1
EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, made and entered into as of this 18th day of
December, 1998, by and between CITIZENS FIRST CORPORATION, a Kentucky
corporation ("Employer"), and XXXXX XXXX, an individual ("Xxxx").
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 Xxxx agree as
follows:
1. EMPLOYMENT. Employer hereby employs Xxxx, and Xxxx hereby accepts
employment with Employer, as the Vice-President and Chief Credit 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 Xxxx'x employment
hereunder shall commence on and be effective as of January 4, 1999 (the
"Commencement Date"), and continue through January 3, 2002, subject to renewal
and to termination in accordance with the terms of this Employment Agreement. On
January 4, 2002, 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 Xxxx 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. Xxxx'x 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
specified herein, all of Xxxx'x 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, Xxxx 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. Xxxx 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. Xxxx 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.
Xxxx 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 Holding Company subject to the direction of the Employer's
President and Chief Executive Officer:
1
2
A) Management of the overall lending function including but
not limited to:
1. Develop, implement and maintain the Credit policies
of the Employer for Commercial, Retail and Real
Estate Mortgage Lending.
2. Supervise the lending staff on a day to day basis
including service as the Chairman of the Senior Loan
Committee.
3. Review credits on a regular basis to ensure
compliance with bank policies and procedures.
4. Provide loan review analysis of outstanding credits
and provide an analysis of the adequacy of the
Allowance for Loan Losses.
5. Provide reports to management and the Board of
Directors regarding loan portfolio monitoring and
credit policy compliance.
B) Serve as a member of the Asset Liability Management
Committee.
5. COMPENSATION. For all services rendered or to be rendered by Xxxx
for Employer during the Term, Employer shall pay, and Xxxx hereby agrees to
accept, compensation as follows: Beginning with the Commencement Date, Xxxx
shall receive a salary at an annualized rate of $63,750.00 per year, payable in
equal bi-weekly installments. The Employer's President and Chief Executive
Officer shall review Xxxx'x salary on a quarterly basis to determine if said
salary is commensurate with the duties and responsibilities being performed by
Xxxx. While the Employer may adjust Xxxx'x salary based on this review, it is
not obligated to do so. Any salary adjustment must be in writing, signed by both
the Employer and Xxxx.
6. REIMBURSEMENT. Employer will reimburse Xxxx 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. Xxxx 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.
7. VACATION AND SICK LEAVE. Xxxx shall be entitled to the following
weeks of paid vacation:
1999 3 weeks
2000 4 weeks
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.
Xxxx shall additionally be entitled to 12 days of paid sick leave
annually except that if Xxxx 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 Xxxx 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 Xxxx 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 Xxxx, the Employer will reimburse Xxxx 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 Xxxx qualifies.
2
3
10. OTHER EMPLOYEE BENEFITS. Xxxx 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:
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 Xxxx 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, the Employer shall complete
an evaluation of Xxxx'x performance as measured against specific goals and
objectives as established by Employer.
12. TERMINATION. Xxxx'x 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 Xxxx'x employment exist:
X. Xxxx has appropriated to his personal use funds, rights or
property of Employer or of any of the customers of Employer;
X. Xxxx has engaged in any other act of substantial dishonesty
in the performance of his duties or responsibilities;
X. Xxxx 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 (30) days of receipt of written notice to him from
the Employer of the failings, which such notice shall specifically describe
Xxxx'x failings and the steps required to remedy same;
X. Xxxx is engaging in competition with Employer in any manner
or in activities harmful to the business of Employer;
X. Xxxx is using alcohol, drugs or similar substances in an
illegal manner;
X. Xxxx has become "disabled" or "incompetent," as hereinafter
defined in this Employment Agreement;
X. Xxxx 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 Xxxx a substantial fidelity bond, or
a bonding company refuses to issue a bond to Employer or any banking institution
which it might organize if Xxxx is employed in the Position;
X. Xxxx 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.
3
4
If Employer reasonably, properly, and in good faith determines that any
one or more of the above causes for terminating Xxxx'x employment exists, then
Employer may, by giving Xxxx 60 days written notice of its intention to
terminate Xxxx'x employment, terminate this Employment Agreement, the Term, and
Xxxx'x employment, and all rights, duties and obligations of the parties under
this Employment Agreement. Xxxx shall be 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 Xxxx 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 Xxxx'x 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), Xxxx 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, Xxxx'x 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. Xxxx'x rights to all salary, compensation and
fringe benefits shall terminate effective as of the date such determination is
made; provided, however, that Xxxx shall be entitled to receive payment for any
accrued vacation.
14. TERMINATION OTHERWISE. The above provisions of this Employment
Agreement to the contrary notwithstanding, Xxxx'x employment may be terminated,
upon delivery to Xxxx 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 Xxxx has no
continuing right to employment by Employer, and that Employer may, therefore,
terminate Xxxx'x 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 Xxxx'x employment is terminated, then Xxxx 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, Xxxx'x employment in the Position shall be terminated and the only
rights to compensation and fringe benefits which Xxxx 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 Xxxx 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 Xxxx'x 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.
4
5
15. VOLUNTARY TERMINATION. Xxxx 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 Xxxx 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 terminate as of the effective
date of such termination; provided, however, that Xxxx shall be entitled to
receive payment for any accrued vacation.
16. DEATH OF XXXX. Bray's death shall terminate the Term and Xxxx'x
employment and shall terminate all of Xxxx'x rights to all salary, compensation
and fringe benefits effective as of the date of such death.
17. DISABILITY. Xxxx 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 Xxxx and Employer,
states in writing that it is such physician's opinion that Xxxx 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 Xxxx'x
employment. In the event Xxxx and Employer are unable to agree upon such a
suitable physician for the purposes of making such a determination, then Xxxx
and Employer shall each select a physician, and such two physicians as selected
by Employer and Xxxx shall select a third physician who shall make the
determination, and the determination made by such third physician shall be
binding upon Xxxx and Employer. It is further agreed that if a guardian is
appointed for Xxxx'x person, or a conservator or curator is appointed for Xxxx'x
estate, or he is adjudicated "incompetent" or is suffering or operating under a
mental "disability" by a court of appropriate jurisdiction, then Xxxx shall be
deemed to be "disabled" for all purposes under this Employment Agreement. In the
event Xxxx 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.
18. FAITHFULNESS. Xxxx 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. Xxxx 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.
5
6
19. NONASSIGNABILITY. Neither this Agreement, nor any rights or
interests hereunder, shall be assignable by Employer, or by Xxxx, his
beneficiaries or legal representatives, without the prior written consent of the
other party. All services to be performed hereunder by Xxxx 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 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
Xxxx 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 Xxxx'x compensation may be increased, from time to time, by
Employer's Board of Directors, in order for any purported agreement to increase
Xxxx'x compensation to be enforceable by Xxxx, 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.
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.
6
7
25. TRADE SECRETS. Xxxx 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 Xxxx'x employment and of this
Employment Agreement. Xxxx 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 and of the affairs of its customers, and that it is therefore
appropriate that Employer prevent Xxxx from engaging in any breach of the
provisions of this Paragraph 25. Xxxx, therefore, agrees that a violation by
Xxxx 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 Xxxx 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 Xxxx 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 xxxx during the term, xxxx 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 Xxxx'x 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.
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
---------------------------------------
XXXX XXXXXX, President and
Chief Executive Officer
/s/ Xxxxx Xxxx
-------------------------------------------
XXXXX XXXX
7
