AMENDED AND RESTATED
CONFIDENTIAL SEPARATION AND GENERAL RELEASE
AGREEMENT
THIS AMENDED AND
RESTATED CONFIDENTIAL SEPARATION AND GENERAL RELEASE AGREEMENT
(“ Agreement ”) is made and entered into as of
this 27th day of January, 2009, by and between PATRICK A. KELLY, an
individual, whose address is 45 Timber Run Court, Canfield, Ohio
44406 (“ Employee ”) and THE HOME SAVINGS AND
LOAN COMPANY OF YOUNGSTOWN, OHIO, an Ohio chartered stock savings
bank (the “ Home Savings ”), whose principal
place of business is located at 275 West Federal Street,
Youngstown, Ohio 44503.
WHEREAS ,
United Community Financial Corp., an Ohio corporation and the sole
shareholder of Home Savings (“ UCFC ”, and
together with Home Savings, the “ Company ”)
employed Employee as the Chief Financial Officer and Treasurer of
Home Savings and UCFC;
WHEREAS ,
the terms and conditions of the Employee’s employment with
Home Savings are set forth in that certain Employment Agreement,
dated December 31, 2004, by and between Home Savings and
Employee, as extended by the Board of Directors of Home Savings
(the “ Employment Agreement ”).
WHEREAS ,
Employee separated from employment with the Company as of
May 21, 2008 (the “ Separation Date ”), and
Employee subsequently resigned as a member of the Board of
Directors of Home Savings and Butler Wick Corp.
WHEREAS ,
Employee is a “ specified employee ” for
purposes of Section 409A of the Internal Revenue Code of 1986,
as amended ( “Code” ), and the Regulations
promulgated thereunder.
WHEREAS ,
except as otherwise provided herein, the Company and Employee wish
to resolve all matters that exist between them arising from
Employee’s employment and termination thereof, including
those that have been or could have been asserted by either party
against the other, and define all rights and obligations of the
parties relating to such separation.
WHEREAS ,
this Agreement is subject to the determination of the Federal
Deposit Insurance Corporation (the “ FDIC ”)
that the lump sum payment under this Agreement is permissible,
pursuant to 12 CFR Section 359 et seq. ( “Federal
Regulator’s Consent” ).
WHEREAS ,
Employee and the Company previously agreed upon an amount
constituting the Separation Pay (as defined below), and the Company
filed an application with the FDIC on November 13, 2008 (the
“ Application ”), to pay such amount to
Employee, but such amount was not approved by the FDIC.
WHEREAS ,
the Company and Employee have agreed to the amount of the
Separation Pay set forth below, and in accordance with the
instructions provided to the Company by the
10.10-1
FDIC, the
Company has agreed to amend the Application to seek the Federal
Regulator’s Consent to pay Employee the Separation
Pay.
NOW
THEREFORE , in consideration of the mutual promises, covenants
and representations set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which hereby
are acknowledged, the parties agree as follows:
1. Payment
by the Company .
(a) The
Company agrees to pay Employee the lump sum payment of Three
Hundred Sixty-Four Thousand, Six Hundred Eighty-Four Dollars and
32/100 ($364,684.32) (the “ Separation Pay ”).
The Company acknowledges that Employee is a “ specified
employee ” for purposes of Section 409A of the
Internal Revenue Code of 1986, as amended (“ Code
”). The Company acknowledges and agrees that the foregoing
lump sum Separation Pay includes (i) the separate payments
(Separation Date through March 15, 2009) under the
“Short-Term Deferral” exclusion under Code
Section 409A, including Treasury
Regulation Section 1.409A-1(b)(4), and (ii) the
separate payments (March 16, 2009 through May 20, 2010)
under the “Two (2) Times – Two
(2) Year” exclusion under Code Section 409A,
including Treasury Regulation Section 1.409A-1 and
Section 1.409A-1(b)(9)(iii), and, consistent with the
foregoing, the Company hereby agrees not to report such amounts in
Box 12 of Internal Revenue Service Form W-2 using Code
Z.
(b) The
Company agrees to provide Employee with the Separation Pay and the
other benefits set forth in Exhibit A, which Exhibit A is
attached to this Agreement, incorporated herein and made a part
hereof, less all customary payroll deductions, in accordance with
its ordinary payroll procedures, as applicable, as soon as
practicably possible after receipt of the Federal Regulator’s
Consent.
(c) The
Company shall promptly amend the Application to obtain the Federal
Regulator’s Consent, which consent the Company hereby
represents and warrants is necessary to make the payment to
Employee under this Agreement or the Employment Agreement. The
Company hereby agrees to keep Employee and his legal counsel
informed of the status of the filing, including any and all replies
and responses from and to the FDIC. Except as specifically set
forth in this Agreement or Exhibit A, no additional compensation,
wages, pay or employment benefits of any type or nature will accrue
as a result of the Separation Pay described herein.
2. Status as
Terminated Employee . Employee agrees that Employee’s
employment with the Company ended as of the close of business on
the Separation Date.
3. Health
Insurance; Employee’s Benefits . After the Separation
Date, Employee shall have the right to elect and pay for continued
coverage for Employee and Employee’s dependents under the
plans listed on Exhibit A, until the earlier of
December 31, 2010, or the date Employee is included in another
employer’s benefit plans as a full time employee. As of the
date hereof, Employee represents and warrants that Employee is
included in another employer’s benefit plans as a full time
employee, and such coverage began as of January 1, 2009.
Except as otherwise indicated in this Agreement and Exhibit A,
all of Employee’s other benefits of employment
with
10.10-2
the Company,
including but not limited to any bonus, profit sharing, incentive
or other compensation enhancement, shall terminate as of the
Separation Date.
4. This
provision intentionally deleted.
5. Employee
and Company Property . Employee agrees that prior to and upon
the separation from employment, Employee will only remove personal
items from Employee’s office and Employee will return to the
Company all records, files, equipment (including but not limited to
all computer equipment, or electronic devices of any type or
nature), office, loge, desk or file keys, credit cards, computer
programs or disks, or other Company property that are in
Employee’s possession, without further request from the
Company. By signing this Agreement, Employee represents that
Employee has returned all property, electronic or otherwise, of the
Company, including all Confidential Information, in
Employee’s possession and Employee agrees that Employee will
not copy any property of the Company, including Confidential
Information, directly or indirectly, in any fashion ( e.g .
by computer copy, CD, disk, cassette or any other electronic
method), except that Employee has retained his cellular telephone,
with the consent of the Company. Employee shall be solely
responsible for all fees and charges incurred after the Separation
Date for any calling/data or other service plans utilized by the
cellular telephone. Employee further agrees that any violation of
this section will cause irreparable harm to Company, and if
Employee violates this section, Company is entitled to pursue all
remedies available, including a temporary or permanent restraining
order. Employee shall turn over the automobile provided to
Employee, together with all keys and electronic entry devices on or
before the Separation Date.
6.
Confidential Information . The parties acknowledge and agree
that Section 9 of the Employment Agreement shall survive
execution of this Agreement and the termination of the Employment
Agreement.
7. General
Release of Claims
(a) The
Company and Employee expressly covenant and agree that in
consideration for the payment of Separation Pay, the reimbursement
of outplacement services obtained by Employee and other
consideration set forth herein, Employee does hereby voluntarily
and fully release, acquit, and forever discharge the Company, its
subsidiaries, affiliates, predecessors, successors and assigns and
their officers, directors, employees, agents, attorneys and other
representatives (hereinafter collectively referred to as the
“Releasees”) from any and all actions, claims, damages,
liabilities, promises, costs (including reasonable attorneys’
fees), rights or demands, of whatsoever kind or nature, in law or
in equity, Employee now has, may have had in the past or will have
at any time hereafter, by reason of any acts, causes, matters or
things arising prior to this
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