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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this
"AGREEMENT"), is entered into this ____ day of ____________, 1998, by and
between The Home Savings and Loan Company of Youngstown, Ohio, a savings and
loan association incorporated under Ohio law (hereinafter referred to as the
"COMPANY"), and _______________, an individual (hereinafter referred to as the
"EMPLOYEE");
WITNESSETH:
WHEREAS, the EMPLOYEE is currently employed as the _______________ of
the COMPANY;
WHEREAS, as a result of the skill, knowledge and experience of the
EMPLOYEE, the Board of Directors of the COMPANY desires to retain the services
of the EMPLOYEE as the _______________ of the COMPANY;
WHEREAS, the EMPLOYEE desires to continue to serve as the
_______________ of the COMPANY; and
WHEREAS, the EMPLOYEE and the COMPANY desire to enter into this
AGREEMENT to set forth the terms and conditions of the employment relationship
between the COMPANY and the EMPLOYEE;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the COMPANY and the EMPLOYEE hereby agree as follows:
1. EMPLOYMENT AND TERM.
(a) TERM. Upon the terms and subject to the conditions of this AGREEMENT, the
COMPANY hereby employs the EMPLOYEE, and the EMPLOYEE hereby accepts employment,
as the _______________ of the COMPANY. The term of this AGREEMENT shall commence
on ____________, 1998, and shall end on ____________, 2001, unless extended by
the COMPANY, with the consent of the EMPLOYEE, as provided in subsection (b) of
this Section 1 (hereinafter referred to, together with such extensions, as the
"TERM").
(b) EXTENSION. On or before each anniversary of the date of this
AGREEMENT, the Board of Directors of the COMPANY shall review this AGREEMENT
and, upon approval by the Board of Directors, shall extend the term of this
AGREEMENT for a one-year period beyond the then effective expiration date. Any
such extension shall be subject to the written consent of the EMPLOYEE.
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2. DUTIES OF THE EMPLOYEE.
(a) GENERAL DUTIES AND RESPONSIBILITIES. The EMPLOYEE shall serve as
the _______________ of the COMPANY. Subject to the direction of the Board of
Directors of the COMPANY, the EMPLOYEE shall perform all duties and shall have
all powers which are commonly incident to the office of _______________ or
which, consistent therewith, are delegated to him by the Board of Directors.
(b) DEVOTION OF ENTIRE TIME TO THE BUSINESS OF THE COMPANY. The
EMPLOYEE shall devote his entire productive time, ability and attention during
normal business hours throughout the TERM to the faithful performance of his
duties under this AGREEMENT. The EMPLOYEE shall not directly or indirectly
render any services of a business, commercial or professional nature to any
person or organization other than the COMPANY, United Community Financial Corp.
(hereinafter referred to as the "HOLDING COMPANY"), the sole shareholder of the
COMPANY, or any subsidiary of the COMPANY or the HOLDING COMPANY without the
prior written consent of the Board of Directors of the COMPANY; provided,
however, that the EMPLOYEE shall not be precluded from (i) vacations and other
leave time in accordance with Section 3(d) below, (ii) reasonable participation
in community, civic, charitable or similar organizations, (iii) reasonable
participation in industry-related activities, including, but not limited to,
attending state and national trade association meetings and serving as an
officer, director or trustee of a state or national trade association or Federal
Home Loan Bank, (iv) serving as an officer or director of the HOLDING COMPANY or
any subsidiary of the COMPANY or the HOLDING COMPANY and receiving a salary,
director's fees or other compensation or benefits, as appropriate, or (v)
pursuing personal investments which do not interfere or conflict with the
performance of the EMPLOYEE's duties to the COMPANY.
3. COMPENSATION.
(a) BASE SALARY. The EMPLOYEE shall receive during the TERM an annual
salary payable in equal installments not less often than monthly. The amount of
such annual salary shall be $__________ until changed by the Board of Directors
of the COMPANY in accordance with Section 3(b) below.
(b) ANNUAL SALARY REVIEW. On or before each anniversary of the date of
this AGREEMENT, the annual salary of the EMPLOYEE shall be reviewed by the Board
of Directors of the COMPANY and shall be set at an amount not less than
$__________, based upon the EMPLOYEE's individual performance and such other
factors as the Board of Directors may deem appropriate (hereinafter referred to
as the "ANNUAL REVIEW"). The results of the ANNUAL REVIEW shall be reflected in
the minutes of the Board of Directors of the COMPANY.
(c) EMPLOYEE BENEFIT PROGRAMS. During the TERM, the EMPLOYEE shall be
entitled to participate in all formally established employee benefit, bonus,
pension and profit sharing plans and similar programs that are maintained by the
COMPANY or the HOLDING COMPANY from time to time and all employee benefit plans
or programs hereafter adopted in
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writing by the Board of Directors of the COMPANY or the HOLDING COMPANY for
which senior management personnel of the COMPANY are eligible, including any
employee stock ownership plan, stock option plan or other stock benefit plan
(hereinafter collectively referred to as "BENEFIT PLANS"), in accordance with
the terms and conditions of such BENEFIT PLANS. Notwithstanding any statement to
the contrary contained elsewhere in this AGREEMENT, the COMPANY may at any time
discontinue or terminate any BENEFIT PLAN now existing or hereafter adopted, to
the extent permitted by the terms of such BENEFIT PLAN, and shall not be
required to compensate the EMPLOYEE for such discontinuance or termination.
(d) VACATION AND SICK LEAVE. The EMPLOYEE shall be entitled, without
loss of pay, to be absent voluntarily from the performance of his duties under
this AGREEMENT, in accordance with the policies periodically established by the
Board of Directors of the COMPANY for senior management officials of the
COMPANY. The EMPLOYEE shall be entitled to annual sick leave as established by
the Board of Directors of the COMPANY for senior management officials of the
COMPANY.
(e) EXPENSES. In addition to any compensation received under
Section 3(d), the COMPANY shall pay or reimburse the EMPLOYEE for all reasonable
travel, entertainment and miscellaneous expenses incurred in connection with the
performance of his duties under this AGREEMENT, including participation in
industry-related activities.
4. TERMINATION OF EMPLOYMENT.
(a) GENERAL. The employment of the EMPLOYEE shall terminate at any time
during the TERM (i) at the option of the COMPANY, upon the delivery by the
COMPANY of written notice of termination to the EMPLOYEE, or (ii) at the option
of the EMPLOYEE, upon delivery by the EMPLOYEE of written notice of termination
to the COMPANY if, in connection with a CHANGE OF CONTROL (hereinafter defined),
the present capacity or circumstances in which the EMPLOYEE is employed are
materially adversely changed (including, but not limited to, a material
reduction in responsibilities or authority or the assignment of duties or
responsibilities substantially inconsistent with those normally associated with
the EMPLOYEE's position described in Section 2(a) of this AGREEMENT, change of
title or removal as a director of the COMPANY or the HOLDING COMPANY, the
requirement that the EMPLOYEE regularly perform his principal executive
functions more than thirty-five (35) miles from his primary office immediately
preceding the CHANGE OF CONTROL or the EMPLOYEE's compensation or other benefits
provided under this AGREEMENT are reduced, unless the benefit reductions are
part of a Company-wide reduction. For purposes of this AGREEMENT, an event shall
be deemed to have occurred "in connection with a CHANGE OF CONTROL" if such
event occurs within one year before or after a CHANGE OF CONTROL. The following
subsections (A), (B) and (C) of this Section 4(a) shall govern the obligations
of the COMPANY to the EMPLOYEE upon the occurrence of the events described in
such subparagraphs:
(A) TERMINATION FOR CAUSE. In the event that the COMPANY terminates the
employment of the EMPLOYEE during the TERM because of the EMPLOYEE's personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit,
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intentional failure or refusal to perform the duties and responsibilities
assigned in this AGREEMENT, willful violation of any law, rule or regulation
(other than traffic violations or other minor offenses), or final
cease-and-desist order or material breach of any provision of this AGREEMENT
(hereinafter collectively referred to as "CAUSE"), the EMPLOYEE shall not
receive, and shall have no right to receive, any compensation or other benefits
for any period after such termination.
(B) TERMINATION IN CONNECTION WITH CHANGE OF CONTROL. In the event that
the employment of the EMPLOYEE is terminated by the COMPANY in connection with a
CHANGE OF CONTROL for any reason other than CAUSE or is terminated by the
EMPLOYEE as provided in Section 4(a)(ii) above, then the following shall occur:
(I) The COMPANY shall promptly pay to the EMPLOYEE or to his
beneficiaries, dependents or estate an amount equal to the product of 2.99
multiplied by the EMPLOYEE's "base amount" as defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder (hereinafter collectively referred to as "SECTION 280G");
(II) The EMPLOYEE, his dependents, beneficiaries and estate
shall continue to be covered at the COMPANY's expense under all health, life,
disability and other benefit plans of the COMPANY in which the EMPLOYEE was a
participant prior to the effective date of the termination of his employment as
if the EMPLOYEE were still employed under this AGREEMENT until the earlier of
the expiration of the TERM or the date on which the EMPLOYEE is included in
another employer's benefit plans as a full-time employee; and
(III) The EMPLOYEE shall not be required to mitigate the
amount of any payment provided for in this AGREEMENT by seeking other employment
or otherwise, nor shall any amounts received from other employment or otherwise
by the EMPLOYEE offset in any manner the obligations of the COMPANY hereunder,
except as specifically stated in subparagraph (II) above.
(C) TERMINATION NOT IN CONNECTION WITH CHANGE OF CONTROL. In the event
that the employment of the EMPLOYEE is terminated before the expiration of the
TERM for any reason other than death, termination for CAUSE or termination in
connection with a CHANGE OF CONTROL, then the following shall occur:
(I) The COMPANY shall be obligated to continue to pay on a
monthly basis, until the expiration of the TERM, to the EMPLOYEE, his designated
beneficiaries or his estate, the annual salary in effect at the time of
termination pursuant to Section 3 above, plus a cash bonus equal to the cash
bonus, if any, paid to the EMPLOYEE in the twelve month period prior to the
termination of employment;
(II) The COMPANY shall continue to provide to the EMPLOYEE,
at the COMPANY's expense, health, life, disability and other benefits
substantially equal to those being provided to the EMPLOYEE at the date of
termination of his employment until the earliest
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to occur of the expiration of the TERM or the date on which the EMPLOYEE is
included in another employer's benefit plans as a full-time employee; and
(III) The EMPLOYEE shall not be required to mitigate the amount
of any payment provided for in this AGREEMENT by seeking other employment or
otherwise, nor shall any amounts received from other employment or otherwise by
the EMPLOYEE offset in any manner the obligations of the COMPANY hereunder,
except as specifically stated in subparagraph II above.
(b) DEATH OF THE EMPLOYEE. The TERM shall automatically expire upon the
death of the EMPLOYEE. In such event, the EMPLOYEE's estate shall be entitled to
receive the compensation due the EMPLOYEE through the last day of the calendar
month in which the death occurred, except as otherwise specified herein.
(c) "GOLDEN PARACHUTE" PROVISION. In the event that any payments
pursuant to this Section 4 would result in the imposition of a penalty tax
pursuant to SECTION 280G, such payments shall be reduced to the maximum amount
which may be paid under SECTION 280G without exceeding such limits. Payments
pursuant to this Section 4. Any payments made to the EMPLOYEE pursuant to this
AGREEMENT are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.
(d) DEFINITION OF "CHANGE OF CONTROL". A "CHANGE OF CONTROL" shall mean
any one of the following events; (i) the acquisition of ownership or power to
vote more than 25% of the voting stock of the COMPANY or the HOLDING COMPANY;
(ii) the acquisition of the ability to control the election of a majority of the
directors of the COMPANY or the HOLDING COMPANY; (iii) during any period of
three or less consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the COMPANY or the HOLDING COMPANY cease
for any reason to constitute at least a majority thereof; provided, however,
that any individual whose election or nomination for election as a member of the
Board of Directors of the COMPANY or the HOLDING COMPANY was approved by a vote
of at least two-thirds of the directors then in office shall be considered to
have continued to be a member of the Board of Directors of the COMPANY or the
HOLDING COMPANY; or (iv) the acquisition by any person or entity of "conclusive
control" of the COMPANY within the meaning of 12 C.F.R. ss.574.4(a), or the
acquisition by any person or entity of "rebuttable control" within the meaning
of 12 C.F.R. ss.574.4(b) that has not been rebutted in accordance with 12 C.F.R.
ss.574.4(c); or (v) an event that would be required to be reported in response
to Item 1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14A pursuant
to the Securities Exchange Act of 1934, as amended (hereinafter referred to as
the "EXCHANGE ACT"), or any successor thereto, whether or not any class of
securities of the Corporation is registered under the EXCHANGE ACT. For purposes
of this paragraph, the term "person" refers to an individual or corporation,
partnership, trust, association or other organization, but does not include the
EMPLOYEE and any person or persons with whom the EMPLOYEE is "acting in concert"
within the meaning of 12 C.F.R. Part 574.
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5. SPECIAL REGULATORY EVENTS. Notwithstanding the provisions of Section
4 of this AGREEMENT, the obligations of the COMPANY to the EMPLOYEE shall be as
follows in the event of the following circumstances:
(a) If the EMPLOYEE is suspended and/or temporarily prohibited from
participating in the conduct of the COMPANY's affairs by a notice served under
section 8(e)(3) or 8(g)(1) of the Federal Deposit Insurance Act (hereinafter
referred to as the "FDIA"), the COMPANY's obligations under this AGREEMENT shall
be suspended as of the date of service of such notice, unless stayed by
appropriate proceedings. If the charges in the notice are dismissed, the COMPANY
shall pay the EMPLOYEE all or part of the compensation withheld while the
obligations in this AGREEMENT were suspended and reinstate, in whole or in part,
any of the obligations that were suspended;
(b) If the EMPLOYEE is removed and/or permanently prohibited from
participating in the conduct of the COMPANY's affairs by an order issued under
Section 8(e)(4) or 8(g)(1) of the FDIA, all obligations of the COMPANY under
this AGREEMENT shall terminate as of the effective date of such order; provided,
however, that vested rights of the EMPLOYEE shall not be affected by such
termination;
(c) If the COMPANY is in default, as defined in section 3(x)(1) of the
FDIA, all obligations under this AGREEMENT shall terminate as of the date of
default; provided, however, that vested rights of the EMPLOYEE shall not be
affected;
(d) All obligations under this AGREEMENT shall be terminated, except to
the extent of a determination that the continuation of this AGREEMENT is
necessary for the continued operation of the COMPANY, (i) by the Director of the
Office of Thrift Supervision (hereinafter referred to as the "OTS"), or his or
her designee, at the time that the Federal Deposit Insurance Corporation enters
into an agreement to provide assistance to or on behalf of the COMPANY under the
authority contained in Section 13(c) of the FDIA or (ii) by the Director of the
OTS, or his or her designee, at any time the Director of the OTS approves a
supervisory merger to resolve problems related to the operation of the COMPANY
or when the COMPANY is determined by the Director of the OTS to be in an unsafe
or unsound condition; provided, however that no vested rights of the EMPLOYEE
shall not be affected by any such termination; and
(e) The provisions of this Section 5 are governed by the requirements
of 12 C.F.R. Section 563.39(b) and in the event that any statements in this
Section 5 are inconsistent with 12 C.F.R. Section 563.39(b), the provisions of
12 C.F.R. Section 563.39(b) shall be controlling.
6. CONSOLIDATION, MERGER OR SALE OF ASSETS. Nothing in this AGREEMENT shall
preclude the COMPANY or the HOLDING COMPANY from consolidating with, merging
into, or transferring all, or substantially all, of their assets to another
corporation that assumes all of their obligations and undertakings hereunder.
Upon such a consolidation, merger or transfer of assets, the term "COMPANY" as
used herein, shall mean such other corporation or entity, and this AGREEMENT
shall continue in full force and effect.
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7. CONFIDENTIAL INFORMATION. The EMPLOYEE acknowledges that during his
employment he will learn and have access to confidential information regarding
the COMPANY and its customers and businesses. The EMPLOYEE agrees and covenants
not to disclose or use for his own benefit, or the benefit of any other person
or entity, any confidential information, unless or until the COMPANY consents to
such disclosure or use or such information is otherwise legally in the public
domain. The EMPLOYEE shall not knowingly disclose or reveal to any unauthorized
person any confidential information relating to the COMPANY, its subsidiaries,
or affiliates, or to any of the businesses operated by them, and the EMPLOYEE
confirms that such information constitutes the exclusive property of the
COMPANY. The EMPLOYEE shall not otherwise knowingly act or conduct himself to
the material detriment of the COMPANY, its subsidiaries, or affiliates or in a
manner which is inimical or contrary to the interests of the COMPANY.
8. NON-ASSIGNABILITY. Neither this AGREEMENT nor any right or interest hereunder
shall be assignable by the EMPLOYEE, his beneficiaries or legal representatives
without the COMPANY's prior written consent; provided, however, that nothing in
this Section 8 shall preclude the EMPLOYEE from designating a beneficiary to
receive any benefits payable hereunder upon his death or the executors,
administrators or other legal representatives of the EMPLOYEE or his estate from
assigning any rights hereunder to the person or persons entitled thereto.
9. NO ATTACHMENT. Except as required by law, no right to receive payment under
this AGREEMENT shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge or hypothecation or to execution,
attachment, levy, or similar process of assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
10. BINDING AGREEMENT. This AGREEMENT shall be binding upon, and inure to
the benefit of, the EMPLOYEE and the COMPANY and their respective permitted
successors and assigns.
11. AMENDMENT OF AGREEMENT. This AGREEMENT may not be modified or amended,
except by an instrument in writing signed by the parties hereto.
12. WAIVER. No term or condition of this AGREEMENT shall be deemed to have been
waived, nor shall there be an estoppel against the enforcement of any provision
of this AGREEMENT, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver,
unless specifically stated therein, and each waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than the act specifically
waived.
13. SEVERABILITY. If, for any reason, any provision of this AGREEMENT is held
invalid, such invalidity shall not affect the other provisions of this AGREEMENT
not held so invalid, and each such other provision shall, to the full extent
consistent with applicable law, continue in full
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force and effect. If this AGREEMENT is held invalid or cannot be enforced, then
any prior AGREEMENT between the COMPANY (or any predecessor thereof) and the
EMPLOYEE shall be deemed reinstated to the full extent permitted by law, as if
this AGREEMENT had not been executed.
14. HEADINGS. The headings of the paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this AGREEMENT.
15. GOVERNING LAW. This AGREEMENT has been executed and delivered in the State
of Ohio and its validity, interpretation, performance, and enforcement shall be
governed by the laws of the State of Ohio, except to the extent that federal law
is governing.
16. EFFECT OF PRIOR AGREEMENTS. This AGREEMENT contains the entire understanding
between the parties hereto and supersedes any prior employment agreement between
the COMPANY or any predecessor of the COMPANY and the EMPLOYEE.
17. NOTICES. Any notice or other communication required or permitted pursuant to
this AGREEMENT shall be deemed delivered if such notice or communication is in
writing and is delivered personally or by facsimile transmission or is deposited
in the United States mail, postage prepaid, addressed as follows:
If to the COMPANY:
The Home Savings and Loan Company
of Youngstown, Ohio
000 Xxxxxxx Xxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
If to the EMPLOYEE:
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IN WITNESS WHEREOF, the COMPANY has caused this AGREEMENT to be
executed by its duly authorized officer, and the EMPLOYEE has signed this
AGREEMENT, each as of the day and year first above written.
Attest: The Home Savings and Loan Company
of Youngstown, Ohio
By:
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its Chairman of the Board
Attest:
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[EMPLOYEE]
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