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EXHIBIT 10.5
EMPLOYMENT CONTRACT
THIS
EMPLOYMENT CONTRACT ("Contract") made and effective this 1st day
of
January, 2007, by and between Gary D. Haapala ("Employee") and
UNITED BANK &
TRUST, 205 E. Chicago Blvd., P.O. Box 248, Tecumseh, Michigan 49286
("Bank").
RECITALS
A. Bank is a
wholly owned subsidiary of United Bancorp, Inc. ("UBI").
B. Bank desires
to continue to employ Employee.
C. Employee
desires to continue to be employed by Bank.
D. There is
continued 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
Bank
wishes to minimize the uncertainty and distraction caused by such
activity,
which would detract from Employee's ability to perform his/her
duties, by
providing Employee with some transition assistance if UBI or Bank
is
acquired or if there is a change in control of UBI or Bank, or
if
Employee's employment is terminated in anticipation of such an
acquisition,
merger, change in control, or similar transaction.
NOW,
THEREFORE, Bank and Employee hereby enter into this Employment
Contract on the following terms and conditions:
1. Employment.
Bank hereby employs Employee, and Employee accepts this
employment and agrees to devote his/her full-time attention and
energies to
the
performance of his/her employment duties.
2. Term of
Contract. This Contract shall be for a term of one (1) year
beginning January 1, 2007, unless terminated earlier pursuant to
the
provisions of paragraph 3 and/or 6.
3. Payment Upon
Termination in Certain Circumstances. If, other than for a
Change in Control, as defined in paragraph 7, below, Bank shall
terminate
Employee's employment other than for "Cause," as defined in
paragraph 6,
below, or by mutual agreement, Employee shall continue to receive
his/her
regular salary (the salary in effect immediately prior to such
termination)
and
benefits (except for group carve out life insurance) for a period
of
six
(6) months. This continuation of salary and benefits shall
immediately
cease if Employee secures employment before the end of the six (6)
month
period.
4. Duties. The
duties, responsibilities and authority of Employee shall be as
determined by Bank from time to time.
5. Compensation.
Employee's annual salary for calendar year 2007 shall be
$167,000, unless adjusted pursuant to the following provisions:
a.
It is
contemplated that an annual bonus shall be paid. Employee will
be a Group 2 Participant in the Target Incentive Compensation
Plan.
b.
Employee shall
receive the standard employee benefits of employees of
Bank.
c.
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 benefits are effective only after Attachment A
has
been signed by the Chairman of the Board of Bank and by the
Employee.
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6. Termination
for Cause. Bank may terminate this Contract for "Cause," such
termination to be immediate, without notice, at any time, and
with
compensation and benefits only to the date of the termination of
Employee.
The
term "Cause" shall include the following enumerated and
substantially
equivalent matters:
a.
the death of
Employee;
b.
the disability
of Employee rendering him unable to perform the
services required under the Contract for a period of 180 days;
c.
known substance
abuse by Employee;
d.
felony
conviction or plea (including a plea of guilty, nolo contendere
or similar plea) of Employee;
e.
misdemeanor
conviction or plea (including a plea of guilty, nolo
contendere or similar plea) of Employee, if the misdemeanor
involves
moral turpitude;
f.
Employee's
repeated unprofessional, irresponsible or disruptive
language or conduct in the performance of his duties;
g.
Employee's
dishonesty, breach of professional or corporate ethics, or
criticism by a regulatory agency involving a serious violation of
law
or regulations;
h.
Employee's
substantial breach of any significant term of this
Contract, including, but not limited to, continued unsatisfactory
job
performance, or repeated uncooperative conduct.
7. Suspension.
Bank may suspend the employment of Employee resulting in the
cessation of the performance of duties and the cessation of all
compensation and benefits, in accordance with the following
provisions:
a.
If criminal
charges as described in subparagraph 6.d. and e. are made
against Employee, then Bank, acting in its discretion, may
suspend
Employee for any period of time, provided that the suspension
shall
end if
such charges do not result in a conviction of a plea (of guilty
or nolo contendere, etc.) of either the original charge(s) or
any
lessor charge(s).
b.
If a regulatory
agency criticizes Employee for regulatory violations
as set forth in paragraph 6.g. above, Bank shall have the
discretion
to suspend Employee for any period of time, provided that if
the
alleged violations are resolved in the Employee's favor, the
suspension shall end.
The
discretion invested in Bank as set forth in this paragraph 7, shall
be
exercised by the Chairman of its Board of Directors.
8. Failure to
Meet Goals and Objectives. In the event of Employee's repeated
failure to meet goals and objectives which are established by the
Board of
Directors of Bank from time to time, Employee's employment may
be
terminated immediately, without notice, at any time, provided that
Employee
shall continue to receive his/her regular salary and benefits for a
period
of
six (6) months in accordance with the provisions of paragraph 3,
above.
9. Employee
Responsibilities Following Termination. Termination of this
Contract shall not relieve Employee of his/her responsibilities to
complete
any
records, cooperate with Bank 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
its termination.
10. Change in Control.
For purposes of this Contract, a Change in Control of
UBI
or Bank shall be deemed to have occurred if:
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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;
or
b.
the stockholders
of UBI approved any plan or proposal for the
liquidation or dissolution of UBI; or
c.
except for any
Employee Stock Ownership Plan of UBI or its affiliates,
any person (as such term is used in Section 14(d)(2) of the
Securities
Exchange Act of 1934, as amended (the "Exchange Act")), shall
become
the beneficial owner (within the meaning of Rule 13d-3 under
the
Exchange Act) of twenty-five percent (25%) or more of UBI's
outstanding common stock.
d.
fifty percent
(50%) or more of the outstanding common stock of Bank is
not owned by UBI (unless the stock not owned by UBI was distributed
to
its shareholders in a reorganization transaction).
11. Provisions
Applicable in the Event of a Change in Control. If within
twelve
(12)
months following the effective date of a Change in Control,
Employee's
employment is terminated by Bank (or a successor) for any reason
(other
than
for a cause described in subparagraphs 6.a, b, c, d a
