Exhibit 10.2
UNITED COMMUNITY FINANCIAL CORP.
&
THE HOME SAVINGS AND LOAN COMPANY OF YOUNGSTOWN, OHIO
STAY BONUS AND RETENTION PLAN
1. Purpose. Effective as of April 28, 2011 (the “Effective Date”), the Boards of
Directors (collectively, the “Board”) of United Community Financial Corp.
(“UCFC”) and UCFC’s wholly owned subsidiary, The Home Savings and Loan Company
of Youngstown, Ohio (“Home Savings” and together with UCFC, the “Company”),
hereby adopt this STAY BONUS AND RETENTION PLAN (the “Retention Plan”) for the
purpose of recruiting and retaining qualified officers and employees of the
Company by providing additional procedures and guidelines for payments of Cash
Awards and Equity Awards to Participants (all as defined herein). Equity Awards
will be granted in the form of Restricted Shares issued under and pursuant to
the terms and conditions of the United Community Financial Corp. Amended and
Restated 2007 Long Term Incentive Plan (the “2007 Plan”).
2. Definitions. Capitalized terms used but not defined in this Retention Plan
shall have the meanings given to such terms in the 2007 Plan. To the extent that
any term defined herein conflicts with the definition of such term under the
2007 Plan, the definition in this Retention Plan shall control, except to the
extent such conflict would render any term or provision of the 2007 Plan
ineffective or inoperable.
3. Administration.
(a) This Retention Plan shall be administered by the Company’s Compensation
Committee (“Committee”), subject to such terms and conditions as the Committee
may prescribe that are not inconsistent with the Retention Plan.
(b) Subject to the terms and conditions of the Retention Plan and the 2007 Plan,
the Committee shall have the discretion and (subject to subsequent approval by a
majority of the independent members of the Board, as defined under applicable
NASDAQ listing rules) exclusive power to:

  (i)   Make Cash Awards and Equity Awards to Participants as described herein;
    (ii)   Determine the terms and conditions with respect to Cash Awards and/or
Equity Awards to the extent not inconsistent with the provisions of the
Retention Plan or the 2007 Plan; and     (iii)   Resolve all questions relating
to the administration of the Retention Plan and applicable law.

(c) The interpretation of, and application by, the Committee of any provision of
the Retention Plan shall be final and conclusive. The Committee, in its sole
discretion, may establish rules and guidelines relating to the Retention Plan as
it may deem appropriate.

 

 

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4. Participation.
(a) The Committee shall recommend officers and employees of the Company to be
participants in the Retention Plan at or any time after the Effective Date,
including any officers or employees hired after the Effective Date in accordance
with this Section 4(a). The officers and employees recommended for participation
by the Committee shall be approved by at least a majority of the independent
members of the Board (and upon such approval, each such officer and employee
shall become a “Participant,” and collectively shall be the “Participants”).
Attached hereto as Exhibit A is a list of Participants of the Plan as of the
Effective Date, which may be amended from time to time by the Board and the
Committee in their sole and absolute discretion.
(b) To be eligible for any Cash Award or Equity Award, each Participant must
maintain no less than a consolidated rating of competent performance of such
Participant’s goals and responsibilities within the Participant’s current job
description and other related/required duties that may be assigned. In addition,
each Participant must be actively employed by UCFC or Home Savings at the time
any Cash Award is paid or an Equity Award is granted.
5. Awards.
(a) For purposes of this Retention Plan,

  (i)   “Cash Award” shall mean any payment of cash by the Company payable to a
Participant in accordance with the terms and conditions of this Retention Plan.

  (ii)   “Equity Award” shall mean any Award of Restricted Shares under the 2007
Plan to a Participant in accordance with the terms and conditions of this
Retention Plan, the 2007 Plan and the award agreement provided by the Company.

(b) Each eligible Participant shall receive a Cash Award of One Thousand and
00/100 Dollars ($1,000.00) on the first regular pay date occurring in
January 2012, subject to all applicable Federal, state and local payroll taxes.
(c) Each eligible Participant also shall receive a Cash Award and be granted an
Equity Award upon receipt by the Board of Home Savings of official notice that
the Order to Cease and Desist, Order No. FDIC -08-175b, as may be amended from
time to time (the “Order”), has been terminated. For purposes of this Retention
Plan, the words “terminated” or “termination” used in connection with the Order
shall mean a termination by the Federal Deposit Insurance Corporation (the
“FDIC”) and the Ohio Division of Financial Institutions (“ODFI”), or either of
such regulatory authority’s successors or assigns, of the Order, which Order is
not replaced, amended or modified in such a manner as to be considered
terminated but replaced with a new order or agreement.

 

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(d) The combined award described above shall be based upon a specified
percentage of each Participant’s base salary in effect at the time the Order has
been terminated, which percentage shall be determined by the Board and set forth
in Exhibit A attached hereto, and as may be amended from time to time by the
Board and the Committee in their sole and absolute discretion.

  (i)   The Cash Award shall equal fifty percent (50%) of the combined award and
will be paid in a single lump sum payment following receipt of the notice of
termination of the Order, in accordance with the Company’s regular pay
practices, but in no event more than thirty (30) days following receipt of such
notice. Payment of the Cash Award shall be subject to all applicable Federal,
state and local payroll taxes.

  (ii)   The Equity Award shall consist of a number of Restricted Shares equal
to fifty percent (50%) of the combined award divided by the Fair Market Value of
a Common Share on the Grant Date (defined below), rounded down to the nearest
whole Common Share. Fractional Common Shares shall not be issued, so any portion
of the Equity Award that is not converted to Restricted Shares on a Grant Date
shall be paid to the Participant in cash as part of the Cash Award.

(e) For purposes of this Retention Plan, the “Grant Date” of the Equity Award
shall be the date upon which the Compensation Committee and a majority of the
independent members of the Board meet and formally approve the issuance of
Restricted Shares pursuant to the Retention Plan. The Compensation Committee and
the Board shall use their best efforts to hold a meeting on the date notice of
termination of the Order is received by the Board or as soon thereafter as
practicable.
(f) Restricted Shares awarded pursuant to the Retention Plan shall be evidenced
by an award agreement containing such terms and conditions as the Committee may
prescribe and that are not inconsistent with the terms of the 2007 Plan or the
Retention Plan; provided, however, that no Restricted Shares may vest prior to
the first anniversary of the Grant Date except as specifically set forth in the
2007 Plan or as provided herein. For purposes of applying Section 13.3 of the
2007 Plan to any Equity Award, a Participant’s “Retirement” shall mean the
Participant’s Separation from Service as provided under 2.1(bb) of the 2007
Plan.
(g) Restricted Shares that vest shall be settled by the Company as soon as
reasonably practicable. In accordance with the terms and conditions of the 2007
Plan, in the case of Equity Awards paid in Restricted Shares, the Company may
withhold Common Shares otherwise issuable upon exercise or settlement of such
Equity Award in order to satisfy withholding obligations, unless otherwise
instructed by the Participant or unless the Committee determines otherwise at
the time of Grant.

 

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(h) In the event that the Company terminates a Participant’s employment for
cause prior to the date upon which a Cash Award is actually paid to a
Participant or a Participant’s Equity Award has vested, the Participant shall
forfeit all his or her rights, title or interest in any such Cash or Equity
award, and the Participant shall not be entitled to receive all or any part of
the Cash or Equity Award. When used in this Retention Plan, “cause” means
(A) the Participant’s continued intentional failure or refusal to perform
substantially the Participant’s assigned duties (other than as a result of total
or partial incapacity due to physical or mental illness) for a period of ten
days following written notice by the Company to the Executive of such failure;
(B) the Participant’s engagement in willful misconduct, including without
limitation, fraud, embezzlement, theft or dishonesty in the course of
Participant’s employment with the Company; (C) the Participant’s conviction of,
or plea of guilty or nolo contendere to a felony or a crime other than a felony,
which felony or crime involves moral turpitude or a breach of trust or fiduciary
duty owed to the Company or any of its affiliates; (D) the Participant’s
disclosure of trade secrets or material, non-public confidential information of
the Company or any of its affiliates in violation of the Company’s or its
affiliates’ policies that applies to the Executive or any agreement with the
Company or any of its Affiliates in respect of confidentiality, nondisclosure,
non-competition or otherwise; or (E) with respect to any Participant not
otherwise employed by the Company pursuant to an executed employment agreement,
any other termination for cause pursuant to the Company’s policies, procedures
or employment practices, where such termination is not otherwise prohibited by
applicable law or regulation.
6. Plan as Controlling. Except as provided otherwise herein, any Equity Award
granted to a Participant under the Retention Plan shall be subject to the terms
and conditions of the 2007 Plan, including such additional terms and conditions
as the Committee may impose that are not inconsistent with the 2007 Plan or the
Retention Plan.
7. Amendment and Termination. Subject to any limitations contained in the 2007
Plan, the Board may, at any time and from time to time, amend, modify or suspend
the Retention Plan and all rules and guidelines hereunder; provided, however,
that no such amendment, modification, suspension or termination shall impair or
adversely alter any Cash Award or Equity Award previously granted under the
Retention Plan without the consent of the affected Participant.
8. Term of Retention Plan. The Retention Plan shall terminate on the earlier of
the date of termination of the 2007 Plan or after all Equity Awards issued
hereunder have vested and been settled by the Company, and no Equity Award may
be granted pursuant to the Retention Plan thereafter; provided, however, that
neither the termination of the 2007 Plan nor the termination of the Retention
Plan shall affect the vesting of any Equity Award outstanding upon such
termination or the right of a Participant to receive Common Shares upon vesting
of an Equity Award.
9. Regulatory Matters. In the event and to the extent the payment of any Cash
Award or grant of any Equity Award is subject to regulatory approval and/or may
be nullified or rendered inoperative or inapplicable by operation of applicable
Federal or state law, this Retention Plan shall be effective only to the extent
permissible under such regulatory and/or other legal requirements, but to the
fullest extent as may be permissible thereunder.

 

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10. Miscellaneous
(a) Except as otherwise specifically provided in the Retention Plan or as set
forth in an award agreement (and to the extent not otherwise inconsistent with
the 2007 Plan), during the vesting period and after the certificates for the
Restricted Shares have been issued, the Participant shall be entitled to all
rights of a shareholder of the Company, including the right to vote and the
right to receive dividends, with respect to the Restricted Shares subject to
this Retention Plan. Subject to applicable withholding requirements, if any,
dividends on the Restricted Shares shall be paid to the Participant when earned
and payable.
(b) An Award may not be sold, pledged, assigned, hypothecated, transferred, or
disposed of in exchange for consideration.
(c) Nothing contained herein shall be deemed to restrict or prohibit any
employee from making a Section 83(b) election under the Code.
(d) Except as otherwise explicitly stated herein, the adoption of the Retention
Plan by the Board shall not be construed as amending, modifying or rescinding
the 2007 Plan but is intended to serve as a framework for the Board and the
Committee with respect to grants to Participants.
(e) Nothing contained in the Retention Plan or in an award agreement granted
hereunder shall confer upon any Participant any right to continue serving as an
employee of the Company or interfere in any way with the right of UCFC or Home
Savings to terminate the Participant’s service as an employee at any time.
(f) An award agreement may provide that Common Shares issuable upon settlement
of an Equity Award may be subject to such restrictions, including, without
limitation, restrictions as to transferability as the Committee may determine at
the time such Equity Award is granted.
(g) The Retention Plan and all actions taken hereunder shall be governed by and
construed in accordance with the laws of the State of Ohio, except to the extent
federal law shall be deemed applicable. All disputes and matters arising under,
in connection with or incident to this Agreement shall be litigated, if at all,
in and before any Federal court sitting within the Northern District of Ohio or
any State court sitting in Mahoning County, Ohio, to the exclusion of the courts
of any other state or county.

 

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