EXHIBIT 10.13
AGREEMENT
THIS AGREEMENT is made and entered into as of this 4thth day of
January, 2000, by and between WESTERN SECURITY BANK (the "Bank"), located at 000
X. Xxxxxxxx, Xxxxxxxx, Xxxxxxx and XXXXXXX X. XXXXXXX, XX. (the "Employee"),
whose address is 0000 Xxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000.
WHEREAS, the Employee is currently serving as Senior Vice President
Western Region Manager of the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to her/his assigned duties;
and
WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 3 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of Sections
5(b) through 5(g) or Section 6 of this Agreement) in connection with or within
12 months after a change in control of the Bank or the Holding Company which
occurs at any time during the term of this Agreement, the Bank shall pay to the
Employee, over the period as provided in the following sentence, an amount equal
to the product of (x) two hundred percent (200%) of the Base Salary of the
Employee, as defined below, times (y) a fraction, the numerator of which is 730
minus the number of days from the date of the change in control to the date of
termination and the denominator of which is 730. The amount payable pursuant to
the preceding sentence shall be paid in equal consecutive monthly installments,
and the number of monthly installments shall be 24 minus the number of whole
months elapsed from the date of change in control to the date of termination.
(b) Definitions. (1) The term "Date of Termination" means the
date upon which the Employee ceases to serve as an Employee of the Bank.
(2) The term "change in control" is defined solely as any acquisition
of control of the Bank or Holding Company (other than by a trustee or other
fiduciary holding
1
securities under an employee benefit plan of the Holding Company or a subsidiary
of the Holding Company), as defined in 12 C.F.R. ss. 574.4, or any successor
regulation, which would require the filing of an application for acquisition of
control or notice of change in control in a manner as set forth in 12 C.F.R. ss.
574.3, or any successor regulation.
(3) The term "base salary" is defined as the semi-monthly amount of
salary paid the Employee for the pay period immediately preceding the date of
termination annualized by multiplying by twenty-four (24).
(4) The Employee shall be considered to be involuntarily terminated (1)
if the employment of the Employee is involuntarily terminated for any reason
other than for "cause" as provided in this Section 1(b), pursuant to any of
Sections 5(b) through 5(g) or by reason of death or disability as provided in
Sections 5(c) and Section 6; or (2) there occurs a material diminution of or
interference with the Employee's duties, responsibilities and benefits as Senior
Vice President Western Region Manager. By way of example and not by way of
limitation, any of the following actions, if unreasonable or materially adverse
to the Employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (i) a change in the principal workplace
of the Employee to a location more than fifty (50) miles from the Bank's main
office; (ii) a material demotion of the Employee, a reduction in the number or
seniority of other Bank personnel reporting to the Employee, or a reduction in
the frequency with which, or in the nature of the matters with respect to which,
such personnel are to report to the Employee; or (iii) a reduction or adverse
change in the salary, perquisites, benefits, contingent benefits or vacation
time which had theretofore been provided to the Employee.
(5) Termination for "cause" shall include termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than a majority
of the disinterested members of the Board of Directors of the Bank at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(c) Compliance with Capital Requirements. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Section 1 hereof without the prior approval of the Regional Deputy Director
of the OTS if following such payment the Bank would not be in compliance with
its fully phased in capital
2
requirements as defined in OTS regulations.
2. Certain Reduction of Payments by the Bank. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Bank to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a 'Payment") would be nondeductible
(in whole or part) by the Bank for Federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of amounts payable or
distributable to or for the benefit of the Employee pursuant to this Agreement
(such amounts payable or distributable pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount, not less than zero, expressed
in present value which maximizes the aggregate present value of Agreement
Payments without causing any Payment to be nondeductible by the Bank because of
Section 280G of the Code. For purposes of this Section 2, present value shall be
determined in accordance with Section 280G(d) (4) of the Code.
(b) All determinations required to be made under this Section
2 shall be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full amount
of the Agreement Payments and that the Employee has substantial authority not to
report on her/his federal income tax return any excise tax imposed by Section
4999 of the Code with respect to the Agreement Payments. Any such determination
and opinion by the Advisory Firm shall be binding upon the Bank and the
Employee. The Employee shall determine which and how much, if any, of the
Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 2, provided that, if the Employee does not make
such determination within ten business days of the receipt of the calculations
made by the Advisory Firm, the Bank shall elect which and how much, if any, of
the Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 2 and shall notify the Employee promptly of such
election. Within five business days of the earlier of (i) the Bank's receipt of
the Employee's determination pursuant to the immediately preceding sentence of
this Agreement or (ii) the Bank's election in lieu of such determination, the
Bank shall pay to or distribute to or for the benefit of the Employee such
amounts as are then due the Employee under this Agreement. The Bank and the
Employee shall cooperate fully with the Advisory Firm, including without
limitation providing to the Advisory Firm all information and materials
reasonably requested by it, in connection with the making of the determinations
required under this Section 2.
(c) As a result of uncertainty in application of Section
280G of the
3
Code at the time of the initial determination by the Advisory Firm hereunder, it
is possible that Agreement Payments will have been made by the Bank which should
not have been made ("Overpayment") or that additional Agreement Payments will
not have been made by the Bank which should have been made ("Underpayment"), in
each case, consistent with the calculations required to be made hereunder. In
the event that the Advisory Firm, based upon the assertion by the Internal
Revenue Service against the Employee of a deficiency which the Advisory Firm
believes has a high probability of success determines that an Overpayment has
been made, any such Overpayment paid or distributed by the Bank to or for the
benefit of Employee shall be treated for all purposes as a loan ab initio which
the Employee shall repay to the Bank together with interest at the applicable
federal rate provided for in Section 7872(f) (2) of the Code; provided, however,
that no such loan shall be deemed to have been made and no amount shall be
payable by the Employee to the Bank if and to the extent such deemed loan and
payment would not either reduce the amount on which the Employee is subject to
tax under Section 1 and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Advisory Firm, based upon controlling preceding or
other substantial authority, determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the Bank to or for the benefit of
the Employee together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code.
(d) Any payments made to the Employee, pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1828(k) and any regulations adopted thereunder.
3. Term. The term of this Agreement shall be a period of two (2) years
commencing on January 4, 2000 and ending on January 3, 2002, subject to earlier
termination as provided herein.
4. Participation in Other Employee Benefit Plans. In addition to the
benefits provided under this agreement, the Employee shall be entitled while
employed to participate in, and receive benefits under, all plans relating to
stock options, stock purchases, pension, thrift, profit-sharing, group life
insurance, medical coverage, education, cash or stock bonuses, and other
retirement or employee benefits or combinations thereof, that are now or
hereafter maintained for the benefit of the Bank's employees of similar rank or
for its employees generally.
5. Termination; Death.
(a) In the event Bank terminates the Employee's employment for
cause, the obligations of the Bank under this Agreement shall cease. In case of
termination of the Employee's employment for cause, the Bank shall pay the
Employee her/his salary through the date of termination, and the Bank shall have
no further obligation to the Employee under this Agreement. The Employee shall
have no right to receive any of the compensation defined in Section 1(a) after
termination for cause.
4
(b) The Employee's employment may be voluntarily terminated by
the Employee at any time upon ninety (90) days written notice to the Bank or
upon such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Bank. In the event of such voluntary termination, the
Bank shall be obligated to continue to pay the Employee her/his salary only
through the date of termination, at the time such payments are due, and the Bank
shall have no further obligation to the Employee under this Agreement.
(c) In the event of the death of the Employee during the term
of this Agreement and prior to any termination hereunder, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall
be entitled to receive from the Bank the salary of the Employee through the last
day of employment and this Agreement shall terminate and end on such last day of
employment.
(d) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e) (3) or (g) (1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e) (3); (g) (l), the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Employee all or part of
the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate in whole or in part any of the obligations which
were suspended.
(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (4) or (g) (1) of the FDIA, 12 U.S.C. ss. 1818(e) (4);
(g) (1), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of the order, but vested rights of the parties shall not be
affected.
(f) If the Bank becomes in default (as defined in Section 3(x)
(1) of the FDIA, 12 U.S.C. ss. 1813(x) (1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of the parties.
(g) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank: (i) by the Director of the Office of
Thrift Supervision ("OTS") or his or her designee at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the Director of the OTS
or his or her designee approves a supervisory merger to resolve problems related
to operation of the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition.
5
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
6. Disability. If during the term of this Agreement the Employee shall
become disabled or incapacitated to the extent that she/he is unable to perform
the duties of the Senior Vice President Western Region Manager, she/he shall be
entitled to receive disability benefits of the type provided for other officers
of the Bank of similar rank. If the employment of Employee is terminated due to
disability or incapacity to perform the duties and requirements of the
employment, this Agreement shall terminate and end on such last day of
employment.
7. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Bank will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Bank, by; an
assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. Failure of the Bank to obtain such an
assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 1(a) hereof. For purposes of implementing the
provisions of this Section 7(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed to the attention of the Board of Directors
of the Bank with a copy to the Secretary of the Bank), or to such other address
as either party may have furnished to the other in writing in accordance
herewith.
6
9. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
10. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Montana.
13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXXX X. XXXXXXX, XX. Employee
Address: 0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
WESTERN SECURITY BANK
By:__________________________________
Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer
7
EXHIBIT 10.14
AGREEMENT
THIS AGREEMENT is made and entered into as of this __ day of April,
1999, by and between WESTERN SECURITY BANK (the "Bank"), located at 000 X.
Xxxxxxxx, Xxxxxxxx, Xxxxxxx and XXXXX X. XXXXXXXX (the "Employee"), whose
address is 0000 Xxxxxxxx Xxxx, XX, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, the Employee has been retained to serve as President and Chief
Executive Officer of the Bank effective July 1, 1999 and until that date he will
serve as President-Elect and Chief Executive Officer-Elect;
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to her/his assigned duties;
and
WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 3 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of Sections
5(b) through 5(g) or Section 6 of this Agreement) in connection with or within
12 months after a change in control of the Bank or the Holding Company which
occurs at any time during the term of this Agreement, the Bank shall pay to the
Employee, over the period as provided in the following sentence, an amount equal
to the product of (x) three hundred percent (300%) of the Base Salary of the
Employee, as defined below, times (y) a fraction, the numerator of which is 1095
minus the number of days from the date of the change in control to the date of
termination and the denominator of which is 1095. The amount payable pursuant to
the preceding sentence shall be paid in equal consecutive monthly installments,
and the number of monthly installments shall be thirty-six (36) minus the number
of whole months elapsed from the date of change in control to the date of
termination.
(b) Definitions. (1) The term "Date of Termination" means the
date upon which the Employee ceases to serve as an Employee of the Bank.
1
(2) The term "change in control" is defined solely as any acquisition
of control of the Bank or Holding Company (other than by a trustee or other
fiduciary holding securities under an employee benefit plan of the Holding
Company or a subsidiary of the Holding Company), as defined in 12 C.F.R. ss.
574.4, or any successor regulation, which would require the filing of an
application for acquisition of control or notice of change in control in a
manner as set forth in 12 C.F.R. ss. 574.3, or any successor regulation.
(3) The term "base salary" is defined as the semi-monthly amount of
salary paid the Employee for the pay period immediately preceding the date of
termination annualized by multiplying by twenty-four (24).
(4) The Employee shall be considered to be involuntarily terminated (1)
if the employment of the Employee is involuntarily terminated for any reason
other than for "cause" as provided in this Section 1(b), pursuant to any of
Sections 5(b) through 5(g) or by reason of death or disability as provided in
Sections 5(c) and Section 6; or (2) there occurs a material diminution of or
interference with the Employee's duties, responsibilities and benefits as
President and Chief Executive Officer. By way of example and not by way of
limitation, any of the following actions, if unreasonable or materially adverse
to the Employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (i) a change in the principal workplace
of the Employee to a location more than fifty (50) miles from the Bank's main
office; (ii) a material demotion of the Employee, a reduction in the number or
seniority of other Bank personnel reporting to the Employee, or a reduction in
the frequency with which, or in the nature of the matters with respect to which,
such personnel are to report to the Employee; or (iii) a reduction or adverse
change in the salary, perquisites, benefits, contingent benefits or vacation
time which had theretofore been provided to the Employee.
(5) Termination for "cause" shall include termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than a majority
of the disinterested members of the Board of Directors of the Bank at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(c) Compliance with Capital Requirements. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Section 1
2
hereof without the prior approval of the Regional Deputy Director of the OTS if
following such payment the Bank would not be in compliance with its fully phased
in capital requirements as defined in OTS regulations.
2. Certain Reduction of Payments by the Bank. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Bank to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a 'Payment") would be nondeductible
(in whole or part) by the Bank for Federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of amounts payable or
distributable to or for the benefit of the Employee pursuant to this Agreement
(such amounts payable or distributable pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount, not less than zero, expressed
in present value which maximizes the aggregate present value of Agreement
Payments without causing any Payment to be nondeductible by the Bank because of
Section 280G of the Code. For purposes of this Section 2, present value shall be
determined in accordance with Section 280G(d) (4) of the Code.
(b) All determinations required to be made under this Section
2 shall be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full amount
of the Agreement Payments and that the Employee has substantial authority not to
report on his federal income tax return any excise tax imposed by Section 4999
of the Code with respect to the Agreement Payments. Any such determination and
opinion by the Advisory Firm shall be binding upon the Bank and the Employee.
The Employee shall determine which and how much, if any, of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 2, provided that, if the Employee does not make such determination
within ten business days of the receipt of the calculations made by the Advisory
Firm, the Bank shall elect which and how much, if any, of the Agreement Payments
shall be eliminated or reduced consistent with the requirements of this Section
2 and shall notify the Employee promptly of such election. Within five business
days of the earlier of (i) the Bank's receipt of the Employee's determination
pursuant to the immediately preceding sentence of this Agreement or (ii) the
Bank's election in lieu of such determination, the Bank shall pay to or
distribute to or for the benefit of the Employee such amounts as are then due
the Employee under this Agreement. The Bank and the Employee shall cooperate
fully with the Advisory Firm, including without limitation providing to the
Advisory Firm all information and materials reasonably requested by it, in
connection with the making of the determinations required under this Section 2.
3
(c) As a result of uncertainty in application of Section 280G
of the Code at the time of the initial determination by the Advisory Firm
hereunder, it is possible that Agreement Payments will have been made by the
Bank which should not have been made ("Overpayment") or that additional
Agreement Payments will not have been made by the Bank which should have been
made ("Underpayment"), in each case, consistent with the calculations required
to be made hereunder. In the event that the Advisory Firm, based upon the
assertion by the Internal Revenue Service against the Employee of a deficiency
which the Advisory Firm believes has a high probability of success determines
that an Overpayment has been made, any such Overpayment paid or distributed by
the Bank to or for the benefit of Employee shall be treated for all purposes as
a loan ab initio which the Employee shall repay to the Bank together with
interest at the applicable federal rate provided for in Section 7872(f) (2) of
the Code; provided, however, that no such loan shall be deemed to have been made
and no amount shall be payable by the Employee to the Bank if and to the extent
such deemed loan and payment would not either reduce the amount on which the
Employee is subject to tax under Section 1 and Section 4999 of the Code or
generate a refund of such taxes. In the event that the Advisory Firm, based upon
controlling preceding or other substantial authority, determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Bank to or for the benefit of the Employee together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.
(d) Any payments made to the Employee, pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1828(k) and any regulations adopted thereunder.
3. Term. The term of this Agreement shall be a period of three (3)
years commencing on April 19, 1999, subject to earlier termination as provided
herein. Beginning on the first anniversary the commencement date and on each
anniversary thereafter, the term of this Agreement shall be extended for a
period of one (1) year unless either the Bank or the Employee gives contrary
written notice to the other not less than 90 days in advance of the date on
which the term of this Agreement would otherwise be extended. Notwithstanding
any other statement or provision in this Agreement, this Agreement will not be
automatically extended unless, prior thereto, such extension is approved by the
Board of Directors of the Bank following the Board's review of a formal
performance evaluation of the Employee performed by the disinterested members of
the Board of Directors of the Bank and reflected in the minutes of the Board of
Directors. Reference herein to the term under this Agreement shall refer to both
such initial term and such extended terms.
4. Participation in Other Employee Benefit Plans. In addition to the
benefits provided under this agreement, the Employee shall be entitled while
employed to participate in, and receive benefits under, all plans relating to
stock options, stock purchases, pension, thrift, profit-sharing, group life
insurance, medical coverage, education, cash or stock bonuses, and other
retirement or employee benefits or
4
combinations thereof, that are now or hereafter maintained for the benefit of
the Bank's employees of similar rank or for its employees generally.
5. Termination; Death.
(a) In the event Bank terminates the Employee's employment for
cause, the obligations of the Bank under this Agreement shall cease. In case of
termination of the Employee's employment for cause, the Bank shall pay the
Employee her/his salary through the date of termination, and the Bank shall have
no further obligation to the Employee under this Agreement. The Employee shall
have no right to receive any of the compensation defined in Section 1(a) after
termination for cause.
(b) The Employee's employment may be voluntarily terminated by
the Employee at any time upon ninety (90) days written notice to the Bank or
upon such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Bank. In the event of such voluntary termination, the
Bank shall be obligated to continue to pay the Employee her/his salary only
through the date of termination, at the time such payments are due, and the Bank
shall have no further obligation to the Employee under this Agreement.
(c) In the event of the death of the Employee during the term
of this Agreement and prior to any termination hereunder, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall
be entitled to receive from the Bank the salary of the Employee through the last
day of employment and this Agreement shall terminate and end on such last day of
employment.
(d) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e) (3) or (g) (1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e) (3); (g) (l), the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Employee all or part of
the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate in whole or in part any of the obligations which
were suspended.
(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (4) or (g) (1) of the FDIA, 12 U.S.C. ss. 1818(e) (4);
(g) (1), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of the order, but vested rights of the parties shall not be
affected.
(f) If the Bank becomes in default (as defined in Section 3(x)
(1) of the FDIA, 12 U.S.C. ss. 1813(x) (1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of
5
the parties.
(g) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank: (i) by the Director of the Office of
Thrift Supervision ("OTS") or his or her designee at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the Director of the OTS
or his or her designee approves a supervisory merger to resolve problems related
to operation of the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
6. Disability. If during the term of this Agreement the Employee shall
become disabled or incapacitated to the extent that she/he is unable to perform
the duties of the President-Elect, President, Chief Executive Officer-Elect or
Chief Executive Officer, she/he shall be entitled to receive disability benefits
of the type provided for other officers of the Bank of similar rank. If the
employment of Employee is terminated due to disability or incapacity to perform
the duties and requirements of the employment, this Agreement shall terminate
and end on such last day of employment.
7. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Bank will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Bank, by; an
assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. Failure of the Bank to obtain such an
assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 1(a) hereof. For purposes of implementing the
provisions of this Section 7(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to
6
the Employee hereunder if the Employee had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Employee's devisee, legatee or other designee or if there
is no such designee, to the Employee's estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed to the attention of the Board of Directors
of the Bank with a copy to the Secretary of the Bank), or to such other address
as either party may have furnished to the other in writing in accordance
herewith.
9. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
10. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Montana.
13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXX X. XXXXXXXX Employee
Address: 0000 Xxxxxxxx Xxxx, XX,
Xxxxxx, Xxxxxxxxxx 00000.
WESTERN SECURITY BANK
By:__________________________________
Xxxx X. Xxxxxx, President
and Chief Executive Officer
7
EXHIBIT 10.15
AGREEMENT
THIS AGREEMENT is made and entered into as of this 16th day of June,
1999, by and between WESTERN SECURITY BANK (the "Bank"), located at 000 X.
Xxxxxxxx, Xxxxxxxx, Xxxxxxx and XXXXXX X. XXXXXXX (the "Employee"), whose
address is, ______________________________________________________.
WHEREAS, the Employee is currently serving as Senior Vice President,
Manager of Central Operations of the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to her assigned duties; and
WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 3 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of Sections
5(b) through 5(g) or Section 6 of this Agreement) in connection with or within
12 months after a change in control of the Bank or the Holding Company which
occurs at any time during the term of this Agreement, the Bank shall pay to the
Employee, over the period as provided in the following sentence, an amount equal
to the product of (x) two hundred percent (200%) of the Base Salary of the
Employee, as defined below, times (y) a fraction, the numerator of which is 730
minus the number of days from the date of the change in control to the date of
termination and the denominator of which is 730. The amount payable pursuant to
the preceding sentence shall be paid in equal consecutive monthly installments,
and the number of monthly installments shall be 24 minus the number of whole
months elapsed from the date of change in control to the date of termination.
(b) Definitions. (1) The term "Date of Termination" means the
date upon which the Employee ceases to serve as an Employee of the Bank.
(2) The term "change in control" is defined solely as any acquisition
of control of the Bank or Holding Company (other than by a trustee or other
fiduciary holding
1
securities under an employee benefit plan of the Holding Company or a subsidiary
of the Holding Company), as defined in 12 C.F.R. ss. 574.4, or any successor
regulation, which would require the filing of an application for acquisition of
control or notice of change in control in a manner as set forth in 12 C.F.R. ss.
574.3, or any successor regulation.
(3) The term "base salary" is defined as the semi-monthly amount of
salary paid the Employee for the pay period immediately preceding the date of
termination annualized by multiplying by twenty-four (24).
(4) The Employee shall be considered to be involuntarily terminated:
(1) if the employment of the Employee is involuntarily terminated for any reason
other than for "cause" as provided in this Section 1(b), pursuant to any of
Sections 5(b) through 5(g) or by reason of death or disability as provided in
Sections 5(c) and Section 6; or (2) there occurs a material diminution of or
interference with the Employee's duties, responsibilities and benefits as Senior
Vice President, Manager of Central Operations. By way of example and not by way
of limitation, any of the following actions, if unreasonable or materially
adverse to the Employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (i) a change in the principal workplace
of the Employee to a location more than fifty (50) miles from the Bank's main
office; (ii) a material demotion of the Employee, a reduction in the number or
seniority of other Bank personnel reporting to the Employee, or a reduction in
the frequency with which, or in the nature of the matters with respect to which,
such personnel are to report to the Employee; or (iii) a reduction or adverse
change in the salary, perquisites, benefits, contingent benefits or vacation
time which had theretofore been provided to the Employee.
(5) Termination for "cause" shall include termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than a majority
of the disinterested members of the Board of Directors of the Bank at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(c) Compliance with Capital Requirements. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Section 1 hereof without the prior approval of the Regional Deputy Director
of the OTS if following
2
such payment the Bank would not be in compliance with its fully phased in
capital requirements as defined in OTS regulations.
2. Certain Reduction of Payments by the Bank. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Bank to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a "Payment") would be nondeductible
(in whole or part) by the Bank for Federal income tax purposes because of
Section 280G of the Internal Revenue Code ("Code"), then the aggregate present
value of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such amounts payable or distributable pursuant to
this Agreement are hereinafter referred to as "Agreement Payments") shall be
reduced to the Reduced Amount. The "Reduced Amount" shall be an amount, not less
than zero, expressed in present value which maximizes the aggregate present
value of Agreement Payments without causing any Payment to be nondeductible by
the Bank because of Section 280G of the Code. For purposes of this Section 2,
present value shall be determined in accordance with Section 280G(d) (4) of the
Code.
(b) All determinations required to be made under this Section
2 shall be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full amount
of the Agreement Payments and that the Employee has substantial authority not to
report on her federal income tax return any excise tax imposed by Section 4999
of the Code with respect to the Agreement Payments. Any such determination and
opinion by the Advisory Firm shall be binding upon the Bank and the Employee.
The Employee shall determine which and how much, if any, of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 2, provided that, if the Employee does not make such determination
within ten business days of the receipt of the calculations made by the Advisory
Firm, the Bank shall elect which and how much, if any, of the Agreement Payments
shall be eliminated or reduced consistent with the requirements of this Section
2 and shall notify the Employee promptly of such election. Within five business
days of the earlier of: (i) the Bank's receipt of the Employee's determination
pursuant to the immediately preceding sentence of this Agreement; or (ii) the
Bank's election in lieu of such determination, the Bank shall pay to or
distribute to or for the benefit of the Employee such amounts as are then due
the Employee under this Agreement. The Bank and the Employee shall cooperate
fully with the Advisory Firm, including without limitation providing to the
Advisory Firm all information and materials reasonably requested by it, in
connection with the making of the determinations required under this Section 2.
3
(c) As a result of uncertainty in application of Section 280G
of the Code at the time of the initial determination by the Advisory Firm
hereunder, it is possible that Agreement Payments will have been made by the
Bank which should not have been made ("Overpayment") or that additional
Agreement Payments will not have been made by the Bank which should have been
made ("Underpayment"), in each case, consistent with the calculations required
to be made hereunder. In the event that the Advisory Firm, based upon the
assertion by the Internal Revenue Service against the Employee of a deficiency
which the Advisory Firm believes has a high probability of success determines
that an Overpayment has been made, any such Overpayment paid or distributed by
the Bank to or for the benefit of Employee shall be treated for all purposes as
a loan ab initio which the Employee shall repay to the Bank together with
interest at the applicable federal rate provided for in Section 7872(f) (2) of
the Code; provided, however, that no such loan shall be deemed to have been made
and no amount shall be payable by the Employee to the Bank if and to the extent
such deemed loan and payment would not either reduce the amount on which the
Employee is subject to tax under Section 1 and Section 4999 of the Code or
generate a refund of such taxes. In the event that the Advisory Firm, based upon
controlling preceding or other substantial authority, determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Bank to or for the benefit of the Employee together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.
(d) Any payments made to the Employee, pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1828(k) and any regulations adopted thereunder.
3. Term. The term of this Agreement shall be a period of two (2) years
commencing on June 16, 1999, and ending June 15, 2001, subject to earlier
termination as provided herein.
4. Participation in Other Employee Benefit Plans. In addition to the
benefits provided under this agreement, the Employee shall be entitled while
employed to participate in, and receive benefits under, all plans relating to
stock options, stock purchases, pension, thrift, profit-sharing, group life
insurance, medical coverage, education, cash or stock bonuses, and other
retirement or employee benefits or combinations thereof, that are now or
hereafter maintained for the benefit of the Bank's employees of similar rank or
for its employees generally.
5. Termination; Death.
(a) In the event the Bank terminates the Employee's employment
for cause, the obligations of the Bank under this Agreement shall cease. In case
of termination of the Employee's employment for cause, the Bank shall pay the
Employee her salary through the date of termination, and the Bank shall have no
further obligation
4
to the Employee under this Agreement. The Employee shall have no right to
receive any of the compensation defined in Section 1(a) after termination for
cause.
(b) The Employee's employment may be voluntarily terminated by
the Employee at any time upon ninety (90) days written notice to the Bank or
upon such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Bank. In the event of such voluntary termination, the
Bank shall be obligated to continue to pay the Employee her salary only through
the date of termination, at the time such payments are due, and the Bank shall
have no further obligation to the Employee under this Agreement.
(c) In the event of the death of the Employee during the term
of this Agreement and prior to any termination hereunder, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall
be entitled to receive from the Bank the salary of the Employee through the last
day of employment and this Agreement shall terminate and end on such last day of
employment.
(d) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e) (3) or (g) (1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e) (3); (g) (l), the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion: (i) pay the Employee all or part of
the compensation withheld while its obligations under this Agreement were
suspended; and (ii) reinstate in whole or in part any of the obligations which
were suspended.
(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (4) or (g) (1) of the FDIA, 12 U.S.C. ss. 1818(e) (4);
(g) (1), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of the order, but vested rights of the parties shall not be
affected.
(f) If the Bank becomes in default (as defined in Section 3(x)
(1) of the FDIA, 12 U.S.C. ss. 1813(x) (1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of the parties.
(g) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank: (i) by the Director of the Office of
Thrift Supervision ("OTS") or his or her designee at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the
5
Director of the OTS or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director of the OTS to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
6. Disability. If during the term of this Agreement the Employee shall
become disabled or incapacitated to the extent that she is unable to perform the
duties of the Senior Vice President, Manager of Central Operations, she shall be
entitled to receive disability benefits of the type provided for other officers
of the Bank of similar rank. If the employment of Employee is terminated due to
disability or incapacity to perform the duties and requirements of the
employment, this Agreement shall terminate and end on such last day of
employment.
7. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Bank will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Bank, by; an
assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. Failure of the Bank to obtain such an
assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 1(a) hereof. For purposes of implementing the
provisions of this Section 7(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed
6
to the attention of the Board of Directors of the Bank with a copy to the
Secretary of the Bank), or to such other address as either party may have
furnished to the other in writing in accordance herewith.
9. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
10. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Montana.
13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXX X. XXXXXXX, Employee
Address:
WESTERN SECURITY BANK
By:
Xxxx X. Xxxxxx, President
and Chief Executive Officer
7
EXHIBIT 10.16
AGREEMENT
THIS AGREEMENT is made and entered into as of this ___ day of
_________, 1999, by and between WESTERN SECURITY BANK (the "Bank"), located at
000 X. Xxxxxxxx, Xxxxxxxx, Xxxxxxx and XXXXX X. XXXXXXXX (the "Employee"), whose
address is,7267 Xxxxxxx 00, Xxxxxxx, Xxxxxxx 00000.
WHEREAS, the Employee is currently serving as Senior Vice President,
Credit Administrator of the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to his assigned duties; and
WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 3 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of Sections
5(b) through 5(g) or Section 6 of this Agreement) in connection with or within
12 months after a change in control of the Bank or the Holding Company which
occurs at any time during the term of this Agreement, the Bank shall pay to the
Employee, over the period as provided in the following sentence, an amount equal
to the product of (x) two hundred percent (200%) of the Base Salary of the
Employee, as defined below, times (y) a fraction, the numerator of which is 730
minus the number of days from the date of the change in control to the date of
termination and the denominator of which is 730. The amount payable pursuant to
the preceding sentence shall be paid in equal consecutive monthly installments,
and the number of monthly installments shall be 24 minus the number of whole
months elapsed from the date of change in control to the date of termination.
(b) Definitions. (1) The term "Date of Termination" means the
date upon which the Employee ceases to serve as an Employee of the Bank.
(2) The term "change in control" is defined solely as any acquisition
of control of the Bank or Holding Company (other than by a trustee or other
fiduciary holding
1
securities under an employee benefit plan of the Holding Company or a subsidiary
of the Holding Company), as defined in 12 C.F.R. ss. 574.4, or any successor
regulation, which would require the filing of an application for acquisition of
control or notice of change in control in a manner as set forth in 12 C.F.R. ss.
574.3, or any successor regulation.
(3) The term "base salary" is defined as the semi-monthly amount of
salary paid the Employee for the pay period immediately preceding the date of
termination annualized by multiplying by twenty-four (24).
(4) The Employee shall be considered to be involuntarily terminated:
(1) if the employment of the Employee is involuntarily terminated for any reason
other than for "cause" as provided in this Section 1(b), pursuant to any of
Sections 5(b) through 5(g) or by reason of death or disability as provided in
Sections 5(c) and Section 6; or (2) there occurs a material diminution of or
interference with the Employee's duties, responsibilities and benefits as Senior
Vice President, Credit Administrator. By way of example and not by way of
limitation, any of the following actions, if unreasonable or materially adverse
to the Employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (i) a change in the principal workplace
of the Employee to a location more than fifty (50) miles from the Bank's main
office; (ii) a material demotion of the Employee, a reduction in the number or
seniority of other Bank personnel reporting to the Employee, or a reduction in
the frequency with which, or in the nature of the matters with respect to which,
such personnel are to report to the Employee; or (iii) a reduction or adverse
change in the salary, perquisites, benefits, contingent benefits or vacation
time which had theretofore been provided to the Employee.
(5) Termination for "cause" shall include termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than a majority
of the disinterested members of the Board of Directors of the Bank at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(c) Compliance with Capital Requirements. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Section 1 hereof without the prior approval of the Regional Deputy Director
of the OTS if following
2
such payment the Bank would not be in compliance with its fully phased in
capital requirements as defined in OTS regulations.
2. Certain Reduction of Payments by the Bank. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Bank to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a "Payment") would be nondeductible
(in whole or part) by the Bank for Federal income tax purposes because of
Section 280G of the Internal Revenue Code ("Code"), then the aggregate present
value of amounts payable or distributable to or for the benefit of the Employee
pursuant to this Agreement (such amounts payable or distributable pursuant to
this Agreement are hereinafter referred to as "Agreement Payments") shall be
reduced to the Reduced Amount. The "Reduced Amount" shall be an amount, not less
than zero, expressed in present value which maximizes the aggregate present
value of Agreement Payments without causing any Payment to be nondeductible by
the Bank because of Section 280G of the Code. For purposes of this Section 2,
present value shall be determined in accordance with Section 280G(d) (4) of the
Code.
(b) All determinations required to be made under this Section
2 shall be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full amount
of the Agreement Payments and that the Employee has substantial authority not to
report on his federal income tax return any excise tax imposed by Section 4999
of the Code with respect to the Agreement Payments. Any such determination and
opinion by the Advisory Firm shall be binding upon the Bank and the Employee.
The Employee shall determine which and how much, if any, of the Agreement
Payments shall be eliminated or reduced consistent with the requirements of this
Section 2, provided that, if the Employee does not make such determination
within ten business days of the receipt of the calculations made by the Advisory
Firm, the Bank shall elect which and how much, if any, of the Agreement Payments
shall be eliminated or reduced consistent with the requirements of this Section
2 and shall notify the Employee promptly of such election. Within five business
days of the earlier of: (i) the Bank's receipt of the Employee's determination
pursuant to the immediately preceding sentence of this Agreement; or (ii) the
Bank's election in lieu of such determination, the Bank shall pay to or
distribute to or for the benefit of the Employee such amounts as are then due
the Employee under this Agreement. The Bank and the Employee shall cooperate
fully with the Advisory Firm, including without limitation providing to the
Advisory Firm all information and materials reasonably requested by it, in
connection with the making of the determinations required under this Section 2.
3
(c) As a result of uncertainty in application of Section 280G
of the Code at the time of the initial determination by the Advisory Firm
hereunder, it is possible that Agreement Payments will have been made by the
Bank which should not have been made ("Overpayment") or that additional
Agreement Payments will not have been made by the Bank which should have been
made ("Underpayment"), in each case, consistent with the calculations required
to be made hereunder. In the event that the Advisory Firm, based upon the
assertion by the Internal Revenue Service against the Employee of a deficiency
which the Advisory Firm believes has a high probability of success determines
that an Overpayment has been made, any such Overpayment paid or distributed by
the Bank to or for the benefit of Employee shall be treated for all purposes as
a loan ab initio which the Employee shall repay to the Bank together with
interest at the applicable federal rate provided for in Section 7872(f) (2) of
the Code; provided, however, that no such loan shall be deemed to have been made
and no amount shall be payable by the Employee to the Bank if and to the extent
such deemed loan and payment would not either reduce the amount on which the
Employee is subject to tax under Section 1 and Section 4999 of the Code or
generate a refund of such taxes. In the event that the Advisory Firm, based upon
controlling preceding or other substantial authority, determines that an
Underpayment has occurred, any such Underpayment shall be promptly paid by the
Bank to or for the benefit of the Employee together with interest at the
applicable federal rate provided for in Section 7872(f)(2) of the Code.
(d) Any payments made to the Employee, pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1828(k) and any regulations adopted thereunder.
3. Term. The term of this Agreement shall be a period of two (2) years
commencing on October 18, 1999, and ending October 17, 2001, subject to earlier
termination as provided herein.
4. Participation in Other Employee Benefit Plans. In addition to the
benefits provided under this agreement, the Employee shall be entitled while
employed to participate in, and receive benefits under, all plans relating to
stock options, stock purchases, pension, thrift, profit-sharing, group life
insurance, medical coverage, education, cash or stock bonuses, and other
retirement or employee benefits or combinations thereof, that are now or
hereafter maintained for the benefit of the Bank's employees of similar rank or
for its employees generally.
5. Termination; Death.
(a) In the event the Bank terminates the Employee's employment
for cause, the obligations of the Bank under this Agreement shall cease. In case
of termination of the Employee's employment for cause, the Bank shall pay the
Employee his salary through the date of termination, and the Bank shall have no
further obligation
4
to the Employee under this Agreement. The Employee shall have no right to
receive any of the compensation defined in Section 1(a) after termination for
cause.
(b) The Employee's employment may be voluntarily terminated by
the Employee at any time upon ninety (90) days written notice to the Bank or
upon such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Bank. In the event of such voluntary termination, the
Bank shall be obligated to continue to pay the Employee his salary only through
the date of termination, at the time such payments are due, and the Bank shall
have no further obligation to the Employee under this Agreement.
(c) In the event of the death of the Employee during the term
of this Agreement and prior to any termination hereunder, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall
be entitled to receive from the Bank the salary of the Employee through the last
day of employment and this Agreement shall terminate and end on such last day of
employment.
(d) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e) (3) or (g) (1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e) (3); (g) (l), the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion: (i) pay the Employee all or part of
the compensation withheld while its obligations under this Agreement were
suspended; and (ii) reinstate in whole or in part any of the obligations which
were suspended.
(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (4) or (g) (1) of the FDIA, 12 U.S.C. ss. 1818(e) (4);
(g) (1), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of the order, but vested rights of the parties shall not be
affected.
(f) If the Bank becomes in default (as defined in Section 3(x)
(1) of the FDIA, 12 U.S.C. ss. 1813(x) (1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of the parties.
(g) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank: (i) by the Director of the Office of
Thrift Supervision ("OTS") or his or her designee at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the
5
Director of the OTS or his or her designee approves a supervisory merger to
resolve problems related to operation of the Bank or when the Bank is determined
by the Director of the OTS to be in an unsafe or unsound condition.
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
6. Disability. If during the term of this Agreement the Employee shall
become disabled or incapacitated to the extent that he is unable to perform the
duties of the Senior Vice President, Credit Adminstrator, he shall be entitled
to receive disability benefits of the type provided for other officers of the
Bank of similar rank. If the employment of Employee is terminated due to
disability or incapacity to perform the duties and requirements of the
employment, this Agreement shall terminate and end on such last day of
employment.
7. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Bank will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Bank, by; an
assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. Failure of the Bank to obtain such an
assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 1(a) hereof. For purposes of implementing the
provisions of this Section 7(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed
6
to the attention of the Board of Directors of the Bank with a copy to the
Secretary of the Bank), or to such other address as either party may have
furnished to the other in writing in accordance herewith.
9. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
10. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Montana.
13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXX X. XXXXXXXX, Employee
Address: 0000 Xxxxxxx 00
Xxxxxxx, Xxxxxxx 00000
WESTERN SECURITY BANK
By:
Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer
7
EXHIBIT 10.17
AGREEMENT
THIS AGREEMENT is made and entered into as of this 17th day of
December, 1999, by and between WESTERN SECURITY BANK (the "Bank"), located at
000 X. Xxxxxxxx, Xxxxxxxx, Xxxxxxx and XXXXXXX X. XXXXXX (the "Employee"), whose
address is 0000 00xx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000.
WHEREAS, the Employee is currently serving as Vice President Internal
Auditor Compliance Officer of the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to her/his assigned duties;
and
WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 3 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of Sections
5(b) through 5(g) or Section 6 of this Agreement) in connection with or within
12 months after a change in control of the Bank or the Holding Company which
occurs at any time during the term of this Agreement, the Bank shall pay to the
Employee, over the period as provided in the following sentence, an amount equal
to the product of (x) two hundred percent (200%) of the Base Salary of the
Employee, as defined below, times (y) a fraction, the numerator of which is 730
minus the number of days from the date of the change in control to the date of
termination and the denominator of which is 730. The amount payable pursuant to
the preceding sentence shall be paid in equal consecutive monthly installments,
and the number of monthly installments shall be 24 minus the number of whole
months elapsed from the date of change in control to the date of termination.
(b) Definitions. (1) The term "Date of Termination" means the
date upon which the Employee ceases to serve as an Employee of the Bank.
(2) The term "change in control" is defined solely as any acquisition
of control of the Bank or Holding Company (other than by a trustee or other
fiduciary holding
1
securities under an employee benefit plan of the Holding Company or a subsidiary
of the Holding Company), as defined in 12 C.F.R. ss. 574.4, or any successor
regulation, which would require the filing of an application for acquisition of
control or notice of change in control in a manner as set forth in 12 C.F.R. ss.
574.3, or any successor regulation.
(3) The term "base salary" is defined as the semi-monthly amount of
salary paid the Employee for the pay period immediately preceding the date of
termination annualized by multiplying by twenty-four (24).
(4) The Employee shall be considered to be involuntarily terminated (1)
if the employment of the Employee is involuntarily terminated for any reason
other than for "cause" as provided in this Section 1(b), pursuant to any of
Sections 5(b) through 5(g) or by reason of death or disability as provided in
Sections 5(c) and Section 6; or (2) there occurs a material diminution of or
interference with the Employee's duties, responsibilities and benefits as Vice
President Internal Auditor Compliance Officer. By way of example and not by way
of limitation, any of the following actions, if unreasonable or materially
adverse to the Employee, shall constitute such diminution or interference unless
consented to in writing by the Employee: (i) a change in the principal workplace
of the Employee to a location more than fifty (50) miles from the Bank's main
office; (ii) a material demotion of the Employee, a reduction in the number or
seniority of other Bank personnel reporting to the Employee, or a reduction in
the frequency with which, or in the nature of the matters with respect to which,
such personnel are to report to the Employee; or (iii) a reduction or adverse
change in the salary, perquisites, benefits, contingent benefits or vacation
time which had theretofore been provided to the Employee.
(5) Termination for "cause" shall include termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than a majority
of the disinterested members of the Board of Directors of the Bank at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(c) Compliance with Capital Requirements. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Section 1 hereof without the prior approval of the Regional Deputy Director
of the OTS if following such payment the Bank would not be in compliance with
its fully phased in capital
2
requirements as defined in OTS regulations.
2. Certain Reduction of Payments by the Bank. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Bank to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a 'Payment") would be nondeductible
(in whole or part) by the Bank for Federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of amounts payable or
distributable to or for the benefit of the Employee pursuant to this Agreement
(such amounts payable or distributable pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount, not less than zero, expressed
in present value which maximizes the aggregate present value of Agreement
Payments without causing any Payment to be nondeductible by the Bank because of
Section 280G of the Code. For purposes of this Section 2, present value shall be
determined in accordance with Section 280G(d) (4) of the Code.
(b) All determinations required to be made under this Section
2 shall be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full amount
of the Agreement Payments and that the Employee has substantial authority not to
report on her/his federal income tax return any excise tax imposed by Section
4999 of the Code with respect to the Agreement Payments. Any such determination
and opinion by the Advisory Firm shall be binding upon the Bank and the
Employee. The Employee shall determine which and how much, if any, of the
Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 2, provided that, if the Employee does not make
such determination within ten business days of the receipt of the calculations
made by the Advisory Firm, the Bank shall elect which and how much, if any, of
the Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 2 and shall notify the Employee promptly of such
election. Within five business days of the earlier of (i) the Bank's receipt of
the Employee's determination pursuant to the immediately preceding sentence of
this Agreement or (ii) the Bank's election in lieu of such determination, the
Bank shall pay to or distribute to or for the benefit of the Employee such
amounts as are then due the Employee under this Agreement. The Bank and the
Employee shall cooperate fully with the Advisory Firm, including without
limitation providing to the Advisory Firm all information and materials
reasonably requested by it, in connection with the making of the determinations
required under this Section 2.
(c) As a result of uncertainty in application of Section
280G of the
3
Code at the time of the initial determination by the Advisory Firm hereunder, it
is possible that Agreement Payments will have been made by the Bank which should
not have been made ("Overpayment") or that additional Agreement Payments will
not have been made by the Bank which should have been made ("Underpayment"), in
each case, consistent with the calculations required to be made hereunder. In
the event that the Advisory Firm, based upon the assertion by the Internal
Revenue Service against the Employee of a deficiency which the Advisory Firm
believes has a high probability of success determines that an Overpayment has
been made, any such Overpayment paid or distributed by the Bank to or for the
benefit of Employee shall be treated for all purposes as a loan ab initio which
the Employee shall repay to the Bank together with interest at the applicable
federal rate provided for in Section 7872(f) (2) of the Code; provided, however,
that no such loan shall be deemed to have been made and no amount shall be
payable by the Employee to the Bank if and to the extent such deemed loan and
payment would not either reduce the amount on which the Employee is subject to
tax under Section 1 and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Advisory Firm, based upon controlling preceding or
other substantial authority, determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the Bank to or for the benefit of
the Employee together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code.
(d) Any payments made to the Employee, pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1828(k) and any regulations adopted thereunder.
3. Term. The term of this Agreement shall be a period of two (2) years
commencing on December 17, 1999 and ending on December 16, 2001, subject to
earlier termination as provided herein.
4. Participation in Other Employee Benefit Plans. In addition to the
benefits provided under this agreement, the Employee shall be entitled while
employed to participate in, and receive benefits under, all plans relating to
stock options, stock purchases, pension, thrift, profit-sharing, group life
insurance, medical coverage, education, cash or stock bonuses, and other
retirement or employee benefits or combinations thereof, that are now or
hereafter maintained for the benefit of the Bank's employees of similar rank or
for its employees generally.
5. Termination; Death.
(a) In the event Bank terminates the Employee's employment for
cause, the obligations of the Bank under this Agreement shall cease. In case of
termination of the Employee's employment for cause, the Bank shall pay the
Employee her/his salary through the date of termination, and the Bank shall have
no further obligation to the Employee under this Agreement. The Employee shall
have no right to receive any of the compensation defined in Section 1(a) after
termination for cause.
4
(b) The Employee's employment may be voluntarily terminated by
the Employee at any time upon ninety (90) days written notice to the Bank or
upon such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Bank. In the event of such voluntary termination, the
Bank shall be obligated to continue to pay the Employee her/his salary only
through the date of termination, at the time such payments are due, and the Bank
shall have no further obligation to the Employee under this Agreement.
(c) In the event of the death of the Employee during the term
of this Agreement and prior to any termination hereunder, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall
be entitled to receive from the Bank the salary of the Employee through the last
day of employment and this Agreement shall terminate and end on such last day of
employment.
(d) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e) (3) or (g) (1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e) (3); (g) (l), the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Employee all or part of
the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate in whole or in part any of the obligations which
were suspended.
(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (4) or (g) (1) of the FDIA, 12 U.S.C. ss. 1818(e) (4);
(g) (1), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of the order, but vested rights of the parties shall not be
affected.
(f) If the Bank becomes in default (as defined in Section 3(x)
(1) of the FDIA, 12 U.S.C. ss. 1813(x) (1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of the parties.
(g) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank: (i) by the Director of the Office of
Thrift Supervision ("OTS") or his or her designee at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the Director of the OTS
or his or her designee approves a supervisory merger to resolve problems related
to operation of the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition.
5
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
6. Disability. If during the term of this Agreement the Employee shall
become disabled or incapacitated to the extent that she/he is unable to perform
the duties of the Vice President Internal Auditor Compliance Officer, she/he
shall be entitled to receive disability benefits of the type provided for other
officers of the Bank of similar rank. If the employment of Employee is
terminated due to disability or incapacity to perform the duties and
requirements of the employment, this Agreement shall terminate and end on such
last day of employment.
7. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Bank will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Bank, by; an
assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. Failure of the Bank to obtain such an
assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 1(a) hereof. For purposes of implementing the
provisions of this Section 7(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed to the attention of the Board of Directors
of the Bank with a copy to the Secretary of the Bank), or to such other address
as either party may have furnished to the other in writing in accordance
herewith.
6
9. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
10. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Montana.
13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXXX X. XXXXXX Employee
Address: 0000 00xx Xxxxxx
Xxxxxxxx, XX 59 801
WESTERN SECURITY BANK
By:__________________________________
Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer
7
EXHIBIT 10.18
AGREEMENT
THIS AGREEMENT is made and entered into as of this 31th day of January,
2000, by and between WESTERN SECURITY BANK (the "Bank"), located at 000 X.
Xxxxxxxx, Xxxxxxxx, Xxxxxxx and XXXXXX X. XXXXXXXX (the "Employee"), whose
address is Xxxxxxx, Xxxxxxx 00000.
WHEREAS, the Employee is currently serving as Corporate Secretary Senior
Vice President Data Center Coordinator of the Bank; and
WHEREAS, the Board of Directors of the Bank believes it is in the best
interests of the Bank to enter into this Agreement with the Employee in order to
assure continuity of management of the Bank and to reinforce and encourage the
continued attention and dedication of the Employee to her/his assigned duties;
and
WHEREAS, the Board of Directors of the Bank has approved and authorized
the execution of this Agreement with the Employee to take effect as stated in
Section 3 hereof;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, it is AGREED as
follows:
1. Change in Control.
(a) Involuntary Termination. If the Employee's employment is
involuntarily terminated (other than for cause or pursuant to any of Sections
5(b) through 5(g) or Section 6 of this Agreement) in connection with or within
12 months after a change in control of the Bank or the Holding Company which
occurs at any time during the term of this Agreement, the Bank shall pay to the
Employee, over the period as provided in the following sentence, an amount equal
to the product of (x) two hundred percent (200%) of the Base Salary of the
Employee, as defined below, times (y) a fraction, the numerator of which is 730
minus the number of days from the date of the change in control to the date of
termination and the denominator of which is 730. The amount payable pursuant to
the preceding sentence shall be paid in equal consecutive monthly installments,
and the number of monthly installments shall be 24 minus the number of whole
months elapsed from the date of change in control to the date of termination.
(b) Definitions. (1) The term "Date of Termination" means the
date upon which the Employee ceases to serve as an Employee of the Bank.
(2) The term "change in control" is defined solely as any acquisition
of control of the Bank or Holding Company (other than by a trustee or other
fiduciary holding
1
securities under an employee benefit plan of the Holding Company or a subsidiary
of the Holding Company), as defined in 12 C.F.R. ss. 574.4, or any successor
regulation, which would require the filing of an application for acquisition of
control or notice of change in control in a manner as set forth in 12 C.F.R. ss.
574.3, or any successor regulation.
(3) The term "base salary" is defined as the semi-monthly amount of
salary paid the Employee for the pay period immediately preceding the date of
termination annualized by multiplying by twenty-four (24).
(4) The Employee shall be considered to be involuntarily terminated (1)
if the employment of the Employee is involuntarily terminated for any reason
other than for "cause" as provided in this Section 1(b), pursuant to any of
Sections 5(b) through 5(g) or by reason of death or disability as provided in
Sections 5(c) and Section 6; or (2) there occurs a material diminution of or
interference with the Employee's duties, responsibilities and benefits as
Corporate Secretary Senior Vice President Data Center Coordinator. By way of
example and not by way of limitation, any of the following actions, if
unreasonable or materially adverse to the Employee, shall constitute such
diminution or interference unless consented to in writing by the Employee: (i) a
change in the principal workplace of the Employee to a location more than fifty
(50) miles from the Bank's main office; (ii) a material demotion of the
Employee, a reduction in the number or seniority of other Bank personnel
reporting to the Employee, or a reduction in the frequency with which, or in the
nature of the matters with respect to which, such personnel are to report to the
Employee; or (iii) a reduction or adverse change in the salary, perquisites,
benefits, contingent benefits or vacation time which had theretofore been
provided to the Employee.
(5) Termination for "cause" shall include termination because of the
Employee's personal dishonesty, incompetence, willful misconduct, breach of a
fiduciary duty involving personal profit, intentional failure to perform stated
duties, willful violation of any law, rule, or regulation (other than traffic
violations or similar offenses) or final cease-and-desist order. Notwithstanding
the foregoing, the Employee shall not be deemed to have been terminated for
cause unless and until there shall have been delivered to the Employee a copy of
a resolution, duly adopted by the affirmative vote of not less than a majority
of the disinterested members of the Board of Directors of the Bank at a meeting
of the Board called and held for such purpose (after reasonable notice to the
Employee and an opportunity for the Employee, together with the Employee's
counsel, to be heard before the Board), stating that in the good faith opinion
of the Board the Employee was guilty of conduct constituting "cause" as set
forth above and specifying the particulars thereof in detail.
(c) Compliance with Capital Requirements. Notwithstanding
anything in this Agreement to the contrary, no payments may be made pursuant to
this Section 1 hereof without the prior approval of the Regional Deputy Director
of the OTS if following such payment the Bank would not be in compliance with
its fully phased in capital
2
requirements as defined in OTS regulations.
2. Certain Reduction of Payments by the Bank. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Bank to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise) (a 'Payment") would be nondeductible
(in whole or part) by the Bank for Federal income tax purposes because of
Section 280G of the Code, then the aggregate present value of amounts payable or
distributable to or for the benefit of the Employee pursuant to this Agreement
(such amounts payable or distributable pursuant to this Agreement are
hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced
Amount. The "Reduced Amount" shall be an amount, not less than zero, expressed
in present value which maximizes the aggregate present value of Agreement
Payments without causing any Payment to be nondeductible by the Bank because of
Section 280G of the Code. For purposes of this Section 2, present value shall be
determined in accordance with Section 280G(d) (4) of the Code.
(b) All determinations required to be made under this Section
2 shall be made by the Bank's independent auditors, or at the election of such
auditors by such other firm or individuals of recognized expertise as such
auditors may select (such auditors or, if applicable, such other firm or
individual, are hereinafter referred to as the "Advisory Firm"). The Advisory
Firm shall within ten business days of the Date of Termination, or at such
earlier time as is requested by the Bank, provide to both the Bank and the
Employee an opinion (and detailed supporting calculations) that the Bank has
substantial authority to deduct for federal income tax purposes the full amount
of the Agreement Payments and that the Employee has substantial authority not to
report on her/his federal income tax return any excise tax imposed by Section
4999 of the Code with respect to the Agreement Payments. Any such determination
and opinion by the Advisory Firm shall be binding upon the Bank and the
Employee. The Employee shall determine which and how much, if any, of the
Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 2, provided that, if the Employee does not make
such determination within ten business days of the receipt of the calculations
made by the Advisory Firm, the Bank shall elect which and how much, if any, of
the Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 2 and shall notify the Employee promptly of such
election. Within five business days of the earlier of (i) the Bank's receipt of
the Employee's determination pursuant to the immediately preceding sentence of
this Agreement or (ii) the Bank's election in lieu of such determination, the
Bank shall pay to or distribute to or for the benefit of the Employee such
amounts as are then due the Employee under this Agreement. The Bank and the
Employee shall cooperate fully with the Advisory Firm, including without
limitation providing to the Advisory Firm all information and materials
reasonably requested by it, in connection with the making of the determinations
required under this Section 2.
(c) As a result of uncertainty in application of Section
280G of the
3
Code at the time of the initial determination by the Advisory Firm hereunder, it
is possible that Agreement Payments will have been made by the Bank which should
not have been made ("Overpayment") or that additional Agreement Payments will
not have been made by the Bank which should have been made ("Underpayment"), in
each case, consistent with the calculations required to be made hereunder. In
the event that the Advisory Firm, based upon the assertion by the Internal
Revenue Service against the Employee of a deficiency which the Advisory Firm
believes has a high probability of success determines that an Overpayment has
been made, any such Overpayment paid or distributed by the Bank to or for the
benefit of Employee shall be treated for all purposes as a loan ab initio which
the Employee shall repay to the Bank together with interest at the applicable
federal rate provided for in Section 7872(f) (2) of the Code; provided, however,
that no such loan shall be deemed to have been made and no amount shall be
payable by the Employee to the Bank if and to the extent such deemed loan and
payment would not either reduce the amount on which the Employee is subject to
tax under Section 1 and Section 4999 of the Code or generate a refund of such
taxes. In the event that the Advisory Firm, based upon controlling preceding or
other substantial authority, determines that an Underpayment has occurred, any
such Underpayment shall be promptly paid by the Bank to or for the benefit of
the Employee together with interest at the applicable federal rate provided for
in Section 7872(f)(2) of the Code.
(d) Any payments made to the Employee, pursuant to this Agreement or
otherwise, are subject to and conditioned upon their compliance with 12 U.S.C.
ss. 1828(k) and any regulations adopted thereunder.
3. Term. The term of this Agreement shall be a period of two (2) years
commencing on January 31, 2000 and ending on January 30, 2002, subject to
earlier termination as provided herein.
4. Participation in Other Employee Benefit Plans. In addition to the
benefits provided under this agreement, the Employee shall be entitled while
employed to participate in, and receive benefits under, all plans relating to
stock options, stock purchases, pension, thrift, profit-sharing, group life
insurance, medical coverage, education, cash or stock bonuses, and other
retirement or employee benefits or combinations thereof, that are now or
hereafter maintained for the benefit of the Bank's employees of similar rank or
for its employees generally.
5. Termination; Death.
(a) In the event Bank terminates the Employee's employment for
cause, the obligations of the Bank under this Agreement shall cease. In case of
termination of the Employee's employment for cause, the Bank shall pay the
Employee her/his salary through the date of termination, and the Bank shall have
no further obligation to the Employee under this Agreement. The Employee shall
have no right to receive any of the compensation defined in Section 1(a) after
termination for cause.
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(b) The Employee's employment may be voluntarily terminated by
the Employee at any time upon ninety (90) days written notice to the Bank or
upon such shorter period as may be agreed upon between the Employee and the
Board of Directors of the Bank. In the event of such voluntary termination, the
Bank shall be obligated to continue to pay the Employee her/his salary only
through the date of termination, at the time such payments are due, and the Bank
shall have no further obligation to the Employee under this Agreement.
(c) In the event of the death of the Employee during the term
of this Agreement and prior to any termination hereunder, the Employee's estate,
or such person as the Employee may have previously designated in writing, shall
be entitled to receive from the Bank the salary of the Employee through the last
day of employment and this Agreement shall terminate and end on such last day of
employment.
(d) If the Employee is suspended from office and/or
temporarily prohibited from participating in the conduct of the Bank's affairs
by a notice served under Section 8(e) (3) or (g) (1) of the Federal Deposit
Insurance Act ("FDIA"), 12 U.S.C. ss. 1818(e) (3); (g) (l), the Bank's
obligations under this Agreement shall be suspended as of the date of service,
unless stayed by appropriate proceedings. If the charges in the notice are
dismissed, the Bank may in its discretion (i) pay the Employee all or part of
the compensation withheld while its obligations under this Agreement were
suspended and (ii) reinstate in whole or in part any of the obligations which
were suspended.
(e) If the Employee is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's affairs by an order
issued under Section 8(e) (4) or (g) (1) of the FDIA, 12 U.S.C. ss. 1818(e) (4);
(g) (1), all obligations of the Bank under this Agreement shall terminate, as of
the effective date of the order, but vested rights of the parties shall not be
affected.
(f) If the Bank becomes in default (as defined in Section 3(x)
(1) of the FDIA, 12 U.S.C. ss. 1813(x) (1)), all obligations under this
Agreement shall terminate as of the date of default, but this provision shall
not affect any vested rights of the parties.
(g) All obligations under this Agreement shall be terminated,
except to the extent determined that continuation of this Agreement is necessary
for the continued operation of the Bank: (i) by the Director of the Office of
Thrift Supervision ("OTS") or his or her designee at the time the Federal
Deposit Insurance Corporation or the Resolution Trust Corporation enters into an
agreement to provide assistance to or on behalf of the Bank under the authority
contained in Section 13(c) of the FDIA, 12 U.S.C. ss. 1823(c); or (ii) by the
Director of the OTS or his or her designee at the time the Director of the OTS
or his or her designee approves a supervisory merger to resolve problems related
to operation of the Bank or when the Bank is determined by the Director of the
OTS to be in an unsafe or unsound condition.
5
Any rights of the parties that have already vested, however, shall not
be affected by any such action.
6. Disability. If during the term of this Agreement the Employee shall
become disabled or incapacitated to the extent that she/he is unable to perform
the duties of the Corporate Secretary Senior Vice President Data Center
Coordinator, she/he shall be entitled to receive disability benefits of the type
provided for other officers of the Bank of similar rank. If the employment of
Employee is terminated due to disability or incapacity to perform the duties and
requirements of the employment, this Agreement shall terminate and end on such
last day of employment.
7. No Assignments. (a) This Agreement is personal to each of the
parties hereto, and neither party may assign or delegate any of its rights or
obligations hereunder without first obtaining the written consent of the other
party; provided, however, that the Bank will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Bank, by; an
assumption agreement in form and substance satisfactory to the Employee, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Bank would be required to perform it if no such
succession or assignment had taken place. Failure of the Bank to obtain such an
assumption agreement prior to the effectiveness of any such succession or
assignment shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Bank in the same amount and on the same terms as the
compensation pursuant to Section 1(a) hereof. For purposes of implementing the
provisions of this Section 7(a), the date on which any such succession becomes
effective shall be deemed the Date of Termination.
(b) This Agreement and all rights of the Employee hereunder
shall inure to the benefit of and be enforceable by the Employee's personal and
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Employee should die while any
amounts would still be payable to the Employee hereunder if the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Employee's devisee,
legatee or other designee or if there is no such designee, to the Employee's
estate.
8. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the 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, addressed to the respective
addresses set forth on the first page of this Agreement (provided that all
notices to the Bank shall be directed to the attention of the Board of Directors
of the Bank with a copy to the Secretary of the Bank), or to such other address
as either party may have furnished to the other in writing in accordance
herewith.
6
9. Amendments. No amendments or additions to this Agreement shall be
binding unless in writing and signed by both parties, except as herein otherwise
provided.
10. Paragraph Headings. The paragraph headings used in this Agreement
are included solely for convenience and shall not affect, or be used in
connection with, the interpretation of this Agreement.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Governing Law. This Agreement shall be governed by the laws of the
United States to the extent applicable and otherwise by the laws of the State of
Montana.
13. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXXX X. XXXXXXXX Employee
Address: Xxxxxxx, XX 00000
WESTERN SECURITY BANK
By:__________________________________
Xxxxx X. Xxxxxxxx, President
and Chief Executive Officer
7
