Exhibit 10.4
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT
(hereinafter referred to as this “AGREEMENT”),
originally entered into on the 1st day of July, 2005, by and
between United Community Bank, a savings bank chartered under the
laws of the United States of America (hereinafter referred to as
the “BANK”), and William F. Ritzmann, an individual
(hereinafter referred to as the “EMPLOYEE”), is amended
and restated in its entirety as of December 30, 2008.
WITNESSETH:
WHEREAS, as a result of the skill,
knowledge and experience of the EMPLOYEE, the Board of Directors of
the BANK desires to continue to retain the services of the EMPLOYEE
as the President/Chief Executive Officer of the Bank;
and
WHEREAS, the EMPLOYEE desires to
continue to serve as the President/Chief Executive Officer of the
BANK; and
WHEREAS, the EMPLOYEE and the BANK
desire to enter into this AGREEMENT to set forth the terms and
conditions of the employment relationship between the BANK and the
EMPLOYEE; and
WHEREAS, the parties desire to amend
and restate this AGREEMENT to bring it into compliance with
Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”).
NOW, THEREFORE, in consideration of
the promises and mutual covenants herein contained, the BANK 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 BANK hereby
employs the EMPLOYEE, and the EMPLOYEE hereby accepts employment,
as the President/Chief Executive Officer of the BANK. The term of
this AGREEMENT shall commence on July 1, 2005, and shall end
on June 30, 2008, unless extended by the BANK, 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 original date of this AGREEMENT, the Board
of Directors of the BANK 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. The Board of Directors shall document its
reasons for extending the term of this AGREEMENT in the minutes of
the meeting at which such action is taken.
2. Duties of the EMPLOYEE.
(a) General Duties and
Responsibilities. The EMPLOYEE shall serve as the
President/Chief Executive Officer of the BANK. Subject to the
direction of the Board of Directors, the EMPLOYEE shall perform all
duties and shall have all powers which are commonly incident to the
office of President/Chief Executive Officer or which, consistent
therewith, are delegated to him by the Board of
Directors.
(b) Devotion of Entire Time to
the Business of the BANK. 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 BANK or any
subsidiary of the BANK without the prior written consent of the
Board of Directors; 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 any subsidiary of the BANK 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 BANK.
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 $142,106 until changed by the Board of Directors of
the BANK in accordance with Section 3(b) below.
(b) Periodic Salary Review.
The annual salary of the EMPLOYEE shall be reviewed by the Board of
Directors from time to time throughout the TERM, but not less often
than once every three years, and shall be set at an amount not less
than $142,106, based upon the EMPLOYEE’s individual
performance and such other factors as the Board of Directors may
deem appropriate (hereinafter referred to as the “PERIODIC
REVIEW”). The results of the PERIODIC REVIEW shall be
reflected in the minutes of the Board of Directors.
(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 BANK from time to time and all employee benefit
plans or programs hereafter adopted in writing by the Board of
Directors for which senior management personnel of the BANK 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 BANK may
at any time discontinue or terminate any BENEFIT PLAN now existing
or hereafter
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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 to the extent such
discontinuance or termination pertains to all employees of the BANK
who are eligible participants at the time.
(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 for senior management officials of the
BANK. The EMPLOYEE shall be entitled to annual sick leave as
established by the Board of Directors for senior management
officials of the BANK.
(e) Expenses. In addition to
any compensation received under Section 3(d), the BANK 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 BANK, upon the delivery by the BANK
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 BANK 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 so as to constitute Good Reason if such events
occur within one year of a CHANGE IN CONTROL. For purposes of this
AGREEMENT, “Good Reason” shall mean the occurrence of
any of the following events without the EMPLOYEE’s
consent:
(1) The assignment to the EMPLOYEE
of duties that constitute a material diminution of his authority,
duties, or responsibilities (including reporting
requirements);
(2) A material diminution in the
EMPLOYEE’s Base Salary;
(3) Relocation of the EMPLOYEE to a
location outside a radius of 35 miles of the Bank’s
Lawrenceburg, Indiana office; or
(4) Any other action or inaction by
the Bank that constitutes a material breach of this
Agreement;
provided, that within ninety
(90) days after the initial existence of such event, the Bank
shall be given notice and an opportunity, not less than thirty
(30) days, to effectuate a cure for such asserted “Good
Reason” by the EMPLOYEE. The EMPLOYEE’s resignation
hereunder for Good Reason shall not occur later than one hundred
fifty (150) days following the initial date on which the event
claims constitutes Good Reason occurred.
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The following subsections (A),
(B) and (C) of this Section 4(a) shall govern the
obligations of the BANK to the EMPLOYEE upon the occurrence of the
events described in such subparagraphs:
(A) Termination for CAUSE. In
the event that the BANK 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, 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 BANK 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 BANK 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 Code, 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
BANK’s expense under all health, life, disability and other
benefit plans of the BANK 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 BANK 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 BANK shall be obligated to
pay to the EMPLOYEE, his designated beneficiaries or his estate, a
lump sum amount, within ten (10) days of his termination,
equal to the base salary that would have been paid to the EMPLOYEE
through the expiration of the TERM, at the annual rate of salary in
effect at the time of termination pursuant to Section 3(b)
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;
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(II) The BANK shall continue to
provide to the EMPLOYEE, at the BANK’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 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 BANK 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’
