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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into this 22d day of April, 1997, by
and between Xxxxxxx X. Valerian ( the "Employee") and Charter One Investments,
Inc. (the "Employer"), a wholly owned, second tier subsidiary of Charter One
Bank, F.S.B. (the "Bank"), a wholly owned, second tier subsidiary of Charter One
Financial, Inc. ( the "Company"), but shall not be effective until the Effective
Date (as defined herein).
WHEREAS, the Employer desires to employ the Employee, and the Employee is
willing to be employed, on the terms set forth below, and
WHEREAS, the Board of Directors of the has approved the execution of this
Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and upon the terms and considerations set forth below, the parties agree as
follows.
I. TERM. The term of this Agreement shall the period of three years (the
"Term") commencing on the day of the consummation of the acquisition of
Xxxxxxxxxx Corporation ("Xxxxxxxxxx") by the Company (the "Effective Date")
pursuant to the agreement dated April 22, 1997, under which Xxxxxxxxxx shall be
acquired by the Company and Xxxxxxxxxx'x wholly owned subsidiary, Home Bank,
F.S.B. ("Home"), shall be merged into the Bank.
II. EMPLOYMENT; CONSULTING SERVICES FOR OTHERS.
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A. The Employee shall be employed under this Agreement as President of the
Employer. As such, he shall report to the Chief Executive Officer of the
Employer and shall have such duties and authority as are specified by the Chief
Executive Officer or the Board of Directors of the Employer from time to time.
B. The Employer agrees that the Employee, acting as a sole proprietor or in
connection with a consulting business established by him, may render consulting
services to others not affiliated with the Company so long as (i) such
activities do not interfere with the proper rendering of services pursuant to
this Agreement and (ii) the Employee does not violate Section IV of this
Agreement.
III. COMPENSATION. The Employer shall pay the Employee a salary of $225,000
per year in regular increments not less frequently than monthly. The Employer
shall pay
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on behalf of the Employee his Shaker Heights Country Club dues (annual and
monthly) and capital assessments and the Employee shall be entitled to benefits
under such benefit plans as are applicable to officers of the Employer, except
that the Employee shall not be entitled to participate in any incentive bonus
program offered by the Employer or any stock or stock option plan of the
Company. The Employer shall reimburse the Employee for reasonable expenses
incurred by him in connection with his duties under this Agreement in accordance
with the Employer's policies on reimbursement of expenses applicable to its
officers generally.
IV. COVENANT NOT TO COMPETE; CONFIDENTIAL INFORMATION.
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A. The Employee hereby agrees that during the Term, without the prior
written consent of the Employer, he shall not serve as a director, employee or
officer of, or provide personal services to, any institution insured by the
Federal Deposit Insurance Corporation or the National Credit Union
Administration which has an office in the State of Ohio or any holding company
or other affiliate of such an institution. Notwithstanding the foregoing, it is
expressly understood by the parties that during the Term, the Employee may
render consulting services to others as set forth in Section II.B of this
Agreement.
B. The parties agree that by reason of his employment as President of Home
prior to the Effective Date and his services hereunder, the Employee has and
will have special knowledge of the business and plans of the Company and its
affiliates which has not been disclosed by the Company or any affiliate and
which constitutes confidential and proprietary business information
("Confidential Information"). The Employee agrees that, without the prior
written consent of the Employer, he shall not in any way disclose to any person
or entity other than the Company and its affiliates any Confidential Information
or written or other form of record containing Confidential Information.
Nothwithstanding the foregoing, the Employee may, consistent with the
performance of consulting services for persons and entities other than the
Company and its affiliates as permitted under Section II.B of this Agreement,
disclose knowledge of financial and economic principles that do not reflect
Confidential Information.
C. At the conclusion of the Term or upon earlier termination of this
Agreement, the Employee shall deliver to the Employer all copies of all written
or other records containing Confidential Information which are in his possession
or control.
D. The provisions of this Section IV shall survive termination of this
Agreement. In the event of a breach or threatened breach of this Section IV, the
Employer shall be entitled to an injunction restraining the Employee from
violating this Section IV in addition to any other remedies available to the
Employer, including but not limited to recovery of damages from the Employee.
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V. TERMINATION; REGULATORY PROVISIONS.
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A. The Employer's Board of Directors may terminate the employment of the
Employee at any time, but such termination, other than Termination for Cause (as
defined below) shall not prejudice the Employee's right to compensation or other
benefits under this Agreement. "Termination for Cause" shall include termination
because of violation of the provisions of Section IV of this Agreement or the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. The Employee shall have no right to
compensation or other benefits for any period after Termination for Cause.
B. If the Employee is removed and/or permanently prohibited from
participating in the conduct of the affairs of the Bank by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act ("FDIA"), 12
U.S.C. Section 1818(e)(4) and (g)(1), all obligations of the Employer under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected.
C. If the Bank is in default (as defined in Section 3(x)(1) of the FDIA),
all obligations of the Employer under this Agreement shall terminate as of the
date of default, but this provision shall not affect any vested rights of the
contracting parties.
D. All obligations of the Employer under this Agreement shall be
terminated, except to the extent determined that continuation of this Agreement
is necessary for the continued operation of the Bank: (i) by the Director of the
Office of Thrift Supervision (the "Director") or his or her designee, at the
time the Federal Deposit Insurance Corporation enters into an agreement to
provide assistance to or on behalf of the Bank under the authority contained in
Section 13(c) of the FDIA; or (ii) by the Director or his or her designee, at
the time the Director or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director to be in an unsafe or unsound condition. Any rights of the
parties that have already vested, however, shall not be affected by any such
action.
E. Any payments to the Employee pursuant to this Agreement, or otherwise,
are subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k)
and any rules and regulations promulgated thereunder.
F. In the event that the Employee dies during the Term, this Agreement
shall terminate upon the date of death and the Employer shall be obligated under
Section III only to pay salary and provide benefits accrued through such date.
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G. Notwithstanding any other provision of this Agreement, if the value and
amounts of benefits under this Agreement, together with any other amounts and
the value of benefits received or to be received by the Employee in connection
with a change in ownership or effective control or in the ownership of a
substantial portion of the assets of the Employer, the Bank or the Company,
would cause any amount to be nondeductible by the Employer, the Bank or the
Company for federal income tax purposes pursuant to Section 280G of the Internal
Revenue Code, of 1986, as amended, then the amounts and benefits under this
Agreement shall be reduced (not less than zero) to the extent necessary so as to
maximize amounts and the value of benefits to the Employee without causing any
amount to become nondeductible pursuant to or by reason of such Section 280G.
The Employee shall determine the allocation of such reduction among payments and
benefits to the Employee.
VI. ASSIGNMENT; SUCCESSORS. This Agreement may not be assigned by either
party, whether by agreement, operation of law or otherwise, without the consent
of the other, except that the Employer may assign this Agreement to the Company
or any affiliate of the Company, either directly or indirectly, or to a
successor by operation of law. This Agreement shall be binding upon and inure to
the benefit of the Employee and the Employer and their respective permitted
successors and assigns.
VII. PRIOR AGREEMENTS; AMENDMENTS; SEVERABILITY; WAIVER; HEADINGS. This
Agreement contains the entire agreement between the parties with respect to
employment of the Employee and his provision of consulting services to others
during the Term and supersedes any prior oral or written agreements or
understandings between them with respect to such employment and services. This
Agreement may be modified or amended only by an instrument in writing executed
by both parties. If any provision of this Agreement is determined to be invalid,
such invalidity shall not affect any other provisions, and such other provisions
shall continue in full force and effect to the full extent consistent with
applicable law. No term of condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against enforcement of any
provision of this Agreement, except by a writing signed by the party charged
with waiver or estoppel. No written waiver shall be deemed a continuing waiver
unless specifically stated therein and each waiver shall operate only as to the
specific term or condition waived. 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.
VIII. ARBITRATION. Except in the event that the Employer alleges a breach
or threatened breach of Section IV of this Agreement, any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction.
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IX. NOTICES. Any notices pursuant to this Agreement shall be sent (i) if to
the Employee, to the home address he has most recently provided to the Employer
and (ii) if to the Employer, to Charter One Investments, Inc., 0000 Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxx 00000, attention: Xxxx X. Xxxx, Chief Executive Officer.
X. GOVERNING LAW. This Agreement shall be governed by Ohio law to the
extent not pre-empted by federal law.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
CHARTER ONE INVESTMENTS, INC.
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By:
Its:
Employee
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Xxxxxxx X. Valerian
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