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EXHIBIT 10a.
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into this 8th
day of July, 1997, by and between FIRSTFEDERAL FINANCIAL SERVICES CORP (the
"Company"), and XXX X. XXXX (the "Executive"), effective for all purposes and in
all respects at the Closing as such term is defined in the Agreement of
Affiliation and Plan of Merger dated December 30, 1996, by and between the
Company and Summit Bancorp (the "Merger Agreement").
WHEREAS, prior to Closing, Executive was Vice President and Chief
Financial Officer of Summit Bank, National Association, formerly known as Summit
Bank ("Summit Bank") and party to certain agreements which shall terminate upon
the Closing of the Merger Agreement;
WHEREAS, as a result of the Merger Agreement, Company is acquiring all
of the issued and outstanding capital stock of Summit Bank;
WHEREAS, Executive has unique talents and experience;
WHEREAS, Company desires to employ Executive in the capacity of
Treasurer of Company on and after the Closing on the terms and conditions set
forth herein;
WHEREAS, Executive desires to be employed by Company in the aforesaid
capacity; and
WHEREAS, Executive and Company desire to set forth in writing the terms
and conditions of their agreements and understandings.
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties intending to be legally bound, agree as follows:
1. TERM. The term of this Agreement shall be a period of two (2) years
commencing on the Closing Date (the "Commencement Date"), subject to earlier
termination as provided herein. Beginning on the second anniversary of the
Commencement Date, and on each anniversary thereafter, the term of this
Agreement shall be extended for a period of one year, PROVIDED THAT neither the
Executive nor Company has given notice to the other in writing at least 90 days
prior to such anniversary that the term of this Agreement shall not be extended
further. Reference herein to the term of this Agreement shall refer to both such
initial term and such extended terms.
2. EMPLOYMENT. The Executive is employed as the Treasurer of Company.
As Treasurer, Executive shall render administrative and management services as
are customarily performed by persons situated in similar executive capacities,
including but not limited to such duties and responsibilities as set forth in
Exhibit A attached hereto and incorporated hereby by reference, and shall have
such other powers and duties as the Chief Executive Officer of the
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Company may prescribe from time to time. The Executive shall devote his best
efforts and all his business time and attention to the business and affairs of
Company.
3. COMPENSATION.
(a) SALARY. Company agrees to pay the Executive during the term of this
Agreement an annual base salary of Seventy Seven Thousand Dollars ($77,000.00).
The base salary shall be paid in accordance with Company's standard pay
practices and shall be subject to all local, state, and federal withholding
requirements. The Executive's base salary may not be reduced during the term of
this Agreement.
(b) DISCRETIONARY BONUSES. The Executive shall be entitled to
discretionary bonuses as authorized and declared by the Company's Board of
Directors to its executives subject to such terms and conditions set forth in
the Management Incentive Compensation Plan.
(c) EXPENSES. The Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
performing services under this Agreement in accordance with the policies and
procedures applicable to the executive officers of the Company and Signal Bank,
National Association, formerly known as First Federal Savings and Loan
Association of Wooster ("Signal Bank"), PROVIDED THAT the Executive properly
accounts for such expenses in accordance with such policies and procedures.
(d) NONCOMPETITION PAYMENT. In partial consideration for the execution
of this Agreement, the Executive agrees to the noncompetition provisions set
forth in Section 7 hereof.
4. BENEFITS.
(a) PARTICIPATION IN RETIREMENT AND EXECUTIVE BENEFIT PLANS. The
Executive shall be entitled to participate in all plans relating to stock
options (at a minimum level of 2,000 shares for the first year of this
Agreement; and thereafter as the Company's Stock Option Committee shall
determine), thrift, profit-sharing, group life insurance, medical and dental
coverage, education, and other retirement or employee benefits or combinations
thereof ("Plans") that are now or hereafter maintained for the benefit of Signal
Bank's executive employees or its employees generally, provided that the
Executive meets all eligibility requirements of such Plans.
(b) FRINGE BENEFITS. The Executive shall be eligible to participate in,
and receive benefits under, any other fringe benefit plans which are or may
become applicable to Company's or Signal Bank's executive officers.
(c) MOVING EXPENSES. In the event Company requests Executive to
maintain his principal work place in Wooster and Executive moves his principal
residence to Wooster, Company shall reimburse Executive all reasonable expenses
related to such move including broker or realtor fees, real property purchase
closing costs, and packing and shipment of household good costs. Executive shall
also be entitled to participate in the Signal Bank's employee loan program then
in effect.
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5. VACATIONS; LEAVE. The Executive shall be entitled to three (3) weeks
or, if greater, that number of weeks of annual paid vacation provided in
accordance with the policies established by Company's Board of Directors for
executive employees and to voluntary leave of absence, with or without pay, from
time to time at such times and upon such conditions as the Board of Directors of
Company may determine in their discretion.
6. TERMINATION OF EMPLOYMENT.
(a) INVOLUNTARY TERMINATION. The Board of Directors may terminate the
Executive's employment at any time, but, except in the case of Termination for
Cause, termination of employment shall not prejudice the Executive's right to
compensation or other benefits under this Agreement. In the event of Involuntary
Termination, Company shall pay to the Executive during the remaining term of
this Agreement but in no event less than twelve (12) months, his salary at the
rate in effect immediately prior to the Date of Termination, payable in such
manner and at such times as such salary would have been payable to the Executive
under Section 1 if the Executive had continued to be employed by Company.
(b) TERMINATION FOR CAUSE. In the event of Termination for Cause,
Company shall pay the Executive his salary through the Date of Termination, and
Company shall have no further obligation to the Executive under this Agreement.
(c) DEATH; DISABILITY. In the event of the death of the Executive while
employed under this Agreement and prior to any termination of employment, the
Executive's estate, or such person as the Executive may have previously
designated in writing, shall be entitled to receive from Company the salary of
the Executive through the last day of the calendar month in which the Executive
died. If the Executive becomes disabled as defined in Company's then current
disability plan or if the Executive is otherwise unable to serve as Treasurer,
the Executive shall be entitled to receive group and other disability income
benefits of the type then provided by Signal Bank for executive officers.
7. NONCOMPETITION.
(a) As a material inducement to Company to enter into this Agreement
and for Company to pay Executive compensation stated in Section 3, as well as
any additional benefits provided for herein, Executive covenants and agrees
that:
(i) If Executive voluntarily terminates his employment or is
terminated for Cause, Executive shall not, in the Market Area as
defined below, directly or indirectly, for a period commencing on the
Closing Date and continuing for one year following the Date of
Termination (the "Restricted Period"), for whatever reason, directly or
indirectly, whether as shareholder, partner, joint venturer, or agent
of any person, firm or corporation or other entity or otherwise, engage
in any or all of the following activities:
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(a) Enter into or engage in any business which directly or
indirectly competes with the business of Company and its subsidiaries
(collectively for purposes only of this Section "Company");
(b) Interfere or attempt to interfere with the business,
goodwill, trade, customers or employees of Company or with any one
dealing with Company in the operation of Company's business;
(c) Solicit borrowers' and depositors' business, patronage, or
perform any services for, any business which directly or indirectly
competes with the business carried on by Company;
(d) Promote or assist, financially or otherwise, any person,
firm, association or corporation engaged in any business which directly
or indirectly competes with the business carried on by Company.
(ii) During the Restricted Period, the Executive shall not,
directly or indirectly, knowingly solicit or encourage to leave the
employment of Company, any employee of Company or hire any employee who
has left the employment of Company after the date of this Agreement
within one year of the termination of such employee's employment with
Company or such shorter period as shall be agreed by Company in
writing.
(b) If the Executive violates this restrictive covenant and Company
brings legal action for injunctive or other relief, Company shall not as a
result of the time involved in obtaining the relief be deprived of the benefit
of the full period of the restrictive covenant. Accordingly, the restrictive
covenant shall be deemed to have the duration specified herein, computed from
the date the relief is granted, but reduced by the time between the period when
the restriction began to run and the date of the first violation of the covenant
by Executive.
If any court shall determine that the duration or geographical limit of
any restriction contained in this paragraph is unenforceable, it is the
intention of the parties that the restrictive covenant set forth herein shall
not thereby be permitted to be terminated but shall be deemed amended to the
extent required to render it valid and enforceable. Such amendment shall apply
only with respect to the operation of this paragraph and the jurisdiction of the
court that has made the adjudication.
(c) If any court determines that any provision of this Section, or any
part thereof, is invalid or unenforceable, the remainder of the provisions of
this Section shall not thereby be affected and shall be given full effect,
without regard to the invalid portions.
(d) If any court determines that any of the provisions of this Section,
or any part thereof, is unenforceable because of the duration of such provision
or the area covered thereby, such court shall have the power to reduce the
duration or area of such provisions and, in its reduced form, such provision
shall then be enforceable and shall be enforced.
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8. DISCLOSURE OF INFORMATION. The Executive acknowledges that in and as
a result of his employment hereunder, he will be making use of, acquiring and/or
adding to confidential information of a special and unique nature and value
relating to such matters as Company's and its affiliated companies' trade
secrets, systems, procedures, manuals, confidential reports, and lists of
customers. As a material inducement to Company to enter into this Agreement and
for Company to pay Executive compensation stated in Section 3, as well as any
additional benefits provided for herein, Executive covenants and agrees that he
shall not at any time during or following the term of his employment, directly
or indirectly divulge or disclose for any purpose whatsoever any confidential
information that has been obtained by or disclosed to him as the result of
employment by Company heretofore or hereafter, except that there shall be no
breach of this Section so long as Executive is acting in good faith and there is
no material harm to Company; provided, however, that this duty of
confidentiality shall not apply to information which is on the date hereof
generally known to the public or which is subsequently made public by an
individual authorized to do so.
9. SURRENDER OF BOOKS AND RECORDS. Executive acknowledges that all
files, books, records, literature, products, and other materials owned by
Company or its affiliates or used by it in connection with the conduct of its
business shall at all times remain the property of Company and that upon
termination of the employment hereunder, irrespective of the time, manner, or
cause of said termination, Executive will surrender to Company all such files,
books, records, literature, products, and other materials, other than such
personal effects not related to the operation of the business.
10. NO ASSIGNMENTS.
(a) This Agreement is personal to each of the parties hereto, and
neither party may assign or delegate any of its rights or obligations hereunder
without first obtaining the written consent of the other party.
(b) This Agreement and all rights of the Executive hereunder shall
inure to the benefit of and be enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
11. REMEDIES. It is recognized by Executive that a special and
confidential relationship exists between Company and Executive because of his
knowledge, expertise and judgment and the dependence of Company upon his
knowledge, expertise and judgment. Executive agrees that the remedy at law for
any breach of threatened breach of the covenants set forth in paragraphs 7, 8
and 9 hereof will be inadequate and that any breach or attempted breach of such
covenants would cause such immediate and permanent damage as would be
irreparable and the exact amount of which would be impossible to ascertain.
Executive further agrees that in the event of any such breach or threatened
breach of such covenants by Executive, in addition to any and all other legal
and equitable remedies available, Company may have any of such actions enjoined
by any court authorized by law to take such action. Executive acknowledges and
agrees that the limitations contained in paragraphs 7, 8 and 9 hereof are
reasonable and properly required for the adequate protection of Company.
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12. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or sent by certified
mail, return receipt requested, postage prepaid, to Company at its home office,
to the attention of the Board of Directors with a copy to the secretary of
Company, or, if to the Executive, to such home or other address as the Executive
has most recently provided, in writing to Company.
13. AMENDMENTS. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
14. HEADINGS. The headings used in this Agreement are included solely
for convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement.
15. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity and unenforceability of any provisions shall not
affect the validity or enforceability of the other provisions hereof.
16. GOVERNING LAW. This Agreement shall be governed by and is to be
construed and enforced in accordance with the laws of the State of Ohio.
17. ARBITRATION. Any dispute or controversy arising hereunder or in
connection with this Agreement shall be finally and conclusively determined by
the decision of a board of arbitration consisting of three members (hereinafter
sometimes called the "Board of Arbitration") collected as hereinafter provided.
Both Company and Executive shall select one member and the third member shall be
selected by mutual agreement of the other members, or if the other members fail
to reach an agreement on a third member within 20 days after their selection,
the third member shall thereafter be selected by the American Arbitration
Association upon application made to it for such purpose by Company. The Board
of Arbitration shall meet in Wooster, Ohio, or in such other place as the
majority of the members of the Board of Arbitration determines more appropriate
and shall reach and render a decision in writing (concurred in by a majority by
the members of the Board of Arbitration) with respect to the resolution of the
dispute or controversy. In connection with rendering its decision, the Board of
Arbitration shall adopt and follow such rules and procedures, except with regard
to discovery matters, as a majority of the members of the Board of Arbitration
deem necessary or appropriate. Arbitration discovery shall be that discovery
allowed by Ohio Rules of Civil Procedure Title V as amended and modified by the
parties herein permitting discovery by deposition, interrogatories, requests for
admission, and production of documents, which Rules are incorporated by
reference herein, but shall be modified in their application as follows: (i)
depositions shall be limited to: the adversary (or in case of a corporation or
other entity to two agents thereof who may be required to be identified as
competent for the discovery purpose); other third party witnesses whose
discovery may lead to relevant evidence for the preparation of the arbitration;
other third party witnesses whose testimony reasonably needs to be perpetuated,
including witnesses who by affidavit, state that they cannot be available for
the hearing. Depositions of third party witnesses shall be limited to three;
(ii) request for production of documents shall be limited to one set of relevant
and
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reasonable requests and to such supplemental requests as may be reasonably
required from information produced; (iii) each side shall be permitted one set
of interrogatories and request for admissions, each consisting of no more than
thirty (30) items including sub-parts; (iv) the limitations contained herein on
the number of depositions, requests for production of documents, interrogatories
and requests for admissions may be modified by a majority of the members of the
Board of Arbitration upon motion of a party; (v) all discovery disputes shall be
resolved by the Board of Arbitration whose decision shall be final, except as
below provided, in any post-award proceeding under O.R.C. Chapter 2711, the
court may consider as an additional ground for vacating or modifying the award
an Arbitration Discovery decision involving a gross abuse of discretion, the
Board of Arbitration and/or the court shall also be empowered to impose costs,
expenses (excluding attorney's fees) and sanctions as provided in the Rules of
Civil Procedure against any party for failure to comply with the Arbitration
Discovery, and to base such imposition on the same criteria used by the courts
in similar circumstances. To the extent practical, decisions of the Board of
Arbitration shall be rendered no more than 30 calendar days following
commencement of proceedings with respect thereto. The Board of Arbitration's
written decision made by the Board of Arbitration (either prior to or after the
expiration of such 30 calendar day period) shall be final, binding and
conclusive on Company and Executive and shall be entitled to be enforced to the
fullest extent permitted by law and entered in any court of competent
jurisdiction. Each party shall bear its own costs and expenses and an equal
share of the Board of Arbitration's fees and administrative fees of arbitration.
Notwithstanding anything in this Agreement to the contrary, nothing in this
Agreement shall restrict or prohibit any party to any arbitration under this
Section from obtaining injunctive relief in connection with any claim hereunder.
18. OTHER AGREEMENTS. At the Effective Time (as defined in the Merger
Agreement), all agreements by and between Executive and Summit Bancorp and
Summit Bank shall terminate and be null and void, except that the Company shall
provide the Executive with benefits substantially equivalent to those provided
by the Agreements listed on the attached Schedule 18. At the Effective Time,
this Agreement shall constitute the sole agreement for employment for Executive,
except that Executive's rights to compensation or other benefits under those
agreements set forth in Schedule 18 shall not be prejudiced as a result of
Involuntary or Voluntary Termination under this Agreement, except as set forth
therein.
19. DEFINITIONS.
(a) The term "Date of Termination" means the earlier of (1) the date
upon which Company gives notice to the Executive of the termination of his
employment with Company other than pursuant to Paragraph 1 or (2) the date upon
which the Executive ceases to serve as an employee of Company.
(b) The term "Involuntary Termination" means the termination of the
employment of Executive without his express written consent, and shall include a
material diminution of or interference with the Executive's duties,
responsibilities and benefits as Treasurer of the Company, including (without
limitation) any of the following actions unless consented to in
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writing by the Executive; (1) a change in the principal workplace of the
Executive to a location outside of a 60 mile radius from Company's headquarters
office as of the date hereof; (2) a material demotion of the Executive; (3) a
material adverse change in the Executive's salary, perquisites, benefits,
contingent benefits or vacation, other than as part of an overall program
applied uniformly and with equitable effect to all members of the senior
management of the Company; and (4) a material permanent increase in the required
hours of work or the workload of the Executive. The term "Involuntary
Termination" does not include Termination for Cause or termination of employment
due to retirement, death, or disability.
(c) The terms "Termination for Cause" and "Terminated for Cause" mean
termination of the employment of the Executive because of the Executive's
personal dishonesty, willful misconduct, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses), incompetence, or
material breach of any provision of this Agreement. No act, or failure to act,
on the Executive's part shall be considered "willful" unless the Executive has
acted (or failed to act) with an absence of good faith and without reasonable
belief that the Executive's action or failure to act was in the best interest of
Company.
(d) The term "Market Area" means the following counties: Wayne, Medina,
Summit, Tuscarawas, Xxxx, Ashland, Richland, and Licking.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
FIRSTFEDERAL FINANCIAL
SERVICES CORP
By /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Chairman of the Board, President
and Chief Executive Officer
EXECUTIVE:
/s/ Xxx X. Xxxx
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Xxx X. Xxxx
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