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EXHIBIT 99.1
AGREEMENT, dated as of
June 1, 2004, by and between Zions Bancorporation (“ZIONS”), and Xxxxxx
X. Xxxxxx (“EMPLOYEE”).
IN
CONSIDERATION OF the mutual covenants herein contained, and other good and valuable
consideration, the parties hereto agree as follows:
1.
Employment.
Zions
hereby agrees to employ Employee, and Employee agrees to serve as an employee of Zions
during the Period of Employment, as defined in Section 2, as Executive Vice President
of Zions with corporate responsibility for a private client wealth management business to
be developed by Employee through Xxxxxx Holdings, Inc. (“Xxxxxx”), an
indirectly held subsidiary of Zions, reporting to the Chief Executive Officer of Zions
(“Chief Executive Officer”) with the duties and responsibilities
attendant to such position.
2.
Period of Employment.
The
“Period of Employment” shall be the period commencing on September 1,
2003 (the “Effective Date”) and ending on the second anniversary of the
Effective Date (the “Initial Employment Period”). Commencing upon the
conclusion of the Initial Employment Period and on each anniversary of the Effective Date
thereafter, the Period of Employment shall be automatically extended for one year terms
unless written notice of the intention not to extend the Period of Employment is provided
by either party not later than 60 days prior to the conclusion of the Initial Employment
Period or any extension thereof (a “Non-Renewal Notice”).
3.
Duties During the Period of Employment.
During
the Period of Employment, Employee shall devote substantially all of his business time and
attention to the affairs of Zions and its subsidiary companies and use his best efforts to
perform such responsibilities, provided, however, that Employee may engage in other
activities, such as activities involving professional, charitable, educational, religious
and similar types of organizations, speaking engagements, membership on the board of
directors of other organizations (as Zions may from time to time agree to), and personal
investments and similar type activities to the extent that such other activities do not
inhibit or prohibit the performance of Employee’s duties under this Agreement or
conflict in any material way with the business of Zions and its subsidiaries.
4.
Compensation.
(a)
Signing Bonus.
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On
November 3, 2003, Zions paid Employee a one-time signing bonus in the amount of $233,000.
(b) Annual Base Salary.
Zions
will pay (or cause to be paid) to Employee during the Period of Employment an annual base
salary (“Annual Base Salary”) payable in bi-weekly installments during
each fiscal year, or portion thereof. The initial Annual Base Salary shall be $325,000 per
annum, which shall be increased by not less than 10% of the previous year’s Annual
Base Salary in each of fiscal years 2004, 2005 and 2006 and by not less than 6% of the
previous year’s Annual Base Salary in fiscal year 2007. Such adjustments shall be
made during the first quarter of each respective fiscal year, retroactive to the first pay
period in such fiscal year. Any increases to Annual Base Salary after fiscal year 2007
shall be determined in Zions’ sole discretion. The term Annual Base Salary as used in
this Agreement shall refer to Annual Base Salary as so increased.
(c) Discretionary Bonus.
During
the Period of Employment, Employee shall be considered annually by the Executive
Compensation Committee of the Board of Directors of Zions (“Board of
Directors”) for a discretionary bonus payment made in accordance with the
compensation policies of Zions as in effect from time to time. The “target”
bonus amount to be presented to the Executive Compensation Committee for Employee shall be
60% of Annual Base Salary (“Target Bonus”).
(d)
Xxxxxx Stock.
Zions
and Employee acknowledge and agree that Section 10.5 of the Stock Purchase and Shareholder
Agreement, dated as of June 1, 2004, by and among Welman, Zions, Zions First National Bank
(“ZFNB”), PCS Wealth Management LLC and Employee (“Stock Purchase
Agreement”) provides certain rights to ZFNB with respect to Employee’s
Proportionate Interest (as defined in the Stock Purchase Agreement) upon a “Change in
Control” (as defined in the Stock Purchase Agreement) and Employee’s termination
of employment.
5.
Other Employee Benefits.
(a)
Vacation and Sick
Leave.
Employee
shall be entitled to paid annual vacation periods and to sick leave in accordance with the
policies of Zions as in effect from time to time.
(b)
Key Employee Incentive Stock Option Plan.
Employee
shall be entitled to receive stock options under the Key Employee Incentive Stock Option
Plan of Zions, as in effect from time to time, in such amounts and upon such terms as may
be prescribed by the Executive Compensation Committee of the Board of Directors, in the
sole discretion of the Committee.
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(c)
Employee Benefit Plans or Arrangements.
During
the Period of Employment, except as otherwise expressly provided herein, Employee shall be
entitled to participate in all employee benefit plans of Zions, as in effect from time to
time, under such terms as may be applicable to officers of Employee’s rank employed
by Zions or its subsidiaries, including, without limitation, plans providing retirement
benefits, medical insurance, life insurance, disability insurance, and accidental death or
dismemberment insurance. Employee shall not be eligible to participate in the Zions Senior
Management Value Sharing Plans.
(d) Expenses.
Employee
shall be reimbursed for reasonable travel and other expenses incurred or paid by Employee
in connection with the performance of his services under this Agreement, upon presentation
of expense statements or vouchers or such other supporting information as may from time to
time be requested and in accordance with policies of Zions as in effect from time to time.
(e)
Change in Control
Agreement.
Employee
shall be provided with a Change in Control Agreement (“Change in Control
Agreement”), in a form substantially comparable to that provided to other
executive officers of Zions. In the event a Change in Control (as defined in the Change in
Control Agreement) occurs during the Period of Employment, the terms and provisions of the
Change in Control Agreement shall expressly supercede the terms and provisions of this
Agreement as of the effective date of such Change in Control.
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| 6. |
Termination of Employment. |
| (a)
Termination by Zions Other Than for Just Cause. |
| (i) |
If Zions terminates Employee’s employment during the Initial Employment
Period for other than Just Cause (as herein defined), Zions shall have no
further obligations to Employee under this Agreement other than to cause to be
paid to Employee forthwith an amount equal to the sum of (a) the product of (i)
Annual Base Salary and (ii) the fraction, the numerator of which is the number
of months (and fractions thereof) then remaining in the Initial Employment
Period plus twelve months and the denominator of which is twelve, and (b) the
product of (i) the Target Bonus and (ii) the fraction, the numerator of which is
the number of months (and fractions thereof) then remaining in the Initial
Employment Period plus twelve months and the denominator of which is twelve
(this sum, the “Initial Employment Period Severance Payment”). |
| (ii) |
If Zions terminates Employee’s employment after the Initial Employment
Period for other than Just Cause, Zions shall have no further obligations to
Employee under this Agreement other than to cause to be paid to Employee
forthwith an amount equal to the sum of (a) the product of (i) Annual Base
Salary and (ii) the fraction, the numerator of which is the greater of (x) six
and (y) the number of months (and fractions thereof) then remaining in the
Period of Employment and the denominator of which is twelve, and (b) the Target
Bonus (this sum, the “Employment Period Severance Payment”). |
| (iii) |
For purposes of this Agreement, “Just Cause” shall mean (i) the
continual failure by Employee to perform substantially his duties with Zions
(other than any such failure resulting from incapacity due to physical or mental
illness) after a written demand for substantial performance is delivered to
Employee by the Chief Executive Officer; (ii) a conviction of a felony or
nolo contendere plea by Employee with respect thereto; (iii) habitual
drunkenness; (iv) excessive absenteeism not related to illness, sick leave or
vacations, but only after written notice from the Chief Executive Officer
followed by a repetition of such excessive absenteeism; (v) dishonesty; (vi)
continuous violations of Zions’ Code of Ethics and Business Conduct after
written notification from the Chief Executive Officer or (vii) material breach
of Section 7 after written notice from the Chief Executive Officer. In each
instance in which Employee is entitled to written notice of conduct allegedly
constituting Just Cause, he shall have 60 days thereafter to cure such
deficiency. If the Chief Executive Officer does not deliver to Employee such
written notice, or in an instance in which no written notice is required, take
action, within 90 days after the Chief Executive Officer has knowledge of an
event constituting Just Cause for termination, the event will no longer
constitute Just Cause. Notwithstanding the foregoing, Employee shall not be
deemed to have been terminated for Just Cause unless and until there shall have
been delivered to him a copy of a resolution duly adopted by the affirmative
vote of not less than a majority of the entire membership of the Board of
Directors at a meeting of the Board of Directors called and held (after
reasonable notice to Employee and an opportunity for Employee, together with
Employee’s counsel, to be heard before the Board of Directors) for the
purpose of determining whether in the good faith opinion of the Board of
Directors Zions has Just Cause to terminate Employee’s employment. |
| (b)
Termination by Employee for Material Breach by Zions. |
| (i) |
If Employee terminates his employment during the Initial Employment Period for
Material Breach by Zions (as herein defined), Zions shall have no further
obligations to Employee under this Agreement other than to cause the Initial
Employment Period Severance Payment to be paid to Employee forthwith. |
| (ii) |
If Employee terminates his employment after the Initial Employment Period for
Material Breach by Zions, Zions shall have no further obligations to Employee
under this Agreement other than to cause the Employment Period Severance Payment
to be paid to Employee forthwith. |
| (iii) |
For purposes of this Agreement, “Material Breach by Zions”
shall mean, in the absence of a written consent of Employee, (i) the substantive
failure of ZFNB to fulfill its obligations under Section 9.3 of the Stock
Purchase Agreement with respect to the Guaranteed Investment (as defined in the
Stock Purchase Agreement); (ii) a material reduction in the scope or nature of
the responsibilities of Employee as contemplated by Section 1; (iii) a transfer
of the overall management of Zions’ private client wealth management
business to another individual; or (iv) Zions giving Employee a Non-Renewal
Notice. A Material Breach by Zions shall not be deemed to have occurred unless
and until there shall have been delivered to the Chief Executive Officer a
written notice explaining the basis for such breach, and Zions shall have had 60
days thereafter to cure any such alleged breach. If Employee does not deliver to
Zions such written notice within 90 days after Employee has knowledge of an
event constituting a Material Breach by Zions, the event will no longer
constitute a Material Breach by Zions. Notwithstanding the foregoing, placing
Employee on a paid leave for up to 90 days, pending determination of whether
there is a basis to terminate Employee for Just Cause, shall not constitute a
Material Breach by Zions; provided, further, that if Employee is subsequently
terminated for Just Cause, then Employee shall repay any amounts paid by the
Zions to Employee during such leave period. |
| (c) |
Termination by Zions for Just Cause, by Employee Other Than for Material
Breach by Zions, or at the End of the Period of Employment. |
If
Zions terminates Employee’s employment for Just Cause or Employee terminates his
employment other than for Material Breach by Zions (or if Employee gives Zions a
Non-Renewal Notice and Employee is still employed by Zions on the last day of the Period
of Employment), Employee will be entitled to be paid Annual Base Salary through the end of
the month in which the date of termination occurs.
(d) Death or Disability
If,
during the Period of Employment, Employee’s employment terminates on account of
Employee’s death or any disability which Zions determines renders Employee
permanently unable to perform his duties under this Agreement, Zions shall have no further
obligations to Employee under this Agreement other than to pay Employee or his estate
forthwith the sum of (a) the product of (i) Annual Base Salary and (ii) the fraction, the
numerator of which is the number of months (and fractions thereof) then remaining in the
Period of Employment and the denominator of which is twelve, and (b) the product of (i)
Target Bonus and (ii) the fraction, the numerator of which is the number of months (and
fractions thereof) then remaining in the Period of Employment and the denominator of which
is twelve.
(e) Notice of Termination
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Any
termination by Zions or by Employee shall be communicated by Notice of Termination to the
other party hereto given in accordance with Section 12. For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed to provide
basis for termination of Employee’s employment under the provision so indicated and
(iii) if the date of termination is other than the date of receipt of such notice,
specifies the date of termination.
(f) Condition.
Zions
shall not be required to make the payments and provide the benefits specified in this
Section 6 unless Employee executes and delivers to Zions an agreement releasing Zions, its
affiliates and its officers, directors and employees from all liability (other than the
payments and benefits under this Agreement) substantially in the form attached as Exhibit
A and such agreement has become effective and irrevocable.
7.
Noncompetition; Non-Disclosure
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| (a) |
Employee hereby agrees that (x) during the Period of Employment and (y) for a
two year period after the Period of Employment is terminated for any of the
reasons described in Section 6(c) hereof or for a six month period after the
Period of Employment is terminated pursuant to Section 6(a) or Section 6(b)
hereof, Employee will not (i) engage in the private client wealth
management business other than on behalf of Zions or its affiliates within the
Designated Area (as hereinafter defined), (ii) directly or indirectly own,
manage, operate, control, be employed by, or provide management or consulting
services in any capacity to any firm, corporation, or other entity (other than
Zions or its affiliates) engaged in the private client wealth management
business in the Designated Area, or (iii) directly or indirectly Solicit
any employee, officer, or member of the Board of Directors or any of its
affiliates to engage in any action prohibited under (i) or (ii) of this
Section 7(a); provided that the ownership by Employee as an investor of not more
than five percent of the outstanding shares of stock of any corporation whose
stock is listed for trading on any securities exchange or is quoted on The
Nasdaq Stock Market, or the shares of any investment company as defined in
section 3 of the Investment Company Act of 1940, as amended, shall not in
itself constitute a violation of Employee’s obligations under this
Section 7(a).
As
used herein, “Designated Area” shall mean any market within 50 miles of
any private client wealth management office which Employee has, during the course of his
employment with Zions, managed, either directly or indirectly and
“Solicit” means any direct or indirect communication of any kind,
regardless of who initiates it, that in any way invites, advises, encourages or requests
any person to take or refrain from taking any action. |
| (b) |
Employee hereby acknowledges that, as an employee of Zions, he will be making
use of, acquiring and adding to confidential information of a special and unique
nature and value relating to Zions and its strategic plan and financial
operations. Employee further recognizes and acknowledges that all confidential
information is the exclusive property of Zions, is material and confidential,
and is critical to the successful conduct of the business of Zions. Accordingly,
Employee shall not, at any time during or following the Period of Employment,
disclose, use, transfer or sell, except in the course of employment with Zions,
any confidential information or proprietary data of Zions and its affiliates so
long as such information or proprietary data remains confidential and has not
been disclosed or is not otherwise in the public domain, except as required by
law or pursuant to legal process. |
| (c) |
The parties acknowledge that this Agreement would not have been entered into and
the benefits described in Section 4, 5 or 6 would not have been promised in the
absence of Employee’s promises under this Section 7. Employee acknowledges
and agrees that irreparable injury will result to Zions in the event of a breach
of any of the provisions of this Section 7 (the “Designated
Provisions”) and that Zions will have no adequate remedy at law with
respect thereto. Accordingly, in the event of a material breach of any
Designated Provision, and in addition to any other legal or equitable remedy
Zions may have, Zions shall be entitled to the entry of a preliminary and
permanent injunction (including, without limitation, specific performance) by a
court of competent jurisdiction in the state of Utah to restrain the violation
or breach thereof by Employee or any affiliates, agents, or any other persons
acting for or with Employee in any capacity whatsoever, and Employee submits to
the jurisdiction of such court in any such action. |
| (d) |
Any termination of Employee’s employment or of this Agreement (or breach of
this Agreement by Employee or Zions) shall have no effect on the continuing
operation of this Section 7 except as described in Section 7(a). |
| (e) |
It is the desire and intent of the parties that the provisions of this
Section 7 shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of this Section 7 shall be
adjudicated to be invalid or unenforceable, such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such deletion to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made. In
addition, should any court determine that the provisions of this Section 7 shall
be unenforceable with respect to scope, duration, or geographic area, such court
shall be empowered to substitute, to the extent enforceable, provisions similar
hereto or other provisions so as to provide to Zions, to the fullest extent
permitted by applicable law, the benefits intended by this Section 7. |
| (f) |
In the event that Employee breaches Section 7(a) or 7(b), Zions’ obligation
to make or provide payments or benefits under Section 6 shall cease. |
In
light of the unusual abilities and experience of Employee, Zions in its discretion may
apply for and procure as owner and for its own benefit insurance on the life of Employee,
in such amount and in such form as Zions may choose. Zions shall make all payments for
such insurance and shall receive all benefits from it. Employee shall have no interest
whatsoever in any such policy or policies but, at the request of Zions shall submit to
medical examinations and supply such information and execute such documents as may
reasonably be required by the insurance company or companies to which Zions has applied
for insurance.
| 9. |
Representations and Warranties. |
| (a) |
Employee represents and warrants to Zions that his execution, delivery, and
performance of this Agreement will not result in or constitute a breach of or
conflict with any term, covenant, condition, or provision of any commitment,
contract, or other agreement or instrument, including, without limitation, any
other employment agreement, to which Employee is or has been a party. |
| (b) |
Employee shall indemnify, defend, and hold harmless Zions for, from and against
any and all losses, claims, suits, damages, expenses, or liabilities, including
court costs and counsel fees, Zions has incurred or to which Zions may become
subject, insofar as such losses, claims, suits, damages, expenses, liabilities,
costs, or fees arise out of or are based upon any failure of any representation
or warranty of Employee in Section 9(a) hereof to be true and correct when
made. |
At
all times during the Period of Employment, Zions’ Articles of Incorporation and
Bylaws shall provide for the indemnification of Employee against any costs or expenses
(including reasonable attorneys’ fees), judgments, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, relating to
Employee’s actions as a director and/or officer of Zions, and to the advancement of
expenses as incurred in connection therewith, to the fullest extent permissible under Utah
law and the Federal Deposit Insurance Act.
| (a) |
This Agreement is governed by and is to be construed and enforced in accordance
with the laws of the State of Utah. If under such law, any portion of this
Agreement is at any time deemed to be in conflict with any applicable statute,
rule, regulation or ordinance, such portion shall be deemed to be modified or
altered to conform thereto or, if that is not possible, to be omitted from this
Agreement; the invalidity of any such portion shall not affect the force, effect
and validity of the remaining portion hereof. |
| (b) |
Subject to the right of each party to seek specific performance (which right
shall not be subject to arbitration), if a dispute arises out of or relates to
this Agreement, or the breach thereof, Employee’s employment or the
termination of his employment, such dispute shall be referred to arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”). A dispute subject to the provisions of
this Section will exist if either party notifies the other party in writing that
a dispute subject to arbitration exists and states, with reasonable specificity,
the issue subject to arbitration (the “Arbitration Notice”).
The parties agree that, after the issuance of the Arbitration Notice, the
parties will try in good faith to resolve the dispute by mediation in accordance
with the Commercial Rules of Arbitration of AAA between the date of the issuance
of the Arbitration Notice and the date the dispute is set for arbitration. If
the dispute is not settled by the date set for arbitration, then any controversy
or claim arising out of this Agreement or the breach hereof shall be resolved by
binding arbitration and judgment upon any award rendered by arbitrator(s) may be
entered in a court having jurisdiction. Any person serving as a mediator or
arbitrator must have at least ten years’ experience in resolving commercial
disputes through arbitration. In the event any claim or dispute involves an
amount in excess of $2,000,000, either party may request that the matter be
heard by a panel of three arbitrators; otherwise all matters subject to
arbitration shall be heard and resolved by a single arbitrator. The arbitrator
shall have the same power to compel the attendance of witnesses and to order the
production of documents or other materials and to enforce discovery as could be
exercised by a United States District Court judge sitting in the state of Utah.
In the event of any arbitration, each party shall have a reasonable right to
conduct discovery to the same extent permitted by the Federal Rules of Civil
Procedure, provided that such discovery shall be concluded within ninety days
after the date the matter is set for arbitration. Any provision in this
Agreement to the contrary notwithstanding, this section shall be governed by the
Federal Arbitration Act and the parties have entered into this Agreement
pursuant to such Act. |
All
notices and other communications under this Agreement shall be in writing and shall be
deemed effective when delivered in person, or forty-eight (48) hours after deposit thereof
in the U.S. mails, postage prepaid, for delivery as registered or certified mail,
addressed, as follows:
If
to Employee, at Employee’s primary residential address as shown on the records of
Zions.
If
to Zions, to:
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Xxxxxx
X. Xxxxxxx, CEO
Zions Bancorporation |
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1 So. Xxxx Xx.
Xxxx Xxxx Xxxx, XX 00000
Fax: 000-000-0000 |
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or to such other address as either
party shall have furnished to the other in writing in accordance herewith. In lieu of
personal notice or notice by deposit in the U.S. mail, a party may give notice by
confirmed fax (with telephone confirmation of receipt).
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| (a) |
This
Agreement constitutes the entire understanding between Zions and Employee
relating to employment of Employee by Zions and supersedes and cancels all prior
written and oral agreements and understandings with respect to the subject
matter of this Agreement (and Employee shall not be eligible for severance
benefits under any plan, program or policy of Zions other than those benefits
provided in the Change in Control Agreement). This Agreement may be amended or
modified but only by a subsequent written agreement of the parties. This
Agreement shall be binding upon and shall inure to the benefit of Employee,
Employee’s heirs, executors, administrators and beneficiaries, and Zions
and its successors. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. |
| (b) |
All amounts payable to Employee under this Agreement shall be subject to
applicable withholding of income, wage and other taxes. Zions may withhold from
any amounts payable under this Agreement such Federal, state and local taxes as
shall be required to be withheld pursuant to any applicable law or regulation. |
| (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) |
Zions’ or Employee’s failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right Employee or Zions
may have hereunder shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement, except as set forth
specifically in Sections 6(a)(iii) and 6(b)(iii) of this Agreement. |
| (e) |
Any reference to a Section herein is a reference to a section of this Agreement
unless otherwise noted. |
| (f) |
This Agreement may be executed in counterparts, each of which shall be deemed to
be an original and all of which together shall constitute one and the same
instrument. |
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the year and day
first above written.
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ZIONS BANCORPORATION
BY: _________________________________
Name: Xxxxxx X. Xxxxxxx
Title:
Chairman, President and
Chief Executive Officer |
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BY: _________________________________
Name: Xxxxxx X. Xxxxxx |
EXHIBIT A
(Form of Release)
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