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Exhibit 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, made and entered into as of this 20 day
of October, 1998, by and between CITIZENS FIRST CORPORATION, a Kentucky
corporation ("Employer"), and XXXX X. XXXXXXX, an individual ("Xxxxxxx").
For and in consideration of the mutual terms, conditions and benefits
to be obtained by the parties to this Employment Agreement, the receipt and
sufficiency of which the parties hereby acknowledge, Employer and Xxxxxxx agree
as follows:
1. EMPLOYMENT. Employer hereby employs Xxxxxxx, and Xxxxxxx hereby
accepts employment with Employer, as the Vice-President and Chief Operations
Officer of Employer and of any banking institution established by the Employer
in its capacity as a Bank Holding Company. Such positions are hereinafter
collectively referred to as "the Position."
2. TERM OF EMPLOYMENT. This Employment Agreement and Xxxxxxx'
employment hereunder shall commence on and be effective as of August 1, 1998
(the "Commencement Date"), and continue through July 31, 2001, subject to
renewal and to termination in accordance with the terms of this Employment
Agreement. On August 1, 2001, this Employment Agreement will be automatically
renewed for a new three year term, subject to renewal and to termination in
accordance with the terms of this Employment Agreement, unless either Employer
or Xxxxxxx gives written notice to the other party hereto at least 60 days prior
to the renewal date that it does not intend to renew this Employment Agreement.
Xxxxxxx' initial term of employment and any subsequent renewal thereof shall
hereinafter be referred to as the "Term." If this Employment Agreement is not
renewed as
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specified herein, all of Xxxxxxx' rights to compensation and fringe benefits
shall terminate at the end of the Term.
3. RESPONSIBILITIES IN POSITION. During the Term, except for illness,
and reasonable vacation periods as hereinafter provided and reasonable
involvement in civic affairs and in organizations which benefit, promote or
complement the interests of Employer, and except as otherwise provided in this
Employment Agreement, or as approved by Employer, Xxxxxxx shall devote
substantially all of his business time, attention, skill and efforts to the
faithful performance of his duties hereunder and in the Position, and shall use
his best efforts, skill and experience to promote the business, interests and
welfare of Employer. Xxxxxxx shall not, during the Term, without the consent of
Employer, be engaged in any other business activity, whether or not such
activity is pursued for gain, profit or pecuniary advantage.
4. SPECIFIC DESCRIPTION OF AUTHORITY. Xxxxxxx is hereby employed in the
Position, and he shall have, exercise and carry out the authorities, powers,
duties and responsibilities conferred upon persons occupying each of the
capacities contained in the Position by the Bylaws of Employer, as such Bylaws
are from time to time in effect, and shall observe such directions and
restrictions as the Employer may from time to time confer or impose upon him. In
the absence of specific directions, Xxxxxxx shall have the following duties,
responsibilities and authorities with respect to Employer:
Xxxxxxx shall have the day-to-day responsibility for the following
operations of the Employer or of any banking institution established by the
Employer in its capacity as a Bank
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Holding Company subject to the direction of the Employer's President and Chief
Executive Officer:
1. Technology
2. Branch Administration
3. Human Resources
4. Facilities
5. Security
6. Purchasing
7. Customer Support (loans and deposits)
5. COMPENSATION. For all services rendered or to be rendered by Xxxxxxx
for Employer during the Term, Employer shall pay, and Xxxxxxx hereby agrees to
accept, compensation as follows: Beginning with the Commencement Date, Xxxxxxx
shall receive a salary at an an annualized rate of $80,000.00 per year, payable
in equal bi-weekly installments. Xxxxxxx' salary shall increase to $85,000.00
per year upon the official opening of a banking institution established by the
Employer in its capacity as a Bank Holding Company. Xxxxxxx' salary for any
calendar year after 1998 shall be at the annualized rate established by Employer
at the commencement of each such year.
6. REIMBURSEMENT. Employer will reimburse Xxxxxxx for all reasonable
and necessary expenses incurred by him in carrying out his duties under this
Employment Agreement; provided that such expenses shall be incurred by him only
pursuant to the policies and procedures of Employer, from time to time in
effect, and that all such expenses must be reasonable and necessary expenses
incurred by him solely for the purpose of carrying out his duties under this
Employment Agreement. Xxxxxxx shall present to Employer from time to time an
itemized account of such expenses in such form as may be required by Employer.
Any such itemized account shall be subject to approval by Employer.
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7. VACATION AND SICK LEAVE. Xxxxxxx shall be entitled to the following
weeks of paid vacation:
August 1, 1998 - July 31, 1999 3 weeks
August 1, 1999 - July 31, 2000 4 weeks
August 1, 2000 - July 31, 2001 5 weeks
Vacation shall be taken only at those times that have been approved in advance
by Employer. At least five days of vacation must be taken consecutively each
year.
Xxxxxxx shall additionally be entitled to 12 days of paid sick leave
annually except that if Xxxxxxx becomes entitled to receive benefits under any
disability policy provided by the Employer, all rights to sick leave
compensation shall end at that time. Sick leave shall only be taken if Xxxxxxx
is incapacitated by illness or injury from performing his duties in the Position
and shall not be utilized as additional vacation time.
8. ACCRUAL. Unused vacation time shall not accrue from year-to-year.
Sick leave may be carried over from year-to-year, but Xxxxxxx agrees that he
will not be compensated for any unused sick leave upon termination of this
Employment Agreement.
9. HEALTH INSURANCE BENEFITS. Upon written evidence that payment has
been made by Xxxxxxx, the Employer will reimburse Xxxxxxx for monthly premiums
associated with a policy of single health insurance coverage until such time as
the Employer has established group health insurance for which Xxxxxxx qualifies.
10. OTHER EMPLOYEE BENEFITS. Xxxxxxx shall be entitled to such
additional employee benefits as are not herein specifically described as are
conferred by Employer, from time to time, upon its other executive officers,
including the following:
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A. The right to participate in any profit sharing plan,
pension plan, or other incentive program, retirement benefit plan or similar
program established by Employer; provided, that Xxxxxxx must be a "qualified
participant," as defined in the legal documentation establishing such plans;
B. The right to participate in any life insurance plan,
short-term disability plan, or long-term disability plan established by the
Employer.
C. The right to participate in any bonus plan or stock option
plan established by Employer in its sole discretion.
11. ANNUAL EVALUATION. At least annually beginning in 1999, the
Employer shall complete an evaluation of Xxxxxxx' performance as measured
against specific goals and objectives as established by Employer.
12. TERMINATION. Xxxxxxx' employment under the terms of this Employment
Agreement may be terminated by Employer at any time during the Term, if Employer
reasonably, properly, and in good faith determines that any of the following
causes for terminating Xxxxxxx' employment exist:
X. Xxxxxxx has appropriated to his personal use funds, rights
or property of Employer or of any of the customers of Employer;
X. Xxxxxxx has engaged in any other act of substantial
dishonesty in the performance of his duties or responsibilities;
X. Xxxxxxx has, in any substantial respects, failed to
discharge his duties and responsibilities in the Position, and fails or refuses
to correct such failings within thirty
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(30) days of receipt of written notice to him from the Employer of the failings,
which such notice shall specifically describe Xxxxxxx' failings and the steps
required to remedy same;
X. Xxxxxxx is engaging in competition with Employer in any
manner or in activities harmful to the business of Employer;
X. Xxxxxxx is using alcohol, drugs or similar substances in an
illegal manner;
X. Xxxxxxx has become "disabled" or "incompetent," as
hereinafter defined in this Employment Agreement;
X. Xxxxxxx is convicted of a felony, or of a substantial
misdemeanor involving moral turpitude;
H. For any reason, Employer or any banking institution which
it might organize is unable to procure upon Xxxxxxx a substantial fidelity bond,
or a bonding company refuses to issue a bond to Employer or any banking
institution which it might organize if Xxxxxxx is employed in the Position;
X. Xxxxxxx is guilty of gross professional misconduct, or of a
gross breach of this Employment Agreement of such a serious nature as would
reasonably render his service entirely unacceptable.
If Employer reasonably, properly, and in good faith determines that any
one or more of the above causes for terminating Xxxxxxx' employment exists, then
Employer may, by giving Xxxxxxx 60 days written notice of its intention to
terminate Xxxxxxx' employment, terminate this Employment Agreement, the Term,
and Xxxxxxx' employment, and all rights, duties and obligations of the parties
under this Employment Agreement. Xxxxxxx shall be
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entitled to receive all compensation and fringe benefits, hereinabove provided
for, for such period of 60 days, plus any accrued vacation time, plus any rights
to any fringe benefits or other compensation hereinabove described in this
Employment Agreement which accrue during such period of 60 days. Nevertheless,
although Xxxxxxx shall be entitled to his compensation and fringe benefits for
such period, Employer may, if it, in its discretion deems it prudent to do so,
terminate Xxxxxxx' employment, effective on the date when such notice is given.
Any of the following provisions of this Employment Agreement to the contrary
notwithstanding (including those dealing with termination pay), Xxxxxxx shall
not be entitled to any further compensation of any kind or nature whatsoever
following such termination.
13. TERMINATION FOR FAILURE OF PURPOSE. The above provisions of this
Employment Agreement to the contrary notwithstanding, Xxxxxxx' employment will
automatically terminate on any such date that Employer, in its capacity as a
Bank Holding Company, determines that it cannot successfully establish or
operate a banking institution. Xxxxxxx' rights to all salary, compensation and
fringe benefits shall terminate effective as of the date such determination is
made; provided, however, that Xxxxxxx shall be entitled to receive payment for
any accrued vacation.
14. TERMINATION OTHERWISE. The above provisions of this Employment
Agreement to the contrary notwithstanding, Xxxxxxx' employment may be
terminated, upon delivery to Xxxxxxx of 60 days notice of termination, at any
time during the Term, for any reason whatsoever, with or without cause, if
Employer determines that such employment should be terminated. It is understood
that Xxxxxxx has no continuing right to employment
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by Employer, and that Employer may, therefore, terminate Xxxxxxx' employment at
any time of its choosing, and for any reasons which are satisfactory to it. If
notice is delivered pursuant to this Paragraph 14 that Xxxxxxx' employment is
terminated, then Xxxxxxx shall be entitled to receive all compensation and
fringe benefits to which he is otherwise entitled (and which would otherwise
accrue) under this Employment Agreement during the period of 60 days following
delivery of such notice. At the conclusion of such period of 60 days, Xxxxxxx'
employment in the Position shall be terminated and the only rights to
compensation and fringe benefits which Xxxxxxx shall thereafter have under this
Employment Agreement shall be: (a) the right to receive from Employer, on the
next scheduled salary payment date, the value of fringe benefits accruing to
Xxxxxxx under this Agreement as of the effective date of the termination
(subject to the terms and conditions of any plan or agreement pursuant to which
such benefits are made available) and (b) the right to receive from Employer the
total amount of the salary, at the annual rate then in effect, equal to the
number of months of Xxxxxxx' service under the Term but in no event to exceed
twelve (12) months (such total amount being referred to as "Severance Pay"). For
purposes of this Paragraph 14, the Term shall begin anew on each occasion that
this Employment Agreement is renewed.
15. VOLUNTARY TERMINATION. Xxxxxxx may terminate his employment in the
Position, and this Employment Agreement, at any time during the Term, provided
that he shall give to the Employer at least 60 days written notice of such
termination. Any of the above provisions of this Employment Agreement to the
contrary notwithstanding, if Xxxxxxx shall voluntarily terminate his employment
in the Position and this Employment Agreement at any time during the Term, then
all rights to compensation and fringe benefits shall
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terminate as of the effective date of such termination; provided, however, that
Xxxxxxx shall be entitled to receive payment for any accrued vacation.
16. DEATH OF XXXXXXX. Xxxxxxx' death shall terminate the Term and
Xxxxxxx' employment and shall terminate all of Xxxxxxx' rights to all salary,
compensation and fringe benefits effective as of the date of such death.
17. DISABILITY. Xxxxxxx shall be deemed to be "disabled" or shall be
deemed to be suffering from a "disability" under the provisions of this
Employment Agreement if a competent physician, acceptable to Xxxxxxx and
Employer, states in writing that it is such physician's opinion that Xxxxxxx
will be permanently (or for a continuous period of four (4) calendar months)
unable to perform a substantial number of the usual and customary duties of
Xxxxxxx' employment. In the event Xxxxxxx and Employer are unable to agree upon
such a suitable physician for the purposes of making such a determination, then
Xxxxxxx and Employer shall each select a physician, and such two physicians as
selected by Employer and Xxxxxxx shall select a third physician who shall make
the determination, and the determination made by such third physician shall be
binding upon Xxxxxxx and Employer. It is further agreed that if a guardian is
appointed for Xxxxxxx' person, or a conservator or curator is appointed for
Xxxxxxx' estate, or he is adjudicated "incompetent" or is suffering or operating
under a mental "disability" by a court of appropriate jurisdiction, then Xxxxxxx
shall be deemed to be "disabled" for all purposes under this Employment
Agreement. In the event Xxxxxxx becomes "disabled," as defined in this Paragraph
17, then his employment and all rights to compensation and fringe benefits shall
terminate effective as of the date of such disability determination.
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18. FAITHFULNESS. Xxxxxxx shall diligently employ himself in the
Position and in the business of Employer and shall be faithful to Employer in
all transactions relating to it and its business and shall give, whenever
required, a true account to the Employer of all business transactions arising
out of or connected with Employer and its business, and shall not, without first
obtaining the consent of Employer, employ either his interest in Employer, or
his interests in this Employment Agreement or the capital or credit of Employer
for any purposes other than those of Employer. Xxxxxxx shall keep Employer fully
informed of all work for and transactions on behalf of Employer. He shall not,
except in accordance with regular policies of the Board of Directors from time
to time in effect, borrow money in the name of Employer, use collateral owned by
Employer as security for loans or lease or dispose of or in any way deal with
any of the property, assets or interests of Employer other than in connection
with the proper conduct of the business of Employer.
19. NONASSIGNABILITY. Neither this Agreement, nor any rights or
interests hereunder, shall be assignable by Employer, or by Xxxxxxx, his
beneficiaries or legal representatives, without the prior written consent of the
other party. All services to be performed hereunder by Xxxxxxx must be
personally performed by him.
20. CONSOLIDATION. MERGER OR SALE OF ASSET. Nothing in this Employment
Agreement shall preclude Employer from consolidating or merging into or with, or
transferring all or substantially all of its assets to another bank or
corporation which assumes this Employment Agreement and all obligations and
undertakings of it hereunder. Upon such a consolidation, merger or transfer of
assets and assumption, "Employer," as used
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herein, shall mean such other bank or corporation, as the case may be, and this
Employment Agreement shall continue in full force and effect.
21. BINDING EFFECT. This Employment Agreement shall be binding upon,
and shall inure to the benefit of Employer and its successors and assigns, and
Xxxxxxx and his heirs, executors, administrators and personal representatives.
22. AMENDMENT OF AGREEMENT. This Employment Agreement may not be
amended or modified except by an instrument in writing signed by the parties
hereto. Although Xxxxxxx' compensation may be increased, from time to time, by
Employer's Board of Directors, in order for any purported agreement to increase
Xxxxxxx' compensation to be enforceable by Xxxxxxx, the provisions for increased
compensation must be set forth in a resolution of Employer's Board of Directors,
duly adopted by such Board of Directors, and properly reflected in the minutes
of such Board of Directors. Any purported agreement for additional compensation
or for an adjustment in compensation which is not so evidenced by a written
resolution of Employer's Board of Directors shall not be enforceable, and shall
be of no force or effect whatsoever.
23. WAIVER. No term or condition of this Employment Agreement shall be
deemed to have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Employment Agreement, except by written
instrument of the party charged with such waiver or estoppel. No such written
waiver shall be deemed to be a continuing waiver unless specifically stated
therein, and each such waiver shall operate only as to the specific term or
condition waived, and shall not constitute a waiver of such term or condition in
the future or as to any act other than that specifically waived.
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24. SEVERABILITY. If for any reason any provision of this Employment
Agreement is held invalid, such invalidity shall not affect any other provision
of this Employment Agreement not held invalid, and each such other provision
shall, to the full extent consistent with law, continue in full force and
effect. If any provisions of this Employment Agreement shall be invalid in part,
such partial invalidity shall in no way affect the rest of such provision not
held invalid, and the rest of such provision, together with all other provisions
of this Employment Agreement, shall, to the extent consistent with law, continue
in full force and effect.
25. TRADE SECRETS. Xxxxxxx shall not, at any time or in any manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm or corporation, in any manner whatsoever, any information concerning any
matters affecting or relating to Employer, including, without limiting the
generality of the foregoing, any information concerning any of its customers,
its manner of operation, its plans, process or other data, without regard to
whether all or any part of the foregoing matters will be deemed confidential,
material or important, as the parties hereto stipulate that as between them, the
same are important, material and confidential and gravely affect the effective
and successful conduct of the business and goodwill of Employer, and that any
breach of the terms of this Paragraph 25 shall be a substantial and material
breach of this Employment Agreement. All terms of this Paragraph 25 shall remain
in full force and effect after the termination of Xxxxxxx' employment and of
this Employment Agreement. Xxxxxxx acknowledges that it is necessary and proper
that Employer preserves and protects its proprietary rights and unique,
confidential and special information and goodwill, and the confidential nature
of its business
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and of the affairs of its customers, and that it is therefore appropriate that
Employer prevent Xxxxxxx from engaging in any breach of the provisions of this
Paragraph 25. Xxxxxxx, therefore, agrees that a violation by Xxxxxxx of the
terms of this Paragraph 25 would result in irreparable and continuing injury to
Employer, for which there might well be no adequate remedy at law. Therefore in
the event Xxxxxxx shall fail to comply with the provisions of this Paragraph 25,
Employer shall be entitled to such injunctive and other relief as may be
necessary or appropriate to cause Xxxxxxx to comply with the provisions of this
Paragraph 25, and to recover, in addition to such relief, its reasonable costs
and attorney's fees incurred in obtaining same. Such right to injunctive relief
shall be in addition to, and not in lieu of, such rights to damages or other
remedies as Employer shall be entitled to receive.
26. COVENANT NOT TO COMPETE. Should this agreement be terminated for
any reason by Employer or Xxxxxxx during the Term, Xxxxxxx covenants and agrees
that he will not accept a similar position or title requiring him to perform
duties and responsibilities comparable to those described in Paragraph 4 of this
Agreement with a banking institution or any business operating a banking
institution within the geographical limits of Xxxxxx County, Kentucky and all
counties adjoining Xxxxxx County, Kentucky for a period of one year following
the date of termination of the Agreement.
27. ENTIRE AGREEMENT. This Employment Agreement contains the entire
agreement between the parties with respect to Xxxxxxx' employment by Employer.
Each of the parties acknowledges that the other party has made no agreements or
representations with respect to the subject matter of this Employment Agreement
other than those hereinabove specifically set forth in this Employment
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.
CITIZENS FIRST CORPORATION
BY: /s/ Xxxx Xxxxxx
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XXXX XXXXXX, President and
Chief Executive Officer
/s/ Xxxx X. Xxxxxxx
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XXXX X. XXXXXXX
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