Document:

CLF-2013.9.30 EX 10.2

EXHIBIT 10.2 
SEVERANCE AGREEMENT
YOU ARE ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS SEVERANCE AGREEMENT.  YOUR SIGNATURE MUST BE NOTARIZED.
This Severance Agreement (the “Agreement”) is entered into knowingly and voluntarily by and between David B. Blake (“Employee”) and Cliffs Natural Resources Inc. and its affiliates identified in Section III.A, below (collectively, the “Company”).  Employee and the Company may be collectively referred to as the “Parties.”
RECITALS
A.    Employee has decided to voluntarily resign from his position with the Company as the Senior Vice President of Eastern Canadian Operations and terminate his employment effective October 31, 2013 (the “Termination Date”). 
B.    The Company agrees to pay Employee all wages and other compensation earned through the Termination Date.  
C.    Employee and the Company desire to establish the terms for an amicable termination of Employee’s employment, to facilitate an appropriate transition of Employee’s responsibilities, and to settle fully and finally any and all differences between them which have arisen, or may arise, out of the employment relationship and/or the termination of that relationship.
D.    The Company desires to offer Employee the payments and benefits described herein in connection with Employee’s termination of employment in exchange for Employee entering into the Release.
E.    Receipt of the payments and benefits described herein requires (1) execution and notarization; (2) delivery to the Company; and (3) non-revocation of the Release, all within the time frames specified in Release.
AGREEMENT
I.    TERMINATION, SEVERANCE PAYMENTS AND BENEFITS
A.    On the Termination Date, Employee’s employment with the Company shall cease, he shall cease to be an officer of the Company, and he shall resign from any positions that he then holds with the Company as of the Termination Date.  As of the Termination Date, Employee shall be released from his duties with the Company and cease to have any authority to conduct business on behalf of the Company.
B.    Subject to Section I.D., Employee shall receive the following benefits and payments (collectively the “Payment” or “Benefits”) if Employee (1) executes this Agreement; (2) signs, notarizes and delivers the Release in the form attached hereto as Exhibit A (the “Release”) no earlier than the calendar day following the Termination Date and no later than five calendar days following the Termination Date; and (3) does not revoke the Release prior to the Effective Date (as defined in Section V.D. of the Release):

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	1.
	The Company shall continue to provide coverage under the medical, prescription drug, dental and vision benefit programs under the health care plan for active employees offered by the Company, if any, for Employee and Employee’s eligible dependents, through December 31, 2013 as long as Employee or Employee’s eligible dependents timely and properly pay(s) the same portion of the costs of such coverages as is paid by similarly situated active employees.

		
	2.
	Provided that Employee timely elects to receive and properly completes and submits all of the necessary documentation relating to the receipt of COBRA coverage, the Company shall pay the premiums for COBRA continuation coverage for Employee and Employee’s COBRA qualified beneficiaries (the “COBRA Payment”) for a maximum period of eighteen (18) months following the termination of his active-employee benefits (i.e., through June 30, 2015).  COBRA assistance is subject to shortening of this period if Employee or Employee’s COBRA qualified beneficiaries become ineligible for COBRA continuation coverage.

		
	3.
	Employee shall continue to participate in the Company’s Executive Management Performance Incentive Plan (the “EMPI Plan”) through October 31, 2013 and shall receive a ten-month pro-rata payment, if any, for the 2013 plan year with the bonus payout to be determined based on actual performance during the applicable performance period and paid, less appropriate withholdings and deductions, in a lump sum when (but not prior to the Effective Date), and at the rate, the EMPI Plan bonuses are paid to active employees of the Company, which is expected to be in the first quarter of 2014.  Employee shall not participate in the EMPI Plan for 2014 or any subsequent year.

		
	4.
	Direct reimbursement of the reasonable fees and expenses of Employee’s chosen outplacement consultant for a maximum period of eighteen (18) months following the Termination Date.

B.    All Payments made pursuant to this Agreement shall be subject to all required and/or customary taxes, withholdings and deductions.
C.    The term “Base Pay” shall mean Employee’s base salary, calculated at Employee’s base salary rate in effect as of the Termination Date.  Base Pay does not include pension contributions made by the Company, welfare or other fringe benefits paid for by the Company, expense reimbursements, overtime pay, bonuses, commissions, incentive pay, or any other special compensation.
D.    Should Employee breach any of the provisions of Sections V, VI, VII, VIII, IX, or X of this Agreement, Employee shall be required to return the Payment and Benefits already received under this Agreement in excess of one (1) Month’s Base Pay within seven (7) days of demand by the Company, and shall receive no further Payments or Benefits.
II.    REPRESENTATIONS AND WARRANTIES 
Employee understands, acknowledges and agrees that:
		
	•
	Employee has the sole right and exclusive authority to execute this Agreement. 

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	•
	The Company is not obligated to pay, and will not pay, to Employee any Payment or Benefits until this Agreement has become effective.

		
	•
	Employee signs this Agreement knowingly and voluntarily, in order to induce Company to provide the Benefits.

		
	•
	Employee has not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations or causes of action referred to in this Agreement.

		
	•
	No other person or entity has an interest in the claims, demands, obligations or causes of action referred to in this Agreement.

		
	•
	The Benefits that Employee will receive in exchange for signing this Agreement and the Release is in addition to anything of value to which Employee is already entitled.

		
	•
	The Benefits provided for in this Agreement are the only consideration that Employee ever will receive from the Company or any Released Parties (as defined below) for any and all claims, demands, obligations or causes of action released by this Agreement and the Release.

		
	•
	The Payments provided for in this Agreement are not intended to be provided in addition to any payments or benefits that may now be due or in the future become due or payable to Employee under the Worker Adjustment and Retraining Notification (“WARN”) Act (if applicable).  Therefore, if WARN Act payments are or become due to Employee, any Payment made under this Agreement in excess of one Month’s Base Pay, up to the full amount necessary to satisfy such obligation, shall be treated as having been paid in satisfaction of any such obligation, and the rest of the Benefits shall be treated as having been given in exchange for the other terms and obligations of this Agreement and the Release.

		
	•
	This Agreement and its terms shall not be construed as an admission of any liability whatsoever on the part of the Company or any other Released Parties described in this Agreement, by which/whom any liability is and always has been expressly denied.

		
	•
	As of the date of execution of this Agreement, Employee has not filed any administrative charges or lawsuits arising out of or relating to his employment with the Company or the separation of that employment.  

		
	•
	As of the date of execution of this Agreement, Employee has no work-related injury and is medically stationary with no impairment of earning capacity. 

III.    RELEASE
A.    Employee, for himself, and his marital community (if any), agents, heirs, executors, administrators, and assigns, hereby knowingly and voluntarily fully releases and forever discharges from any and all agreements, debts, claims, demands, actions, judgments, causes of action, and liabilities of every kind or nature, known or unknown, that Employee, individually or as a member of a class, ever had or now has, the following (referred to as the “Released Parties”):
		
	•
	Cliffs Natural Resources Inc.;

		
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	Cliffs North American Coal LLC;

		
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	Pinnacle Mining Company, LLC;

		
	•
	Oak Grove Resources, LLC;

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	•
	Cliffs Logan County Coal LLC;

		
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	Cliffs Quebec Iron Mining Limited;

		
	•
	The Bloom Lake Iron Ore Mine Limited Partnership;

		
	•
	Cliffs Canadian Shared Services Inc.;

		
	•
	Northshore Mining Company;

		
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	Silver Bay Power Company;

		
	•
	Tilden Mining Company LC;

		
	•
	Empire Iron Mining Partnership;

		
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	Cliffs Mining Company;

		
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	Hibbing Taconite Company Joint Venture;

		
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	United Taconite LLC;

		
	•
	The Cleveland-Cliffs Iron Company;

		
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	Cliffs Mining Services Company;

		
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	Lake Superior & Ishpeming Railroad Company;

		
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	Wabush Iron Co. Ltd.;

		
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	Wabush Mines Joint Venture;

		
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	Cliffs International Management Company LLC;

		
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	Cliffs Sales Company;

		
	•
	Cliffs Natural Resources Exploration Ltda.;

		
	•
	Cliffs Natural Resources Pty Ltd;

		
	•
	All affiliates of Cliffs Natural Resources Inc. not already listed above, including any corporation or other entity which is controlled by or under common control with Cliffs Natural Resources Inc., or which is in the same affiliated service group or otherwise required to be aggregated with Cliffs Natural Resources Inc. under Sections 414 or 1563 of the Internal Revenue Code;

		
	•
	All current or former owners, officers, directors, shareholders, members, employees, managers, agents, attorneys, partners and insurers of the above entities; and

		
	•
	The predecessors, successors, and assigns of the above entities and individuals and the spouses, children, and family members of the individuals.

B.    Without limiting the generality of this Agreement, Employee acknowledges and agrees that this Agreement is intended to bar every claim, demand, and cause of action, including without limitation any and all claims arising under:
		
	•
	The federal Civil Rights Acts of 1866, 1871, 1964 and 1991 and all similar state civil rights statutes; 

•The Employee Retirement Income Security Act of 1974;
•The Fair Labor Standards Act; 
•The Rehabilitation Act of 1973; 
•The Occupational Safety and Health Act;
•The Mine Safety and Health Act;
•The Health Insurance Portability and Accountability Act;
•The Age Discrimination in Employment Act;
•The Older Workers Benefit Protection Act;
•The Americans with Disabilities Act;
•The National Labor Relations Act;
•The Family and Medical Leave Act; 
•The Equal Pay Act;
•The Worker Adjustment and Retraining Notification Act;

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•The Lilly Ledbetter Fair Pay Act;
•The Ohio Civil Rights Act; 
•State wage payment statutes;
•State wage and hour statutes;
•State employment statutes; 
•Any statutes regarding the making and enforcing of contracts;
•Any whistleblower statute; and 
•All similar provisions under all other federal, state and local laws.
C.    Without limiting the generality of this Agreement, Employee further acknowledges and agrees that this Agreement is intended to bar all equitable claims and all common law claims, including without limitation claims of or for:
•Breach of an express or an implied contract;
•Breach of the covenant of good faith and fair dealing; 
		
	•
	Unpaid wages, salary, commissions, vacation or other employee benefits;

•Unjust enrichment;
•Negligent or intentional interference with contractual relations; 
•Negligent or intentional interference with prospective economic relations; 
•Estoppel; 
•Fraud;
•Negligence;
•Negligent or intentional misrepresentation;
•Personal injury;
•Slander;
•Libel;
•Defamation;
•False light; 
•Injurious falsehood;
•Invasion of privacy; 
•Wrongful discharge; 
•Failure to hire;
•Retaliatory discharge;
•Constructive discharge; 
•Negligent or intentional infliction of emotional distress;
•Negligent hiring, supervision or retention;
•Loss of consortium; and
•Any claims that may relate to drug and/or alcohol testing.
D.    Employee further understands, acknowledges and agrees that this Agreement is a general release, and that Employee further waives and assumes the risk of any and all claims which exist as of this date, including those of which Employee does not know or suspect to exist, whether through ignorance, oversight, error, negligence, or otherwise, and which, if known, would materially affect Employee’s decision to sign this Agreement.
E.    Employee further understands, acknowledges and agrees that this Agreement waives any right Employee has to recover damages in any lawsuit brought by Employee as well as in any lawsuit brought on his behalf by any other person or entity, including without limitation by the United States Equal Employment Opportunity Commission (EEOC) or any similar state 

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agency.  Employee is not, however, waiving the right to file a charge with the EEOC or any similar state agency. 
F.    This Agreement shall not be interpreted to release or require the release of the Company or the Released Parties from any:
		
	•
	Claims for Payments or Benefits under this Agreement; or

		
	•
	Claims for benefits under any pension plan of the Company; or

		
	•
	Claims arising out of acts or practices which occur after the execution of this Agreement.

IV.    REPRESENTATION OF UNDERSTANDING OF RELEASE
Employee acknowledges that Employee has had the opportunity to consult an attorney of Employee’s own choosing before entering into this Agreement.  Employee represents and warrants that Employee has read all of the terms of this Agreement; and that Employee fully understands and voluntarily accepts these terms.  Employee further acknowledges and agrees that Employee has been given a reasonable period of time within which to consider this Agreement.
		
	V.
	CONFIDENTIAL INFORMATION AND COVENANTS

Employee represents that, during Employee’s employment with the Company, Employee has not breached any confidentiality agreement to which Employee is a party.  Employee further represents and warrants that Employee will continue to abide by the terms of any confidentiality agreement applicable to Employee after the Termination Date.
VI.    RETURN OF COMPANY PROPERTY
A.    Employee agrees to return to the Company all originals and copies of the Company’s property, documents and information in Employee’s possession, regardless of the form on which such information has been maintained or stored, including without limitation, computer disks, tapes or other forms of electronic storage, Company credit cards (including telephone credit cards), tools, equipment, keys, identification, software, computer access codes, disks and instructional manuals, and all other property prepared by, or for, or belonging to the Company.  Employee further agrees that he will not retain any documents or other property belonging to Company.
B.    By signing this Agreement, Employee affirms that Employee either (1) has no Company property remaining in his possession or control or, (2) if Employee does have any such property in his possession or control, Employee has provided the Company a list of such property, the reason why Employee has been unable to return it to the Company, and the date by which Employee intends to return such property to the Company.  
VII.    COOPERATION
Employee shall cooperate with the Company in effecting a smooth transition, and shall timely provide such information as the Company may reasonably request regarding operations and information within Employee’s knowledge while Employee was employed by the Company.  Employee further agrees to execute any documentation necessary to resign any positions that he holds with the Company as of the Termination Date.

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VIII.    NON-DISPARAGEMENT
Employee shall not voluntarily make any negative statements orally or in writing about Employee’s employment with the Company, about the Company or its affiliates or any of its employees or products, to anyone other than to the EEOC or any similar state agency, Employee’s immediate family, and Employee’s legal representatives or financial advisors.  Nothing herein shall prevent Employee from testifying truthfully in a legal proceeding or governmental administrative proceeding.  Employee may indicate on employment applications that Employee was employed by the Company, Employee’s duties, length of employment, and salary.    
IX.    NON-COMPETITION
Employee covenants and agrees that, during the twelve (12) month period following the Termination Date, Employee shall not, directly or indirectly, anywhere in North America, on behalf of any Competitive Business perform the same or substantially the same job duties Employee performed at any time while employed by the Company. For purposes of this Section IX, the term “Competitive Business” shall include any firm, partnership, joint venture, corporation and/or any other entity and/or person that mines, processes, manufactures, markets, distributes, and/or sells iron ore or iron ore related assets.
X.    NON-SOLICITATION
Employee covenants and agrees that, during the twelve (12) month period following the Termination Date, Employee shall not directly or indirectly contact, approach or solicit for the purpose of offering employment to, or directly or indirectly actually hire or cause to be hired by any organization or company with which Employee is affiliated, any person employed by the Company or its affiliates (or who was employed by the Company or its affiliates during the six (6) month period immediately prior to such solicitation or hire), without the prior written consent of the Company.
XI.    SEVERABILITY
In the event that any provision(s) of this Agreement is found to be unenforceable for any reason whatsoever, the unenforceable provision shall be considered to be severable, and the remainder of this Agreement shall continue in full force and effect.
XII.    BINDING EFFECT
This Agreement shall be binding upon and operate to the benefit of Employee, the Company, the Released Parties, and their successors and assigns.
XIII.    WAIVER
No waiver of any of the terms of this Agreement shall constitute a waiver of any other terms, whether or not similar, nor shall any waiver be a continuing waiver.  No waiver shall be binding unless executed in writing by the party making the waiver.  The Company or Employee may waive any provision of this Agreement intended for its/his/her benefit, but such waiver shall in no way excuse the other from the performance of any of its/his/her other obligations under this Agreement.
XIV.    GOVERNING LAW

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This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio, without regard to the principles of conflicts of law, except to the extent those laws are preempted by federal law.
XV.    SUBSEQUENT MODIFICATIONS
The terms of this Agreement may be altered or amended, in whole or in part, only upon the signed written agreement of all Parties to this Agreement.  No oral agreement may modify any term of this Agreement.
XVI.    ENTIRE AGREEMENT
This Agreement constitutes the sole and entire agreement of the Parties with respect to the subject matter hereof, and supersedes any and all prior and contemporaneous agreements, promises, representations, negotiations, and understandings of the Parties, whether written or oral.  There are no agreements of any nature whatsoever among the parties except as expressly stated herein.
XVII.    ATTORNEYS’ FEES AND COSTS
This Section XVII shall not apply to any litigation arising out of a challenge to the validity of the Release under the ADEA, or any litigation in which the validity of the Release under the ADEA is an issue.  In the event of litigation arising out of any other alleged breach of this Agreement, the prevailing party shall be entitled to an award of its reasonable attorneys’ fees and costs.
XVIII.    SECTION 409A
The Parties acknowledge that Employee shall incur a “separation from service,” within the meaning of Section 409A of the Internal Revenue Code (“Section 409A”), no later than the Termination Date.  Notwithstanding anything in this Agreement to the contrary, if Employee is considered a “specified employee” (as that term is defined in Section 409A), any amounts paid or provided under this Agreement shall, to the extent necessary in order to avoid the imposition of a penalty tax on employee under Section 409A, be delayed for six months after Employee’s “separation from service” within the meaning of Section 409A, and the accumulated amounts shall be paid in a lump sum within ten (10) calendar days after the end of the six (6) month period.  If Employee dies during the six-month postponement period prior to the payment of benefits, the payments which are deferred on account of Section 409A shall be paid to the personal representative of Employee’s estate within 60 calendar days after the date of Employee’s death.  For purposes of this Agreement, each amount to be paid or benefit to be provided to Employee pursuant to this Agreement shall be construed as a separate identified payment for purposes of Section 409A.  All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last calendar day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
[Signature Page Follows]

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	CLIFFS NATURAL RESOURCES INC.

	 

	 

	 

	/s/ James Michaud

	James Michaud

	Executive Vice President, Chief Human Resources Officer

	
				
	Date:   August 21, 2013
	 
	 
	/s/ David B. Blake

	 
	 
	 
	David B. Blake

	 
	 
	 
	 

	STATE OF OHIO
	)
	 
	 

	 
	)
	ss.
	 

	COUNTY OF CUYAHOGA
	)
	 
	 

On this 21st day of August, 2013, before me personally appeared David B. Blake, to me known to be the person described in and who executed the Severance Agreement and acknowledged that he executed the same as his free act and deed.

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written.

	
			
	 
	 
	/s/ Robert J. Bonko

	 
	 
	Notary Public

	 
	 
	 

	My Commission Expires:
	 
	No expiration date

9EMPLOYMENT CONTRACT

THIS EMPLOYMENT CONTRACT ("Contract") made and effective this 24th day of October, 2013, by and between _________ ("Employee") and UNITED BANCORP, INC., 2723 S. State Street, Ann Arbor, Michigan 48104 ("UBI").

RECITALS

	A.	UBI desires to continue to employ Employee.

	B.	Employee desires to continue to be employed by UBI.

	C.	There is continued activity by multi-bank holding companies in the acquisition of independent community banks, which often jeopardizes the continued employment of senior officers of the acquired bank, and UBI wishes to minimize the uncertainty and distraction caused by such activity, which would detract from Employee's ability to perform his/her duties, by providing Employee with some transition assistance if Employee's employment is terminated under circumstances entitling Employee to payments under paragraph 3 or 11 of this Contract.

NOW, THEREFORE, UBI and Employee hereby enter into this Employment Contract on the following terms and conditions:

	
1.

	
Employment.  UBI hereby employs Employee, and Employee accepts this employment and agrees to devote his/her full-time attention and energies to the performance of his/her employment duties.  UBI retains the right to terminate Employee's employment at will subject to the terms of this Contract.

	
2.

	
Term of Contract.  The Initial Term of this Contract shall be from October 24, 2013, through March 31, 2014.  Beginning on April 1, 2014, this contract shall automatically renew for additional one year terms from April 1 through March 31 ("Renewal Term") unless either party gives the other written notice of nonrenewal not later than 60 days before the expiration of the Initial Term or any Renewal Term; if such notice of nonrenewal is given this Contract will expire at the end of its then-current term.  If Employee's employment terminates before expiration of this Contract: (A) Employee will be entitled to the payments under paragraph 3 or 11, if applicable, notwithstanding such expiration and (B) Employee will remain subject to paragraphs 9, 12, 13 and 14 notwithstanding such expiration.  The confidentiality provisions in paragraph 12 shall survive termination of Employee's employment and expiration of this Contract, and will remain in effect permanently as provided in paragraph 12.

	
3.

	
Payment Upon Termination in Certain Circumstances.  If UBI terminates Employee's employment other than for "Cause," as defined in paragraph 6, below, under circumstances constituting an involuntary separation from service, as those terms are defined under Section 409A of the Internal Revenue Code and related regulations (the "Code"), Employee will be entitled to the payments provided in this paragraph, subject to the conditions in this paragraph.  Provided, however, that if Employee is entitled to payments under paragraph 11, this paragraph will not apply.

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a.

	
Payments.

	
i.

	
Employee shall continue to receive his/her regular salary (the salary in effect immediately prior to such termination) in accordance with UBI's regular payroll practices and subject to required payroll withholding, for 6 months after the date of Employee's separation from service.

	
ii.

	
Provided that Employee elects and remains eligible for COBRA continuation coverage, UBI will pay the COBRA continuation premiums to continue Employee's employee and dependent coverage under the Company's health insurance program for 6 months after the date of Employee's separation from service.

	
b.

	
Conditions.  Employee's entitlement to the payments in subparagraph a. above is subject to the following conditions.

	
i.

	
Employee must sign within a time period designated by UBI (which shall be at least 7 days and not more than 45 days after Employee's separation from service), and must not revoke or purport to revoke, a general release, in a form prepared by UBI, of any claims that the Employee might otherwise have against UBI, any entity owning, owned by, or under common ownership with UBI ("Affiliate"), and the officers, directors, employees and agents of UBI and each Affiliate, provided that such general release will not release Employee's right to any payments under this Contract, any vested benefits to which Employee is entitled under the terms of UBI's benefit programs with respect to Employee's service through the date of separation from service, any rights of Employee under the terms of any applicable UBI equity compensation programs with respect to outstanding stock options or restricted stock, or any rights of Employee to indemnification under the Articles of Incorporation of Bylaws of UBI or any Affiliate.

	
ii.

	
Employee's entitlement to the payments under this paragraph is conditioned on Employee's compliance with Employee's obligations under paragraphs 9, 12, 13 and 14.

	
iii.

	
The continuation of salary and COBRA premiums shall immediately cease if Employee secures employment before the end of the 6 month period following Employee's separation from service.

	
iv.

	
In no event shall the total salary amounts paid under paragraph 3.a.i. or 11.a.i. exceed twice the compensation limit under Code Section 401(a)(17) in effect at the time the payments are made.

	
4.

	
Duties.  The duties, responsibilities and authority of Employee shall be as determined by UBI from time to time.

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5.

	
Compensation.  Employee's annual salary for the Initial Term shall be $_____, unless adjusted pursuant to the following provisions:

	
a.

	
It is contemplated that Employee will be eligible for an annual cash bonus as a participant in the Management Committee Incentive Compensation Plan, subject to the terms of the plan.  Any annual cash bonus shall be paid not later than 21⁄2 months following the end of the applicable fiscal year.

	
b.

	
Employee shall receive the standard employee benefits of employees of UBI.

	
c.

	
Changes may be made to the salary and fringe benefits herein set forth and such changes shall be set forth in Attachment A.  Changes to the salary and fringe benefits are effective only after Attachment A has been signed by the Chairman of the Board of Directors of UBI and by the Employee.  UBI retains the right to modify its benefit programs as applicable to all participating employees, and such changes will not require an Attachment A.

	
6.

	
Termination for Cause.  UBI may terminate this Contract for "Cause," such termination to be immediate, without notice, at any time, and with compensation and benefits only to the date of the termination of Employee.  The term "Cause" shall include the following enumerated and substantially equivalent matters:

	
a.

	
the death of Employee;

	
b.

	
the disability of Employee rendering him/her unable to perform the services required under the Contract for a period of 180 days;

	
c.

	
known substance abuse by Employee;

	
d.

	
felony conviction or plea (including a plea of guilty, nolo contendere or similar plea) of Employee;

	
e.

	
misdemeanor conviction or plea (including a plea of guilty, nolo contendere or similar plea) of Employee, if the misdemeanor involves moral turpitude;

	
f.

	
Employee's repeated unprofessional, irresponsible or disruptive language or conduct in the performance of his duties;

	
g.

	
Employee's dishonesty, breach of professional or corporate ethics, or criticism by a regulatory agency involving a serious violation of law or regulations;

	
h.

	
Employee's substantial breach of any significant term of this Contract, including, but not limited to, continued unsatisfactory job performance (other than as provided in paragraph 8), or repeated uncooperative conduct.

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7.

	
Suspension.  UBI may suspend the employment of Employee resulting in the cessation of the performance of duties and the cessation of all compensation and benefits, in accordance with the following provisions:

	
a.

	
If criminal charges as described in subparagraph 6.d. or e. are made against Employee, then UBI, acting in its discretion, may suspend Employee for any period of time, provided that the suspension shall end if such charges do not result in a conviction or a plea (of guilty or nolo contendere, etc.) of either the original charge(s) or any lesser charge(s).

	
b.

	
 If a regulatory agency criticizes Employee for regulatory violations as set forth in paragraph 6.g. above, UBI shall have the discretion to suspend Employee for any period of time, provided that if the alleged violations are resolved in the Employee's favor, the suspension shall end.

The discretion invested in UBI as set forth in this paragraph 7 shall be exercised by the Chairman of its Board of Directors (as to suspension of UBI's Chief Executive Officer) or by UBI's Chief Executive Officer (as to suspension of any other employee).

	
8.

	
Failure to Meet Goals and Objectives.  In the event of Employee's repeated failure to meet goals and objectives which are established by the Board of Directors of UBI from time to time, Employee's employment may be terminated immediately, without notice, at any time, provided that upon such termination Employee shall receive the payments provided in paragraph 3 (or paragraph 11 if applicable) subject to the conditions in such paragraph.

	
9.

	
Employee Responsibilities Following Termination.  Termination of this Contract shall not relieve Employee of his/her responsibilities to complete any records, cooperate with UBI on any litigation, audits, regulatory reviews, claims or investigations, and otherwise to fulfill all responsibilities under this Contract which should have been rendered prior to its termination.

	
10.

	
Change in Control.  For purposes of this Contract, a Change in Control of UBI shall mean:

	
a.

	
the acquisition by any individual, entity, or group (a "Person"), including any "person" within the meaning of Sections 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act, of 20% or more of either (i) the then outstanding shares of common stock of UBI (the "Outstanding Company Common Stock") or (ii) the combined voting power of the then outstanding securities of UBI entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change in Control: (A) any acquisition by UBI or a UBI subsidiary, (B) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by UBI or a UBI subsidiary or any Person controlled by UBI or a UBI subsidiary,

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(C) any acquisition by any corporation pursuant to a reorganization, merger, or consolidation involving UBI or a UBI subsidiary, if, immediately after such reorganization, merger, or consolidation, each of the conditions described in clauses (i), (ii), and (iii) of subsection c. shall be satisfied, or (D) any acquisition by the Employee or any group of persons including the Employee;

	
b.

	
individuals who, as of the date hereof, constitute the Board of Directors of UBI (the "Incumbent Board") cease for any reason to constitute at least a majority of such Board; provided, however, that any individual who becomes a director of UBI subsequent to the date hereof whose election, or nomination for election by the shareholders of UBI, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of UBI in which such person is named as a nominee for director, without objection to such nomination) shall be deemed to have been a member of the Incumbent Board; and provided further, that no individual who was initially elected as a director of UBI as a result of an actual or threatened election contest, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act, or any other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board, shall be deemed to have been a member of the Incumbent Board;

	
c.

	
approval by the shareholders of UBI of a reorganization, merger, or consolidation unless, in any such case, immediately after such reorganization, merger, or consolidation, (i) more than 50% of the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, or consolidation and more than 50% of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals or entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to such reorganization, merger, or consolidation and in substantially the same proportions relative to each other as their ownership, immediately prior to such reorganization, merger, or consolidation, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (ii) no Person (other than (A) UBI or a UBI subsidiary, any employee benefit plan (or related trust) sponsored or maintained by UBI or a UBI subsidiary or the corporation resulting from such reorganization, merger, or consolidation (or any corporation controlled by UBI or a UBI subsidiary), or (B) any Person which beneficially owned, immediately prior to such reorganization, merger, or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or the Outstanding Company Voting Securities, as the case may be, beneficially owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of such corporation or 20% or more of the combined voting power of the then outstanding securities of such corporation entitled to vote generally in the election of directors, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such reorganization, merger, or consolidation; or

-5-

	

	

	
d.

	
approval by the shareholders of UBI of (i) a plan of complete liquidation or dissolution of UBI or (ii) the sale or other disposition of all or substantially all of the assets of UBI.

	
11.

	
Provisions Applicable in the Event of a Change in Control.  Employee will be entitled to the payments in this paragraph, subject to the conditions in this paragraph, if, within 12 months following the effective date of a Change in Control (A) Employee's employment is terminated by UBI (or a successor) for any reason (other than for a cause described in subparagraphs 6.a, b, c, d or e) and such termination constitutes an involuntary separation from service, as those terms are defined under Section 409A of the Code or (B) Employee resigns for "Good Reason" (as defined below) and such resignation constitutes an involuntary separation from service as those terms are defined in Section 409A of the Code.

	
a.

	
Payments.

	
i.

	
UBI will pay Employee, within 15 days after the effective date of the release of claims referred to in paragraph 11.b. and 3.b.i., a lump sum in cash equal to 24 months of Employee's salary (at a rate equal to Employee's regular base pay in effect immediately prior to such termination and subject to required payroll withholding).

	
ii.

	
UBI will provide Employee with continued health insurance coverage for Employee and Employee's dependents for 24 months after the date of Employee's separation from service.  UBI will provide that coverage by directly paying the COBRA continuation premiums for the period that Employee elects and remains eligible for COBRA continuation coverage.  For any period during which Employee is not eligible for COBRA continuation coverage, or UBI's direct payment of the COBRA continuation premiums would result in a negative tax impact on Employee or UBI, UBI will reimburse Employee for 100% of Employee's cost to obtain health insurance that is substantially equivalent to those provided by UBI for the Employee and eligible dependents immediately before the Employee's separation from service.  For any portion of the above 24-month period that Employee is not entitled to elect COBRA continuation coverage, such reimbursement shall be in the amount of the Employee's cost to obtain equivalent coverage from another source.  Reimbursements under this Section 11(a)(2) will be made no later than thirty (30) days after Employee requests reimbursement, but in no event after the year following that in which Employee incurs such expense.

	
b.

	
Conditions.  Employee's entitlement to the payments in (a) above is subject to the conditions in paragraph 3.b.i., ii., and iv. and paragraph 17.

	
c.

	
"Good Reason" Defined.  Employee's separation from service will be considered an involuntary separation from service for Good Reason if Employee resigns as a result of any of the conditions in i. below, UBI has had the opportunity to correct such condition and has failed to do so within the period provided in ii. below and Employee resigns as provided in ii. below.

-6-

	

	

	
i.

	
Any one or more of the following conditions arises in the 12 months following the Change in Control without the consent of Employee:

	
1.

	
A material diminution in Employee's base compensation;

	
2.

	
A material diminution in Employee's authority, duties, or responsibilities;

	
3.

	
A material diminution in the authority, duties or responsibility of the supervisor to whom Employee reports, including (if Employee reports to UBI's Board of Directors) a requirement that Employee report to a corporate officer or employee instead of reporting directly to the Board of Directors;

	
4.

	
A material diminution in the budget over which Employee retains authority;

	
5.

	
A material change in the geographic location at which Employee must perform services; or

	
6.

	
Any other action or inaction by UBI or its successor that constitutes material breach of this Contract.

	
ii.

	
Employee notifies UBI or its successor in writing of the existence of the condition described in paragraph 11.c.i. within 90 days of the initial existence of the condition, UBI or its successor fails to remedy the condition and make Employee whole within 30 days after such notification by Employee and Employee resigns by written notice within 30 days thereafter.

	
12.

	
Confidential Information.  The following confidentiality provisions are a material part of the consideration relied upon by UBI in entering into this Contract:

	
a.

	
In connection with Employee's employment with UBI, Employee will have access to information or materials of UBI and/or its subsidiaries that are considered trade secret, confidential and/or proprietary ("Information").  Information includes, but is not limited to, compilations of data, strategic plans, sales and marketing plans, customer and supplier information, financial information, and proposed agreements, and applies to such Information whether communicated orally, in writing, electronically, or by any other means.

	
b.

	
Information created by Employee during Employee's employment with UBI that relates to the business of UBI and its subsidiaries (or prospective business opportunities), or uses by UBI and/or its subsidiaries of Information created with resources of UBI and/or its subsidiaries (including staff, premises and equipment), belongs to UBI.  The term "Information" includes copyrightable works of original authorship (including but not limited to reports, analyses, and compilations, business plans, new product plans), ideas, inventions (whether patentable or not), know-how, processes, trademarks and other intellectual property.  All works of original authorship created during Employee's employment are "works for hire" as that term is used in connection with the U.S. Copyright Act.  Employee hereby assigns to UBI all rights, title and interest in work product, including copyrights, patents, trade secrets, trademarks and know-how.

-7-

	
c.

	
Employee shall use Information only for the benefit of UBI and/or its subsidiaries and not for Employee's own benefit.  Employee shall not take Information or the materials of UBI and/or its subsidiaries upon termination of Employee's employment.

	
d.

	
Information shall be disclosed and used only by staff members of UBI and/or its subsidiaries who have a need to access it in order to do their jobs, shall be maintained in secure physical locations, and shall not be disclosed to any other company or person except in connection with the business activities of UBI and/or its subsidiaries.

	
e.

	
The confidentiality provisions of this paragraph will survive termination of the employment relationship with UBI and expiration of this Contract, and shall continue in effect permanently for so long a period of time as the Information is maintained by UBI and/or its subsidiaries as confidential.

	
13.

	
Nonsolicitation of Employees and Customers.  The following nonsolicitation provisions form a material part of the consideration relied upon by UBI in entering into this Contract:

	
a.

	
During the term of Employee's employment and for a period of 24 months after Employee's last day of employment, Employee agrees not to hire, and not to solicit for hire, any then-current employees of UBI and/or its subsidiaries, or to contact them for the purpose of inducing them to leave UBI and/or its subsidiaries.

	
b.

	
During the term of Employee's employment and for a period of 24 months after Employee's last day of employment, Employee agrees not to contact any then-current customers of UBI and/or its subsidiaries for the purpose of inducing them to leave UBI and/or its subsidiaries or to discourage them from doing business with UBI and/or its subsidiaries.  Employee agrees that, for such time period, Employee will not provide the type of services Employee provided under this Contract to any person or business customer who was a customer of UBI and/or its subsidiaries at the time of Employee's departure.

	
14.

	
Noncompete.  UBI and Employee acknowledge and agree that by virtue of his/her past experience in the banking industry and his/her knowledge of the business of UBI and its subsidiaries, Employee is uniquely qualified to successfully compete with UBI and/or its subsidiaries.  In recognition of these circumstances, and in consideration of UBI's continued employment of Employee in accordance with the terms of this Contract, Employee covenants and agrees that during the term of Employee's employment and for  a period of 24 months after Employee's last day of employment, Employee will not engage in the counties of Lenawee, Livingston, Monroe and/or Washtenaw in any business which is competitive with a business then regularly conducted by UBI and/or its subsidiaries in any of said counties, as an owner, employee, independent contractor or in any other capacity; provided, however, that the forgoing covenants shall not prohibit the Employee from owning, directly or indirectly, 1% or less of any publicly traded class of securities of a financial services corporation.

-8-

	
15.

	
Enforcement of Contract; Injunctive Relief; Attorney Fees and Expenses.  Employee acknowledges that violation of paragraph 12, 13, or 14 of this Contract would cause irreparable damage to UBI and/or its subsidiaries, and that they shall be entitled to injunctive relief for any such violation, in addition to any other available remedy.  If Employee violates this Contract, in addition to all other remedies available to UBI and/or its subsidiaries at law, in equity, and under Contract, Employee agrees that he/she is obligated to pay all of the costs enforcement of this Contract incurred by UBI and/or its subsidiaries, including attorney fees and expenses.  The parties agree that venue concerning this Contract shall be Washtenaw County, Michigan.

	
16.

	
Recovery.  Notwithstanding any other provision of this Contract, UBI may recover and Employee shall repay to UBI any bonus or incentive compensation based on statements of earnings, revenues, gains or other criteria that are later found to be materially inaccurate.

	
17.

	
Code Section 280G Cap.  Notwithstanding any other provision of this Contract, if (a) part or all of any compensation and benefits to be paid to Employee by or on behalf of UBI or any affiliate, whether under this Contract or otherwise, constitute a "parachute payment" (or payments) under Section 280G or any other similar provision of the Code, and (b) if the aggregate present value of such parachute payments (the "Parachute Amount") exceeds 2.99 times Employee's "base amount" as defined in Section 280G of the Code, then the amounts otherwise payable to or for the benefit of Employee under this Contract and taken into account in calculating the Parachute Amount shall be adjusted to the extent necessary to equate the Parachute Amount with 2.99 times Employee's "base amount."  The adjustments permitted under this paragraph may include the elimination of payments and the reduction of the amount of any payments.

	
18.

	
Notice.  For purposes of this Contract, notices and all other communications provided for in this Contract shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, as follows:

	
If to UBI:

Chairman of the Board

United Bancorp, Inc.

2723 S. State Street

Ann Arbor, Michigan 48104

	
If to Employee:

_________________

_________________

_________________

or such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

	
19.

	
Miscellaneous Provisions.  The following miscellaneous provisions form a part of this Contract:

-9-

	
a.

	
Applicable Law.  This Contract and the rights of the parties hereunder shall be interpreted, construed and performed in accordance with the laws of the State of Michigan.

	
b.

	
Entire Agreement.  This Contract as it may be modified in writing from time to time, constitutes the entire agreement between the parties, and supersedes any and all other agreements, oral or in writing, with respect to the subject matter contained herein.

	
c.

	
Amendments.  This Contract may be altered, amended or modified at any time, but only by written agreement executed by the parties hereto, except that UBI may unilaterally amend the Contract to the extent required by law.  Notwithstanding the preceding, no amendment or modification may be made to the Contract, even by mutual agreement, that would cause any Contract payments to violate the requirements of Section 409A of the Code.  No waiver of any provision of this Contract shall be valid unless made in writing and signed by the party against whom such waiver is sought.

	
d.

	
Paragraph Headings.  Any paragraph title or caption contained in this Contract is for convenience only, and shall not be deemed a part of this Contract.

	
e.

	
Invalid Provisions.  The invalidity or unenforceability of any particular provision of this Contract shall not affect any other provision hereof.  If any provision or portion of a provision of this Contract is determined by a court of competent jurisdiction to be unenforceable as written, it is the intent of the parties that the court should modify such provision, including modifications to the activities covered, duration, or geographic scope of such provision, to the extent necessary to allow its enforcement as so modified.

	
f.

	
Successors and Assigns.  This Contract shall be binding upon, and shall inure to the benefit of the successors and assigns, including purchasers of UBI, and for purposes of realizing any benefits payable hereunder to Employee prior to his/her death, the heirs and personal representative of Employee.  In no event shall Employee assign or delegate any of Employee's rights, powers, duties and obligations under this Contract without prior written consent of UBI.  If Employee dies after a termination of Employee's employment entitling Employee to payments under paragraph 3 or 11, any remaining salary payments otherwise payable under paragraph 3 or 11 will be made to the beneficiary designated by Employee in writing to receive such payments (or if none, to Employee's estate), and COBRA premium payments will continue for the remainder of the period called for by paragraph 3 or 11 for the benefit of Employee's eligible dependents.  UBI shall have the right to assign and delegate any or all of its rights, powers, duties and obligations under this Contract to any of its subsidiaries.

  

-10-

	
g.

	
This Agreement is intended to be exempt from Section 409A of the Internal Revenue Code as an involuntary separation pay plan as that term is understood under Treasury Regulation § 1.409A-1(b)(9) and as providing for short-term deferrals, and shall be interpreted and operated consistently with those intentions.  To the extent Section 409A is found to be applicable to this Agreement, this Agreement is to be interpreted to comply with Section 409A and shall be interpreted and operated consistently with those intentions, including but not limited to, any applicable six-month delay in payment if Employee is a specified employee of UBI.

	
20.

	
Waiver of Jury Trial.  UBI and Employee specifically and knowingly waive their rights to a jury trial.

	
21.

	
Arbitration.  The parties agree that any dispute or controversy arising out of or in connection with this Contract shall be resolved by arbitration in accordance with the following provisions:

	
a.

	
The arbitration proceeding shall be conducted under the Employment Dispute Resolution Rules of the American Arbitration Association in effect at the time a demand for arbitration of the dispute is made.  The decision and award of the arbitrator made under the AAA rules shall be exclusive, final and binding on all parties, their heirs, representatives, successors and assigns.  Judgment upon the award rendered by the arbitrator may be rendered in any circuit court having jurisdiction of the matter.  In the event Employee or UBI shall require equitable relief prior to the selection of an arbitrator to resolve the dispute, either party may seek temporary equitable relief from any court having jurisdiction of the dispute, subject to any final relief awarded by the arbitrator.

	
b.

	
Limited civil discovery shall be permitted for the production of documents and the taking of depositions, provided, however, that no party is permitted to take the deposition of more than three witnesses except by agreement of the other party or upon order of the arbitrator pursuant to the motion of a party.  Subject to the foregoing limitations, discovery shall be conducted in accordance with the Federal Rules of Civil Procedure with any enforcement issues resolved by the arbitrator.

	
c.

	
The arbitration and all proceedings, discovery and any award of the arbitrator, is confidential.  Neither the parties nor the arbitrator shall disclose any information gained during the course of the arbitration to any person or entity who is not a party to the arbitration unless permitted by law.  Attendance at the arbitration shall be limited to the parties and those called as witnesses.

	
d.

	
The arbitration provisions of this paragraph shall not apply to any alleged violation by Employee of paragraph 12, 13 or 14, and UBI shall be entitled to seek judicial injunctive and other relief for any such alleged violation.

	
e.

	
The fees and expenses of the arbitrator shall be divided equally between and paid by the parties.  Each party shall bear the cost of its own attorney fees and expenses.

-11-

 

 

  IN WITNESS WHEREOF, the parties have executed this Contract, effective as of the date first above written.

	
UNITED BANCORP, INC.

 

 

By:              ____________________________

 

Chairman of the  Board

	
 

 

 

_______________________________

 

Employee

-12-

ATTACHMENT A

Employee:                                                                                                              Effective Date:                                                                                    

Salary Per Annum: $                                                                                                  

	
 

________________________________

 

Employee

	
 

_________________________

 

Date

	
 

________________________________

 

Chairman of the Board, United Bancorp, Inc.

	
 

_________________________

 

Date

 

-13-

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