Exhibit 10.2
RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (the "Agreement") is entered into as of
the __th day of_______, 200_ (the "Grant Date"), by and between, Oak Hill
Financial, Inc., an Ohio corporation (the "Company") and _____________________,
an employee of the Company (the "Employee").
The Company desires to provide the Employee with an ownership interest in
the Company as a bonus for superior job performance throughout the course of
this past year and as an incentive to continue contributing to the growth and
profits of the Company in the years to follow.
Agreement
---------
1. Issue of Restricted Stock. In consideration of the Employee's exemplary
performance during the past year and continuing employment by the Company in
future years, the Company hereby agrees to deliver to Employee ______________
(______) common shares of the Company (the "Shares"), subject to all of the
terms and conditions set forth in this Agreement and subject to shareholder
approval of the 2004 Incentive Compensation Plan (the "Plan"). Upon approval of
the Plan, the Company shall cause a certificate or certificates for the Shares
to be issued in the Employee's name and the Employee shall thereupon be a
shareholder of the Company with respect to all of the Shares represented by such
certificate or certificates and shall have all of the rights of a shareholder
with respect to the Shares including the right to vote the Shares and to receive
all dividends and other distributions paid with respect to the Shares; provided,
however, that the Shares, including the right to vote the Shares and to receive
all dividends and other distributions paid with respect to the Shares, shall be
subject to the restrictions hereinafter described. Certificates representing
Shares shall be imprinted, in conspicuous type, with the following legend:
THE SALE, EXCHANGE, TRANSFER, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE AND
ANY INTEREST THEREIN IS RESTRICTED BY AN AGREEMENT DATED AS
OF_________, 200_ [insert grant date], A COPY OF WHICH IS LOCATED AT
THE OFFICE OF THE SECRETARY OF THE CORPORATION. THE SECRETARY OF THE
CORPORATION WILL MAIL WITHOUT CHARGE TO A SHAREHOLDER, WITHIN FIVE
DAYS AFTER WRITTEN REQUEST FROM SUCH SHAREHOLDER, A COPY OF SUCH
AGREEMENT.
Delivery of the Shares shall occur as soon as practicable.
2. Escrow Agent. The Employee shall, immediately upon receipt of the certificate
or certificates for the Shares, deposit such certificate or certificates
together with a stock power or other instrument of transfer, appropriately
endorsed in blank, with Xxxx X. Xxxx, or his designee, as escrow agent (the
"Escrow Agent"). Any expenses of such escrow shall be borne by the Company. The
Escrow Agent shall hold the certificate or certificates for the Shares until the
restrictions hereinafter set forth in Section 3 are satisfied. Additionally, the
Escrow Agent shall receive and hold in trust all dividends and other
distributions paid with respect to the Shares during the Restricted Period and
shall invest any such dividends in: (a) obligations issued or guaranteed as to
interest and principal by the government of the United States or any agent or
instrumentality thereof; (b) obligations (including certificates of deposit and
bankers' acceptances) of U.S. banks (including Oak Hill Banks.); (c) commercial
paper which at the date of investment is rated A-1 by Standard & Poor's
Corporation or Prime-1 by Xxxxx'x Investment Service, Inc. or, if not rated, is
of equivalent quality; (d) short-term (one year or less) corporate obligations
which at the date of investment are rated AAA or AA by Standard & Poor's or Aaa
or Aa by Moody's; (e) repurchase agreements fully secured by obligations of any
of the kinds specified in clauses (a) through (d) above; or (f) interests in any
money market fund or trust the investments of which are principally restricted
to obligations of any of the kinds specified in clauses (a) through (e) above.
On the third anniversary of the Grant Date during the Restricted Period (as
those terms are defined in Section 3), the Escrow Agent shall release to the
Employee the certificate or certificates representing all of the Shares, as
determined in accordance with Section 3, without the legend set forth in Section
1 (but with the legend set forth in Section 6), along with all dividends and
other distributions paid with respect to the Shares and any investment proceeds
generated thereon.
3. Restricted Period. During the period commencing on the Grant Date and ending
on the third anniversary of the Grant Date (the "Restricted Period"), the
Employee shall not sell, exchange, transfer, pledge, hypothecate or otherwise
dispose of any legal or beneficial ownership interest in the Shares, subject to
the terms and conditions set forth in this Agreement. The Employee shall have no
legal or beneficial interest in the Shares until the end of the Restricted
Period, except as otherwise provided in this Agreement. The Employee shall have
no legal or beneficial interest in the Shares until and if shareholder approval
of the 2004 Incentive Compensation Plan occurs.
--------------------------------------------------------------------------------
40
4. Termination of Employment.
--------------------------
(a) If the Company's full-time employment of Employee should be terminated
voluntarily by Employee, unless for good reason (as defined in Section
4(c) herein, "For Good Reason") at any time prior to the end of the
Restricted Period or should the Company terminate Employee for cause (as
defined in Section 4(c) herein, "For Cause") at any time prior to the end
of the Restricted Period, all of the Shares shall be forfeited by the
Employee and the certificate or certificates for such Shares shall be
delivered to the Company by the Escrow Agent upon the Escrow Agent's
receipt of written notice from the Company of such termination. Employee
hereby appoints the Company as his attorney-in-fact to transfer any of
such forfeited shares on the books of the Company.
(b) If the Company's employment of Employee is terminated otherwise than (i)
voluntarily by the Employee, unless For Good Reason by Employee, (ii) for
Cause by the Company, or (iii) as a result of Employee's death or
disability, 100% of the Shares shall vest and Employee, Employee's
personal representative or the person or persons to whom his rights pass
by will or the laws of descent and distribution may sell, exchange,
transfer, pledge, hypothecate or otherwise dispose of the Shares without
reference to the restrictions set forth in Section 3 (but subject, to the
extent then applicable, to the restrictions set forth in Section 6). Upon
written notice from the Company of such an event, the Escrow Agent shall
release to Employee or Employee's legal representative or beneficiary all
of the certificates representing the Shares without the legend set forth
in Section 1.
(c) For purposes of this Agreement, "For Cause" shall mean:
Employee's (i) willful violation of laws and regulations governing the
Company; (ii) failure to substantially perform his position, provided
Company shall have made a written demand for substantial performance
setting forth the specific reason(s) for same and Employee shall have had
thirty (30) days to cure, if possible; (iii) willful breach of fiduciary
duties: (iv) willful misrepresentation or willful dishonesty which the
Company determines has had or is likely to have a material adverse effect
upon the Company's operations or financial conditions; or (v) dismissal at
the insistence of state or federal regulators of the Company or any of its
subsidiaries.
For purposes of this Agreement, "For Good Reason" shall mean:
(i) the Company's failure to substantially comply with any material terms
of a written agreement of employment with Employee, if any, now or
hereinafter in effect, provided that Employee has given written notice to
the Company of any alleged noncompliance and such alleged noncompliance
continues for 30 days after receipt, or (ii) a material change by the
Company without sufficient business justification and without Employee's
consent in Employee's position, authority, functions, duties or
responsibilities which would significantly reduce Employee's position,
authority, functions, duties or responsibilities.
(d) The Shares shall not be affected by any change of duties or position as
long as the Employee continues to be employed on a full-time basis by the
Company.
5. Reorganizations.
----------------
(a) If shares of common stock of the Company should, as a result of a stock
split, stock dividend, combination of shares or any other change, or
exchange for other securities, by reclassification, reorganization,
merger, consolidation, recapitalization or otherwise, be increased or
decreased or changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another
corporation, the number of Shares shall be appropriately adjusted to
reflect such action. If any such adjustment shall result in a fractional
share, such fraction shall be disregarded.
(b) If, as a result of one of the events set forth in paragraph (a) of this
Section 5, the Employee shall, as owner of the Shares, be entitled to new
or additional or different shares of stock or securities, the certificate
or certificates therefor, or other evidences of such new or additional or
different shares or securities, shall be imprinted with the legends set
forth in Sections 1 and 6, and together with a stock power or other
instrument of transfer appropriately endorsed, shall be deposited by
Employee with the Escrow Agent, and all the provisions of this Agreement
shall be applicable to such new or additional or different shares or
securities to the extent applicable to the Shares.
6. Securities Laws Compliance. Employee understands that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Act") and
are, therefore, "restricted shares" within the meaning of Rule 144 of the
Securities and Exchange Commission ("SEC"). Employee further understands that,
regardless of the termination of the Restricted Period and the vesting
provisions set forth in Section 3, he may not sell or otherwise dispose of the
Shares unless they are registered under the Act and any applicable state
securities law or an exemption from such registration is available. Employee
therefore agrees that the certificate or certificates for the Shares delivered
to him pursuant to Section 3 shall bear the following legend:
--------------------------------------------------------------------------------
41
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR
QUALIFIED UNDER ANY STATE SECURITIES LAWS. THE SHARES MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
QUALIFICATION WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
Employee agrees that he will advise the Secretary of the Company prior to
any sale or other transfer of the Shares.
7. Change of Control. Notwithstanding any other provision of this Agreement to
the contrary, in the event of a Change of Control (as defined below), 100% of
the Shares shall vest in the Employee immediately prior to the effective time of
any Change of Control and all conditions to exercise thereof shall be deemed to
have been met and Employee may sell, exchange, transfer, pledge, hypothecate or
otherwise dispose of the Shares without reference to the restrictions set forth
in Section 3 (but subject, to the extent then applicable, to the restrictions
set forth in Section 6). Upon written notice from the Employee or the Company of
such an event, the Escrow Agent shall release to Employee all of the
certificates representing the Shares without the legend set forth in Section 1.
A "Change of Control" will be deemed to have occurred if and when (i) a
person, partnership, corporation, trust or other entity ("Person") acquires or
combines with the Company, or acquires fifty percent or more of its assets or
earning power, in one or more transactions, and after such acquisition or
combination, less than a majority of the outstanding voting shares of the Person
surviving such transaction (or the ultimate parent of the surviving Person) is
owned by the owners of the voting shares of the Company outstanding immediately
prior to such acquisition or combination; or (ii) during any period of two
consecutive years during the term of this Plan, individuals who at the beginning
of such period are members of the Board ("Original Board Members") cease for any
reason to constitute at least a majority of the Board, unless the election of
each Board member who was not an Original Board Member has been approved in
advance by Board members representing at least two-thirds of the Board members
then in office who were Original Board Members.
8. Withholding Taxes; Section 83(b).
---------------------------------
(a) The Company shall have the right to require the Employee to remit to the
Company, or to withhold from other amounts payable to the Employee, as
compensation or otherwise, an amount sufficient to satisfy all federal,
state and local withholding tax requirements.
(b) The Employee shall have the right to elect, pursuant to Section 83(b) of
the Internal Revenue Code, to be taxed on the Grant Date on all or a
portion of the Shares rather than upon termination of the Restricted
Period by filing an election under Section 83(b) of the Code with the
Internal Revenue Service within thirty (30) days of the Grant Date and
with his or her income tax returns for the year to which the 83(b)
election pertains (a "Section 83(b) Election"); provided, however, that
the Employee must comply with Treasury Regulation 1.83, as applicable,
including the provision to the Company of a copy of the notice of the
Section 83(b) Election sent to the Internal Revenue Service. Employee
acknowledges that it is Employee's sole responsibility and not the
Company's to file timely the Section 83(b) Election. Employee should
consult with its own tax adviser regarding the effect of a Section 83(b)
Election.
9. No Contract of Employment. NOTHING IN THIS AGREEMENT SHALL CONFER ON THE
EMPLOYEE ANY RIGHT TO CONTINUE IN THE SERVICE OF THE COMPANY OR INTERFERE WITH
THE RIGHT OF THE COMPANY TO TERMINATE AT WILL SUCH EMPLOYEE'S EMPLOYMENT OR
OTHER SERVICES AT ANY TIME. This Agreement shall in no way, now or hereafter,
reduce, enlarge or modify the employment relationship between the Company and
the Employee.
10. Notices. All notices required pursuant to this Agreement shall be in writing
and shall be personally delivered or sent by registered or certified mail,
postage prepaid, (a) if to the Company, at its principal office, Attn: Xxxx X.
Xxxx; (b) if to the Escrow Agent, to Xxxx X. Xxxx, at the Company's address; or
(c) if to Employee, to Employee's last known address on the personnel records of
the Company.
11. General. This Agreement shall be construed as a contract under the laws of
the State of Ohio, without reference to its choice of law rules. It may be
executed in several counterparts, all of which shall constitute one agreement.
It shall bind and benefit the parties and their respective successors, assigns,
heirs and legal representatives.
--------------------------------------------------------------------------------
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
OAK HILL FINANCIAL, INC. EMPLOYEE:
By:
---------------------------- ------------------------------------
------------, --------------
--------------------------------------------------------------------------------
43
