foregoing, and all other materials of a secret or
confidential nature relating to the Company's business which are in the
possession or in the control of Consultant. By way of example and not
limitation, Consultant shall not:
1. Disclose to any person, firm, partnership,
association, corporation or business organization, entity or enterprise, any
confidential information, including the names of customers or clients of, or
other persons, firms, partnerships, associations, corporations or business
organization, entities or enterprises having business dealings with the Company;
or
2. Disclose to any competitor, or potential
competitor of the Company or its affiliates or the business of the Company or
its affiliates, any trade secrets or confidential information of any kind
relating to or developed in the course of such business or the development or
sale of the products or services thereof.
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B. By way of example and not limitation, "confidential
information" shall include matters of a technical nature such as "know-how",
innovations, research projects, methods; matters of a business nature, such as
information about costs, prices, profits, markets, marketing, sales, customers,
suppliers, business processes, computer programs, accounting methods or data,
information systems, business or financial plans and reports, employee
compensation, personnel and any other information of a similar nature; and trade
secrets and confidential matter or information as defined by the statutory and
common law of Ohio or federal legislation and regulations.
C. Consultant agrees not to use confidential information for
Consultant's own benefit, in violation of federal or Ohio securities laws or
otherwise, or to divulge, disclose or communicate any confidential information
to any person or entity, in violation of federal or Ohio securities laws or
otherwise, except that Consultant may communicate confidential information to
other employees, representatives or agents of the Company or any of its
affiliates having a need to know such confidential information, and then only to
the extent necessary for those employees, representatives or agents to perform
their employment or agency responsibilities to the Company.
IV. COMPENSATION.
A. In consideration for the obligations of Consultant set
forth in this Agreement, Company shall pay Consultant (i) a non-compete fee in
the aggregate amount of $90,000 of which $45,000 shall be payable on the first
day of the Term of this Agreement and $45,000 shall be payable on the first
anniversary of the first day of the Term of this Agreement, and (ii) consulting
fees in the amount of $3,750 per month for 24 consecutive months, the first such
consulting fee payment to be due and payable on the first day of the Term of
this Agreement and each subsequent payment to be due and payable on the same day
of each succeeding month. In the event the Company determines in good faith that
Consultant is in breach of this Agreement, the Company may suspend payments to
the Consultant under this Agreement only upon failure of Consultant to cure such
breach
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within 10 days of the receipt of written notice of the breach of this Agreement.
If, prior to termination of this Agreement under Section 5, Consultant cures
such breach, including by being reasonably available to render previously
unserved consultant services upon the request of the Company, then the Company
shall resume payment and make up past payments. The obligation of the Company to
pay the Consultant the non-compete fee described in Section 4(a)(i) above shall
survive and shall in no event be impacted by the death or total or partial
disability of the Consultant.
B. In performing the consulting services required in
accordance with this Agreement, Consultant shall be reimbursed his actual and
reasonable documented expenses incurred in performing such services against
presentation of receipts or invoices evidencing such expenses. The Company shall
not be obligated to reimburse any expenses which have not been approved in
advance which exceed expenses of a kind otherwise paid by the Company for its
executive officers.
V. TERM. The term of this Agreement ("Term") shall commence on the
effective date of the merger of the Company and Trumbull Financial Corporation
and shall continue for a period of two (2) years thereafter. Either party may
terminate this Agreement in the event of a breach by the other party, by giving
60 days written notice of the breach and the intention to terminate to the
breaching party if such breach is not cured within such 60 day period.
VI. WAIVER. Failure to insist upon a strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver or
relinquishment of any such term, covenant or condition, nor shall any such
failure at any one time or more times be deemed a waiver or relinquishment at
any other time or times of any right under the terms, covenants or conditions
hereof.
VII. BENEFITS OF AGREEMENT. This Agreement shall inure to the benefit
of and be binding upon the Company, its successors and assigns. With the
exception of the obligation upon the Consultant to provide consulting services
which are personal unto the Consultant, this Agreement shall inure to the
benefit of and be
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binding upon Consultant and Consultant's heirs, legatees, personal
representatives, administrators, executors, successors and assigns.
VIII. ASSIGNMENT. Neither the Company nor Consultant's rights and
obligations under this Agreement may be assigned or otherwise transferred
without the prior written consent of the other party; except that Company may
assign its rights and obligations hereunder without the consent of the
Consultant to any affiliate of the Company or to any successor of the Company by
merger or similar transaction.
IX. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
X. HEADINGS. The headings of the various sections of this Agreement
have been inserted for convenience only. Interpretation hereof shall be based
strictly upon the text without reference to such headings.
XI. MODIFICATIONS. No modification hereof shall be effective unless the
same shall be in writing duly executed by the party to be bound thereby.
XII. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the matters set forth herein.
XIII. EQUITABLE RELIEF. Consultant's obligations contained in this
Agreement are of a special and unique character which gives them a peculiar
value to the Company. The Company cannot be reasonably or adequately compensated
in damages in an action at law in the event Consultant breaches such
obligations. Consultant therefore expressly agrees that, in addition to any
other rights or remedies which the Company may possess, the Company shall be
entitled to injunctive and other equitable relief in the form of preliminary and
permanent injunctions without bond or other security in the event of any actual
or threatened breach of said obligations by Consultant.
XIV. NOTICES. All notices, requests, demands, payments and other
communications required or permitted to be given under this Agreement shall be
given in writing and shall be deemed to have been given if
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delivered by hand, by express service or by certified mail, postage prepaid:
A. If to Consultant, to:
Xxxxx X. Xxxxx
0000 Xxxxxxx Xxxx, X.X.
Xxxxxx, XX 00000-0000
with a copy to:
Xxxxx X. Xxxxxx
Xxxxxx & XxXxxxxx
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx, XX 00000
B. If to Company, to:
000 Xxxx Xxxxxx, X.X.
X.X. Xxx 0000
Xxxxxx, Xxxx 00000
Attention: Chairman
Any party to this Agreement may, by notice given in accordance with this
section, designate a new address for notices and other communications to such
party.
XV. EXECUTION OF AGREEMENT. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be a duplicate original, but
all counterparts taken together shall constitute duplicate originals of one and
the same agreement.
XVI. JURISDICTION AND VENUE. Any actions or proceedings instituted
under this Agreement with respect to any matters arising under or related to
this Agreement shall be brought and tried only in courts located in the State of
Ohio. By entering into this Agreement, the Company and Consultant consent to the
jurisdiction over their person in both federal and state court systems of Ohio
and expressly waive any right to cause any such action or proceeding to be
brought or tried elsewhere.
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IN WITNESS WHEREOF, the Company and Consultant have executed this
Agreement to be effective as of the date set forth in the first paragraph above.
SECOND BANCORP INCORPORATED
By:
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Xxxx X. Xxxxx, Chairman and President
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Xxxxx X. Xxxxx
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