Exhibit 10.1






Exhibit 10.1




CHANGE OF CONTROL AGREEMENT



This CHANGE OF CONTROL AGREEMENT (hereinafter referred to as this “Agreement”), is made and
entered into as of this 11th day of June, 2009 (“Effective Date”) by and between THE
HOME SAVINGS AND LOAN COMPANY OF YOUNGSTOWN, OHIO, a savings bank incorporated under Ohio Law
(hereinafter referred to as the “Company”, a wholly owned subsidiary of United Community Financial
Corp., the “Holding Company”), and MATTHEW T. GARRITY, an individual (herein after referred to as
the “Executive”).



RECITALS





WHEREAS, the Executive is or shall be employed as the Senior Vice President and Chief Credit
Officer of the Company; and



WHEREAS, the Executive and the Company desire to enter into this Agreement to set forth
certain terms and conditions of the employment relationship between the Company and the Executive
resulting from a Change of Control (defined below).




NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
Company and the Executive, each party intending to be legally bound, hereby agree as follows:



AGREEMENTS




1. Term. This Agreement shall be effective as of the Effective Date set forth above
and shall terminate on or before the first anniversary of the Effective Date in accordance with the
terms and conditions set forth in this Agreement.



2. Termination of Employment in connection with Change of Control. In the event that
the employment of the Executive is terminated (as defined below) by the Company within one (1) year
after a Change of Control (defined below) for any reason other than Cause (defined below), death or
disability, or within one (1) year after a Change of Control the Executive’s employment is
terminated at the Executive’s option as provided in Section 3 below, then the following shall
occur:



(a) The Company shall promptly pay to the Executive an amount equal to the product of one (1)
multiplied by the Executive’s “base amount” as defined in Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder (hereinafter
collectively referred to as “Section 280G”).



(b) For purposes of the Agreement, a “Change of Control” shall mean any one of the following
events:




	 	(i)	 	the acquisition by any person or entity of the
ability to control the election of a majority of the directors of the
Holding Company;







	 	(ii)	 	the acquisition by any person or entity of
“control” of the Holding Company within the meaning of 12 C.F.R.
Section 303.81(c) (even if the Company and/or the Holding Company does
not satisfy the definition of ‘insured bank’ at such time); and





 


 









 






	 	(iii)	 	the sale by the Holding Company of all, or
substantially all, of the assets of the Holding Company; provided;
however, that the sale of the Company to, or a merger of the Company
with and into, an entity directly or indirectly acquired by the Holding
Company in or part of a transaction in which the Company is not the
surviving entity shall not constitute a change of control so long as
the present capacity or circumstances in which the Executive is
employed by the Company does not constitute a Material Adverse Change
(defined below).






For purposes of this paragraph, the term “person” refers to an individual or corporation,
partnership, trust, association or other organization, but does not include the Executive or any
person or persons with whom the Executive is “acting in concert” within the meaning of 12 C.F.R.
Section 303.81(b).



(c) The Executive shall not be required to mitigate the amount of any payment provided for in
this Agreement in any way, nor shall any amounts or benefits received from other employment or
otherwise by the Executive offset in any manner the obligations of the Company hereunder.



(d) In the event that any payments pursuant to this Agreement or pursuant to any other plan,
agreement or arrangement would result in or contribute to the imposition of a penalty tax pursuant
to Section 280G and Internal Revenue Code Section 4999, such payments shall be reduced to the
maximum amount that may be paid under Section 280G without exceeding such limits. Any such
reduction shall be made consistent with the requirements of Section 409A of the Internal Revenue
Code of 1986, as amended and the regulations promulgated thereunder (“Section 409A”). Any payments
made to the Executive pursuant to this Agreement are subject to and conditioned upon their
compliance with 12 U.S.C. Section 1828(k) and any regulations promulgated thereunder.



(e) As used in this Section 2, “Cause” shall mean the termination of the Executive by the
Company because of the Executive’s personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure or refusal to perform the duties and
responsibilities of the Executive in connection with his employment with the Company, willful
violation of any law, rule or regulation (other than traffic violations or other minor offenses),
final cease-and-desist order or material breach of any provision of this Agreement. In the event
of Executive’s termination for Cause, the Executive shall not receive, and shall have no right to
receive, any compensation or other benefits under this Agreement for any period after such
termination.



(f) For purposes of this Agreement, any reference to the Executive’s termination of employment
(or any form thereof) shall mean the Executive’s “separation from service”, within the meaning of
Section 409A, from the Company and all entities with whom the Company would be treated as a single
employer for purposes of Sections 414(b) and (c) of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.



3. Termination of Employment at the Option of the Executive in connection with a Change of
Control. The employment of the Executive may be terminated at the option of Executive within
one (1) year after a Change of Control, upon delivery by the Executive of written notice of
termination to the Company if the present capacity or circumstances in which the Executive is
employed are materially adversely changed (including, but not limited to, a material reduction in responsibilities or authority or the assignment of duties or
responsibilities substantially inconsistent with those normally associated with the Executive’s
position immediately prior to the Change of Control, change of title or the requirement that the
Executive regularly perform his principal functions more than thirty-five (35) miles from his
primary office as it existed immediately prior to the Change of Control (the foregoing collectively
referred to in this Agreement as a “Material Adverse Change”). Should this event occur, the
Company shall pay the Executive the amount set forth above in Section 2(a).


 


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4. Non-Compete. If the Executive terminates his employment without the written
consent of the Company, other than pursuant to Section 3 of this Agreement, then, during the 12
months immediately following the effective date of such termination by Executive, the Executive
shall not engage in the financial institutions business as a director, officer, executive or
consultant for any business or enterprise that competes with the principal business of the Company
or the Holding Company or any of their subsidiaries within Mahoning, Trumbull or Columbiana
counties or any other geographic area in which the Company or the Holding Company is doing business
at the time of Executive’s termination.



5. Withholding. All payments required to be made by the Company hereunder to the
Executive shall be subject to the withholding of such amounts, if any, relating to Federal, State
and local tax and other payroll deductions as the Company may reasonably determine should be
withheld pursuant to any applicable law or regulation.



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



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



8. Arbitration. Any dispute concerning the interpretation or application of this
Agreement that cannot be resolved by mutual agreement of the Company and Executive must be
submitted for determination by an impartial arbitrator selected in accordance with the American
Arbitration Association’s Employment Dispute Resolution Rules.



9. Notices. Any notice or other communication required or permitted pursuant to this
Agreement shall be deemed delivered if such notice or communication is in writing and is delivered
personally or by facsimile transmission or is deposited in the United States mail, postage prepaid,
addressed as follows:




 


If to the Company:

President and Chief Executive Officer

The Home Savings and Loan Company of Youngstown, Ohio

275 West Federal Street

Youngstown, Ohio 44503




 


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With a copy to:

General Counsel

The Home Savings and Loan Company of Youngstown, Ohio

275 West Federal Street

Youngstown, Ohio 44503





If to the Executive:

Matthew T. Garrity

370 Apple Blossom Lane

Bay Village, Ohio 44140



or such other address as the recipient party shall have specified by prior written notice to the
sending party.




10. Binding Agreement. This Agreement shall be binding upon, and inure to the benefit
of, the Executive and the Company and its successors and assigns.



11. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
document.



12. Amendment. No alteration, modification, amendment or addition to this Agreement,
or any waiver of any of the terms hereof, shall be valid unless made in writing and signed by the
duly authorized representative of the Company and by the Executive.



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



14. Section 409A. This Agreement is intended to comply with or be exempt from the
requirements of Section 409A, as applicable, and, to the maximum extent permitted by laws, shall be
interpreted, operated and administered consistent with this intent. Nothing herein shall be
construed as a guarantee of any particular tax treatment to the Executive and none of the Company,
the Holding Company or any other person shall have any liability to the Executive in the event this
Agreement fails to comply with the requirements of Section 409A. Notwithstanding anything in this
Agreement to the contrary, if the Executive is a “specified employee” (within the meaning of
Section 409A and as determined under the Holding Company’s policy for determining specified
employees) on the date of the Executive’s termination and the Executive is entitled to a payment
under this Agreement that is required to be delayed pursuant to Section 409A, then such payment
shall not be paid until the first business day of the seventh month following the date of the
Executive’s termination (or, if earlier, the date of the Employee’s death).



[Signature Page Follows]



 


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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and the Executive has signed this Agreement, each as of the day and year first
above written.



	 	 	 	 	 
	 	THE HOME SAVINGS AND LOAN COMPANY OF

YOUNGSTOWN, OHIO

 	 
	 	By:  	/S/ Patrick W. Bevack
 	 
	 	 	Name:  	        Patrick W. Bevack 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 	 	 
	 	By:  	/S/ Matthew T. Garrity
 	 
	 	 	Name:  	Matthew T. Garrity 	 



 


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