EXHIBIT 10.32
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is effective as of the 31st
day of December, 2004 by and between FirstMerit Corporation, its subsidiaries
and affiliates ("FirstMerit") and Xxxxx Xxxxx ("Xxxxx"), (the "Agreement").
WITNESSETH:
A. WHEREAS, the Parties previously entered into a certain employment
agreement dated May 16, 2003, as amended (the "Initial Agreement"),
pursuant to which Xxxxx was employed by FirstMerit as Executive Vice
President and Chief Credit Officer;
B. WHEREAS, the Initial Agreement incorporated certain terms of an
Amended and Restated Change in Control Termination Agreement and an
Amended and Restated Displacement Agreement entered into between the
Parties.
C. WHEREAS, FirstMerit has adopted revised forms of the Change in
Control Termination Agreement and the Displacement Agreement for its
executive officers (the "Change Agreements"); and
D. WHEREAS, the Parties desire to modify the Initial Agreement to
accurately reflect the revised form of Change Agreements; and
E. WHEREAS, FirstMerit and Xxxxx desire to enter into this Agreement to
amend and restate the Initial Agreement in its entirety and to
provide for the continuation of Xxxxx'x services to FirstMerit for a
term certain.
IN CONSIDERATION of the foregoing, the mutual covenants contained herein
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:
1. Employment Duties
During the term of this Agreement, Xxxxx shall serve as Executive Vice
President and Chief Credit Officer, and shall have duties and responsibilities
as may be assigned commensurate with Xxxxx'x executive position (the "Assigned
Duties"). The Chairman and Chief Executive Officer shall, from time to time and
subject to modification at any time and at his sole discretion, hereafter assign
such responsibilities and duties as he may deem appropriate; provided, however
that such responsibilities and duties are generally consistent with Xxxxx'x
Assigned Duties and his position with FirstMerit. Xxxxx shall faithfully,
diligently, competently, and to the best of his
ability, carry out those responsibilities and duties as assigned from time to
time by the Chairman and Chief Executive Officer of FirstMerit.
2. Term of Agreement
The term of this Agreement shall continue until December 31, 2005, unless
such term is earlier terminated as herein provided (the "Agreement Period").
Xxxxx and FirstMerit agree that on January 1, 2006, Xxxxx shall become an
at-will employee of FirstMerit. Xxxxx shall receive the compensation and
benefits set forth in Paragraph 3 (the "Compensation") and 4 (the "Benefits")
below for the Agreement Period; provided, however, that in the event of a
Qualifying Termination under Xxxxxxxxx 0, Xxxxx shall receive Compensation and
Benefits set forth in Paragraph 6 for the Agreement Period. Any Compensation and
Benefits to which Xxxxx is entitled under this Agreement are in addition to any
compensation and benefits to which he may be entitled, if any, under the Change
in Control Agreement or Displacement Agreement between Xxxxx and FirstMerit. The
terms of this Agreement shall override any inconsistent provisions in the Change
in Control Agreement and Displacement Agreement.
3. Compensation
During the term of this Agreement, FirstMerit shall pay Xxxxx for his
services the sum of Nine Thousand Three Hundred Seventy-five Dollars
($9,375.00), paid semimonthly, subject to any salary increases that may occur
from time to time and at the sole discretion of FirstMerit (the "Base Salary").
The semimonthly amount to be paid hereunder shall be paid in accordance with
FirstMerit's policies and shall be paid net of amounts withheld for federal,
state or local income taxes, FICA, and such other applicable amounts as may be
required to be paid during the term of this Agreement.
4. Employee Benefits
During the term of this Agreement, Xxxxx shall be eligible to participate
in the following employee benefits from FirstMerit as applicable:
(a) Xxxxx shall be eligible to participate in such retirement,
medical, and other employee benefit plans as may be maintained by
FirstMerit during the term of this Agreement.
(b) Xxxxx shall be eligible to participant in the Executive Life
Insurance Program that FirstMerit may maintain during the term of this
Agreement. Xxxxx shall be personally obligated to pay any and all taxes
associated with this life insurance benefit.
(c) Xxxxx shall be granted stock options and restricted stock of
FirstMerit in accordance with the Non-qualified Stock Option Agreements
each dated________ and the Restricted Stock Award Agreement dated May 16,
2002. Any unexercised and outstanding stock options and restricted stock
will vest and will be exercisable in accordance with the terms of the
award agreement. Xxxxx shall be eligible
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to participate in additional stock option quotes as may be authorized from
time-to-time by FirstMerit Board of Directors.
(d) Xxxxx shall be eligible to participate in the Executive
Supplemental Retirement Plan ("SERP"). Such SERP benefits are defined in
the plan documents as may be amended from time to time at the discretion
of the FirstMerit Board of Directors.
(e) Xxxxx shall be eligible to participate in the FirstMerit
Executive Incentive Plan at performance levels established from time to
time by the FirstMerit Board of Directors.
5. Termination
(a) FirstMerit may terminate the employment of Xxxxx under the
Agreement for Just Cause. Notwithstanding anything to the contrary
contained herein, it shall be considered Just Cause to terminate the
Xxxxx'x employment upon the happening of any of the following:
1. The retirement, disability or death of Xxxxx;
2. Felonious criminal activity whether or not affecting the
Employer;
3. Disclosure to unauthorized persons of Employer
information which is considered by FirstMerit to be
Confidential Information under Paragraph 7;
4. Breach of any contract with, or violation of any legal
obligation to, the FirstMerit or dishonesty; or
5. Gross negligence or insubordination in the performance
of duties of the position held by the Employee.
In the event of termination by FirstMerit for Just Cause, the
Agreement Period shall end and Xxxxx shall not be entitled to receive
Compensation or Benefits beyond the date of termination.
(b) Xxxxx may terminate his employment relationship with
FirstMerit without reason by resignation, provided that he provide thirty
(30) days advance written notice ("Resignation").
(c) Xxxxx may terminate his employment relationship with
FirstMerit for Good Reason in accordance with the following provisions.
Notwithstanding anything herein to the contrary, it shall be considered
Good Reason to terminate employment upon the happening of any of the
following:
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1. Involuntary reduction in Xxxxx'x Base Salary, unless
such reduction occurs simultaneously with a company-wide
reduction in officers' salaries.
2. Involuntary discontinuance or reduction in Xxxxx'x
incentive compensation award opportunities, unless a
company-wide reduction of all officers' incentive award
opportunities occurs simultaneously with such
discontinuance or reduction.
3. Involuntary relocation to another office located more
than 50 miles from Xxxxx'x office location.
4. Significant reduction in Xxxxx'x responsibilities and
status within FirstMerit's organization or change in
Xxxxx'x title or office held without prior written
consent of Xxxxx.
5. Involuntary discontinuance of Xxxxx'x participation in
any employee benefit plans maintained by FirstMerit
unless such plans are discontinued by reason of law or
loss of tax deductibility to FirstMerit with respect to
contributions to such plans, or are discontinued as a
matter of company policy applied equally to all
participants.
6. Involuntary reduction of Xxxxx'x paid vacation to less
than 24 working days per calendar year.
7. Failure to obtain an assumption of FirstMerit's
obligations under this Agreement by any successor to
FirstMerit.
(d) Any termination by FirstMerit for Just Cause or by Xxxxx for
Good Reason shall be communicated to the other party by written notice
which identifies the specific termination provision in this Agreement
relied upon, sets forth the facts and circumstances claimed to form the
basis for the termination under the provisions so identified, and
specifies a date of termination.
(e) Termination of Xxxxx'x employment (i) by FirstMerit for any
reason other than Just Cause, or (ii) by Xxxxx for Good Reason, shall
constitute a "Qualifying Termination" under this Agreement.
6. Compensation and Benefits Upon Events of Termination
(a) Upon termination of this Agreement by FirstMerit for Just
Cause, or by Xxxxx'x Resignation (or any other termination by Xxxxx
without Good Reason), the obligations of each of the parties hereunder
shall expire as of the date of such termination, including, without
limitation, the obligations of FirstMerit to pay any
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Compensation or Benefits to Xxxxx provided, however, that the obligations
contained in Paragraph 7 shall survive the termination of this Agreement.
(b) Upon any Qualifying Termination of this Agreement during the
Agreement period, the Agreement Period shall continue until December 31,
2005, and FirstMerit shall continue to pay Xxxxx Compensation and Benefits
on the terms set forth below until December 31, 2005.
1. Compensation. FirstMerit shall continue to pay Xxxxx his
Base Salary at the rate in effect at the time of his
termination of employment.
2. Retirement, Medical and Life Insurance Benefits. Xxxxx
shall continue to be covered and accrue service and
benefits under the plans described in Paragraph 4(a) and
(b), as such may be modified, enhanced or supplemented
from time to time, until the end of the Agreement
Period. For this purpose, Xxxxx shall be deemed to be in
full-time service with FirstMerit, and Xxxxx'x Base
Salary shall be deemed to be at the rate in effect at
the time of his termination of employment.
3. Stock Programs. To the extent not previously granted,
FirstMerit shall xxxxx Xxxxx the stock options and
shares of restricted stock contained in any such plan or
agreement no later than the date of termination.
FirstMerit shall fully vest all stock options, grants of
restricted stock, stock appreciation rights or similar
arrangements granted to Xxxxx as of the termination
date. Notwithstanding any provision of the plan or any
grant agreement to the contrary, Xxxxx shall be given
the longer of 90 days after the date of termination, or
the remaining period provided in the grant agreement, to
realize or exercise all such rights or options.
4. Incentive Programs. FirstMerit shall continue to pay
Xxxxx awards under the incentive programs, in an amount
equal to the incentive compensation payment Xxxxx would
receive if payout was made at the "target" percentage
under the programs, based upon Xxxxx'x Base Salary as
determined under Paragraph 6(a), until the end of the
Agreement Period.
5. SERP. Xxxxx shall continue to be covered and accrue
service and benefits under the SERP until the end of the
Agreement Period. For this purpose, Xxxxx'x average
monthly earnings shall be deemed to be his Base Salary
as determined under Paragraph 6(a) divided by 12 plus
the incentive compensation payment Xxxxx would receive
if payout was made at "target" percentage for Xxxxx
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under the Executive Incentive Bonus Plan in the year of
the termination divided by 12. These provisions shall
supercede any less generous contrary provisions of the
SERP and any membership agreement executed between Xxxxx
and FirstMerit.
7. Trade Secrets and Confidential Information
Xxxxx acknowledges that, as Chief Credit Officer of FirstMerit
Corporation, 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").
Xxxxx agrees that the Confidential Information is and will be of special and
unique value to FirstMerit. 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, 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. Excluded from the definition of
Confidential Information is (a) information which is publicly available, other
than as a result of actions by Xxxxx in breach of this Agreement; and (b)
information which is disclosed by FirstMerit to third parties on a
non-confidential basis.
8. Further Payments
The Compensation and Benefits provided under this Agreement are not
contingent on a change in ownership or control of FirstMerit. However, in the
event that any compensation or benefits paid or distributed from FirstMerit to
Xxxxx pursuant to this Agreement, the Change in Control Termination Agreement,
the Displacement Agreement, or otherwise from FirstMerit to Xxxxx, either alone
or with other compensation and benefits received by Xxxxx (the "Covered
Payments") are or become subject to the tax imposed by Internal Revenue Code
Section 4999 or any similar tax (the "Excise Tax"), FirstMerit shall pay to
Xxxxx an additional amount (the "Excise Tax Reimbursement") such that the net
amount retained by Xxxxx with respect to such Covered Payments, after deduction
of any Excise Taxes on the Covered Payments and any Federal, state and local
income or employment tax and Excise Tax on the Excise Tax Reimbursement, but
before deduction for any Federal, state and local income or employment tax
withholding on such Covered Payments, shall be equal to the amount of the
Covered Payments.
9. Assignment
This Agreement shall be binding upon the parties hereto, their respective
heirs, personal representatives, executors, administrators and successors;
provided, however, that no assignment or transfer of this Agreement by Xxxxx
including assignment or transfer by operation of law,
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shall be valid without the prior written consent of FirstMerit. FirstMerit may
freely assign this Agreement without Xxxxx'x consent.
10. Governing Law
This Agreement shall be construed under and governed by the internal laws
of the State of Ohio and properly venued in Summit County, Ohio. In the event
that any provision of this Agreement shall be held to be void or unenforceable
by a court of competent jurisdiction, this Agreement shall not be rendered null
and void thereby but shall be construed and enforced as if such void or
unenforceable provision was not originally a part of this Agreement.
11. Legal Fees
From and after any Change in Control, FirstMerit shall pay all legal fees
and expenses incurred by Xxxxx in enforcing any right or benefit provided by
this Agreement.
12. Entire Agreement
This Agreement, the Change in Control Termination Agreement, the
Displacement Agreement, and the Indemnification Agreement, set forth the entire
agreement of the parties herein with regard to the employment of Xxxxx and any
oral or written statements, representations, agreements or understandings made
or entered into prior to or contemporaneously with the execution of this such
agreements, are hereby rescinded, revoked and rendered null and void by the
parties. In the event of inconsistencies, the terms of this Agreement shall
supercede and control over any conflicting language in the Change in Control
Termination Agreement or the Displacement Agreement. Moreover, the terms of the
Change in Control Termination Agreement and the Displacement Agreement (the
"Supplemental Agreements") are hereby specifically modified to provide that:
(a) Paragraph 7 containing the "Overall Limitation on Benefits" in
each of the Supplemental Agreements shall be deleted.
(b) Paragraph 10(a) regarding the term of the Amended and Restated
Change in Control Termination Agreement shall be modified to read:
"(a) Except as provided in paragraph 6, the Employee's
employment with the Company or any Subsidiary, before a
Change in Control, or, after a Change in Control, the
Change Entity or any Related Entity, terminates before
the beginning of the Protection Period because the
Employee (i) is removed for Cause, (ii) is no longer an
employee due to Disability, retirement or death, or
(iii) resigns not for Good Reason."
(c) Paragraph 6(c) regarding payment of compensation and benefits
under each of the Supplemental Agreements shall be modified by the
addition at the end thereof of a new paragraph to read as follows:
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"The compensation and benefits payable under this
subparagraph (c) shall be in addition to any
compensation and benefits otherwise payable to the
Employee under any employment or other agreement(s)
between the Company and the Employee."
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed the 28th day of February, 2005, to be effective the date above first
written.
FIRSTMERIT CORPORATION
By: /s/ Xxxxxxxxxxx X. Xxxxxx
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Its: Executive Vice President
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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