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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and effective as of the ____ day of
__________, 1999, by and among Sky Financial Group, Inc. ("Sky"), SKY BANK
("Employer") and XXXXXXX X. XXXXXX ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to an Agreement and Plan of Merger to be
entered into (the "Merger Agreement") by and between Sky and Mahoning National
Bancorp, Inc. ("Mahoning"), Mahoning's wholly owned subsidiary, Mahoning
National Bank ("Bank") shall merge into Employer, a wholly owned subsidiary of
Sky (the "Merger"); and
WHEREAS, in connection with the Merger, Mahoning and Sky have
agreed that Employee shall be employed by the Employer pursuant to an agreement
in the form of this Agreement; and
WHEREAS, Employer has agreed to employ Employee on the terms
set forth and Employee will acquire access to confidential information of
Employer including, but not limited to, Employer's business concept, proprietary
techniques, organization, products, systems, technology, developments, know-how,
marketing plans, customer contacts, clients, client lists, financial
information, personnel information, pricing, internal operations, business
strategies, trade secrets, and other information, materials, and business
records of any kind ("Confidential Information"); and
WHEREAS, Employer has expended significant amounts of money in
developing its business and establishing client relationships and, because of
the competitive nature and special character of Employer's business, has a
reasonable and legitimate interest in maintaining the secrecy and
confidentiality of the Confidential Information and in maintaining and
furthering business relationships with existing and prospective customers; and
WHEREAS, Employee wishes to enter into employment with
Employer on the terms set forth and acknowledges Employer's need to protect
Employer's business and goodwill; and
WHEREAS, Sky has agreed to guarantee the obligations of
Employer under this Agreement.
NOW THEREFORE, in consideration of Employer's agreement to
hire Employee and the covenants and promises set forth, the parties agree as
follows:
1. EMPLOYMENT. Employer shall employ Employee during the Term
as Chief Executive Officer of the Mahoning Valley Region of Employer. In the
event the Merger takes effect subsequent to the Effective Time, Employee shall
continue to serve as President and Chief Executive Officer of Bank. Sky agrees
to be jointly and severally liable for Employer's obligations under this
Agreement.
2. EFFECTIVE TIME. The provisions of this Agreement shall take
effect as of the Effective Time as defined in the Merger Agreement ("Effective
Time"), provided
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Employee is employed by Mahoning immediately prior to the Effective Time. As of
the Effective Time, the prior Change-In-Control Protective Agreement dated May
14, 1997 and Guarantee Agreement dated May 14, 1997 between Employee and
Mahoning and/or the Bank shall become void.
3. TERM. The initial term of employment under this Agreement
shall be the period of three (3) years commencing on the Effective Time. This
Agreement shall automatically be extended for one (1) additional year on the
second anniversary date of the Effective Time and, if so renewed, for an
additional one (1) year renewal term, annually on each succeeding anniversary
date of the Effective Time, unless either party gives the other three (3) months
advance written notice of intent not to renew. References to the Term shall
refer to the initial three (3) year term and any successive renewal terms. The
Term shall end upon termination of Employee's employment under this Agreement.
4. NON-COMPETITION. In consideration of the payment of Nine
Hundred Thirty Five Thousand Four Hundred Forty Eight Dollars ($935,448.00), in
lump sum, paid to Employee at the Effective Time or on January 3, 2000 (at
Employee's option, to be elected at least sixty (60) days prior to the Effective
Time), employment of Employee by Employer, and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties
agree that during Employee's employment or in the event this Agreement is
terminated for any reason, Employee shall be subject to the following
restrictive covenants:
A. COVENANT NOT TO COMPETE. During the Employee's
employment and for a period of three (3) years following termination of
Employee's employment (the "Restrictive Period"), Employee shall not, without
the prior written consent of Employer, (i) engage in any business activity,
directly or indirectly, on Employee's own behalf or as a partner, stockholder
(except by ownership of less than five percent of the outstanding stock of a
publicly held corporation), owner, director, trustee, principal, agent,
employee, consultant or otherwise of any person, firm or corporation, which is
engaged in any activity for profit in which Employer or any parent, subsidiary
or affiliate of Employer is engaged (although Employee may continue to serve as
a director of S-P Company and its affiliates), or (ii) allow the use of
Employee's name by or in connection with any business which is engaged in an
activity for profit in which Employer or any parent, subsidiary or affiliate of
Employer is engaged. In the event of a violation of this paragraph by Employee,
the Restrictive Period shall be extended for such a period of time as may be
required through litigation or otherwise to obtain strict compliance with the
terms of this Agreement. The parties acknowledge that this Agreement is fair and
reasonable under the circumstances. This covenant shall be limited to areas
within a fifty (50) mile radius in which Employer or its affiliates or agents is
operating customer service or other facilities or actively planning to open such
facilities at the time of termination of Employee's employment. Employee
acknowledges that this Agreement is necessary for the protection of Employer,
does not impose undue hardship on Employee, and is not injurious to the public.
B. NON-SOLICITATION. During the Restrictive Period (as may
be extended pursuant to ss.4A), Employee shall not (i) solicit, divert, take
away or deprive Employer of any business from any customer of Employer for or on
behalf of any competitive business, regardless of where said competitive
business or customer is located, if such customer was a customer or active
prospect of Employer or any parent, subsidiary or affiliate of Employer, during
the period of Employee's employment by Employer; or (ii) offer employment to or
employ, on Employee's own behalf or on behalf of any competitor of Employer or
any parent,
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subsidiary or affiliate of Employer, any person who at any time within the prior
three (3) years shall have been employed by Employer or any parent, subsidiary
or affiliate of the Employer.
C. CONFIDENTIAL INFORMATION. While employed by Employer and
thereafter, Employee shall not for any reason (except as required by law and
after prior notice to Employer by Employee of a legal requirement that Employee
disclose Confidential Information) directly or indirectly disclose Confidential
Information to any person or entity or use any Confidential Information for
Employee's own benefit or the benefit of any other person or entity. All
records, files, documents, data, equipment and the like relating to Employer's
business, which Employee shall prepare or use or come into contact with, shall
be and remain Employer's property and shall be returned to Employer upon
termination of this Agreement. Employee shall not retain copies or duplicates of
these items. Employee acknowledges the ability to earn a livelihood after
termination of employment without disclosing or using Confidential Information.
These confidentiality restrictions are permanent and do not lapse upon
termination of employment.
D. BREACH. The parties intend that Employer be given the
broadest protection allowed by law with regard to the restrictions of this
Agreement. In the event of a breach or a threatened breach by Employee of any of
the provisions of this Agreement, Employer, upon presentation of proof of the
elements required by law, shall be entitled to an injunction restraining
Employee from breach or threatened breach and such other equitable relief as
determined appropriate by a court of competent jurisdiction. In the event that
this restrictive covenant shall be determined by any court of competent
jurisdiction to be unenforceable by reason of it being extended for too great a
period of time, or as encompassing too large a geographical area, or over too
great a range of activities, or any combination of these elements, the parties
agree that this covenant shall be interpreted to extend only over the maximum
period of time, geographic area, and range of activities, or any combination of
these elements, which the court deems reasonable and enforceable. The parties
agree that the provisions of this Agreement shall be deemed divisible as to the
time, duration and geographical area of the restrictions imposed, and further
agree that injunctive relief shall not be the sole and exclusive remedy of
Employer, nor shall an initiation of an action requesting same constitute an
election of remedies, but Employer may maintain an action for damages to the
fullest extent authorized by law in the event of a breach. The existence of any
claim or cause of action by Employee against Employer, whether predicated upon
this Agreement or not, shall not constitute a defense to the enforcement by
Employer of this Agreement.
5. DUTIES OF EMPLOYEE. Employee shall at all times
diligently and faithfully perform the duties and accept the responsibilities as
directed by Employer's Chief Executive Officer, consistent with Employee's
executive officer position, and with comparable position and surroundings as
similarly situated officers, and which duties and responsibilities may change
from time to time. Employee shall maintain all appropriate licensure and
certification as directed by Employer. Employee agrees to devote Employee's full
and exclusive business time, skill, best efforts, and attention to promote the
business of Employer and to perform faithfully to the fullest extent of
Employee's ability all of Employee's duties, provided that Employee may serve on
boards and committees of other corporations and charitable organizations and
manage his personal investments so long as such activities do not interfere with
the performance of his duties and responsibilities under this Agreement. To the
extent consistent with this Agreement, Employee shall comply with all policies,
rules, and directions given to Employee by Employer (including those set forth
in the Employee Handbook) and shall
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comply with all applicable laws governing Employee's duties and employment.
Employee shall not undertake any activity in conflict with Employee's employment
or with Employee's obligation of loyalty and trust owed to Employer.
6. COMPENSATION.
A. SALARY. Employer shall pay Employee an annual salary
(the "Base Salary") of at least Two Hundred Fifty-Five Thousand Dollars
($255,000.00) per year during the initial three years of the Term, payable in
regular installments consistent with Employer's payroll practices and subject to
customary withholding. The amount of the Base Salary may be increased following
the initial three (3) year term by Employer in such amounts as Employer may in
its discretion determine. During Employee's employment, Employee shall be
entitled to participate in Employer's bonus plan to the same extent and upon the
same terms as similarly situated officers of Employer generally. Any increase in
compensation or any modification of benefits, commission, or bonus practices
shall not operate as a cancellation of this Agreement, and all terms and
conditions of this Agreement shall remain in force.
B. BENEFITS. Employee shall be entitled to participate in
all pension and welfare benefit plans and arrangements in which similarly
situated officers of Employer generally are entitled to participate, including
but not limited to 401(k) plans, pension and profit-sharing plans, annual
incentive compensation plans, and long term incentive compensation plans. During
Employee's employment, Employee shall be entitled to participate in such plans
and arrangements to the same extent and upon the same terms as similarly
situated officers of Employer generally, provided that with respect to all such
plans and arrangements, Employee shall receive full credit for his service with
Mahoning to the same extent as if such service were with Employer. Additionally,
through the Term, Employer shall pay Employee's membership dues in the
Youngstown Country Club and the Youngstown Club.
C. EXTENDED HEALTH CARE BENEFITS. Employee and his
dependents (to the extent such dependents would qualify as dependents pursuant
to Employer's health and dental plans) shall be entitled to participate in
Employer's health and dental plans, or comparable health and dental plans, until
the later of such time as employee reaches the age of 65 or Employee is eligible
for Medicare. Employee may participate at the cost equal to that charged to
full-time employees of Employer at that time.
D. EXPENSES. While employed by Employer, Employee shall be
entitled to reimbursement of all reasonable expenses incurred by him in
connection with his duties, in accordance with Employer's policies and
procedures for reimbursement of expenses.
E. VACATIONS. Employee shall be entitled to annual paid
vacation time as set forth by Company policies, but shall have at least six (6)
weeks vacation annually. Employee shall schedule vacations in a reasonable
manner, with approval of the Chief Executive Officer of Employer.
F. SPLIT-DOLLAR LIFE INSURANCE. If Employer decides to
discontinue its policy for split-dollar life insurance on Employee, Employee
shall have the right to buy such policy from Employer (subject to the terms and
conditions of the policy) for an amount equal to the lesser of its cash
surrender value or the premiums that Employer paid on the policy.
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G. TERMINATION OF BENEFITS. If Employee is terminated for
"Cause", then Employer's obligation under this Agreement to make any further
payments to Employee or to continue any benefits shall cease.
7. TERMINATION. During the Term of Employee's employment,
Employee may only be terminated by Employer in the following circumstances:
A. CAUSE. Employer may terminate Employee's employment for
cause, which for this purpose shall mean any material violation by Employee of
the terms of this Agreement (provided, however, that in the event of any such
violation, Employer shall give Employee reasonable notice and opportunity to
cure); fraud; material misappropriation of or intentional damage to Employer's
property, operations or business prospects; the conviction of a felony, or of a
misdemeanor involving fraud, theft, or dishonesty; the commission of any illegal
activities in connection with Employee's employment; gross incompetence, gross
insubordination, gross misconduct or gross neglect; or being under the habitual
influence of alcohol or drugs. In the event of termination for cause, Employer
shall pay Employee his Base Salary through the date of termination of employment
only.
B. DEATH. If Employee shall die.
C. DISABILITY. If Employee shall be unable to perform the
essential functions of his job, with or without reasonable accommodation due to
physical or mental illness or incapacity, or otherwise, for a period that
qualifies Employee for long-term disability benefits under any plan sponsored by
Employer (or, if no such plan exists, a period which would qualify Employee for
disability benefits under the federal social security system). Employee shall be
entitled to the same disability benefits as similarly situated officers of
Employer generally.
D. VOLUNTARY TERMINATION. In the event that Employee
determines to terminate his employment voluntarily, he shall notify Employer in
writing and Employer shall pay him his Base Salary and benefits earned through
the date of termination of employment only, provided that Employee shall receive
the severance benefits specified in Section 8 if his voluntary resignation
occurs after Employee reaches age 55 or is for "good reason", which shall mean
any of the following events, which has not been consented to in advance by
Employee in writing: (i) the requirement that Employee move his personal
residence or perform his principal executive functions more than thirty (30)
miles from his primary office as of the Effective Time; (ii) a material
reduction in Employee's base compensation, as the same may be increased from
time to time; (iii) the failure by Employer to continue to provide Employee with
compensation and benefits provided for on the Effective Time, as the same may be
increased from time to time, or with benefits substantially similar to those
provided to him under any of Employee benefit plans in which Employee now or
hereafter becomes a participant, or the taking of any action by Employer which
would directly or indirectly materially reduce any of such benefits or deprive
Employee of any material fringe benefit enjoyed by him; (iv) the assignment to
Employee of duties and responsibilities materially diminished from those
associated with his position on the Effective Time; and (v) a material
diminution or reduction in Employee's responsibilities or authority (including
reporting responsibilities) in connection with his employment with Employer.
8. SEVERANCE. Upon termination of employment by Employer or by
Employee, Employee shall be paid through the date of termination of employment.
In addition,
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if Employee elects to terminate his employment after reaching age 55, he may do
so upon three (3) months advance written notice. In that event, or if Employer
terminates employee without cause, Employee shall receive the remaining amount,
if any, of his annual salary (not including bonus or incentive compensation), as
yet unpaid, that would have been paid through the end of the third full year of
the initial term of employment, plus any bonus or incentive compensation accrued
pro rata through the termination date of Employee's employment. This amount may
be paid in lump sum or in equal installments, as requested by Employee, but any
such installment period may not exceed ten (10) years. If Employee chooses to
receive this payment in lump sum, this amount shall be paid within thirty (30)
days after the date of termination. Disability or death after termination and
election in this instance shall not affect Employee's (or Employee's
representative's) ability to receive payments.
9. GOVERNING LAW. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Ohio, without regard to principles of conflicts of laws. The
Employer and the Employee irrevocably submit to the exclusive jurisdiction of
the courts of the State of Ohio, with the exclusive venue in Wood County over
any dispute arising out of this Agreement, and agree that all claims in respect
of such dispute or proceeding shall be heard and determined in such court only.
The Employer and the Employee irrevocably waive, to the fullest extent permitted
by applicable law, any objection that they may have to the venue of any such
dispute brought in such court or any defense of inconvenient forum for the
maintenance of such dispute. The Employer and the Employee consent to process
being served by them as required by law in any suit, action or proceeding.
10. CONSENT TO JURISDICTION. Employer and Employee agree that
any action to enforce the terms of this Agreement shall be brought either in
Wood County Court of Common Pleas or the United States District Court for the
Northern District of Ohio, Western Division. Employee agrees and irrevocably
consents to the personal jurisdiction of the Ohio courts.
11. LITIGATION EXPENSES. In the event that any dispute arises
between Employee and Employer as to the terms or interpretation of this
Agreement, whether instituted by formal legal proceedings or otherwise,
including any action that either party takes to enforce the terms of this
Agreement or to defend against any action taken by the other, the prevailing
party shall be reimbursed for all costs and expenses, including reasonable
attorneys' fees, arising from such dispute, proceedings or actions, provided
that the prevailing party shall obtain a final judgment by a court of competent
jurisdiction in favor of the prevailing party. Such reimbursement shall be paid
within ten (10) days of furnishing written evidence, which may be in the form,
among other things, of a cancelled check or receipt, of any costs or expenses
incurred.
12. SUCCESSORS.
A. This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of Employer which shall acquire,
directly or indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of Employer.
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B. Since Employer is contracting for the unique and personal
skills of Employee, Employee shall be precluded from assigning or delegating his
rights or duties hereunder without first obtaining the written consent of
Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement
in one (1) or more counterparts on the day and year first written above.
SKY FINANCIAL GROUP, INC.
By____________________________
Its___________________________
SKY BANK
By____________________________
Its___________________________
______________________________
XXXXXXX X. XXXXXX
