CHANGE OF CONTROL
AGREEMENT
This CHANGE OF CONTROL AGREEMENT (hereinafter
referred to as this “Agreement”), is made and entered
into as of this 11 th day of June, 2009 (“Effective Date”)
by and between THE HOME SAVINGS AND LOAN COMPANY OF YOUNGSTOWN,
OHIO, a savings bank incorporated under Ohio Law (hereinafter
referred to as the “Company”, a wholly owned subsidiary
of United Community Financial Corp., the “Holding
Company”), and MATTHEW T. GARRITY, an individual (herein
after referred to as the “Executive”).
WHEREAS, the Executive is or shall be employed
as the Senior Vice President and Chief Credit Officer of the
Company; and
WHEREAS, the Executive and the Company desire to
enter into this Agreement to set forth certain terms and conditions
of the employment relationship between the Company and the
Executive resulting from a Change of Control (defined
below).
NOW, THEREFORE, in consideration of the premises
and mutual covenants herein contained, the Company and the
Executive, each party intending to be legally bound, hereby agree
as follows:
1. Term . This Agreement shall be
effective as of the Effective Date set forth above and shall
terminate on or before the first anniversary of the Effective Date
in accordance with the terms and conditions set forth in this
Agreement.
2. Termination of Employment in
connection with Change of Control . In the event that the
employment of the Executive is terminated (as defined below) by the
Company within one (1) year after a Change of Control (defined
below) for any reason other than Cause (defined below), death or
disability, or within one (1) year after a Change of Control
the Executive’s employment is terminated at the
Executive’s option as provided in Section 3 below, then
the following shall occur:
(a) The Company shall promptly pay to the
Executive an amount equal to the product of one (1) multiplied by
the Executive’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”).
(b) For purposes of the Agreement, a
“Change of Control” shall mean any one of the following
events:
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(i)
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the acquisition by any person or
entity of the ability to control the election of a majority of the
directors of the Holding Company;
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(ii)
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the acquisition by any person or
entity of “control” of the Holding Company within the
meaning of 12 C.F.R. Section 303.81(c) (even if the Company
and/or the Holding Company does not satisfy the definition of
‘insured bank’ at such time); and
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(iii)
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the sale by the Holding Company of
all, or substantially all, of the assets of the Holding Company;
provided; however, that the sale of the Company to, or a
merger of the Company with and into, an entity directly or
indirectly acquired by the Holding Company in or part of a
transaction in which the Company is not the surviving entity shall
not constitute a change of control so long as the present capacity
or circumstances in which the Executive is employed by the Company
does not constitute a Material Adverse Change (defined
below).
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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 Executive or any person or persons with whom the
Executive is “acting in concert” within the meaning of
12 C.F.R. Section 303.81(b).
(c) The Executive shall not be required to
mitigate the amount of any payment provided for in this Agreement
in any way, nor shall any amounts or benefits received from other
employment or otherwise by the Executive offset in any manner the
obligations of the Company hereunder.
(d) In the event that any payments pursuant
to this Agreement or pursuant to any other plan, agreement or
arrangement would result in or contribute to the imposition of a
penalty tax pursuant to Section 280G and Internal Revenue Code
Section 4999, such payments shall be reduced to the maximum
amount that may be paid under Section 280G without exceeding
such limits. Any such reduction shall be made consistent with the
requirements of Section 409A of the Internal Revenue Code of
1986, as amended and the regulations promulgated thereunder
(“Section 409A”). Any payments made to the
Executive 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.
(e) As used in this Section 2,
“Cause” shall mean the termination of the Executive by
the Company because of the Executive’s personal dishonesty,
incompetence, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure or refusal to
perform the duties and responsibilities of
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