Kentucky First Federal Bancorp 10-Q 2009
Documents found in this filing:
THIS AGREEMENT> (the “Agreement”), made this 15th day of August, 2008, by and between KENTUCKY FIRST FEDERAL BANCORP, a federally chartered corporation (the “Company”), and R. Clay Hulette> (the “Executive”). References to the “Bank” herein shall mean First Federal Savings Bank of Frankfort, a federally chartered savings institution and subsidiary of the Company.
WHEREAS, Executive serves the Company in a position of substantial responsibility;
WHEREAS, >the Company wishes to assure the services of Executive for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Company for said period.
NOW, THEREFORE, >in consideration of the mutual covenants herein contained, and upon the other terms and conditions hereinafter provided, the parties hereby agree as follows:
1. Employment>. Executive is employed as Vice President, Chief Financial Officer and Treasurer of the Company. Executive shall perform all duties and shall have all powers which are commonly incident to those offices. During the term of this Agreement, Executive also agrees to serve, if elected, as an officer and/or director of any subsidiary of the Company and in such capacity will carry out such duties and responsibilities as are reasonably appropriate to those offices.
2. Location and Facilities>. Executive will be furnished with the working facilities and staff customary for executive officers with the title and duties set forth in Section 1 and as are necessary for him to perform his duties. The location of such facilities and staff shall be at the principal administrative offices of the Company or the Bank, or at such other site or sites customary for such offices.
4. Base Compensation.
5. Bonuses>. Executive shall be entitled to participate in discretionary bonuses or other incentive compensation programs that may be awarded from time to time to senior management employees pursuant to bonus plans or otherwise.
6. Benefit Plans>. Executive shall be entitled to participate in such life insurance, medical, dental, pension, profit sharing, retirement and stock-based compensation plans and other programs and arrangements as may be approved from time to for the benefit of Company or Bank employees.
7. Vacation and Leave>. At such reasonable times as the Board shall in its discretion permit, Executive shall be entitled, without loss of pay, to absent himself voluntarily from the performance of his employment under this Agreement, all such voluntary absences to count as vacation time, provided that:
8. Expense Payments and Reimbursements>. Executive shall be reimbursed for all reasonable out-of-pocket business expenses that he shall incur in connection with his services under this Agreement upon substantiation of such expenses in accordance with applicable policies of the Company.
9. Automobile Allowance>. During the term of this Agreement, Executive may be entitled to an automobile allowance. In the event such automobile allowance is provided by the Company, Executive shall comply with reasonable reporting and expense limitations on the use of such automobile as may be established by the Company from time to time, and the Company shall annually include on Executive’s Form W-2 any amount of income attributable to Executive’s personal use of such automobile.
10. Loyalty and Confidentiality.
11. Termination and Termination Pay>. Subject to Section 12 of this Agreement, Executive’s employment under this Agreement may be terminated in the following circumstances:
d. Termination for Cause.
f. Without Cause or With Good Reason.
(7) Liquidation or dissolution of the Company or the Bank.
12. Termination in Connection with a Change in Control.
Notwithstanding anything in this Agreement to the contrary, in no event shall the conversion of the Bank from mutual to stock form constitute a “Change in Control” for purposes of this Agreement.
13. Indemnification and Liability Insurance.
14. Reimbursement of Executive’s Expenses to Enforce this Agreement>. The Company shall reimburse Executive for all out-of-pocket expenses, including, without limitation, reasonable attorneys’ fees, incurred by Executive in connection with successful enforcement by Executive of the obligations of the Company to Executive under this Agreement. Successful enforcement shall mean the grant of an award of money or the requirement that the Company and the Bank take some action specified by this Agreement: (i) as a result of a court order; or (ii) otherwise following an initial failure of the Company to pay such money or take such action promptly after written demand therefor from Executive stating the reason that such money or action was due under this Agreement at or prior to the time of such demand.
15. Limitation of Benefits under Certain Circumstances>. If the payments and benefits pursuant to Section 12 of this Agreement, either alone or together with other payments and benefits which Executive has the right to receive from the Company or the Bank, would constitute a “parachute payment” under Section 280G of the Code, the payments and benefits pursuant to Section 12 shall be reduced or revised, in the manner determined by Executive, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits under Section 12 being non-deductible to the Company pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code. The determination of any reduction in the payments and benefits to be made pursuant to Section 12 shall be based upon the opinion of the Company independent public accountants and paid for by the Company. In the event that the Company or Executive do not agree with the opinion of such counsel, (i) the Company shall pay to Executive the maximum amount of payments and benefits pursuant to Section 12, as selected by Executive, which such opinion indicates there is a high probability do not result in any of such payments and benefits being non-deductible to the Company and subject to the imposition of the excise tax imposed under Section 4999 of the Code and (ii) the Company may request, and Executive shall have the right to demand that it request, a ruling from the IRS as to whether the disputed payments and benefits pursuant to Section 12 have such consequences. Any such request for a ruling from the IRS shall be promptly prepared and filed by the Company, but in no event later than thirty (30) days from the date of the opinion of counsel referred to above, and shall be subject to Executive’s approval prior to filing, which shall not be unreasonably withheld. The Company, the Bank and Executive agree to be bound by any ruling received from the IRS and to make appropriate payments to each other to reflect any such rulings, together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code. Nothing contained herein shall result in a reduction of any payments or benefits to which Executive may be entitled upon termination of employment other than pursuant to Section 12 hereof, or a reduction in the payments and benefits specified in Section 12 below zero.
16. Injunctive Relief>. If there is a breach or threatened breach of Section 11g. of this Agreement or the prohibitions upon disclosure contained in Section 10c. of this Agreement, the parties agree that there is no adequate remedy at law for such breach, and that the Company shall be entitled to injunctive relief restraining Executive from such breach or threatened breach, but such relief shall not be the exclusive remedy hereunder for such breach. The parties hereto likewise agree that Executive, without limitation, shall be entitled to injunctive relief to enforce the obligations of the Company under this Agreement.
17. Source of Payments>. Notwithstanding any provision herein to the contrary, to the extent that payments and benefits, as provided by this Agreement, are paid to or received by Executive under the Employment Agreement in effect between the Executive and the Bank (the “Bank Agreement”), such compensation payments and benefits paid by the Bank will be subtracted from any amount due simultaneously to Executive under similar provisions of this Agreement. Payments pursuant to this Agreement and the Bank Agreement shall be allocated in proportion to the activities by Executive as determined by the Company and the Bank.
18. Successors and Assigns.
19. No Mitigation>. Executive 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 Executive in any subsequent employment.
20. Notices>. All notices, requests, demands and other communications in connection with this Agreement shall be made in writing and shall be deemed to have been given when delivered by hand or 48 hours after mailing at any general or branch United States Post Office, by registered or certified mail, postage prepaid, addressed to the Company at its principal business offices and to Executive at his home address as maintained in the records of the Company.
21. No Plan Created by this Agreement>. Executive and the Company expressly declare and agree that this Agreement was negotiated among them and that no provision or provisions of this Agreement are intended to, or shall be deemed to, create any plan for purposes of the Employee Retirement Income Security Act or any other law or regulation, and each party expressly waives any right to assert the contrary. Any assertion in any judicial or administrative filing, hearing, or process that such a plan was so created by this Agreement shall be deemed a material breach of this Agreement by the party making such an assertion.
22. 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.
23. Applicable Law>. Except to the extent preempted by federal law, the laws of the State of Kentucky shall govern this Agreement in all respects, whether as to its validity, construction, capacity, performance or otherwise.
24. 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.
25. Headings. Headings contained herein are for convenience of reference only.
26. Entire Agreement>. This Agreement, together with any understanding or modifications thereof as agreed to in writing by the parties, shall constitute the entire agreement among the parties hereto with respect to the subject matter hereof, other than written agreements with respect to specific plans, programs or arrangements described in Sections 5 and 6.
IN WITNESS WHEREOF>, the parties hereto have executed this Agreement on the date first set forth above.
This Amendment to the Employment Agreement is entered into as of December 22, 2008, by and between Kentucky First Federal Bancorp (the “Company”) and R. Clay Hulette (the “Executive”).
WHEREAS, the Executive is currently employed as Vice President and Chief Financial Officer of the Company; and
WHEREAS,> the Executive and the Company previously entered into an Employment Agreement dated August 15, 2008 (the “Employment Agreement”); and
WHEREAS,> the parties to the Employment Agreement desire to amend the Employment Agreement to bring it into compliance with Section 409A of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE,> in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend the Employment Agreement as follows:
A new Section 27 is added to the Employment Agreement read as follows:
27. Section 409A
(i) The Executive will be deemed to have a termination of employment for purposes of determining the timing of any payments that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A.
(ii) If at the time of the Executive’s separation from service, (a) the Executive is a “specified employee” (within the meaning of Section 409A and using the methodology selected by the Company) and (b) the Company make a good faith determination that an amount payable or the benefits to be provided hereunder constitutes deferred compensation (within the meaning of Section 409A), the payment of which is required to be delayed pursuant to the six-month delay rule of Section 409A in order to avoid taxes or penalties under Section 409A, then the Company will not pay the entire amount on the otherwise scheduled payment date but will instead pay on the scheduled payment date the maximum amount permissible in order to comply with Section 409A (i.e., any amount that satisfies an exception under the Section 409A rules from being categorized as deferred compensation) and will pay the remaining amount (if any) in a lump sum on the first business day after such six month period.
(iii) To the extent the Executive would be subject to an additional 20% tax imposed on certain deferred compensation arrangements pursuant to Section 409A as a result of any provision of this Agreement, such provision shall be deemed amended to the minimum extent necessary to avoid application of such tax and the parties shall promptly execute any amendment reasonably necessary to implement this Section 27. The Executive and the Company agree to cooperate to make such amendment to the terms of this Agreement as may be necessary to avoid the imposition of penalties and taxes under Section 409A; provided, however, that the Executive agrees that any such amendment shall provide the Executive with economically equivalent payments and benefits, and the Executive agrees that any such amendment will not materially increase the cost to, or liability of, the Company with respect to any payment.
(iv) For purposes of the this Agreement, Section 409A shall refer to Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations and any other authoritative guidance issued thereunder.
IN WITNESS WHEREOF,> the parties have duly executed and delivered this Amendment to the Employment Agreement, or have caused this Amendment to the Employment Agreement to be duly executed and delivered in their name and on their behalf, as of the day and year first above written.