EX-10.4






EXHIBIT 10.4




EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this “Agreement”), is entered into as of
this 19th day of May, 2008 (“Effective Date”) by and between THE HOME SAVINGS AND LOAN COMPANY OF
YOUNGSTOWN, OHIO, an Ohio chartered stock savings bank (hereinafter referred to as the “Company”),
and JAMES R. RESKE, an individual (hereinafter referred to as the “Executive”);



WITNESSETH:




     WHEREAS, as a result of the skill, knowledge and experience of the Executive, the Board of
Directors of the Company desires to retain the services of the Executive as the Chief Financial
Officer and Treasurer of the Company;



     WHEREAS, the Executive desires to serve as the Chief Financial Officer and Treasurer of the
Company; and



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



     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:



1. Employment and Term.




     (a) Term. Upon the terms and subject to the conditions of this Agreement, the Company hereby
employs the Executive, and the Executive hereby accepts employment, as the Chief Financial Officer
and Treasurer of the Company. The term of this Agreement shall commence on May 19, 2008 and shall
end on December 31, 2010, unless extended by the Company, with the consent of the Executive, as
provided in subsection (b) of this Section 1 (hereinafter referred to, together with such
extensions, as the “Term”).



     (b) Extension. On, or before, each annual anniversary date of the Effective Date, the Term of
Agreement may be extended for up to an additional one-year period beyond the then effective Term
upon a determination of the Board of Directors that the performance of the Executive has met the
requirements and standards of the Board. References herein to the Term of this Agreement shall
refer both to the initial term and successive terms. Any such extension shall be subject to the
consent of the Executive.



2. Duties of the Executive.




     (a) General Duties and Responsibilities. The Executive shall serve as the Chief Financial
Officer and Treasurer of the Company. Subject to the direction of the Board of Directors of the
Company and such Executive’s manager, the Executive shall perform all duties



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and shall have all powers that commonly are incident to the office of Chief Financial Officer and
Treasurer or that, consistent therewith, are delegated to him by the Board of Directors or by the
Chief Executive Officer and/or President of the Company.




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



     (c) Standards. During the Term of this Agreement, the Executive shall perform his duties in
accordance with such reasonable standards expected of executives with comparable positions in
comparable organizations and as may be established from time to time by the Board of Directors.



3. Remuneration.




     (a) Base Compensation. The Executive shall receive during the Term compensation established
by the Board of Directors or Compensation Committee of the Company or the Holding Company, and
shall include a base salary of not less than One Hundred and Eighty Thousand Dollars ($180,000.00)
per year.



     (b) Annual Review. On or about December 31 of each year, commencing during the year including
the Effective Date, the annual base salary of the Executive shall be reviewed by the Board of
Directors or Compensation Committee of the Company or the Holding Company and shall be set at an
amount not less than One Hundred and Eighty Thousand Dollars ($180,000.00), based upon the
Executive’s individual performance and such other factors as the Board of Directors may deem
appropriate.



     (c) Executive Benefit Programs. During the Term, the Executive shall be entitled to
participate in all formally established benefit, bonus, insurance, profit sharing plans, stock
benefit plans and similar programs (hereinafter collectively referred to as “Benefit Plans”), in
accordance with the terms and conditions of such Benefit Plans that are maintained by the Company
or the Holding Company from time to time and all Executive benefit plans or programs hereafter
adopted in writing by the Board of Directors of the Company or the Holding Company for which senior
management personnel of the Company are eligible.



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Notwithstanding any statement to the contrary contained elsewhere in this Agreement, the Company or
the Holding Company, as applicable, may at any time discontinue or terminate any Benefit Plan now
existing or hereafter adopted, to the extent permitted by the terms of such Benefit Plan, and shall
not be required to compensate the Executive for such discontinuance or termination to the extent
such discontinuance or termination pertains to all employees of the Company or the Holding Company
who are eligible participants at the time.




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



     (e) Expenses. The Company shall pay or reimburse the Executive for reasonable travel,
entertainment and miscellaneous expenses incurred in connection with the performance of his duties
under this Agreement, including participation in industry-related activities upon furnishing timely
documentation to the Company of such expenses incurred.



4. Termination of Employment.




     (a) General. The employment of the Executive shall terminate at any time during the Term: (i)
at the option of the Company, upon the delivery by the Company of written notice of termination to
the Executive with or without “Cause” (as defined hereinafter), or (ii) at the option of the
Executive, 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 described in Section 2 (a) of this Agreement, change of
title or removal as a director of the Company or the Holding Company, the requirement that the
Executive regularly perform his principal executive functions more than thirty-five (35) miles from
his primary office as it existed on the date of this Agreement or the Executive’s benefits provided
under this Agreement are reduced, unless the benefit reductions are part of a Company-wide
reduction. The following subsections (b), (c), (d) and (e) of this Section 4 shall govern the
obligations of the Company to the Executive upon the occurrence of the events described in such
subparagraphs. If the Executive terminates this Agreement without the written consent of the
Company, other than pursuant to Section 4(a)(ii) of this Agreement, the Executive shall not
receive, and shall have no right to receive, any compensation or other benefits for any period
after such termination and 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 any
county in which the Company or the Holding Company has an office for the unexpired Term of this
Agreement. The provisions of this subparagraph 4(a) shall survive the termination of this
Agreement.



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     (b) Termination for Cause. In the event that the Company terminates the employment of the
Executive during the Term 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 assigned in this Agreement, willful violation of any law,
rule or regulation (other than traffic violations or other minor offenses), or final
cease-and-desist order or material breach of any provision of this Agreement (hereinafter
collectively referred to as “Cause”), the Executive shall not receive, and shall have no right to
receive, any compensation or other benefits for any period after such termination.



     (c) Termination in Connection with Change of Control. In the event that the employment of the
Executive is terminated by Company within one (1) year before or after a Change of Control
(hereinafter defined) for any reason other than Cause, death, or disability, or within one (1) year
before or after a Change of Control the Executive’s employment is terminated at the Executive’s
option as provided in Section 4 (a) (ii) above, then the following shall occur:



          (i) The Company shall promptly pay to the Executive or to his beneficiaries, dependents or
estate an amount equal to the product of three (3) 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 less one dollar ($1.00) (hereinafter collectively referred to as
“Section 280G”).




          (ii) The Executive, his dependents, beneficiaries and estate shall: continue to be covered at
the Company’s expense under all health and welfare benefit plans of the Company in which the
Executive was a participant prior to the effective date of the termination of his employment as if
the Executive were still employed under this Agreement until the earlier of the expiration of the
Term or the date on which the Executive is included in another employer’s benefit plans as a
full-time Executive; be eligible for benefit distribution from any of the Company’s stock benefit
plans in accordance with the terms and conditions of any such plans; but the Executive shall not
accrue any further benefit, vesting, or service credits under any qualified retirement plans
maintained by the Company after the effective date of the Executive’s termination of employment.




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




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





          (A) the acquisition of ownership or power to vote more than 20% of the voting stock of
the Company or the Holding Company, provided that acquisition of ownership or power to vote
by a qualified employee stock ownership plan sponsored by the Company shall not be
considered a Change of Control;



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          (B) the acquisition of the ability to control the election of a majority of the
directors of Company or the Holding Company




          (C) during any period of three or less consecutive years individuals who at the
beginning of such period constitute the Board of Directors of the Company or the Holding
Company cease for any reason to constitute at least a majority thereof; provided, however,
that any individual whose election or nomination for election as a member of the Board of
Directors of the Company or the Holding Company was approved by a vote of at least
two-thirds of the directors then in office shall be considered to have continued to be a
member of the Board of Directors of the Company or the Holding Company;




          (D) the acquisition of “control” of the Company, within the meaning of 12 C.F.R.
Section 303.81(c), by any individual or corporation, partnership, trust, association or
other organization other than the Executive and any person, corporation, partnership, trust,
association or other organization with whom the Executive is “acting in concert” within the
meaning of 12 C.F.R. Section 303.81 (b); or




          (E) an event that would be required to be reported in response to Item 1 (a) of Form
8-K or Item 6 (e) of Schedule 14A pursuant to the Securities Exchange Act of 1934, as
amended (hereinafter referred to as the “Exchange Act”), or any successor thereto, whether
or not any class of securities of the Corporation is registered under the Exchange Act.



          (v) In the event that any payments pursuant to this Section 4(c) 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 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.




          (vi) In the event the Executive’s employment terminates pursuant to this Section 4 (c), the
Executive shall not engage in the financial institutions business as a director, officer, executive
or consultant for any business or enterprise which competes with the principal business of the
Company or the Holding Company or any of their subsidiaries within any county in which the Company
or the Holding Company has an office for a period of eight (8) months from the Executive’s date of
employment termination. In exchange for Executive’s agreement concerning non-competition, the
Company agrees to pay Executive eight (8) months of base salary.




     (d) Death of the Executive. The Term shall automatically expire upon the death of the
Executive. In such event, the Executive’s estate shall be entitled to receive the Executive’s
monthly base salary continuation for ninety (90) days following the day death occurred, except as
otherwise specified herein.



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     (e) Disability of the Executive. If the Executive is unable to perform the essential
functions of the position assigned by reason of illness or incapacity for a period up to one
hundred and fifty (150) consecutive days, then, despite the Company’s efforts to reasonably
accommodate such illness or incapacity, the Company may terminate this Agreement upon written
notice to Executive. Upon termination, the Executive may be eligible for long term disability
benefits under the Company’s disability plan, subject to the terms and conditions of that plan. In
the event that the Executive is (and continues to be) eligible for long term disability benefits
under the Company’s disability plan, then the Executive shall be entitled to be covered under the
health and life insurance welfare benefits plans in which the Executive was a participant prior to
the effective date of the termination of his employment as if the Executive were still employed
under this Agreement for a period of two (2) years after the effective date of the Executive’s
termination of employment; be eligible for benefit distribution from any of the Company’s stock
benefit plans in accordance with the terms and conditions of any such plans; but the Executive
shall not accrue any further benefit, vesting, or service credits under any qualified retirement
plans maintained by the Company after the effective date of the Executive’s termination of
employment.



     (f) Other Termination. In the event that the employment of the Executive is terminated by the
Company before expiration of the Term for any reason other than death, termination for Cause or
termination in connection with a Change of Control, or disability, then the following shall occur:



          (i) The Company shall be obligated to continue to pay on at least a monthly basis, until the
expiration of the Term, to the Executive, his designated beneficiaries or his estate, the total
compensation in effect at the time of termination pursuant to Section 3 above, plus a cash bonus
equal to the cash bonus, if any, paid to the Executive in the twelve month period prior to the
termination of employment.




          (ii) The Executive shall (A) continue to be covered at the Executive’s expense under all
health and welfare benefits plans in which the Executive was a participant prior to the effective
date of the termination of his employment as if the Executive were still employed under this
Agreement until the earlier of the expiration of the Term or the date on which the Executive is
included in another employer’s benefit plans as a full-time Executive, and (B) be eligible for
benefit distribution from any of the Company’s stock benefit plans in accordance with the terms and
conditions of any such plans; provided, however, that the Executive shall not accrue any further
benefit, vesting, or service credits under any qualified retirement plans maintained by the Company
after the effective date of the Executive’s termination of employment.




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



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




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and local tax and other payroll deductions as the Company may reasonably determine should be
withheld pursuant to any applicable law or regulation.




6. Indemnification; Insurance.




     (a) Indemnification. The Company agrees to indemnify the Executive and his heirs, executors,
and administrators to the fullest extent permitted under applicable law and regulations, including,
without limitation 12 U.S.C. Section 1828(k), against any and all expenses and liabilities
reasonably incurred by the Executive in connection with or arising out of any action, suit or
proceeding in which the Executive may be involved by reason of having been a director or officer of
the Bank or any of its subsidiaries, whether or not the Executive is a director or officer at the
time of incurring any such expenses or liabilities. Such expenses and liabilities shall include,
but shall not be limited to, judgments, court costs and attorney’s fees and the cost of reasonable
settlements. The Executive shall be entitled to indemnification in respect of a settlement only if
the Board of Directors of the Company has approved such settlement. Notwithstanding anything
herein to the contrary, (I) indemnification for expenses shall not extend to matters for which the
Executive has been terminated for, and (ii) the obligations of this Section shall survive the
termination of this Agreement. Nothing contained herein shall be deemed to provide indemnification
prohibited by applicable law or regulation.



     (b) Insurance. During the Term of the Agreement, the Company shall provide the Executive with
coverage under a directors’ and officers’ liability policy at the Company’s expense, at least
equivalent to such coverage otherwise provided to the other directors and senior officers of the
Company.


7. Special Regulatory Events. Notwithstanding the provisions of Section 4 of this Agreement, the
obligations of the Company to the Executive shall be as follows in the event of the following
circumstances:




     (a) If the Executive is suspended and/or temporarily prohibited from participating in the
conduct of the Company’s affairs by a notice served under section 8(e)(3) or 8(g)(1) of the Federal
Deposit Insurance Act (hereinafter referred to as the “FDIA”), the Company’s obligations under this
Agreement shall be suspended as of the date of service of such notice, unless stayed by appropriate
proceedings. If the charges in the notice are dismissed, the Company may pay the Executive all or
part of the compensation withheld while the obligations in this Agreement were suspended and
reinstate, in whole or in part, any of the obligations that were suspended;



     (b) If the Executive is removed and/or permanently prohibited from participating in the
conduct of the Company’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDIA,
all obligations of the Company under this Agreement shall terminate as of the effective date of
such order; provided, however, that vested rights of the Executive shall not be affected by such
termination; or



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     (c) If the Company is in default, as defined in section 3(x)(1) of the FDIA, all obligations
under this Agreement shall terminate as of the date of default; provided, however, that vested
rights of the Executive shall not be affected.


8. Consolidation, Merger or Sale of Assets. 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.



9. Confidential Information. The Executive acknowledges that during his employment he will learn
and have access to confidential information regarding the Company and its customers and businesses.
The Executive agrees not to disclose or use for his own benefit, or the benefit of any other
person or entity, any confidential information, unless or until the Company consents to such
disclosure or use of such information is otherwise legally in the public domain. The Executive
shall not knowingly disclose or reveal to any unauthorized person any confidential information
relating to the Holding Company, its subsidiaries, or affiliates, or any of the businesses operated
by them, and the Executive confirms that such information constitutes the exclusive property of the
Company. The provisions of this Section 9 shall survive the termination or expiration of this
Agreement.



10. Non-Assignability. Neither this Agreement nor any right or interest hereunder shall be
assignable by the Executive, by the Executive, his beneficiaries or legal representatives without
the Company’s prior written consent; provided, however, that nothing in this Section 10 shall
preclude the Executive from designating a beneficiary to receive any benefits payable hereunder
upon his death or the executors, administrators or legal representatives of the Executive or his
estate from assigning any rights hereunder to the person or persons entitled thereto.



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



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



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



14. Waiver. No term or condition of this Agreement shall deemed to have been waived, nor shall
there be an estoppel against the enforcement of any provision of this Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written waiver shall be
deemed a continuing waiver, unless specifically stated therein, and each waiver shall




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operate only as to the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than the act specifically waived.



15. Severability. If, for any reason, any provision of this Agreement is held invalid, such
invalidity shall not affect the other provisions of this Agreement not held so invalid, and each
such other provision shall, to the full extent consistent with applicable law, continue in full
force and effect. If this Agreement is held invalid or cannot be enforced, then any prior
Agreement between the Company (or any predecessor thereof) and the Executive shall be deemed
reinstated to the full extent permitted by law, as this Agreement had not been executed.



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



17. 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.



18. Effect of Prior Agreements. This Agreement contains the entire understanding between the
parties hereto and supersedes any prior employment agreement between the Company or any predecessor
of the Company and the Executive, including, but not limited to that certain Offer Letter of the
Company dated May 7, 2008 (“Offer Letter”). Notwithstanding the foregoing, paragraph numbers 1, 3,
6 and 7 of the Offer Letter shall survive the execution of this Agreement.



19. 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.



20. 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:



Chairman and CEO

The Home Savings and Loan Company of Youngstown, Ohio

275 West Federal Plaza Street

Youngstown, Ohio 44503



If to the Executive:



To the last address on file with the Company as provided by Executive to the Company.




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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/ Douglas M. McKay
 

	 	 
	 	 	Name: Douglas M. McKay	 	 
	 	 	Title: Chairman of the Board and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	Executive	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ James R. Reske	 	 
	 	 	 	 	 
	 	 	James R. Reske	 	 






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