EXHIBIT 99.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made by and between FirsTier Financial, Inc., a Nebraska
corporation (the "Corporation"), and Xxxxx X. Xxxxxxxxx (the "Executive") dated
the fourth day of August, 1995.
WHEREAS, the Corporation has entered into an Agreement of Merger and
Consolidation (the "Merger Agreement") with First Bank System, Inc. of even
date herewith;
WHEREAS, the Executive has served as Chairman, President and Chief
Executive Officer of the Corporation, and has gained significant and valuable
knowledge and experience with respect to the Corporation in such capacities; and
WHEREAS, the Executive and the Corporation have entered into an Employment
Agreement dated as of the 20th day of March, 1995 (the "Prior Agreement"); and
WHEREAS, the Corporation wishes to provide for the continued involvement
of the Executive in the business of the Corporation following the consummation
of the Merger (as such term is defined in the Merger Agreement) and the
Executive desires to perform such services;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
provisions herein contained, the Executive and the Corporation agree with each
other as follows:
1. EMPLOYMENT PERIOD. The Corporation hereby retains the Executive for
the period commencing on the Effective Date (as such term is defined in the
Merger Agreement) and ending on December 31, 1996 (the "Employment Period"),
during which time the Executive shall serve as Chairman and Chief Executive
Officer of First Bank Nebraska and shall be available to aid the Corporation in
the transition period following the acquisition of the Corporation with respect
to (a) general corporate and personnel organizational matters; (b) the
retention of employees and employee relations; (c) the retention of customers;
and (d) cost reduction and organizational efficiencies. During the Employment
Period, the Executive shall be an employee of the Corporation for all purposes,
including for purposes of the FirsTier Financial, Inc. Omnibus Executive
Benefit Plan (the "Omnibus Plan") as well as the Corporation's Restricted Stock
Bonus Plan, Discounted Nonqualified Stock Option Plan and Phantom Stock Unit
Plan (collectively, the "Stock Plans"). Except as specifically provided herein,
this Agreement shall not affect the Executive's rights under the Prior
Agreement.
2. SALARY AND BENEFITS. In consideration of the services and duties
agreed to be rendered and performed by the Executive hereunder, the Corporation
hereby covenants and agrees to pay the Executive a monthly salary at the rate
of one-twelfth of three hundred fifty thousand dollars ($350,000). During the
Employment Period, the Executive
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shall be entitled: to receive health and welfare and similar benefits
substantially the same as those provided by the Corporation to the Executive's
peer executives; to continued coverage under UNUM policy number LAD318392
providing for disability income (the "Disability Income Policy") as in effect
immediately prior to the Effective Date; and to continuation of the fringe
benefits provided by the Corporation to the Executive immediately prior to the
Effective Date (including, without limitation, providing and paying for: all
fees and charges associated with the Executive's membership at the Omaha
Country Club; an automobile (the "Automobile") comparable to the automobile
currently available for the Executive's use; and home security system) (the
"Fringe Benefits").
3. BONUS POOL. On the business day immediately preceding the date set
for the closing of the Merger Agreement, the Executive shall be entitled to
receive a cash Bonus as set forth in the FirsTier Financial, Inc. Change of
Control Bonus Pool Plan (the "Bonus Pool Plan"). The Corporation hereby
covenants and agrees that the Bonus awarded to the Executive pursuant to the
terms of the Bonus Pool Plan shall in no event be in an amount comprising less
than fifty per cent (50%) of the total available Bonus Pool.
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4. CHANGE IN CONTROL PAYMENT. Upon consummation of the Merger the
Corporation shall immediately pay to the Executive the termination benefit
provided by the Prior Agreement as if the Executive had been terminated by the
Corporation as a result of a Change in Control pursuant to Section 5 thereof
whether or not the Executive is then employed by the Corporation and regardless
of the reason for any such cessation of employment.
5. TERMINATION
(a) During the Employment Period the Corporation may not terminate the
Executive's employment other than for "Cause." For purposes of this Agreement,
Cause means either:
i. Conviction of a felony involving moral turpitude; or
ii. Conduct willfully injurious to the Corporation.
(b) At the end of the Employment Period or if, during the Employment
Period, the Corporation shall terminate the Executive's employment other than
for Cause or the Executive shall terminate employment for any reason:
i. The Executive shall be entitled to receive retirement benefits
under Article V of the Omnibus Plan payable as if the Executive were sixty-two
(62) years of age on the date of such cessation of employment, and for purposes
of
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calculating such retirement benefits the Executive shall be deemed to have
continued his employment with the Corporation through the attainment of
sixty-two (62) years of age at a base annual salary equal to the greater of
three hundred fifty thousand dollars ($350,000) and the Executive's base annual
salary immediately prior to such cessation of employment; the retirement
benefits payable to the Executive shall be calculated in accordance with the
assumptions underlying Exhibit A;
ii. The Executive shall be entitled to receive retiree life and
medical benefits no less favorable than those provided by the Corporation
immediately prior to the date of the signing of the Merger Agreement, and for
purposes of calculating the retiree benefits to which the Executive shall be
entitled the Executive shall be deemed to have continued his employment with
the Corporation through the attainment of sixty-two (62) years of age at a base
annual salary equal to the greater of three hundred fifty thousand dollars
($350,000) and the Executive's base annual salary immediately prior to such
cessation of employment;
iii. The Executive shall be entitled to the continuation of the
Fringe Benefits until the earlier of his death or the attainment of sixty-two
(62) years of age;
iv. All stock options, Bonus Shares, Phantom Stock Units and any
other rights and benefits granted to the Executive pursuant to the Stock Plans
shall immediately become
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fully vested and/or exercisable as set forth in Section 7 of the Prior
Agreement;
v. Effective as of the first premium date following such cessation
of employment, the Executive shall be entitled to assume and to continue his
coverage under the Disability Income Policy as in effect immediately prior to
such cessation of employment to the extent permissible under the terms of such
policy; such assumption and continuation of the Disability Income Policy shall
be at the Executive's own expense, provided, however, that the Corporation
shall be liable for and shall pay all premiums and other costs payable with
respect to such Disability Income Policy through the first premium date
following such cessation of employment;
vi. In accordance with the provisions of Section 6.2(d) of the
Omnibus Plan, the Executive shall be deemed to have reached his Normal
Retirement Date prior to such cessation of employment for purposes of
determining the Survivor Benefit to which the Executive and his beneficiary are
entitled pursuant to Article VI of the Omnibus Plan; and
vii. The Executive shall be entitled to purchase the Automobile from
the Corporation at a price not to exceed the Automobile's book value for
financial reporting purposes as of the date of such cessation of employment.
(c) In addition to the foregoing, in the event that, during the employment
period, the Corporation shall terminate
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the Executive's employment (other than for Cause) without the Executive's
written consent, the Executive shall be entitled to receive a termination
payment equal to the balance of his annual salary (no less than three hundred
fifty thousand dollars ($350,000)) that would be payable if his employment had
continued through the end of the calendar year during which such cessation of
employment occurs.
6. FULL SETTLEMENT. The Corporation's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Corporation may have against
the Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and
such amounts shall not be reduced whether or not the Executive obtains other
employment. The Corporation agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Corporation, the Executive or others of the validity or enforceability
of, or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive
about the amount of any payment pursuant to this Agreement), plus in each case
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interest on any delayed payment at the applicable Federal rate provided for
in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended
(the "Code").
7. CERTAIN ADDITIONAL PAYMENTS. In the event it shall be determined that
any payment (within the meaning of Section 280G of the Code) or distribution to
or for the benefit of the Executive (determined without regard to any
additional payments required under this Section 6) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest
or penalties are incurred by the Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive from the Corporation an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments. All determinations under this
Section 6 shall be made by a nationally recognized accounting firm selected by
the Executive.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall limit or
otherwise affect such rights as the
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Executive may have under any other agreements with, or plans or programs of,
the Corporation or any of its affiliated companies, including, without
limitation, the Prior Agreement, the Omnibus Plan or the Stock Plans. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Corporation or any of their affiliated
companies at or subsequent to the Effective Date including, but not limited to,
the Executive's entitlement to severance under the Prior Agreement shall be
payable in accordance with such plan or program, except as otherwise expressly
provided herein.
9. SUCCESSORS.
(a) This Agreement is personal to the Executive and without the prior
written consent of the Corporation shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit or and be binding upon the
Corporation and its successors.
(c) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to expressly
assume and agree to perform this Agreement in the same manner and to the
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same extent that the Corporation would be required to perform it if no such
succession had taken place. As used in this Agreement, "Corporation" shall mean
the Corporation as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement
by operation of law, or otherwise.
10. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Nebraska, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
IF TO THE EXECUTIVE:
Xxxxx X. Xxxxxxxxx
0000 Xxxxx 000xx Xxxxx
Xxxxx, Xxxxxxxx 00000
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IF TO THE CORPORATION:
FirsTier Financial, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
First Bank System, Inc.
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X Xxxx, Vice Chairman
and Chief Financial Officer
Fax: (000) 000-0000
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this
Agreement such amounts as shall be required to be withheld pursuant to any
applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or any
other provision thereof.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Corporation
has caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.
/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
FIRSTIER FINANCIAL, INC.
By /s/ Xxxxxx Xxxxx
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Xxxxxx Xxxxx, Xx., Chairman of the
Executive Committee of the
Board of Directors
Acknowledged and Agreed to:
FIRST BANK SYSTEM INC.
By /s/ X.X. Xxxx
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Xxxxxxx X. Xxxx, Vice Chairman
and Chief Financial Officer
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