EXHIBIT 10.1
RETIREMENT AND CONSULTING AGREEMENT
THIS RETIREMENT AND CONSULTING AGREEMENT ("Agreement") is made and
entered into this _____ of ___________________________, 2005, by and between
UNITED BANCORP, INC., a Michigan corporation ("UBI"), UNITED BANK & TRUST, a
Michigan banking corporation ("UB&T"), UNITED BANK & TRUST - WASHTENAW, a
Michigan banking corporation ("UB&T-W"), and XXXXX X. XXXXXXX ("Xxxxxxx").
WITNESSETH:
WHEREAS, UBI is a bank holding company and the sole shareholder of UB&T
and UB&T-W; and
WHEREAS, Xxxxxxx is the Chairman of the Board of Directors of both UBI
and UB&T, and a Director of UB&T-W; and
WHEREAS, UBI, UB&T, UB&T-W and Xxxxxxx desire to document their mutual
agreement concerning the terms of Xxxxxxx'x retirement as an active employee of
UBI and UB&T, and his engagement as a consultant for UBI, UB&T and UB&T-W, all
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants of the parties
as herein contained,
IT IS AGREED AS FOLLOWS:
A. Retirement Provisions. The following enumerated provisions shall govern
Xxxxxxx'x retirement as an employee of UBI and UB&T:
1. Effective Date. Effective at the close of business on December 31,
2005, Xxxxxxx'x Employment Contract shall terminate, including a
termination of compensation and all benefits (including but not
limited to medical insurance, group life insurance, LTD insurance,
and cafeteria plan participation).
2. Payments from Employee Plans. Xxxxxxx shall be entitled to the
following enumerated payments from Plans in which he participates:
a. Supplemental Employee Retirement Plan ("SERP"). Payment in
accordance with the SERP beginning in January 2006 at the
rate of $5,088 per month for a total of one hundred eighty
(180) months.
b. Management Committee Incentive Compensation Plan ("MCICP"). A
Group 2 level bonus for the year 2005 to be paid in January
2006. Xxxxxxx shall not be entitled to any further
participation in the MCICP.
c. 401(k) Plan. A matching contribution and profit sharing
contribution shall be made for Xxxxxxx for calendar year
2005, the contribution to be made in January 2006.
Thereafter, Xxxxxxx shall not be entitled to any further
401(k) match or profit sharing contributions. Promptly
following payment of the contributions for 2005, Xxxxxxx
agrees to roll-over his 401(k) account into his existing
Individual Retirement Account maintained with the Trust &
Investment Group of UB&T ("T&IG").
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d. Stock Options. Xxxxxxx shall receive a stock option award for
calendar year 2005 as a Group 2 participant. Thereafter,
Xxxxxxx shall not be eligible for further stock option awards
in any capacity, specifically including his continuing
capacity as a director of UBI, UB&T and UB&T-W.
e. Group Carve Out Life Insurance. The group carve out life
insurance benefits to be assigned to Xxxxxxx, with Xxxxxxx to
pay all future premiums beginning with the premium in the
amount of $12,200 due in March 2006.
f. Defined Bonus Stock Plan. Xxxxxxx'x deferred balance in this
Plan computed at December 31, 2005 shall be paid to Xxxxxxx
in the form of UBI shares in January 2006.
g. Incentive Compensation Plan. Xxxxxxx'x balance in the amount
of $25,471 determined as of December 31, 2004, plus interest
for calendar year 2005, will be paid to Xxxxxxx in January
2006.
h. No Other Payments or Benefits. Except as specifically set
forth above, Xxxxxxx shall be entitled to no other
compensation or benefits arising out of his employment by UBI
and UB&T.
B. Consulting Provisions. Effective January 1, 2006, Xxxxxxx agrees to
provide consulting services to UBI, UB&T and UB&T-W on the following
terms and conditions:
1. Consulting Services. Xxxxxxx agrees to render his part-time
consulting services to UBI, UB&T and UB&T-W as an expert in the
operation of bank holding companies and banks, emphasizing the
following areas:
a. Business Development. Business development activities for
UB&T and UB&T-W, specifically including the T&IG of UB&T.
b. Adrian Marketing. Assistance with efforts to increase UB&T's
market position in Adrian.
c. Leadership Transition. Assist UB&T's president with a
successful transition into a leadership position in Lenawee
County.
d. Holding Company Activities. Consultation with UBI's chairman
regarding holding company opportunities, challenges and
corporate governance.
e. ABA and MBA Service. Continue active involvement with the
American Bankers Association ("ABA") and the Michigan Bankers
Association ("MBA") on behalf of UBI and its banks.
f. Community Involvement. Continue Xxxxxxx'x history of activity
community involvement in Lenawee County on behalf of UBI and
UB&T, and in Washtenaw County on behalf of UB&T-W.
It is contemplated by the parties that Xxxxxxx will be reasonably
available to UBI, UB&T and UB&T-W, and will devote his approximately
fifty percent (50%) part-time efforts to these consulting activities in
a manner reasonably consistent with the requirements of UBI, UB&T and
UB&T-W, but the parties agree that Xxxxxxx shall not be committed to
set aside a specific amount of time for the affairs of UBI, UB&T and
UB&T-W.
2. Term of Agreement. This Agreement shall be for a term of five (5)
years, commencing January 1, 2006 and terminating on December 31,
2010, subject to the right of UBI,
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UB&T and UB&T-W, or Xxxxxxx, to terminate this Agreement with or
without cause on ninety (90) days' advance written notice to the
opposite party or parties. This Agreement shall also terminate
upon the death or the occurrence of the total and permanent
disability of Xxxxxxx.
3. Covenants of Xxxxxxx. As a material part of the consideration to
be received by UBI, UB&T and UB&T-W in accordance with this
Agreement, Xxxxxxx hereby covenants as follows:
a. Confidential Information. In connection with Xxxxxxx'x
consulting services for UBI, UB&T and UB&T-W, Xxxxxxx will
have access to information or materials that are considered
trade secrets, confidential and/or proprietary information
("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.
(i) Information created by Xxxxxxx during the term of this
Agreement that relates to the business of UBI, UB&T
and/or UB&T-W (or prospective business opportunities),
or uses UBI, UB&T and/or UB&T-W Information, or is
created by UBI, UB&T and/or UB&T-W resources
(including staff, premises and equipment) is the
property of UBI, UB&T and/or UB&T-W. This Information
includes copyrightable works of original authorship
(including, but not limited to, reports, analyses,
compilations, business plans, new product plans),
ideas, inventions (whether patentable or not),
knowhow, processes, trademarks and other intellectual
property. All works of original authorship created by
Xxxxxxx during the term of this Agreement are "works
for hire," as that term is used in connection with the
United States Copyright Act. Xxxxxxx hereby assigns to
UBI all rights, title and interest in work product,
including copyrights, patents, trade secrets,
trademarks and knowhow.
(ii) Xxxxxxx shall use Information only for the benefit of
UBI, UB&T and/or UB&T-W and not for his own benefit.
Xxxxxxx shall not disclose Information to third
parties, and shall not take Information or the UBI,
UB&T and/or UB&T-W materials upon termination of this
Agreement.
(iii) Information created by Xxxxxxx to be used by UBI, UB&T
and/or UB&T-W staff 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 personal or entity except in connection with the
business activities of UBI, UB&T and/or UB&T-W.
(iv) The confidentiality provisions of this Agreement shall
survive termination of the Agreement for so long a
period of time as the Information is maintained by
UBI, UB&T and/or UB&T-W as confidential.
b. Nonsolicitation of Employees and Customers.
(i) During the term of this Agreement and for a period of
one (1) year thereafter, Xxxxxxx agrees not to hire,
and not to solicit for hire, any then-current UBI,
UB&T and/or UB&T-W employees or to contact such
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employees for the purpose of inducing them to
terminate their employment by UBI, UB&T and/or UB&T-W.
(ii) During the term of this Agreement and for a period of
his Agreement and for a period of one (1) year
thereafter, Xxxxxxx agrees not to contact any
then-current UBI, UB&T and/or UB&T-W customers for the
purpose of inducing them to leave UBI, UB&T and/or
UB&T-W or to discourage them from doing business with
UBI, UB&T and/or UB&T-X. Xxxxxxx agrees that during
the above defined period of time he will not provide
the type of services he provided under this Agreement
to any person or business entity who was a customer of
UBI, UB&T and/or UB&T-W at the time of termination of
this Agreement.
c. Noncompete. During the term of this Agreement and for one (1)
year thereafter, Xxxxxxx agrees not to provide the types of
services he provided under this Agreement in either UB&T's or
UB&T-W's delineated Community Reinvestment Act areas. This
prohibition includes services whether as an employee,
independent contractor, officer, director, consultant,
partner, or in any other capacity whatsoever.
4. Payment for Services. As payment for Xxxxxxx'x consulting services
under this Agreement, UBI, UB&T and/or UB&T-W agree to pay Xxxxxxx
consulting fees totaling $150,000 per year, payable in
installments of $12,500 per month, the first monthly installment
to be paid in January 2006.
5. Expense Reimbursement. UBI, UB&T and/or UB&T-W will reimburse
Xxxxxxx for reasonable business expenses incurred in the conduct
of his consulting activities, such reimbursement to be in
accordance with the normal expense reimbursement policies of UBI,
UB&T and/or UB&T-W. Reimbursable expenses shall include reasonable
expenses incurred by Xxxxxxx and his spouse for attendance at ABA
and MBA functions to the extent such expenses are not paid by
those organizations.
6. Independent Contractor Status. In performing services under this
Agreement, Xxxxxxx will determine the method, means and manner of
his performance, and shall not be subject to the general
supervision and control of UBI, UB&T and/or UB&T-W, provided only
that Xxxxxxx shall observe good professional business practices
and shall conform to the requirements of paragraph 1, above. The
parties intend to create by this Agreement the relationship of an
independent contractor and not an employer/employee relationship.
Xxxxxxx specifically acknowledges and agrees that in his capacity
as an independent contractor he will not enjoy protection by UBI,
UB&T and/or UB&T-W under either the Michigan Workers' Compensation
Act or the Michigan Employment Security Act, nor will UBI, UB&T
and/or UB&T-W be responsible to withhold state or federal income
tax or social security from the independent contractor payments;
and that Xxxxxxx shall therefore be solely responsible for the
payment of appropriate state and federal taxes on an estimated
basis, for the payment of social security taxes, and for providing
such employment and/or fringe benefits as he may require.
7. Assignment. This Agreement shall not be assigned by any of the
parties without the advance written consent of all other parties.
8. Governing Law. This Agreement shall be subject to and governed by
the laws of the State of Michigan.
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9. Notices. All notices and other communications provided for in this
Agreement shall be in writing and shall be deemed to have been
duly given when personally delivered or mailed by United States
Registered Mail, Return Receipt Requested, postage prepaid, as
follows
Notice to UBI, UB&T and UB&T-W Notice to Xxxxxxx
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Chairman of the Board Xxxxx X. Xxxxxxx
United Bancorp, Inc. 0000 Xxxxxxxxxx Xxxxx
X.X. Xxx 000 Xxxxxxxx, Xxxxxxxx 00000
Xxxxxxxx, Xxxxxxxx 00000
10. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, and their respective heirs,
personal representatives, successors and assigns, subject to the
limitation on assignment as set forth above.
THE BALANCE OF THIS PAGE HAS
INTENTIONALLY BEEN LEFT BLANK
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
as of the day and year first above written.
WITNESSES: United Bancorp, Inc., a Michigan corporation
By:
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Xxxxxx X. Xxxxxxx, President
United Bank & Trust, a Michigan banking
corporation
By:
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Xxxxxx X. Xxxx, President
United Bank & Trust - Washtenaw, a Michigan
banking corporation
By:
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Xxxxxx X. Xxxxxxx, President
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Xxxxx X. Xxxxxxx
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