EXHIBIT 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is entered into by and between
VALLEY BANK (the "BANK") and XXXXX X. XXXXX ("EXECUTIVE") as of the 22nd day of
March, 2000 ("EFFECTIVE DATE").
RECITALS
A. Executive is presently the President and Chief Executive Officer ("CEO")
of the Bank. The Bank wishes to continue Executive's employment in that
capacity under the terms and conditions of this Agreement. For purposes of
this Agreement, the term "Bank" refers to Valley Bank and any successor in
interest.
B. Under the terms of this Agreement, Executive wishes to continue his
employment with the Bank.
AGREEMENT
The parties agree as follows.
1. EMPLOYMENT. The Bank will continue Executive's employment during the Term,
and Executive accepts employment by the Bank on the terms and conditions
set forth in this Agreement. Executive's title with the Bank will be
"President and CEO."
2. EFFECTIVE DATE AND TERM.
(a) Effective Date. This Agreement is effective as of the Effective
Date.
(b) Term. The term of this Agreement ("TERM") is three (3) years,
beginning on the Effective Date. Notwithstanding the foregoing, this
Agreement shall automatically terminate upon a Change in Control (as
defined) in the Bank.
(c) Failure to Renew Term. If the parties do not renew this Agreement at
the end of the Term, then at that time (i) Executive shall be deemed
an at-will employee of the Bank, (ii) Executive shall cease to have
any right to continued employment under this Agreement, and (iii)
upon termination of his employment, Executive shall only be entitled
to receive the salary and bonuses earned and expenses reimbursable
through the date of such termination, except as otherwise expressly
provided herein.
3. DUTIES. Executive will faithfully and diligently perform the duties
assigned to Executive from time to time by the Bank's board of directors.
Executive will use his best efforts to perform his duties and will devote
full time and attention to these duties during working hours. These duties
will include, without limitation, the following:
(a) Bank Performance. Executive will be responsible for all aspects of
the Bank's performance, including, without limitation, directing
that daily operational and managerial matters are performed in a
manner consistent with the Bank's policies. These duties will also
include performing all other tasks in connection with the Bank's
management and affairs that are normal and customary to Executive's
position.
(b) Development and Preservation of Business. Executive will be
responsible for the development and preservation of banking
relationships and other business development efforts (including
appropriate civic and community activities) in the Bank's market
areas.
(c) Report to Board. Executive will report directly to the Bank's board
of directors. The Bank's board of directors may, from time to time,
modify Executive's title or add to, delete from, or modify
Executive's performance responsibilities to accommodate any
management objectives of the Bank. Executive will assume any
additional positions, duties, and responsibilities as may reasonably
be requested of him with or without additional compensation, as
appropriate and consistent with Sections 3(a), 3(b), and 3(c) of
this Agreement.
(d) Goal Setting. Executive will, on an annual basis, contemporaneous
with presentation of the Bank's annual budget to the Board of
Directors, recommend short-term and long-term goals for the Bank,
its management and Board of Directors to achieve.
4. SALARY. Executive will receive an initial base salary of $120,000 per
year, to be paid in accordance with the Bank's regular payroll schedule.
The Bank's board of directors will at minimum review Executive's base
salary on an annual basis.
5. INCENTIVE COMPENSATION. The Bank's board of directors will determine the
amount of bonus, if any, to be paid by the Bank to Executive for each year
during the Term. In making this determination, the Bank's board of
directors will consider factors such as Executive's performance of his
duties and the safety, soundness, and profitability of the Bank.
Executive's bonus, if any, will reflect Executive's contribution to the
performance of the Bank during the year.
6. INCOME DEFERRAL AND BENEFITS. Subject to eligibility requirements and in
accordance with and subject to any policies adopted by the Bank's board of
directors with respect to any benefit plans or programs, Executive will be
entitled to receive benefits (including stock options) similar to those
offered to other executive officers of the Bank with positions and duties
comparable to those of Executive.
7. BUSINESS EXPENSES. The Bank will reimburse Executive for ordinary and
necessary expenses (including, without limitation, travel, entertainment,
and similar expenses) incurred in performing and promoting the Bank's
business. Executive will present from time to time itemized accounts of
these expenses, subject to any limits of Bank policy or the rules and
regulations of the Internal Revenue Service.
8. CHANGE IN CONTROL WHILE EMPLOYED. If, while Executive is employed by the
Bank (i) during the Term, and a Change in Control closes during the Term,
or (ii) after expiration of the Term, and the Bank enters into an
agreement for a Change in Control or any party announces or is required by
law to announce a Change in Control of the Bank within six (6) months
after expiration of the Term, then upon the closing of such Change in
Control, Executive shall receive a single cash payment (the "CHANGE IN
CONTROL PAYMENT") in an amount equal to three (3) times Executive's
highest W-2 income (before salary deferrals) received from the Bank over
the five (5) years preceding such closing. Upon payment of the Change in
Control Payment, this Agreement, shall terminate automatically. If
Executive's employment during the Term is terminated pursuant to Section
9(b), and, within six (6) months following such termination, the Bank
enters into an agreement for a Change in Control or any party announces or
is required by
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law to announce a prospective Change in Control of the Bank, the
provisions of Section 9(c) shall apply.
9. TERMINATION OF EMPLOYMENT
(a) Termination By Bank for Cause or by Executive without Good Reason.
If, during the Term, the Bank terminates Executive's employment for
Cause (defined below) or Executive terminates his employment without
Good Reason (defined below), then (i) the Bank will pay Executive
the salary earned and expenses reimbursable under this Agreement
incurred through the date of such termination, and (ii) this
Agreement will terminate immediately on the date of such
termination. Executive will have no right to receive compensation or
other benefits for any period after termination under this Section
9(a).
(b) Termination By Bank without Cause or by Executive with Good Reason.
If, during the Term, the Bank terminates Executive's employment
without Cause or Executive resigns from the Bank with Good Reason
(defined below), then (i) the Bank will pay Executive the
Termination Payment (defined below) for the greater of (A) the
remainder of the Term or (B) eighteen months, (ii) Executive will be
subject to the noncompetition and nonsolicitation restrictions in
Section 15 for the period of time during which he receives the
Termination Payments, and (iii) this Agreement (other than the
Bank's continuing obligation to make the Termination Payments and
Executive's corresponding noncompetition and nonsolicitation
obligation while receiving such payments) will terminate six (6)
months following the date of such termination or resignation. If,
within six (6) months following the date of such termination or
resignation, the Bank enters into an agreement for a Change in
Control, or any party announces or is required to announce a
prospective Change in Control of the Bank, (i) the provisions of
this Section 9(b) will cease to apply and the provisions of Section
9(c) shall apply instead, and (ii) this Agreement will terminate
upon payment of the Change in Control Payment pursuant to Section
9(c) or the abandonment of such Change in Control..
(1) The "TERMINATION PAYMENT" shall be an amount equal to the sum
of (a) Executive's monthly base salary in effect at the time
his employment terminates and (b) one-twelfth (1/12) of
Executive's annual bonus for the year immediately preceding
the year in which his employment terminates.
(2) Notwithstanding the foregoing, if the Good Reason for which
Executive resigns is a reduction of salary as set forth in
Section 11(b)(1), then the monthly base salary to be used for
the purpose of the Termination Payment shall be Executive's
monthly base salary in effect prior to such reduction.
(c) Termination Prior to Change in Control. If, during the Term, the
Bank terminates Executive's employment without Cause or Executive
resigns for Good Reason and within six (6) 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 a Change in Control Payment in an
amount equal to three (3) times Executive's highest W-2 income
(before salary deferrals) received from the Bank over the five (5)
years preceding the termination less the amount of any Termination
Payments that have been paid to Executive through the date of such
closing. Upon closing of the Change in
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Control, Executive's noncompetition and nonsolicitation obligations
under Section 15 shall terminate immediately.
(d) Death or Disability. This Agreement terminates (1) if Executive dies
or (2) if Executive 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 Executive could
continue to perform his duties under this Agreement and making these
accommodations would not pose an undue hardship on the Bank. If
termination occurs under this Section 9(d), Executive or his estate
will be entitled to receive all compensation and benefits earned and
expenses reimbursable through the date Executive's employment
terminated.
10. LIMITATIONS ON PAYMENTS RELATED TO CHANGE IN CONTROL. The total of the
payments and benefits described in Sections 8 and 9 will be less than the
amount that would cause them to be a "parachute payment" within the
meaning of Section 280G(b)(2)(A) of the Internal Revenue Code of 1986.
11. DEFINITIONS.
(a) Cause. "CAUSE" means only 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 his duties.
(3) Conduct demonstrably and significantly harmful to the Bank, as
reasonably determined on the advice of legal counsel by the
Bank's board of directors.
(b) Good Reason. "GOOD REASON" means only any one or more of the
following:
(1) 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.
(2) The assignment to Executive without his consent of any
authority or duties materially inconsistent with Executive's
position as of the date of this Agreement.
(3) 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 his current
business office at the Bank on the date of this Agreement,
unless Executive consents to the relocation or transfer.
(c) 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
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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.
12. MUTUALLY EXCLUSIVE PAYMENTS. The Change In Control Payment and the
Severance Payment are mutually exclusive, and if the circumstances of
Executive's termination would otherwise entitle Executive to receive both
payments, Executive shall receive only the amount of the Change In Control
Payment.
13. CONFIDENTIALITY. Executive will not, after signing this Agreement,
including during and after its Term, use for his own purposes or disclose
to any other person or entity any confidential information concerning the
Bank or its business operations or customers, unless (1) the Bank consents
to the use or disclosure of its confidential information, (2) the use or
disclosure is consistent with Executive's duties under this Agreement, or
(3) disclosure is required by law or court order.
14. RETURN OF BANK PROPERTY. If and when Executive ceases, for any reason, to
be employed by the Bank, Executive must return to the Bank all keys, pass
cards, identification cards and any other property of the Bank. At the
same time, Executive also must return to the Bank all originals and copies
(whether in hard copy, electronic or other form) of any documents,
drawings, notes, memoranda, designs, devices, diskettes, tapes, manuals,
and specifications which constitute proprietary information or material of
the Bank. The obligations in this paragraph include the return of
documents and other materials which may be in Executive's desk at work, in
Executive's car or place of residence, or in any other location under
Executive's control.
15. NONCOMPETITION.
(a) Participation in a Competing Business. Except as otherwise expressly
provided in this Agreement, while Executive is employed by the Bank
pursuant to this Agreement and for so long as Executive receives any
Termination Payments, Executive will not become involved with a
Competing Business or serve, directly or indirectly, a Competing
Business in any manner, including, without limitation, as a
shareholder, member, partner, director, officer, manager, investor,
organizer, "founder," employee, consultant, or agent; provided,
however, that Executive may acquire and passively own an interest
not exceeding 2% of the total equity interest in any entity (whether
or not such entity is a Competing Business). Executive's obligations
under this Section 15(a) terminate immediately upon a Change in
Control of the Bank.
(b) No Solicitation. Except as otherwise expressly provided in this
Agreement, while Executive is employed by the Bank pursuant to this
Agreement and for so long as Executive receives any Termination
Payments, Executive will not directly or indirectly solicit or
attempt to solicit (1) any employees of the Bank to leave their
employment or (2) any customers of the Bank to remove their business
from the Bank, or to participate in any manner in a Competing
Business. Solicitation prohibited under this Section includes
solicitation by any means, including, without limitation, meetings,
letters or other mailings, electronic communications of any kind,
and internet communications.
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Executive's obligations under this Section 15(b) terminate
immediately upon a Change in Control of the Bank.
(c) Employment Outside Xxxxx County, Nevada. Nothing in this Section 15
prevents Executive from accepting employment outside Xxxxx County,
Nevada, from a Competing Business, as long as Executive will not (a)
act as an employee or other representative or agent of the Competing
Business within Xxxxx County, Nevada or (b) have any
responsibilities for the Competing Business' operations within Xxxxx
County, Nevada.
(d) Competing Business. "COMPETING BUSINESS" means any financial
institution or trust company (including without limitation, any
start-up or other financial institution or trust company in
formation) that competes with, or will compete in Xxxxx County,
Nevada, with the Bank.
16. ENFORCEMENT.
(a) The Bank and Executive stipulate that, in light of all of the facts
and circumstances of the relationship between Executive and the
Bank, the agreements referred to in Section 15 (including without
limitation their scope, duration and geographic extent) are fair and
reasonably necessary for the protection of the Bank's confidential
information, goodwill and other protectable interests. If a court of
competent jurisdiction should decline to enforce any of those
covenants and agreements, Executive and the Bank request the court
to reform these provisions to restrict Executive's use of
confidential information and Executive's ability to compete with the
Bank to the maximum extent, in time, scope of activities, and
geography, the court finds enforceable.
(b) Executive acknowledges that the Bank will suffer immediate and
irreparable harm that will not be compensable by damages alone, if
Executive repudiates or breaches any of the provisions of Section 15
threatens or attempts to do so. For this reason, under these
circumstances, the Bank, in addition to and without limitation of
any other rights, remedies or damages available to it at law or in
equity, will be entitled to obtain temporary, preliminary, and
permanent injunctions in order to prevent or restrain the breach,
and the Bank will not be required to post a bond as a condition for
the granting of this relief.
17. ADEQUATE CONSIDERATION. Executive specifically acknowledges the receipt of
adequate consideration for the covenants contained in Section 15 and that
the Bank is entitled to require him to comply with that Section. Section
15 will survive termination of this Agreement. Executive represents that
if his employment is terminated, whether voluntarily or involuntarily,
Executive has experience and capabilities sufficient to enable Executive
to obtain employment in areas which do not violate this Agreement and that
the Bank's enforcement of a remedy by way of injunction will not prevent
Executive from earning a livelihood.
18. ARBITRATION.
(a) 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
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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.
(b) Governing Law. 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.
(c) Exception to Arbitration. Notwithstanding the above, if Executive
violates Section 15, the Bank will have the right to initiate the
court proceedings described in Section 16(b), in lieu of an
arbitration proceeding under this Section 18. The Bank may initiate
these proceedings wherever appropriate within Nevada State; but
Executive will consent to venue and jurisdiction in Xxxxx County,
Nevada.
19. MISCELLANEOUS PROVISIONS.
(a) 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 his rights under any employment,
change-in-control and salary continuation agreements, whether
written or oral, he has previously entered into with the Bank.
(b) Binding Effect. This Agreement will bind and inure to the benefit of
the Bank's and Executive's heirs, legal representatives, successors
and assigns.
(c) Litigation Expenses. If either party successfully seeks to enforce
any provision of this Agreement or to collect any amount claimed to
be due under it, this 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) 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.
(e) Counsel Review. Executive acknowledges that he has had the
opportunity to consult with independent counsel with respect to the
negotiation, preparation, and execution of this Agreement.
(f) Assignment. The services to be rendered by Executive under this
Agreement are unique and personal. Accordingly, Executive may not
assign any of his rights or duties under this Agreement.
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(g) Amendment. This Agreement may be modified only through a written
instrument signed by both parties.
(h) Severability. The provisions of this Agreement are severable. The
invalidity of any provision will not affect the validity of other
provisions of this Agreement.
(i) 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, and the parties will submit to jurisdiction in that
county.
(j) 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 22, 2000:
VALLEY BANK
By /s/ Xxxxxx X. X'Xxxxxxx
--------------------------------
Xxxxxx X. X'Xxxxxxx
Chairman of the Board of Directors
XXXXX X. XXXXX, individually
/s/ Xxxxx X. Xxxxx
--------------------------------------
XXXXX X. XXXXX
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AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement ("Amendment") is entered into by and
between VALLEY BANK (the "Bank") and XXXXX X. XXXXX ("Executive") as of the 23rd
day of October, 2002.
RECITALS
A. Executive and the Bank are parties to an Employment Agreement, dated March
22, 2000 (the "Employment Agreement"), pursuant to which the Bank has
hired Executive as the Bank's President and Chief Executive Officer for a
term ending on March 21, 2003.
B. On May 1, 2001, the Bank was reorganized as a wholly owned subsidiary of
Valley Bancorp ("Bancorp") (the "Reorganization").
C. Executive and the Bank wish to amend the Employment Agreement to extend
the Term (as defined therein) for an additional three years, so that the
Term is six (6) years from the Effective Date of March 22, 2000.
D. Further, in light of the Reorganization, Executive and the Bank wish to
amend the Employment Agreement to make Bancorp a party to such agreement
and to clarify that all provisions of the Employment Agreement applicable
to the Bank are equally applicable to Bancorp.
AGREEMENT
The parties agree as follows:
1. Extension of Term. Section 2(a) of the Employment is hereby amended in its
entirety to read as follows:
a. Term. The term of this Agreement ("Term") is six (6) years,
beginning on the Effective Date. Notwithstanding the foregoing, this
Agreement shall automatically terminate upon a Change in Control (as
defined), subject to the Change in Control payment provisions
otherwise provided in this Agreement.
2. Application to Bancorp. All references in the Employment Agreement to the
"Bank" are hereby amended to read "the Bank and/or Valley Bancorp."
Without limiting the generality of the preceding sentence, the parties to
this Amendment specifically intend that the change in control provisions
of the Employment Agreement, including the definition of "Change in
Control," shall apply to Bancorp as well as the Bank, so that a Change in
Control of Bancorp shall trigger such provisions to the same extent as a
Change in Control of the Bank.
3. Miscellaneous.
a. No Other Changes. Except as revised by Sections 1 and 2 of this
Amendment, all other terms of the Employment 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 XXXXX X. XXXXX, individually
By /s/ Xxxxxx X. X'Xxxxxxx /s/ Xxxxx X. Xxxxx
----------------------------------------- ------------------------------
Xxxxxx X. X' Xxxxxxx Xxxxx X. Xxxxx
Chairman of the Board of Directors
Acknowledged and agreed:
VALLEY BANCORP
By /s/ Xxxxxx X. X'Xxxxxxx
-----------------------------------------
Xxxxxx X. X'Xxxxxxx
Chairman of the Board of Directors
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SECOND AMENDMENT TO EMPLOYMENT AGREEMENT
This Second Amendment to Employment Agreement ("Amendment") is entered into by
and between VALLEY BANK (the "Bank"), VALLEY BANCORP ("Bancorp" and together
with the Bank, the "Company") and XXXXX X. XXXXX ("Executive") as of the 26th
day of May, 2004.
RECITALS
A. Executive and the Company are parties to an Employment Agreement, dated
March 22, 2000, as amended October 23, 2002 (the "Employment Agreement"),
pursuant to which the Company has hired Executive as its President and
Chief Executive Officer for a term ending on March 21, 2006.
B. Executive and the Company wish to amend the Employment Agreement to (i)
extend the Term (as defined therein) for an additional three years, and
(ii) expand the geographic scope of the non-competition provisions to
include Xxx County, Nevada.
AGREEMENT
The parties agree as follows:
1. Extension of Term. Section 2(a) of the Employment Agreement is hereby
amended in its entirety to read as follows:
a. Term. The term of this Agreement ("Term") commences on the
Effective Date and expires on March 21, 2009. Notwithstanding
the foregoing, this Agreement shall automatically terminate
upon a Change in Control (as defined), subject to the Change
in Control payment provisions otherwise provided in this
Agreement.
2. Inclusion of Xxx County, NV in Non-Compete. Subsections (c) and (d) of
Section 15 of the Employment Agreement are hereby amended in their
entirety to read as follows:
c. Employment Outside Restricted Area Xxxxx & Xxx Counties,
Nevada. Nothing in this Section 15 prevents Executive from
accepting employment outside Xxxxx County or Xxx County,
Nevada (the "RESTRICTED AREA"), from a Competing Business, as
long as Executive will not (a) act as an employee or other
representative or agent of the Competing Business within the
Restricted Area or (b) have any responsibilities for the
Competing Business' operations within the Restricted Area.
d. Competing Business. "COMPETING BUSINESS" means any financial
institution or trust company (including without limitation,
any start-up or other financial institution or trust company
in formation) that competes with, or will compete with the
Bank in the Restricted Area.
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3. Miscellaneous.
a. No Other Changes. Except as revised by Sections 1 and 2 of this
Amendment, all other terms of the Employment 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 XXXXX X. XXXXX, individually
By /s/ Xxxxxx X. Xxxx /s/ Xxxxx X. Xxxxx
----------------------------------------- ----------------------------
Xxxxxx X. Xxxx Xxxxx X. Xxxxx
Chairman of the Board of Directors
Acknowledged and agreed:
VALLEY BANCORP
By /s/ Xxxxxx X. Xxxx
-----------------------------------------
Xxxxxx X. Xxxx
Chairman of the Board of Directors
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