Employment Agreement (2018)Full Document 

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Employment Agreement with Gary M. Small


THIS EMPLOYMENT AGREEMENT (this "Agreement"), is entered into this 20th day of February, 2018 by and among United Community Financial Corp., a bank holding company incorporated under Ohio law ("UCFC"), Home Savings Bank, an Ohio chartered commercial bank ("Home Savings") (collectively, the "Company") and Gary M. Small, an individual (hereinafter referred to as the "Executive").


WHEREAS, the Boards of Directors of the Company (the "Board") desire to retain the services of the Executive as President and Chief Executive Officer of Home Savings and as President and Chief Executive Officer of UCFC, and the Executive desires to so serve; and

WHEREAS, the Executive 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 Executive.

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the parties, the Company and the Executive, each party intending to be legally bound, 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 Executive for a term beginning on February 20, 2018 (the "Effective Date") and continuing for a period of 36 months (together with any renewal period described in Section 1(b), the "Term"). The Term may be terminated as set forth in Section 4 of this Agreement.

(b) Renewal. The Term of this Agreement shall be extended automatically on each anniversary date following the Effective Date for an additional period of 36 months, unless either the Company or the Executive provides the other party with written notice that the Term shall not be so extended within at least 90 days prior to the end of the Term.

(c) Resignation of All Other Positions. Upon termination of the Executive’s employment hereunder for any reason, the Executive shall be deemed to have resigned from all positions that the Executive holds as an officer or member of the Board (or a committee thereof) of the Company and any of its affiliates.

2. Duties of the Executive.

(a) General Duties and Responsibilities. The Executive shall serve as the President and Chief Executive Officer of Home Savings and as the President and Chief Executive Officer of UCFC. In such capacity(ies), the Executive shall have the authority commensurate with such position and such duties as shall be determined from time to time by the Board and as further described in the Executive’s most recent job description on file with the Company. The

Executive shall report directly to the Board. The Executive will further perform such other duties and hold such other positions related to the business of the Company and its Affiliates as may from time to time be reasonably requested of the Executive by the Board. For purposes of this Agreement, an "Affiliate" shall mean any corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, trust, association or organization which, directly or indirectly, controls, is controlled by, or is under common control with, the Company.

(b) Devotion of Entire Time to the Business of the Company. The Executive shall devote the Executive’s entire productive time, ability and attention during normal business hours throughout the Term to the faithful performance of the Executive’s duties under this Agreement. The Executive shall not directly or indirectly render any services of a business, commercial or professional nature to any person or organization other than the Company or its Affiliates without the prior written consent of the Board; provided, however, that the Executive shall not be precluded from taking such vacation or sick leave as is applicable to the Executive, pursuing personal investments that do not interfere or conflict with the performance of the Executive’s duties to the Company, reasonable participation in community, civic, charitable or similar organizations, or in industry-related activities, including, but not limited to, attending state and national trade association meetings and serving as an officer, director, trustee or committee member of a state or national trade association or Federal Home Loan Bank, or such other regulatory governing body.

(c) Standards. During the Term, the Executive shall perform the Executive’s duties in accordance with such reasonable standards expected of executives with comparable positions in comparable organizations and as may be established from time to time by the Board.

3. Compensation and Review.

(a) Base Salary. During the Term, the Executive will receive an annual base salary of $465,000. In the event that the Company increases the Executive’s annual base salary, the amount of the initial annual base salary, together with any increase(s) will be the Executive’s base salary (the "Base Salary"). The Base Salary will be payable in accordance with the Company’s regular payroll payment practices, but not less frequently than monthly.

(b) Annual Review. On or about December 31 of each year, the compensation of the Executive shall be reviewed in accordance with the Company’s charter documents and applicable laws, rules or regulations, including those of any listing agency applicable to the Company, by either the Board or the Compensation Committee of the Board (the "Committee") and, based upon the Executive’s individual performance and such other factors as the Board or the Committee (as applicable) may deem appropriate, the Board or the Committee may, in its sole discretion, increase the Executive’s Base Salary.

(c) Incentive Compensation. The Executive shall be eligible to participate during the Term in the Annual Executive Incentive Plan (the "AIP"), the Long-Term Incentive Plan (the "LTIP") and in any other executive incentive bonus plan that the Company may adopt and implement from time to time, including, but not limited to, any plans that replace or supplement the AIP or LTIP. Executive acknowledges that the Company’s Compensation Adjustment and Recoupment Policy adopted on March 17, 2015, as amended from time to time, is applicable to all stock-based awards, performance-based compensation, and any other forms of cash or equity


compensation received by Executive other than salary. Nothing contained in this Section shall obligate the Company to institute, maintain or refrain from changing, amending or discontinuing any incentive bonus plan, so long as such changes are similarly applicable to other executive employees under such plan.

(d) Fringe Benefits. During the Term, the Company will provide the Executive with all health and life insurance coverages, disability programs, tax-qualified retirement plans, equity compensation programs, and similar fringe benefit plans, paid holidays, paid vacation, perquisites, and such other fringe benefits of employment as the Company may provide from time to time to actively employed similarly situated employees of the Company. Notwithstanding any provision contained in this Agreement, the Company may discontinue or terminate at any time any employee benefit plan, policy or program described in this Section 3(e), now existing or hereafter adopted, to the extent permitted by the terms of such plan, policy or program and will not be required to compensate the Executive for such discontinuance or termination. The Company also will pay for Executive’s dues at one or more country clubs or social clubs in accordance with the policies and practices of the Compensation Committee of the Company.

(e) Supplemental disability. The Company shall provide Executive with supplemental disability coverage to ensure that total disability benefits are equivalent to 60% of the Executive’s Base Salary, up to a maximum benefit of $35,000 per month.

(f) Expenses. The Company shall reimburse the Executive for reasonable travel, industry, entertainment and miscellaneous expenses incurred in connection with the performance of the Executive’s duties under this Agreement, including participation in industry-related activities, in accordance with the existing policies and procedures of the Company pertaining to reimbursement of such expenses to executives.

(g) Stock Options. In consideration of Executive’s performance to date and to encourage his future devotion to the Company’s best interests, the Company will award non-qualified stock options to purchase Company shares pursuant to an award agreement that will be entered into on the Effective Date.

4. Termination of Employment and This Agreement. For purposes of this Agreement, any reference to the Executive’s "termination of employment" (or any form thereof) shall mean the Executive’s "separation from service" within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulation §1.409A-1(h).

(a) Death of Executive. The Term will terminate upon the Executive’s termination of employment due to his death and the Executive’s beneficiary (as designated by the Executive in writing with the Company prior to the Executive’s death) will be entitled to the following payments and benefits:

(i) Any Base Salary that is accrued but unpaid and any business expenses that are unreimbursed – all, as of the date of termination of employment, paid within 30 days after the date of the Executive’s death;


(ii) Any rights and benefits (if any) provided under any employee benefit plans and programs of the Company, determined in accordance with the applicable terms and provisions of such plans and programs (the payments described in Sections 4(a)(i) and (ii) are hereinafter collectively referred to as the "Accrued Obligations");

(iii) An amount equal to 3 months of Executive’s Base Salary, paid within 60 days of death; and

(iv) Payment of any accrued but unpaid annual incentive award, which shall be paid pursuant to the terms of the applicable incentive plan.

In the absence of a beneficiary designation by the Executive, or, if the Executive’s designated beneficiary does not survive the Executive, payments and benefits described in this Section 4(a) will be paid to the Executive’s estate.

(b) Disability. The Term and the Executive’s employment may be terminated by the Company upon written notice from the Company following the determination, as set forth immediately below, that the Executive suffers from a Permanent Disability. For purposes of this Agreement, "Permanent Disability" means a physical or mental impairment that renders the Executive incapable of performing the essential functions of the Executive’s job, on a full-time basis, even taking into account reasonable accommodation required by law, as determined by a physician who is selected by the agreement of the Executive and the Company, for a period of greater than 150 days.

(i) During any period that the Executive fails to perform the Executive’s duties hereunder as a result of a Permanent Disability ("Disability Period"), the Executive will continue to receive the Executive’s Base Salary at the rate then in effect for such period until the Executive’s employment is terminated; provided, however, that payments of Base Salary so made to the Executive will be reduced by the sum of the amounts, if any, that were payable to the Executive at or before the time of any such salary payment under any disability benefit plan or plans of the Company and that were not previously applied to reduce any payment of Base Salary;

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