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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") is entered into as of September 18,
1997, between FIRST NATIONAL BANK OF PORT ORCHARD (the "Bank"), Port Orchard,
Washington, and XXXXX X. XXXXXXXXX (the "Executive").
PREAMBLE
WHEREAS, Puget Sound Bancorp, Inc., which is the parent company of the
Bank, intends to merge into InterWest Bancorp, Inc. ("InterWest"), and the
Bank will thereby become the wholly owned subsidiary of InterWest (the
"Merger");
WHEREAS, the Bank wishes to assure itself of the services of Executive
for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank (or
its successor, if any) on a full-time basis for such period.
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and upon the other terms and conditions set forth in this
Agreement, the Bank and the Executive agree as follows:
1. POSITION AND RESPONSIBILITIES.
(a) During the Term of Employment (as defined below), Executive
shall serve in such position as the Chief Executive Officer of InterWest
determines, and shall report to the Chief Executive Officer (or his designee).
Executive will have the responsibilities set forth in Exhibit A, and such other
duties as the Chief Executive Officer of InterWest may assign consistent with
Executive's existing duties.
(b) During the Term of Employment (as defined below), except for
periods of absence occasioned by illness, reasonable vacation periods, and
reasonable leaves of absence, Executive shall devote substantially all his
business time, attention, skill, and efforts to the faithful performance of his
duties under this Agreement.
2. TERM.
The term of this Agreement shall be for twelve (12) months, commencing
on the closing date of the Merger (the "Term of Employment"). This Agreement
will only become effective if the Merger is consummated.
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3. COMPENSATION AND REIMBURSEMENT.
(a) The compensation specified under this Agreement shall
constitute the salary and benefits paid for the duties described in Section 1.
The Bank shall pay Executive as compensation a salary of $102,500 per year
("Base Salary"). Such Base Salary shall be payable in accordance with the
customary payroll practices of the Bank. Executive shall be entitled to four
weeks of vacation during the Term of Employment, use of the Bank-owned
automobile presently used by Executive, and such other benefits as are
generally provided to similarly situated, full-time employees of InterWest
Bank.
(b) In addition to the Base Salary provided for by paragraph (a)
of this Section 3, the Bank shall pay or reimburse Executive for all reasonable
travel and other expenses incurred in connection with Executive's performance
of his obligations under this Agreement.
4. PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the occurrence of an Event of Termination (as defined
below) during the Term of Employment, the provisions of this Section shall
apply. As used in this Agreement, an "Event of Termination" means: (1)
termination by the Bank of Executive's full-time employment under this
Agreement for any reason other than (A) death, (B) disability, as defined in
Section 5 of this Agreement, or (C) for Cause, as defined in Section 6 of this
Agreement; (2) termination by Executive for "Good Reason" (as defined below);
or (3) termination of Executive's employment due to the expiration of the Term
of Employment.
For purposes of this Agreement, Executive's termination for "Good
Reason" shall mean the occurrence of any of the following, in which event
Executive shall have the right to terminate his employment with the Bank, which
termination shall be deemed a justifiable termination of his employment and
shall excuse Executive from the obligation to render services under or relating
to this Agreement:
(1) A material change in Executive's responsibilities or
title (as set forth in paragraph 1 of this Agreement);
(2) The Bank's requiring Executive to be based in any
location other than Kitsap County, except for normal travel in the
ordinary course of the Bank's business;
(3) Any material breach of this Agreement by the Bank,
including, without limitation, (A) the failure by the Bank to pay to
Executive any installment of salary and/or benefit (including, without
limitation, any benefit under any defined contribution plan or
incentive plan) required to be paid or provided to Executive, which
failure continues for a period of thirty (30) days after written
notice thereof is given by Executive to the Bank, and (B) any failure
by the Bank to adopt, continue or maintain in effect any plan or
benefit that is required to be provided by the Bank to Executive
pursuant to this Agreement.
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(b) Upon the occurrence of an Event of Termination (including
termination of Executive's employment due to the expiration of the Term of
Employment), the Bank shall pay to Executive (1) all compensation and benefits
earned, and all reimbursable expenses incurred, through the date on which the
Event of Termination occurs, (2) all remaining installments of Executive's Base
Salary through the expiration of the Term of Employment, and (3) an additional
amount equal to Executive's Base Salary.
5. TERMINATION UPON DEATH OR DISABILITY.
Upon the death of Executive during the Term of Employment, the Bank
shall pay to Executive's estate the compensation due to and reimbursable
expenses incurred by Executive through the last day of the calendar month in
which his death occurred. In the event of Executive's termination by reason of
disability, as defined in the Bank's then-current disability plan, or if
Executive is otherwise unable to serve in the capacity required pursuant to
Section 1 of this Agreement, Executive shall be entitled to receive group and
other disability benefits of the type then provided by the Bank for other
similarly situated officers.
6. TERMINATION FOR CAUSE.
For purposes of this Agreement, termination for "cause" means
termination because Executive (a) willfully and continually fails to
substantially perform his principal responsibilities with the Bank, as outlined
in Section 1 of this Agreement (other than any such failure resulting from
Executive's incapacity due to injury or illness), and such failures continue
for a period of at least thirty (30) days after a written demand for
performance is delivered to Executive by a duly authorized member or
representative of the Board of Directors of the Bank that specifically
identifies the manner in which it is alleged that Executive has not
substantially performed such duties, (b) is adjudged guilty of any crime
involving a breach of his fiduciary duties to the Bank or involving moral
turpitude, or (c) willfully and continually fails to comply with any law, rule
or regulation (other than traffic violations or similar minor offenses) or any
final cease and desist order of any government agency having jurisdiction over
the Bank. For purposes of this Agreement, no act or failure to act on the part
of Executive shall be considered "willful" unless done or omitted to be done in
bad faith and without reasonable belief that such action or omission was in, or
not opposed to, the best interests of the Bank.
7. NON-COMPETITION.
(a) Upon any termination of Executive's employment under this
Agreement for any reason other than an Event of Termination, Executive will not
engage in Competition (as defined below) with the Bank or InterWest in Kitsap
County for a period of two (2) years following such termination. The term
"Competition" means working for or advising, consulting or otherwise serving
with, directly or indirectly, any entity whose business materially competes
with the depository, lending or other business activities of the Bank or
InterWest; provided, however, that Competition shall not include the
acquisition and ownership of an interest not exceeding 5% of the total equity
interests in any publicly held entity (whether or not such entity competes with
InterWest, the Bank or any other affiliate of InterWest). The Bank and
Executive recognize that
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irreparable injury will result to the Bank and/or InterWest, its business and
property in the event of Executive's breach of this Subsection 7(a) and agree
that, in the event of any such breach by Executive, the Bank and/or InterWest
will be entitled, in addition to any other remedies and damages available, to
an injunction to restrain the violation of this non-competition covenant by
Executive. Executive represents and admits that in the event of the
termination of his employment for reasons other than an Event of Termination,
Executive's experience and capabilities are such that Executive can obtain
employment in a business engaged in other lines and/or of a different nature
than the business in which the Bank or InterWest is engaged, and that the
enforcement of a remedy by way of injunction will not prevent Executive from
earning a livelihood. Nothing in this Agreement will be construed as
prohibiting the Bank or InterWest from pursuing any other remedies available to
the Bank or InterWest for such breach or threatened breach, including without
limitation the recovery of damages from Executive.
(b) Executive recognizes and acknowledges that the knowledge of
the business activities and plans for business activities of InterWest, the
Bank, and other affiliates of InterWest (now existing or subsequently
established or acquired) is a valuable, special and unique asset of the
business of the Bank and InterWest. Executive will not, during or after the
Term of Employment, disclose any knowledge of the past, present, planned or
considered business activities of InterWest, the Bank, or other affiliates of
InterWest to any person, firm, corporation, or other entity for any reason or
purpose whatsoever; provided, however, that the foregoing shall not apply to
any confidential or proprietary information or trade secret that (1) is or
becomes generally available to the public other than as a result of a
disclosure by Executive in violation of this Agreement, (2) becomes available
to Executive on a non-confidential basis from a source other than InterWest,
the Bank, or other affiliates of InterWest, or (3) Executive is required to
disclose pursuant to any law, rule, regulation, legal proceeding, subpoena,
court order or other similar process. Notwithstanding the foregoing, Executive
may disclose any knowledge of banking, financial and/or economic principles,
concepts or ideas that are not solely and exclusively derived from the business
plans and activities of InterWest, the Bank or other affiliates of InterWest.
In the event of a breach or threatened breach by Executive of the provisions of
this Section 7(b), the Bank and/or InterWest will be entitled to an injunction
restraining Executive from disclosing, in whole or in part, the knowledge of
the past, present, planned or considered business activities of InterWest, the
Bank, or other affiliates of InterWest, or from rendering any services to any
person, firm, corporation, or other entity to whom such knowledge, in whole or
in part, has been disclosed or is actively threatened to be disclosed. Nothing
in this Agreement will be construed as prohibiting the Bank and/or InterWest
from pursuing any other remedies available to them for such breach or
threatened breach, including the recovery of damages from Executive.
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8. NOTICE.
For purposes of this Agreement, notices and all other communications
contemplated by this Agreement shall be in writing and shall be deemed to have
been duly given when personally delivered or sent by certified mail, return
receipt requested, postage prepaid. All notices to the Bank shall be sent to
the home office of InterWest, directed to the attention of InterWest's
President and Chief Executive Officer. All notices to Executive shall be sent
to 0000 X Xxxx Xxxx Xxxxx, Xxxx Xxxxxxx,XX 00000-0000, or such other address as
Executive may designate by written notice delivered to the Bank.
9. SOURCE OF PAYMENTS.
All payments provided in this Agreement shall be timely paid in cash
or check from the general funds of the Bank.
10. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the Bank and
Executive and supersedes any prior employment agreement between the Bank and
Executive, except that this Agreement shall not affect or operate to reduce any
benefit or compensation inuring to Executive of a kind elsewhere provided. No
provision of this Agreement shall be interpreted to mean that Executive is
subject to receiving fewer benefits than those available to him without
reference to this Agreement.
11. NO ATTACHMENT.
(a) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.
(b) This Agreement shall be binding upon, and inure to the benefit
of, Executive, the Bank, and their respective successors and assigns.
12. MODIFICATION AND WAIVER.
(a) This Agreement may not be modified or amended except by an
instrument in writing signed by the Bank and the Executive with the prior
written consent of InterWest.
(b) No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with such waiver or estoppel and the prior written consent of InterWest. No
such written waiver shall be deemed a continuing waiver unless specifically
stated therein, and each such waiver shall operate only as to the specific term
or condition waived
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and shall not constitute a waiver of such term or condition for the future as
to any act other than that specifically waived.
13. SEVERABILITY.
If, for any reason, any provision of this Agreement, or any part of
any provision, is held invalid, such invalidity shall not affect any other
provision of this Agreement or any part of such provision not held so invalid,
and each such other provision and part thereof shall to the full extent
consistent with law continue in full force and effect.
14. HEADINGS FOR REFERENCE ONLY.
The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
15. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of
Washington, unless otherwise specified herein; provided, however, that in the
event of a conflict between the terms of this Agreement and any applicable
federal or state law or regulation, the provisions of such law or regulation
shall prevail.
16. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by Executive within one
hundred (100) miles from Port Orchard, Washington, in accordance with the rules
of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction. All
expenses of arbitration, including without limitation arbitration fees, costs
and reasonable attorneys' fees, shall be awarded by the arbitrator(s) in favor
of such party as the arbitrator(s) shall determine to be the prevailing party
in such arbitration.
17. INDEPENDENT COUNSEL.
Executive acknowledges that he has had the opportunity to consult with
his own, independent counsel with respect to the negotiation, preparation, and
execution of this Agreement.
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IN WITNESS OF THE FOREGOING, the Bank has caused this Agreement to be
executed and its seal to be affixed hereunto by a duly authorized officer, and
Executive has signed this Agreement, all as of the 18th day of September, 1997.
ATTEST: FIRST NATIONAL BANK OF PORT ORCHARD
/s/ BY: /s/
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BANK SEAL:
WITNESS: EXECUTIVE
/s/ /s/
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Xxxxx X. Xxxxxxxxx
STATE OF WASHINGTON )
) ss.
COUNTY OF_________________ )
On this _____ day of ________________, 1997, before me personally
appeared XXXXX X. XXXXXXXXX, to me known to be the individual that executed the
foregoing Employment Agreement, and acknowledged the Employment Agreement to be
his free and voluntary act for the uses and purposes therein mentioned, and on
oath stated that he was authorized to execute the Employment Agreement.
In witness whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
________________________________________
Signature
________________________________________
Please print name clearly
NOTARY PUBLIC in and for the State of
Washington residing at_________________.
My commission expires on ______________.
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STATE OF WASHINGTON )
) ss.
COUNTY OF_________________ )
On this _____ day of ________________, 1997, before me personally
appeared ____________________, the _________________ of FIRST NATIONAL BANK OF
PORT ORCHARD, a national banking association, and such person on oath stated
that he or she was authorized to execute the foregoing Employment Agreement,
and acknowledged the Employment Agreement to be the free and voluntary act of
such party for the uses and purposes therein mentioned.
In witness whereof I have hereunto set my hand and affixed my official
seal the day and year first above written.
________________________________________
Signature
________________________________________
Please print name clearly
NOTARY PUBLIC in and for the State of
Washington residing at_________________.
My commission expires on ______________.
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EXHIBIT A
RESPONSIBILITIES AND DUTIES OF XXXXX X. XXXXXXXXX
During the Term of Employment, Executive shall have the following
responsibilities and duties with respect to that portion of Kitsap County now
served by First National Bank of Port Orchard:
I. ORGANIZATION AND PLANNING
1. Establishing current and long-range objectives, strategic
plans and policies.
2. Providing leadership and broad direction and guidance to
ensure profitability, fair treatment and development of
employees, and effective community relations.
3. Facilitating significant loan and deposit growth.
4. Providing overall management.
II. LENDING
Monitoring of and overall responsibility for credit quality.
III. PERSONNEL
Managing all personnel functions.
IV. PUBLIC RELATIONS
Attending civic and fraternal functions.
V. MARKETING
Working with InterWest Marketing Director to produce advertising
products
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