**Exhibit10.5**

 

**EMPLOYMENTAGREEMENT**

 

EMPLOYMENT AGREEMENT, dated this 29th day of March 2000,between Peoples Community Bancorp, Inc. (the “Corporation”), Peoples CommunityBank, a Federally chartered savings bank and a wholly owned subsidiary of theCorporation (the “Bank”), and Jerry D. Williams (the “Executive”).

 

**WITNESSETH**

 

WHEREAS, the Employers desire to be ensuredof the Executive’s active participation in the business of the Employers;

 

WHEREAS, in order to induce the Executive toserve in the employ of the Employers and in consideration of the Executive’sagreeing to serve in the employ of the Employers, the parties desire to specifythe severance benefits which shall be due the Executive by the Employers in theevent that his employment with the Employers is terminated under specifiedcircumstances;

 

NOW THEREFORE, in consideration of the mutualagreements herein contained, and upon the other terms and conditionshereinafter provided, the parties hereby agree as follows:

 

**1.****                                      Definitions.**  The following words and terms shall have themeanings set forth below for the purposes of this Agreement:

 

(a)                                  **Average Annual Compensation.**  The Executive’s “Average Annual Compensation”for purposes of this Agreement shall be deemed to mean the average level of compensationpaid to the Executive by the Employers or any subsidiary thereof during themost recent five taxable years preceding the Date of Termination and which waseither (i) included in the Executive’s gross income for tax purposes,including but not limited to Base Salary, bonuses and amounts taxable to theExecutive under any qualified or non-qualified employee benefit plans of theEmployers, or (ii) deferred at the election of the Executive.

 

(b)                                 **Base Salary.**  “Base Salary” shall have the meaning set forthin Section 3(a) hereof.

 

(c)                                  **Cause.** Termination of the Executive’semployment for “Cause” shall mean termination because of personal dishonesty,incompetence, willful misconduct, breach of fiduciary duty involving personalprofit, intentional failure to perform stated duties, willful violation of anylaw, rule or regulation (other than traffic violations or similar offenses) orfinal cease-and-desist order or material breach of any provision of thisAgreement.

 

(d)                                 **Change in Control of the Corporation.**  “Change in Control of the Corporation” shallmean the occurrence of any of the following: (i) the acquisition of control of the Corporation as defined in 12C.F.R. §574.4, unless a presumption of control is successfully

 

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rebutted or unless the transaction isexempted by 12 C.F.R. §574.3(c)(vii), or any successor to such sections;(ii) an event that would be required to be reported in response to Item1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14Apursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”),or any successor thereto, whether or not any class of securities of theCorporation is registered under the Exchange Act; (iii) any “person” (assuch term is used in Sections 13(d) and 14(d) of the Exchange Act) is orbecomes the “beneficial owner” (as defined in Rule 13d-3 under the ExchangeAct), directly or indirectly, of securities of the Corporation representing 20%or more of the combined voting power of the Corporation’s then outstandingsecurities; or (iv) during any period of three consecutive years, individualswho at the beginning of such period constitute the Board of Directors of theCorporation cease for any reason to constitute at least a majority thereofunless the election, or the nomination for election by stockholders, of eachnew director was approved by a vote of at least two-thirds of the directorsthen still in office who were directors at the beginning of the period.

 

(e)                                  **Code.** “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(f)                                    **Date of Termination.**  “Date of Termination” shall mean (i) if theExecutive’s employment is terminated for Cause or for Disability, the datespecified in the Notice of Termination, and (ii) if the Executive’s employmentis terminated for any other reason, the date on which a Notice of Terminationis given or as specified in such Notice.

 

(g)                                 **Disability.** Termination by the Employers of the Executive’s employment based on “Disability”shall mean termination because of any physical or mental impairment whichqualifies the Executive for disability benefits under the applicable long-termdisability plan maintained by the Employers or any subsidiary or, if no suchplan applies, which would qualify the Executive for disability benefits underthe Federal Social Security System.

 

(h)                                 **Good Reason.**  Termination by the Executive of the Executive’semployment for “Good Reason” shall mean termination by the Executive withintwenty-four (24) months following a Change in Control of the Corporation basedon:

 

(i)                                     Withoutthe Executive’s express written consent, the failure to elect or to re-elect orto appoint or to re-appoint the Executive to the offices of President and ChiefExecutive Officer of the Employers or a material adverse change made by theEmployers in the Executive’s functions, duties or responsibilities as Presidentand Chief Executive Officer of the Employers;

 

(ii)                                  Withoutthe Executive’s express written consent, a reduction by either of the Employersin the Executive’s Base Salary as the same may be increased from time to timeor, except to the extent permitted by Section 3(b) hereof, a reduction inthe package of fringe benefits provided to the Executive, taken as a whole;

 

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(iii)                               Theprincipal executive office of either of the Employers is relocated outside ofthe Lebanon, Ohio area or, without the Executive’s express written consent,either of the Employers require the Executive to be based anywhere other thanan area in which the Employers’ principal executive office is located, exceptfor required travel on business of the Employers to an extent substantiallyconsistent with the Executive’s present business travel obligations;

 

(iv)                              Anypurported termination of the Executive’s employment for Disability orRetirement which is not effected pursuant to a Notice of Termination satisfyingthe requirements of paragraph (j) below; or

 

(v)                                 Thefailure by the Employers to obtain the assumption of and agreement to performthis Agreement by any successor as contemplated in Section 9 hereof.

 

(i)                                     **IRS.** IRS shall mean the Internal Revenue Service.

 

(j)                                     **Notice of Termination.**  Any purported termination of the Executive’semployment by the Employers for any reason, including without limitation forCause, Disability or Retirement, or by the Executive for any reason, includingwithout limitation for Good Reason, shall be communicated by written “Notice ofTermination” to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean adated notice which (i) indicates the specific termination provision in thisAgreement relied upon, (ii) sets forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated, (iii) specifies a Date ofTermination, which shall be not less than thirty (30) nor more than ninety (90)days after such Notice of Termination is given, except in the case of theEmployers’ termination of Executive’s employment for Cause, which shall beeffective immediately; and (iv) is given in the manner specified in Section 10hereof.

 

(k)                                  **Retirement.** “Retirement” shall mean voluntary termination by the Executive inaccordance with the Employers’ retirement policies, including early retirement,generally applicable to their salaried employees.

 

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**2.****                                      Termof Employment.**

 

(a)                                  TheEmployers hereby employ the Executive as President and Chief Executive Officer,and the Executive hereby accepts said employment and agrees to render suchservices to the Employers on the terms and conditions set forth in thisAgreement.  The term of this Agreementshall be a period of three years commencing as of the date hereof (the “CommencementDate”), subject to earlier termination as provided herein. Beginning on the daywhich is one year subsequent to the Commencement Date, and on each annualanniversary thereafter, the term of this Agreement shall be extended for aperiod of one year in addition to the then-remaining term, provided that theEmployers have not given notice to the Executive in writing at least 60 daysprior to such day that the term of the Agreement shall not be extendedfurther.  Reference herein to the term ofthis Agreement shall refer to both such initial term and such extendedterms.  The Boards of Directors of theEmployers shall review on a periodic basis (and no less frequently thanannually) whether to permit further extensions of the term of this Agreement.  As part of such review, the Board of Directorsshall consider all relevant factors, including the Executive’s performancehereunder, and shall either expressly approve further extensions of the time ofthis Agreement or decide to provide notice to the contrary.  Effective upon the Commencement Date, any andall prior agreements with the Employers or with Harvest Home FinancialCorporation, Harvest Home Savings Bank or The Oakley Improved Building and LoanCompany (collectively, the “Former Employers”) shall terminate, with noobligations to the Executive thereunder on the part of the Former Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall perform such executive servicesfor the Employers as may be consistent with his titles and from time to timeassigned to him by the Employers’ Boards of Directors.

 

**3.****                                      Compensationand Benefits.**

 

(a)                                  TheEmployers shall compensate and pay the Executive for his services during theterm of this Agreement at a minimum base salary of $100,000.00 per year (“BaseSalary”), which may be increased from time to time in such amounts as may bedetermined by the Boards of Directors of the Employers and may not be decreasedwithout the Executive’s express written consent.  In addition to his Base Salary, the Executiveshall be entitled to receive during the term of this Agreement such bonuspayments as may be determined by the Boards of Directors of the Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall be entitled to participate inand receive the benefits of any pension or other retirement benefit plan,profit sharing, stock option, employee stock ownership, or other plans,benefits and privileges given to employees and executives of the Employers, tothe extent commensurate with his then duties and responsibilities, as fixed bythe Boards of Directors of the Employers. The Employers shall not make any changes in such plans, benefits orprivileges which would adversely affect the Executive’s rights or benefitsthereunder, unless such change occurs pursuant to a program applicable to allexecutive officers of the Employers and does not result in a proportionately greateradverse change in the rights of or benefits to the Executive as compared withany other executive officer of the Employers. Nothing paid to the Executive under any plan or arrangement presently ineffect or made available in the future shall be deemed to be in lieu of thesalary payable to the Executive pursuant to Section 3(a) hereof.

 

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(c)                                  Duringthe term of this Agreement, the Executive shall be entitled to paid annualvacation in accordance with the policies as established from time to time bythe Boards of Directors of the Employers. The Executive shall not be entitled to receive any additionalcompensation from the Employers for failure to take a vacation, nor shall theExecutive be able to accumulate unused vacation time from one year to the next,except to the extent authorized by the Boards of Directors of the Employers.

 

(d)                                 Inthe event the Executive’s employment is terminated due to Disability orRetirement, the Employers shall provide continued life, medical, dental anddisability coverage substantially identical to the coverage maintained by theEmployers for the Executive immediately prior to his termination.  Such coverage shall cease upon the expirationof the remaining term of this Agreement.

 

(e)                                  TheExecutive’s compensation, benefits and expenses shall be paid by theCorporation and the Bank in the same proportion as the time and servicesactually expended by the Executive on behalf of each respective Employer.

 

**4.****                                      Expenses.**  The Employers shall reimburse the Executiveor otherwise provide for or pay for all reasonable expenses incurred by theExecutive in furtherance of or in connection with the business of theEmployers, including, but not by way of limitation, automobile expenses andother traveling expenses, and all reasonable entertainment expenses (whetherincurred at the Executive’s residence, while traveling or otherwise), subjectto such reasonable documentation and other limitations as may be established bythe Boards of Directors of the Employers. If such expenses are paid in the first instance by the Executive, theEmployers shall reimburse the Executive therefor.

 

**5.****                                      Termination.**

 

(a)                                  TheEmployers shall have the right, at any time upon prior Notice of Termination,to terminate the Executive’s employment hereunder for any reason, includingwithout limitation termination for Cause, Disability or Retirement, and theExecutive shall have the right, upon prior Notice of Termination, to terminatehis employment hereunder for any reason.

 

(b)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor Cause or (ii) the Executive terminates his employment hereunder other thanfor Disability, Retirement, death or Good Reason, the Executive shall have noright pursuant to this Agreement to compensation or other benefits for anyperiod after the applicable Date of Termination.

 

(c)                                  Inthe event that the Executive’s employment is terminated as a result ofDisability, Retirement or the Executive’s death during the term of thisAgreement, the Executive shall have no right pursuant to this Agreement tocompensation or other benefits for any period after the applicable Date ofTermination, except as provided for in Section 3(d) hereof.

 

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(d)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor other than Cause, Disability, Retirement or the Executive’s death or (ii)such employment is terminated by the Executive (a) due to a material breach ofthis Agreement by the Employers, which breach has not been cured within fifteen(15) days after a written notice of non-compliance has been given by theExecutive to the Employers, or (b) for Good Reason, then the Employers shall,subject to the provisions of Section 6 hereof, if applicable

 

(A)                              payto the Executive, in either thirty-six (36) equal monthly installmentsbeginning with the first business day of the month following the Date ofTermination or in a lump sum within five business days of the Date ofTermination (at the Executive’s election), a cash severance amount equal tothree (3) times that portion of the Executive’s Average Annual Compensationpaid by the Employers, and

 

(B)                                maintainand provide for a period ending at the earlier of (i) the expiration of theremaining term of employment pursuant hereto prior to the Notice of Terminationor (ii) the date of the Executive’s full-time employment by another employer(provided that the Executive is entitled under the terms of such employment tobenefits substantially similar to those described in this subparagraph (B)), atno cost to the Executive, the Executive’s continued participation in all groupinsurance, life insurance, health and accident insurance, disability insuranceand other employee benefit plans, programs and arrangements offered by theEmployers in which the Executive was entitled to participate immediately priorto the Date of Termination (excluding (x) stock option and restricted stockplans of the Employers, (y) bonuses and other items of cash compensationincluded in Average Annual Compensation and (z) other benefits, orportions thereof, included in Average Annual Compensation), provided that inthe event that the Executive’s participation in any plan, program orarrangement as provided in this subparagraph (B) is barred, or during suchperiod any such plan, program or arrangement is discontinued or the benefitsthereunder are materially reduced, the Employers shall arrange to provide theExecutive with benefits substantially similar to those which the Executive wasentitled to receive under such plans, programs and arrangements immediatelyprior to the Date of Termination.

 

**6.****                                      Limitationof Benefits under Certain Circumstances.** If the payments and benefits pursuant to Section 5 hereof, eitheralone or together with other payments and benefits which the Executive has theright to receive from the Employers, would constitute a “parachute payment”under Section 280G of the Code, the payments and benefits payable by theEmployers pursuant to Section 5 hereof shall be reduced, in the mannerdetermined by the Executive, by the amount, if any, which is the minimumnecessary to result in no portion of the payments and benefits payable by theEmployers under Section 5 being non-deductible to the Employers pursuantto Section 280G of the Code and subject to the excise tax imposed under Section 4999of the Code.  The parties hereto agreethat the present value of the payments and benefits payable pursuant to this

 

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Agreement to the Executive upon terminationshall be limited to three times the Executive’s Average AnnualCompensation.  The determination of anyreduction in the payments and benefits to be made pursuant to Section 5shall be based upon the opinion of independent counsel selected by theEmployers’ independent public accountants and paid by the Employers.  Such counsel shall be reasonably acceptableto the Employers and the Executive; shall promptly prepare the foregoingopinion, but in no event later than thirty (30) days from the Date ofTermination; and may use such actuaries as such counsel deems necessary oradvisable for the purpose.  Nothingcontained herein shall result in a reduction of any payments or benefits towhich the Executive may be entitled upon termination of employment under anycircumstances other than as specified in this Section 6, or a reduction inthe payments and benefits specified in Section 5 below zero.

 

**7.****                                      Mitigation;Exclusivity of Benefits.**

 

(a)                                  TheExecutive shall not be required to mitigate the amount of any benefitshereunder by seeking other employment or otherwise, nor shall the amount of anysuch benefits be reduced by any compensation earned by the Executive as aresult of employment by another employer after the Date of Termination orotherwise.

 

(b)                                 Thespecific arrangements referred to herein are not intended to exclude any otherbenefits which may be available to the Executive upon a termination ofemployment with the Employers pursuant to employee benefit plans of theEmployers or otherwise.

 

**8.****                                      Withholding.**  All payments required to be made by theEmployers hereunder to the Executive shall be subject to the withholding ofsuch amounts, if any, relating to tax and other payroll deductions as theEmployers may reasonably determine should be withheld pursuant to anyapplicable law or regulation.

 

**9.****                                      Assignability.**  The Employers may assign this Agreement andits rights and obligations hereunder in whole, but not in part, to anycorporation, bank or other entity with or into which the Employers mayhereafter merge or consolidate or to which the Employers may transfer all orsubstantially all of its assets, if in any such case said corporation, bank orother entity shall by operation of law or expressly in writing assume allobligations of the Employers hereunder as fully as if it had been originallymade a party hereto, but may not otherwise assign this Agreement or its rightsand obligations hereunder.  The Executivemay not assign or transfer this Agreement or any rights or obligationshereunder.

 

**10.****                               Notice.**  For the purposes of this Agreement, noticesand all other communications provided for in this Agreement shall be in writingand shall be deemed to have been duly given when delivered or mailed bycertified or registered mail, return receipt requested, postage prepaid,addressed to the respective addresses set forth below:

 

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| To the Employers: |   | Boards of Directors       |
|-------------------|--------|---------------------------|
|              |   | Peoples Bancorp, Inc.     |
|              |   | Peoples Community Bank    |
|              |   | 11 South Broadway         |
|              |   | Lebanon, Ohio 45036-1780  |
|              |   |                      |
| To the Executive: |   | Jerry D. Williams         |
|              |   | 219 South Mechanic Street |
|              |   | Lebanon, Ohio 45036       |

 

**11.****                               Amendment;Waiver.**  No provisions of thisAgreement may be modified, waived or discharged unless such waiver,modification or discharge is agreed to in writing and signed by the Executiveand such officer or officers as may be specifically designated by the Boards ofDirectors of the Employers to sign on their behalf.  No waiver by any party hereto at any time ofany breach by any other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or atany prior or subsequent time.

 

**12.****                               GoverningLaw.**  The validity, interpretation,construction and performance of this Agreement shall be governed by the laws ofthe United States where applicable and otherwise by the substantive laws of theState of Ohio.

 

**13.****                               Natureof Obligations.**  Nothing containedherein shall create or require the Employers to create a trust of any kind tofund any benefits which may be payable hereunder, and to the extent that theExecutive acquires a right to receive benefits from the Employers hereunder,such right shall be no greater than the right of any unsecured general creditorof the Employers.

 

**14.****                               Headings.**  The section headings contained in this Agreementare for reference purposes only and shall not affect in any way the meaning orinterpretation of this Agreement.

 

**15.****                               Validity.**  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provisions of this Agreement, which shall remain in full force andeffect.

 

**16.****                               Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same instrument.

 

**17.****                               RegulatoryActions.**  The following provisionsshall be applicable to the parties to the extent that they are required to beincluded in employment agreements between a savings association and itsemployees pursuant to Section 563.39(b) of the Regulations Applicable toAll Savings Associations, 12 C.F.R. §563.39(b), or any successor thereto, andshall be controlling in the event of a conflict with any other provision ofthis Agreement, including without limitation Section 5 hereof.

 

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(a)                                  Ifthe Executive is suspended from office and/or temporarily prohibited fromparticipating in the conduct of the Employers’ affairs pursuant to noticeserved under Section 8(e)(3) or Section 8(g)(1) of the FederalDeposit Insurance Act (“FDIA”) (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), theEmployers’ obligations under this Agreement shall be suspended as of the dateof service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed,the Employers may, in their discretion: (i) pay the Executive all or part of the compensation withheld while itsobligations under this Agreement were suspended, and (ii) reinstate (in wholeor in part) any of its obligations which were suspended.

 

(b)                                 Ifthe Executive is removed from office and/or permanently prohibited fromparticipating in the conduct of the Employers’ affairs by an order issued underSection 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.§§1818(e)(4) and (g)(1)), all obligations of the Employers under this Agreementshall terminate as of the effective date of the order, but vested rights of theExecutive and the Employers as of the date of termination shall not beaffected.

 

(c)                                  Ifthe Bank is in default, as defined in Section 3(x)(1) of the FDIA (12U.S.C. §1813(x)(1)), all obligations under this Agreement shall terminate as ofthe date of default, but vested rights of the Executive and the Employers as ofthe date of termination shall not be affected.

 

(d)                                 Allobligations under this Agreement shall be terminated pursuant to 12 C.F.R.§563.39(b)(5) (except to the extent that it is determined that continuation ofthe Agreement for the continued operation of the Employers is necessary):  (i) by the Director of the Office of ThriftSupervision (“OTS”), or his/her designee, at the time the Federal DepositInsurance Corporation (“FDIC”) enters into an agreement to provide assistanceto or on behalf of the Bank under the authority contained in Section 13(c)of the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, orhis/her designee, at the time the Director or his/her designee approves asupervisory merger to resolve problems related to operation of the Bank or whenthe Bank is determined by the Director of the OTS to be in an unsafe or unsoundcondition, but vested rights of the Executive and the Employers as of the dateof termination shall not be affected.

 

**18.****                               RegulatoryProhibition.**  Notwithstanding anyother provision of this Agreement to the contrary, any payments made to theExecutive pursuant to this Agreement, or otherwise, are subject to andconditioned upon their compliance with Section 18(k) of the FederalDeposit Insurance Act (12 U.S.C. §1828(k)) and the regulations promulgatedthereunder, including 12 C.F.R. Part 359.

 

**19.****                               Paymentof Costs and Legal Fees and Reinstatement of Benefits.**  In the event any dispute or controversyarising under or in connection with the Executive’s termination is resolved infavor of the Executive, whether by judgment, arbitration or settlement, theExecutive shall be entitled to the payment of (a) all legal fees incurredby the Executive in resolving such dispute or controversy, and (2) anyback-pay, including Base Salary, bonuses and any other cash compensation, fringebenefits and any compensation and benefits due to the Executive under thisAgreement.

 

**20.****                               EntireAgreement.**  This Agreement embodiesthe entire agreement between the Employers and the Executive with respect tothe matters agreed to herein.  All prior agreementsbetween the Employers and the Executive with respect to the matters agreed toherein are hereby superseded and shall have no force or effect.  Notwithstanding the foregoing, nothingcontained in this Agreement shall affect the agreement of even date beingentered into between the Corporation and the Executive.

 

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IN WITNESS WHEREOF, this Agreement has beenexecuted as of the date first above written.

 
| ** ** | **PEOPLES**  **COMMUNITY BANCORP, INC.** |
|------------|-----------------------------------------------|
|       |                                          |
| ** ** |                                          |
|       | By:                                           |   /s/  Thomas J. Noe |
|       |                                          |
|       |                                          |
| ** ** | **PEOPLES COMMUNITY BANK**                    |
|       |                                          |
|       |                                          |
|       | By:                                           |   /s/ Thomas J. Noe |
|       |                                          |   |
|       |                                          |   |
|       | **EXECUTIVE**                                 |
|       |                                          |   |
|       |                                          |   /s/ Jerry D. Williams |
|       |                                          | Jerry D. Williams |

** **

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**EMPLOYMENTAGREEMENT**

 

EMPLOYMENT AGREEMENT, dated this 29th day of March 2000,between Peoples Community Bancorp, Inc. (the “Corporation”), Peoples CommunityBank, a Federally chartered savings bank and a wholly owned subsidiary of theCorporation (the “Bank”), and Thomas J. Noe (the “Executive”).

 

**WITNESSETH**

 

WHEREAS, the Employers desire to be ensuredof the Executive’s active participation in the business of the Employers;

 

WHEREAS, in order to induce the Executive toserve in the employ of the Employers and in consideration of the Executive’sagreeing to serve in the employ of the Employers, the parties desire to specifythe severance benefits which shall be due the Executive by the Employers in theevent that his employment with the Employers is terminated under specifiedcircumstances;

 

NOW THEREFORE, in consideration of the mutualagreements herein contained, and upon the other terms and conditionshereinafter provided, the parties hereby agree as follows:

 

**1.****                                      Definitions.**  The following words and terms shall have themeanings set forth below for the purposes of this Agreement:

 

(a)                                  **Average Annual Compensation.**  The Executive’s “Average Annual Compensation”for purposes of this Agreement shall be deemed to mean the average level ofcompensation paid to the Executive by the Employers or any subsidiary thereofduring the most recent five taxable years preceding the Date of Termination andwhich was either (i) included in the Executive’s gross income for taxpurposes, including but not limited to Base Salary, bonuses and amounts taxableto the Executive under any qualified or non-qualified employee benefit plans ofthe Employers, or (ii) deferred at the election of the Executive.

 

(b)                                 **Base Salary.**  “Base Salary” shall have the meaning setforth in Section 3(a) hereof.

 

(c)                                  **Cause.** Termination of the Executive’semployment for “Cause” shall mean termination because of personal dishonesty,incompetence, willful misconduct, breach of fiduciary duty involving personalprofit, intentional failure to perform stated duties, willful violation of anylaw, rule or regulation (other than traffic violations or similar offenses) orfinal cease-and-desist order or material breach of any provision of thisAgreement.

 

(d)                                 **Change in Control of the Corporation.**  “Change in Control of the Corporation” shallmean the occurrence of any of the following: (i) the acquisition of control of the Corporation as defined in 12C.F.R. §574.4, unless a presumption of control is successfully

 

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rebutted or unless the transaction isexempted by 12 C.F.R. §574.3(c)(vii), or any successor to such sections;(ii) an event that would be required to be reported in response to Item1(a) of Form 8-K or Item 6(e) of Schedule 14A of Regulation 14Apursuant to the Securities Exchange Act of 1934, as amended (“Exchange Act”),or any successor thereto, whether or not any class of securities of theCorporation is registered under the Exchange Act; (iii) any “person” (assuch term is used in Sections 13(d) and 14(d) of the Exchange Act) is orbecomes the “beneficial owner” (as defined in Rule 13d-3 under the ExchangeAct), directly or indirectly, of securities of the Corporation representing 20%or more of the combined voting power of the Corporation’s then outstandingsecurities; or (iv) during any period of three consecutive years, individualswho at the beginning of such period constitute the Board of Directors of theCorporation cease for any reason to constitute at least a majority thereofunless the election, or the nomination for election by stockholders, of eachnew director was approved by a vote of at least two-thirds of the directorsthen still in office who were directors at the beginning of the period.

 

(e)                                  **Code.** “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(f)                                    **Date of Termination.**  “Date of Termination” shall mean (i) if theExecutive’s employment is terminated for Cause or for Disability, the datespecified in the Notice of Termination, and (ii) if the Executive’s employmentis terminated for any other reason, the date on which a Notice of Terminationis given or as specified in such Notice.

 

(g)                                 **Disability.** Termination by the Employers of the Executive’s employment based on “Disability”shall mean termination because of any physical or mental impairment whichqualifies the Executive for disability benefits under the applicable long-termdisability plan maintained by the Employers or any subsidiary or, if no suchplan applies, which would qualify the Executive for disability benefits underthe Federal Social Security System.

 

(h)                                 **Good Reason.**  Termination by the Executive of the Executive’semployment for “Good Reason” shall mean termination by the Executive withintwenty-four (24) months following a Change in Control of the Corporation basedon:

 

(i)                                     Withoutthe Executive’s express written consent, the failure to elect or to re-elect orto appoint or to re-appoint the Executive to the office of Chief FinancialOfficer of the Employers or a material adverse change made by the Employers inthe Executive’s functions, duties or responsibilities as Chief FinancialOfficer of the Employers;

 

(ii)                                  Withoutthe Executive’s express written consent, a reduction by either of the Employersin the Executive’s Base Salary as the same may be increased from time to timeor, except to the extent permitted by Section 3(b) hereof, a reduction inthe package of fringe benefits provided to the Executive, taken as a whole;

 

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(iii)                               Theprincipal executive office of either of the Employers is relocated outside ofthe Lebanon, Ohio area or, without the Executive’s express written consent,either of the Employers require the Executive to be based anywhere other thanan area in which the Employers’ principal executive office is located, exceptfor required travel on business of the Employers to an extent substantiallyconsistent with the Executive’s present business travel obligations;

 

(iv)                              Anypurported termination of the Executive’s employment for Disability orRetirement which is not effected pursuant to a Notice of Termination satisfyingthe requirements of paragraph (j) below; or

 

(v)                                 Thefailure by the Employers to obtain the assumption of and agreement to performthis Agreement by any successor as contemplated in Section 9 hereof.

 

(i)                                     **IRS.** IRS shall mean the Internal Revenue Service.

 

(j)                                     **Notice of Termination.**  Any purported termination of the Executive’semployment by the Employers for any reason, including without limitation forCause, Disability or Retirement, or by the Executive for any reason, includingwithout limitation for Good Reason, shall be communicated by written “Notice ofTermination” to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean adated notice which (i) indicates the specific termination provision in thisAgreement relied upon, (ii) sets forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated, (iii) specifies a Date ofTermination, which shall be not less than thirty (30) nor more than ninety (90)days after such Notice of Termination is given, except in the case of theEmployers’ termination of Executive’s employment for Cause, which shall beeffective immediately; and (iv) is given in the manner specified in Section 10hereof.

 

(k)                                  **Retirement.** “Retirement” shall mean voluntary termination by the Executive inaccordance with the Employers’ retirement policies, including early retirement,generally applicable to their salaried employees.

 

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**2.****                                      Termof Employment.**

 

(a)                                  TheEmployers hereby employ the Executive as Chief Financial Officer, and theExecutive hereby accepts said employment and agrees to render such services tothe Employers on the terms and conditions set forth in this Agreement.  The term of this Agreement shall be a periodof three years commencing as of the date hereof (the “Commencement Date”),subject to earlier termination as provided herein. Beginning on the day whichis one year subsequent to the Commencement Date, and on each annual anniversarythereafter, the term of this Agreement shall be extended for a period of oneyear in addition to the then-remaining term, provided that the Employers havenot given notice to the Executive in writing at least 60 days prior to such daythat the term of the Agreement shall not be extended further.  Reference herein to the term of thisAgreement shall refer to both such initial term and such extended terms.  The Boards of Directors of the Employersshall review on a periodic basis (and no less frequently than annually) whetherto permit further extensions of the term of this Agreement.  As part of such review, the Board ofDirectors shall consider all relevant factors, including the Executive’sperformance hereunder, and shall either expressly approve further extensions ofthe time of this Agreement or decide to provide notice to the contrary.  Effective upon the Commencement Date, any andall prior agreements with the Employers or with Harvest Home FinancialCorporation, Harvest Home Savings Bank or The Oakley Improved Building and LoanCompany (collectively, the “Former Employers”) shall terminate, with noobligations to the Executive thereunder on the part of the Former Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall perform such executive servicesfor the Employers as may be consistent with his titles and from time to timeassigned to him by the Employers’ Boards of Directors.

 

**3.****                                      Compensationand Benefits.**

 

(a)                                  TheEmployers shall compensate and pay the Executive for his services during theterm of this Agreement at a minimum base salary of $75,000.00 per year (“BaseSalary”), which may be increased from time to time in such amounts as may bedetermined by the Boards of Directors of the Employers and may not be decreasedwithout the Executive’s express written consent.  In addition to his Base Salary, the Executiveshall be entitled to receive during the term of this Agreement such bonuspayments as may be determined by the Boards of Directors of the Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall be entitled to participate inand receive the benefits of any pension or other retirement benefit plan,profit sharing, stock option, employee stock ownership, or other plans,benefits and privileges given to employees and executives of the Employers, tothe extent commensurate with his then duties and responsibilities, as fixed bythe Boards of Directors of the Employers. The Employers shall not make any changes in such plans, benefits orprivileges which would adversely affect the Executive’s rights or benefitsthereunder, unless such change occurs pursuant to a program applicable to allexecutive officers of the Employers and does not result in a proportionately greateradverse change in the rights of or benefits to the Executive as compared withany other executive officer of the Employers. Nothing paid to the Executive under any plan or arrangement presently ineffect or made available in the future shall be deemed to be in lieu of thesalary payable to the Executive pursuant to Section 3(a) hereof.

 

(c)                                  Duringthe term of this Agreement, the Executive shall be entitled to paid annualvacation in accordance with the policies as established from time to time bythe Boards of Directors of the Employers. The Executive shall not be entitled to receive any additionalcompensation from the Employers for failure to take a vacation, nor shall theExecutive be able to accumulate unused vacation time from one year to the next,except to the extent authorized by the Boards of Directors of the Employers.

 

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(d)                                 Inthe event the Executive’s employment is terminated due to Disability orRetirement, the Employers shall provide continued life, medical, dental anddisability coverage substantially identical to the coverage maintained by theEmployers for the Executive immediately prior to his termination.  Such coverage shall cease upon the expirationof the remaining term of this Agreement.

 

(e)                                  TheExecutive’s compensation, benefits and expenses shall be paid by theCorporation and the Bank in the same proportion as the time and servicesactually expended by the Executive on behalf of each respective Employer.

 

**4.****                                      Expenses.**  The Employers shall reimburse the Executiveor otherwise provide for or pay for all reasonable expenses incurred by theExecutive in furtherance of or in connection with the business of theEmployers, including, but not by way of limitation, automobile expenses andother traveling expenses, and all reasonable entertainment expenses (whetherincurred at the Executive’s residence, while traveling or otherwise), subjectto such reasonable documentation and other limitations as may be established bythe Boards of Directors of the Employers. If such expenses are paid in the first instance by the Executive, theEmployers shall reimburse the Executive therefor.

 

**5.****                                      Termination.**

 

(a)                                  TheEmployers shall have the right, at any time upon prior Notice of Termination,to terminate the Executive’s employment hereunder for any reason, includingwithout limitation termination for Cause, Disability or Retirement, and theExecutive shall have the right, upon prior Notice of Termination, to terminatehis employment hereunder for any reason.

 

(b)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor Cause or (ii) the Executive terminates his employment hereunder other thanfor Disability, Retirement, death or Good Reason, the Executive shall have noright pursuant to this Agreement to compensation or other benefits for anyperiod after the applicable Date of Termination.

 

(c)                                  Inthe event that the Executive’s employment is terminated as a result ofDisability, Retirement or the Executive’s death during the term of thisAgreement, the Executive shall have no right pursuant to this Agreement tocompensation or other benefits for any period after the applicable Date ofTermination, except as provided for in Section 3(d) hereof.

 

(d)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor other than Cause, Disability, Retirement or the Executive’s death or (ii)such employment is terminated by the Executive (a) due to a material breach ofthis Agreement by the Employers, which breach has not been cured within fifteen(15) days after a written notice of non-compliance has been given by theExecutive to the Employers, or (b) for Good Reason, then the Employers shall,subject to the provisions of Section 6 hereof, if applicable

 

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(A)                              payto the Executive, in either thirty-six (36) equal monthly installmentsbeginning with the first business day of the month following the Date ofTermination or in a lump sum within five business days of the Date ofTermination (at the Executive’s election), a cash severance amount equal tothree (3) times that portion of the Executive’s Average Annual Compensationpaid by the Employers, and

 

(B)                                maintainand provide for a period ending at the earlier of (i) the expiration of theremaining term of employment pursuant hereto prior to the Notice of Terminationor (ii) the date of the Executive’s full-time employment by another employer(provided that the Executive is entitled under the terms of such employment tobenefits substantially similar to those described in this subparagraph (B)), atno cost to the Executive, the Executive’s continued participation in all groupinsurance, life insurance, health and accident insurance, disability insuranceand other employee benefit plans, programs and arrangements offered by theEmployers in which the Executive was entitled to participate immediately priorto the Date of Termination (excluding (x) stock option and restricted stockplans of the Employers, (y) bonuses and other items of cash compensationincluded in Average Annual Compensation and (z) other benefits, orportions thereof, included in Average Annual Compensation), provided that inthe event that the Executive’s participation in any plan, program orarrangement as provided in this subparagraph (B) is barred, or during suchperiod any such plan, program or arrangement is discontinued or the benefitsthereunder are materially reduced, the Employers shall arrange to provide theExecutive with benefits substantially similar to those which the Executive wasentitled to receive under such plans, programs and arrangements immediatelyprior to the Date of Termination.

 

**6.****                                      Limitationof Benefits under Certain Circumstances.** If the payments and benefits pursuant to Section 5 hereof, eitheralone or together with other payments and benefits which the Executive has theright to receive from the Employers, would constitute a “parachute payment”under Section 280G of the Code, the payments and benefits payable by theEmployers pursuant to Section 5 hereof shall be reduced, in the mannerdetermined by the Executive, by the amount, if any, which is the minimumnecessary to result in no portion of the payments and benefits payable by theEmployers under Section 5 being non-deductible to the Employers pursuantto Section 280G of the Code and subject to the excise tax imposed under Section 4999of the Code.  The parties hereto agreethat the present value of the payments and benefits payable pursuant to thisAgreement to the Executive upon termination shall be limited to three times theExecutive’s Average Annual Compensation. The determination of any reduction in the payments and benefits to bemade pursuant to Section 5 shall be based upon the opinion of independentcounsel selected by the Employers’ independent public accountants and paid bythe Employers.  Such counsel shall bereasonably acceptable to the Employers and the Executive; shall promptlyprepare the foregoing opinion, but in no event later than thirty (30) days fromthe Date of Termination; and may use such actuaries as such

 

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counsel deems necessary or advisable for thepurpose.  Nothing contained herein shallresult in a reduction of any payments or benefits to which the Executive may beentitled upon termination of employment under any circumstances other than asspecified in this Section 6, or a reduction in the payments and benefitsspecified in Section 5 below zero.

 

**7.****                                      Mitigation;Exclusivity of Benefits.**

 

(a)                                  TheExecutive shall not be required to mitigate the amount of any benefitshereunder by seeking other employment or otherwise, nor shall the amount of anysuch benefits be reduced by any compensation earned by the Executive as aresult of employment by another employer after the Date of Termination orotherwise.

 

(b)                                 Thespecific arrangements referred to herein are not intended to exclude any otherbenefits which may be available to the Executive upon a termination ofemployment with the Employers pursuant to employee benefit plans of theEmployers or otherwise.

 

**8.****                                      Withholding.**  All payments required to be made by theEmployers hereunder to the Executive shall be subject to the withholding ofsuch amounts, if any, relating to tax and other payroll deductions as theEmployers may reasonably determine should be withheld pursuant to anyapplicable law or regulation.

 

**9.****                                      Assignability.**  The Employers may assign this Agreement andits rights and obligations hereunder in whole, but not in part, to any corporation,bank or other entity with or into which the Employers may hereafter merge orconsolidate or to which the Employers may transfer all or substantially all ofits assets, if in any such case said corporation, bank or other entity shall byoperation of law or expressly in writing assume all obligations of theEmployers hereunder as fully as if it had been originally made a party hereto,but may not otherwise assign this Agreement or its rights and obligationshereunder.  The Executive may not assignor transfer this Agreement or any rights or obligations hereunder.

 

**10.****                               Notice.**  For the purposes of this Agreement, noticesand all other communications provided for in this Agreement shall be in writingand shall be deemed to have been duly given when delivered or mailed bycertified or registered mail, return receipt requested, postage prepaid,addressed to the respective addresses set forth below:

 
| To the Employers: |   | Boards of Directors       |
|-------------------|--------|---------------------------|
|              |   | Peoples Bancorp, Inc.     |
|              |   | Peoples Community Bank    |
|              |   | 11 South Broadway         |
|              |   | Lebanon, Ohio 45036-1780  |
|              |   |                      |
| To the Executive: |   | Thomas J. Noe             |
|              |   | 3348 Partridge Lake Court |
|              |   | Cincinnati, Ohio 45248    |

 

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**11.****                               Amendment;Waiver.**  No provisions of thisAgreement may be modified, waived or discharged unless such waiver,modification or discharge is agreed to in writing and signed by the Executiveand such officer or officers as may be specifically designated by the Boards ofDirectors of the Employers to sign on their behalf.  No waiver by any party hereto at any time ofany breach by any other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or atany prior or subsequent time.

 

**12.****                               GoverningLaw.**  The validity, interpretation,construction and performance of this Agreement shall be governed by the laws ofthe United States where applicable and otherwise by the substantive laws of theState of Ohio.

 

**13.****                               Natureof Obligations.**  Nothing containedherein shall create or require the Employers to create a trust of any kind tofund any benefits which may be payable hereunder, and to the extent that theExecutive acquires a right to receive benefits from the Employers hereunder,such right shall be no greater than the right of any unsecured general creditorof the Employers.

 

**14.****                               Headings.**  The section headings contained in thisAgreement are for reference purposes only and shall not affect in any way themeaning or interpretation of this Agreement.

 

**15.****                               Validity.**  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provisions of this Agreement, which shall remain in full force andeffect.

 

**16.****                               Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same instrument.

 

**17.****                               RegulatoryActions.**  The following provisionsshall be applicable to the parties to the extent that they are required to beincluded in employment agreements between a savings association and itsemployees pursuant to Section 563.39(b) of the Regulations Applicable toAll Savings Associations, 12 C.F.R. §563.39(b), or any successor thereto, andshall be controlling in the event of a conflict with any other provision ofthis Agreement, including without limitation Section 5 hereof.

 

(a)                                  Ifthe Executive is suspended from office and/or temporarily prohibited fromparticipating in the conduct of the Employers’ affairs pursuant to noticeserved under Section 8(e)(3) or Section 8(g)(1) of the FederalDeposit Insurance Act (“FDIA”) (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), theEmployers’ obligations under this Agreement shall be suspended as of the dateof service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed,the Employers may, in their discretion: (i) pay the Executive all or part of the compensation withheld while its

 

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obligations under this Agreement weresuspended, and (ii) reinstate (in whole or in part) any of its obligationswhich were suspended.

 

(b)                                 Ifthe Executive is removed from office and/or permanently prohibited fromparticipating in the conduct of the Employers’ affairs by an order issued underSection 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.§§1818(e)(4) and (g)(1)), all obligations of the Employers under this Agreementshall terminate as of the effective date of the order, but vested rights of theExecutive and the Employers as of the date of termination shall not beaffected.

 

(c)                                  Ifthe Bank is in default, as defined in Section 3(x)(1) of the FDIA (12U.S.C. §1813(x)(1)), all obligations under this Agreement shall terminate as ofthe date of default, but vested rights of the Executive and the Employers as ofthe date of termination shall not be affected.

 

(d)                                 Allobligations under this Agreement shall be terminated pursuant to 12 C.F.R.§563.39(b)(5) (except to the extent that it is determined that continuation ofthe Agreement for the continued operation of the Employers is necessary):  (i) by the Director of the Office of ThriftSupervision (“OTS”), or his/her designee, at the time the Federal DepositInsurance Corporation (“FDIC”) enters into an agreement to provide assistanceto or on behalf of the Bank under the authority contained in Section 13(c)of the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, or his/herdesignee, at the time the Director or his/her designee approves a supervisorymerger to resolve problems related to operation of the Bank or when the Bank isdetermined by the Director of the OTS to be in an unsafe or unsound condition,but vested rights of the Executive and the Employers as of the date oftermination shall not be affected.

 

**18.****                               RegulatoryProhibition.**  Notwithstanding anyother provision of this Agreement to the contrary, any payments made to theExecutive pursuant to this Agreement, or otherwise, are subject to andconditioned upon their compliance with Section 18(k) of the FederalDeposit Insurance Act (12 U.S.C. §1828(k)) and the regulations promulgatedthereunder, including 12 C.F.R. Part 359.

 

**19.****                               Paymentof Costs and Legal Fees and Reinstatement of Benefits.**  In the event any dispute or controversyarising under or in connection with the Executive’s termination is resolved infavor of the Executive, whether by judgment, arbitration or settlement, theExecutive shall be entitled to the payment of (a) all legal fees incurredby the Executive in resolving such dispute or controversy, and (2) anyback-pay, including Base Salary, bonuses and any other cash compensation,fringe benefits and any compensation and benefits due to the Executive underthis Agreement.

 

**20.****                               EntireAgreement.**  This Agreement embodiesthe entire agreement between the Employers and the Executive with respect tothe matters agreed to herein.  All prioragreements between the Employers and the Executive and between The OakleyImproved Building & Loan Company and the Executive with respect to thematters agreed to herein are hereby superseded and shall have no force oreffect.  Notwithstanding the foregoing,nothing contained in this Agreement shall affect the agreement of even datebeing entered into between the Corporation and the Executive.

 

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IN WITNESS WHEREOF, this Agreement has beenexecuted as of the date first above written.

 
| ** ** | **PEOPLES**  **COMMUNITY BANCORP, INC.** |
|------------|-----------------------------------------------|
|       |                                          |
| ** ** |                                          |
|       | By:                                           |   /s/ Jerry D. Williams |
|       |                                          |
|       |                                          |
| ** ** | **PEOPLES COMMUNITY BANK**                    |
|       |                                          |
|       |                                          |
|       | By:                                           |   /s/ Jerry D. Williams |
|       |                                          |   |
|       |                                          |   |
|       | **EXECUTIVE**                                 |
|       |                                          |   |
|       |                                          |   /s/ Thomas J. Noe |
|       |                                          | Thomas J. Noe |
|       |                                          |   |

** **

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**EMPLOYMENTAGREEMENT**

 

EMPLOYMENT AGREEMENT, dated this 29th day of March 2000,between Peoples Community Bancorp, Inc. (the “Corporation”), Peoples CommunityBank, a Federally chartered savings bank and a wholly owned subsidiary of theCorporation (the “Bank”), and John E. Rathkamp (the “Executive”).

 

**WITNESSETH**

 

WHEREAS, the Employers desire to be ensuredof the Executive’s active participation in the business of the Employers;

 

WHEREAS, in order to induce the Executive toserve in the employ of the Employers and in consideration of the Executive’sagreeing to serve in the employ of the Employers, the parties desire to specifythe severance benefits which shall be due the Executive by the Employers in theevent that his employment with the Employers is terminated under specifiedcircumstances;

 

NOW THEREFORE, in consideration of the mutualagreements herein contained, and upon the other terms and conditionshereinafter provided, the parties hereby agree as follows:

 

**1.****                                      Definitions.**  The following words and terms shall have themeanings set forth below for the purposes of this Agreement:

 

(a)                                  **Average Annual Compensation.**  The Executive’s “Average Annual Compensation”for purposes of this Agreement shall be deemed to mean the average level ofcompensation paid to the Executive by the Employers or any subsidiary thereofduring the most recent five taxable years preceding the Date of Termination andwhich was either (i) included in the Executive’s gross income for taxpurposes, including but not limited to Base Salary, bonuses and amounts taxableto the Executive under any qualified or non-qualified employee benefit plans ofthe Employers, or (ii) deferred at the election of the Executive.

 

(b)                                 **Base Salary.**  “Base Salary” shall have the meaning setforth in Section 3(a) hereof.

 

(c)                                  **Cause.** Termination of the Executive’semployment for “Cause” shall mean termination because of personal dishonesty,incompetence, willful misconduct, breach of fiduciary duty involving personalprofit, intentional failure to perform stated duties, willful violation of anylaw, rule or regulation (other than traffic violations or similar offenses) orfinal cease-and-desist order or material breach of any provision of thisAgreement.

 

(d)                                 **Change in Control of the Corporation.**  “Change in Control of the Corporation” shallmean the occurrence of any of the following: (i) the acquisition of control of the Corporation as defined in 12C.F.R. §574.4, unless a presumption of control is successfully

 

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rebutted or unless the transaction is exemptedby 12 C.F.R. §574.3(c)(vii), or any successor to such sections; (ii) anevent that would be required to be reported in response to Item 1(a) of Form 8-Kor Item 6(e) of Schedule 14A of Regulation 14A pursuant to theSecurities Exchange Act of 1934, as amended (“Exchange Act”), or any successorthereto, whether or not any class of securities of the Corporation isregistered under the Exchange Act; (iii) any “person” (as such term isused in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of securities of the Corporation representing 20% or more of thecombined voting power of the Corporation’s then outstanding securities; or (iv)during any period of three consecutive years, individuals who at the beginningof such period constitute the Board of Directors of the Corporation cease forany reason to constitute at least a majority thereof unless the election, orthe nomination for election by stockholders, of each new director was approvedby a vote of at least two-thirds of the directors then still in office who weredirectors at the beginning of the period.

 

(e)                                  **Code.** “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(f)                                    **Date of Termination.**  “Date of Termination” shall mean (i) if theExecutive’s employment is terminated for Cause or for Disability, the datespecified in the Notice of Termination, and (ii) if the Executive’s employmentis terminated for any other reason, the date on which a Notice of Terminationis given or as specified in such Notice.

 

(g)                                 **Disability.** Termination by the Employers of the Executive’s employment based on “Disability”shall mean termination because of any physical or mental impairment whichqualifies the Executive for disability benefits under the applicable long-termdisability plan maintained by the Employers or any subsidiary or, if no suchplan applies, which would qualify the Executive for disability benefits underthe Federal Social Security System.

 

(h)                                 **Good Reason.**  Termination by the Executive of the Executive’semployment for “Good Reason” shall mean termination by the Executive withintwenty-four (24) months following a Change in Control of the Corporation basedon:

 

(i)                                     Withoutthe Executive’s express written consent, the failure to elect or to re-elect orto appoint or to re-appoint the Executive to the office of Secretary of theEmployers or a material adverse change made by the Employers in the Executive’sfunctions, duties or responsibilities as Secretary of the Employers;

 

(ii)                                  Withoutthe Executive’s express written consent, a reduction by either of the Employersin the Executive’s Base Salary as the same may be increased from time to timeor, except to the extent permitted by Section 3(b) hereof, a reduction inthe package of fringe benefits provided to the Executive, taken as a whole;

 

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(iii)                               Theprincipal executive office of either of the Employers is relocated outside ofthe Lebanon, Ohio area or, without the Executive’s express written consent,either of the Employers require the Executive to be based anywhere other thanan area in which the Employers’ principal executive office is located, exceptfor required travel on business of the Employers to an extent substantiallyconsistent with the Executive’s present business travel obligations;

 

(iv)                              Anypurported termination of the Executive’s employment for Disability orRetirement which is not effected pursuant to a Notice of Termination satisfyingthe requirements of paragraph (j) below; or

 

(v)                                 Thefailure by the Employers to obtain the assumption of and agreement to performthis Agreement by any successor as contemplated in Section 9 hereof.

 

(i)                                     **IRS.** IRS shall mean the Internal Revenue Service.

 

(j)                                     **Notice of Termination.**  Any purported termination of the Executive’semployment by the Employers for any reason, including without limitation forCause, Disability or Retirement, or by the Executive for any reason, includingwithout limitation for Good Reason, shall be communicated by written “Notice ofTermination” to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean adated notice which (i) indicates the specific termination provision in this Agreementrelied upon, (ii) sets forth in reasonable detail the facts and circumstancesclaimed to provide a basis for termination of Executive’s employment under theprovision so indicated, (iii) specifies a Date of Termination, which shall benot less than thirty (30) nor more than ninety (90) days after such Notice ofTermination is given, except in the case of the Employers’ termination ofExecutive’s employment for Cause, which shall be effective immediately; and(iv) is given in the manner specified in Section 10 hereof.

 

(k)                                  **Retirement.** “Retirement” shall mean voluntary termination by the Executive inaccordance with the Employers’ retirement policies, including early retirement,generally applicable to their salaried employees.

 

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**2.****                                      Termof Employment.**

 

(a)                                  TheEmployers hereby employ the Executive as Secretary, and the Executive herebyaccepts said employment and agrees to render such services to the Employers onthe terms and conditions set forth in this Agreement.  The term of this Agreement shall be a periodof three years commencing as of the date hereof (the “Commencement Date”),subject to earlier termination as provided herein. Beginning on the day whichis one year subsequent to the Commencement Date, and on each annual anniversarythereafter, the term of this Agreement shall be extended for a period of oneyear in addition to the then-remaining term, provided that the Employers havenot given notice to the Executive in writing at least 60 days prior to such daythat the term of the Agreement shall not be extended further.  Reference herein to the term of thisAgreement shall refer to both such initial term and such extended terms.  The Boards of Directors of the Employersshall review on a periodic basis (and no less frequently than annually) whetherto permit further extensions of the term of this Agreement.  As part of such review, the Board ofDirectors shall consider all relevant factors, including the Executive’sperformance hereunder, and shall either expressly approve further extensions ofthe time of this Agreement or decide to provide notice to the contrary.  Effective upon the Commencement Date, any andall prior agreements with the Employers or with Harvest Home FinancialCorporation, Harvest Home Savings Bank or The Oakley Improved Building and LoanCompany (collectively, the “Former Employers”) shall terminate, with noobligations to the Executive thereunder on the part of the Former Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall perform such executive servicesfor the Employers as may be consistent with his titles and from time to timeassigned to him by the Employers’ Boards of Directors.

 

**3.****                                      Compensationand Benefits.**

 

(a)                                  TheEmployers shall compensate and pay the Executive for his services during theterm of this Agreement at a minimum base salary of $75,000.00 per year (“BaseSalary”), which may be increased from time to time in such amounts as may bedetermined by the Boards of Directors of the Employers and may not be decreasedwithout the Executive’s express written consent.  In addition to his Base Salary, the Executiveshall be entitled to receive during the term of this Agreement such bonuspayments as may be determined by the Boards of Directors of the Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall be entitled to participate inand receive the benefits of any pension or other retirement benefit plan,profit sharing, stock option, employee stock ownership, or other plans,benefits and privileges given to employees and executives of the Employers, tothe extent commensurate with his then duties and responsibilities, as fixed bythe Boards of Directors of the Employers. The Employers shall not make any changes in such plans, benefits orprivileges which would adversely affect the Executive’s rights or benefitsthereunder, unless such change occurs pursuant to a program applicable to allexecutive officers of the Employers and does not result in a proportionately greateradverse change in the rights of or benefits to the Executive as compared withany other executive officer of the Employers. Nothing paid to the Executive under any plan or arrangement presently ineffect or made available in the future shall be deemed to be in lieu of thesalary payable to the Executive pursuant to Section 3(a) hereof.

 

(c)                                  Duringthe term of this Agreement, the Executive shall be entitled to paid annualvacation in accordance with the policies as established from time to time bythe Boards of Directors of the Employers. The Executive shall not be entitled to receive any additionalcompensation from the Employers for failure to take a vacation, nor shall theExecutive be able to accumulate unused vacation time from one year to the next,except to the extent authorized by the Boards of Directors of the Employers.

 

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(d)                                 Inthe event the Executive’s employment is terminated due to Disability orRetirement, the Employers shall provide continued life, medical, dental anddisability coverage substantially identical to the coverage maintained by theEmployers for the Executive immediately prior to his termination.  Such coverage shall cease upon the expirationof the remaining term of this Agreement.

 

(e)                                  TheExecutive’s compensation, benefits and expenses shall be paid by theCorporation and the Bank in the same proportion as the time and servicesactually expended by the Executive on behalf of each respective Employer.

 

**4.****                                      Expenses.**  The Employers shall reimburse the Executiveor otherwise provide for or pay for all reasonable expenses incurred by theExecutive in furtherance of or in connection with the business of theEmployers, including, but not by way of limitation, automobile expenses andother traveling expenses, and all reasonable entertainment expenses (whetherincurred at the Executive’s residence, while traveling or otherwise), subjectto such reasonable documentation and other limitations as may be established bythe Boards of Directors of the Employers. If such expenses are paid in the first instance by the Executive, theEmployers shall reimburse the Executive therefor.

 

**5.****                                      Termination.**

 

(a)                                  TheEmployers shall have the right, at any time upon prior Notice of Termination,to terminate the Executive’s employment hereunder for any reason, includingwithout limitation termination for Cause, Disability or Retirement, and theExecutive shall have the right, upon prior Notice of Termination, to terminatehis employment hereunder for any reason.

 

(b)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor Cause or (ii) the Executive terminates his employment hereunder other thanfor Disability, Retirement, death or Good Reason, the Executive shall have noright pursuant to this Agreement to compensation or other benefits for anyperiod after the applicable Date of Termination.

 

(c)                                  Inthe event that the Executive’s employment is terminated as a result ofDisability, Retirement or the Executive’s death during the term of this Agreement,the Executive shall have no right pursuant to this Agreement to compensation orother benefits for any period after the applicable Date of Termination, exceptas provided for in Section 3(d) hereof.

 

(d)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor other than Cause, Disability, Retirement or the Executive’s death or (ii)such employment is terminated by the Executive (a) due to a material breach ofthis Agreement by the Employers, which breach has not been cured within fifteen(15) days after a written notice of non-compliance has been given by theExecutive to the

 

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Employers, or (b) for Good Reason, then theEmployers shall, subject to the provisions of Section 6 hereof, ifapplicable

 

(A)                              payto the Executive, in either thirty-six (36) equal monthly installmentsbeginning with the first business day of the month following the Date ofTermination or in a lump sum within five business days of the Date ofTermination (at the Executive’s election), a cash severance amount equal tothree (3) times that portion of the Executive’s Average Annual Compensationpaid by the Employers, and

 

(B)                                maintainand provide for a period ending at the earlier of (i) the expiration of theremaining term of employment pursuant hereto prior to the Notice of Terminationor (ii) the date of the Executive’s full-time employment by another employer(provided that the Executive is entitled under the terms of such employment tobenefits substantially similar to those described in this subparagraph (B)), atno cost to the Executive, the Executive’s continued participation in all groupinsurance, life insurance, health and accident insurance, disability insuranceand other employee benefit plans, programs and arrangements offered by theEmployers in which the Executive was entitled to participate immediately priorto the Date of Termination (excluding (x) stock option and restricted stockplans of the Employers, (y) bonuses and other items of cash compensationincluded in Average Annual Compensation and (z) other benefits, orportions thereof, included in Average Annual Compensation), provided that inthe event that the Executive’s participation in any plan, program orarrangement as provided in this subparagraph (B) is barred, or during suchperiod any such plan, program or arrangement is discontinued or the benefitsthereunder are materially reduced, the Employers shall arrange to provide theExecutive with benefits substantially similar to those which the Executive wasentitled to receive under such plans, programs and arrangements immediatelyprior to the Date of Termination.

 

**6.****                                      Limitationof Benefits under Certain Circumstances.** If the payments and benefits pursuant to Section 5 hereof, eitheralone or together with other payments and benefits which the Executive has theright to receive from the Employers, would constitute a “parachute payment”under Section 280G of the Code, the payments and benefits payable by theEmployers pursuant to Section 5 hereof shall be reduced, in the mannerdetermined by the Executive, by the amount, if any, which is the minimumnecessary to result in no portion of the payments and benefits payable by theEmployers under Section 5 being non-deductible to the Employers pursuantto Section 280G of the Code and subject to the excise tax imposed under Section 4999of the Code.  The parties hereto agreethat the present value of the payments and benefits payable pursuant to this Agreementto the Executive upon termination shall be limited to three times theExecutive’s Average Annual Compensation. The determination of any reduction in the payments and benefits to bemade pursuant to Section 5 shall be based upon the opinion of independentcounsel selected by the Employers’ independent public accountants and paid bythe Employers.  Such counsel shall bereasonably acceptable to the Employers and the Executive; shall promptlyprepare the foregoing opinion, but in no event later

 

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than thirty (30) days from the Date ofTermination; and may use such actuaries as such counsel deems necessary oradvisable for the purpose.  Nothingcontained herein shall result in a reduction of any payments or benefits towhich the Executive may be entitled upon termination of employment under anycircumstances other than as specified in this Section 6, or a reduction inthe payments and benefits specified in Section 5 below zero.

 

**7.****                                      Mitigation;Exclusivity of Benefits.**

 

(a)                                  TheExecutive shall not be required to mitigate the amount of any benefitshereunder by seeking other employment or otherwise, nor shall the amount of anysuch benefits be reduced by any compensation earned by the Executive as aresult of employment by another employer after the Date of Termination orotherwise.

 

(b)                                 Thespecific arrangements referred to herein are not intended to exclude any otherbenefits which may be available to the Executive upon a termination ofemployment with the Employers pursuant to employee benefit plans of theEmployers or otherwise.

 

**8.****                                      Withholding.**  All payments required to be made by theEmployers hereunder to the Executive shall be subject to the withholding ofsuch amounts, if any, relating to tax and other payroll deductions as theEmployers may reasonably determine should be withheld pursuant to anyapplicable law or regulation.

 

**9.****                                      Assignability.**  The Employers may assign this Agreement andits rights and obligations hereunder in whole, but not in part, to anycorporation, bank or other entity with or into which the Employers mayhereafter merge or consolidate or to which the Employers may transfer all orsubstantially all of its assets, if in any such case said corporation, bank orother entity shall by operation of law or expressly in writing assume allobligations of the Employers hereunder as fully as if it had been originallymade a party hereto, but may not otherwise assign this Agreement or its rightsand obligations hereunder.  The Executivemay not assign or transfer this Agreement or any rights or obligationshereunder.

 

**10.****                               Notice.**  For the purposes of this Agreement, noticesand all other communications provided for in this Agreement shall be in writingand shall be deemed to have been duly given when delivered or mailed bycertified or registered mail, return receipt requested, postage prepaid,addressed to the respective addresses set forth below:

 
| To the Employers: |   | Boards of Directors      |
|-------------------|--------|--------------------------|
|              |   | Peoples Bancorp, Inc.    |
|              |   | Peoples Community Bank   |
|              |   | 11 South Broadway        |
|              |   | Lebanon, Ohio 45036-1780 |
|              |   |                     |
| To the Executive: |   | John E. Rathkamp         |
|              |   | 4552 Fairview Lane       |
|              |   | Cincinnati, Ohio 45247   |

 

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**11.****                               Amendment;Waiver.**  No provisions of thisAgreement may be modified, waived or discharged unless such waiver, modificationor discharge is agreed to in writing and signed by the Executive and suchofficer or officers as may be specifically designated by the Boards ofDirectors of the Employers to sign on their behalf.  No waiver by any party hereto at any time ofany breach by any other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or atany prior or subsequent time.

 

**12.****                               GoverningLaw.**  The validity, interpretation,construction and performance of this Agreement shall be governed by the laws ofthe United States where applicable and otherwise by the substantive laws of theState of Ohio.

 

**13.****                               Natureof Obligations.**  Nothing containedherein shall create or require the Employers to create a trust of any kind tofund any benefits which may be payable hereunder, and to the extent that theExecutive acquires a right to receive benefits from the Employers hereunder, suchright shall be no greater than the right of any unsecured general creditor ofthe Employers.

 

**14.****                               Headings.**  The section headings contained in thisAgreement are for reference purposes only and shall not affect in any way themeaning or interpretation of this Agreement.

 

**15.****                               Validity.**  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provisions of this Agreement, which shall remain in full force andeffect.

 

**16.****                               Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same instrument.

 

**17.****                               RegulatoryActions.**  The following provisionsshall be applicable to the parties to the extent that they are required to beincluded in employment agreements between a savings association and itsemployees pursuant to Section 563.39(b) of the Regulations Applicable toAll Savings Associations, 12 C.F.R. §563.39(b), or any successor thereto, andshall be controlling in the event of a conflict with any other provision ofthis Agreement, including without limitation Section 5 hereof.

 

(a)                                  Ifthe Executive is suspended from office and/or temporarily prohibited fromparticipating in the conduct of the Employers’ affairs pursuant to noticeserved under Section 8(e)(3) or Section 8(g)(1) of the FederalDeposit Insurance Act (“FDIA”) (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), theEmployers’ obligations under this Agreement shall be suspended as of the dateof service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed,the Employers may, in their discretion: (i) pay the Executive all or part of the compensation withheld while its

 

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obligations under this Agreement weresuspended, and (ii) reinstate (in whole or in part) any of its obligationswhich were suspended.

 

(b)                                 Ifthe Executive is removed from office and/or permanently prohibited fromparticipating in the conduct of the Employers’ affairs by an order issued underSection 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.§§1818(e)(4) and (g)(1)), all obligations of the Employers under this Agreementshall terminate as of the effective date of the order, but vested rights of theExecutive and the Employers as of the date of termination shall not beaffected.

 

(c)                                  Ifthe Bank is in default, as defined in Section 3(x)(1) of the FDIA (12U.S.C. §1813(x)(1)), all obligations under this Agreement shall terminate as ofthe date of default, but vested rights of the Executive and the Employers as ofthe date of termination shall not be affected.

 

(d)                                 Allobligations under this Agreement shall be terminated pursuant to 12 C.F.R.§563.39(b)(5) (except to the extent that it is determined that continuation ofthe Agreement for the continued operation of the Employers is necessary):  (i) by the Director of the Office of ThriftSupervision (“OTS”), or his/her designee, at the time the Federal DepositInsurance Corporation (“FDIC”) enters into an agreement to provide assistanceto or on behalf of the Bank under the authority contained in Section 13(c)of the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, orhis/her designee, at the time the Director or his/her designee approves asupervisory merger to resolve problems related to operation of the Bank or whenthe Bank is determined by the Director of the OTS to be in an unsafe or unsoundcondition, but vested rights of the Executive and the Employers as of the dateof termination shall not be affected.

 

**18.****                               RegulatoryProhibition.**  Notwithstanding anyother provision of this Agreement to the contrary, any payments made to theExecutive pursuant to this Agreement, or otherwise, are subject to and conditionedupon their compliance with Section 18(k) of the Federal Deposit InsuranceAct (12 U.S.C. §1828(k)) and the regulations promulgated thereunder, including12 C.F.R. Part 359.

 

**19.****                               Paymentof Costs and Legal Fees and Reinstatement of Benefits.**  In the event any dispute or controversyarising under or in connection with the Executive’s termination is resolved infavor of the Executive, whether by judgment, arbitration or settlement, theExecutive shall be entitled to the payment of (a) all legal fees incurredby the Executive in resolving such dispute or controversy, and (2) anyback-pay, including Base Salary, bonuses and any other cash compensation,fringe benefits and any compensation and benefits due to the Executive underthis Agreement.

 

**20.****                               EntireAgreement.**  This Agreement embodiesthe entire agreement between the Employers and the Executive and betweenHarvest Home Financial Corporation and Harvest Home Savings Bank and theExecutive with respect to the matters agreed to herein.  All prior agreements between the Employersand the Executive with respect to the matters agreed to herein are herebysuperseded and shall have no force or effect. Notwithstanding the foregoing, nothing contained in this Agreement shallaffect the agreement of even date being entered into between the Corporationand the Executive.

 

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IN WITNESS WHEREOF, this Agreement has beenexecuted as of the date first above written.

 
| ** ** | **PEOPLES**  **COMMUNITY BANCORP, INC.** |
|------------|-----------------------------------------------|
|       |                                          |
| ** ** |                                          |
|       | By:                                           |   /s/ Jerry D. Williams |
|       |                                          |
|       |                                          |
| ** ** | **PEOPLES COMMUNITY BANK**                    |
|       |                                          |
|       |                                          |
|       | By:                                           |   /s/ Jerry D. Williams |
|       |                                          |   |
|       |                                          |   |
|       | **EXECUTIVE**                                 |
|       |                                          |   |
|       |                                          |   /s/ John E. Rathkamp |
|       |                                          | John E. Rathkamp |

** **

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**EMPLOYMENTAGREEMENT**

 

EMPLOYMENT AGREEMENT, dated this 29th day of March 2000,between Peoples Community Bancorp, Inc. (the “Corporation”), Peoples CommunityBank, a Federally chartered savings bank and a wholly owned subsidiary of theCorporation (the “Bank”), and Teresa O’Quinn (the “Executive”).

 

**WITNESSETH**

 

WHEREAS, the Employers desire to be ensuredof the Executive’s active participation in the business of the Employers;

 

WHEREAS, in order to induce the Executive toserve in the employ of the Employers and in consideration of the Executive’sagreeing to serve in the employ of the Employers, the parties desire to specifythe severance benefits which shall be due the Executive by the Employers in theevent that his employment with the Employers is terminated under specifiedcircumstances;

 

NOW THEREFORE, in consideration of the mutualagreements herein contained, and upon the other terms and conditionshereinafter provided, the parties hereby agree as follows:

 

**1.****                                      Definitions.**  The following words and terms shall have themeanings set forth below for the purposes of this Agreement:

 

(a)                                  **Average Annual Compensation.**  The Executive’s “Average Annual Compensation”for purposes of this Agreement shall be deemed to mean the average level ofcompensation paid to the Executive by the Employers or any subsidiary thereofduring the most recent five taxable years preceding the Date of Termination andwhich was either (i) included in the Executive’s gross income for taxpurposes, including but not limited to Base Salary, bonuses and amounts taxableto the Executive under any qualified or non-qualified employee benefit plans ofthe Employers, or (ii) deferred at the election of the Executive.

 

(b)                                 **Base Salary.**  “Base Salary” shall have the meaning setforth in Section 3(a) hereof.

 

(c)                                  **Cause.** Termination of the Executive’semployment for “Cause” shall mean termination because of personal dishonesty,incompetence, willful misconduct, breach of fiduciary duty involving personalprofit, intentional failure to perform stated duties, willful violation of anylaw, rule or regulation (other than traffic violations or similar offenses) orfinal cease-and-desist order or material breach of any provision of thisAgreement.

 

(d)                                 **Change in Control of the Corporation.**  “Change in Control of the Corporation” shallmean the occurrence of any of the following: (i) the acquisition of control of the Corporation as defined in 12C.F.R. §574.4, unless a presumption of control is successfully

 

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rebutted or unless the transaction is exemptedby 12 C.F.R. §574.3(c)(vii), or any successor to such sections; (ii) anevent that would be required to be reported in response to Item 1(a) of Form 8-Kor Item 6(e) of Schedule 14A of Regulation 14A pursuant to theSecurities Exchange Act of 1934, as amended (“Exchange Act”), or any successorthereto, whether or not any class of securities of the Corporation isregistered under the Exchange Act; (iii) any “person” (as such term isused in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficialowner” (as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of securities of the Corporation representing 20% or more of thecombined voting power of the Corporation’s then outstanding securities; or (iv)during any period of three consecutive years, individuals who at the beginningof such period constitute the Board of Directors of the Corporation cease forany reason to constitute at least a majority thereof unless the election, orthe nomination for election by stockholders, of each new director was approvedby a vote of at least two-thirds of the directors then still in office who weredirectors at the beginning of the period.

 

(e)                                  **Code.** “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(f)                                    **Date of Termination.**  “Date of Termination” shall mean (i) if theExecutive’s employment is terminated for Cause or for Disability, the datespecified in the Notice of Termination, and (ii) if the Executive’s employmentis terminated for any other reason, the date on which a Notice of Terminationis given or as specified in such Notice.

 

(g)                                 **Disability.** Termination by the Employers of the Executive’s employment based on “Disability”shall mean termination because of any physical or mental impairment whichqualifies the Executive for disability benefits under the applicable long-termdisability plan maintained by the Employers or any subsidiary or, if no suchplan applies, which would qualify the Executive for disability benefits underthe Federal Social Security System.

 

(h)                                 **Good Reason.**  Termination by the Executive of the Executive’semployment for “Good Reason” shall mean termination by the Executive withintwenty-four (24) months following a Change in Control of the Corporation basedon:

 

(i)                                     Withoutthe Executive’s express written consent, the failure to elect or to re-elect orto appoint or to re-appoint the Executive to the office of Vice President ofthe Employers or a material adverse change made by the Employers in theExecutive’s functions, duties or responsibilities as Vice President of theEmployers;

 

(ii)                                  Withoutthe Executive’s express written consent, a reduction by either of the Employersin the Executive’s Base Salary as the same may be increased from time to timeor, except to the extent permitted by Section 3(b) hereof, a reduction inthe package of fringe benefits provided to the Executive, taken as a whole;

 

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(iii)                               Theprincipal executive office of either of the Employers is relocated outside ofthe Lebanon, Ohio area or, without the Executive’s express written consent,either of the Employers require the Executive to be based anywhere other thanan area in which the Employers’ principal executive office is located, exceptfor required travel on business of the Employers to an extent substantiallyconsistent with the Executive’s present business travel obligations;

 

(iv)                              Anypurported termination of the Executive’s employment for Disability orRetirement which is not effected pursuant to a Notice of Termination satisfyingthe requirements of paragraph (j) below; or

 

(v)                                 Thefailure by the Employers to obtain the assumption of and agreement to performthis Agreement by any successor as contemplated in Section 9 hereof.

 

(i)                                     **IRS.** IRS shall mean the Internal Revenue Service.

 

(j)                                     **Notice of Termination.**  Any purported termination of the Executive’semployment by the Employers for any reason, including without limitation forCause, Disability or Retirement, or by the Executive for any reason, includingwithout limitation for Good Reason, shall be communicated by written “Notice ofTermination” to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean adated notice which (i) indicates the specific termination provision in thisAgreement relied upon, (ii) sets forth in reasonable detail the facts andcircumstances claimed to provide a basis for termination of Executive’semployment under the provision so indicated, (iii) specifies a Date ofTermination, which shall be not less than thirty (30) nor more than ninety (90)days after such Notice of Termination is given, except in the case of theEmployers’ termination of Executive’s employment for Cause, which shall beeffective immediately; and (iv) is given in the manner specified in Section 10hereof.

 

(k)                                  **Retirement.** “Retirement” shall mean voluntary termination by the Executive inaccordance with the Employers’ retirement policies, including early retirement,generally applicable to their salaried employees.

 

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**2.****                                      Termof Employment.**

 

(a)                                  TheEmployers hereby employ the Executive as Vice President, and the Executivehereby accepts said employment and agrees to render such services to theEmployers on the terms and conditions set forth in this Agreement.  The term of this Agreement shall be a periodof three years commencing as of the date hereof (the “Commencement Date”),subject to earlier termination as provided herein. Beginning on the day whichis one year subsequent to the Commencement Date, and on each annual anniversarythereafter, the term of this Agreement shall be extended for a period of oneyear in addition to the then-remaining term, provided that the Employers havenot given notice to the Executive in writing at least 60 days prior to such daythat the term of the Agreement shall not be extended further.  Reference herein to the term of thisAgreement shall refer to both such initial term and such extended terms.  The Boards of Directors of the Employersshall review on a periodic basis (and no less frequently than annually) whetherto permit further extensions of the term of this Agreement.  As part of such review, the Board ofDirectors shall consider all relevant factors, including the Executive’sperformance hereunder, and shall either expressly approve further extensions ofthe time of this Agreement or decide to provide notice to the contrary.  Effective upon the Commencement Date, any andall prior agreements with the Employers or with Harvest Home Financial Corporation,Harvest Home Savings Bank or The Oakley Improved Building and Loan Company(collectively, the “Former Employers”) shall terminate, with no obligations tothe Executive thereunder on the part of the Former Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall perform such executive servicesfor the Employers as may be consistent with his titles and from time to timeassigned to him by the Employers’ Boards of Directors.

 

**3.****                                      Compensationand Benefits.**

 

(a)                                  TheEmployers shall compensate and pay the Executive for his services during theterm of this Agreement at a minimum base salary of $60,000.00 per year (“BaseSalary”), which may be increased from time to time in such amounts as may bedetermined by the Boards of Directors of the Employers and may not be decreasedwithout the Executive’s express written consent.  In addition to his Base Salary, the Executiveshall be entitled to receive during the term of this Agreement such bonuspayments as may be determined by the Boards of Directors of the Employers.

 

(b)                                 Duringthe term of this Agreement, the Executive shall be entitled to participate inand receive the benefits of any pension or other retirement benefit plan,profit sharing, stock option, employee stock ownership, or other plans,benefits and privileges given to employees and executives of the Employers, tothe extent commensurate with his then duties and responsibilities, as fixed bythe Boards of Directors of the Employers. The Employers shall not make any changes in such plans, benefits orprivileges which would adversely affect the Executive’s rights or benefitsthereunder, unless such change occurs pursuant to a program applicable to allexecutive officers of the Employers and does not result in a proportionately greateradverse change in the rights of or benefits to the Executive as compared withany other executive officer of the Employers. Nothing paid to the Executive under any plan or arrangement presently ineffect or made available in the future shall be deemed to be in lieu of thesalary payable to the Executive pursuant to Section 3(a) hereof.

 

(c)                                  Duringthe term of this Agreement, the Executive shall be entitled to paid annualvacation in accordance with the policies as established from time to time bythe Boards of Directors of the Employers. The Executive shall not be entitled to receive any additionalcompensation from the Employers for failure to take a vacation, nor shall theExecutive be able to accumulate unused vacation time from one year to the next,except to the extent authorized by the Boards of Directors of the Employers.

 

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(d)                                 Inthe event the Executive’s employment is terminated due to Disability orRetirement, the Employers shall provide continued life, medical, dental anddisability coverage substantially identical to the coverage maintained by theEmployers for the Executive immediately prior to his termination.  Such coverage shall cease upon the expirationof the remaining term of this Agreement.

 

(e)                                  TheExecutive’s compensation, benefits and expenses shall be paid by theCorporation and the Bank in the same proportion as the time and servicesactually expended by the Executive on behalf of each respective Employer.

 

**4.****                                      Expenses.**  The Employers shall reimburse the Executiveor otherwise provide for or pay for all reasonable expenses incurred by theExecutive in furtherance of or in connection with the business of theEmployers, including, but not by way of limitation, automobile expenses and othertraveling expenses, and all reasonable entertainment expenses (whether incurredat the Executive’s residence, while traveling or otherwise), subject to suchreasonable documentation and other limitations as may be established by theBoards of Directors of the Employers.  Ifsuch expenses are paid in the first instance by the Executive, the Employersshall reimburse the Executive therefor.

 

**5.****                                      Termination.**

 

(a)                                  TheEmployers shall have the right, at any time upon prior Notice of Termination,to terminate the Executive’s employment hereunder for any reason, includingwithout limitation termination for Cause, Disability or Retirement, and theExecutive shall have the right, upon prior Notice of Termination, to terminatehis employment hereunder for any reason.

 

(b)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor Cause or (ii) the Executive terminates his employment hereunder other thanfor Disability, Retirement, death or Good Reason, the Executive shall have noright pursuant to this Agreement to compensation or other benefits for anyperiod after the applicable Date of Termination.

 

(c)                                  Inthe event that the Executive’s employment is terminated as a result ofDisability, Retirement or the Executive’s death during the term of thisAgreement, the Executive shall have no right pursuant to this Agreement tocompensation or other benefits for any period after the applicable Date ofTermination, except as provided for in Section 3(d) hereof.

 

(d)                                 Inthe event that (i) the Executive’s employment is terminated by the Employersfor other than Cause, Disability, Retirement or the Executive’s death or (ii)such employment is terminated by the Executive (a) due to a material breach ofthis Agreement by the Employers, which breach has not been cured within fifteen(15) days after a written notice of non-compliance has been given by theExecutive to the

 

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Employers, or (b) for Good Reason, then theEmployers shall, subject to the provisions of Section 6 hereof, ifapplicable

 

(A)                              payto the Executive, in either thirty-six (36) equal monthly installmentsbeginning with the first business day of the month following the Date ofTermination or in a lump sum within five business days of the Date ofTermination (at the Executive’s election), a cash severance amount equal tothree (3) times that portion of the Executive’s Average Annual Compensationpaid by the Employers, and

 

(B)                                maintainand provide for a period ending at the earlier of (i) the expiration of theremaining term of employment pursuant hereto prior to the Notice of Terminationor (ii) the date of the Executive’s full-time employment by another employer(provided that the Executive is entitled under the terms of such employment tobenefits substantially similar to those described in this subparagraph (B)), atno cost to the Executive, the Executive’s continued participation in all groupinsurance, life insurance, health and accident insurance, disability insuranceand other employee benefit plans, programs and arrangements offered by theEmployers in which the Executive was entitled to participate immediately priorto the Date of Termination (excluding (x) stock option and restricted stockplans of the Employers, (y) bonuses and other items of cash compensationincluded in Average Annual Compensation and (z) other benefits, orportions thereof, included in Average Annual Compensation), provided that inthe event that the Executive’s participation in any plan, program orarrangement as provided in this subparagraph (B) is barred, or during suchperiod any such plan, program or arrangement is discontinued or the benefitsthereunder are materially reduced, the Employers shall arrange to provide theExecutive with benefits substantially similar to those which the Executive wasentitled to receive under such plans, programs and arrangements immediatelyprior to the Date of Termination.

 

**6.****                                      Limitationof Benefits under Certain Circumstances.** If the payments and benefits pursuant to Section 5 hereof, eitheralone or together with other payments and benefits which the Executive has theright to receive from the Employers, would constitute a “parachute payment”under Section 280G of the Code, the payments and benefits payable by theEmployers pursuant to Section 5 hereof shall be reduced, in the mannerdetermined by the Executive, by the amount, if any, which is the minimumnecessary to result in no portion of the payments and benefits payable by theEmployers under Section 5 being non-deductible to the Employers pursuantto Section 280G of the Code and subject to the excise tax imposed under Section 4999of the Code.  The parties hereto agreethat the present value of the payments and benefits payable pursuant to thisAgreement to the Executive upon termination shall be limited to three times theExecutive’s Average Annual Compensation. The determination of any reduction in the payments and benefits to bemade pursuant to Section 5 shall be based upon the opinion of independentcounsel selected by the Employers’ independent public accountants and paid bythe Employers.  Such counsel shall bereasonably acceptable to the Employers and the Executive; shall promptlyprepare the foregoing opinion, but in no event later

 

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than thirty (30) days from the Date ofTermination; and may use such actuaries as such counsel deems necessary oradvisable for the purpose.  Nothingcontained herein shall result in a reduction of any payments or benefits towhich the Executive may be entitled upon termination of employment under anycircumstances other than as specified in this Section 6, or a reduction inthe payments and benefits specified in Section 5 below zero.

 

**7.****                                      Mitigation;Exclusivity of Benefits.**

 

(a)                                  TheExecutive shall not be required to mitigate the amount of any benefitshereunder by seeking other employment or otherwise, nor shall the amount of anysuch benefits be reduced by any compensation earned by the Executive as aresult of employment by another employer after the Date of Termination orotherwise.

 

(b)                                 Thespecific arrangements referred to herein are not intended to exclude any otherbenefits which may be available to the Executive upon a termination ofemployment with the Employers pursuant to employee benefit plans of theEmployers or otherwise.

 

**8.****                                      Withholding.**  All payments required to be made by theEmployers hereunder to the Executive shall be subject to the withholding ofsuch amounts, if any, relating to tax and other payroll deductions as the Employersmay reasonably determine should be withheld pursuant to any applicable law orregulation.

 

**9.****                                      Assignability.**  The Employers may assign this Agreement andits rights and obligations hereunder in whole, but not in part, to anycorporation, bank or other entity with or into which the Employers mayhereafter merge or consolidate or to which the Employers may transfer all orsubstantially all of its assets, if in any such case said corporation, bank orother entity shall by operation of law or expressly in writing assume allobligations of the Employers hereunder as fully as if it had been originallymade a party hereto, but may not otherwise assign this Agreement or its rightsand obligations hereunder.  The Executivemay not assign or transfer this Agreement or any rights or obligationshereunder.

 

**10.****                               Notice.**  For the purposes of this Agreement, noticesand all other communications provided for in this Agreement shall be in writingand shall be deemed to have been duly given when delivered or mailed by certifiedor registered mail, return receipt requested, postage prepaid, addressed to therespective addresses set forth below:

 
| To the Employers: |   | Boards of Directors      |
|-------------------|--------|--------------------------|
|              |   | Peoples Bancorp, Inc.    |
|              |   | Peoples Community Bank   |
|              |   | 11 South Broadway        |
|              |   | Lebanon, Ohio 45036-1780 |
|              |   |                     |
| To the Executive: |   | Teresa O’Quinn      |
|              |   | 261 Centerbury Court     |
|              |   | Cincinnati, Ohio 45246   |

 

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**11.****                               Amendment;Waiver.**  No provisions of thisAgreement may be modified, waived or discharged unless such waiver,modification or discharge is agreed to in writing and signed by the Executiveand such officer or officers as may be specifically designated by the Boards ofDirectors of the Employers to sign on their behalf.  No waiver by any party hereto at any time ofany breach by any other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same or atany prior or subsequent time.

 

**12.****                               GoverningLaw.**  The validity, interpretation,construction and performance of this Agreement shall be governed by the laws ofthe United States where applicable and otherwise by the substantive laws of theState of Ohio.

 

**13.****                               Natureof Obligations.**  Nothing containedherein shall create or require the Employers to create a trust of any kind tofund any benefits which may be payable hereunder, and to the extent that theExecutive acquires a right to receive benefits from the Employers hereunder,such right shall be no greater than the right of any unsecured general creditorof the Employers.

 

**14.****                               Headings.**  The section headings contained in thisAgreement are for reference purposes only and shall not affect in any way themeaning or interpretation of this Agreement.

 

**15.****                               Validity.**  The invalidity or unenforceability of anyprovision of this Agreement shall not affect the validity or enforceability ofany other provisions of this Agreement, which shall remain in full force andeffect.

 

**16.****                               Counterparts.**  This Agreement may be executed in one or morecounterparts, each of which shall be deemed to be an original but all of whichtogether will constitute one and the same instrument.

 

**17.****                               RegulatoryActions.**  The following provisionsshall be applicable to the parties to the extent that they are required to beincluded in employment agreements between a savings association and itsemployees pursuant to Section 563.39(b) of the Regulations Applicable toAll Savings Associations, 12 C.F.R. §563.39(b), or any successor thereto, andshall be controlling in the event of a conflict with any other provision ofthis Agreement, including without limitation Section 5 hereof.

 

(a)                                  Ifthe Executive is suspended from office and/or temporarily prohibited fromparticipating in the conduct of the Employers’ affairs pursuant to noticeserved under Section 8(e)(3) or Section 8(g)(1) of the FederalDeposit Insurance Act (“FDIA”) (12 U.S.C. §§1818(e)(3) and 1818(g)(1)), theEmployers’ obligations under this Agreement shall be suspended as of the dateof service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed,the Employers may, in their discretion: (i) pay the Executive all or part of the compensation withheld while its

 

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obligations under this Agreement weresuspended, and (ii) reinstate (in whole or in part) any of its obligationswhich were suspended.

 

(b)                                 Ifthe Executive is removed from office and/or permanently prohibited fromparticipating in the conduct of the Employers’ affairs by an order issued underSection 8(e)(4) or Section 8(g)(1) of the FDIA (12 U.S.C.§§1818(e)(4) and (g)(1)), all obligations of the Employers under this Agreementshall terminate as of the effective date of the order, but vested rights of theExecutive and the Employers as of the date of termination shall not beaffected.

 

(c)                                  Ifthe Bank is in default, as defined in Section 3(x)(1) of the FDIA (12U.S.C. §1813(x)(1)), all obligations under this Agreement shall terminate as ofthe date of default, but vested rights of the Executive and the Employers as ofthe date of termination shall not be affected.

 

(d)                                 Allobligations under this Agreement shall be terminated pursuant to 12 C.F.R.§563.39(b)(5) (except to the extent that it is determined that continuation ofthe Agreement for the continued operation of the Employers is necessary):  (i) by the Director of the Office of ThriftSupervision (“OTS”), or his/her designee, at the time the Federal DepositInsurance Corporation (“FDIC”) enters into an agreement to provide assistanceto or on behalf of the Bank under the authority contained in Section 13(c)of the FDIA (12 U.S.C. §1823(c)); or (ii) by the Director of the OTS, orhis/her designee, at the time the Director or his/her designee approves asupervisory merger to resolve problems related to operation of the Bank or whenthe Bank is determined by the Director of the OTS to be in an unsafe or unsoundcondition, but vested rights of the Executive and the Employers as of the dateof termination shall not be affected.

 

**18.****                               RegulatoryProhibition.**  Notwithstanding anyother provision of this Agreement to the contrary, any payments made to theExecutive pursuant to this Agreement, or otherwise, are subject to andconditioned upon their compliance with Section 18(k) of the FederalDeposit Insurance Act (12 U.S.C. §1828(k)) and the regulations promulgatedthereunder, including 12 C.F.R. Part 359.

 

**19.****                               Paymentof Costs and Legal Fees and Reinstatement of Benefits.**  In the event any dispute or controversyarising under or in connection with the Executive’s termination is resolved infavor of the Executive, whether by judgment, arbitration or settlement, theExecutive shall be entitled to the payment of (a) all legal fees incurredby the Executive in resolving such dispute or controversy, and (2) anyback-pay, including Base Salary, bonuses and any other cash compensation,fringe benefits and any compensation and benefits due to the Executive underthis Agreement.

 

**20.****                               EntireAgreement.**  This Agreement embodiesthe entire agreement between the Employers and the Executive and betweenHarvest Home Financial Corporation and Harvest Home Savings Bank and theExecutive with respect to the matters agreed to herein.  All prior agreements between the Employersand the Executive with respect to the matters agreed to herein are herebysuperseded and shall have no force or effect. Notwithstanding the foregoing, nothing contained in this Agreement shallaffect the agreement of even date being entered into between the Corporationand the Executive.

 

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IN WITNESS WHEREOF, this Agreement has beenexecuted as of the date first above written.

 
| ** ** | **PEOPLES**  **COMMUNITY BANCORP, INC.** |
|------------|-----------------------------------------------|
|       |                                          |
| ** ** |                                          |
|       | By:                                           |   /s/ Jerry D. Williams |
|       |                                          |
|       |                                          |
| ** ** | **PEOPLES COMMUNITY BANK**                    |
|       |                                          |
|       |                                          |
|       | By:                                           |   /s/ Jerry D. Williams |
|       |                                          |   |
|       |                                          |   |
|       | **EXECUTIVE**                                 |
|       |                                          |   |
|       |                                          |   /s/ Teresa O’Quinn |
|       |                                          | Teresa O’Quinn |

** **

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