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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, made and entered into as of this 20th day
of October, 1998, by and between CITIZENS FIRST CORPORATION, a Kentucky
corporation ("Employer"), and XXXXX XXXX, an individual ("Hall").
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 Hall agree as
follows:
1. EMPLOYMENT. Employer hereby employs Hall, and Hall hereby
accepts employment with Employer, as the Chief Financial Officer
(hereinafter "Position") of Employer and of any banking institution
established by the Employer in its capacity as a Bank Holding Company.
2. TERM OF EMPLOYMENT. This Employment Agreement and Hall's
employment hereunder shall commence on and be effective as of January
1, 1999 (the "Commencement Date"), and continue through December 31,
2001, subject to renewal and to termination in accordance with the
terms of this Employment Agreement. On January 1, 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 Hall
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. Hall's initial term of employment and any subsequent
renewal thereof shall hereinafter be referred to as
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the "Term." If this Employment Agreement is not renewed as specified
herein, all of Hall's 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, Hall 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. Hall 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. Hall 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, Hall shall have the following duties,
responsibilities and authorities with respect to Employer:
Hall shall have the day-to-day responsibility for the following
operations of the
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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:
A. Manage the accounting function including but not limited
to:
(1) Maintain the general ledgers, and ensure that the
balances represented in the general ledger accounts are
properly supported by subsidiary ledgers and other
appropriate documentation.
(2) Direct the preparation of accurate and timely financial
reports on the results of operations.
(3) Prepare all required filings for regulators (call
reports, 10-Q's if required, etc.).
(4) Prepare reports for management, the Board of Directors,
and shareholders (quarterly reports, annual financial
reports, etc.).
(5) Develop financial policies and procedures as needed.
B. Maintain the investments portfolio in accordance with
business needs; develop policies and procedures as needed.
C. Ensure that appropriate audit coverage is provided, that
the results of audits are reported to the Board, and that the audit efforts of
the external auditors are coordinated with internal efforts to ensure efficient
and effective coverage.
D. Provide compliance review to ensure compliance with
appropriate laws and regulations; develop compliance policies and procedures as
needed.
E. Provide loan review analysis for credits issued.
F. Provide payroll services and file all necessary withholding
remittances and informational returns.
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G. Maintain the fixed assets subsidiary ledgers.
H. Maintain the accounts payable subsidiary system.
I. Maintain the wire transfer function.
5. COMPENSATION. For all services rendered or to be rendered by
Hall for Employer during the Term, Employer shall pay, and Hall hereby
agrees to accept, compensation as follows: Beginning with the
Commencement Date, Hall shall receive a salary at an an annualized
rate of $80,000.00 per year, payable in equal bi-weekly installments.
Hall's 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. Hall's salary for any calendar
year after 1999 shall be at the annualized rate established by
Employer at the commencement of each such year.
6. REIMBURSEMENT. Employer will reimburse Hall 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.
Hall 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
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approval by Employer.
7. VACATION AND SICK LEAVE. Hall shall be entitled to the
following weeks of paid vacation:
Year: 1999 3 weeks
Year: 2000 4 weeks
Year: 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.
Hall shall additionally be entitled to 12 days of paid sick leave
annually except that if Hall 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 Hall 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
Hall 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 Hall, the Employer will reimburse Hall 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 Hall qualifies.
10. OTHER EMPLOYEE BENEFITS. Hall shall be entitled to such
additional employee
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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 Hall 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 Hall's performance as measured against
specific goals and objectives as established by Employer.
12. TERMINATION. Hall's 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 Hall's
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;
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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
Hall's 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 Hall a substantial fidelity bond, or
a bonding company refuses to issue a bond to Employer or any banking institution
which it might organize if Hall 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.
If Employer reasonably, properly, and in good faith determines that any
one or more of the above causes for terminating Hall's employment exists, then
Employer may, by giving Hall 60 days written notice of its intention to
terminate Hall's employment, terminate this
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Employment Agreement, the Term, and Hall's employment, and all rights, duties
and obligations of the parties under this Employment Agreement. Hall 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 Hall 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 Hall's 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), Hall 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, Hall's
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.
Hall's rights to all salary, compensation and fringe benefits shall
terminate effective as of the date such determination is made;
provided, however, that Hall shall be entitled to receive payment for
any accrued vacation.
14. TERMINATION OTHERWISE. The above provisions of this Employment
Agreement to the contrary notwithstanding, Hall's employment may be
terminated, upon delivery to Hall 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
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employment should be terminated. It is understood that Hall has no
continuing right to employment by Employer, and that Employer may,
therefore, terminate Hall's 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 Hall's employment is
terminated, then Hall 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, Hall's employment in the Position shall be
terminated and the only rights to compensation and fringe benefits
which Hall 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 Hall
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 Hall's 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. Hall 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
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above provisions of this Employment Agreement to the contrary
notwithstanding, if Hall 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 Hall shall be entitled to receive payment for any
accrued vacation.
16. DEATH OF HALL. Hall's death shall terminate the Term and
Hall's employment and shall terminate all of Hall's rights to all
salary, compensation and fringe benefits effective as of the date of
such death.
17. DISABILITY. Hall 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 Hall
and Employer, states in writing that it is such physician's opinion
that Hall 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 Hall's employment. In the event Hall and
Employer are unable to agree upon such a suitable physician for the
purposes of making such a determination, then Hall and Employer shall
each select a physician, and such two physicians as selected by
Employer and Hall shall select a third physician who shall make the
determination, and the determination made by such third physician
shall be binding upon Hall and Employer. It is further agreed that if
a guardian is appointed for Hall's person, or a conservator or curator
is appointed for Hall's estate, or he is adjudicated "incompetent" or
is suffering or operating under a mental "disability" by a court of
appropriate jurisdiction, then Hall shall be deemed to be "disabled"
for all
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purposes under this Employment Agreement. In the event Hall 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. Hall 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. Hall 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 Hall, his
beneficiaries or legal representatives, without the prior written
consent of the other party. All services to be performed hereunder by
Hall must be personally performed by him.
20. CONSOLIDATION. MERGER OR SALE OF ASSET. Nothing in this
Employment
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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 Hall 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 Hall's compensation may be increased, from
time to time, by Employer's Board of Directors, in order for any
purported agreement to increase Hall's compensation to be enforceable
by Hall, 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
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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.
25. TRADE SECRETS. Hall 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
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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 Hall's employment and of this Employment Agreement.
Hall 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 Hall from engaging in any
breach of the provisions of this Paragraph 25. Hall, therefore, agrees
that a violation by Hall 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
Hall 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 Hall 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 Hall during the Term, Hall 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
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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 Hall's 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
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XXXX XXXXXX, President and
Chief Executive Officer
/s/ Xxxxx Xxxx
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XXXXX XXXX
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