Contract
Exhibit 10.1
THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this ___ day
of __________, 2008, by and between 1st
Security Bank of Washington, Mountlake Terrace, Washington (hereinafter referred
to as the “Bank”) and ____________ (the “Employee”).
WHEREAS,
the Employee serves as _______________ of 1st
Security Bancorp, Inc. (the “Company”) and the Bank; and
WHEREAS,
the board of directors of the Bank (the “Board of Directors”) believes it is in
the best interests of the Company and the Bank to enter into this Agreement with
the Employee in order to assure continuity of management of the Company and the
Bank; and
WHEREAS,
the Board of Directors has approved and authorized the execution of this
Agreement with the Employee;
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. Definitions.
(a) The
term “Change in Control” means any of the following events occurring: (i) the
acquisition by any “person” or “group” (as defined in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 (“Exchange Act”)), other than the
Company, any subsidiary of the Company or their employee benefit plans, directly
or indirectly, as “beneficial owner” (as defined in Rule 13d-3, under the
Exchange Act) of securities of the Company representing twenty percent (20%) or
more of either the then outstanding shares or the combined voting power of the
then outstanding securities of the Company; (ii) either a majority of the
directors of the Company elected at the Company’s annual stockholders meeting
shall have been nominated for election other than by or at the direction of the
“incumbent directors” of the Company, or the “incumbent directors” shall cease
to constitute a majority of the directors of the Company. The term
“incumbent director” shall mean any director who was a director of the Company
on the Effective Date and any individual who becomes a director of the Company
subsequent to the Effective Date and who is elected or nominated by or at the
direction of at least two-thirds of the then incumbent directors; (iii) the
shareholders of the Company approve (x) a merger, consolidation or other
business combination of the Company with any other “person” or “group” (as
defined in Sections 13(d) and 14(d) of the Exchange Act) or affiliate thereof,
other than a merger or consolidation that would result in the outstanding common
stock of the Company immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into common stock of the
surviving entity or a parent or affiliate thereof) at least fifty percent (50%)
of the outstanding common stock of the Company or such surviving entity or a
parent or affiliate thereof outstanding immediately after such merger,
consolidation or other business combination, or (y) a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company’s assets; or (iv) any other
event or circumstance which is not covered by the foregoing subsections but
which the Board of Directors determines to affect control of the Company and
with respect to which the
Board of
Directors adopts a resolution that the event or circumstance constitutes a
Change of Control for purposes of the Agreement. The Change of
Control Date is the date on which an event described in (i), (ii), (iii) or (iv)
occurs.
(b) The
term “Consolidated Subsidiaries” means any subsidiary or subsidiaries of the
Company (or its successors) that are part of the consolidated group of the
Company (or its successors) for federal income tax reporting.
(c) The
term “Date of Termination” means the date upon which the Employee's employment
with the Company or the Bank or both ceases, as specified in a notice of
termination pursuant to Section 8 of this Agreement.
(d)
The term “Effective Date” means ____________ __, 2008.
(e) The
term “Involuntary Termination” means the termination of the employment of
Employee (i) by either the Company or the Bank or both without his express
written consent; or (ii) by the Employee by reason of a material diminution of
or interference with his duties, responsibilities or benefits, including
(without limitation) any of the following actions unless consented to in writing
by the Employee: (1) a requirement that the Employee be based at any
place other than Mountlake Terrace, or within 20 miles thereof, except for
reasonable travel on Company or Bank business; (2) a material demotion of the
Employee; (3) a material reduction in the number or seniority of personnel
reporting to the Employee or a material 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, other than as part of a Bank- or Company-wide reduction
in staff; (4) a reduction in the Employee’s salary or a material adverse change
in the Employee’s perquisites, benefits, contingent benefits or vacation, other
than prior to a Change in Control as part of an overall program applied
uniformly and with equitable effect to all members of the senior management of
the Bank or the Company; (5) a material permanent increase in the required hours
of work or the workload of the Employee; or (6) the failure of the board of
directors of the Company (or a board of directors of a successor of the Company)
to elect him as _________________ of the Company (or a successor of the Company)
or any action by the board of directors of the Company (or a board of directors
of a successor of the Company) removing him from any of such offices, or the
failure of the Board of Directors of the Bank (or any successor of the Bank) to
elect him as _____________________ of the Bank (or any successor of the Bank) or
any action by such board o(or board of a successor of the Bank) removing him
from any of such offices. The term “Involuntary Termination” does not
include Termination for Cause or termination of employment due to death or
permanent disability pursuant to Section 7(g) of this Agreement, or suspension
or temporary or permanent prohibition from participation in the conduct of the
affairs of a depository institution under Section 8 of the Federal Deposit
Insurance Act, or Section 32.16.090 of the Revised Code of Washington
(“R.C.W.”).
(f)
The terms “Termination for Cause” and “Terminated for Cause” mean termination of
the employment of the Employee with either the Company or the Bank, as the case
may be, because of the Employee’s 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
(excluding violations which do not have a material adverse affect on the Company
or the Bank) or final cease-and-desist order, or (except as
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provided
below) material breach of any provision of this Agreement. No act or
failure to act by the Employee shall be considered willful unless the Employee
acted or failed to act with an absence of good faith and without a reasonable
belief that his action or failure to act was in the best interest of the
Bank. 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 entire membership of the Board of Directors at a meeting of the Board
duly 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 of
Directors the Employee has engaged in conduct described in the preceding
sentence and specifying the particulars thereof in detail. The
opportunity of the Employee to be heard before the Board shall not affect the
right of the Employee to arbitration as set forth in paragraph 18.
(g) The
term “Code” means the Internal Revenue Code of 1986, as amended, or any
successor code thereto.
(h) The
term “Section 409A” means Section 409A of the Code and the regulations and
guidance of general applicability issued thereunder.
2. Term. The
term of this Agreement shall be a period of three years commencing on the
Effective Date, subject to earlier termination as provided herein. On
each anniversary of this Agreement the term shall be extended for a period of
one year in addition to the then-remaining term, provided that the
Bank has not given notice to the Employee in writing at least 90 days prior to
such anniversary that the term of this Agreement shall not be extended further,
and provided further
that the Employee has not received an unsatisfactory performance review
by either the Board of Directors or the board of directors of the
Company.
3. Employment. The
Employee is employed as the ________________ of the Company and as
the ___________________ of the Bank. As such, the Employee shall
render administrative and management services as are customarily performed by
persons situated in similar executive capacities, and shall have such other
powers and duties as the Board of Directors or the board of directors of the
Company may prescribe from time to time. The Employee shall also
render services to any subsidiary or subsidiaries of the Company or the Bank as
requested by the Company or the Bank from time to time consistent with his
executive position. The Employee shall devote his best efforts and
reasonable time and attention to the business and affairs of the Company and the
Bank to the extent necessary to discharge his responsibilities
hereunder. The Employee may (i) serve on corporate or charitable
boards or committees, and (ii) manage personal investments, so long as such
activities do not interfere materially with performance of his responsibilities
hereunder.
4. Cash
Compensation.
(a) Salary. The
Bank agrees to pay the Employee during the term of this Agreement a base salary
(the “Bank Salary”) the annualized amount of which shall be not less than the
annualized aggregate amount of the Employee’s base salary from the Bank and any
Consolidated Subsidiaries in effect at the Effective Date; provided that any
amounts of salary actually paid to the Employee by any Consolidated Subsidiaries
shall reduce the amount to be paid by the Bank to the Employee. The
Bank Salary shall be paid no less frequently than
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monthly
and shall be subject to customary tax withholding. The amount of the
Employee’s Bank Salary shall be increased (but shall not be decreased other than
prior to a Change in Control as part of an overall program applied uniformly and
with equitable effect to all members of senior management of the Company or the
Bank) from time to time in accordance with the amounts of salary approved by the
Board of Directors or the board of directors of any of the Consolidated
Subsidiaries after the Effective Date.
(b) Bonuses. The
Employee shall be entitled to participate in an equitable manner with all other
executive officers of the Company and the Bank in such performance-based and
discretionary bonuses, if any, as are authorized and declared by the board of
directors for executive officers of the Company and by the Board of Directors of
the Bank for executive officers of the Bank. Any discretionary bonus
shall be paid not later than 2 2 months
after the year in which the Employee obtains a legally binding right to the
bonus. If the discretionary bonus cannot be paid by that date, then
it shall be paid on the next following April 15, or such other date during the
year as permitted under Section 409A.
(c) Expenses. The
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Employee in performing services under this Agreement in
accordance with the policies and procedures applicable to the executive officers
of the Company and the Bank, provided that the
Employee accounts for such expenses as required under such policies and
procedures.
5.
Benefits.
(a) Participation in Benefit
Plans. The Employee shall be entitled to participate, to the
same extent as executive officers of the Company and the Bank generally, in all
plans of the Company and the Bank relating to pension, retirement, thrift,
profit-sharing, savings, group or other life insurance, hospitalization, medical
and dental coverage, travel and accident insurance, education, cash bonuses, and
other retirement or employee benefits or combinations thereof. In
addition, the Employee shall be entitled to be considered for benefits under all
of the stock and stock option related plans in which the Company's or the Bank's
executive officers are eligible or become eligible to participate.
(b)
Fringe
Benefits. The Employee shall be eligible to participate in,
and receive benefits under, any other fringe benefit plans or perquisites which
are or may become generally available to the Company’s or the Bank’s executive
officers.
6. Vacations;
Leave. The Employee shall be entitled to annual paid vacation
in accordance with the policies established by the Board of Directors and the
board of directors of the Company for executive officers, in no event less than
_____ weeks per year, and to voluntary leaves of absence, with or without pay,
from time to time at such times and upon such conditions as the Board of
Directors may determine in its discretion.
7. Termination of
Employment.
(a) Involuntary
Termination. If the Employee experiences an Involuntary
Termination, such termination of employment shall be subject to the Bank’s
obligations under this Section 7. In the event of the Involuntary
Termination of the Employee, the Bank shall,
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during
the remaining term of this Agreement (i) pay to the Employee monthly one-twelfth
of the Bank Salary at the annual rate in effect immediately prior to the Date of
Termination and one-twelfth of the average annual amount of cash bonus and cash
incentive compensation of the Employee, based on the average amounts of such
compensation earned by the Employee from the Bank and any Consolidated
Subsidiaries for the two full fiscal years preceding the Date of Termination;
and (ii) maintain substantially the same group life or key man life insurance,
hospitalization, medical, dental, prescription drug and other health benefits,
and long-term disability insurance (if any) for the benefit of the Employee and
his dependents and beneficiaries who would have been eligible for such benefits
if the Employee had not suffered Involuntary Termination and on terms
substantially as favorable to the Employee including amounts of coverage and
deductibles and other costs to him in effect immediately prior to such
Involuntary Termination (the “Employee’s Health Coverage”). No
payment shall be made under this Section 7(a) unless the Employee=s
termination of employment qualifies as a “Separation from Service” (as that
phrase is defined in Section 409A taking into account all rules and presumptions
provided for in the Section 409A regulations). If the Employee is a
“Specified Employee” (as defined in Section 409A) at the time of his Separation
from Service, then payments under this Section 7(a) which are not considered
paid on account of an involuntary separation from service (as defined in
Treasury Regulation Section 1.409A-1(b)(9)(iii)), and as such constitute
deferred compensation under Section 409A, shall not be paid until the 185th day
following the Employee=s Separation
from Service, or his earlier death (the “Delayed Distribution
Date”). Any payments deferred on account of the preceding sentence
shall be accumulated without interest and paid with the first payment that is
payable in accordance with the preceding sentence and Section
409A. To the extent permitted by Section 409A, amounts payable under
this Section 7(a) which are considered deferred compensation shall be treated as
payable after amounts which are not considered deferred compensation (i.e.,
which are considered payable on account of an involuntary separation from
service as herein defined herein).
(b) Change in
Control. In the event that the Employee experiences an
Involuntary Termination within the six months preceding, at the time of, or
within 12 months following a Change in Control, in addition to the Bank’s
obligations under Section 7(a) of this Agreement, the Bank shall pay to the
Employee in cash, within 30 days after the later of the date of such Change in
Control or the Date of Termination, an amount equal to 299% of the Employee’s
“base amount” as determined under Section 280G of the Code.
(c) Certain Reduction of
Payments by the Bank.
(i)
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
5
aggregate
present value of Agreement Payments without causing any Payment to be
nondeductible by the Association because of Section 280G of the
Code. For purposes of this Section 7(c), present value shall be
determined in accordance with Section 280G(d)(3) and (4) of the
Code.
(ii) All
determinations required to be made under this Section 7(c) 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 7(c), 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 7(c) 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 7(c).
(iii) 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 1274 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
precedent 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
6
with
interest at the applicable federal rate provided for in Section 1274 of the
Code. An Underpayment shall be treated as a disputed payment for
purposes of Section 409A, and the parties shall act in accordance with Treasury
Regulations Section 1.409A-3(g), regarding the resolution of the Underpayment
and the timing of the payment to eliminate the Underpayment.
(d) Termination for
Cause. In the event of Termination for Cause, the Bank shall have
no further obligation to the Employee under this Agreement after the Date of
Termination.
(e) Voluntary
Termination. The Employee may terminate his employment
voluntarily at any time by a notice pursuant to Section 8 of this
Agreement. In the event that the Employee voluntarily terminates his
employment other than by reason of any of the actions that constitute
Involuntary Termination under Section 1(e)(ii) of this Agreement (“Voluntary
Termination”), the Bank shall be obligated to the Employee for the amount of his
Bank Salary and benefits 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.
(f) Death. In
the event of the death of the Employee while employed under this
Agreement and prior to any termination of employment, the Bank shall pay to the
Employee’s estate, or such person as the Employee may have previously designated
in writing, (i) the Bank Salary which was not previously paid to the Employee
through the last day of the calendar month in which Employee’s death occurred
and, if applicable, the Change in Control payment set forth in Section 7(b),
provided Employee died within six months prior or 12 months following such
change in control; and (ii) the amounts of any benefits or awards which,
pursuant to the terms of any applicable plan or plans, were earned with respect
to the fiscal year in which the Employee died and which the Employee would have
been entitled to receive if he had continued to be employed, and the amount of
any bonus or incentive compensation for such fiscal year which the Employee
would have been entitled to receive if he had continued to be employed,
pro-rated in accordance with the portion of the fiscal year prior to his death,
provided that
such amounts shall be payable when and as ordinarily payable under the
applicable plans.
(g)
Permanent
Disability. For purposes of this Agreement, the term
“permanently disabled” means that the Employee has a mental or physical
infirmity which permanently impairs his ability to perform substantially his
duties and responsibilities under this Agreement and which results in (i)
eligibility of the Employee under the long-term disability plan of the Company
or the Bank, if any; or (ii) inability of the Employee to perform substantially
his duties and responsibilities under this Agreement for a period of 180
consecutive days. Either the Company or the Bank or both may
terminate the employment of the Employee after having established that the
Employee is permanently disabled.
(h)
Regulatory
Action. Notwithstanding any other provisions of this
Agreement:
(1)
If the Employee is removed and/or permanently prohibited from participating in
the conduct of the affairs of a depository institution by an order issued under
Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act (“FDIA”), 12
U.S.C. ' 1818(e)(4)
and (g)(1), or pursuant R.C.W. 32.16.090, all obligations of the Bank under this
Agreement shall terminate as of the effective date of the order, but vested
rights of the contracting parties shall not be affected;.
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(2)
If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all
obligations of the Bank under this Agreement shall terminate as of the date of
default, but this provision shall not affect any vested rights of the
contracting parties; and
(3)
All obligations of the Bank 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 Washington
Department of Financial Institutions (the “Director”) or his or her designee, at
the time the Federal Deposit Insurance 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; or (ii) by the Director or his or her designee,
at the time the Director 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 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. Payments under this Agreement that are suspended under
this Section 7(h), but are later determined by the applicable regulatory
authority to be payable, shall be paid on the earliest date practicable
thereafter.
8.
Notice of
Termination. In the event that the Company or the Bank, or
both, desire to terminate the employment of the Employee during the term of this
Agreement, the Company or the Bank, or both, shall deliver to the Employee a
written notice of termination, stating whether such termination constitutes
Termination for Cause or Involuntary Termination, setting forth in reasonable
detail the facts and circumstances that are the basis for the termination, and
specifying the date upon which employment shall terminate, which date shall be
at least 30 days after the date upon which the notice is delivered, except in
the case of Termination for Cause. In the event that the Employee
determines in good faith that he has experienced an Involuntary Termination of
his employment, he shall send a written notice to the Company stating the
circumstances that constitute such Involuntary Termination and the date upon
which his employment shall have ceased due to such Involuntary
Termination. In the event that the Employee desires to effect a
Voluntary Termination, he shall deliver a written notice to the Company, stating
the date upon which employment shall terminate, which date shall be at least 30
days after the date upon which the notice is delivered, unless the parties agree
to a date sooner.
9. Attorneys
Fees. The Bank shall pay all legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by the Employee
as a result of (i) the Employee’s contesting or disputing any termination of
employment, or (ii) the Employee’s seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company (or its successors) or the Consolidated Subsidiaries
under which the Employee is or may be entitled to receive benefits; provided that the
Bank’s obligation to pay such fees and expenses is subject to the Employee’s
prevailing with respect to the matters in dispute in any action initiated by the
Employee or the Employee's having been determined to have acted reasonably and
in good faith with respect to any action initiated by the Company or the
Bank.
10. Non-Disclosure and
Non-Solicitation.
(a) Non-Disclosure. The
Employee acknowledges that he has acquired, and will continue to acquire while
employed by the Company and/or any Consolidated Subsidiary,
8
special
knowledge of the business, affairs, strategies and plans of the Company and the
Consolidated Subsidiaries which has not been disclosed to the public and which
constitutes confidential and proprietary business information owned by the
Company and the Consolidated Subsidiaries, including but not limited to,
information about the customers, customer lists, software, data, formulae,
processes, inventions, trade secrets, marketing information and plans, and
business strategies of the Company and the Consolidated Subsidiaries, and other
information about the products and services offered or developed or planned to
be offered or developed by the Company and/or the Consolidated Subsidiaries
(“Confidential Information’). The Employee agrees that, without
the prior written consent of the Company or the Bank, he shall not, during the
term of his employment or at any time thereafter, in any manner directly or
indirectly disclose any Confidential Information to any person or entity other
than the Company and the Consolidated Subsidiaries. Notwithstanding
the foregoing, if the Employee is requested or required (including but not
limited to by oral questions, interrogatories, requests for information or
documents in legal proceeding, subpoena, civil investigative demand or other
similar process) to disclose any Confidential Information the Employee shall
provide the Company or the Bank with prompt written notice of any such request
or requirement so that the Company and/or a Consolidated Subsidiary may seek a
protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 10(a). If, in the absence of a protective order or
other remedy or the receipt of a waiver from the Company or the Bank, the
Employee is nonetheless legally compelled to disclose Confidential Information
to any tribunal or else stand liable for contempt or suffer other censure or
penalty, the Employee may, without liability hereunder, disclose to such
tribunal only that portion of the Confidential Information which is legally
required to be disclosed, provided that the Employee exercise his best efforts
to preserve the confidentiality of the Confidential Information, including
without limitation by cooperating with the Company and/or a Consolidated
Subsidiary to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded the Confidential Information by
such tribunal. On the Date of Termination, the Employee shall
promptly deliver to the Company or the Bank all copies of documents or other
records (including without limitation electronic records) containing any
Confidential Information that is in his possession or under his control, and
shall retain no written or electronic record of any Confidential
Information.
(b) Non-Solicitation. During
the three year period next following the Date of Termination, the Employee shall
not directly or indirectly solicit, encourage, or induce any person while
employed by the Company or any Consolidated Subsidiary to (i) leave the Company
or any Consolidated Subsidiary, (ii) cease his or her employment with the
Company or any Consolidated Subsidiary or (iii) accept employment with another
entity or person.
The
provisions of this Section 10 shall survive any termination of the Employee=s employment
and any termination of this Agreement.
11. 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 shall require any successor or assign (whether direct or indirect, by
purchase, merger, consolidation or otherwise) by an
9
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 and benefits from the Bank in the same amount and on the same terms
as provided for an Involuntary Termination under Section 7
hereof. For purposes of implementing the provisions of this Section
11(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.
12. No
Mitigation. The Employee shall not be required to mitigate the
amount of any salary or other payment or benefit provided for in this Agreement
by seeking other employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Agreement be reduced by any compensation earned by
the Employee as the result of employment by another employer, by retirement
benefits after the date of termination or otherwise.
13. Notice. For
the purposes of this Agreement, notices and all other communications provided
for in this 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, to the Bank at its home office, to the attention of
the Board of Directors with a copy to the Secretary of the Bank, or, if to the
Employee, to such home or other address as the Employee has most recently
provided in writing to the Bank.
14. Amendments. No
amendments or additions to this Agreement shall be binding unless in writing and
signed by both parties, except as herein otherwise provided.
15. Headings. The
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.
16. 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.
17. Governing Law. This
Agreement shall be governed by the laws of the State of Washington.
18. Arbitration. Any
dispute or controversy arising under or in connection with this Agreement (other
than relating to the enforcement of the provisions of Section 10) 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.
19. Equitable and Other Judicial
Relief. In the event of an actual or threatened breach by the
Employee of any of the provisions of Section 10, the Bank shall be entitled to
equitable
10
relief in
the form of an injunction from a court of competent jurisdiction and such other
equitable and legal relief as such court deems appropriate under the
circumstances. The parties agree that the Bank shall not be required
to post any bond in connection with the grant or issuance of an injunction
(preliminary, temporary and/or permanent) by a court of competent jurisdiction,
and if a bond is nevertheless required, the parties agree that it shall be in a
nominal amount. The parties further agree that in the event of a
breach by the Employee of any of the provisions of Section 10, the Bank will
suffer irreparable damage and its remedy at law against the Employee is
inadequate to compensate it for such damage.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.
THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
1ST
SECURITY BANK OF WASHINGTON
____________________________________________________
By:
Its:
EMPLOYEE
____________________________________________________
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