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Exhibit 10.1 to
Form 8-K
FRONTIER BANK
CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL AGREEMENT (this
"Agreement") is made by and between FRONTIER FINANCIAL CORPORATION
and FRONTIER BANK (hereinafter jointly referred to as the "Bank"),
and the undersigned executive (hereinafter referred to as
"Executive"). The Bank and Executive are sometimes referred to
herein as "the Parties."
WHEREAS, Executive has rendered valuable services
to the Bank, and the Board of Directors of the Bank (the "Board")
desires to be assured that Executive will continue rendering such
services to the Bank; and
WHEREAS, the Board wishes to assure the Bank of
continuity of management in the event of a Change of Control of the
Bank; and
WHEREAS, Executive desires assurance that
Executive will be protected in the event of any Change of
Control;
NOW, THEREFORE, in consideration of the mutual
covenants and promises herein, the Parties agree as
follows:
1. Severance
Benefits. The Bank agrees that if there is a Change of
Control of the Bank and the Bank terminates Executive’s
employment other than for Cause, as defined below, or Executive
terminates this Agreement for Good Reason, as defined below, within
twenty-four (24) months after such Change of Control, Executive
shall receive the benefits provided in Paragraphs 1.1 and 1.2 (the
"Severance Benefit"):
1.1 Executive shall
receive a lump sum payment equal to two (2) times Executive’s
W-2 compensation before salary deferrals (excluding any gains from
stock-based compensation) over the twelve (12) months prior to the
effective date of the Change of Control, less statutory payroll
deductions on the first day of the seventh calendar month following
the discontinuance of Executive’s employment due to a Change
of Control; and
1.2 Executive shall
continue to be covered by all of the Bank’s medical and
dental plans for twenty-four (24) months following discontinuance
of Executive’s employment due to a Change of
Control.
2. Termination Before
Change of Control. If Executive’s employment is
involuntarily terminated (other than for Cause, as defined below)
or Executive dies or terminates employment due to disability as
defined below on or after the date of the press release announcing
the entering into of an agreement that will result in a Change of
Control of the Bank, Executive shall be entitled to the Severance
Benefits described in Section 1, said benefits to be paid after the
Change of Control actually occurs but no earlier than the first day
of the seventh calendar month following the discontinuance of
Executive’s employment due to a Change of Control. For
purposes of this paragraph, "disability" shall be determined using
the definition of that term in the Bank’s long-term
disability plan in effect at the time of the disability, or if no
such plan is then in effect, the definition of "disability"
contained in such other plan providing a disability benefit. If
there is no such plan then in effect, the definition of
"disability" found in Internal Revenue Code Section 22(e), as may
be amended from time to time, shall apply.
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Exhibit 10.1 to Form 8-K
3.
Consideration.
3.1 The amounts paid to
Executive hereunder shall be considered severance pay in
consideration of the past services Executive has rendered to the
Bank and in consideration of Executive’s continued service
from the date hereof to the date of Executive’s entitlement
to such payments, and in further consideration for the covenant not
to compete/non-solicitation, as described in Section 13.
3.2 Executive shall have
no duty to mitigate the amount of any payment under this Agreement
by seeking other employment. Should Executive actually receive
earnings from any such other employment, the payments called for
hereunder shall not be reduced or offset by any such future
earnings.
4. Change of
Control. "Change of Control" as used herein will be
deemed to have occurred when there is a Change in the Ownership of
the Bank. For purposes of this Agreement, a Change in the Ownership
of the Bank shall be deemed to occur when any one person, or more
than one person acting as a group, acquires ownership of the Bank
stock that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market
value or total voting power of the Bank. A Change in Ownership of
the Bank will not occur when any one person, or more than one
person acting as a group, owning more than fifty percent (50%) of
the total fair market value or total voting power of the stock of
the Bank acquires additional stock. For the purposes of this
section, an increase in the percentage of stock owned by any one
person, or more than one person if acting as a group, as a result
of a transaction in which the Bank acquires its stock in exchange
for property will be treated as an acquisition of stock.
5. Cause.
For purposes of this Agreement, "Cause" shall mean:
5.1 The willful breach or
habitual neglect of assigned duties related to the Bank, including
compliance with the Bank’s policies, and such breach or
neglect is materially detrimental to the Bank;
5.2 Conviction (including
any plea of nolo contendere ) of
Executive of any felony or crime involving dishonesty or moral
turpitude;
5.3 Any act of personal
dishonesty knowingly taken by Executive in connection with
Executive’s responsibilities as an employee and intended to
result in personal enrichment of Executive or any other
person;
5.4 Bad faith conduct that
is materially detrimental to the Bank;
5.5 Inability of Executive
to perform Executive’s duties due to alcohol or illegal drug
use;
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Exhibit 10.1 to Form 8-K
5.6 Executive’s
failure to comply with any material legal written directive of the
Board; or
5.7 Any act or omission of
Executive which is of substantial detriment to the Bank because of
Executive’s intentional failure to comply with any statute,
rule or regu
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