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Exhibit 99.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”),
made and entered into effective as of January 14, 2005 (the
“Effective Date”), by and among United Bancshares,
Inc. , headquartered in Columbus Grove, Ohio and its
wholly-owned subsidiary, The Union Bank Company ("Union")
(collectively referred to herein as the “Company”) and
Daniel W. Schutt , a resident of Ohio
(“Employee”).
WITNESSETH
WHEREAS, the Company is a registered bank holding company
under the Bank Holding Company Act of 1956 and the sole shareholder
of Union, an Ohio state-chartered bank.
WHEREAS, Employee has knowledge, experience and expertise in
the area of the business of the Company, and the Company desires to
obtain the benefits of Employee’s knowledge, experience and
expertise;
WHEREAS, the Company desires to employ Employee on the terms
and subject to the conditions set forth herein and Employee desires
to accept employment on such terms and conditions; and
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, agree as follows:
1.
Employment
1.1 Position. On the terms and subject to the
conditions set forth in this Agreement, the Company shall employ
Employee to serve as President and Chief Executive Officer of the
Company and Union, respectively, and to perform all duties
commensurate with such positions, serving at the pleasure and
direction of the Boards of Directors of Company (the
“Board”) and subject to the terms of this Agreement.
1.2 Board Reporting & Job Description.
Employee is to exercise such authority and perform such duties as
are commensurate with the position and will report directly to the
Board of Directors. Such services shall be performed in the same
market area where the Company has offices, or at such other
location as the Company and Employee may reasonably agree.
2.
Compensation
2.1 Base Salary. As consideration for
Employee’s services as an employee hereunder, The Company
agrees to pay Employee, and Employee agrees to accept, a base
salary of not less than $238,000 annually (“Base
Salary”) throughout the Term with increases as the Board, in
its discretion, may make at any time and from time to time.
The Base Salary, as so determined, shall be payable in
accordance with the Company's customary practice. It is
further understood and agreed that during the term of
Employee’s status as an employee, Employee shall be subject
to the withholding of taxes as required by law. During the
term of employment contemplated by this Agreement, the Employee
shall receive employee benefits and wage increase considerations on
the same basis as other employees and other perquisites as
determined by the Board.
2.2 Bonus. The Company shall make a
$25,000 payment to the Employee as a signing bonus. Payment
will be made upon full execution of this Agreement and Employee
gaining status as an employee, the payment will be subject to the
withholding of taxes as required by law. Additionally, the
Employee shall be eligible to participate in Senior Management
incentive compensation/bonus plans as provided by the Company.
2.3 Benefits. Employee shall be entitled
to participate in any insurance or other benefit plans now or
hereafter provided or made available to employees of the Company
generally; provided, however, that except as otherwise provided
herein nothing contained in this Agreement shall require the
Company to establish, maintain or continue any such benefits
already in existence or hereafter adopted for employees of the
Company.
2.4 Vacation. Employee shall be
entitled to annual vacation and leave time of four weeks at full
pay. Unused vacation time shall be treated pursuant to the
Company policy.
2.5 Executive Supplemental Income Plan.
Employee shall be entitled to participate in the Company's
current Executive Supplemental Income Plan ("Plan") which will be
structured to produce $40,000 in income per year for 15 years in
accordance with the Company's current Plan guidelines. With
the exclusion of the Death Benefit as described in the Plan, the
Employee will be fully vested at age 62. The plan shall be
fully funded at the Employee’s age of 65.
2.6 Change of Control Agreement .
If Employee remains employed pursuant to this Agreement
for the full five year employment period reflected in Section 3.1,
upon the expiration of the Term, as defined below, Employee and the
Company agree to enter into the Change of Control Agreement in the
form attached hereto as Exhibit 1, which shall provide for benefits
in the event of a change of control of the Company. If
Employee does not complete the full five year employment period or
is terminated at any time for cause, this agreement to execute the
Change of Control shall become null and void and of no force or
effect.
3.
Term and Termination.
3.1 Term. Employee shall be employed for a term
commencing on the Effective Date and ending on the fifth
anniversary of the Effective Date (the “Term”) unless
terminated earlier as provided herein.
3.2 Termination.
(a)
Death or Disability. If Employee dies or becomes disabled to
the extent that Employee cannot perform his duties under this
Agreement for a period of the lesser of (i) 180 consecutive days or
(ii) the time that the Employee and Company mutually determine that
there is a reasonable medical probability that the Employee will
not return to perform his duties within 180 days (the
“Disability Period”), this Agreement shall cease and
terminate on the date of Employee’s death or conclusion of
the Disability Period, as applicable, and Employee shall be
entitled to receive any Base Salary and benefits, earned through
Employee’s date of death or disability. Any disability
payments received by the Employee from the Company’s
disability policy will offset payments owed to the Employee under
section 2.1.
(b)
Retirement. Upon Employee’s retirement from Company at such
time as is normal and expected for employee retirement from the
Company, this Agreement shall cease and terminate as of the date of
retirement, and subject to the terms of this Agreement, Employee
shall be entitled to receive only Base Salary and benefits, earned
through the date of retirement.
(c)
Termination for Cause. If this Agreement is terminated by the
Company for Cause (as defined herein), this Agreement shall cease
and terminate as of the date of termination of Employee.
“Cause” shall be defined as (i) commission of a
willful act of dishonesty in the course of the Employee’s
duties; (ii) conviction by a court of competent jurisdiction of a
crime constituting a felony; (iii) the Employee’s continued,
habitual intoxication or performance under the influence of
controlled substances during working hours; (iv) frequent or
extended, and unjustifiable (not as a result of incapacity or
disability) absenteeism; (v) the Employee’s continued
personal misconduct, inability or refusal to substantially perform
his duties and responsibilities as determined by the Board of
Directors of the Company or by a state or federal banking
regulatory agency that has jurisdiction over the Company, or (vi)
material deviation from reasonable financial goals or operational
policies established by the Board.
3.3 Termination by Employee Without Cause.
Employee may terminate employment under this Agreement at any
time by giving 30 days advance notice in writing to the
Company.
3.4 Termination by Employee for “Good
Cause”. Employee may terminate employment under
this Agreement at any time upon the breach by the Company of any of
its obligations under this Agreement or for Good Cause; provided
that the Employee has given the Company at least ten days prior
written notice of the nature of such breach and Company, has failed
to cure such breach within a 30 day period following such notice.
For purposes herein, “Good Cause” means without
Employee’s express written consent, the assignment to
Employee of any duties or responsibilities inconsistent with the
Employee’s position, or a change in the Employee’s
reporting responsibilities, titles or offices as described herein,
or any removal of the Employee from, or the failure to re-elect the
Employee to, any such positions, except in connection with the
termination of the Employee for Cause, or his earlier disability,
retirement or death.
3.5 Employee’s Rights Upon
Termination.
In the event that this Agreement is terminated by the Company for
Cause, Employee shall receive all Base Salary and benefits, earned
through Employee’s final day of employment. In the event that
Employee terminates his employment for Good Cause, the Company
shall pay to Employee an amount equal to the Base Salary for the
remaining term of the agreement, subject to any necessary
regulatory approval. In the event that the Company terminates
Employee without Cause, the Company shall pay to Employee an amount
equal to the Base Salary for the remaining term of the agreement,
subject to any necessary regulatory approval. Any such Base
Salary shall be paid to Employee within 30 days of Employee’s
final day of employment. Upon termination for any reason, Employee
shall be required to deliver to the Company any Company assets.
3.6 Reimbursement for Certain Litigation
Expenses. To the extent that the Employee prevails in
a court of competent jurisdiction on the issue of whether
Employee’s employment was properly terminated under this
Agreement, the Company shall reimburse Employee his reasonable
attorney’s fees and costs incurred in such action. Any
amounts to be reimbursed hereunder will be paid to the Employee
within 30 days of a written consent for the same.
4 .
Confidential Information and Property of the Company and the
Bank.
4.1 Confidential Information. Employee
acknowledges and agrees that in connection with his employment
Employee will have access to certain confidential and proprietary
information owned by and related to the Company and Union.
For purposes of this Agreement, “Confidential
Information” means any proprietary information of or related
to the Company and the Bank, including but not limited to:
(i) operations manuals and guidelines, marketing manuals and
plans, and business strategies, techniques and methodologies; (ii)
financial information, including information set forth in internal
records, files and ledgers, or incorporated in profit and loss
statements, fiscal reports, sales reports and business plans; (iii)
any and all active prospective mergers or acquisitions of the
Company or the Bank, and all financial data, pricing terms,
information memoranda and due diligence reports relating thereto;
(iv) all internal memoranda and other office records, including
electronic and data processing files and records; and (v) any other
information constituting a trade secret under governing trade
secrets law or that is customarily considered confidential in
nature by industry.
4.2 Exceptions. Notwithstanding the
foregoing, Confidential Information does not include an
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