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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and effective as of the ____ day of
__________, 1999, by and among SKY FINANCIAL GROUP, INC. ("Sky"), SKY BANK
("Employer") and XXXXX XXXXXX ("Employee").
W I T N E S S E T H
WHEREAS, pursuant to an Agreement and Plan of Merger to be
entered into (the "Merger Agreement") by and between Sky Financial Group, Inc.
("Sky") and Mahoning National Bancorp, Inc. ("Mahoning"), Mahoning's wholly
owned subsidiary, Mahoning National Bank ("Bank") shall merge into Employer, a
wholly owned subsidiary of Sky (the "Merger"); and
WHEREAS, in connection with the Merger, Mahoning and Sky have
agreed that Employee shall be employed by the Employer pursuant to an agreement
in the form of this Agreement; and
WHEREAS, Employer has agreed to employ Employee on the terms
set forth and Employee will acquire access to confidential information of
Employer including, but not limited to, Employer's business concept, proprietary
techniques, organization, products, systems, technology, developments, know-how,
marketing plans, customer contacts, clients, client lists, financial
information, personnel information, pricing, internal operations, business
strategies, trade secrets, and other information, materials, and business
records of any kind ("Confidential Information"); and
WHEREAS, Employer has expended significant amounts of money in
developing its business and establishing client relationships and, because of
the competitive nature and special character of Employer's business, has a
reasonable and legitimate interest in maintaining the secrecy and
confidentiality of the Confidential Information and in maintaining and
furthering business relationships with existing and prospective customers; and
WHEREAS, Employee wishes to enter into employment with
Employer on the terms set forth and acknowledges Employer's need to protect
Employer's business and goodwill.
WHEREAS, Sky has agreed to guarantee the obligations of
employer under this Agreement.
NOW THEREFORE, in consideration of Employer's agreement to
hire Employee and the covenants and promises set forth, the parties agree as
follows:
1. EMPLOYMENT. Employer shall employ Employee during the Term
as Senior Vice President of Employer. In the event the Merger takes effect
subsequent to the Effective Time, Employee shall continue to serve as Senior
Vice President/Loans of Bank. Sky agrees to be jointly and severally liable for
Employer's obligations under this Agreement.
2. EFFECTIVE TIME. The provisions of this Agreement shall take
effect as of the Effective Time as defined in the Merger Agreement ("Effective
Time"), provided Employee is employed by Mahoning immediately prior to the
Effective Time. As of the
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Effective Time, the prior Change-In-Control Protective Agreement dated May 14,
1997 and Guarantee Agreement dated May 14, 1997 between Employee and Mahoning
and/or the Bank shall become void.
3. TERM. The initial term of employment under this Agreement
shall be the period of two (2) years commencing on the Effective Time. This
Agreement shall automatically be extended for one (1) additional year on the
first anniversary date of the Effective Time and, if so renewed, for an
additional one (1) year renewal term, annually on each succeeding anniversary
date of the Effective Time, unless either party gives the other three (3) months
advance written notice of intent not to renew. References to the Term shall
refer to the initial two (2) year term and any successive renewal terms. The
Term shall end upon termination of Employee's employment under this Agreement.
4. NON-COMPETITION. In consideration of the payment of Two
Hundred Eighty Nine Thousand Two Hundred Sixty Two Dollars ($289,262.00), in
lump sum, paid to Employee at the Effective Time or on January 3, 2000 (at
Employee's option, to be elected at least sixty (60) days prior to the Effective
Time), employment of Employee by Employer, and other good and valuable
consideration, the receipt and sufficiency of which is acknowledged, the parties
agree that during Employee's employment or in the event this Agreement is
terminated for any reason, Employee shall be subject to the following
restrictive covenants:
A. COVENANT NOT TO COMPETE. During the Employee's
employment and for a period of two (2) years following termination of Employee's
employment (the "Restrictive Period"), Employee shall not, without the prior
written consent of Employer, (i) engage in any business activity, directly or
indirectly, on Employee's own behalf or as a partner, stockholder (except by
ownership of less than five percent of the outstanding stock of a publicly held
corporation), owner, director, trustee, principal, agent, Employee, consultant
or otherwise of any person, firm or corporation, which is engaged in any
activity for profit in which Employer or any parent, subsidiary or affiliate of
Employer is engaged, or (ii) allow the use of Employee's name by or in
connection with any business which is engaged in an activity for profit in which
Employer or any parent, subsidiary or affiliate of Employer is engaged. In the
event of a violation of this paragraph by Employee, the Restrictive Period shall
be extended for such a period of time as may be required through litigation or
otherwise to obtain strict compliance with the terms of this Agreement. The
parties acknowledge that this Agreement is fair and reasonable under the
circumstances. This covenant shall be limited to areas within a fifty (50) mile
radius in which Employer or its affiliates or agents is operating customer
service or other facilities or actively planning to open such facilities at the
time of termination of Employee's employment. Employee acknowledges that this
Agreement is necessary for the protection of Employer, does not impose undue
hardship on Employee, and is not injurious to the public.
B. NON-SOLICITATION. During the Restrictive Period (as may
be extended), Employee shall not (i) solicit, divert, take away or deprive
Employer of any business from any customer of Employer for or on behalf of any
competitive business, regardless of where said competitive business or customer
is located, if such customer was a customer or active prospect of Employer or
any parent, subsidiary or affiliate of Employer, during the period of Employee's
employment by Employer; or (ii) offer employment to or employ, on Employee's own
behalf or on behalf of any competitor of Employer or any parent, subsidiary or
affiliate of Employer, any person who at any time within the prior three (3)
years shall have been employed by Employer or any parent, subsidiary or
affiliate of the Employer.
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C. CONFIDENTIAL INFORMATION. While employed by Employer and
thereafter, Employee shall not for any reason (except as required by law and
after prior notice to Employer by Employee of a legal requirement that Employee
disclose Confidential Information) directly or indirectly disclose Confidential
Information to any person or entity or use any Confidential Information for
Employee's own benefit or the benefit of any other person or entity. All
records, files, documents, data, equipment and the like relating to Employer's
business, which Employee shall prepare or use or come into contact with, shall
be and remain Employer's property and shall be returned to Employer upon
termination of this Agreement. Employee shall not retain copies or duplicates of
these items. Employee acknowledges the ability to earn a livelihood after
termination of employment without disclosing or using Confidential Information.
These confidentiality restrictions are permanent and do not lapse upon
termination of employment.
D. BREACH. The parties intend that Employer be given the
broadest protection allowed by law with regard to the restrictions of this
Agreement. In the event of a breach or a threatened breach by Employee of any of
the provisions of this Agreement, Employer, upon presentation of proof of the
elements required by law, shall be entitled to an injunction restraining
Employee from breach or threatened breach and such other equitable relief as
determined appropriate by a court of competent jurisdiction. In the event that
this restrictive covenant shall be determined by any court of competent
jurisdiction to be unenforceable by reason of it being extended for too great a
period of time, or as encompassing too large a geographical area, or over too
great a range of activities, or any combination of these elements, the parties
agree that this covenant shall be interpreted to extend only over the maximum
period of time, geographic area, and range of activities, or any combination of
these elements, which the court deems reasonable and enforceable. The parties
agree that the provisions of this Agreement shall be deemed divisible as to the
time, duration and geographical area of the restrictions imposed, and further
agree that injunctive relief shall not be the sole and exclusive remedy of
Employer, nor shall an initiation of an action requesting same constitute an
election of remedies, but Employer may maintain an action for damages to the
fullest extent authorized by law in the event of a breach. The existence of any
claim or cause of action by Employee against Employer, whether predicated upon
this Agreement or not, shall not constitute a defense to the enforcement by
Employer of this Agreement.
5. DUTIES OF EMPLOYEE. Employee shall at all times diligently
and faithfully perform the duties and accept the responsibilities as directed by
Employer's Chief Executive Officer, consistent with Employee's executive officer
position, and with comparable position and surroundings as similarly situated
officers, and which duties and responsibilities may change from time to time.
Employee shall maintain all appropriate licensure and certification as directed
by Employer. Employee agrees to devote Employee's full and exclusive business
time, skill, best efforts, and attention to promote the business of Employer and
to perform faithfully to the fullest extent of Employee's ability all of
Employee's duties, provided that Employee may serve on boards and committees of
charitable organizations and manage his personal investments so long as such
activities do not interfere with the performance of his duties and
responsibilities under this Agreement. Employee shall comply with all policies,
rules, and directions given to Employee by Employer (including those set forth
in the Employee Handbook) and shall comply with all applicable laws governing
Employee's duties and employment. Employee shall not undertake any activity in
conflict with Employee's employment or with Employee's obligation of loyalty and
trust owed to Employer.
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6. COMPENSATION.
A. SALARY. Employer shall initially pay Employee an annual
salary (the "Base Salary") of at least One Hundred Twenty Five Thousand Dollars
($125,000.00) per year during the Term, payable in regular installments
consistent with Employer's payroll practices and subject to customary
withholding. The amount of the Base Salary may be increased following Employee's
January, 2001 review, in accordance with Employer's regular evaluation and
compensation practices. Also at that time, Employee shall become eligible for
payment through Employer's bonus plan, in accordance with the terms of such
plan, to a maximum of 25% of Employee's Base Salary for services rendered in
calendar year 2000. Any increase in compensation or any modification of
benefits, commission, or bonus practices shall not operate as a cancellation of
this Agreement, and all terms and conditions of this Agreement shall remain in
force.
B. BENEFITS. Employee shall be entitled to participate in
all pension and welfare benefit plans and arrangements in which similarly
situated officers of Employer generally are entitled to participate, including
but not limited to 401(k) plans, pension and profit-sharing plans, annual
incentive compensation plans, and long term incentive compensation plans.
Employee shall be entitled to participate in such plans and arrangements to the
same extent as similarly situated officers of Employer generally, provided that
with respect to all such plans and arrangements, Employee shall receive full
credit for his service with Mahoning to the same extent as if such service were
with Employer. If Employee is terminated for "cause", then Employer's obligation
under this Agreement to make any further payments to Employee or to continue any
benefits shall cease.
C. EXPENSES. While employed by Employer, Employee shall be
entitled to reimbursement of all reasonable expenses incurred by him in
connection with his duties, in accordance with Employer's policies and
procedures for reimbursement of expenses.
D. VACATIONS. Employee shall be entitled to annual paid
vacation time as set forth by Company policies. Employee shall schedule
vacations in a reasonable manner, with approval of the Chief Executive Officer
of Employer.
7. TERMINATION. During the Term of Employee's employment,
Employee may only be terminated by Employer in the following circumstances:
A. CAUSE. Employer may terminate Employee's employment for
cause, which for this purpose shall mean any material violation by Employee of
the terms of this Agreement (provided, however, that in the event of any such
violation, Employer shall give Employee reasonable notice and opportunity to
cure); fraud; material misappropriation of or intentional damage to Employer's
property, operations or business prospects; the conviction of a felony, or of a
misdemeanor involving fraud, theft, or dishonesty; the commission of any illegal
activities in connection with Employee's employment; gross incompetence,
insubordination, misconduct or neglect; or being under the habitual influence of
alcohol or drugs. In the event of termination for cause, Employer shall pay
Employee his Base Salary through the date of termination of employment only.
B. DEATH. If Employee shall die.
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C. DISABILITY. If Employee shall be unable to perform the
essential functions of his job, with or without reasonable accommodation due to
physical or mental illness or incapacity, or otherwise, for a period that
qualifies Employee for long-term disability benefits under any plan sponsored by
Employer (or, if no such plan exists, a period which would qualify Employee for
disability benefits under the federal social security system). Employee shall be
entitled to the same disability benefits as similarly situated officers of
Employer generally.
D. VOLUNTARY TERMINATION. In the event that Employee
determines to terminate his employment voluntarily, he shall notify Employer in
writing and Employer shall pay him his Base Salary and benefits earned through
the date of termination of employment only, provided that Employee shall receive
the severance benefits specified in Section 8 of his voluntary resignation is
for "good reason", which shall mean any of the following events, which has not
been consented to in advance by Employee in writing: (i) the requirement that
Employee move his personal residence or perform his principal executive
functions more than thirty (30) miles from his primary office as of the
Effective Time; (ii) a material reduction in Employee's base compensation, as
the same may be increased from time to time; (iii) the failure by Employer to
continue to provide Employee with compensation and benefits provided for on the
Effective Time, as the same may be increased from time to time, or with benefits
substantially similar to those provided to him under any of Employee benefit
plans in which Employee now or hereafter becomes a participant, or the taking of
any action by Employer which would directly or indirectly materially reduce any
of such benefits or deprive Employee of any material fringe benefit enjoyed by
him; (iv) the assignment to Employee of duties and responsibilities materially
diminished from those associated with his position on the Effective Time; and
(v) a material diminution or reduction in Employee's responsibilities or
authority (including reporting responsibilities) in connection with his
employment with Employer.
8. SEVERANCE. Upon termination of employment by Employer or by
Employee, Employee shall be paid through the date of termination of employment.
In addition, if Employee is terminated without Cause (as defined in paragraph
7.A.) during the Term, Employer shall pay to Employee a lump sum cash amount or
monthly installments, as Employee chooses, equal to the product of two (2) times
the Employee's Average Annual Compensation. For purposes of this paragraph,
Average Annual Compensation shall mean either: (i) the average total annual
compensation (salary and incentive) payable during the preceding two (2) years;
or (ii) in the event that the Employee shall have been employed by the Company
less than two (2) years, the annualized average total compensation (salary and
incentive) payable during the period in which Employee has been employed by the
Company. If Employee chooses to receive this payment in a lump sum, this amount
shall be paid within thirty (30) days after the date of termination. If Employee
chooses to receive this payment in a series of equal monthly installments over a
two (2) year period, payments shall be made in accordance with the payroll
practice of Company but no less frequently than once a month. Disability or
death during this extended payment period shall not affect Employee's (or
Employee's representative's) ability to receive payments. "Reasonable
justification" shall have the same meaning as Cause in paragraph 7.A. for this
purpose only, but shall in no way alter the at-will employment status of
Employee, which allows for termination without cause following the Term.
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9. TERMINATION OF SECTIONS FOUR AND EIGHT. Notwithstanding any
other provisions of this Agreement, Sections Four and Eight of this Agreement
shall become void if any of the following banks or their holding companies
directly or indirectly acquire more than 25% of the common stock of Sky or
Employers; National City Bank, Bank One, and Key Bank; and if Employee chooses
to terminate employment with Employer following such acquisition.
10. 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
Employer and the Employee irrevocably submit to the exclusive jurisdiction of
the courts of the State of Ohio, with the exclusive venue in Wood 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 only.
The Employer and the Employee irrevocably waive, to the fullest extent permitted
by applicable law, any objection that 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 Employer and the Employee consent to process
being served by them as required by law in any suit, action or proceeding.
11. CONSENT TO JURISDICTION. Employer and Employee agree that
any action to enforce the terms of this Agreement shall be brought either in
Wood County Court of Common Pleas or the United States District Court for the
Northern District of Ohio, Western Division. Employee agrees and irrevocably
consents to the personal jurisdiction of the Ohio courts.
12. LITIGATION EXPENSES. In the event that any dispute arises
between Employee and Employer as to the terms or interpretation of this
Agreement, whether instituted by formal legal proceedings or otherwise,
including any action that either party takes to enforce by formal legal
proceedings or otherwise, including any action that either party takes to
enforce the terms of this Agreement or to defend against any action taken by the
other, the prevailing party shall be reimbursed for all costs and expenses,
including reasonable attorneys' fees, arising form such dispute, proceedings or
actions, provided that the prevailing party shall obtain a final judgment by a
court of competent jurisdiction in favor of the prevailing party. Such
reimbursement shall be paid within ten (10) days of furnishing written evidence,
which may be in the form, among other things, of a cancelled check or receipt,
of any costs or expenses incurred.
13. SUCCESSORS
A. This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of Employer which shall
acquire, directly or indirectly, by merger, consolidation, purchase or
otherwise, all or substantially all of the assets or stock of Employer.
B. Since Employer is contracting for the unique and
personal skills of Employee, Employee shall be precluded from assigning or
delegating his rights or duties hereunder without first obtaining the
written consent of Employer.
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IN WITNESS WHEREOF, the parties have executed this Agreement
in one (1) or more counterparts on the day and year first written above.
SKY BANK
By__________________________
Its_________________________
____________________________
XXXXX XXXXXX
