EXHIBIT 10.9
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS AMENDED AND RESTATED AGREEMENT is entered into this 24th day of
February, 2003, by and between Kentucky First Bancorp, Inc. (the "Company") and
Xxxxx X. Xxxx (the "Employee"), effective on the date hereof (the "Effective
Date").
WHEREAS, the Employee has heretofore been employed by the Company as its
President and Chief Executive Officer and is experienced in all phases of the
business of the Company; and
WHEREAS, the parties desire by this writing to establish and to set forth
the employment relationship between the Company and the Employee.
NOW, THEREFORE, it is AGREED as follows:
1. Employment. The Employee is employed as the President and Chief
Executive Officer of the Company. The Employee shall render such administrative
and management services for the Company as are currently rendered and as are
customarily performed by persons situated in a similar executive capacity. The
Employee shall also promote, by entertainment or otherwise, as and to the extent
permitted by law, the business of the Company. The Employee's other duties shall
be such as the Board of Directors of the Company ("Board") may from time to time
reasonably direct, including normal duties as an officer of the Company.
2. Consideration from Company: Joint and Several Liability. In lieu of
paying the Employee a base salary during the term of this Agreement, the Company
hereby agrees that to the extent permitted by law, it shall be jointly and
severally liable with the Bank for the payment of all amounts due under the
employment agreement of even date herewith between the Bank and the Employee.
Nevertheless, the Board may in its discretion at any time during the term of
this Agreement agree to pay the Employee a base salary for the remaining term of
this Agreement. If the Board agrees to pay such salary, the Board shall
thereafter review, not less often than annually, the rate of the Employee's
salary, and in its sole discretion may decide to increase her salary.
3. Discretionary Bonuses. The Employee shall participate in an equitable
manner with all other senior management employees of the Company in
discretionary bonuses that the Board may award from time to time to the
Company's senior management employees. No other compensation provided for in
this Agreement shall be deemed a substitute for the Employee's right to
participate in such discretionary bonuses.
4. (a) Participation in Retirement, Medical and Other Plans. The Employee
shall participate in any plan that the Company maintains for the benefit of its
employees if the plan relates to (i) pension, profit-sharing, or other
retirement benefits, (ii) medical insurance or the reimbursement of medical or
dependent care expenses, or (iii) other group benefits, including disability and
life insurance plans.
(b) Employee Benefits; Expenses. The Employee shall participate in any
fringe benefits which are or may become available to the Company's senior
management employees, including for example: any stock option or incentive
compensation plans, club memberships, and any other benefits which are
commensurate with the responsibilities and functions to be performed by the
Employee under this Agreement. The Employee shall be reimbursed for all
reasonable out-of-pocket business expenses which she shall incur in connection
with her services under this Agreement upon substantiation of such expenses in
accordance with the policies of the Company.
5. Term. The Company hereby employs the Employee, and the Employee hereby
accepts such employment under this Agreement, for the period commencing on the
Effective Date and ending 36 months thereafter (or such earlier date as is
determined in accordance with Section 9). Additionally, on each annual
anniversary date from the Effective Date, the Employee's term of employment
shall be extended for an additional one-year period beyond the then effective
expiration date provided the Board determines in a duly adopted resolution that
the performance of the Employee has met the Board's requirements and standards,
and that this Agreement shall be extended.
6. Loyalty; Noncompetition.
(a) During the period of her employment hereunder and except for
illnesses, reasonable vacation periods, and reasonable leaves of absence, the
Employee shall devote all her full business time, attention, skill, and efforts
to the faithful performance of her duties hereunder; provided, however, from
time to time, Employee may serve on the boards of directors of, and hold any
other offices or positions in, companies or organizations, which will not
present any conflict of interest with the Company or any of its subsidiaries or
affiliates, or unfavorably affect the performance of Employee's duties pursuant
to this Agreement, or will not violate any applicable statute or regulation.
"Full business time" is hereby defined as that amount of time usually devoted to
like companies by similarly situated executive officers. During the term of her
employment under this Agreement, the Employee shall not engage in any business
or activity contrary to the business affairs or interests of the Company, or be
gainfully employed in any other position or job other than as provided above.
(b) Nothing contained in this Paragraph 6 shall be deemed to prevent
or limit the Employee's right to invest in the capital stock or other securities
of any business dissimilar from that of the Company, or, solely as a passive or
minority investor, in any business.
7. Standards. The Employee shall perform her duties under this Agreement in
accordance with such reasonable standards as the Board may establish from time
to time. The Company will provide Employee with the working facilities and staff
customary for similar executives and necessary for her to perform her duties.
8. Vacation and Sick Leave. At such reasonable times as the Board shall in
its discretion permit, the Employee shall be entitled, without loss of pay, to
absent herself voluntarily from the performance of her employment under this
Agreement, all such voluntary absences to count as vacation time; provided that:
(a) The Employee shall be entitled to an annual vacation in accordance
with the policies that the Board periodically establishes for senior management
employees of the Company.
(b) The Employee shall not receive any additional compensation from
the Company on account of her failure to take a vacation or sick leave, and the
Employee shall not accumulate unused vacation from one fiscal year to the next,
except in either case to the extent authorized by the Board.
(c) In addition to the aforesaid paid vacations, the Employee shall be
entitled without loss of pay, to absent herself voluntarily from the performance
of her employment with the Company for such additional periods of time and for
such valid and legitimate reasons as the Board may in its discretion determine.
Further, the Board may grant to the Employee a leave or leaves of absence, with
or without pay, at such time or times and upon such terms and conditions as such
Board in its discretion may determine.
(d) In addition, the Employee shall be entitled to an annual sick
leave benefit as established by the Board.
9. Termination and Termination Pay. Subject to Section 11 hereof, the
Employee's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Employee's employment under this Agreement shall
terminate upon her death during the term of this Agreement, in which event the
Employee's estate shall be entitled to receive the compensation due the Employee
through the last day of the calendar month in which her death occurred.
(b) Disability. The Company may terminate the Employee's employment
after having established the Employee's Disability. For purposes of this
Agreement, "Disability" means a physical or mental infirmity which impairs the
Employee's ability to substantially perform her duties under this Agreement and
which results in the Employee becoming eligible for long-term disability
benefits under the Company's long-term disability plan (or, if the Company has
no such plan in effect, which impairs the Employee's ability to substantially
perform her duties under this Agreement for a period of one hundred eighty (180)
consecutive days). The Employee shall be entitled to the compensation and
benefits provided for under this Agreement for (i) any period during the term of
this Agreement and prior to the establishment of the Employee's Disability
during which the Employee is unable to work due to the physical or mental
infirmity, or (ii) any period of Disability which is prior to the Employee's
termination of employment pursuant to this Section 9(b).
(c) Just Cause. The Board may, by written notice to the Employee,
immediately terminate her employment at any time, for Just Cause. The Employee
shall have no right to receive compensation or other benefits for any period
after termination for Just Cause. Termination for "Just Cause" shall mean
termination because of, in the good faith determination of the Board, the
Employee's personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order, or material
breach of any provision of this Agreement. Notwithstanding the foregoing, in the
event of termination for Just Cause there shall be delivered to the Employee a
copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board called
and held for that purpose (after reasonable notice to the Employee, together
with the Employee's counsel, to be heard before the Board), such meeting and the
opportunity to be heard to be held prior to, or as soon as reasonably
practicable following, termination, but in no event later than 60 days following
such termination, finding that in the good faith opinion of the Board the
Employee was guilty of conduct set forth above in the second sentence of this
Subsection (c) and specifying the particulars thereof in detail. If following
such meeting the Employee is reinstated, she shall be entitled to receive back
pay for the period following termination and continuing through reinstatement.
(d) Without Just Cause. Subject to Section 11 hereof, the Board may,
by written notice to the Employee, immediately terminate her employment at any
time for a reason other than Just Cause, in which event the Employee shall be
entitled to receive the following compensation and benefits: (i) any salary
provided pursuant to Section 2 hereof, up to the date of termination of the term
(including any renewal term) of this Agreement (the "Expiration Date"), plus
said salary for an additional 12-month period, but not to exceed three year's
salary, and (ii) the cost to the Employee of obtaining all health, life,
disability and other benefits which the Employee would have been eligible to
participate in through the Expiration Date based upon the benefit levels
substantially equal to those that the Company provided for the Employee at the
date of termination of employment. Said
sum shall be paid, at the option of the Employee, either (I) in periodic
payments over the remaining term of this Agreement, as if the Employee's
employment had not been terminated, or (II) in one lump sum within ten (10) days
of such termination.
(e) Voluntary Termination by Employee. Subject to Section 11 hereof,
the Employee may voluntarily terminate employment with the Company during the
term of this Agreement, upon at least 60 days' prior written notice to the Board
of Directors, in which case the Employee shall receive only her compensation,
vested rights and employee benefits up to the date of her termination.
10. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Employee in any subsequent employment.
11. Change in Control.
(a) Notwithstanding any provision herein to the contrary, if the
Employee's employment under this Agreement is terminated by the Company, without
the Employee's prior written consent and for a reason other than Just Cause, in
connection with or within twelve (12) months after any change in control of the
Company, the Employee shall be paid an amount equal to the difference between -
(i) the sum of -
I. the product of 2.99 times her "base amount" as defined
in Section 280G(b)(3) of the Internal Revenue Code of
1986, as amended (the "Code") and regulations
promulgated thereunder, and
II. $150,000, and
(ii) the sum of any other parachute payments (as defined under
Section 280G(b)(2) of the Code) that the Employee receives on account of the
change in control. Said sum shall be paid in one lump sum within ten (10) days
of such termination. This paragraph would not apply to a termination of
employment due to death, Disability or voluntary termination by the Employee.
The term "change in control" shall mean any one of the following events:
(1) the acquisition of ownership, holding or power to vote more than 25% of the
Bank's or the Company's voting stock, (2) the acquisition of the ability to
control the election of a majority of the Bank's or the Company's directors, (3)
the acquisition of a controlling influence over the management or policies of
the Bank or the Company by any person or by persons acting as a "group" (within
the meaning of Section 13(d) of the Securities Exchange Act of 1934), (4) the
acquisition of control of the Bank or the Company within the meaning of 12
C.F.R. Part 574 or its applicable equivalent (except in the case of (1), (2),
(3) and (4) hereof, ownership or control of the Bank by the Company itself shall
not constitute a "change in control"), or (5) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board of Directors of the Company or the Bank (the "Existing Board") (the
"Continuing Directors") cease for any reason to constitute at least a majority
thereof, provided that any individual whose election or nomination for election
as a member of the Existing Board was approved by a vote of at least a majority
of the Continuing Directors then in office shall be considered a Continuing
Director. For purposes of this subparagraph only, the term "person" refers to an
individual or a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization or any other
form of entity not specifically listed herein.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the Employee may voluntarily terminate her employment under this
Agreement within twelve (12) months following a change in control of the
Company, and the Employee shall thereupon be entitled to receive the payment
described in Section 11(a) of this Agreement, upon the occurrence of any of the
following events, or within ninety (90) days thereafter, which have not been
consented to in advance by the Employee in writing: (i) the requirement that the
Employee perform her principal
executive functions more than thirty (30) miles from her primary office or more
than thirty (30) miles from her personal residence as of the date of the change
in control; (ii) a material reduction in the Employee's base compensation as in
effect on the date of the change in control or as the same may be changed by
mutual agreement from time to time; (iii) the failure by the Company to continue
to provide the Employee with compensation and benefits provided for under this
Agreement, as the same may be changed by mutual agreement from time to time, or
with benefits substantially similar to those provided to her under any employee
benefit in which the Employee is a participant at the time of the change in
control, or the taking of any action which would materially reduce any of such
benefits or deprive the Employee of any material fringe benefit enjoyed by her
at the time of the change in control; (iv) the assignment to the Employee of
duties and responsibilities materially different from those normally associated
with her position as referenced at Section 1; (v) a failure to elect or reelect
the Employee to the Board, if the Employee is serving on the Board on the date
of the change in control; or (vi) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting responsibilities)
in connection with her employment with the Company.
(c) Any payments made to the Employee pursuant to this Agreement, or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
Section 1828(k) and any regulations promulgated thereunder.
(d) In the event that any dispute arises between the Employee and the
Company as to the terms or interpretation of this Agreement, including this
Section 11, whether instituted by formal legal proceedings or otherwise,
including any action that the Employee takes to enforce the terms of this
Section 11 or to defend against any action taken by the Company, the Employee
shall be reimbursed for all costs and expenses, including reasonable attorneys'
fees, arising from such dispute, proceedings or actions, provided that the
Employee shall obtain a final judgement by a court of competent jurisdiction in
favor of the Employee. Such reimbursement shall be paid within ten (10) days of
Employee's furnishing to the Company written evidence, which may be in the form,
among other things, of a cancelled check or receipt, of any costs or expenses
incurred by the Employee.
(e) Notwithstanding any other provision of this Agreement to the
contrary, the Employee may voluntarily terminate her employment for any reason
within the 30-day period beginning on the date of the change in control and the
Employee shall be entitled to receive the payment described in Section 11(a) of
this Agreement.
(f) If the Employee's employment is terminated under circumstances
described in Section 11(a), (b) or (e) of this Agreement, and in consideration
of the payments to be made to her thereunder, the Employee agrees as follows:
(i) The parties recognize that the Employee's reputation and
business and personal relationships are of significant benefit to the Company
and First Federal Savings Bank (the "Bank"). The parties further recognize that
the Company and the Bank are in direct competition with certain banks and other
similar institutions. Therefore, the Employee agrees that for a period of
eighteen (18) months following her termination of employment she will not accept
employment or serve in any capacity with any bank, savings bank or savings and
loan association the deposits or accounts or shares of which are insured by the
Federal Deposit Insurance Corporation or credit union the deposits or accounts
or shares of which are insured by the National Credit Union Administration or
any holding company for such bank, savings bank, savings and loan association or
credit union or other entity controlling, controlled by or under common control
with such financial institution at a principal place of employment within thirty
(30) miles of any office of the Company or the Bank
open to the public at the time of this Agreement.
(ii) For a period of two (2) years following her termination of
employment, the Employee will not solicit or induce any person who is an
employee of the Company or the Bank, or any entity controlling, controlled by or
under common control with the Company or the Bank, or any successor to either,
or any person who was such within three months prior to her termination of
employment, to become employed by any other person, firm or corporation or
approach any such employee for such purpose or authorize or knowingly approve
the taking of such actions by other persons.
(iii) The Employee acknowledges that during the course of her
employment with the Company and the Bank she has and will continue to receive,
obtain or become aware of, and will have acess to proprietary information, lists
and records of customers and trade secrets which are the property of the Company
or the Bank which are not known by competitors or generally by the public
("Proprietary Information") and recognizes that such Proprietary Information to
be valuable and unique assets of the Company or the Bank, as the case may be. At
all times following her termination of employment, the Employee agrees to hold
the Proprietary Information in the strictest confidence and agrees not to use or
disclose any Proprietary Information, directly or indirectly, at any time for
any purpose, or to use for the Employee's benefit or the benefit of any person,
firm, corporation or other entity (other than the Company or the Bank or an
affiliate of or successor to either), any Proprietary Information, and to use
Executive's best efforts to prevent such prohibited use or disclosure by any
other persons.
(iv) The Employee hereby acknowledges that her duties and
responsibilities under this Section 11(f) are unique and extraordinary and that
irreparable injury may result to the Company or the Bank or an affiliate of or
successor to either in the event of a breach of the terms and conditions of this
Section 11(f), which may be difficult to ascertain, and that the award of
damages would not be adequate relief to the Company or the Bank or affiliate or
successor. The Employee therefore agrees that in the event of her breach of any
of the terms or conditions of this Section 11(f), the Company or the Bank or it
successor shall have the right, without posting any bond or other security, to
preliminary and permanent injunctive relief as well as damages and an equitable
accounting of all earnings, profits and other benefits arising from such
violation, which rights shall be cumulative and in addition to any other rights
or remedies in law or equity to which it may be entitled against the Employee.
If at the time of the enforcement of any provision of this Section 11(f) a court
shall hold that the period or scope of the provisions thereof are unreasonable
under the circumstances then existing, the parties hereby agree that the maximum
period or scope under the circumstances shall be substituted for the period or
scope stated in such provision.
12. Successors and Assigns.
(a) This Agreement shall inure to the benefit of and be binding upon
any corporate or other successor of the Company which shall acquire, directly or
indirectly, by merger, consolidation, purchase or otherwise, all or
substantially all of the assets or stock of the Company.
(b) Since the Company is contracting for the unique and personal
skills of the Employee, the Employee shall be precluded from assigning or
delegating her rights or duties hereunder without first obtaining the written
consent of the Company.
13. Amendments. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
14. Applicable Law. Except to the extent preempted by Federal law, the laws
of the Commonwealth of Kentucky shall govern this Agreement in all respects,
whether as to its validity, construction, capacity, performance or otherwise.
15. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
16. Entire Agreement. This Agreement, together with any understanding or
modifications thereof as agreed to in writing by the parties, shall constitute
the entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year first hereinabove written.
ATTEST: KENTUCKY FIRST BANCORP, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxx X. Xxxxx, Secretary Its: Chairman of the Board
WITNESS:
/s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
