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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of this 29th day
of November, 1999, by and among Ohio Legacy Corp, an Ohio corporation (the
"Bancorp"), Ohio Legacy Bank, a national banking association (the "Company") and
Xxxxxx X. Xxxxxx (the "Executive") and is effective as of October 6, 1999
("Effective Date").
In consideration of the mutual promises contained herein and other good
and valuable consideration, the Executive and the Company have entered into this
Agreement.
1. EMPLOYMENT AND DUTIES.
(a) The Company agrees to employ the Executive and the Executive
agrees to be employed by the Company as the Company's Senior Vice President of
Lending and President of the Xxxxx County Division. The Executive shall hold
such other offices as the Board of Directors of the Company (the "Board") shall
determine from time to time.
(b) The Executive agrees to perform such duties as may be assigned
by the Board, to devote all of his working time to the business of the Company,
and to use his best efforts to advance the interests of the Company and its
shareholders including, without limitation, the performance by the Executive of
all necessary and reasonable services not inconsistent with his positions of
Senior Vice President of Lending and President of the Xxxxx County Division.
(c) If elected, the Executive also agrees to serve as a member of
the Board without additional compensation for such services.
2. TERM. The Company's employment of the Executive shall commence on
the Effective Date and expire on the first anniversary thereof, unless renewed
or earlier terminated according to the provisions of this Agreement. Unless
earlier terminated in accordance with this Agreement, this Agreement shall be
automatically renewed for successive one (1) year periods unless and until
either party shall have given the other at least sixty (60) days written notice
prior to the expiration date of the term (or renewal term, if applicable) of
this Agreement. The Executive's obligations and the Company's rights under
Section 6, 7, 8, 9 and 10 hereof shall survive the expiration of the term
(including all renewal terms) of this Agreement.
3. COMPENSATION.
(a) The Executive's annual base salary ("Base Salary") during the
term of this Agreement shall be One Hundred Thousand Dollars ($100,000), payable
in accordance with the Company's standard payroll practices in effect for all
employees. The Board, in its sole discretion, may from time to time increase,
but not decrease, the amount of Executive's Base Salary.
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(b) Nothing herein shall be deemed to preclude the Company from
paying the Executive, in addition to his Base Salary, any bonuses ("Bonus") as
may be awarded from time to time by the Board in its sole discretion.
(c) The Company will reimburse the Executive for all reasonable
business expenses incurred by him in the course of performing his duties under
this Agreement that are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business expenses.
4. BENEFITS. During the term of this Agreement, the Executive and his
eligible dependents shall be entitled to participate in employee benefit plans
generally afforded by the Company to its executive employees from time to time.
5. DISABILITY OR DEATH; RESIGNATION; TERMINATION FOR CAUSE; OTHER
TERMINATIONS.
(a) DEATH. In the event of the Executive's death, this Agreement
and the Executive's employment shall terminate upon such date of death, except
that Executive's estate shall be entitled to receive the unpaid portion of
Executive's Base Salary earned up to the date of his death; and the Executive's
designated beneficiary (or, in the absence of a designated beneficiary, the
Executive's estate) shall be entitled to receive all benefits payable as a
result of the Executive's death under the terms of the Company's employee
benefit plans.
(b) DISABILITY.
(1) SHORT-TERM. In the event of the Executive's failure to
substantially perform his duties hereunder on a full-time basis for periods
aggregating not more than one hundred eighty (180) days during any twelve-month
period as a result of incapacity due to physical or mental illness, the Company
shall continue to pay the Base Salary to the Executive during the period of such
incapacity, but only in the amounts and to the extent that disability benefits
payable to the Executive under Company-sponsored insurance polices are less than
the Executive's Base Salary.
(2) LONG-TERM. If the Executive is incapacitated for a period
of one hundred eighty (180) consecutive days so that he cannot perform his
duties hereunder on a full-time basis, the Executive's employment will terminate
upon the expiration of such one hundred eighty (180) day period, and the
Executive shall be entitled to receive all benefits payable to the Executive as
a result of such termination under the terms of the Company's employee benefit
plans. Notwithstanding the foregoing, the Executive's obligations and the
Company's rights under Sections 6, 7, 8, 9 and 10 shall survive the termination
of this Agreement.
(c) TERMINATION BY THE EXECUTIVE.
(1) RESIGNATION. If the Executive's employment is terminated
by reason of Executive's voluntary resignation, all of the Company's obligations
hereunder shall terminate upon the date the Executive ceases to be employed as a
result of such resignation.
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Notwithstanding the foregoing, the Executive's obligations and the Company's
rights under Sections 6, 7, 8, 9 and 10 shall survive the termination of this
Agreement, and the Executive shall be entitled to receive the unpaid portion of
the Executive's Base Salary earned up to the date of such termination and all
benefits payable to the Executive as a result of such termination under the
terms of the Company's employee benefit plans.
(2) TERMINATION FOR GOOD REASON. The Executive may terminate
this Agreement by giving a written notice of termination not less than thirty
(30) days prior to the effective date of such termination for "Good Reason." As
used herein, "Good Reason" means a diminution in the Executive's duties or
material breach ("Material Breach") of this Agreement by the Company or Bancorp,
or "Change in Control." The term "Change of Control" means a change in ownership
or control of either Bancorp or the Company effected through any of the
following transactions:
(i) the direct or indirect acquisition by any person
or related group of persons, other than by the Bancorp or the
Company or a person that directly or indirectly controls, is
controlled by, or is under common control with, Bancorp or the
Company immediately prior to such acquisition, of beneficial
ownership (within the mean of Rule 13d-3 of the Securities and
Exchange Act of 1934, as amended) of securities possessing
more than 50 percent of the total combined voting power of
Bancorp's or the Company's outstanding securities, whether
effectuated pursuant to a tender or exchange offer made
directly to Bancorp's or the Company's shareholders or
pursuant to another transaction;
(ii) a change in the composition of the board of
directors of Bancorp or the Company over a period of 36 or few
consecutive months such that a majority of such respective
board members (rounded up to the next whole number) ceases, by
reason of one or more contested elections for such respective
board membership, to be comprised of individuals who either
(i) have been board members continuously since the beginning
of such period or (ii) have been elected or nominated for
election as board members during such period by at least a
majority of the board members described in clause (i) who were
still in office at the time such election or nomination was
approved by the board; or
(iii) the completion of a transaction requiring
shareholder approval for the acquisition of all or
substantially all of the stock or assets of Bancorp or the
Company by an entity other that Bancorp or the Company or any
merger of Bancorp or the Company into another entity in which
neither Bancorp nor the Company is the surviving entity.
Upon the Executive's termination for Good Reason, the Company
shall pay the Executive in a single lump sum severance pay in the amount equal
to the product of (a) 2.99 if the employment is terminated pursuant to a Change
in Control, or 1.00 if the employment is terminated pursuant to a Material
Breach and (b) the sum of (i) the Executive's Base Salary in effect for the
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year of termination and (ii) the Bonus awarded to the Executive for the
Company's most recently completed fiscal year. All stock options previously
awarded to the Executive, whether vested or unvested, shall become immediately
exercisable. In addition, upon a termination for Good Reason, the Company, to
the extent permitted by applicable law, shall permit the Executive to continue
to participate in its group health insurance plan for a period of one year from
the date of termination. Notwithstanding the foregoing, the Executive's
obligations and the Company's rights under Sections 6, 7, 8, 9 and 10 shall
survive the termination of this Agreement, and the Executive shall be entitled
to receive all benefits payable to the Executive as a result of such termination
under the terms of the Company's employee benefit plans.
(d) TERMINATION FOR CAUSE. If the Company terminates the
Executive's employment for cause (as defined below), all of the Company's
obligations hereunder shall immediately terminate. As used herein, "for cause"
shall mean (i) willful misconduct by the Executive in the performance of his
duties, or (ii) gross negligence by the Executive in the performance of his
duties, or (iii) the Executive's indictment or conviction for committing a
crime, or (iv) the Executive's commission of an act of moral turpitude, or (iv)
the continued failure of and/or refusal by the Executive to perform the duties
required of him by this Agreement which failure and/or refusal shall not be
cured within fifteen (15) days following receipt by the Executive of written
notice from the Board specifying the factors or events constituting such failure
and/or refusal and affording the Executive an opportunity within such fifteen
(15) day period for the Executive to correct such deficiencies. Notwithstanding
the termination of this Agreement pursuant to this Section 5(d), the Executive's
obligations and the Company's rights under Sections 6, 7, 8, 9 and 10 shall
survive this termination of this Agreement.
(e) TERMINATION WITHOUT CAUSE. The Company may terminate the
Executive's employment at any time without cause pursuant to written notice at
least thirty (30) days in advance of such termination date. If the Executive's
employment terminates pursuant to this Section 5(e), both the Company's and the
Executive's obligations hereunder shall immediately terminate. Notwithstanding
the foregoing, the Company shall pay the Executive severance pay in the amount
of Executive's Base Salary in effect for the year of termination, payable in a
single lump sum installment within thirty (30) days following the date of
termination. The Executive's termination date; and the Executive's obligations
and the Company's rights under Sections 6, 7, 8, 9, 10 and 11 shall survive the
termination of this Agreement. In the event Ohio Legacy fails to open for
business, Bancorp shall pay the executive his base salary for a period of one
(1) year from the effective date.
(f) MITIGATION. In the event Ohio Legacy Bank fails to open for
business, the Executive shall be required to mitigate the amount of any payment
or benefit provided for under this Section 5 by seeking other employment or
otherwise.
6. NONSOLICITATION. The Executive agrees that he shall not at any time
(whether during or for a period of one (1) year after the Executive's
termination of employment with the Company), without the prior written consent
of the Company, either directly or indirectly (i) solicit (or attempt to
solicit) induce, (or attempt to induce), cause or facilitate any employee,
director, agent, consultant, independent contractor, representative or associate
of the Company or the Company's Affiliates to terminate his, her or its
relationship with the Company or the Company's Affiliates, or (ii) solicit (or
attempt to solicit) induce (or attempt to induce), cause or facilitate any
supplier of services or products to the Company or the Company's Affiliates to
terminate or change
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his, her or its relationship with the Company or the Company's Affiliates, or
otherwise interfere with any relationship between the Company or the Company's
Affiliates and any of the Company's or the Company's Affiliates' suppliers of
products or services.
7. NONDISCLOSURE. The Executive agrees that he shall not at any time
(whether during or for a period of one (1) year after the termination of his
employment with the Company) directly or indirectly copy, disseminate or use,
for the Executive's personal benefit or the benefit of any third party, any
Confidential Information, regardless of how such Confidential Information may
have been acquired, except for the disclosure of such Confidential Information
as may be (i) in keeping with the performance of the Executive's employment
duties with the Company, (ii) as required by law, or (iii) as authorized in
writing by the Company. For purposes of this Agreement, the term "Confidential
Information" shall mean all information or knowledge belonging to, used by, or
which is in the possession of the Company or the Company's Affiliates relating
to the Company's or the Company's Affiliates' business, business plans,
strategies, pricing, sales methods, customers (including, without limitation,
the names, addresses or telephone numbers of such customers), technology,
programs, finances, costs, employees (including, without limitation, the names,
addresses or telephone numbers of any employees), employee compensation rates or
policies, marketing plans, development plans, computer programs, computer
systems, inventions, developments, trade secrets, know how or confidences of the
Company or the Company's Affiliates or the Company's or the Company's
Affiliates' business, without regard to whether any of such Confidential
Information may be deemed confidential or material to any third party, and the
Company and the Executive hereby stipulate to the confidentiality and
materiality of all such Confidential Information. The Executive acknowledges
that all of the Confidential Information is and shall continue to be the
exclusive proprietary property of the Company and/or the Company's Affiliates,
whether or not prepared in whole or in part by the Executive and whether or not
disclosed to or entrusted to the custody of the Executive. The Executive agrees
that upon the termination of the Executive's employment with the Company for any
reason, the Executive will return promptly to the Company and/or the Company's
Affiliates all memoranda, notes, records, reports, manuals, pricing lists,
prints and other documents (and all copies thereof) relating to the Company's
and/or the Company's Affiliates' business which he may then possess or have with
the Executive's control, regardless of whether any such documents constitute
Confidential Information. The Executive further agrees that he shall forward to
the Company all Confidential Information which at any time (including after the
period of his employment with the Company) should come into the Executive's
possession or the possession of any other person, firm or entity with which the
Executive is affiliated in any capacity.
8. NO SLANDER. The Executive agrees not to in any way slander or injure
the business reputation or goodwill of the Company or the Company's Affiliates
through any contact with customers, vendors, suppliers, employees or agents of
the Company or the Company's Affiliates, or in any other way.
9. INVENTIONS AND PATENTS. The Executive agrees that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports, and all similar or related information which relates to the Company's
or the Company's Affiliates' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by the Executive while employed by the Company or its
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predecessor (all of the foregoing being referred to herein as "Work Product")
belong to the Company and the Company's Affiliates. The Executive shall perform
all actions reasonably requested by the Company (whether during or after the
employment period) to establish and confirm such ownership of Work Product
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
10. REMEDIES.
(a) ENFORCEMENT. The Executive acknowledges that the restrictions
contained in Sections 6, 7, 8, 9 and 10 are reasonable and necessary to protect
the legitimate interests of the Company and the Company's Affiliates. If the
Executive breaches any of the provisions of Sections 6, 7, 8 and 9 hereof, the
Company and/or the Company's Affiliates shall have the right to specifically
enforce the Agreement by means of an injunction, it being acknowledged by the
Executive and agreed upon by the parties that any such breach will cause
irreparable injury to the Company and/or the Company's Affiliates for which
money damages alone will not provide an adequate remedy. The rights and remedies
enumerated above shall be in addition to, and not to in lieu of, any other
rights and remedies available to the Company at law or in equity.
(b) PARTIAL INVALIDITY. In the event any of the covenants
contained in Sections 6, 7, 8, 9 and 10 or any portion thereof, shall be found
by a court of competent jurisdiction to be invalid or unenforceable as against
public policy or for any other reason, such court shall exercise its discretion
to reform such covenant to the end that the Executive shall be subject to
noncompetition, nonsolicitation and nondisclosure covenants that are reasonable
under the circumstances and are enforceable by the Company and/or the Company's
Affiliates. In any event, if any provision of this Agreement is found
unenforceable for any reason, such provision shall remain in force and effect to
the maximum extent allowable and all unaffected provisions shall remain fully
valid and enforceable and such finding shall in no way affect the enforceability
of any such provision at a subsequent date against a different employee.
11. ENFORCEABILITY. The unenforceability or invalidity of any provision
of this Agreement shall not affect the enforceability or validity of the balance
of the Agreement. In the event that any such provision should be or becomes
invalid for any reason, such provision shall remain effective to the maximum
extent permissible, and the parties shall consult and agree on a legally
acceptable modification giving effect to the commercial objectives of the
unenforceable or invalid provision, and every other provision of this Agreement
shall remain in full force and effect.
12. BINDING EFFECT. This Agreement shall inure to the benefit of, and
be enforceable by, the parties' successors, representatives, executors,
administrators or assignees.
13. NOTICES. All notices, requests, demands and other communications
made or given in connection with this Agreement shall be in writing and shall be
deemed to have been duly given (a) if delivered, at the time delivered or (b) if
mailed, at the time mailed at any general or branch United States Post Office
enclosed in a registered or certified postage paid envelope, or (c) if
couriered, one day after deposit with a national overnight courier, addressed to
the address of the respective parties as follows:
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To the Company: Ohio Legacy Bank
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attn: Secretary
With a Copy to: Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxx Xxxxx, 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: M. Xxxxxxxx Xxxxxx, Esq.
To the Executive: Xxxxxx X. Xxxxxx
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or to such other addresses as the party to whom notice is to be given may have
previously furnished to the other party in writing in the manner set forth
above, provided that notices of changes of address shall only be effective upon
receipt.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto relating to the subject matter hereof, and there are no
written or oral terms or representations made by either party other than those
contained herein. This Agreement supersedes and replaces any and all employment
agreement and agreements providing for payments for services between the
Executive and the Company or any of the Company's affiliates, all of which are
terminated upon the Executive's execution of this Agreement.
15. 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
Company and the Executive hereby irrevocably submit to the jurisdiction of the
courts of the State of Ohio, with venue in Xxxxx 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. The Company
and the Executive hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which 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 Company and the Executive hereby consent to
process being served by them as required by law in any suit, action or
proceeding.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first written above.
OHIO LEGACY CORP
/s/ Xxxxxx X. Xxxxxx By: /s/ L. Xxxxxx Xxxxx
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XXXXXX X. XXXXXX
Title: President
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OHIO LEGACY BANK
By: /s/ L. Xxxxxx Xxxxx
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Title: President
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