Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensation Arrangements of Certain
Officers
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On April 24, 2019, Limestone Bancorp, Inc. (“Company”), and its subsidiary, Limestone Bank, Inc. (“Bank”), entered into the
following new executive employment agreements:
(1) an Employment Agreement between the Company, the Bank and John T. Taylor, President, Chief Executive Officer and a
director of the Company and Chairman of the Board, President and Chief Executive Officer of the Bank;
(2) an Employment Agreement between the Company, the Bank and Phillip Barnhouse, Chief Financial Officer of the Company and
the Bank;
(3) an Employment Agreement between the Bank and John Davis, Chief Credit Officer of the Bank; and
(4) an Employment Agreement between the Bank and Joseph Seiler, Executive Vice President—Head of Commercial Banking—Senior
Lending Officer of the Bank.
These new employment agreements updated and replaced the existing employment agreements the Company and the Bank had with these four executive
officers dated September 21, 2016. The new employment agreements, briefly described below, are comparable to the 2016 employment agreements the Company and the Bank had with Messrs. Taylor, Barnhouse, Davis and Seiler except the amount of
severance under the 2016 employment agreements was based on base salary only and did not take into account an executive’s cash incentive compensation or provide for continued health care coverage, and only Mr. Taylor was entitled to an increased
amount of severance if a termination occurred concurrently with or within 24 months following a change in control of the Company or the Bank (as defined under Section 409A of the Internal Revenue Code and the regulations thereunder).
The following is a brief description of the terms and conditions of the new employment agreements. This description is
qualified in its entirety by reference to the employment agreements, copies of which are filed as exhibits with this Report on Form 8-K.
Term
. Each of the employment
agreements has an initial three-year term expiring April 24, 2022, subject to extension and early termination. On each anniversary of the date of the agreement, the term of the agreement will be extended for an additional one year unless we or the
executive elect not to extend the term by providing written notice not less than 30 days before the anniversary date. If notice of election not to renew is provided, the agreement will terminate at the conclusion of its remaining term.
Base salary
. Each employment
agreement provides for an annual base salary which may be increased by the Board of Directors but may not be decreased without the executive’s express written consent. The initial annual base salaries provided in the employment agreements are
shown below:
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John T. Taylor
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$425,000
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John R. Davis
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$255,000
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Joseph C. Seiler
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$244,800
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Phillip W. Barnhouse
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$244,800
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Incentive Compensation
. Mr.
Taylor’s employment agreement assures him of the opportunity to earn annual cash incentive compensation of up 50% of his base salary.
Board Membership
. The Company and
the Bank have agreed that Mr. Taylor will be nominated as a director during the term of his employment agreement and, subject to regulatory requirements, will serve as the Chairman of the Board of the Bank.
Termination of employment
. The
employment agreements provide that if the executive’s employment is terminated for one of the following reasons, he will have no right to compensation or other benefits for any period after the date of termination:
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termination for “Cause”;
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as a result of disability, retirement or death; or
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by the executive other than for “Good Reason.”
Each executive will be entitled to a cash severance payment and payment of the premiums for up to 12 months of continued
health insurance coverage for the executive and his dependents if the executive’s employment is terminated for one of the following reasons:
• by the Company other than for Cause, disability, retirement or death;
• by the executive for Good Reason; or
• by the Company for other than Cause, disability, retirement or death within six months following the expiration of the
term of the agreement.