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Exhibit 10
HUNTINGTON BANCSHARES INCORPORATED
Columbus, Ohio 43287 [Huntington Logo]
March 2, 1998
FRANK WOBST
Chairman and Chief Executive Officer
614 480 3623
Mr. Zuheir Sofia
President, Chief Operating Officer, and Treasurer
Huntington Bancshares Incorporated
Huntington Center
Columbus, Ohio 43287
Re: Retirement from Huntington Bancshares Incorporated
Dear Zuheir,
You have indicated a desire to retire from Huntington Bancshares
Incorporated to form a private investment company. It is with great regret that
I accept your decision to retire. In order to recognize your significant past
contributions to Huntington and ensure a smooth transition, we have agreed on
certain matters affecting your retirement and our future relationship. This
letter will memorialize our agreement.
1. You will continue in your present position at your current
rate of compensation and with your current fringe benefits
until the last day of your employment, which will be June 30,
1998; however, the fulfillment of your responsibilities to the
Huntington prior to that date will be at my pleasure. You will
be entitled to certain benefits pursuant to Huntington's
incentive compensation plans as described in the attachment to
this letter until the last day of your employment.
2. You will be entitled to retirement benefits with payments to
begin after your last day of employment at the times and in
the manner described in the attachment to this letter. Your
last day of employment (June 30, 1998) will be your retirement
date for purposes of this letter.
3. Prior to your retirement date, you will receive one or more
awards of stock options under the Huntington Bancshares
Incorporated 1994 Stock Option Plan for a total of 200,000
shares of Huntington Common Stock, representing both your
customary annual stock option award plus a special one-time
award in recognition of your many contributions to Huntington.
The per share exercise price of these options will be equal to
the fair market value of a share of Huntington Common Stock on
the grant date as specified in the Stock Option Plan. All such
options will be exercisable pursuant to the terms of the Plan.
You will be considered to have retired from Huntington within
the meaning of the 1990 and 1994 Stock Option Plan for
purposes of exercising these and all previously granted
options.
4. You will resign as an officer of Huntington and as an officer
and director of any of Huntington's affiliates effective as of
your retirement date. You will continue
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March 2, 1998
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to serve your term as a director of Huntington Bancshares
Incorporated at the pleasure of the Chairman.
5. You will attempt to complete all current projects that have
been assigned to you prior to your retirement date; however,
if there are any such projects that have not been completed
prior to your retirement date, you have agreed that, if
requested by me, you will from time to time consult with the
staff of Huntington with respect to such projects on a
mutually agreeable schedule.
6. Both before and following your retirement date, Huntington
will indemnify you against any and all claims, suits, charges,
or proceedings, and will advance reasonable expenses
(including reasonable attorneys' fees), arising from your
performance of duties as an officer or director of Huntington
or any affiliated company to the full extent permitted by
federal law and the laws of the State of Maryland. You will
cooperate with Huntington in connection with any such
proceedings.
7. Both before and following your retirement date, you agree that
you will not engage in any activities which may be disruptive
to or which are intended to cause harm to Huntington or its
affiliates, directors, officers, and employees. Huntington
likewise agrees not to engage in any activities intended to
cause harm to you or your reputation. Huntington further
represents and warrants that it is not aware of any claims
that it has or its affiliates have against you.
8. You agree that you will hold in a fiduciary capacity for the
benefit of Huntington all trade secrets, confidential
information, and privileged information, relating to
Huntington and its businesses which you have obtained during
your employment by Huntington. You will not, without the prior
written consent of Huntington or as may otherwise be required
by law or legal process, use, communicate, or divulge any such
trade secrets or confidential or privileged information to
anyone other than Huntington and those designated by
Huntington.
9. You have indicated to me that it is your intention not to take
a position or representation that is adversarial to Huntington
or that represents a conflict to Huntington's interests, and
it is not Huntington's intention to preclude you from engaging
in any business that does not directly compete with and is not
adversarial to Huntington. Accordingly, we have agreed to the
following:
(a) You will not, without the consent of Huntington,
accept or hold any position as an officer, director,
or employee of any bank, thrift, bank holding
company, or thrift holding company, engaging in
full-service
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March 2, 1998
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banking operations in Ohio, Michigan, Florida,
Indiana, Kentucky, or West Virginia which has assets
in excess of $4 billion.
(b) You will not, without the consent of Huntington,
knowingly act as a consultant or advisor to any
financial institution or other entity connected with
the financial services industry for the purpose of
assisting or facilitating such institution or entity
in an undertaking or activity that involves a
conflict with, or is adverse to the interests of,
Huntington in any merger or acquisition transaction.
If at any time during this period you become aware of
any such undertaking or activity, you will advise the
Chairman of Huntington and will not accept or
continue such consulting or advising services without
the consent of Huntington.
(c) You will not, without the consent of Huntington,
solicit any officer of Huntington or any of its
affiliates to become an employee of or consultant for
you or your company.
The non-compete and non-solicitation obligations specified
above will end on June 30, 2001, or, if earlier, the effective
date of any merger of Huntington into, or other acquisition of
Huntington by, another entity.
10. Huntington agrees that it will provide you copies and consult
with you regarding any written announcement language or press
releases to employees, media, and customers regarding your
retirement. All public disclosures, including proxy and other
regulatory filings, discussing you and your retirement will be
provided to you in advance of filing or release for your
review and comment.
11. Subject to the confidentiality requirements described above,
you may retain ownership and possession of your records,
notes, and personal items in your office.
12. Huntington will agree to reimburse you for professional
services and expenses you incurred in connection with
structuring your retirement arrangement up to a maximum of
$20,000.
13. For yourself, your heirs, executors, and assigns, you release,
waive, extinguish, and covenant not to sue with respect to any
and all rights, liabilities, claims, or actions of whatever
nature which you have or may have as of the effective date of
this agreement against Huntington or its affiliates, its or
their successors and assigns, and the directors, officers,
employees, or agents of any of them or their heirs or assigns,
including, but not limited to, any and all such rights,
liabilities,
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March 2, 1998
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claims, or actions arising in any manner out of your
employment or the termination of your employment. These
rights, liabilities, claims, and actions released, waived, and
extinguished by you and with respect to which you covenant not
to sue, include but are not limited to those arising or which
might arise under Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1866, as amended;
Executive Order 11246, as amended; the National Labor
Relations Act, as amended; the Americans with Disabilities Act
of 1990; any claims or rights arising in fact or by
implication pursuant to any alleged contract and any other
claim arising under any federal, state, county, city, or other
local law, rule, ordinance, regulation, order, or decision
concerning discrimination in employment or the terms, rate,
hours, benefits, conditions, or privileges of employment or
any other term or condition of employment including, but not
limited to, any claim arising out of your employment which
relates to or arises out of a claim of discrimination because
of race, color, religion, sex, national origin, handicap, age,
or ancestry pursuant to Chapter 4112 of the Ohio Revised Code
or which relates to or arises out of any claim of age
discrimination pursuant to the federal Age Discrimination in
Employment Act or any state or local age discrimination
statute, law, ordinance, or decision.
14. In the event the benefits to be paid under this letter are
subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, or any similar
federal or state excise tax, Huntington will pay to you an
additional amount such that the net amount retained by you
after payment of any excise tax, and any federal, state, and
local income tax on the gross-up payment itself, shall be
equal to the amount of the payments otherwise provided in this
letter.
15. The agreement set forth in this letter will be binding on the
successors and assigns of Huntington. It is Huntington's
intention that you not be required to incur the expenses
associated with the enforcement of your rights as set forth in
this letter, should such enforcement become necessary
following a change in control of Huntington. Accordingly, if,
following a change in control of Huntington, it should appear
to you that Huntington or its successor has failed to comply
with any of Huntington's obligations to you as described in
this letter, or any action is taken to declare the agreement
set forth in this letter to be void or unenforceable or to
deny, diminish, or recover from you the benefits intended to
be provided to you as described in this letter, you are
irrevocably authorized to retain counsel of your choice at the
expense of Huntington or its successor to represent you in
connection with the initiation or defense of any litigation or
other legal action. Huntington or its successor will pay or
reimburse to you the reasonable fees and expenses of counsel
selected by you on a regular, periodic basis upon presentation
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by you of a statement or statements prepared by such counsel
in accordance with its customary practices.
16. In the event either party is found to have breached the
agreement set forth in this letter prior to a change in
control of Huntington and such breach results in an
adversarial proceeding, the court having jurisdiction may, in
its discretion, award costs and reasonable attorneys' fees to
the prevailing party.
17. You agree that the benefits provided in this letter and the
attachment are in lieu of any and all benefits, rights, and
incidents of employment, including without limitation,
compensation, incentives, club memberships, bonuses, and the
right to use any Huntington property and privileges. This
letter, along with the attachment to this letter, constitutes
the entire agreement with respect to all compensation,
benefits, entitlement, bonuses, retirement, or income
continuation arising from your employment with Huntington or
any of its affiliates. You agree that all prior written or
oral contracts and agreements between you and Huntington or
its predecessor entities with respect to the subject matters
contained in this letter, including without limitation your
Employment Agreement with Huntington originally dated November
15, 1991, and renewed for an additional term in November 15,
1996, your Executive Agreement with Huntington dated January
22, 1997, your rights and obligations under the Huntington
Supplemental Executive Retirement Plan and Huntington
Supplemental Retirement Income Plan are superseded by this
letter. Notwithstanding the above, you will be entitled to the
benefits of any and all stock option agreements and employee
benefit plans to the extent expressly provided for in this
letter and the attachment to this letter.
Zuheir, I again want to express my appreciation for your many
contributions to the current success of Huntington and wish you well in your new
endeavors.
Sincerely,
/s/ Frank Wobst
Frank Wobst
Chairman and Chief Executive Officer
Huntington Bancshares Incorporated
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I acknowledge that I was given up to 21 calendar days within which to
consider this letter agreement; that I was advised of my right to consult with
legal counsel prior to signing this agreement and that I have availed myself of
counsel of my choosing; and that I have the right to revoke this agreement, in
writing, for a period not to exceed 7 days after the date on which it was signed
by me. All parties further acknowledge if I fail to exercise this right to
revoke, this agreement will immediately become a binding contract as to its
terms.
I acknowledge that I have read this letter in its entirety, fully
understand the same, and am in full accord with the terms contained herein.
Notice received and accepted and this letter
agreement approved and accepted this 3rd day of
March, 1998.
/s/ Zuheir Sofia
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Zuheir Sofia
Ratified and affirmed by the Compensation and
Stock Option Committee of the Board of Directors
of Huntington Bancshares Incorporated this 8th day
of March, 1998.
By: /s/ Timothy P. Smucker
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Timothy P. Smucker, Chairman
Compensation and Stock Option Committee
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ATTACHMENT
INCENTIVE PLANS
1. You are a participant in the Incentive Compensation Plan, also
known as the Annual Management Incentive Plan (the "MIP"),
until your retirement date. The Compensation Committee has
agreed to "deem you a retiree," as of the retirement date, for
purposes of the MIP.
You shall be eligible to receive a MIP payment for the plan
year 1998. Your MIP payment for the plan year 1998 will be
based on Huntington's return on average shareholder's equity
("ROAE") performance as calculated pursuant to the terms of
the MIP for your current group A-1. Your MIP payment for the
plan year 1998 will be a pro rata amount equal to a fraction
of a year, the numerator of which will be six and the
denominator shall be twelve. You shall receive this payment
prior to the last day in February 1999.
2. You are a participant in the fifth and sixth cycles of the
Long Term Incentive Compensation Plan (the "Long Term Plan".)
The Compensation Committee has agreed to "deem you a retiree"
as of the retirement date, for purposes of the Long Term Plan.
The fifth cycle of the Long Term Plan covers the period of
January 1, 1996, through December 31, 1998. As a participant
in the fifth cycle of the Long Term Plan, you are eligible to
receive a fifth cycle Long Term Plan payment. Your Long Term
Plan payment will be determined based on Huntington's ROAE
performance relative to the performance of the fifth cycle
Pacesetter Group and calculated pursuant to the terms of that
plan for your current group B. Your payment will be a pro rata
portion of the fifth cycle amount equal to a fraction, the
numerator of which will be 30 and the denominator of which
will be 36. Payment from this plan will be in the form of
shares of Huntington Common Stock with the opportunity to
elect up to 50% of the payment in cash. You will receive this
payment prior to the last day of February 1999.
The sixth cycle of the Long Term Plan covers the period of
January 1, 1998, through December 31, 2000. As a participant
in the sixth cycle of the Long Term Plan, you are eligible to
receive a sixth cycle Long Term Plan payment. Your Long Term
Plan payment will be determined based on Huntington's ROAE
performance relative to the performance of the sixth cycle
Pacesetter Group and calculated pursuant to the terms of that
plan for your current group B. Your payment will be a pro rata
portion of the sixth cycle amount equal to a fraction, the
numerator of which will be six and the denominator of which
will be 36.
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Payment from this plan will be in the form of shares of
Huntington Common Stock with the opportunity to elect up to
50% of the payment in cash. You will receive this payment
prior to the last day in February 2001.
WELFARE BENEFITS
1. You are a participant in the Huntington's Executive Life
Insurance Plan. The plan's agent will review the options
available under the plan with you. Your Group Term Life
Insurance in the amount of $50,000 will end on the retirement
date.
2. Your Business Travel Accidental Death and Dismemberment
coverage and your Long Term Disability coverage will end on
the retirement date.
3. Your employee medical and dental coverage will end on your
retirement date; however, as described below, Huntington
agrees to provide continuing health care benefits to you and
your wife, Susan, for your life, and to your oldest child for
three years and to your two younger children for up to five
years from your retirement date.
Coverage for you and your eligible dependents (which is
defined to include your spouse) will be continued for 18
additional months following your retirement date (the "First
COBRA Period"), if you elect COBRA coverage and make the
required payments. Although you will be responsible for making
the required payments during the First COBRA Period,
Huntington will pay you a lump sum of $14,560 as of the
retirement date which represents the present value of the
estimated cost to you, including an adjustment for the taxes
on such amount, of COBRA coverage, for you and your eligible
dependents, during the First COBRA Period.
Following the expiration of the First COBRA Period, Huntington
will provide (a) you and your current spouse, Susan (for so
long as she remains married to you), coverage for your life
and (b) your other eligible dependents coverage for so long as
they would be eligible to participate in the Huntington
Bancshares Health Care Plan (determined without regard to any
Plan requirement that an employee retire after a certain age).
Such coverage will be comparable to the benefits provided to
retirees and their spouses (which currently provides COBRA
coverage for spouses of deceased retirees for two years at no
cost to the spouse following the retiree's death and one year
of COBRA coverage thereafter at the cost of the deceased
spouse) in the Medical Benefits portion of the Health Care
Plan, as amended from time to time, and will be provided to
you either through your participation in the Health Care Plan
or through payment of substituted benefits, at Huntington's
option, on a basis which is tax neutral to you and your
dependents. Following the
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First COBRA Period, you will be provided an annual
supplemental payment, on or before January 31st of each year,
equal to the sum of (a) $2,250 per year per eligible dependent
as currently defined in the Health Care Plan (determined
without regard to any Plan requirement that an employee retire
after a certain age) and (b) your contribution to the Health
Care Plan (or your contribution for substituted benefits) plus
an amount equal to 50% of such contribution as an adjustment
for the taxes on such CONTRIBUTION.
In addition, once your dependents would be no longer eligible
to participate in the Health Care Plan, coverage may be
continued for them for so long as COBRA requires if you elect
COBRA coverage and make the required payments (the "Second
COBRA Period"). For purposes of determining eligibility to
participate in the Health Care Plan in the preceding sentence,
your dependents will be treated as being eligible during the
period that substituted benefits referred to in the preceding
paragraph are provided, and any substituted benefits shall be
treated as being provided under a group health plan that is
subject to COBRA requirements for purposes of determining
COBRA eligibility. Although you will be responsible for making
these required payments during the Second COBRA Period or
Periods, Huntington will pay you a lump sum of $13,000 on your
retirement date which represents the present value of the
estimated cost to you, including an adjustment for the taxes
on such amount, of COBRA coverage for your oldest child for 21
months and for your two younger children for one year
following the cessation of their eligibility under the Health
Care Plan. If COBRA coverage is not available during the
second COBRA Period or Periods, Huntington will provide
substitute benefits on the basis provided above.
To the extent specified in the Health Care Plan, Huntington
will not pay you for medical expenses that are incurred during
any period you or your eligible dependents are covered, or are
eligible for coverage, under any private, employer, or
government sponsored medical care plan. You agree to notify
Huntington's corporate benefits manager if you or your
eligible dependents should become covered and/or eligible for
coverage under any private, employer, or government sponsored
plan that provides payment for health care expenses you incur.
RETIREMENT INCOME BENEFITS
1. You will cease active participation in the Huntington Stock
Purchase and Tax Savings Plan (the "Stock Plan") and the
Huntington Supplemental Stock Purchase and Tax Savings Plan
(the "Supplemental Stock Plan") or their successors on the
retirement date. Your Supplemental Stock Plan balance will be
distributed to you as soon as administratively feasible
following your retirement date. You will also receive
information regarding options relating to your balance in the
Stock Plan after your retirement date.
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2. You will cease active participation in the Huntington
Bancshares Incorporated Retirement Plan (the "Pension Plan")
on the retirement date. You will first become eligible to
begin receipt of benefits from the Pension Plan on September
1, 1999. You should notify Huntington's employee benefits
department several months before benefit payments are to
commence. Following receipt of your notification, you will be
sent information regarding the optional forms of payment you
may elect.
3. Huntington agrees to provide you a total retirement income
benefit in the form of a joint and 50% survivor annuity of
$43,750 per month ($525,000 per year), for your life,
commencing on the first day of the month following your
retirement date. The 50% survivor annuity of $21,875 per month
($262,500 per year) will be paid to your current wife, Susan
R. Sofia, for her life if she survives you and remains married
to you until the time of your death. The annual retirement
benefit will be offset by all benefits paid or to be paid to
you or your spouse that year under the Pension Plan and Social
Security, and will be in lieu of any benefits under the
Huntington Bancshares Incorporated Supplemental Executive
Retirement Plan and the Huntington Supplemental Retirement
Income Plan. There will be no cost of living adjustments to
this retirement benefit.
4. At any time after the retirement date, Huntington may elect,
but only with your consent, to pay you in a lump sum the
present value of the remaining supplemental retirement benefit
described above. The present value of such benefit will be
calculated using the Pension Plan's actuarial assumptions at
the time of such election.
5. You will be considered to have retired from Huntington within
the meaning of the 1990 Stock Option Plan and the 1994 Stock
Option Plan for purposes of exercising options granted under
those plans that remain outstanding on the retirement date.
OTHER BENEFITS
1. For so long as it is a policy for other retired directors, a
Huntington parking pass will be provided to you.
2. Upon execution of a final release of all claims, in
substantially the same form as paragraph 13 of the letter, at
your retirement date, Huntington will provide you with certain
personal property and perquisites, with the total maximum
value of $30,000.
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CONDITION TO RECEIPT OF BENEFITS
1. Except to the extent otherwise required by law, the benefits
described in this letter are subject to the continued
satisfaction of your responsibilities to Huntington prior to
your retirement date and your obligations under this letter
before and after your retirement date.
Huntington will need to contact you after the retirement date for many
reasons that are financially important to you, such as the payment of any
distributions for which you may be eligible from the Pension Plan, the Stock
Plan or the Supplemental Stock Plan, to mail your W-2 form, and to mail your
COBRA election form. To insure that you will receive this important information,
please keep Huntington's corporate benefits manager advised of any address
change. Brenda Warne currently serves in that capacity. She may be reached at
614-480-3663.
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