EXHIBIT 10.4
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT ("Contract") made and effective this 1st day of
April, 2008, by and between Xxxxxx X. Xxxxxxxx ("Employee") and UNITED BANK &
TRUST, 000 X. Xxxxxxx Xxxx., X.X. Xxx 000, Xxxxxxxx, Xxxxxxxx 00000 ("Bank").
RECITALS
A. Bank is a wholly owned subsidiary of United Bancorp, Inc. ("UBI").
B. Bank desires to continue to employ Employee.
C. Employee desires to continue to be employed by Bank.
D. There is continued activity by multi-bank holding companies in the
acquisition of independent community banks, which often jeopardizes the
continued employment of senior officers of the acquired bank, and Bank
wishes to minimize the uncertainty and distraction caused by such activity,
which would detract from Employee's ability to perform his/her duties, by
providing Employee with some transition assistance if UBI or Bank is
acquired or if there is a change in control of UBI or Bank, or if
Employee's employment is terminated in anticipation of such an acquisition,
merger, change in control, or similar transaction.
NOW, THEREFORE, Bank and Employee hereby enter into this Employment
Contract on the following terms and conditions:
1. Employment. Bank hereby employs Employee, and Employee accepts this
employment and agrees to devote his/her full-time attention and energies to
the performance of his/her employment duties.
2. Term of Contract. This Contract shall be for a term of one (1) year
beginning April 1, 2008, unless terminated earlier pursuant to the
provisions of paragraph 3 and/or 6.
3. Payment Upon Termination in Certain Circumstances. If, other than for a
Change in Control, as defined in paragraph 7, below, Bank shall terminate
Employee's employment other than for "Cause," as defined in paragraph 6,
below, or by mutual agreement, Employee shall continue to receive his/her
regular salary (the salary in effect immediately prior to such termination)
and benefits (except for group carve out life insurance) for a period of
six (6) months. This continuation of salary and benefits shall immediately
cease if Employee secures employment before the end of the six (6) month
period.
4. Duties. The duties, responsibilities and authority of Employee shall be as
determined by Bank from time to time.
5. Compensation. Employee's salary for the year beginning April 1, 2008 shall
be $160,000, unless adjusted pursuant to the following provisions:
a. It is contemplated that an annual bonus shall be paid. Employee
will be a Group 2 Participant in the Target Incentive
Compensation Plan.
b. Employee shall receive the standard employee benefits of
employees of Bank.
c. Changes may be made to the salary and fringe benefits herein set
forth and such changes shall be set forth in Attachment A.
Changes to the salary and fringe benefits are effective only
after Attachment A has been signed by the Chairman of the Board
of Bank and by the Employee.
6. Termination for Cause. Bank may terminate this Contract for "Cause," such
termination to be immediate, without notice, at any time, and with
compensation and benefits only to the date of the termination of Employee.
The term "Cause" shall include the following enumerated and substantially
equivalent matters:
a. a. the death of Employee;
b. the disability of Employee rendering him unable to perform the
services required under the Contract for a period of 180 days;
c. known substance abuse by Employee;
d. felony conviction or plea (including a plea of guilty, nolo
contendere or similar plea) of Employee;
e. misdemeanor conviction or plea (including a plea of guilty, nolo
contendere or similar plea) of Employee, if the misdemeanor
involves moral turpitude;
f. Employee's repeated unprofessional, irresponsible or disruptive
language or conduct in the performance of his duties;
g. Employee's dishonesty, breach of professional or corporate
ethics, or criticism by a regulatory agency involving a serious
violation of law or regulations;
h. Employee's substantial breach of any significant term of this
Contract, including, but not limited to, continued unsatisfactory
job performance, or repeated uncooperative conduct.
7. Suspension. Bank may suspend the employment of Employee resulting in the
cessation of the performance of duties and the cessation of all
compensation and benefits, in accordance with the following provisions:
a. If criminal charges as described in subparagraph 6.d. and e. are
made against Employee, then Bank, acting in its discretion, may
suspend Employee for any period of time, provided that the
suspension shall end if such charges do not result in a
conviction of a plea (of guilty or nolo contendere, etc.) of
either the original charge(s) or any lessor charge(s).
b. If a regulatory agency criticizes Employee for regulatory
violations as set forth in paragraph 6.g. above, Bank shall have
the discretion to suspend Employee for any period of time,
provided that if the alleged violations are resolved in the
Employee's favor, the suspension shall end.
The discretion invested in Bank as set forth in this paragraph 7,
shall be exercised by the Chairman of its Board of Directors.
8. Failure to Meet Goals and Objectives. In the event of Employee's repeated
failure to meet goals and objectives which are established by the Board of
Directors of Bank from time to time, Employee's employment may be
terminated immediately, without notice, at any time, provided that Employee
shall continue to receive his/her regular salary and benefits for a period
of six (6) months in accordance with the provisions of paragraph 3, above.
9. Employee Responsibilities Following Termination. Termination of this
Contract shall not relieve Employee of his/her responsibilities to complete
any records, cooperate with Bank on any litigation, audits, regulatory
reviews, claims or investigations, and otherwise to fulfill all
responsibilities under this Contract which should have been rendered prior
to its termination.
10. Change in Control.
a. there shall be consummated (i) any consolidation or merger of UBI
in which UBI is not the continuing or surviving corporation or
pursuant to which shares of UBI's common stock
would be converted into cash, securities or other property, other
than a merger of UBI in which the holders of UBI's common stock
immediately prior to the merger have the same proportionate
ownership of common stock of the surviving corporation
immediately after the merger or (ii) any sale, lease, exchange or
other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of UBI;
or
b. the stockholders of UBI approved any plan or proposal for the
liquidation or dissolution of UBI; or
c. except for any Employee Stock Ownership Plan of UBI or its
affiliates, any person (as such term is used in Section 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), shall become the beneficial owner (within the meaning of
Rule 13d-3 under the Exchange Act) of twenty-five percent (25%)
or more of UBI's outstanding common stock.
d. fifty percent (50%) or more of the outstanding common stock of
Bank is not owned by UBI (unless the stock not owned by UBI was
distributed to its shareholders in a reorganization transaction).
11. Provisions Applicable in the Event of a Change in Control. If within twelve
(12) months following the effective date of a Change in Control, Employee's
employment is terminated by Bank (or a successor) for any reason (other
than for a cause described in subparagraphs 6.a, b, c, d and e) or by
Employee for any reason, Employee shall continue to receive for twelve (12)
months thereafter salary payments (at a rate equal to Employee's regular
base pay in effect immediately prior to such termination) and benefits.
12. Confidential Information. The confidentiality provisions are a material
part of the consideration relied upon by Bank in entering into this
Contract:
a. In connection with Employee's employment with Bank, Employee will
have access to information or materials of both Bank and UBI that
are considered trade secret, confidential and/or proprietary
("Information"). Information includes, but is not limited to,
compilations of data, strategic plans, sales and marketing plans,
customer and supplier information, financial information, and
proposed agreements, and applies to such Information whether
communicated orally, in writing, electronically, or by any other
means.
b. Information created by Employee during Employee's employment with
Bank that relates to the business of Bank and/or UBI and its
subsidiaries (or prospective business opportunities), or uses by
Bank, UBI and/or its subsidiaries of Information created with
resources of Bank, UBI and/or its subsidiaries (including staff,
premises and equipment), belongs to Bank and/or UBI. The term
"Information" includes copyrightable works of original authorship
(including but not limited to reports, analyses, and
compilations, business plans, new product plans), ideas,
inventions (whether patentable or not), know-how, processes,
trademarks and other intellectual property. All works of original
authorship created during Employee's employment are "works for
hire" as that term is used in connection with the U.S. Copyright
Act. Employee hereby assigns to Bank all rights, title and
interest in work product, including copyrights, patents, trade
secrets, trademarks and know-how.
c. Employee shall use Information only for the benefit of Bank, UBI
and/or its subsidiaries and not for Employee's own benefit.
Employee shall not take Information or the materials of Bank, UBI
and/or its subsidiaries upon termination of Employee's
employment.
d. Information shall be disclosed and used only by staff members of
Bank, UBI and/or its subsidiaries who have a need to access it in
order to do their jobs, shall be maintained in
secure physical locations, and shall not be disclosed to any
other company or person except in connection with the business
activities of Bank, UBI and/or its subsidiaries.
e. The confidentiality provisions of this Contract survive
termination of the employment relationship with Bank and shall
survive for so long a period of time as the Information is
maintained by Bank, UBI and/or its subsidiaries as confidential.
13. Nonsolicitation of Employees and Customers. The following nonsolicitation
provisions form a material part of the consideration relied upon by Bank in
entering into this Contract:
a. During the term of Employee's employment and for a period of one
(1) year after Employee's last day of employment, Employee agrees
not to hire, and not to solicit for hire, any then-current
employees of Bank, UBI and/or its subsidiaries, or to contact
them for the purpose of inducing them to leave Bank, UBI and/or
its subsidiaries.
b. During the term of Employee's employment and for a period of one
(1) year after Employee's last day of employment, Employee agrees
not to contact any then-current customers of Bank, UBI and/or its
subsidiaries for the purpose of inducing them to leave Bank, UBI
and/or its subsidiaries or to discourage them from doing business
with Bank, UBI and/or its subsidiaries. Employee agrees that, for
such time period, Employee will not provide the type of services
he provided under this Contract to any person or business
customer who was a customer of Bank, UBI and/or its subsidiaries
at the time of Employee's departure.
14. Noncompete. Bank and Employee acknowledge and agree that by virtue of
his/her past experience in the banking industry and his/her knowledge of
the business of Bank, UBI and its subsidiaries, Employee is uniquely
qualified to successfully compete with Bank, UBI and/or its subsidiaries.
In recognition of these circumstances, and in consideration of Bank's
continued employment of Employee in accordance with the terms of this
Contract, Employee covenants and agrees that he/she will not, during the
term of this Contract and one (1) year thereafter, engage in the counties
of Lenawee and/or Washtenaw in any business which is competitive with a
business then regularly conducted by Bank, UBI and/or its subsidiaries in
either or both of said counties; provided, however, that the forgoing
covenants shall not prohibit the Employee from owning, directly or
indirectly, one percent (1%) or less of any publicly traded financial
services corporation.
15. Enforcement of Contract; Injunctive Relief Attorney Fees and Expenses.
Employee acknowledges that violation of Sections 12, 13, and 14 of this
Contract may cause irreparable damage to Bank, UBI and/or its subsidiaries,
entitling them to injunctive relief and possible money damages. If Employee
violates this Contract, in addition to all other remedies available to
Bank, UBI and/or its subsidiaries at law, in equity, and under contract,
Employee agrees that he/she is obligated to pay all of the costs of
enforcement of this Contract incurred by Bank, UBI and/or its subsidiaries,
including attorney fees and expenses. The parties agree that venue
concerning this Contract shall be Lenawee County, Michigan.
16. Notice. For purposes of this Contract, notices and all other communications
provided for in this Contract shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered
mail, return receipt requested, postage prepaid, as follows:
If to UBI: If to Employee:
Chairman of the Board Xxxxxx X. Xxxxxxxx
United Bancorp, Inc. 0000 Xxxxxxx Xxxxx
X.X. Xxx 000 Xxxxxx, XX 00000
Xxxxxxxx, Xxxxxxxx 00000
or such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
17. Miscellaneous Provisions. The following miscellaneous provisions form a
part of this Contract:
a. Applicable Law. This Contract and the rights of the parties
hereunder shall be interpreted, construed and performed in
accordance with the laws of the State of Michigan.
b. Entire Agreement. This Contract as it may be modified in writing
from time to time, constitutes the entire agreement between the
parties, and supersedes any and all other agreements, oral or in
writing, with respect to the subject matter contained herein.
c. Amendments. This Contract may be altered, amended or modified at
any time, but only by written agreement executed by the parties
hereto. No waiver of any provision of this Contract shall be
valid unless made in writing and signed by the party against whom
such waiver is sought.
d. Section Headings. Any section or paragraph title or caption
contained in this Contract is for convenience only, and shall not
be deemed a part of this Contract.
e. Invalid Provisions. The invalidity or unenforceability of any
particular provision of this Contract shall not affect any other
provision hereof. This Contract shall be construed and enforced
as if the illegal provision were modified to conform with the
applicable law, or if such modification is impossible, then as if
the Contract did not contain the illegal provision.
f. Successors and Assigns. This Contract shall be binding upon, and
shall inure to the benefit of the successors and assigns,
including purchasers of Bank and/or UBI, and for purposes of
realizing any benefits payable hereunder to Employee prior to his
death, the heirs and personal representative of Employee. In no
event shall Employee assign or delegate any of his rights,
powers, duties and obligations under this Contract without prior
written consent of Bank. Such consent shall not unreasonably be
withheld. Bank shall have the right to assign and delegate any or
all of its rights, powers, duties and obligations under this
contract to UBI and/or any of its subsidiaries.
18. Waiver of Jury Trial. Bank and Employee specifically and knowingly waive
their rights to a jury trial.
19. Arbitration. The parties agree that any dispute or controversy arising out
of or in connection with this Contract shall be resolved by arbitration in
accordance with the following provisions:
a. The arbitration proceeding shall be conducted under the
Employment Dispute Resolution Rules of the American Arbitration
Association in effect at the time a demand for arbitration of the
dispute is made. The decision and award of the arbitrator made
under the AAA rules shall be exclusive, final and binding on all
parties, their heirs, representatives, successors and assigns.
Judgment upon the award rendered by the arbitrator may be
rendered in any circuit court having jurisdiction of the matter.
In the event Employee or Bank shall require equitable relief
prior to the selection of an arbitrator to resolve the dispute,
either party may seek temporary equitable relief from any court
having jurisdiction of the dispute, subject to any final relief
awarded by the arbitrator.
b. Limited civil discovery shall be permitted for the production of
documents and the taking of depositions, provided, however, that
no party is permitted to take the deposition of more than three
witnesses except by agreement of the other party or upon order of
the arbitrator pursuant to the motion of a party. Subject to the
foregoing limitations, discovery shall be conducted in accordance
with the Federal Rules of Civil Procedure with any enforcement
issues resolved by the arbitrator.
c. The arbitration and all proceedings, discovery and any award of
the arbitrator, is confidential. Neither the parties nor the
arbitrator shall disclose any information gained during the
course
of the arbitration to any person or entity who is not a party to
the arbitration unless permitted by law. Attendance at the
arbitration shall be limited to the parties and those called as
witnesses.
IN WITNESS WHEREOF, the parties have executed this Contract, effective as
of the date first above written.
UNITED BANK & TRUST
By: /s/ Xxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxx
--------------------------------- ----------------------------------------
Xxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxxx
Chairman of the Board Employee
SUBSTITUTE PERFORMANCE BY UNITED BANCORP, INC.
United Bancorp, Inc. ("UBI") agrees that the services Employee performs for
any of its subsidiaries, including the Bank, directly or ultimately redound to
the benefit of UBI. In consideration of these benefits, UBI agrees that insofar
as the Bank, for any reason whatsoever, is unable to perform any obligations
assumed hereunder, UBI shall fully and timely perform the same.
UNITED BANCORP, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
Chairman of the Board
ATTACHMENT A
Employee: Xxxxxx X. Xxxxxxxx Effective Date: April 1, 2008
Salary Per Annum: $160,000
Variations to Benefits: Country Club dues/assessments paid by Bank if you
purchase membership.
/s/ Xxxxxx X. Xxxxxxxx April 8, 2008
--------------=---------------------- Date
Xxxxxx X. Xxxxxxxx
"Employee"
/s/ Xxxxx X. Xxxxxxx April 8, 2008
------------------------------------- Date
Xxxxx X. Xxxxxxx
Chairman, United Bank & Trust
