Exhibit 10.3

 

COMPANY EMPLOYMENT AGREEMENT

 

This Employment Agreement (hereinafter referred to as the “AGREEMENT”), is
originally entered into on the 30th day of March, 2006, previously amended and
restated in its entirety as of December 20, 2008 and hereby amended and restated
as of July 1, 2014 by and between United Community Bancorp, an Indiana
corporation, (hereinafter referred to as the “COMPANY”), and Elmer G. McLaughlin
(hereinafter referred to as the “EMPLOYEE”);

 

WITNESSETH:

 

WHEREAS, as a result of the skill, knowledge and experience of the EMPLOYEE, the
Board of Directors of the COMPANY desires to continue to retain the services of
the EMPLOYEE as President and Chief Executive Officer of the COMPANY; and

 

WHEREAS, the EMPLOYEE desires to continue to serve as President and Chief
Executive Officer of the COMPANY; and

 

WHEREAS, the EMPLOYEE and the COMPANY desire to enter into this Agreement to set
forth the terms and conditions of the employment relationship between the
COMPANY and the EMPLOYEE; and

 

WHEREAS, the parties desire to amend and restate this Agreement to bring it into
compliance with changes in the regulatory structure governing financial
institutions like the COMPANY; (ii) reflect the EMPLOYEE’s current job position
with the COMPANY; and (iii) other ministerial matters.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, the COMPANY and the EMPLOYEE hereby agree as follows:

 

1.           Employment and Term.

 

(a)          Term. Upon the terms and subject to the conditions of this
AGREEMENT, the COMPANY hereby employs the EMPLOYEE, and the EMPLOYEE hereby
accepts employment, as the President and Chief Executive Officer of the COMPANY.
The term of this AGREEMENT shall commence on July 1, 2014, and shall end on June
30, 2017, unless extended by the COMPANY, as provided in subsection (b) of this
Section 1 (hereinafter referred to, together with such extensions, as the
“TERM”).

 

(b)          Extension. On or before each anniversary of the original date of
this AGREEMENT, the Board of Directors of the COMPANY may extend the AGREEMENT
for an additional year, so that the remaining TERM of the AGREEMENT again
becomes three (3) years from the applicable anniversary date, unless, the
EMPLOYEE elects not to extend the TERM by giving written notice at least thirty
(30) days prior to the applicable commission date.

 

   

 

 

(c)          The board of directors of the COMPANY will review the AGREEMENT and
the EMPLOYEE’s performance review annually for purposes of determining whether
to extend the AGREEMENT TERM and will include the rationale and results of its
review in the minutes of the meetings.

 

(d)          Nothing in this AGREEMENT shall mandate or prohibit a continuation
of the EMPLOYEE’s employment following the expiration of the TERM of this
AGREEMENT, upon such terms and conditions as the COMPANY and the EMPLOYEE may
mutually agree.

 

2.           Duties of the EMPLOYEE.

 

(a)          General Duties and Responsibilities. The EMPLOYEE shall serve as
the President and Chief Executive Officer of the COMPANY according to the terms
and conditions of this AGREEMENT and for the period stated in Section 1 of this
AGREEMENT. As a President and Chief Executive Officer of the COMPANY, the
EMPLOYEE will perform all duties and will have all powers associated with this
position, as set forth in any job description provided to EMPLOYEE by the
COMPANY or as may be delegated to the EMPLOYEE by the Board of Directors of the
COMPANY. EMPLOYEE shall report directly to the Board of Directors of the
COMPANY.

 

(b)          Devotion of Entire Time to the Business of the COMPANY and its
Affiliates. The EMPLOYEE shall devote his entire productive time, ability and
attention during normal business hours throughout the TERM to the faithful
performance of his duties under this Agreement. The EMPLOYEE shall not directly
or indirectly render any services of a business, commercial or professional
nature to any person or organization other than the COMPANY or any affiliates
without the prior written consent of the Board; provided, however, that the
EMPLOYEE shall not be precluded from (i) vacations and other leave time in
accordance with Section 3(d) below, (ii) reasonable participation in community,
civic, charitable or similar organizations, (iii) reasonable participation in
industry-related activities, including, but not limited to, attending state and
national trade association meetings and serving as an officer, director or
trustee of a state or national trade association or Federal Home Loan Bank, (iv)
serving as an officer or director of any affiliate of the COMPANY and receiving
a salary, director’s fees or other compensation or benefits, as appropriate, or
(v) pursuing personal investments which do not interfere or conflict with the
performance of the EMPLOYEE’s duties to the COMPANY or its affiliates.

 

3.           Compensation.

 

(a)          Base Salary. The EMPLOYEE shall receive during the TERM an annual
salary payable in equal installments not less often than monthly. The amount of
such annual salary shall be $175,000.00 until changed by the Board in accordance
with Section 3(b) below.

 

(b)          Periodic Salary Review. The annual salary of the EMPLOYEE shall be
reviewed by the Board from time to time throughout the TERM, but not less often
than once every three years, and shall be set at an amount not less than
$175,000.00, based upon the EMPLOYEE’s individual performance and such other
factors as the Board may deem appropriate (hereinafter referred to as the
“Periodic Review”). The results of the Periodic Review shall be reflected in the
minutes of the Board.

 

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(c)          EMPLOYEE Benefit Programs. During the TERM, the EMPLOYEE shall be
eligible to participate in all formally established EMPLOYEE benefit, bonus,
pension and profit sharing plans and similar programs that are maintained by the
COMPANY or its affiliates from time to time and all EMPLOYEE benefit plans or
programs hereafter adopted in writing by the Board for which senior management
personnel are eligible, including any EMPLOYEE stock ownership plan, stock
option plan or other stock benefit plan (hereinafter collectively referred to as
“Benefit Plans”), in accordance with the terms and conditions of such Benefit
Plans. Notwithstanding any statement to the contrary contained elsewhere in this
Agreement, the COMPANY or its affiliates may at any time discontinue or
terminate any Benefit Plan now existing or hereafter adopted, to the extent
permitted by the terms of such Benefit Plan, and shall not be required to
compensate the EMPLOYEE for such discontinuance or termination to the extent
such discontinuance or termination pertains to all EMPLOYEES who are eligible
participants at the time.

 

(d)          Vacation and Sick Leave. The EMPLOYEE shall be entitled, without
loss of pay, to be absent voluntarily from the performance of his duties under
this Agreement, in accordance with the policies periodically established by the
Board for senior management. The EMPLOYEE shall be entitled to annual sick leave
as established by the Board for senior management.

 

(e)          Reimbursement of Business Expenses. The EMPLOYEE shall be entitled
to reimbursement for all reasonable business expenses (including mileage at the
prevailing rate established by the Internal Revenue Service) incurred while
performing his obligations under this AGREEMENT, including but not limited to
all reasonable business travel and entertainment expenses incurred while acting
at the request of or in the service of the COMPANY and reasonable costs
associated with participation in industry-related activities. Expenses will be
reimbursed if they are submitted in accordance with the COMPANY’s policies and
procedures.

 

4.           Termination of Employment.

 

(a)          General. The employment of the EMPLOYEE shall terminate at any time
during the Term (i) at the option of the COMPANY, upon the delivery by the
COMPANY of written notice of termination to the EMPLOYEE, or (ii) at the option
of the EMPLOYEE, upon delivery by the EMPLOYEE of written notice of termination
to the COMPANY if, in connection with a Change in Control (hereinafter defined),
the present capacity or circumstances in which the EMPLOYEE is employed are
materially adversely changed so as to constitute Good Reason if such events
occur within one year of a Change In Control. For purposes of this Agreement,
“Good Reason” shall mean the occurrence of any of the following events without
the EMPLOYEE’s consent:

 

(1)         The assignment to the EMPLOYEE of duties that constitute a material
diminution of his authority, duties, or responsibilities (including reporting
requirements);

 

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(2)         A material diminution in the EMPLOYEE’s Base Salary;

 

(3)         Relocation of the EMPLOYEE to a location outside a radius of 35
miles of the COMPANY’s executive office in Lawrenceburg, Indiana; or

 

(4)         Any other action or inaction by the COMPANY that constitutes a
material breach of this Agreement;

 

provided, that within ninety (90) days after the initial existence of such
event, the COMPANY shall be given notice and an opportunity, not less than
thirty (30) days, to effectuate a cure for such asserted “Good Reason” by the
EMPLOYEE. The EMPLOYEE’s resignation hereunder for Good Reason shall not occur
later than one hundred fifty (150) days following the initial date on which the
event the EMPLOYEE claims constitutes Good Reason occurred.

 

The following subsections (A), (B) and (C) of this Section 4(a)(ii) shall govern
the obligations of the COMPANY to the EMPLOYEE upon the occurrence of the events
described in such subparagraphs:

 

(A)         Termination for Cause. In the event that the COMPANY terminates the
employment of the EMPLOYEE during the TERM because of the EMPLOYEE’s personal
dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving
personal profit, intentional failure or refusal to perform the duties and
responsibilities assigned in this Agreement, willful violation of any law, rule
or regulation (other than traffic violations or other minor offenses), or final
cease-and-desist order or material breach of any provision of this Agreement
(hereinafter collectively referred to as “Cause”), the EMPLOYEE shall not
receive, and shall have no right to receive, any compensation or other benefits
for any period after such termination.

 

(B)         Termination in Connection with Change in Control. In the event that
the employment of the EMPLOYEE is terminated by the COMPANY in connection with a
Change in Control for any reason other than Cause or is terminated by the
EMPLOYEE as provided in Section 4(a) above, then the following shall occur:

 

(I)         The COMPANY shall promptly pay to the EMPLOYEE or to his
beneficiaries, dependents or estate an amount equal to the product of 2.99
multiplied by the EMPLOYEE’s “base amount” as defined in Section 280G(b)(3) of
the Code and the regulations promulgated thereunder (hereinafter collectively
referred to as “Section 280G”);

 

(II)        The EMPLOYEE, his dependents, beneficiaries and estate shall
continue to be covered at the COMPANY’s expense under all health, life,
disability and other benefit plans of the COMPANY in which the EMPLOYEE was a
participant prior to the effective date of the termination of his employment as
if the EMPLOYEE were still employed under this Agreement until the earlier of
the expiration of the Term or the date on which the EMPLOYEE is included in
another employer’s benefit plans as a full-time EMPLOYEE; and

 

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(III)       The EMPLOYEE shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall any amounts received from other employment or otherwise by the
EMPLOYEE offset in any manner the obligations of the COMPANY hereunder, except
as specifically stated in subparagraph (II) above.

 

(C)         Termination not in Connection with Change in Control. In the event
that the employment of the EMPLOYEE is terminated before the expiration of the
TERM for any reason other than death, termination for Cause or termination in
connection with a Change in Control, then the following shall occur:

 

(I)         The COMPANY shall be obligated to continue to pay to the EMPLOYEE,
his designated beneficiaries or his estate, a lump sum amount, within ten (10)
days of his termination, equal to the base salary that would have been paid to
the EMPLOYEE through the expiration of the TERM, at the annual rate of salary in
effect at the time of termination pursuant to Section 3(b) above, plus a cash
bonus equal to the cash bonus, if any, paid to the EMPLOYEE in the twelve month
period prior to the termination of employment;

 

(II)        The COMPANY shall continue to provide to the EMPLOYEE, at its
expense, health, life, disability and other benefits substantially equal to
those being provided to the EMPLOYEE at the date of termination of his
employment until the earliest to occur of the expiration of the TERM or the date
on which the EMPLOYEE is included in another employer’s benefit plans as a
full-time EMPLOYEE; and

 

(III)       The EMPLOYEE shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall any amounts received from other employment or otherwise by the
EMPLOYEE offset in any manner the obligations of the COMPANY hereunder, except
as specifically stated in subparagraph (II) above.

 

As a condition precedent to receiving the lump sum severance payment and
benefits under this Section 4(a)(ii)(C), EMPLOYEE shall execute a release
agreement in a form provided by the COMPANY or United Community Bank (“BANK”).
In said release agreement, EMPLOYEE shall, among other provisions included at
the discretion of the BANK and/or the COMPANY, agree to fully and forever
discharge and release COMPANY, its past and present subsidiary and affiliated
corporations or business entities and its and their past and present EMPLOYEES,
agents, representatives, officers, benefit plans, and directors from any and all
actions, causes of action, claims, demands, damages, costs, expenses and
compensation on account of, or in any way growing out of any and all damage that
EMPLOYEE had, has, or may have against the COMPANY and/or the BANK as of the
time the release agreement is executed by EMPLOYEE.

 

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(b)          Death of the EMPLOYEE. The TERM shall automatically expire upon the
death of the EMPLOYEE. In such event, the EMPLOYEE’s estate shall be entitled to
receive the amount of the annual salary that the EMPLOYEE would have received
through the last day of the third calendar month following the month in which
the death occurred, except as otherwise specified herein.

 

(c)          “Golden Parachute” Provision. Notwithstanding any other provisions
of this AGREEMENT, in the event that the aggregate payments or benefits to be
made or afforded to the EMPLOYEE under this AGREEMENT or otherwise, which are
deemed to be parachute payments as defined in SECTION 280G or any successor
thereof (the “Termination Benefits”), would be deemed to include an “excess
parachute payment” under SECTION 280G of the Code, then the Termination Benefits
shall be reduced to a value which is one dollar ($1.00) less than an amount
equal to three (3) times the EMPLOYEE’s “base amount,” as determined in
accordance with Section 280G of the Code. The allocation of the reduction
required hereby among the Termination Benefits shall first be made from any cash
severance benefit due under Section 4 of this AGREEMENT. Nothing contained in
this AGREEMENT shall result in a reduction of any payments or benefits to which
the EMPLOYEE may be entitled upon termination of employment other than pursuant
to Sections 4(a)(ii)(B)(I) and (II), or a reduction in the payments and benefits
specified, below zero.

 

(d)          Definition of “Change in Control”. For purposes of this Agreement,
a Change in Control means any of the following events:

 

(I)          Merger: The COMPANY merges into or consolidates with another
corporation, or merges another corporation into the COMPANY, and as a result
less than a majority of the combined voting power of the resulting corporation
immediately after the merger or consolidation is held by persons who were
stockholders of the COMPANY immediately before the merger or consolidation.

 

(II)         Acquisition of Significant Share Ownership: There is filed, or is
required to be filed, a report on Schedule 13D or another form or schedule
(other than Schedule 13G) required under Sections 13(d) or 14(d) of the
Securities Exchange Act of 1934, if the schedule discloses that the filing
person or persons acting in concert has or have become the beneficial owner of
25% or more of a class of the COMPANY’s voting securities, but this clause (II)
shall not apply to beneficial ownership of COMPANY voting shares held in a
fiduciary capacity by an entity of which the COMPANY directly or indirectly
beneficially owns 50% or more of its outstanding voting securities.

 

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(III)       Change in Board Composition: During any period of two consecutive
years, individuals who constitute the COMPANY’s Board of Directors at the
beginning of the two-year period cease for any reason to constitute at least a
majority of the COMPANY’s Board of Directors; provided, however, that for
purposes of this clause (III), each director who is first elected by the board
(or first nominated by the board for election by the stockholders) by a vote of
a least two-thirds (2/3) of the directors who were directors at the beginning of
the two-year period shall be deemed to have also been a director at the
beginning of such period; or

 

(IV)        Sale of Assets: The COMPANY sells to a third party all or
substantially all of its assets.

 

( e )         Termination by EMPLOYEE. If the EMPLOYEE terminates this Agreement
without the written consent of the COMPANY, other than pursuant to Section
4(a)(ii) of this Agreement, the EMPLOYEE shall not engage in the financial
institutions’ business as a director, officer, EMPLOYEE or consultant for any
business or enterprise which “directly or indirectly” competes with the
principal business of the COMPANY or any of its subsidiaries within Dearborn
County, Indiana or within thirty (30) miles of the principal business location
of COMPANY, for the unexpired TERM of this Agreement. This provision shall not
apply in the event of the termination of the employment of the EMPLOYEE by the
COMPANY prior to the expiration of the TERM or termination by the EMPLOYEE
pursuant to Section 4(a)(ii) of this Agreement.

 

(1)         The term “compete” means:

 

(i)          providing financial products or services on behalf of any financial
institution for any person residing in the territory;

 

(ii)         assisting (other than through the performance of ministerial or
clerical duties) any financial institution in providing financial products or
services to any person residing in the territory; or

 

(iii)        inducing or attempting to induce any person who was a customer of
the COMPANY at the date of the EMPLOYEE’s employment termination to seek
financial products or services from another financial institution.

 

(2)         The words “directly” or “indirectly” mean:

 

(i)          acting as a consultant, officer, director, independent contractor,
or EMPLOYEE of any financial institution in competition with the COMPANY or its
affiliates in the territory, or

 

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(ii)         communicating to such financial institution the names or addresses
or any financial information concerning any person who was a customer of the
COMPANY or its affiliates when the EMPLOYEE’s employment terminated.

 

If any provision of this section (e) or any word, phrase, clause, sentence or
other portion thereof (including, without limitation, the geographical and
temporal restrictions contained therein) is held to be unenforceable or invalid
for any reason, the unenforceable or invalid provision or portion shall be
modified or deleted so that the provisions hereof, as modified, are legal and
enforceable to the fullest extent permitted under applicable law. EMPLOYEE
acknowledges that the COMPANY’s willingness to enter into this AGREEMENT and to
make the payments contemplated by Section 4 of this AGREEMENT is conditioned on
the EMPLOYEE’s acceptance of the covenants set forth in this Section 4(e) and
that the COMPANY would not have entered into this AGREEMENT without such
covenants in force.

 

5.          Consolidation, Merger or Sale of Assets. Nothing in this Agreement
shall preclude the COMPANY from consolidating with, merging into, or
transferring all, or substantially all, of its assets to another corporation
that assumes all of its obligations and undertakings hereunder. Upon such a
consolidation, merger or transfer of assets, the term “COMPANY” as used herein,
shall mean such other corporation or entity, and this Agreement shall continue
in full force and effect.

 

6.          Confidential Information. The EMPLOYEE acknowledges that during his
employment she will learn and have access to confidential information regarding
the COMPANY and its affiliates, and their customers and businesses. The EMPLOYEE
agrees and covenants not to disclose or use for his own benefit, or the benefit
of any other person or entity, any confidential information, unless or until the
COMPANY consents to such disclosure or use of such information is otherwise
legally in the public domain. The EMPLOYEE shall not knowingly disclose or
reveal to any unauthorized person any confidential information relating to the
COMPANY or its affiliates, or to any of the businesses operated by them, and the
EMPLOYEE acknowledges that such information constitutes the exclusive property
of the COMPANY. The EMPLOYEE shall not otherwise knowingly act or conduct
herself to the material detriment of the COMPANY or its affiliates or in a
manner which is inimical or contrary to the interests of the COMPANY or its
affiliates.

 

7.          Non-assignability. Neither this Agreement nor any right or interest
hereunder shall be assignable by the EMPLOYEE, his beneficiaries or legal
representatives without the COMPANY’s prior written consent; provided, however,
that nothing in this Section 7 shall preclude the EMPLOYEE from designating a
beneficiary to receive any benefits payable hereunder upon his death or the
executors, administrators or other legal representatives of the EMPLOYEE or his
estate from assigning any rights hereunder to the person or persons entitled
thereto.

 

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8.          No Attachment. Except as required by law, no right to receive
payment under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to
execution, attachment, levy, or similar process of assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.

 

9.          Binding Agreement. This Agreement shall be binding upon, and inure
to the benefit of, the EMPLOYEE and the COMPANY and their respective permitted
successors and assigns.

 

10.         Amendment of Agreement. This Agreement may not be modified or
amended, except by an instrument in writing signed by the parties hereto.

 

11.         Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be an estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel. No such written waiver shall be deemed a
continuing waiver, unless specifically stated therein, and each waiver shall
operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than the act specifically waived.

 

12.         Severability. If, for any reason, any provision of this Agreement is
held invalid, such invalidity shall not affect the other provisions of this
Agreement not held so invalid, and each such other provision shall, to the full
extent consistent with applicable law, continue in full force and effect.

 

13.         Headings. The headings of the paragraphs herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.

 

14.         Governing Law. This Agreement has been executed and delivered in the
State of Indiana and its validity, interpretation, performance, and enforcement
shall be governed by the laws of the State of Indiana, except to the extent that
federal law governs.

 

15.         Notices. Any notice or other communication required or permitted
pursuant to this Agreement shall be deemed delivered if such notice or
communication is in writing and is delivered personally or by facsimile
transmission or is deposited in the United States mail, postage prepaid,
addressed to the COMPANY at its principal business address, and to the EMPLOYEE
at the EMPLOYEE’s address most recently on file with the COMPANY.

 

16.         Source of Payments. Notwithstanding any provision herein to the
contrary, to the extent payments and benefits, as provided by this Agreement,
are paid or received by EMPLOYEE under the Employment Agreement between EMPLOYEE
and the BANK, such compensation payments and benefits paid by the BANK will be
subtracted from any amount or benefit due simultaneously to EMPLOYEE under
similar provisions of this AGREEMENT. Payments pursuant to this AGREEMENT will
be allocated in proportion to the level of activity and time expended on such
activities by EMPLOYEE, as determined by the COMPANY.

 

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17.          Section 409A of the Code.

 

(a)          This Agreement is intended to comply with the requirements of
Section 409A of the Code, and specifically, with the “short-term deferral
exception” under Treasury Regulation Section 1.409A-1(b)(4) and the “separation
pay exception” under Treasury Regulation Section 1.409A-1(b)(9)(iii), and shall
in all respects be administered in accordance with Section 409A of the Code. If
any payment or benefit hereunder cannot be provided or made at the time
specified herein without incurring sanctions on the EMPLOYEE under Section 409A
of the Code, then such payment or benefit shall be provided in full at the
earliest time thereafter when such sanctions will not be imposed. For purposes
of Section 409A of the Code, all payments to be made upon a termination of
employment under this Agreement may only be made upon a “separation from
service” (within the meaning of such term under Section 409A of the Code), each
payment made under this Agreement shall be treated as a separate payment, the
right to a series of installment payments under this Agreement (if any) is to be
treated as a right to a series of separate payments, and if a payment is not
made by the designated payment date under this Agreement, the payment shall be
made by December 31 of the calendar year in which the designated date occurs. To
the extent that any payment provided for hereunder would be subject to
additional tax under Section 409A of the Code, or would cause the administration
of this Agreement to fail to satisfy the requirements of Section 409A of the
Code, such provision shall be deemed null and void to the extent permitted by
applicable law, and any such amount shall be payable in accordance with (b)
below. In no event shall the EMPLOYEE, directly or indirectly, designate the
calendar year of payment.

 

(b)          If when separation from service occurs the EMPLOYEE is a “specified
EMPLOYEE” within the meaning of Section 409A of the Code, and if the cash
severance payment under Section 4 would be considered deferred compensation
under Section 409A of the Code, and, finally, if an exemption from the six-month
delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available
(i.e., the “short-term deferral exception” under Treasury Regulations Section
1.409A-1(b)(4) or the “separation pay exception” under Treasury Section
1.409A-1(b)(9)(iii)), the COMPANY will make the maximum severance payment
possible in order to comply with an exception from the six month requirement and
make any remaining severance payment under Section 4 to the EMPLOYEE in a single
lump sum without interest on the first payroll date that occurs after the date
that is six (6) months after the date on which the EMPLOYEE separates from
service.

 

(c)          If under the terms of the applicable policy or policies for the
insurance or other benefits specified in Section 4 it is not possible to
continue coverage for the EMPLOYEE and his dependents, or when a separation from
service occurs the EMPLOYEE is a “specified EMPLOYEE” within the meaning of
Section 409A of the Code, and if any of the continued insurance coverage or
other benefits specified in Section 4 would be considered deferred compensation
under Section 409A of the Code, and, finally, if an exemption from the six-month
delay requirement of Section 409A(a)(2)(B)(i) of the Code is not available for
that particular insurance or other benefit, the COMPANY shall pay to the
EMPLOYEE in a single lump sum an amount in cash equal to the present value of
the COMPANY’s projected cost to maintain that particular insurance benefit (and
associated income tax gross-up benefit, if applicable) had the EMPLOYEE’s
employment not terminated, assuming continued coverage for 36 months. The
lump-sum payment shall be made thirty (30) days after employment termination or,
if Section 17(b) applies, on the first payroll date that occurs after the date
that is six (6) months after the date on which the EMPLOYEE separates from
service.

 

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(d)          References in this Agreement to Section 409A of the Code include
rules, regulations, and guidance of general application issued by the Department
of the Treasury under Internal Revenue Section 409A of the Code.

 

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IN WITNESS WHEREOF, the COMPANY has caused this Agreement, as amended and
restated, to be executed by its duly authorized officer, and the EMPLOYEE has
signed this Agreement, each as of June 26, 2014.

 

Attest:   UNITED COMMUNITY BANCORP         /s/ Donna G. Hornbach   By: /s/ Ralph
B. Sprecher       On behalf of the Board of Directors           EMPLOYEE        
  /s/ Elmer G. McLaughlin     Elmer G. McLaughlin

 

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