Chief Operating Officer Employment Agreement

EXHIBIT 10.6


EMPLOYMENT AGREEMENT


THIS EMPLOYMENT AGREEMENT (hereinafter referred to as this "AGREEMENT"), is entered into this 31st day of December, 2003 ("Effective Date") by and between The Home Savings and Loan Company of Youngstown, Ohio, a savings and loan association incorporated under Ohio Law (hereinafter referred to as the "COMPANY"), and David G. Lodge, an individual (hereinafter referred to as the "EXECUTIVE");


WITNESSETH:


WHEREAS, the EXECUTIVE is currently employed as the President and Chief Operating Officer of the COMPANY;


WHEREAS, as a result of the skill, knowledge and experience of the EXECUTIVE, the Board of Directors of the COMPANY desires to continue to retain the services of the EXECUTIVE as the President and Chief Operating Officer of the COMPANY;


WHEREAS, the EXECUTIVE desires to serve as the President and Chief Operating Officer 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 President and Chief Operating Officer of the COMPANY. The term of this AGREEMENT shall commence on December 31, 2003 and shall end on December 31, 2006, 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. Additionally, on, or before, each annual anniversary date of the Effective Date, the Term of Agreement shall be extended for up to an additional one-year period beyond the then effective Term upon a determination and resolution of the Board of Directors that the performance of the Executive has met the requirements and


standards of the Board, and that the Term of such Agreement shall be extended for such additional period. 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 President and Chief Operating Officer 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 and shall have all powers which are commonly incident to the office of President and Chief Operating Officer or which, consistent therewith, are delegated to him by the Board of Directors.


(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 which 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) Compensation. The EXECUTIVE shall receive during the TERM compensation established by the applicable Compensation Committee of the Boards of Directors. It is the intent of the COMPANY that the EXECUTIVE'S compensation shall include the following components: (1) a base salary, payable in installments not less often than monthly; (2) cash incentive compensation, payable not less often than annually; and (3) long term incentive compensation.


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(b) Annual Review. On or before December 31st 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 of the COMPANY and shall be set at an amount not less than $227,115.00, based upon the EXECUTIVE'S individual performance and such other factors as the Board of Directors may deem appropriate (hereinafter referred to as the "ANNUAL REVIEW").


(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. Notwithstanding any statement to the contrary contained elsewhere in this AGREEMENT, the COMPANY 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 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 as 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


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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 of 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 which competes with the principal business of the COMPANY or the HOLDING COMPANY or any of their subsidiaries within Mahoning, Trumbull and Columbiana counties or any other geographic area in which the COMPANY or the HOLDING COMPANY is doing business for the unexpired TERM of this AGREEMENT. This non-compete provision shall not apply in the event the EXECUTIVE terminates employment pursuant to Section 4(a)(ii) of this AGREEMENT. The provisions of this subparagraph 4(a) shall survive the termination of this AGREEMENT.


(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.

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