EXHIBIT 10.2.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ( the "Agreement") is made as of the seventeenth
day of January, 2000, by and between INLAND NORTHWEST BANK, a Washington-state
chartered commercial bank ("Bank") and XXXXXX X. XXXXX ("Employee").
Section 1. Employment.
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1.1 Subject to the terms and conditions set forth in this Agreement,
Bank employs Employee and Employee agrees to render Employee's exclusive
services to Bank during the Employment Term, as defined in Section 3.1
("Employment Term") as the Executive Vice President -- Chief Credit Officer of
the Bank or in such other executive position with the same level of compensation
and benefits as the Board of Directors of the Bank may direct.
1.2 Employee accepts employment and agrees to devote his full business
and professional time and energy to Bank, and to perform his duties and
responsibilities in an efficient, trustworthy and businesslike manner. Employee
shall not render services of a business, professional or commercial nature to
any other person, firm or corporation, whether for compensation or otherwise,
without the written approval of the Bank.
Section 2. Compensation.
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2.1 Fixed Salary. During the Employment Term the Employee shall receive
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compensation (the "Fixed Salary") payable in equal monthly installments at the
annual rate of $85,000. Any changes in the Fixed Salary shall be determined by
the Board of Directors of the Bank and shall be effective for the twelve month
period beginning on the first day of January each year. In no event shall the
Fixed Salary for any twelve month period be less than the Fixed Salary during
the preceding twelve month period.
2.2 Incentive Programs. In addition to the Fixed Salary provided in
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Section 2.1, Bank may pay to Employee from time to time such bonus or other
incentive compensation, in cash or other forms, as the Board of Directors of the
Bank in its judgment may determine and the Employee shall be eligible to
participate in incentive programs for senior management.
2.3 Expenses. Bank shall reimburse Employee for all reasonable business
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expenses incurred by Employee in the course of the performance of his duties
that are consistent with the policies and procedures of Bank as in effect from
time to time. Employee shall submit expense reports with substantiating
vouchers as Bank shall reasonably require; payment of such expenses shall
require approval by another designated officer of Bank.
2.4 Vacation. Employee shall be entitled to four (4) weeks paid vacation
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each year worked during the Employment Term as well as holiday pay for those
holidays recognized by the Federal Reserve Bank and the State of Washington.
Vacation time remaining unused at the
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end of each year of the Employment Term shall not accrue.
2.5 Other Benefits. Employee shall be eligible to be a full participant
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in any pension plan, profit sharing plan, group life, disability, health or
other insurance plan, vision medical plan, dental plan, incentive stock option
plan and any other employee benefit plan or arrangement provided to executive
officers of Bank at Bank's expense. The Bank will pay for the Employee's
membership in the Spokane Club, if the Employee requests.
Section 3. Term and Termination.
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3.1 Employment Term. The Employment Term shall commence on the date of
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this Agreement and shall not have a fixed period of duration. The Bank has the
right, however, at any time to notify the Employee, in writing, that the Bank
will establish an employment term of one (1) year to commence no earlier than
the day following date of receipt of the notice by the Employee. The notice may
be given without a determination of cause and does not constitute a termination
of this Agreement. The Fixed Salary for the Employee, as then in effect, shall
continue without change until reviewed by the directors for the next twelve
month period in accordance with Section 2.1. The Employment Term, as used in
other sections of this Agreement, shall be either the Employee's continuous
employment or the one (1) year period set forth in the notice.
3.2 Termination for Illness and Incapacity. Employee shall receive full
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compensation during any period of illness, disability or incapacity during the
Employment Term. Bank may terminate the Employment Term in the event Employee
suffers an illness or incapacity of such character as to substantially disable
him from performing his duties for a period of more than ninety (90) consecutive
days or one hundred eighty (180) days in the aggregate in any twelve-month
period.
Any payments pursuant to a salary continuation or disability insurance plan
of Bank shall be deducted from any compensation paid to Employee under this
Agreement during the period of his illness, disability or incapacity, but such
deductions shall only be made with respect to payments in the corresponding
periods for which compensation is paid to Employee pursuant to this Agreement.
Nothing contained in this Agreement shall limit or abrogate any insurance or
other benefits available to Employee under any present or future salary
continuation or disability insurance plans of Bank.
3.3 Termination upon Employee's Death. If Employee dies during the
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Employment Term, Bank shall pay to the estate of Employee the compensation
(including a pro rata portion of all incentive compensation to which Employee
may be entitled) which would otherwise accrue or be available to Employee up to
the end of the month in which his death occurred. Nothing contained in this
Agreement shall limit or abrogate any insurance or other benefits available to
the Employee.
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3.4 Other Terminations. This Agreement may also be terminated as
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follows:
(i) Upon written notice delivered by Employee to Bank;
(ii) As Bank and Employee shall mutually agree in writing; or
(iii) For Cause, upon written notice from Bank to Employee setting
forth the "cause" for termination. "Cause" as used in this agreement shall mean
any one or more of the following:
(a) Disobedience of orders or directives of the Board of
Directors of the Bank, clearly given, in accordance with the terms of this
Agreement, or interference with the performance by other employees of Bank of
their duties pursuant to such orders or directives, if such disobedience or
interference shall be either (i) of such a nature that no reasonable doubt can
exist as to its material adverse effect on Bank, or (ii) continued after
specific instructions to stop shall have been given by the Board of Directors of
the Bank; or
(b) Material acts of dishonesty related to the business of
Bank or its relationships with employees, suppliers, contractors, customers or
those with whom Bank does business; or
(c) Refusal or failure to furnish significant information
concerning Bank business as clearly and reasonably requested by or under the
authority of the Board of Directors of the Bank or material falsification of
such information; or
(d) Any other action or course of conduct which has or
reasonably will have an adverse effect on Bank or its business or financial
position, if such action or course of conduct shall be either (i) of such a
nature that no reasonable doubt can exist as to its material adverse effect on
Bank, or (ii) continued after specific instructions to stop shall have been
given by or under the specific authority of the Board of Directors of the Bank;
or
(e) Conviction in a court of the United States or of any
state of a felony or serious crime involving acts of Employee constituting
fraud, moral turpitude, intentional dishonesty or similar conduct.
3.5 Termination by Bank. Following notice from Bank issued in accordance
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with Section 3.1, Bank shall continue to pay Employee his annual Fixed Salary
then in effect in 12 equal monthly installments, on the first day of each month
even if Employee resigns. Employee also shall receive any payments or benefits
which have accrued or to which Employee may be entitled as of the date of
expiration of the employment term in all employee benefit plans and programs,
including bonus and other incentive plans in which employee was participating on
the expiration date.
3.6 Termination by Employee. In the event this Agreement is terminated
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by voluntary resignation of the Employee or For Cause, the pay and other
benefits described in Section 3.5 will not be provided. However, if Bank
eliminates Employee's position and assigns
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Employee to another position and Employee resigns because of these actions, the
Employee will receive the Fixed Salary for the remainder of the Employment Term.
The other benefits described in Section 3.5 will also be provided. Both payments
and benefits will also be subject to the provisions of Section 5.1.
3.7 Termination of Obligations. Upon the termination of this Agreement
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as provided above, any and all obligations of either Bank (except as herein
expressly provided) or Employee for future performance arising out of this
Agreement, or the employment shall forthwith terminate; provided, however, that
the provisions of Sections 3.5, 6, 7, and 8 shall not be affected by termination
of this Agreement.
Section 4 Provisions Regarding Change of Control. The following provisions
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shall be effective as of and after the date on which a Change of Control, as
defined in Section 4.1, occurs:
4.1 Change of Control. For the purposes of this Section 4, a "Change of
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Control" is any event which would be required to be reported as a change in
control in response to Item 6(e) of Schedule 14A of Regulation 14a promulgated
under the Securities Exchange Act of 1934, as amended ("Exchange Act"), provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Bank and
any new director whose election by the Board of Directors or nomination for
election by the Bank's shareholder was approved by a vote of at least two-thirds
( ) of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
(ii) the shareholders of Northwest Bancorporation, Inc. (the parent company of
the Bank) approve a merger or consolidation of the Bank with any other financial
institution, other than a merger or consolidation of the Bank which would result
in the voting securities of the Bank outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the total voting
power represented by the voting securities of the Bank or such surviving entity
outstanding immediately after such merger or consolidation; or (iii) the
shareholder of the Bank approves a plan of complete liquidation of the Bank or
an agreement for the sale or disposition by the Bank of all or substantially all
of the Bank's assets.
4.2 Change of Control Date. Change of Control Date shall mean the
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earliest of:
(i) The date on which the Change of Control occurs;
(ii) The date on which the Bank or Northwest Bancorporation, Inc.
execute an agreement, the consummation of which would result in the occurrence
of a Change of Control; or
(iii) The date the Board of Directors of the Bank or Northwest
Bancorporation, Inc. approve a transaction or series of transactions, the
consummation of which would result in a
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Change of Control.
4.3 Severance Payment. In the event of Employee's termination for
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reasons other than cause during the twelve (12) month period following the
Change of Control Date, Employee will be entitled to a Severance Payment in an
amount equal to his then existing annual Fixed Salary, payable in equal monthly
installments for a twelve (12) month period following the Employee's
termination.
Section 5. Obligations of Employee upon Termination.
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5.1 Employee shall not be required to mitigate the amount of any
payments provided for in Sections 3.5 or 3.6 by seeking other employment or
otherwise; provided, however, that the amount of any payments or other benefits
provided for in Section 3.5 shall be reduced by any corresponding payments or
other benefits received by Employee and/or accrued to the benefit of Employee in
respect of the remainder of the Employment Term as the result of earned income
arising from part or full-time employment by another employer or part or full-
time self-employment ("Successor Employer") after the Termination Date.
Employment by a Successor Employer shall not abrogate or limit payments under
this Section 3.5, but shall only result in deduction of amounts received from
the Successor Employer in the corresponding or subsequent periods for which
payments are made under this Section 3.5. However, should Employee and/or a
Successor Employer fail to provide complete and accurate statements of
Employee's compensation and benefits provided by Successor Employer, all
payments and benefits provided for in Section 3.5 shall cease.
5.2 A material breach of the provisions of Sections 6, 7, 8 and 9 of
this Agreement by Employee shall terminate Bank's obligation to make any
payments pursuant to Section 3.5 from and after the date of such breach.
Section 6. Nondisclosure. Employee acknowledges that Bank's financial affairs,
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contractual arrangements, marketing strategies, business development plans, and
other internal information, plans and policies are valuable, special, and unique
assets of Bank. Employee agrees that (i) during and after the Employment Term he
will not intentionally disclose any such information outside Bank at any time
without the express prior written consent of Bank and (ii) that upon a
termination of his employment with Bank he shall return all confidential
information which shall be in his possession. Bank's obligations under this
Agreement are expressly conditioned upon compliance by Employee with these
obligations.
Section 7. Services Unique. Employee acknowledges that the services to be
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rendered by him under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character which gives them peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in an
action at law. It being understood and agreed that a breach by Employee of the
provisions of this Agreement will cause Bank irreparable injury and damage,
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Employee expressly agrees that Bank shall be entitled to seek injunctive or
other equitable relief to prevent or curtail any breach of this Agreement by
Employee. Resort to such equitable relief however, shall not be construed as a
waiver of any other rights or remedies which Bank may have for damages or
otherwise.
Section 8. Remedies. Bank and Employee will pursue their respective remedies
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under this Agreement as mutually agreed or in a court of law. Without intending
to limit the remedies available to Bank in a court, Employee further agrees that
damages at law will be an insufficient remedy for Bank if Employee violates the
terms of Section 6 and that Bank may apply for injunctive relief in any court of
competent jurisdiction to restrain the breach or the threat of breach of or
otherwise to specifically enforce any of the covenants of Section 6. In the
event of any action arising out of this Agreement, the prevailing party shall be
entitled to court costs and expenses, including such reasonable attorneys' fees
as the court may fix.
Section 9. Indemnification. The Board of Directors of the Bank shall authorize
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the payment of expenses, including attorneys' fees and costs, incurred by, or
satisfy a judgment or fine rendered or levied against Employee or his estate,
executor, administrator, heirs or devisees in an action brought by a third party
against Employee (whether or not Bank is joined as a party defendant) to impose
a liability or penalty on Employee for any act or omission alleged against
Employee while employed by Bank, and shall reimburse Employee for amounts paid
and expenses reasonably incurred, including attorneys' fees and costs, in
settling any such action or threatened action to the full extent authorized by
the Articles of Incorporation and the laws of the State of Washington; provided,
the Board of Directors determines in good faith that Employee was not grossly
negligent and was acting within the scope of his authority.
Section 10. Waiver. The waiver by Bank or Employee of a breach of any of the
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provisions of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
Section 11. Entire Agreement: Successors and Assigns. No Right or Remedy
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Conferred on Others.
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11.1 This Agreement embodies the entire representation, warranties, and
agreements in relation to the subject matter of this Agreement, and no
representations, warranties, covenants, understandings, or agreements, or
otherwise, exist between the parties except as expressly set forth.
11.2 This Agreement is binding upon the parties and their respective
successors, assigns, heirs, and personal representatives. Except as specifically
provided herein, neither of the parties may make any assignment of this
Agreement or any interest therein, by operation of law or otherwise, without the
prior written consent of the other party; provided, however, Bank may assign
this Agreement or any interest therein, by operation of law or otherwise, to (a)
any successor to all or substantially all of its respective assets and business
by dissolution, merger,
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consolidation, transfer of assets, or otherwise, or (b) any direct or indirect
subsidiary of the Bank or of any such successor referred to in (a) hereof. Any
assignment by Bank shall not release Bank's obligations.
11.3 Nothing expressed or implied in this Agreement is intended or shall
be construed to confer upon or give to any person, firm or corporation, other
than the parties and their respective successors, permitted assigns, heirs or
personal representatives, any rights or remedies under or by reason of this
Agreement. This Agreement may not be amended or terminated orally but only as
expressly provided or by an instrument in writing duly executed by the parties.
Section 12. Representations and Warranties. Employee hereby represents and
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warrants that Employee has the right to enter into this Agreement and to render
to Bank the services of Employee as provided; Employee is not subject to any
obligation which will or might prevent or interfere with the performance and
observance by Employee of all of the covenants, conditions and agreements to be
performed and observed by Employee; Employee has not made, nor will he make, any
commitment or agreement which will or might prevent or interfere with the
complete rendition of Employee's services.
Bank hereby represents and warrants that it is a banking corporation duly
organized and in good standing under the laws of the state of Washington; the
Board of Directors has approved the employment arrangement described in this
Agreement and has duly authorized the execution and delivery of this Agreement
by an authorized agent of Bank.
Section 13. Notice. Any notice or other communication required or permitted to
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be given to the parties shall be deemed to have been given if delivered or if
mailed by certified or registered mail, return receipt requested, first class
postage prepaid, addressed as follows:
(i) If to Employee:
Xxxxxx X. Xxxxx
0000 X. Xxxxxxxxx
Xxxxxxx, XX 00000
(ii) If to the Bank:
Inland Xxxxxxxxx Xxxx
Xxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Section 14. Interpretation and Construction.
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14.1 Captions in this Agreement are for convenience only and shall not be
considered as a part of this Agreement or as in any way limiting or amplifying
the terms and provisions.
14.2 This Agreement has been made in Washington and shall in all respects
be interpreted, construed, and governed by and in accordance with the laws of
the State of
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Washington.
14.3 Washington courts shall have jurisdiction over the parties and any
action arising out of this Agreement.
14.4 Venue of any action arising out of this Agreement shall be in
Spokane County, Washington.
Section 15. Counterparts. More than one counterpart of this Agreement may be
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executed by the parties, and each fully executed counterpart shall be deemed an
original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the date first above written.
EMPLOYEE INLAND NORTHWEST BANK
s/ Xxxxxx X. Xxxxx
-------------------------- By: s/ X. X. Xxxxxxxx
XXXXXX X. XXXXX -------------------------
Its: President
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