EXHIBIT 10.9
VALLEY BANK
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("AGREEMENT") is entered into by and between VALLEY
BANK (the "BANK"), a Nevada state-chartered bank, and XXX XXXXXXX ("EXECUTIVE"),
effective as of March 22, 2000.
The Bank and Executive agree as follows:
1. 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), Executive shall, at the Bank's request, assist the Bank
in evaluating such proposal or offer. Further, subject to the additional
terms and conditions of this Agreement, in order to receive the Change In
Control Payment (defined below), Executive cannot resign from the Bank
during any period from the receipt of a specific Change In Control
proposal up to the consummation or abandonment of the transaction
contemplated by such proposal.
2. CHANGE IN CONTROL. For the purposes of this Agreement, the term "CHANGE IN
CONTROL" means (a) a person or entity or a group of persons or entities
acting in concert acquiring or otherwise becoming the owner (as a result
of a purchase, merger, stock exchange, or otherwise) of more than fifty
percent (50%) of the outstanding common stock of the Bank, or (b) the
merger of the Bank into any corporation, or the merger of any corporation
into the Bank, where more than fifty percent (50%) of the stock of such
corporation or the Bank, as the case may be, is owned other than by the
owners of the common stock of the Bank, prior to such merger, or (c) the
sale of substantially all of the assets of the Bank; provided, however,
that an internal reorganization of the Bank (i.e., formation of a holding
company) shall not constitute a Change in Control.
3. PAYMENT OBLIGATIONS.
3.1 Closing of Change in Control. If, consistent with Section 1,
Executive remains employed with the Bank through the closing of a
Change in Control, then upon such closing, Executive shall receive a
single cash payment (the "CHANGE IN CONTROL PAYMENT") in an amount
equal to one and one-half (1.5) times Executive's highest W-2 income
(before salary deferrals) received from the Bank over the three
years preceding the date of closing. Upon payment of the Change in
Control Payment to Executive, this Agreement shall terminate.
3.2 Termination Prior to Change in Control. If, prior to a Change in
Control, the Bank terminates Executive's employment without Cause
(defined below) or Executive resigns for Good Reason (defined
below), and within six months thereafter the Bank enters into an
agreement for a Change in Control, or any party announces or is
required by law to announce a prospective Change in Control of the
Bank, then upon the closing of such Change in Control, Executive
shall
receive the Change in Control Payment in an amount equal to one and
one-half (1.5) times Executive's highest W-2 income (before salary
deferrals) received from the Bank over the three years preceding the
date of termination or resignation.
3.3 Parachute Payment Limitation. Notwithstanding anything in this
Agreement to the contrary, the Change in Control Payment shall not
exceed an amount equal to One Dollar ($1.00) less than the amount
that would cause the payment, together with any other payments
received from the Bank, to be a "parachute payment" within the
meaning of Section 280G(b)(2)(A) of the Internal Revenue Code of
1986, as amended.
4. TERMINATION OF AGREEMENT. This Agreement terminates immediately if, at any
time before the Change in Control transaction closes, (i) the Bank
terminates Executive's employment for Cause, (ii) Executive resigns from
the Bank without Good Reason, (iii) Executive dies, or (iv) Executive is
unable to perform her duties and obligations to the Bank for a period of
90 consecutive days as a result of a physical or mental disability, unless
with reasonable accommodation Executive could continue to perform such
duties and making these accommodations would not pose an undue hardship on
the Bank. This Agreement will terminate six months after Executive's
employment is terminated by the Bank without Cause or by Executive for
Good Reason, unless during such six-month period, the Bank enters into an
agreement for a Change in Control, or a Change in Control is announced or
required by law to be announced, in which case this Agreement will
terminate upon payment of the Change in Control Payment pursuant to
Section 3.2 or the abandonment of such Change in Control.
5. DEFINITIONS.
5.1 Cause. "Cause" means any one or more of the following:
a. Willful misfeasance or gross negligence in the performance of
Executive's duties.
b. Conviction of a crime in connection with her duties.
c. Conduct demonstrably and significantly harmful to the Bank, as
reasonably determined on the advice of legal counsel by the
Bank's board of directors.
5.2 Good Reason. "Good Reason" means only any one or more of the
following:
a. Reduction, without Executive's consent, of Executive's salary
or elimination of any compensation or benefit plan benefiting
Executive, unless the reduction or elimination is generally
applicable to substantially all similarly situated Bank
employees (or employees of a successor or controlling entity
of the Bank) formerly benefited.
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b. The assignment to Executive without her consent of any
authority or duties materially inconsistent with Executive's
position as of the date of this Agreement.
c. A relocation or transfer of Executive's principal place of
employment that would require Executive to commute on a
regular basis more than [30] miles each way from her current
business office at the Bank on the date of this Agreement,
unless Executive consents to the relocation or transfer.
6. ARBITRATION. At either party's request, the parties must submit any
dispute, controversy or claim arising out of or in connection with, or
relating to, this Agreement or any breach or alleged breach of this
Agreement, to arbitration under the American Arbitration Association's
rules then in effect (or under any other form of arbitration mutually
acceptable to the parties). A single arbitrator agreed on by the parties
will conduct the arbitration. If the parties cannot agree on a single
arbitrator, each party must select one arbitrator and those two
arbitrators will select a third arbitrator. This third arbitrator will
hear the dispute. The arbitrator's decision is final (except as otherwise
specifically provided by law) and binds the parties, and either party may
request any court having jurisdiction to enter a judgment and to enforce
the arbitrator's decision. The arbitrator will provide the parties with a
written decision naming the substantially prevailing party in the action.
This prevailing party is entitled to reimbursement from the other party
for its costs and expenses, including reasonable attorneys' fees. All
proceedings will be held at a place designated by the arbitrator in Xxxxx
County, Nevada. The arbitrator, in rendering a decision as to any state
law claims, will apply Nevada law.
7. WITHHOLDING. All payments required to be made by the Bank hereunder to
Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or regulation.
8. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, except with respect to the Change In
Control Payment, this Agreement shall have no effect on the determination
of any compensation payable by the Bank to Executive, or upon any of the
other terms of Executive's employment with the 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 the Bank pursuant to employee benefit plans of the Bank or
otherwise.
9. MISCELLANEOUS PROVISIONS.
9.1 Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties concerning its
subject matter and supersedes all prior agreements, correspondence,
representations, or understandings between the parties relating to
its subject matter.
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9.2 Binding Effect. This Agreement will bind and inure to the benefit of
the Bank's and Executive's heirs, legal representatives, successors
and assigns.
9.3 Waiver. Any waiver by a party of its rights under this Agreement
must be written and signed by the party waiving its rights. A
party's waiver of the other party's breach of any provision of this
Agreement will not operate as a waiver of any other breach by the
breaching party.
9.4 Amendment. This Agreement may be modified only through a written
instrument signed by both parties.
9.5 Severability. The provisions of this Agreement are severable. The
invalidity of any provision will not affect the validity of other
provisions of this Agreement.
9.6 Counsel Review. Executive acknowledges that she has had the
opportunity to consult with independent counsel with respect to the
negotiation, preparation, and execution of this Agreement.
9.7 Governing Law and Venue. This Agreement will be governed by and
construed in accordance with Nevada law, except to the extent that
certain matters may be governed by federal law. The parties must
bring any legal proceeding arising out of this Agreement in Xxxxx
County, Nevada.
9.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of
which taken together will constitute one and the same document.
Signed March ___, 2000.
VALLEY BANK
By/s/ Xxxxx Xxxxx
-----------------------------
Its President
EXECUTIVE
/s/ Xxx Xxxxxxx
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Xxx Xxxxxxx
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AMENDMENT TO CHANGE IN CONTROL SEVERANCE AGREEMENT
This Amendment to Change in Control Severance Agreement ("Amendment") is entered
into by and between VALLEY BANK (the "Bank") and XXX XXXXXXX ("Executive") as of
the 23rd day of October, 2002.
RECITALS
A. Executive and the Bank are parties to a Change in Control Severance
Agreement, dated March 22, 2000 (the "Severance Agreement"), pursuant to
which Executive is entitled to receive a Change in Control Payment (as
defined in the Severance Agreement) in connection with a change in control
of the Bank.
B. On May 1, 2001, the Bank was reorganized as a wholly owned subsidiary of
Valley Bancorp ("Bancorp") (the "Reorganization").
C. In light of the Reorganization, Executive and the Bank wish to amend the
Severance Agreement to make Bancorp a party to such agreement and to
clarify that all provisions of the Severance Agreement applicable to the
Bank are equally applicable to Bancorp.
AGREEMENT
The parties agree as follows:
1. Application to Bancorp. All references in the Severance Agreement to the
"Bank" are hereby amended to read "the Bank and/or Valley Bancorp."
2. Miscellaneous.
a. No Other Changes. Except as revised by Section 1 of this Amendment,
all other terms of the Severance Agreement remain unchanged and
continue in full force and effect.
b. Governing Law. This Amendment is governed by Nevada law.
Effective as of the date first set forth above.
VALLEY BANK EXECUTIVE
By /s/ Xxxxxx X. X'Xxxxxxx /s/ Xxx Xxxxxxx
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Xxxxxx X. X' Xxxxxxx Xxx Xxxxxxx
Chairman of the Board of Directors
Acknowledged and agreed:
VALLEY BANCORP
By /s/ Xxxxxx X. X'Xxxxxxx
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Xxxxxx X. X'Xxxxxxx
Chairman of the Board of Directors
