EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
THIS AGREEMENT is made effective as of _December 20, 2001, by
and
between FIRSTBANK NORTHWEST (the "Bank"), FIRSTBANK NW CORP. (the
"Company"), a
Washington corporation; and CLYDE E. CONKLIN (the "Executive").
WHEREAS, the Bank wishes to assure itself of the services of
Executive
for the period provided in this Agreement; and
WHEREAS, Executive is willing to serve in the employ of the Bank on
a
full-time basis for said period.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and upon the other terms and conditions hereinafter
provided, the
parties hereby agree as follows:
1.
POSITION AND RESPONSIBILITIES.
During the period of his employment hereunder, Executive agrees
to
serve as Chief Financial Officer of the Bank. During said period,
Executive also
agrees to serve, if elected, as an officer and director of the
Company or any
subsidiary or affiliate of the Company or the Bank.
2.
TERMS AND DUTIES.
(a) The term
of this Agreement shall be deemed to have commenced
as of the date first above written and shall continue for a period
of thirty-six
(36) full calendar months thereafter. Commencing on the first
anniversary date,
and continuing at each anniversary date thereafter, the Board of
Directors of
the Bank (the "Board") may extend the Agreement for an additional
year. Prior to
the extension of the Agreement as provided herein, the Board of
Directors of the
Bank will conduct a formal performance evaluation of Executive for
purposes of
determining whether to extend the Agreement, and the results
thereof shall be
included in the minutes of the Board's meeting.
(b) During the
period of his employment hereunder, except for
periods of absence occasioned by illness, reasonable vacation
periods, and
reasonable leaves of absence, Executive shall devote substantially
all his
business time, attention, skill, and efforts to the faithful
performance of his
duties hereunder including activities and services related to the
organization,
operation and management of the Bank; provided, however, that, with
the approval
of the Board, as evidenced by a resolution of such Board, from time
to time,
Executive may serve, or continue to serve, on the boards of
directors of, and
hold any other offices or positions in, companies or organizations,
which, in
such Board's judgment, will not present any conflict of interest
with the Bank,
or materially affect the performance of Executive's duties pursuant
to this
Agreement.
3.
COMPENSATION AND REIMBURSEMENT.
(a) The
compensation specified under this Agreement shall
constitute the salary and benefits paid for the duties described in
Sections 1
and 2. The Bank shall pay Executive as compensation a salary of not
less than
$102,000 per year. Such salary shall be payable in accordance with
the customary
payroll practices of the Bank. During the period of this Agreement,
Executive's
salary shall be reviewed at least annually; the first such review
will be made
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no later than one year from the date of this Agreement. Such review
shall be
conducted by a Committee designated by the Board. Executive's
salary plus any
increases provided by the Committee, including any incentive
compensation, shall
constitute Executive's base salary ("Base Salary"). In addition to
the Base
Salary provided in this Section 3(a), the Bank shall provide
Executive at no
cost to Executive with all such other benefits as are provided
uniformly to
permanent full-time employees of the Bank.
(b) The Bank
will provide Executive with employee benefit plans,
arrangements and perquisites substantially equivalent to those in
which
Executive was participating or otherwise deriving benefit from
immediately prior
to the beginning of the term of this Agreement, and the Bank will
not, without
Executive's prior written consent, make any changes in such plans,
arrangements
or perquisites which would adversely affect Executive's rights or
benefits
thereunder. Without limiting the generality of the foregoing
provisions of this
Subsection (b), Executive will be entitled to participate in or
receive benefits
under any employee benefit plans including, but not limited to,
retirement
plans, supplemental retirement plans, pension plans, profit-sharing
plans,
health-and-accident plan, medical coverage or any other employee
benefit plan or
arrangement made available by the Bank in the future to its senior
executives
and key management employees, subject to, and on a basis consistent
with, the
terms, conditions and overall administration of such plans and
arrangements.
Executive will be entitled to incentive compensation and bonuses as
provided in
any plan, or pursuant to any arrangement of the Bank, in which
Executive is
eligible to participate. Nothing paid to Executive under any such
plan or
arrangement will be deemed to be in lieu of other compensation to
which
Executive is entitled under this Agreement, except as provided
under Section
5(e).
(c) In
addition to the Base Salary provided for by paragraph (a)
of this Section 3, the Bank shall pay or reimburse Executive for
all reasonable
travel and other obligations under this Agreement and may provide
such
additional compensation in such form and such amounts as the Board
may from time
to time determine.
(d) If
Executive serves as a member of the Board or the Board of
Directors of the Company (the "Company Board"), the Company or the
Bank, as
applicable, shall pay Executive, as additional compensation, an
amount equal to
eighty (80) percent of the fees or retainers received by a
nonemployee member of
the Board or the Company Board.
4.
PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.
(a) Upon the
occurrence of an Event of Termination (as herein
defined) during Executive's term of employment under this
Agreement, the
provisions of this Section shall apply. As used in this Agreement,
an "Event of
Termination" shall mean and include any one or more of the
following: (i) the
termination by the Bank of Executive's full-time employment
hereunder for any
reason other than a Change in Control, as defined in Section 5(a)
hereof; death;
or retirement, as defined in Section 7 hereof; (ii) Executive's
resignation from
the Bank's employ, upon (A) unless consented to by Executive, a
material change
in Executive's function, duties, or responsibilities, which change
would cause
Executive's position to become one of lesser responsibility,
importance, or
scope from the position and attributes thereof described in
Sections 1 and 2,
above (any such material change shall be deemed a continuing breach
of this
Agreement), (B) a relocation of Executive's principal place of
employment by
more than 35 miles from its location at the effective date of this
Agreement, or
a material reduction in the benefits and perquisites to Executive
from those
being provided as of the effective date of this Agreement, (C) the
liquidation
or dissolution of the Bank, or (D) any breach of this Agreement by
the Bank.
Upon the occurrence of any event described in clauses (A), (B), (C)
or (D),
above, Executive shall have the right to elect to terminate his
employment under
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this Agreement by resignation upon not less than sixty (60) days
prior written
notice given within a reasonable period of time not to exceed,
except in case of
a continuing breach, four (4) calendar months after the event
giving rise to
said right to elect.
(b) Upon the
occurrence of an Event of Termination, the Bank shall
pay Executive, or, in the event of his subsequent death, his
beneficiary or
beneficiaries, or his estate, as the case may be, as severance pay,
a lump sum
amount equal to the present value (at a rate reasonably determined
by the Board
of all Base Salary and life, medical, dental and disability
coverage that would
have been paid to Executive had the contract remained in effect
through the
remainder of its then existing term; provided, however, that if the
Bank is not
in compliance with its minimum capital requirements or if such
payments would
cause the Bank's capital to be reduced below its minimum capital
requirements,
such payment shall be deferred until such time as the Bank is in
capital
compliance.
5.
CHANGE IN CONTROL.
(a) No benefit
shall be paid under this Section 5 unless there
shall have occurred a Change in Control of the Company or the Bank.
For purposes
of this Agreement, a "Change in Control" of the Company or the Bank
shall be
deemed to occur if and when (a) an offeror other than the Company
purchases
shares of the common stock of the Company or the Bank pursuant to a
tender or
exchange offer for 25% or more of such shares, (b) any person (as
such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act
of 1934) is
or becomes the beneficial owner, directly or indirectly, of
securities of the
Company or the Bank representing 25% or more of the combined voting
power of the
Company's or the Bank's then outstanding securities, (c) the
membership of the
board of directors of the Company or the Bank changes as the result
of a
contested election, such that individuals who were directors at the
beginning of
any twenty-four (24) month period (whether commencing before or
after the date
of adoption of this Agreement) do not constitute a majority of the
Board at the
end of such period, or (d) shareholders of the Company or the Bank
approve a
merger, consolidation, sale or disposition of all or substantially
all of the
Company's or the Bank's assets, or a plan of partial or complete
liquidation.
(b) If any of
the events described in Section 5(a) hereof
constituting a Change in Control have occurred or the Board of the
Bank or the
Company has reasonably determined that a Change in Control has
occurred,
Executive shall be entitled to the benefits provided in paragraphs
(c), (d) and
(e) of this Section 5 upon his subsequent involuntary termination
following the
effective date of a Change in Control (or voluntary termination
following the
effective date of a Change in Control following any demotion, loss
of title,
office or significant authority, reduction in his annual
compensation or
benefits (other than a reduction affecting the Bank's personnel
generally), or
relocation of his principal place of employment by more than
thirty-five (35)
miles from its location immediately prior to the Change in
Control), unless such
termination is because of his death, retirement as provided in
Section 7,
termination for Cause, or termination for Disability.
(c) Upon the
occurrence of a Change in Control followed by
Executive's termination of employment, the Bank shall pay
Executive, or in the
event of his subsequent death, his beneficiary or beneficiaries, or
his estate,
as the case may be, as severance pay or liquidated damages, or
both, a sum equal
to 2.99 times Executive's "base amount," within the meaning of
ss.280G(b)(3) of
the Internal Revenue Code of 1986 ("Code"), as amended. Such
payment shall be
made in a lump sum paid within ten (10) days of Executive's Date of
Termination.
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(d) Upon the
occurrence of a Change in Control followed by
Executive's termination of employment, the Bank will cause to be
continued life,
medical, dental and disability coverage substantially identical to
the coverage
maintained by the Bank for Executive prior to his severance. In
addition,
Executive shall be entitled to receive the value of employer
contributions that
would have been made on Executive's behalf over the remaining term
of the
agreement to any tax-qualified retirement plan sponsored by the
Bank as of the
Date of Termination. Such coverage and payments shall cease upon
the expiration
of thirty-six (36) months.
(e) Upon the
occurrence of a Change in Control, Executive shall be
entitled to receive benefits due him under, or contributed by the
Company or the
Bank on his behalf, pursuant to any retirement, incentive, profit
sharing,
bonus, performance, disability or other employee benefit plan
maintained by the
Bank or the Company on Executive's behalf to the extent that such
benefits are
not otherwise paid to Executive upon a Change in Control.
(f)
Notwithstanding the preceding paragraphs of this Section 5, in
the event that the aggregate payments or benefits to be made or
afforded to
Executive under this Section, together with any other payments or
benefits
received or to be received by Executive in connection with a Change
in Control,
would be deemed to include an "excess parachute payment" under
ss.280G of the
Code, then, at the election of Executive, (i) such payments or
benefits shall be
payable or provided to Executive over the minimum period necessary
to reduce the
present value of such payments or benefits to an amount which is
one dollar
($1.00) less than three (3) times Executive's "base amount" under
ss.280G(b)(3)
of the Code or (ii) the payments or benefits to be provided under
this Section 5
shall be reduced to the extent necessary to avoid treatment as an
excess
parachute payment with the allocation of the reduction among such
payments and
benefits to be determined by Executive.
6.
TERMINATION FOR DISABILITY.
(a) If
Executive shall become disabled as defined in the Bank's
then current disability plan (or, if no such plan is then in
effect, totally
disabled within wit
