Exhibit 10.15.3
COMMUNITY FIRST BANKSHARES, INC.
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is entered into effective as of
December 1, 1998, by and between Community First Bankshares, Inc. a bank
holding company organized under the laws of the state of Delaware ("CFB") and
_____________, residing in Fargo, ND ("Executive").
WHEREAS, CFB considers the establishment and maintenance of a sound and
vital management to be essential to protecting and enhancing the best
interests of CFB and its shareholders; and
WHEREAS, the Executive has made and is expected to make, due to
Executive's intimate knowledge of the business and affairs of CFB, its
policies, methods, personnel, and problems, a significant contribution to the
profitability, growth, and financial strength of CFB; and
WHEREAS, CFB, as a publicly held corporation, recognizes that the
possibility of a Change in Control may exist, and that such possibility and
the uncertainty and questions which it may raise among management may result
in the departure or distraction of the Executive in the performance of the
Executive's duties, to the detriment of CFB and its shareholders; and
WHEREAS, it is in the best interests of CFB and its stockholders to
reinforce and encourage the continued attention and dedication of management
personnel, including Executive, to their assigned duties without distraction
and to ensure the continued availability to CFB of the Executive in the event
of a Change in Control; and
WHEREAS, CFB desires to assure Executive of certain benefits in the
event of Executive's severance from employment with CFB without Cause
following a Change in Control;
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and promises stated below, and for other valuable
consideration, the receipt and adequacy of which are hereby acknowledged, CFB
and Executive agree as follows:
1. EMPLOYMENT. To be eligible to receive benefits under this
Agreement, (a) Executive must maintain employment with CFB until after a
Change in Control and (b) a Severance of Executive's employment shall
have occurred during the Term of this Agreement and after a Change in
Control. Prior to a Change in Control, Executive shall have no right to
benefits under this Agreement.
For purposes of this Agreement, Severance shall mean either the
involuntary termination of Executive's employment with CFB without Cause
or Executive's voluntary termination of employment with CFB resignation
for Good Reason; where Cause has the definition set forth in Section
7(c)(ii) and Good Reason has the definition set forth in Section
7(a)(ii).
2. TERM OF AGREEMENT. Subject to the provisions for earlier
termination provided in this Agreement, the Term of this Agreement shall
commence on the effective date of this Agreement as stated above and
shall continue through December 31, 2001, and shall be extended for
successive one-year periods thereafter unless the Board of Directors of
CFB ("Board") shall have given written notice
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to Executive not later than September 30 of the last year of the original
or extended Term of this Agreement of CFB's election to discontinue the
Term of this Agreement; provided, however, that if a Change in Control
shall have occurred during the original or extended Term of this
Agreement, the Term of this Agreement shall continue, irrespective of any
action of the Board of CFB, for a period of not less than 24 months beyond
the month in which such Change in Control occurred. In the event that
more than one Change in Control shall occur during the original or
extended Term of this Agreement, the 24-month period shall follow the last
Change in Control. The Term of this Agreement shall expire and this
Agreement shall neither impose nor confer any further rights or
obligations on CFB or Executive on the day after the end of the Term of
this Agreement. Expiration of the Term of this Agreement of itself and
without subsequent action by CFB or Executive shall not end the employment
relationship between CFB and Executive.
On or before the expiration of the Term of this Agreement, this Agreement
shall terminate due to the resignation of Executive as set forth in
Section 7(a), death of Executive as set forth in Section 7(b), discharge
of Executive as set forth in Section 7(c) or disability of Executive as
set forth in Section 7(d); provided that any rights or obligations which
expressly or impliedly survive termination of this Agreement shall
continue to be binding and enforceable by CFB and Executive.
3. EXECUTIVE'S DUTIES. During the Term of this Agreement, Executive
shall serve as [title] or such successor position as Executive voluntarily
accepts, with such customary duties and responsibilities as may be
assigned from time to time to Executive by CFB, provided that such
duties and responsibilities are at all times consistent with the duties
and responsibilities of such position. Executive shall devote exclusive
attention and time during normal business hours to the business and
affairs of CFB and, to the extent necessary to discharge the duties and
responsibilities of Executive's position, shall perform faithfully and
efficiently to the best of Executive's abilities such duties and
responsibilities.
4. BASE COMPENSATION. For services rendered by Executive, CFB shall
pay to Executive Base Compensation of [$ ] per annum
payable in accordance with CFB's customary payroll practice for its
management personnel. Base Compensation shall be reviewed at least
annually as of the close of each fiscal year of CFB and may be increased
to reflect inflation or such other adjustments as CFB may deem
appropriate, but original Base Compensation or Base Compensation as
subsequently increased shall not be decreased thereafter, except for
across-the-board percentage salary reductions similarly affecting all
management personnel of CFB.
5. ADDITIONAL BENEFITS. In addition to Base Compensation, Executive
shall be entitled to receive all fringe benefits customarily offered by
CFB to its executives including, without limitation, participation in
CFB's Annual Incentive Compensation Plan at the participation level
established by CFB for Executive as of the date of this Agreement, other
incentive plans and perquisites offered generally to key employees, the
various employee benefit plans or programs provided to the employees of
CFB in general subject to the eligibility requirements with respect to
each of such benefit plans or programs, and such other benefits or
perquisites as may be approved by the Board during the Term of this
Agreement. Nothing in this Section 5 shall prohibit CFB from making any
changes in any of the plans, programs or benefits described in this
Section 5, provided the change similarly affects all management
personnel of CFB.
6. CHANGE IN CONTROL.
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(a) For purposes of this Agreement, "Change in Control" shall mean
the occurrence of one of the following events:
(i) any "person" [as such term is used in Section 13(d) and
4(d) of the Securities Exchange Act of 1934, as amended
("Exchange Act")], other than a trustee or other fiduciary
holding securities under an employee benefit plan of CFB is
or becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly of
securities representing 25% or more of the combined voting
power of CFB's then outstanding securities;
(ii) during any period of two consecutive years (not including any
period ending prior to the effective date of this Agreement),
individuals who at the beginning of such period constitute the
Board of Directors of CFB, and any new director [other than a
director designated by a person who has entered into agreement
with CFB to effect a transaction permitted by Section 6(a)(I),
(iii) or (iv)] whose election by the Board of Directors of CFB
or nomination for election by CFB's stockholders was approved by
vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period
or whose election or nomination for election was previously so
approved ("Continuing Directors"), cease for any reason to
constitute at least a majority of the Board of Directors of CFB;
(iii) the stockholders of CFB approve a merger or consolidation of
CFB with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of
CFB outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the merged or consolidated
entity) 50% or more of the combined voting power of the voting
securities of CFB or such merged or consolidated entity
outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a
recapitalization of CFB or similar transaction in which no
"person" acquires more than 25% of the combined voting power
of CFB's then outstanding securities;
(iv) the stockholders of CFB approve a plan of complete liquidation
or a sale or disposition by CFB of all or substantially all of
CFB's assets. "The sale or disposition by CFB of all or
substantially all of CFB's assets" shall mean a sale or other
disposition transaction or series of related transactions
involving assets of CFB or of any direct or indirect
subsidiary of CFB (including the stock of any direct or
indirect subsidiary of CFB) in which the value of the assets
or stock being sold or otherwise disposed of (as measured by
the purchase price being paid therefor or by such other method
as the Board of Directors of CFB determines is appropriate in
a case where there is no readily ascertainable purchase price)
constitutes more than 50% of the fair market value of CFB. For
purposes of the preceding sentence, the "fair market value of
CFB" shall be the aggregate market value of CFB's outstanding
common stock (on a fully diluted basis) plus the aggregate
market value of CFB's other outstanding equity securities. The
aggregate market value of CFB's common stock shall be
determined by multiplying the number of shares of
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CFB common stock (on a fully diluted basis) outstanding on the
date of the execution and delivery of a definitive agreement
("Transaction Date") with respect to the sale or disposition
by CFB of all or substantially all of CFB's assets by the
average closing price for CFB's common stock for the ten
trading days immediately preceding the Transaction Date. The
aggregate market value of any other equity securities of CFB
shall be determined in a manner similar to that prescribed in
the immediately preceding sentence for determining the
aggregate market value of CFB's common stock or by such other
method as the Board of Directors of CFB shall determine is
appropriate; and
(v) the Board of Directors of CFB determines, by a vote of a
majority of its entire membership, that a tender offer
statement by any person (as defined above) indicates an
intention on the part of such person to acquire control of CFB.
(b) In the event of a Change in Control, any options granted to Executive
that are not vested on the date of a Change in Control shall be
immediately fully (100%) vested and shall be exercisable in
accordance with their respective terms and conditions.
7. TERMINATION. This Agreement may be terminated prior to the end of the
Term of this Agreement subject to the provisions of this Section 7.
(a) RESIGNATION.
(i) Executive may resign, including by reason of retirement, at any
time and thereby terminate this Agreement. In the event of
such resignation, except in the case of resignation for Good
Reason following a Change in Control, all rights and
obligations of CFB and Executive under this Agreement shall
cease on the date of resignation.
(ii) If Executive resigns for Good Reason following a Change in
Control, Executive shall be entitled to the compensation and
benefits provided in Section 7(c)(I). "Good Reason" shall mean
(A) the material breach of any of CFB's obligations under this
Agreement without Executive's written consent or (B) the
occurrence of any of the following circumstances without
Executive's express written consent unless such circumstances
are fully corrected prior to the Date of Termination specified
in Executive's Notice of Termination:
(1) the assignment to Executive of any duties and
responsibilities inconsistent with the position that
Executive held immediately prior to the Change in Control,
relocation of the Executive to an office or site more than
50 miles from the Executive's job location prior to the
Change in Control, or a significant adverse alteration in
the nature or status of Executive's duties and
responsibilities or the conditions of Executive's
employment from those in effect immediately prior to the
Change in Control;
(2) a reduction by CFB in Executive's Base Compensation;
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(3) the failure by CFB to pay to Executive any portion of
Executive's current compensation or any portion of an
installment of deferred compensation under any deferred
compensation program of CFB within seven days of the
date such compensation is due;
(4) the failure by CFB to continue in effect any
compensation plan in which Executive participated
immediately prior to a Change in Control if that
compensation plan is material to Executive's total
compensation unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by CFB
to continue Executive's participation in such
compensation plan (or in such substitute or alternative
plan) on a basis at least as favorable, both in terms
of the amount of benefits provided and the level of
Executive's participation relative to other
participants, as existed prior to the Change in
Control;
(5) the failure by CFB to continue to provide Executive
with benefits substantially similar to those enjoyed
by Executive under any of CFB's pension, savings, life
insurance, medical, health, accident, or disability
plans in which Executive was participating at the time
of the Change in Control, the taking of any action by
CFB which would materially reduce, directly or
indirectly, any of such benefits or deprive Executive
of any material fringe benefit or policy or program for
the benefit of the management personnel of CFB enjoyed
by Executive at the time of the Change in Control;
(6) the failure by CFB to provide Executive with the number
of paid vacation days to which Executive is entitled in
accordance with CFB's normal vacation policy in effect
at the time of the Change in Control;
(7) the failure of CFB to obtain a satisfactory agreement
from any successor to assume and agree to perform this
Agreement, as contemplated in Section 12; or
(8) any purported termination of Executive's employment
that is not effected pursuant to a Notice of
Termination satisfying the requirements of
Section 7(e).
(iii) Executive's rights to resign pursuant to this Section 7(a) shall
not be affected by incapacity due to physical or mental illness.
Executive's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstances
constituting Good Reason.
(b) DEATH. Upon Executive's death, this Agreement shall terminate
and CFB shall have no obligations to Executive or Executive's legal
representatives with respect to this Agreement. Executive's death
prior to the Date of Termination stated in any Notice of Termination
given by CFB or Executive shall invalidate and supersede the Notice of
Termination.
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Termination of this Agreement shall not affect any of the death
benefits payable to Executive's dependents, survivors or beneficiaries
under any plan or program under which Executive was covered at the
time of death.
(c) DISCHARGE.
(i) CFB may terminate, without any liability to Executive under this
Agreement, this Agreement and Executive's employment by
discharging Executive for any reason deemed sufficient by CFB if
the Date of Termination associated with such discharge occurs
prior to a Change in Control. In the event that this Agreement
and Executive's employment are terminated by discharge during the
Term of this Agreement following a Change in Control by CFB for
any reason other than Cause [as defined in Section 7(c)(ii)]
or Disability [as defined in Section 7(d)(I)], then, subject
to Sections 7(c)(iii), 7(g) and 7(h):
(A) CFB shall pay to Executive, within 15 days of the Date of
Termination, an amount in cash equal to two (2) times the
sum of:
(1) the higher of (a) the Executive's annual Base
Compensation as in effect immediately prior to the
Notice of Termination, or (b) Executive's highest
annual Base Compensation over the 24-month period
preceding the Notice of Termination; and
(2) the maximum annual incentive award payable Executive
(without giving any effect to any reduction that would
constitute Good Reason under Section 7(a)(ii)(4) of
this Agreement) under CFB's Annual Incentive
Compensation Plan (or any substitute or alternative
plan) for such year in lieu of any other payment
thereunder; and
(3) the average percentage of employer matching
contributions to the CFB Retirement Savings Plan and
Trust (as a percent of Compensation as defined in the
Plan) and employer contributions to the CFB Employee
Stock Ownership Plan and Trust on behalf of Executive
for the three most recent Plan Years ending immediately
prior to the Date of Termination.
(B) for the 24-month period after Date of Termination, CFB, at
its cost, shall provide or arrange to provide Executive and
Executive's dependents with life, disability, accident and
group health insurance benefits substantially similar to
those which Executive and Executive's dependents were
receiving immediately prior to the Notice of Termination;
benefits otherwise receivable by Executive pursuant to this
Section 7(c)(I)(B) shall be reduced to the extent comparable
benefits are actually received by Executive and Executive's
dependents during the 24-month period following Executive's
Date of Termination from another employer or employer's plan
or program, and any such benefits actually received by
Executive and Executive's dependents shall be reported to
CFB;
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(C) in lieu of shares of restricted stock granted to Executive
by CFB upon which the restricted period does not lapse upon
Date of Termination, CFB shall pay to Executive within 30
days of the Date of Termination a lump-sum cash payment
equal to the greater of (1) the highest quoted per share
sales price for common shares on the New York Stock Exchange
during the ten-day period commencing on the Date of
Termination (or, if not listed on such exchange, on a
nationally recognized exchange or quotation system on which
trading volume of the common shares is highest), or (2) the
fixed or formula price for the acquisition of common shares
specified in an agreement in connection with any Change in
Control;
(D) in lieu of shares of common stock of CFB ("Common Shares")
issuable upon exercise of outstanding options ("Options"),
if any, granted to Executive under a CFB Option Plan (which
Options shall be canceled upon the making of the payment
referred to below), within 15 days of the Date of
Termination CFB shall pay to Executive a lump-sum amount in
cash equal to the product of:
(1) the excess of, in the case of an "incentive stock
option" [as defined in Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code")], the
closing price of common shares as reported on the New
York Stock Exchange on or nearest the Date of
Termination (or, if not listed on such exchange, on a
nationally recognized or quotation system on which
trading volume in the common shares is highest) and, in
the case of all other Options, the greater of (a) the
highest quoted per share sales price for common shares
on the New York Stock Exchange during the ten-day
period commencing on the Date of Termination (or, if
not listed on such exchange, on a nationally recognized
exchange or quotation system on which trading volume of
the common shares is highest), or (b) the fixed or
formula price for the acquisition of common shares
specified in an agreement in connection with any Change
in Control, over the per share option price of each
Option held by Executive (whether or not then fully
exercisable); and
(2) the number of common shares of CFB covered by each
such Option;
(E) for a period of 12 months following Date of Termination, CFB
shall pay the expenses for such outplacement services as
Executive may require, with such services to be performed by
an agency CFB shall designate;
(F) CFB shall pay to Executive all legal fees and expenses
incurred by Executive as a result of termination of
employment (including, but not limited to, all such fees and
expenses, if any, incurred in contesting or disputing any
such termination or in seeking to obtain or enforce any
right
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or benefit provided by this Agreement or in connection
with any tax audit or proceeding to the extent attributable
to the application of Section 4999 of the Code to any
payment or benefit provided hereunder); and
(G) in the event any additional or new incentive
compensation, deferred compensation or other type of bonus
program is instituted by CFB ("New Incentive Program"), the
maximum award payable to Executive under the New Incentive
Program for such year in lieu of any other payment
thereunder, assuming for purposes hereof that Executive had
been employed for all of such year, that all performance
objectives for such year had been met at the maximum levels
and that Executive had been entitled to a full award
thereunder.
(ii) None of the obligations imposed on CFB by Sections 7(c) (I)
(A) through (G) shall apply in the event Executive is
discharged for Cause, in which event this Agreement shall
terminate on the Date of Termination without further rights
or obligations on the part of Executive or CFB under this
Agreement. "Cause" shall mean: (A) the willful and
continued failure by Executive (other than any such failure
resulting from (1) Executive's incapacity due to physical
or mental illness, (2) any such actual or anticipated
failure after the issuance of a Notice of Termination by
Executive for Good Reason or (3) CFB's active or passive
obstruction of the performance of Executive's duties and
responsibilities) to perform substantially the duties and
responsibilities of Executive's position with CFB after a
written demand for substantial performance is delivered to
Executive by the Board, which demand specifically
identifies the manner in which the Board believes that
Executive has not substantially performed the duties or
responsibilities; (B) the conviction of Executive by a
court of competent jurisdiction for felony criminal
conduct; (C) the willful engaging by Executive in fraud or
dishonesty which is demonstrably and materially injurious
to CFB, monetarily or otherwise; No act, or failure to act,
on Executive's part shall be deemed "willful" unless
committed, or omitted by Executive in bad faith and without
reasonable belief that Executive's act or failure to act
was in the best interest of CFB. Executive shall not be
terminated for Cause unless and until CFB shall have
delivered to Executive a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters of
the entire membership of the Board at a meeting of the
Board called and held for such purpose (after reasonable
notice to Executive and an opportunity for Executive,
together with Executive's counsel, to be heard before the
Board), finding that, in the good faith opinion of the
Board, Executive's conduct was Cause and specifying the
particulars thereof in detail.
(d) DISABILITY. If, following a Change in Control, Executive shall have
been absent from the substantial performance of Executive's duties
and responsibilities with CFB for six consecutive months as a result
of Executive's incapacity due to physical or mental illness, as
determined by Executive's physician and within 30 days after written
notice to return is
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given by CFB, Executive shall not have returned to the substantial
performance of the duties and responsibilities, of Executive's
position, CFB may terminate this Agreement as of the end of the
30-day period, after which termination neither CFB nor the Executive
shall have rights or obligations under this Agreement and Executive
shall not be entitled to any compensation or benefits pursuant to
this Agreement. The termination of this Agreement shall not terminate
Executive's employment of itself and without further express action by
CFB or affect in any way Executive's rights or benefits under CFB Long
Term Disability Plan.
(e) NOTICE OF TERMINATION. Any purported termination of this Agreement by
CFB or by Executive shall be communicated by written Notice of
Termination to the other party in accordance with Section 10.
Notice of Termination shall mean a notice given not less than 30
days prior to the Date of Termination stated in the notice which
shall set forth in reasonable detail the basis for termination of this
Agreement by CFB, or, in the case of resignation by Executive for
Good Reason, the basis for such resignation. No purported
termination which is not affected pursuant to this Section 7(e)
shall be valid or effective.
(f) DATE OF TERMINATION. Date of Termination shall mean the date
specified in the Notice of Termination. Following a Change in
Control, either party may, within 15 days after any Notice of
Termination is given, provide notice to the other party pursuant to
Section 10 that a dispute exists concerning the termination of this
Agreement. Notwithstanding the pendency of any such dispute, CFB
shall continue to perform CFB's obligations to Executive under this
Agreement, pay Executive full compensation in effect when the Notice
of Termination giving rise to the dispute was given (including, but
not limited to, Base Compensation) and continue Executive as a
participant in all compensation, benefit and insurance plans in which
Executive was participating when the Notice of Termination giving
rise to the dispute was given, and Executive shall continue to
perform Executive's duties and responsibilities with CFB unless
prevented or relieved by CFB from so performing, until the dispute is
finally resolved in accordance with Section 16, but in no event after
the expiration of the Term of this Agreement.
(g) MITIGATION. Executive shall not be required to mitigate the amount of
any payment provided for in this Section 7 by seeking other
employment or otherwise, nor shall the amount of any payment provided
for in this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owing
by Executive to CFB, or otherwise. In the event that, following a
Notice of Termination given to Executive by CFB, Executive elects to
receive all payments and benefits provided by CFB's severance plan or
policy for employees in general in lieu of any payments and benefits
under this Agreement, Executive shall receive no payments or benefits
under this Agreement as a result of Severance of the Executive by CFB.
(h) POTENTIAL EXCISE TAX. Should any payments hereunder or contemplated
hereby be subject to excise tax pursuant to Section 4999 of the
Internal Revenue Code of 1986, as may be amended, or any successor or
similar provision thereto, or comparable state or local tax laws, CFB
shall pay to Executive such additional compensation as is necessary
(after taking into account all federal, state and local income taxes
payable by Executive as a result of the
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receipt of such compensation) to place Executive in the same
after-tax position he would have been in had no such excise tax (or
any interest or penalties thereon) been paid or incurred. CFB
shall pay such additional compensation upon the earlier of
(i) the time at which CFB withholds such excise tax from any
payments to Executive; or
(ii) 30 days after Executive notifies CFB that Executive has paid
such excise tax pursuant to a tax return filed by Executive
which takes the position that such excise tax is due and
payable in reliance on a written opinion of Executive's tax
counsel that it is more likely than not that such excise tax
is due and payable, or, if later, the date the IRS notifies
Executive that such amount is due and payable.
Without limiting the obligation of CFB hereunder, Executive agrees,
in the event Executive makes any payment pursuant to the preceding
sentence, to negotiate with CFB in good faith with respect to
procedures reasonably requested by CFB which would afford CFB the
ability to contest the imposition of such excise tax; provided,
however, that Executive will not be required to afford CFB any
right to contest the applicability of any such excise tax to the
extent that Executive reasonably determines that such contest is
inconsistent with the overall tax interests of Executive.
CFB agrees to hold in confidence and not to disclose, without
Executive's prior written consent, any information with regard to
Executive's tax position which CFB obtains pursuant to this
subsection.
8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by CFB or any of its
affiliated companies except as provided in Section 7 (g) with respect to
CFB's severance plan or policy and for which Executive may qualify.
Nothing in this Agreement shall limit or otherwise adversely affect such
rights as Executive may have under any stock option or other agreements
with CFB or any of its affiliated corporations.
9. ASSIGNMENT AND DELEGATION. The obligations of Executive under this
Agreement are personal and may not be delegated by Executive or
transferred in any manner whatsoever, nor are such obligations subject
to involuntary alienation, assignment, delegation or transfer. CFB may
assign CFB's rights under this Agreement and delegate all obligations
under this Agreement, either in whole or in part, to any parent,
affiliate, or subsidiary organization or company of CFB, provided that
the obligations of CFB under this Agreement shall remain the obligations
of CFB for which CFB shall be primarily liable notwithstanding the
assignment and delegation.
10. NOTICES. Notices and all other communications provided for in this
Agreement shall be in writing and shall be deemed to have been duly
given when delivered by hand or when mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to CFB as its
principal office address, directed to the attention of the Board, and to
Executive at Executive's residence address on the records of CFB or to
such other address as either party may have furnished to the other in
writing in accordance herewith except that notice of change of address
shall be effective only upon receipt.
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11. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of the other
provisions of this Agreement, which other provisions shall remain in
full force and effect.
12. SUCCESSORS: BINDING AGREEMENT.
(a) CFB shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, contract or otherwise) to all or
substantially all of the business or assets of CFB expressly to
assume and agree to perform this Agreement in the same manner and
to the same extent that CFB would be required to perform it if no
such succession had taken place. Failure of CFB to obtain such
agreement prior to the effective date of any such succession shall
be a breach of this Agreement and shall also entitle Executive to
resign for Good Reason. CFB shall include any successor to its
business or assets which executes and delivers the Agreement
required by this Section 12 or which otherwise becomes bound by all
terms and provisions of this Agreement by operation of law.
(b) This Agreement and all rights of Executive hereunder shall inure to
the benefit of, and be enforceable by, Executive's personal or
legal representatives, executors, administrators, successors,
heirs, distributes, devises and legatees. If Executive should die
while any amounts would be payable to Executive if Executive had
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this
Agreement to Executive's devisee, legatee, or other designee or, if
none of the foregoing, to Executive's estate.
13. INDEMNIFICATION.
(a) CFB shall pay, on behalf of Executive and Executive's executors,
administrators or assigns, any amount which Executive is or becomes
legally obligated to pay as a result of any claim or claims made
against Executive by reason of Executive's service as an employee,
Director or Officer of CFB. The payments that CFB will be
obligated to make shall include (without limitation) damages,
judgments, settlements, costs and expenses of investigation, costs
and expenses of defense of legal actions, claims and proceedings
and appeals therefrom, and costs of attachment and similar bonds;
provided, however, that CFB shall not be obligated to pay fines or
other obligations or fees imposed by law or otherwise that CFB is
prohibited by applicable law from paying as indemnity or for any
other reason.
(b) Costs and expenses (including, without limitation, attorney fees)
incurred by Executive in defending or investigating any action,
suit, proceeding or claim shall be paid by CFB in advance of the
disposition of such matter upon receipt of a written undertaking by
or on behalf of Executive to repay any such amounts if it is
ultimately determined that Executive is not entitled to
indemnification under this Agreement.
(c) If a claim under this Agreement is not paid by or on behalf of CFB
within ninety days after a written claim has been received by CFB,
Executive may at any time thereafter bring suit or proceed under
Section 16 against CFB to recover the unpaid amount of the claim
and, if
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successful in whole or in part, Executive shall also be entitled to
be paid the expenses, including attorneys' fees, of prosecuting
such claim.
(d) In the event of payment under this Agreement, CFB shall be
subrogated to the extent of such payment to all of the rights of
recovery of Executive, who shall execute all documents required and
shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable CFB
effectively to bring suit to enforce such rights.
(e) CFB shall not be liable under this Agreement to make any payment
in connection with any claim made against Executive:
(i) for which payment is actually made to Executive under an
insurance policy maintained by CFB, except in respect of any
excess beyond the amount of payment under such insurance;
(ii) for which Executive is indemnified by CFB otherwise than
pursuant to this Agreement;
(iii)based upon or attributable to Executive's gaining in fact any
personal profit or advantage to which Executive was not
legally entitled;
(iv) for an accounting of profits made from the purchase or sale by
Executive of securities of CFB within the meaning of Section
16(b) of the Exchange Act; or
(v) brought about or contributed to by the dishonesty of
Executive; provided, however, that notwithstanding the
foregoing, Executive shall be protected under this Agreement
as to any claims upon which suit may be brought alleging
dishonesty on the part of Executive, unless a judgment or
other final adjudication thereof adverse to Executive shall
establish that Executive committed acts of active and
deliberate dishonesty with actual dishonest purpose and
intent, which acts were material to the cause of action so
adjudicated.
(f) Executive, as a condition precedent to his right to be indemnified
under this Agreement, shall give to CFB notice in accordance with
Section 10 as soon as practicable of any claim made against
Executive for which indemnity will or could be sought under this
Agreement. Executive shall give CFB such information and
cooperation as it may reasonably require and as shall be within
Executive's power.
(g) Nothing herein shall be deemed to diminish or otherwise restrict
Executive's right to indemnification under any provision of the
Certificate of Incorporation or Bylaws of CFB or under State of
Delaware law.
14. MISCELLANEOUS. No provision of this Agreement may be modified or waived
unless such waiver or modification is agreed to in writing and signed by
Executive and such officer of CFB as may be specifically authorized by
the Board. No waiver by either party at any time of any breach by the
other party of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior
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or subsequent time. This Agreement is an integration of the parties'
agreement; no agreement or representation, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been
made by either party which are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of North
Dakota.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original document but all of
which together will constitute one instrument.
16. DISPUTE RESOLUTION. Executive shall be permitted (but not required) to
elect that any dispute or controversy arising under or in connection
with this Agreement be resolved in Fargo, North Dakota, by any
recognized method of alternative dispute resolution or by arbitration in
accordance with the rules of the American Arbitration Association then
in effect. The parties shall select a mutually acceptable single
arbitrator to resolve the dispute or if they fail or are unable to do
so, each side shall within the following ten business days select a
single arbitrator and the two so selected shall select a third
arbitrator within the following ten business days. The arbitrator shall
have no power to award any punitive or exemplary damages. The
arbitrator may construe or interpret, but shall not ignore or vary the
terms of this Agreement, and shall be bound by controlling law. The
arbitration award or other resolution may be entered as a judgment at
the request of the prevailing party bay any court of competent
jurisdiction in North Dakota or elsewhere. All legal fees and costs
incurred by Executive in connection with the resolution of any dispute
or controversy under or in connection with this Agreement shall be
reimbursed by CFB as bills for such services are presented by Executive
to CFB.
17. AUTHORITY. The authority of CFB to execute and perform this Agreement
is contained in a resolution of the Board of Directors of CFB dated
December 1, 1998.
IN WITNESS WHEREOF, Community First Bankshares, Inc. and Executive have
executed this Agreement on December 1, 1998, to be effective for all purposes.
COMMUNITY FIRST BANKSHARES, INC.
By___________________________________
Its__________________________________
EXECUTIVE:
_____________________________________
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