CONFIDENTIAL SEPARATION AND
GENERAL RELEASE AGREEMENT
THIS CONFIDENTIAL
SEPARATION AND GENERAL RELEASE AGREEMENT (“ Agreement
”) is made and entered into as of this 4th day of February,
2009, by and among DAVID G. LODGE, an individual, whose address is
970 Cascades Drive, Aurora, Ohio 44202 (“ Employee
”), UNITED COMMUNITY FINANCIAL CORP., an Ohio corporation
(“ UCFC ”) and UCFC’s wholly-owned
subsidiary, THE HOME SAVINGS AND LOAN COMPANY OF YOUNGSTOWN, OHIO,
an Ohio chartered stock savings bank (the “ Home
Savings, ” and together with UCFC, the “
Company ”), principal place of business is located at
275 West Federal Street, Youngstown, Ohio 44503.
WHEREAS ,
Employee has been employed at UCFC as the President and Chief
Operating Officer of UCFC and at Home Savings as the Director of
Strategic Planning; and
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,
and as amended to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (“ Code ”), and
the regulations thereunder (“ Section 409A
”) (the “ Employment Agreement ”);
and
WHEREAS ,
Home Saving engaged an outside consultant to perform a management
assessment of its management team, which assessment recommended
that Employee’s compensation be materially reduced and that
Employee retire from service; and
WHEREAS ,
the Company decided, as a result of the management assessment and
certain business dispositions by the Company that have
significantly reduced Employee’s responsibilities, to
involuntarily terminate Employee; and
WHEREAS ,
in response to such involuntary termination decision, the Company
and Employee have agreed to amicably resolve any difference between
them and that Employee will retire from employment with the Company
as of February 28, 2009, which retirement constitutes a
“separation from service” within the meaning of
Section 409A (the “ Separation Date ”), and
Employee will simultaneously retire as a member of the Board of
Directors of UCFC; and
WHEREAS ,
Employee is a “ specified employee ” for
purposes of Section 409A; and
WHEREAS ,
the Company and Employee intend that any amounts and benefits paid
and/or provided hereunder qualify for exemption under Treasury
Regulation Section 1.409A-1(b)(9)(iii); and
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; and
WHEREAS ,
this Agreement is subject to the determination of the Federal
Deposit Insurance Corporation (the “ FDIC ”) and
the Office of Thrift Supervision (the “ OTS ”,
and collectively, the “ Regulators ”) that the
payments under this Agreement are permissible, pursuant to 12 CFR
Section 359 et seq. ( “Federal Regulators’
Consent” ); and
WHEREAS ,
Employee’s time and compensation is allocated ninety percent
(90%) to UCFC and ten percent (10%) to Home Savings; and
WHEREAS ,
the Company and Employee have agreed to the amount of the
Separation Pay set forth below, which will be allocated in the same
proportions described above to UCFC and Home Savings, and the
Company has agreed to seek the Federal Regulators’ 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) Subject to the requirements of Section 1(b),
the Company agrees to pay Employee the equivalent of sixteen
months’ salary, which amounts to Three Hundred Fifty
Thousand, Seven Hundred Eighty-Four Dollars and 70/100
($350,784.70), or
33
Ten Thousand
Twenty-Two Dollars and 42/100 ($10,022.42) per pay period (for
which there are 35 pay periods) (the “ Separation Pay
”).
(b) The Company acknowledges that Employee is a
“ specified employee ” for purposes of Section
409A and that Employee will have an involuntary “separation
from service” within the meaning of Section 409A.
Subject to the Company’s prior receipt of the Federal
Regulators’ Consent, the Company agrees to pay the Employee
the Separation Pay in the equivalent of thirty-five (35)
consecutive installments paid every two (2) weeks (each
installment calculated by the Company as one-thirty fifth (1/35) of
the Separation Pay), less all customary payroll deductions, as
applicable, which (as a result of Employee’s involuntary
separation from service) would begin as of March 6, 2009, but
for the requirement to obtain the Federal Regulators’
Consent. Thus, payment of the Separation Pay shall begin on the
first payroll date following the Company’s receipt of the
Federal Regulators’ Consent; provided ,
however , that if the Federal Regulators’ Consent
is not obtained, the Employee shall forfeit the Separation Pay, and
the Company shall be under no obligation to pay Employee any
amounts hereunder or under the Employment Agreement, except as
provided in Section 1(c). In the event the Federal
Regulator’s Consent is obtained, but in an amount less than
the agreed Separation Pay, Employee acknowledges and agrees that
the amount actually approved by the OTS and the FDIC shall
constitute the Separation Pay, and Employee’s payments made
hereunder shall be appropriately adjusted (all other terms and
conditions of this Agreement shall remain in full force and
effect).
(c) Notwithstanding Section 1(b), the Company
agrees to make available to the Employee the benefits set forth in
Exhibit A, which Exhibit A is attached to this Agreement,
incorporated herein, and made a part hereof.
(d) 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 Regulators. Except as
specifically set forth in this Agreement or Exhibit A, no
additional severance or compensation, wages, pay or
employment/employee benefits of any type or nature will accrue as a
result of the Separation Pay described herein or as a result of the
Employment Agreement.
2.
Status as Terminated Employee . Employee agrees that
Employee’s employment with the Company ended, and that he has
incurred a “separation from service” within the meaning
of Section 409A, as of the close of business on the Separation
Date. In response to any request for separation from service
information, including from the Ohio Department of Job and Family
Services (the “ ODJFS ”), the Company agrees to
respond that Employee retired from the Company as a result of an
involuntary termination and the negotiation thereof. Additionally,
the Company shall inform the ODJFS that Employee is entitled to
receive certain Separation Pay as set forth in this Agreement,
unless such pay is forfeited as provided in
Section 1(b).
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. Except as
otherwise indicated in this Agreement and Exhibit A, all of
Employee’s other benefits of employment with the Company,
including but not limited to any bonus, profit sharing, incentive
or other compensation enhancement, shall terminate as of the
Separation Date; provided, however , that Employee shall be
entitled to receive an allocation under the United Community
Financial Corp. Employee Stock Ownership Plan (Plan No. 003) ,
in accordance with the terms of such plan, for service rendered
through the Separation Date.
4.
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 on or
before the Separation Date, Employee shall return 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 In
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