EXHIBIT 99.6
November 29, 1995
FirsTier Financial, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Ladies and Gentlemen:
This letter agreement is being entered into in connection with the
execution of an Agreement of Merger and Consolidation (the "Agreement"),
dated as of August 6, 1995, between First Bank System, Inc. (the "Acquiror")
and FirsTier Financial, Inc. (the "Company"), pursuant to which, among other
things, the Company will merge with and into the Acquiror (the "Merger"),
subject to the terms and conditions set forth in the Agreement. Capitalized
terms which are used but not defined herein shall have the meanings ascribed
to such terms in the Agreement.
The purpose of this letter agreement is to confirm our mutual
understandings and agreements with regard to the Amended and Restated
Employment Agreement between FirsTier Financial, Inc. and Xxxx X. XxXxxxxxx
(the "Executive"), dated March 20, 1995 (the "Employment Agreement") and the
other matters described in the Consent to Unanimous Action of the Executive
Committee of the Board of Directors of FirsTier Financial, Inc., dated
November 29, 1995 (the "Resolutions") (attached hereto as Exhibit 1) as it
relates to the Executive.
Each of the Company and the Acquiror hereby certifies to each other
as of the date hereof (the "Payment Date") that it is not now aware of any
facts applicable to it that would be likely to prevent approval of the Merger
by any governmental entity. The Company agrees to pay on the Payment Date, and
the Executive agrees to accept payment of, the amounts described in the
Resolutions, including, without limitation, (i) the amounts due pursuant to
the Employment Agreement and (ii) the amount due under the Company's Change
of Control Bonus Pool Plan, as modified by the Resolutions (the "Bonus Pool")
(it being acknowledged that the aggregate of all payments owing by the
Company pursuant to the Bonus Pool shall total $7 million in accordance with
Schedule A attached to the Resolutions), in each case as if a Change of
Control had taken place on the Payment Date and the Company had terminated
the Executive's employment (without cause and without the Executive's
consent) on such date. The Acquiror agrees that the total of all such
payments to the Executive will equal the total payment as set forth on the
schedule attached hereto as Exhibit 2 (the "Total Payments").
FirsTier Financial, Inc.
November 29, 1995
Page 2
The Executive agrees, on his behalf and on behalf of his heirs,
assigns, executors, administrators and legal representatives, that (i) the
Company's payment of the amounts described in clauses (i) and (ii) of the
preceding paragraph shall be in full satisfaction of the Company's
obligations to make such payments to the Executive pursuant to the Employment
Agreement and the Bonus Pool and (ii) upon the Executives' receipt of such
payments, the Company will be released from any further obligation, liability
or claim under or relating to the obligation to make such payments to the
Executive pursuant to the Employment Agreement and the Bonus Pool whenever
arising; provided, that such satisfaction and release shall be without
prejudice to any other provision of the Employment Agreement, including,
without limitation, rights to payment of death benefits or supplemental
retirement benefits; and provided further, however, that nothing in this
letter agreement shall have any effect whatsoever on the rights of the
Executive to receive from the Company reimbursement with respect to taxes as
set forth in the penultimate paragraph of Section 5 of the Employment
Agreement.
In the event that the Merger is not consummated pursuant to the
Agreement after the Payment Period, the Acquiror shall, within five days
following termination of the Agreement in accordance with its terms, promptly
reimburse the Company for the Total Payments. In the event that the Company
becomes liable for any Taxes (including, without limitation, any interest or
penalties imposed with respect to such Taxes) as a result of the payments
made by the Acquiror to the Company pursuant to the preceding sentence (any
such liability being referred to herein as a "Company Tax Liability"), the
Acquiror shall pay to the Company such additional amounts as may be necessary
to make the Company whole on an after-tax basis (taking into account any
deductions actually utilized by the Company as a result of making the Total
Payments) as if such Company Tax Liability had never been incurred (after
taking into account any additional liability for Taxes imposed on the Company
as a result of any of the payments made by the Acquiror pursuant to this
sentence). In the event that the Executive becomes liable for any Taxes
(including, without limitation, any interest or penalties imposed with
respect to such Taxes) as a result of the Total Payments being paid hereunder
that would not have been payable had such payments been made immediately
after the consummation of the Merger (an "Executive Tax Liability"), the
Acquiror shall indemnify the Executive on an after-tax basis from and against
any such Executive Tax Liability. Acquiror shall indemnify the Company and
the Executive for reasonable expenses (including, without limitation,
reasonable attorneys' and accountants' fees) incurred as a result of any
audit or other proceeding relating to the defense of a Company Tax Liability
or Executive Tax Liability (together a "Tax Liability"). The Acquiror shall
make any payments required pursuant to this paragraph within five days after
it receives written notice that a Tax Liability or related expense actually
has been incurred.
FirsTier Financial, Inc.
November 29, 1995
Page 3
In addition, the Acquiror acknowledges that, in accordance with the
Resolutions, and without any resulting reimbursement obligation being imposed
on the Acquiror, the Company shall cause all outstanding Incentive Stock
Options, Discounted Non-Qualified Stock Options (collectively, the
"Options"), Restricted Stock Options and Phantom Stock Options, if any,
granted to the Executive under the Company's Omnibus Equity Plan or any
predecessor plan to become immediately vested and exercisable as of the
Payment Date. The Executive agrees to exercise the Options prior to December
31, 1995.
Except as expressly set forth herein, this letter agreement shall
not be deemed to affect or modify any provision of the Employment Agreement.
This letter agreement may not be amended or terminated without
the prior written consent of the Company, the Executive and the Acquiror.
This letter agreement may be executed in any number of counterparts
which together shall constitute but one agreement.
This letter agreement may not be assigned by any party hereto and
shall be binding on and inure to the benefit of their respective successors
and, in the case of the Executive, heirs and other legal representatives.
Each of the Acquiror, the Company and the Executive has caused this
letter agreement to be duly executed as of the date first above written.
FIRST BANK SYSTEM, INC.
by: /s/ XXX X. MITAU
-------------------------------------
Executive Vice President, General
Counsel & Secretary
FIRSTIER FINANCIAL, INC.
by: /s/ XXXXX X. XXXXXXXXX
-------------------------------------
/s/ XXXX X. XxXXXXXXX
-------------------------------------
Xxxx X. XxXxxxxxx
Exhibit 2
PAYMENT TO XXXX XxXXXXXXX
Base salary $ 672,750
Incentive 448,500
Average of last 3 years' incentives 146,667
Accrued vacation 17,308
Tax equalization payment 140,000
Salary replacement 28,125
Consulting payment 250,000
401(k) forfeiture 70,000
Health coverage estimate 255,000
CIC Bonus Pool 1,920,000
----------
Total Payment $3,948,350
----------
----------
