EXHIBIT 10.4
EXECUTIVE SEVERANCE AGREEMENT
This EXECUTIVE SEVERANCE AGREEMENT ("Agreement") is dated as of *Effective
Date* (the "Effective Date"). The parties to this Agreement ("Parties") are
PIONEER CITIZENS BANK, a Nevada state-chartered bank ("Bank"), and *First Name*
*Last Name* ("Executive").
A. Executive is employed by Bank in a managerial capacity, presently holding
the position of Executive Vice President.
B. Bank wishes to ensure the continued availability of Executive's services in
the event of a change in the control of Bank, thereby allowing Bank to
maximize the benefits obtainable from any such change. To that end, Bank
desires to provide incentive for Executive's continued employment with
Bank.
NOW THEREFORE, Bank and Executive agree as follows:
Agreement
---------
1. Effective Date and Term. As of the Effective Date, this Agreement shall be
a binding obligation of the parties, not subject to revocation or amendment
except by mutual consent or in accordance with its terms. The term of this
Agreement ("Term") shall commence as of the Effective Date and shall expire
upon Executive's termination of employment with Bank. Notwithstanding the
preceding, if a definitive agreement providing for a Change in Control
(defined below) is entered into (i) on or before the expiration of the Term
or (ii) within sixty (60) days after Executive's termination other than for
Cause, Disability, Retirement or death, then expiration of such Term, the
term of this Agreement shall be extended through the Severance Protection
Period (defined below).
2. Commitment of Executive. In the event that any person extends any proposal
or offer which is intended to or may result in a Change in Control, defined
below (a "Change in Control Proposal"), Executive shall, at Bank's request,
assist Bank and/or its parent holding company, Pioneer Bancorporation
("Bancorp"), in evaluating such proposal or offer. Further, as a condition
to receipt of the Severance Payment (defined below), Executive agrees not
to voluntarily resign Executive's position with Bank during any period from
the Executive's receipt of information of a specific Change in Control
Proposal up to the consummation or abandonment of the transaction
contemplated by such Proposal.
3. Severance Payment.
a. Payment Events. In the event of voluntary or involuntary termination
--------------
of Executive's employment with Bank, other than for Cause, Disability
(each defined below) or death (i) within the Severance Protection
Period after a Change in Control, or (ii) within sixty (60) days
before a Change in Control, Bank will pay Executive a severance
payment in the amount determined pursuant to the next section
("Severance Payment"), payable on the later of the date of termination
or the date of the Change in Control. The "Severance Protection
Period" shall be the period beginning on the Change of Control and
continuing thereafter for (i) twenty-four (24) months plus (ii) an
additional month for
1
each year Executive has been employed with Bank up to six years, for a
maximum Severance Protection Period of thirty (30) months.
b. Amount of Payment. The Severance Payment shall be an amount equal to
-----------------
the Payment Multiple (defined below) multiplied by the sum of (i)
Executive's regular monthly salary in effect as of the date of
termination of employment (as reportable on Executive's IRS Form W-2,
but including the amount of any voluntary deferrals of salary, and
excluding any expense allowances or reimbursements, any bonuses, any
gain from exercise of stock options, or any other similar non-
recurring payments) and (ii) one-twelfth of Executive's most recent
bonus paid (as reported on Executive's IRS Form W-2). The "Payment
Multiple" shall be the number of months in the Severance Protection
Period.
c. Limitation on Payment. Notwithstanding anything in this Agreement to
---------------------
the contrary, the Severance Payment shall not exceed an amount equal
to One Dollar ($1.00) less than the amount which would cause the
payment, together with any other payments received from Bank to be a
"parachute payment" as defined in Section 280G(b)(2)(A) of the
Internal Revenue Code of 1986, as amended.
d. Release. Executive agrees that in exchange for the Severance Payment,
-------
Executive will execute a release of any and all employment-related
claims against the Bank.
4. Definitions. Solely for purposes of this Agreement, the following terms
shall have the meanings set forth below:
a. Bancorp. "Bancorp" shall mean Pioneer Bancorporation, a Nevada
-------
corporation and parent company of Bank.
b. Cause. "Cause" means any one or more of the following:
-----
(1) Willful misfeasance or gross negligence in the performance of
Executive's duties;
(2) Conviction of a crime in connection with such duties; or
(3) Conduct demonstrably and significantly harmful to the financial
condition of the Bank.
c. Change in Control. "Change in Control" shall mean either of the
-----------------
following:
(1) The merger or consolidation of Bank or Bancorp into any
corporation, or the merger or consolidation of any corporation
into Bank or Bancorp, where at least sixty-six and two-thirds
percent (66-2/3 %) of the stock of such corporation or Bank or
Bancorp, as the case may be, (the "Surviving Corporation") is
owned by other than the owners of the common stock of Bank or
Bancorp prior to such merger or consolidation; or
(2) The sale of substantially all of the assets of Bank or Bancorp to
an entity other than Bancorp or an entity owned more than fifty
percent (50%) by Bancorp.
2
d. Disability. "Disability" shall mean a physical or mental impairment
----------
which renders Executive incapable of substantially performing the
essential functions of such Executive's position, and which is
expected to continue rendering Executive so incapable for the
reasonably foreseeable future, with or without reasonable
accommodation.
e. Retirement. "Retirement" shall mean voluntary termination by
----------
Executive in accordance with Bank's retirement policies, including
early retirement, if applicable to their salaried employees
5. No Impact on Employment.
a. Not an Employment Agreement. Nothing in this Agreement, express or
---------------------------
implied, is intended to confer upon Executive the right to employment
with Bank. Accordingly, except with respect to the Severance Payment,
this Agreement shall have no effect on the determination of any
compensation payable by Bank to Executive, or upon any of the other
terms of Executive's employment with Bank. The specific arrangements
referred to herein are not intended to exclude any other benefits
which may be available to Executive upon a termination of employment
with Bank pursuant to employee benefit plans of Bank or otherwise.
b. No Change in Employment Status. Nothing in this Agreement shall
------------------------------
change Executive's employment status with Bank. Unless otherwise
expressly provided in a separate written agreement, (i) this Agreement
shall not alter Executive's "at will" employment relationship with
Bank and (ii) either Executive or Bank may terminate Executive's
employment at any time with or without notice and with or without
cause.
6. Noncompetition
a. Participation in Competing Business. During the period from the date
-----------------------------------
on which any Severance Payment is made and for twelve (12) months
thereafter ("Noncompete Period"), Executive will not become involved,
directly or indirectly, as a shareholder, member, partner, director,
officer, manager, consultant, agent or representative of a Competing
Business.
(1) Competing Business. "Competing Business" means any financial
------------------
institution, credit union, or trust company within the Covered
Area.
(2) Covered Area. "Covered Area" means the State of Nevada.
------------
b. Employment Outside Covered Area. Nothing in this Agreement prevents
-------------------------------
the Executive from accepting employment outside the Covered Area from
a Competing Business, if, during the Noncompete Period, the Executive:
(i) will not act as an employee or other representative or agent of
the Competing Business within the Covered Area and (ii) will have no
responsibilities for the Competing Business' operations within the
Covered Area.
c. Passive Interest. Nothing in this Agreement prevents the Executive
----------------
from owning five percent (5%) or less of any class of security of a
Competing Business.
3
d. Enforceability. If a court determines that the restrictions set forth
--------------
in this Section 6 are unenforceable, the maximum restrictions, term,
scope or geographical area that is enforceable will be substituted in
place of the unenforceable provisions.
e. Exception to Arbitration. Notwithstanding Section 11(b) below, if
------------------------
Executive violates this Section 6, Bank and/or Bancorp will be
entitled to injunctive relief and/or specific performance, as well as
to any other legal or equitable remedies to which they may be
entitled.
7. Proprietary Information. Executive acknowledges that during the course of
Executive's employment with Bank, Executive shall have access to and make
use of certain trade secrets and confidential information (collectively
"Confidential Information"). "Confidential Information" refers to all
nonpublic information relating to Bank or its business that is disclosed to
or produced by Executive, or that Executive otherwise obtains during
employment with Bank, including but not limited to business strategies,
financial results, lists of current or future customer accounts, key
persons to contact with regard to customer accounts, customer needs,
contractual agreements between Bank and other individuals, strategies and
ideas, and compilations of information and records owned by Bank and
regularly used in operation of Bank's business. Executive agrees that
Executive shall not disclose any Confidential Information, directly or
indirectly, or use any of it in any way, except as required in the course
of employment by Bank. Executive further agrees that all files, records,
documents, drawings, specifications, lists, equipment, graphics, designs,
and similar items relating to the business of Bank, including any copies
whether prepared by Executive or otherwise coming into Executive's
possession, shall remain the exclusive property Bank and shall not be
removed from the premises of Bank without prior written consent of Bank.
8. Withholding. All payments required to be made by Bank hereunder to
Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.
9. Assignability. Bank may assign this Agreement and its rights hereunder in
whole, but not in part, to any corporation, bank or other entity with or
into which Bank may hereafter merge or consolidate or to which Bank may
transfer all or substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of Bank hereunder as fully as if it had been
originally made a party hereto, but may not otherwise assign this Agreement
or its rights hereunder. Executive may not assign or transfer this
Agreement or any rights or obligations hereunder.
10. Entire Agreement. This Agreement constitutes the entire understanding
between the parties concerning its subject matter and supersedes all prior
agreements. Accordingly, Executive specifically waives the terms of and
all of Executive's rights under all change-in-control agreements and
severance compensation provisions of any other agreements, whether written
or oral, previously entered into with Bank.
11. General Provisions.
a. Choice of Law. This Agreement is made with reference to and is
-------------
intended to be construed in accordance with the laws of the State of
Nevada.
4
b. Arbitration. Any dispute, controversy or claim arising out of or in
-----------
connection with, or relating to, this Agreement or any breach or
alleged breach hereof, shall, upon the request of any party involved,
be submitted to, and settled by, arbitration pursuant to the rules
then in effect of the American Arbitration Association (or under any
other form of arbitration mutually acceptable to the parties so
involved). Any award rendered shall be final and conclusive upon the
parties and a judgment thereon may be entered in the highest court of
the forum having jurisdiction. The arbitrator shall render a written
decision, naming the substantially prevailing party in the action, and
shall award such party all costs and expenses incurred, including
reasonable attorneys' fees.
c. Attorney Fees. In the event of any breach of or default under this
-------------
Agreement which results in either party incurring attorney or other
fees, costs or expenses (including in arbitration), the prevailing
party shall be entitled to recover from the non-prevailing party any
and all such fees, costs and expenses, including attorney fees.
d. Successors. This Agreement shall bind and inure to the benefit of the
----------
Parties and each of their respective affiliates, legal
representatives, heirs, successors and assigns.
e. Amendment. This Agreement may be amended only in a writing signed by
---------
the Parties.
f. Headings. The headings of sections of this Agreement have been
--------
included for convenience of reference only. They shall not be
construed to modify or otherwise affect in any respect any of the
provisions of the Agreement.
EXECUTED by each of the Parties effective as of the date first stated above.
BANK: EXECUTIVE:
PIONEER CITIZENS BANK, *First Name* *Last Name*
a Nevada state-charted bank
By:_____________________________ _____________________________
Its:____________________________
5
