AMENDED AND RESTATED EMPLOYMENT AGREEMENT (PAUL D. TOBIAS)
Exhibit 10.1
| EFFECTIVE DATE: | May 7th, 2007 | |||
This Agreement, dated as of the 7th day of May 2007 (the “Effective Date”) by and between
MACKINAC FINANCIAL CORPORATION, a Michigan corporation (the “Company”), and ▇▇▇▇ ▇. ▇▇▇▇▇▇
(“Employee”).
WITNESSETH:
WHEREAS, the Company currently employs Employee pursuant to an Employment Agreement dated
August 10, 2004, as amended by that certain letter agreement dated December 19, 2006 (the “First
Agreement”); and
WHEREAS, Employee and Company have agreed to Employee’s employment by Company on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual undertakings set forth herein
the parties hereto agree as follows:
1. Employment and Duties. As Chairman and Chief Executive Officer of the Company and
Chairman of the Company’s wholly-owned subsidiary, mBank (the “Bank”), Employee shall have the
duties and responsibilities commensurate with such titles and offices, including, without
limitation, all such duties and responsibilities as now are or hereafter may be set forth with
respect to such offices in the bylaws of the Company and the Bank or in the directives of the Board
of Directors of the Company (the “Company Board”) or Board of Directors of the Bank. As of the
Effective Date, this Agreement shall amend, supersede and replace in its entirety any other written
or oral Employment Agreements between Company, Bank and Employee, including, without limitation,
the First Agreement, and all such agreements shall be of no further force and
effect. During the Employment Period (as hereinafter defined), Employee also shall serve as
an officer of such other affiliates of the Bank or the Company and in such other capacities as he
may be requested by the Company Board and shall assume such duties and responsibilities as from
time to time may be assigned to him by the Company Board, all without additional compensation
therefore. Throughout the Employment Period, Employee shall devote his business time, attention
and energy on a full-time basis exclusively to the affairs of the Bank and the Company and its
affiliates. The foregoing notwithstanding, during the Employment Period, it shall not be a
violation of this Agreement for the Employee to (a) serve on corporate, civic or charitable boards
or committees, (b) deliver lectures, fulfill speaking engagements or teach at educational
institutions and (c) own, operate and manage investments or businesses other than banking
institutions, including, Mackinac Partners, LLC, so long as such activities do not interfere with
the performance of the Employee’s primary responsibilities as an executive of the Company in
accordance with this Agreement. On an annual basis, Employee shall disclose to the Board of
Directors of the Company all such other activities, responsibilities and arrangements. It is
expressly understood and agreed that, to the extent that any such activities have been conducted by
Employee prior to the effective date of the First Agreement, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto) subsequent to the
Effective Date shall not thereafter be deemed to interfere with the performance of the Employee’s
responsibilities to the Company.
2. Term of Employment. The employment of Employee hereunder shall commence on the
Effective Date and shall continue, unless earlier terminated as provided in this Agreement, through
June 30, 2010 (the “Employment Period”).
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3. Cash Compensation. As full cash compensation for all services to be performed by
Employee hereunder, the Company shall pay to Employee the following:
(a) salary of not less than $240,000.00 per year (to be reviewed annually by the
Company Board), payable at the intervals at which other executive officers of the Company
and Bank are paid;
(b) an additional incentive bonus (if earned) payable during the Employment Period
prior to fiscal year-end in accordance with the Company’s or Bank’s policy or plan.
4. Oakland County Office. During the Employment Period, the Company shall provide
Employee with an office and support staff in Oakland County, Michigan for his principal office.
5. Employee Benefits; Disability Insurance. During the Employment Period, Employee
shall be entitled to participate in such Company employee benefit plans as from time to time are
maintained, sponsored, or made available to the executive employees of the Company and the Bank
generally, in each case on the same terms and subject to the same conditions and limitations
generally applicable to other executive officers with respect to participation therein. Employee
shall be entitled to no less than six (6) weeks of paid vacation per calendar year during the
Employment Period. Vacation time not taken shall not be accumulated and carried forward to a
subsequent calendar year.
6. Certain Expenses. Subject to review of the Board of Directors, in accordance with
the Company’s practices and policies as then effect during the Employment Period as same are
applied to executive officers, the Company shall pay or reimburse Employee for reasonable travel,
entertainment, and other incidental expenses (including, the cost of business publications and
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professional associations), incurred on or in furtherance of the business of the Company or
the Bank.
7. Certain Continuing Obligations of Employee. Throughout the Employment Period and
thereafter, Employee agrees to keep confidential all trade secrets, customer lists, business
strategies, financial and marketing information, and other data concerning the private affairs of
the Company and the Bank or any of their affiliates, made known to or developed by Employee during
the course of his employment hereunder (“Confidential Information”), not to use any Confidential
Information or supply Confidential Information to others other than in furtherance of the Company’s
or Bank’s business, and to return to the Company upon termination of his employment all copies, in
whatever form, of all Confidential Information and all other documents relating to the business of
the Company or any of its affiliates, including, without limitation, the Bank, which may then be in
the possession or under the control of Employee.
At the request of the Company Board, whether or not made during the Employment Period,
Employee agrees to execute such confidentiality agreements, assignments of intellectual property
rights, and other documents as hereafter may be reasonably determined by the Company Board to be
appropriate to carry out the purposes of this Section.
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8. Termination of Employment: Effect.
(a) Employee’s employment hereunder will be terminated in any of the following ways:
(i) Immediately upon the death of the Employee;
(ii) Upon the Employee becoming disabled due to his physical or mental
condition to regularly and satisfactorily perform his duties hereunder (as
determined by the Company Board) for a period of one (1) year, but the retention of
another person to perform Employee’s duties on a temporary basis during such period
of disability shall not constitute a termination under this subsection (ii) or a
termination without Cause under subsection (iii) below;
(iii) By either the Employee or the Company, without or with Cause (as
hereinafter defined), by thirty (30) days’ prior written notice to the other,
effective as of the date specified in such notice; or
(iv) In the event of a Change in Control (as hereinafter defined) unless prior
to the effectiveness of the Change in Control, Employee enters into a new employment
agreement or other arrangement acceptable to Employee which terminates this
Agreement and Employee’s right to the compensation and benefits described in Section
9(d) of this Agreement. Employee covenants and agrees to negotiate a new employment
agreement in good faith.
(b) Upon the termination of Employee’s employment in any of the ways provided in
subsection (a), then this Agreement and all rights and obligations of Employee and the
Company hereunder (as opposed to rights and obligations under any Company employee benefit
plan in which Employee participated) shall terminate and cease
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immediately, except for (i) Employee’s rights to the payments provided in Section 9
below; and (ii) the rights and obligations set forth in Section 7 above and Sections 11, 12
and 13 below.
9. Payments on Termination. Employee shall be entitled to the following payments and
benefits upon termination of his employment:
(a) If Employee’s employment is terminated under Section 8(a)(i) above (by reason of
death), or if Employee’s employment is terminated (either voluntarily by Employee or for
Cause by the Company) under Section 8(a)(iii) above, then Employee shall be entitled to the
cash compensation under Section 3(a) above, and the benefits and reimbursements to which
Employee is entitled under Sections 5(a) and 6 above, through the date of termination of
employment.
(b) If Employee’s employment is terminated by the Company without Cause under Section
8(a)(iii) above, and
(i) the effective date of such termination is during the first 12 months of this
Agreement, then Employee shall be entitled to a lump sum cash compensation equal to 300% of
his then compensation under Section 3(a) above, or
(ii) the effective date of such termination is during the second 12 months of this
Agreement, then Employee shall be entitled to a lump sum cash compensation equal to 200% of
his then compensation under Section 3(a) above, or
(iii) the effective date of such termination is during the third 12 months of this
Agreement or thereafter (in the event that Employee’s employment, under this Agreement, is
extended beyond the date set forth in Section 2 above) then Employee shall be entitled to
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a lump sum cash compensation equal to 100% of his then compensation under Section 3(a)
above, and
plus, in each case, the greater of (x) the highest incentive bonus received by Employee
under Section 3(b) above, and (y) the highest incentive bonus received by Employee from the
period January 1, 2005 through the Effective Date; together with the benefits and
reimbursements under Sections 5(a) and 6 above, for a period of one year following the
effective date of such termination of employment.
Unless otherwise prohibited or restricted by statute, regulation, or regulatory agency
overseeing banks or bank holding companies, the lump sum compensation due Employee under
this Section 9(b) shall be paid to Employee within fifteen (15) days of the event giving
rise to the required payment.
(c) If Employee’s employment is terminated due to Employee’s disability under Section
8(a)(ii) above, Employee shall be entitled to receive the insurance benefits described in
Section 5(b)(ii) above.
(d) If Employee’s employment is terminated upon a Change of Control under Section
8(a)(iv) above (by Employee or by the Company other than for Cause), Employee shall be
entitled to (a) a cash payment equal to 299% of Employee’s then current base salary under
Section 3(a) above immediately, and (b) the benefits and reimbursements under Sections 5(a)
and 6 above for a period of one (1) year following a Change in Control.
(e) In the event the payments required under this Agreement, when added together with
any other amounts required to be included by Employee under the provisions of the Internal
Revenue Code of 1986, as amended, result in an “Excess Parachute Payment,” as that term is
defined in Section 280G of the Code, then the amount of the
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payments provided for in this Agreement shall be reduced in an amount which eliminates
any and all excise tax to be imposed under Section 4999 (or any successor thereto) of the
Code.
10. Definitions. For purposes of this Agreement:
(a) “Cause” means any of the following:
(i) Material breach of any of the terms of this Agreement or of the Company’s
or Bank’s policies and procedures applicable to employees and/or directors;
(ii) Conviction of or plea of guilty or nolo contendere to a
crime involving moral turpitude or involving any violation of securities or banking
law or regulation, or the issuance of any court or administrative order enjoining or
prohibiting Employee from violating any such law or regulation;
(iii) Repeated or habitual intoxication with alcohol or drugs while on the
premises of the Company or the Bank or any of their affiliates, or during the
performance by Employee of any of his duties hereunder;
(iv) Embezzlement of any property belonging or entrusted to the Company or the
Bank, or any of their affiliates;
(v) Willful misconduct or gross neglect of duties, or failure to act with
respect to duties or actions previously communicated to Employee in writing by the
Company Board; or
(vi) Any act or omission of kind or nature determined in good faith by the
Company Board to be of significant seriousness, which in the good faith judgment of
the Company Board may have adversely affected or may in the future
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adversely affect the Company, the Bank, or any of their affiliates, or has
irreparably damaged Employee’s continued ability to function effectively in any of
the capacities contemplated by this Agreement.
(b) “Change in Control” shall occur if at any time:
(i) Any person or group (as such terms are used in connection with Section
13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in
Rule 13(d)(3) and 13(d)(5) under the Exchange Act), directly or indirectly, of
securities of the Company or Bank representing twenty-five percent (25%) or more of
the combined voting power of the Company’s or Bank’s then outstanding securities;
(ii) A merger, consolidation, sale of assets, reorganization, or proxy contest
is consummated and, as a consequence of which, members of the Company Board in
office immediately prior to such transaction or event constitute less than a
majority of the Board thereafter; or
(iii) A merger, consolidation, or reorganization is consummated with any other
corporation pursuant to which the shareholders of the Company or the Bank
immediately prior to the merger, consolidation, or reorganization do not immediately
thereafter directly or indirectly own more than fifty percent (50%) of the combined
voting power of the voting securities entitled to vote in the election of directors
of the merged, consolidated, or reorganized entity.
Notwithstanding the foregoing, no trust department or designated fiduciary or other trustee
of such trust department of the Company or a subsidiary of the Company, or other similar
fiduciary capacity of the Company with direct voting control of the stock shall be treated
as a person or group within the meaning of subsection (b)(i) hereof. Further, no
profit-sharing, employee stock ownership, employee stock purchase and savings, employee
pension, or other employee benefit plan of the Company or any of its subsidiaries, and no
trustee of any such plan in its capacity as such trustee, shall be treated as a person or
group within the meaning of subsection (b)(i) hereof.
11. Integration; Amendment. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and thereof, and supersedes and replaces in their
entirety any prior agreements or understandings concerning such subject matter, including without
limitation the First Agreement. This Agreement may not be waived, changed, modified, extended,
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or discharged orally, but only by agreement in writing signed in the case of the Company by
the Chairman or Vice Chairman of the Company Board.
12. Arbitration. Any controversy, dispute, or claim arising out of or relating to
employee’s employment or to this Agreement or breach thereof shall be settled by arbitration in
accordance with the commercial rules of the American Arbitration Association at its Southfield,
Michigan offices. Judgment upon any award may be entered in any circuit court or other court
having jurisdiction thereof, without notice to the opposite party or parties. Anything contained
herein to the contrary notwithstanding, this agreement to arbitrate shall not be deemed to be a
waiver of the Company’s right to secure equitable relief including injunction (whether as part of
or separate from the arbitration proceeding) if and when otherwise appropriate.
13. Noncompetition and Nonsolicitation. Notwithstanding anything to the contrary
contained elsewhere in this Agreement:
(a) In view of Employee’s importance to the success of the Company and the Bank,
Employee and the Company agree that the Company and the Bank would likely suffer significant
harm from Employee’s competing with the Company or the Bank during Employee’s term of
employment and for some period of time thereafter. Accordingly, Employee agrees that
Employee shall not engage in competitive activities while employed by the Company or the
Bank and, in the event Employee’s employment is terminated voluntarily by Employee or
without cause by the Company pursuant to Section 8(a)(iii) above, during the Restricted
Period. Employee shall be deemed to engage in competitive activities if he shall, without
the prior written consent of the Company, (i) within a fifty (50) mile radius of the main
office or any branch office of the Bank, render services directly or indirectly, as an
employee, officer, director, consultant, advisor, partner, or
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otherwise, for any organization or enterprise which competes directly or indirectly
with the business of Company or any of its affiliates in providing financial products or
services (including, without limitation, banking, insurance, or securities products or
services) to consumers and businesses, or (ii) directly or indirectly acquires any financial
or beneficial interest in (except as provided in the next sentence) any organization which
conducts or is otherwise engaged in a business or enterprise within a fifty (50) mile radius
of the main office or any branch office of the Bank, which competes directly or indirectly
with the business of the Company or the Bank or any of their affiliates in providing
financial products or services (including, without limitation, banking, insurance or
securities products or services) to consumers and businesses. Notwithstanding the preceding
sentence, Employee shall not be prohibited from owning less than five (5%) percent of any
publicly traded corporation whether or not such corporation is in competition with the
Company. For purposes hereof, the term “Restricted Period” shall equal the longer of (y)
twelve (12) months, or (z) the period during which Employee receives salary and benefits
under Section 8(a)(iii) above (as provided in Section 9(b)), in each case commencing as of
the date of Employee’s termination of employment.
14. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Michigan applicable to contracts made and to be performed within such
State.
15. Regulatory Approval. The Company and Employee agree to use their respective best
efforts to obtain such approval of bank regulatory authorities if required for this Agreement and
the payment of any termination payments.
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[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.
| MACKINAC FINANCIAL CORPORATION | ||||
| /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President |
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| /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
|
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