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EXHIBIT 10.3
EMPLOYMENT CONTRACT
This
Employment Contract ("Contract") made and effective this 1st day
of
January, 2005, by and between Randal J. Rabe ("Employee") and
UNITED BANCORP,
INC., 205 E. Chicago Blvd., P.O. Box 248, Tecumseh, Michigan 49286
("UBI") and
UNITED BANK & TRUST (the "Bank").
WHEREAS,
UBI and the Bank desire to continue to employ Employee, and
WHEREAS,
Employee desires to continue to be employed by UBI and the
Bank,
and
WHEREAS,
there is increased activity by multi-bank holding companies in
the acquisition of independent community banks, which often
jeopardizes the
continued employment of senior officers of the acquired bank, and
whereas, UBI
wishes to minimize the uncertainty and distraction caused by such
activity,
which would detract from Employee's ability to perform his duties,
by providing
Employee with some transition assistance if the Bank and/or UBI is
acquired or
if there is a change in control or if Employee's employment is
terminated in
anticipation of such an acquisition, merger, change in control, or
similar
transaction,
THEREFORE,
UBI and Employee hereby enter into this Employment Contract on
the following terms and conditions:
1. General. The parties hereto deem it mutually desirable that this
Contract
entered into be binding upon each of them.
2. Term and Payment Upon Termination in Certain Circumstances.
Unless sooner
terminated (i) by mutual agreement evidenced in writing and signed
by all
parties, or (ii) by the Board of Directors of UBI for cause, the
employment by
UBI of Employee as an officer shall be for a one year term
commencing with the
date hereof. If (other than after a Change in Control, as defined
below) UBI
shall terminate Employee's employment other than for the reasons
set forth in
paragraph 6, below, or by mutual agreement, Employee shall continue
to receive
his regular salary (the salary in effect immediately prior to such
termination)
for six months. This continuation of salary shall immediately cease
if the
Employee secures employment before the end of this six-month
period.
3. Term of Contract. This Contract shall be for a 12-month period,
unless
terminated earlier pursuant to paragraph 6.
4. Duties. The duties, responsibilities and authority of Employee
shall be as
determined by UBI or the Bank, from time to time.
5. Compensation. It is further agreed between the parties that
Employee's annual
salary shall be directly related to the Board of Directors'
reasonable and good
faith determination of the value of his services to the Bank, but
shall not be
less than $190,000.
a.
Employee's
annual salary for 2005 shall be $190,000, unless adjusted
pursuant to item d.,
below.
b.
It is
contemplated that an annual bonus shall be paid. Employee will
be a Group 2 Participant in the Target Incentive Compensation
Plan.
c.
Employee
shall receive the standard employee benefits of employees
of the Bank.
d.
Changes
may be made to the salary and fringe benefits herein set
forth and such changes shall be set forth in Attachment A.
Changes
to the salary and fringe
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e.
benefits
are effective only after Attachment A has been signed by
the Chairman of the Board of both UBI and the Bank, and by the
Employee.
6. a.
In the
event of any violation by Employee of any terms of this
Agreement, or if there is cause for termination of Employee,
Employee's employment may be terminated immediately, without
notice,
at any time, and with compensation only to the date of the
termination of Employee. "Cause" for termination of this
Contract
shall include the following events, but this list is simply
some
examples of "cause" and it is not all-inclusive:
(1) the death of
Employee;
(2) the
disability of Employee rendering him unable to perform the
services required under the Contract for a period of 180 days;
(3) known
substance abuse by Employee;
(4) felony
conviction or plea (including a plea of guilty, nolo
contendere or similar plea) of Employee;
(5) misdemeanor
conviction or plea (including a plea of guilty,
nolo contendere or similar plea) of Employee, if the
misdemeanor involves moral turpitude;
(6) Employee's
repeated unprofessional, irresponsible or
disruptive language or conduct in the performance of his
duties;
(7) Employee's
dishonesty, breach of professional or corporate
ethics, or criticism by a regulatory agency involving a
serious violation of law or regulations;
(8) Employee's
substantial breach of any significant term of this
Contract, including, but not limited to, continued
unsatisfactory job performance.
If criminal charges as described above in subsections (4) and
(5)
are made against Employee, then UBI or the Bank shall have the
discretion to suspend Employee for any period of time, except
that
the suspension shall end if such charges do not result in a
conviction or a plea (of guilty or nolo contendere, etc.) of
either
the original charge or of any lesser charge. If a regulatory
agency
criticizes Employee for serious regulatory violations, UBI or
the
Bank shall have the discretion to suspend Employee for any period
of
time, except that if the alleged violations are resolved in his
favor, the suspension shall end. A suspension, pursuant to
items
(4), (5) or (7), above, would entail the cessation of the
performance of duties and the cessation of all compensation.
The Chairmen of the Boards of UBI or the Bank each shall retain
the
power and authority to suspend Employee based on his
determination
that one of the events described above has occurred.
Termination of this Contract shall not relieve Employee of his
responsibilities to complete any records, cooperate with the
Bank
and UBI on any litigation, audits, regulatory reviews, claims
or
investigations, and otherwise to fulfill all responsibilities
under
this
Contract which should have been rendered prior to the early
termination of this Contract.
b.
In the
event of the occurrence of any of the following by Employee,
Employee's employment may be terminated immediately, without
notice,
at any time, and with compensation for six months thereafter,
unless
the Employee secures employment
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sooner, which shall terminate all obligation for compensation of
UBI
and the Bank. The following are occurrences which shall lead to
termination:
(i) Repeated
unsatisfactory performance or repeated uncooperative
conduct;
(ii) Employee's
repeated failure to meet the goals and objectives
which shall be established by the Boards of UBI and the Bank
from time to time; or
(iii) Any other continued unsatisfactory job performance or
conduct.
7. Change in Control. For purposes of this Contract, a Change in
Control of UBI
shall be deemed to have occurred if
a.
there
shall be consummated (i) any consolidation or merger of UBI in
which UBI is not the continuing or surviving corporation or
pursuant
to which shares of UBI's common stock would be converted into
cash,
securities or other property, other than a merger of UBI in
which
the holders of UBI's common stock immediately prior to the
merger
have the same proportionate ownership of common stock of the
surviving corporation immediately after the merger or (ii) any
sale,
lease, exchange or other transfer (in one transaction or a series
of
related transactions) of all, or substantially all, of the assets
of
UBI (including, without limitation, more than 25% of UBI's
equity
interest in United Bank &
