NATIONAL BANK OF TUKWILA
NONCOMPETITION AND SEVERANCE AGREEMENT
THIS NONCOMPETITION AND SEVERANCE AGREEMENT ("Agreement"), signed June
11, 1999, between NATIONAL BANK OF TUKWILA (the "Bank") and Xxxxxx X. Xxxx
("Employee") takes effect on the effective date of the Merger ("Effective
Date").
RECITALS
A. NBT Northwest Bancorp ("NBT"), which is the parent company of the Bank,
intends to merge into InterWest Bancorp, Inc. ("InterWest"), and the
Bank will thereby become the wholly owned subsidiary of InterWest (the
"Merger") under the terms of the Agreement and Plan of Merger of even
date herewith ("Plan") between the parties and Pacific Northwest Bank,
the wholly owned subsidiary of InterWest.
B. As a condition to InterWest's execution of the Plan, all members of the
boards of directors of NBT and the Bank must execute a director's
agreement, pursuant to which such directors will be subject to certain
noncompetition and nonsolicitation obligations for two years after they
cease to be directors of NBT or the Bank (the "Director's Agreement").
C. Employee, who is presently the Bank's Senior Vice President and Chief
Credit Officer, has resigned from the boards of directors of NBT and
the Bank so as not to be subject to the Director's Agreement. InterWest
has agreed to such resignation provided that Employee execute this
Agreement.
AGREEMENT
The parties agree as follows.
1. ABANDONMENT OF THE MERGER. If the Plan terminates before Closing, this
Agreement will not become effective and will be void.
2. SEVERANCE PAYMENT. If Employee continues his employment with the Bank
through the Effective Date, and at any time after the Effective Date
the Bank terminates Employee without Cause (defined below), the Bank
will pay to Employee an amount equal to six (6) months of Employee's
then-current annual base salary (the "Severance Payment").
3. TERMINATION OF AGREEMENT. This Agreement terminates immediately (1) if
Employee dies, (2) if Employee voluntarily terminates his employment
with the Bank at any time, or (3) if Employee is unable to perform his
duties and obligations under this Agreement for a period of 90 days as
a result of a physical or mental disability arising at any time during
the term of this Agreement, unless with reasonable accommodation
Employee could continue to perform his duties under this Agreement and
making these accommodations would not pose an undue burden on the Bank.
4. DEFINITION OF "CAUSE". "Cause" means any one or more of the following:
(a) Willful misfeasance or gross negligence in the performance of
Employee's duties;
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(b) Conviction of a crime in connection with his duties; or
(c) Conduct demonstrably and significantly harmful to the Bank, as
reasonably determined by the Bank's board of directors on the
advice of legal counsel.
5. CONFIDENTIALITY. Employee will not use for his own purposes or disclose
to any other person or entity any confidential information concerning
the Bank, InterWest, their subsidiaries or their business operations or
customers, unless (1) the Bank or InterWest consents to the use or
disclosure of their respective confidential information, (2) the use or
disclosure is consistent with Employee's duties as an employee of the
Bank, or (3) disclosure is required by law or court order.
6. POST-EMPLOYMENT RESTRICTIONS.
(a) NON-COMPETITION. For a six-month period after Employee's
employment with the Bank or its successor terminates for any
reason (the "Restricted Period"), Employee will not, directly
or indirectly, become interested in, as a promoter, principal
shareholder, director or officer of, any financial institution
that competes or will compete with InterWest or any of its
subsidiaries or their affiliates within a thirty (30) mile
radius of Tukwila, Washington. The term "principal
shareholder" means any person who owns, directly or
indirectly, five percent (5%) or more of the outstanding
shares of any voting class of equity security of a company.
(b) NON-SOLICITATION. During the Restricted Period, Employee will
not directly or indirectly solicit or attempt to solicit on
behalf or for the benefit of any financial institution (i) any
employees of the Bank, InterWest, or any of their subsidiaries
or affiliates, to leave their employment for employment with
another financial institution or (ii) any customers of the
Bank, InterWest, or any of their subsidiaries or affiliates to
remove their business from the Bank, InterWest, or any of
their subsidiaries or affiliates. Solicitation prohibited
under this section includes solicitation by any means,
including, without limitation, meetings, telephone calls,
letters or other mailings, electronic communication of any
kind, and internet communications.
(c) REMEDIES. Employee recognizes and agrees that any breach of
this paragraph 6 by him will entitle InterWest and any of its
successors or assigns to injunctive relief and/or specific
performance, as well as any other legal or equitable remedies
to which such entities may otherwise be entitled. The
substantially prevailing party in any such dispute will be
entitled to recover from the other party its costs and
expenses, including specifically, reasonable attorneys' fees.
7. MISCELLANEOUS PROVISIONS.
(a) ENTIRE AGREEMENT; AT-WILL EMPLOYMENT. This Agreement
constitutes the entire understanding between the parties
concerning its subject matter and supersedes all prior
agreements. Nothing in this Agreement, express or implied, is
intended to confer upon Employee the right to employment with
the Bank. Employee's employment term with the Bank is
indefinite and at the will of both parties, subject only to
the provisions of paragraph 2 regarding severance pay and
paragraphs 5 and 6 regarding Employee's confidentiality,
noncompetition and nonsolicitation obligations.
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(b) COUNSEL REVIEW. Employee acknowledges that he has had the
opportunity to consult with independent counsel with respect
to the negotiation, preparation and execution of this
Agreement.
(c) LITIGATION EXPENSES. If either party seeks to enforce any
provision of this Agreement or to collect any amount claimed
to be due under it, the substantially prevailing party will be
entitled to reimbursement from the other party for any and all
of its out-of-pocket expenses and costs including, without
limitation, reasonable attorneys' fees and costs incurred in
connection with the enforcement or collection.
(d) BINDING EFFECT. This Agreement will bind and inure to the
benefit of the Bank's or InterWest's legal representatives,
successors and assigns.
(e) ASSIGNMENT; AMENDMENT. Employee may not assign any of his
rights or duties under this Agreement. This Agreement may not
be modified or amended except by a written instrument signed
by both parties with the prior written consent of InterWest.
(f) FAIRNESS; SEVERABILITY. The Bank and Employee stipulate that,
in light of all of the facts and circumstances of the
relationship between Employee and the Bank, the agreements
referred to in paragraphs 5 and 6 (including without
limitation their scope, duration and geographic extent) are
fair and reasonably necessary for the protection of the Bank's
and InterWest's confidential information, goodwill and other
protectable interests. If a court of competent jurisdiction
should decline to enforce any of those covenants and
agreements, Employee and the Bank request the court to reform
these provisions to restrict Employee's use of confidential
information and Employee's ability to compete with the Bank
and InterWest to the maximum extent, in time, scope of
activities, and geography, the court finds enforceable.
(g) GOVERNING LAW. This Agreement will be governed by and
construed in accordance with Washington law.
(h) COUNTERPARTS. This Agreement may be executed in one or more
facsimile counterparts, each of which will be deemed an
original, but all of which taken together will constitute one
and the same document.
Signed: June 11, 1999:
NATIONAL BANK OF TUKWILA
/s/
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By:
Its:
XXXXXX X. XXXX, individually
/s/
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Xxxxxx X. Xxxx
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