EXHIBIT 10.5
AGREEMENT
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This Agreement (this "Agreement") is made as of February 27, 1998 by and
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between Pioneer Citizens Bank, a state chartered bank (the "Bank") and Xxx X.
Xxxxxxx, an individual ("Xxxxxxx").
Preliminary Statements
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X. Xxxxxxx is currently employed by the Bank in the position of
Executive Vice-President at the Bank's Reno headquarters location.
X. Xxxxxxx has had a long, outstanding career with the Bank, and has
decided to retire. The relationship between Xxxxxxx and the Bank is one of
mutual respect. Xxxxxxx' retirement from the Bank is on the most amicable of
terms.
C. The Bank recognizes that Xxxxxxx is a prominent figure in the banking
industry and in the general community in Las Vegas and in Reno, Nevada. A
competitor of the Bank may approach Xxxxxxx and engage Xxxxxxx in a capacity
that is detrimental to the Bank's business.
D. The primary purpose of this Agreement is to limit Xxxxxxx from
competing with the Bank during the three (3) year period commencing on the date
when Xxxxxxx retires, which will be April 1, 1998, and running through March 30,
2001 (the "Transition Period"). A secondary purpose is to set the terms and
conditions of Xxxxxxx' acting as a consultant to the Bank if the Bank calls upon
Xxxxxxx to provide certain consulting and advisory services, and if Xxxxxxx
agrees to render such services, during the Transition Period.
In consideration of the foregoing, the mutual promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
Covenants
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1. Non-Competition; Non-Solicitation. Without the prior written
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authorization of the Bank, Xxxxxxx shall not, directly or indirectly, during the
Transition Period:
(a) own, manage, operate, control or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director or consultant, (other than providing Consulting Services to
the Bank) or otherwise with or have any financial interest in any entity engaged
in the practice of banking within Xxxxx County and Washoe County, Nevada; or
(b) solicit or contact any employee of the Bank with a view to inducing
or encouraging such employee to leave the employ of the Bank for the purpose of
being employed by Xxxxxxx or any competitor of the Bank; or
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(c) solicit any customer of the Bank to relocate his or her accounts to
that of a competitor.
The parties hereto recognize and acknowledge that the geographical and time
limitations contained in this Section are reasonable and properly required for
the adequate protection of the Bank's interests. The parties further
acknowledge that violation of this Section would cause irreparable injury for
which there would be no adequate remedy at law, and agree that the Bank shall be
entitled to seek injunctive relief against such violation.
2. Monetary Consideration. As a material inducement to enter into this
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Agreement, the Bank shall pay or cause to be paid to Xxxxxxx the sum of Three
Hundred Sixty Thousand Dollars ($360,000) for the Transition Period. This
amount shall be paid in equal monthly installments payable on the last business
day of each month.
In the event of Xxxxxxx' death, the Bank shall continue to pay the Monetary
Consideration pursuant to the payment schedule set forth above. The payee shall
be determined in accordance with Xxxxxxx' operative estate plan, which currently
is the Revocable Living Trust Agreement made and executed March 12, 1997 by
Xxxxxxx and his wife Xxxxx X. Xxxxxxx, as Settlors and Trustees.
In the event the Bank is acquired by another person or entity or is merged
into another person or entity and the Bank is not the surviving entity, the
unpaid balance of the Monetary Consideration shall become due and payable on the
date the merger or acquisition is final.
3. Medical Insurance Benefits. As an additional material inducement to
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enter into this Agreement, the Bank shall provide Xxxxxxx with medical insurance
during the Transition Period which is the same as the medical insurance and
coverages Xxxxxxx received as an employee prior to his retirement.
In the event of Xxxxxxx' death, the Bank shall continue to provide those
dependents of Xxxxxxx who were dependents at the time of his death with the same
medical insurance during the remainder of the Transition Period.
4. Consulting Services. During the Transition Period, the Bank may call
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upon Xxxxxxx to perform certain consulting and advisory services for the Bank.
Xxxxxxx agrees to perform such services that the Bank and Xxxxxxx mutually agree
upon. The services may include providing business referrals, assisting the Bank
with the retention of its existing customer base, and providing information and
assistance with regard to the Bank's past and future lending decisions as well
as any other consulting and advisory services ("Consulting Services"). With the
exception of expenses addressed in Section 5 of this Agreement, he shall be paid
only the Monetary Consideration and Medical Insurance Benefits set forth above
for rendering the Consulting Services.
5. Expenses with Regard to Consulting Services. Xxxxxxx shall be
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reimbursed by the Bank for all reasonable expenses incurred by him in connection
with performance of the
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Consulting Services provided that Xxxxxxx timely provides the Bank with a
reasonable accounting for such expenses.
6. Confidential Information. In view of the fact that Xxxxxxx has
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obtained and will continue to obtain information regarding the confidential
affairs of the Bank and its operations and customers, which is not readily
available to the pubic, Xxxxxxx agrees, during the Transition Period and
thereafter, to keep secret and to retain in the strictest confidence all
information in business and financial matters such as costs, profits, and plans
for future expansion or development, plans for rendering additional services,
methods of operation, and marketing concepts of the Bank, customer lists,
customer financial information, as well as employment policies and plans, and
any other information relating to the Bank and its operation, business and
financial affairs or the financial affairs of its customers (collectively, the
"Confidential Matters") and not to disclose the Confidential Matters to anyone
outside the Bank, either during the Transition Period or thereafter, except to
the extent reasonably required in the course of performing the Consulting
Services or with the Bank's express written consent. The covenants, agreements,
representations and warranties contained in and made pursuant to this Section
shall survive the Transition Period.
7. Resignation of Xxxxxxx. Concurrently with the execution of this
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Agreement, Xxxxxxx shall agree to resign as of April 1, 1998 as an officer and
employee of the Bank by executing and delivering to the Bank a resignation in
the form set forth on Exhibit "A" attached hereto and made a part hereof.
8. Confidentiality of Terms of this Agreement. As an additional material
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inducement to enter into this Agreement, each party covenants and agrees that
neither he nor it, nor his or its respective heirs, successors, assigns, agents
or representatives shall disclose to anyone, to whom disclosure is not required
by law or court order, the terms of this Agreement. The parties agree that each
will disclose the following when asked about Xxxxxxx' departure from the Bank
and/or Xxxxxxx' relationship with the Bank after he terminates his employment
with the Bank on April 1, 1998: "Xxxxxxx will be retiring/retired as of April 1,
1988, and will be/is a consultant for the Bank for a three (3) year period
commencing April 1, 1998."
9. Arbitration. Except as is provided in Section 1 of this Agreement,
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any dispute between the parties arising out of the terms and conditions of this
Agreement that cannot be promptly settled shall be resolved by final and binding
arbitration in Reno, Nevada, in accordance with the then-prevailing Commercial
Rules of the American Arbitration Association (the "AAA"). The parties shall
select a single arbitrator. The arbitrator shall be required to abide by the
provisions of this Agreement and the arbitrator shall not modify or alter same.
The arbitrator's award shall be issued within sixty (60) days following
submission of the dispute to the AAA. The arbitrator's award shall be
unappealable. A judgment upon the award may be entered in any court having
jurisdiction of the parties.
10. Fees and Costs Regarding Dispute. In any action to enforce the terms
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and conditions of this Agreement, the prevailing party shall be entitled to
recover from the other party his or its reasonable legal fees, costs and other
expenses.
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11. Governing Law and Venue. This Agreement shall be governed by and
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construed in accordance with the laws of the State of Nevada. Any suit brought
hereon shall be brought in the appropriate state or federal court located in
Washoe County, Nevada, the parties hereto hereby waiving any claim or defense
that such form is not convenient or proper. Each party hereby agrees that any
such court shall have in personam jurisdiction over it and consents to service
of process in manner authorized by Nevada law.
12. Notices. All notices, requests, demands and other communications
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hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or by overnight commercial courier or mailed, by certified
mail, return receipt requested, as follows:
If to the Bank: Pioneer Citizens Bank
0000 Xxxxx Xxxxxxxx Xxxxxxx
P. O. Xxx 0000
Xxx Xxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President and CEO
If to Xxxxxxx: Xxx X. Xxxxxxx
0000 Xxxxxxxxxx Xx
Xxxx, XX. 00000
or to such other address as to which either party may notify the other as
provided herein.
13. Binding Effect. This Agreement shall be binding upon, and inure to
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the benefit of, the parties hereto and their respective hears, executors, legal
representatives, successors and assigns.
14. Enforceability. If any of the provisions in this Agreement, for any
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reason and to any extent, are construed to be invalid or unenforceable, the
remainder of this Agreement, and the application of the remaining covenants to
other persons or circumstances, shall not be affected thereby, but rather shall
be enforced to the greatest extent permitted by law.
15. Entire Agreement. This Agreement contains the entire agreement
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between the Bank and Xxxxxxx with respect to the subject matter hereof. This
Agreement may not be amended, waived, changed, modified or discharged except by
an instrument in writing executed by or on behalf of the party or parties
against whom any amendment, waiver, change, modification or discharge is sought
to be enforced.
16. Effect of Other Employment and Severance Agreements. As of April 1,
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1998, this Agreement supercedes and renders null and void any and all other
employment and severance agreements and arrangements between Xxxxxxx and the
Bank, including but not limited to the September 30, 1992 amendment to the
severance arrangement between Xxxxxxx and the Bank.
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17. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument.
18. Fees and Costs Regarding Negotiation Of This Agreement. The Bank
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shall bear its own legal fees and costs and other expenses, and Xxxxxxx'
reasonable legal fees, costs and other expenses, incurred in connection with the
negotiation, preparation and execution of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
set forth above.
XXXXXXX BANK
Pioneer Citizens Bank, a state chartered bank
/s/ Xxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
______________________________ ______________________________
Xxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: President/CEO
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