Exhibit 10.18
EMPLOYMENT
AGREEMENT
This Employment Agreement (“
Agreement ”) is entered into and effective (subject to
regulatory approval) as of January 25, 2005 (the “
Effective Date ”) by and between AmericanWest
Bancorporation, a Washington corporation (“ AWBC
”), its wholly owned subsidiary AmericanWest Bank, a
Washington state-chartered bank (the “ Bank ”
and, together with AWBC, “ Employer ”), and R.
Blair Reynolds (“ Executive ”).
RECITALS
WHEREAS, Executive is currently employed by
Employer as the Senior Vice President and General Counsel of AWBC
and the Bank; and
WHEREAS, Employer and Executive each desire to
formalize the employment relationship by entering into this
Employment Agreement;
NOW, THEREFORE, in consideration of the mutual
promises set forth in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Definitions; Construction .
Defined terms used in this Agreement are capitalized and, where not
expressly defined in a separate section of this Agreement, are
defined as set forth in Section 16 . The headings of
Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references
to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement.
2. Employment; Title . Employer
hereby employs Executive, and Executive hereby accepts employment
with Employer, upon the terms and conditions set forth in this
Agreement. Executive’s title shall be “Senior Vice
President and General Counsel” of AWBC and of the
Bank.
3. Term of Employment . The term
of this Agreement (“ Term ”) is one year,
commencing on the Effective Date. Unless earlier terminated
pursuant to the provisions hereof, this Agreement shall be
automatically renewed for successive one-year terms (each a “
Renewal Term ”) unless either party gives written
notice of non-renewal to the other not less than six (6) months
prior to the end of the Term. If this Agreement is not renewed or
the parties do not enter into a new employment agreement at the end
of the Term, then at that time, to the extent Executive remains
employed by Employer, (i) Executive shall be deemed an at-will
employee of Employer, (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 reimbursable expenses
incurred through the date of such termination, together with such
other benefits such as, by way of example but not limited to,
Performance Stock awards and/or Stock Options granted to Executive,
consistent with the terms of any such grant; provided, however,
that paragraphs (b) and (c) of Section 11 of this Agreement
shall survive this Agreement in the event of written notice of
non-renewal by Employer without Cause such that Executive’s
rights and Employer’s obligations thereunder
shall continue with respect to any subsequent
termination of Executive’s employment with Employer as
described therein.
4. Duties . Executive will report
directly to the President and Chief Executive Officer, and will
perform and discharge well and faithfully the duties that may be
assigned to him from time to time by the Chief Executive Officer in
connection with the conduct of Employer’s business. Executive
will conduct himself so as to maintain and increase the goodwill
and reputation of Employer and its business and abide by all codes
of ethics or other professional duties applicable to Executive. In
his capacity as Senior Vice President and General Counsel,
Executive shall perform the customary duties of Senior Vice
President and General Counsel of a Washington commercial bank
holding company, including but not limited to:
(a) Coordinate and oversee legal and
regulatory compliance affairs of Employer;
(b) Render advice to
Employer’s Board, executive officers and staff on legal
issues relating to the business of Employer;
(c) Maintain a good relationship
with regulatory authorities;
(d) Maintain a good relationship
with Employer’s Board, management and
shareholders;
(e) Coordinate with other executive
officers in the development of strategic plans and objectives for
Employer;
and such other duties as are set forth in
Executive’s job description or as may be assigned from time
to time by Employer’s Board or Chief Executive
Officer.
5. Extent of Service . Executive
shall devote his entire business time, attention and energies to
the business of Employer. The foregoing, however, shall not
preclude Executive from engaging in appropriate civic, charitable
or religious activities or from devoting a reasonable amount of
time to private investments (subject to the limitations of
Section 13 ) or from serving on the boards of directors of
other entities, as long as such activities and services do not
interfere or conflict with his responsibilities to
Employer.
6. Compensation .
(a) Salary . Employer shall
pay Executive a base salary at the annual rate of $150,000 payable
in accordance with the standard payroll procedures of Employer but
not less than monthly. Executive’s base salary may be
increased annually, taking into consideration Executive’s
performance for the most recent performance period and other
relevant factors.
(b) Incentive Programs .
Executive shall be entitled to participate in any annual and
longer-term incentive programs that are adopted by Employer and
that cover employees in positions comparable to that of
Executive.
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(c) Performance Stock Awards and
Stock Options .
(i) Discretionary Performance
Shares . Employer may from time to time grant Executive shares
of AWBC common stock (the “ Discretionary Performance
Shares ”) as a Performance Stock award as Employer, at
Employer’s sole discretion, may see fit. Any such
Discretionary Performance Shares shall vest in accordance with the
terms of the grant thereof, except that the provisions for
immediate vesting thereof set forth in subparagraphs (b)(1)(v)
and (c)(1)(iv) of Section 11 of this Agreement shall apply to
any such Discretionary Performance Shares.
(ii) Stock Options . Employer
may from time to time grant Executive stock options to purchase
shares of AWBC common stock (the “ Stock Options
”) at the closing price of AWBC’s common stock on the
date of grant as Employer, at Employer’s sole discretion, may
see fit. Any such grant shall be evidenced by a separate stock
option agreement and shall become exercisable (i.e., vest) in
accordance with the terms of such stock option agreement, except
that the provisions for immediate vesting thereof set forth in
subparagraphs (b)(1)(v) and (c)(1)(iv) of Section 11 of this
Agreement shall apply to any such Stock Options. All such Stock
Options shall be “incentive stock options” within the
meaning of the Code.
(d) Expenses . Executive
shall be entitled to prompt reimbursement of all reasonable
business expenses incurred by him in the performance of his duties
during the Term, subject to the timely presentment of appropriate
vouchers and receipts in accordance with Employer’s
policies.
(e) Deferred Compensation .
Executive may, at his option, defer income from all or part of his
base salary and bonuses through a Deferred Compensation Plan that
is acceptable to Employer, which acceptance shall not be
unreasonably withheld.
7. Employee Benefits . Executive
shall be entitled to participate in employee benefit plans or
programs (including but not limited to retirement plans) of
Employer, if any, to the extent that his position, tenure, salary,
age, health and other qualifications make him eligible to
participate, subject to the rules and regulations applicable
thereto. Employer shall have no duty under this Agreement to give
Executive any additional compensation to cover life insurance
premiums or to maintain any life insurance on Executive’s
life.
8. Vacation . Executive shall be
entitled to vacation of four (4) weeks per year, at full salary, at
the discretion of Executive and as time allows, so long as it is
reasonable and does not jeopardize his responsibilities;
provided , that at least once each year Executive must be
absent from his duties with Employer for a period of at least ten
(10) consecutive business days, all or any portion of which may be
vacation leave. The length of vacation at any one time should not
exceed two (2) weeks without the approval of the President and
Chief Executive Officer.
9. Surety Bond . Executive agrees
to furnish all information and take any other steps necessary to
enable Employer to obtain and maintain a fidelity bond conditioned
on the rendering of a true account by Executive of all moneys,
goods or other property which may come into the custody, charge or
possession of Executive during the Term. The surety company issuing
such bond and the amount of the bond must be acceptable to
Employer. All premiums on the
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bond shall be paid by Employer. If Executive
cannot personally qualify for a surety bond at any time during the
Term, Employer may terminate this Agreement immediately and such
termination shall be deemed to be a termination for
Cause.
10. Termination . Notwithstanding
the provisions of Section 3 , Executive’s employment
may be terminated without any breach of this Agreement (provided
that any required payments under Section 11 are duly made)
under the following circumstances:
(a) Death . This Agreement
shall terminate upon Executive’s death.
(b) Disability . If Executive
becomes Disabled, Employer may terminate Executive’s
employment hereunder by providing him written notice thereof, and
such termination will be effective upon delivery of such
notice.
(c) Resignation without Good
Reason . Executive may terminate his employment with Employer
at any time without Good Reason (as defined in Section 16 )
by giving Employer two (2) months’ written notice thereof.
Such termination will be effective on the earlier of the last day
of the notice period or the last day on which Executive performs
services for Employer.
(d) Resignation for Good
Reason . Executive may terminate his employment with Employer
for Good Reason (as defined in Section 16 ) by giving
Employer thirty (30) days’ written notice thereof. Such
notice must describe the matter or matters which, in
Executive’s opinion, form the basis for Good Reason and
include a statement of his intent to terminate his employment on
such basis. If the basis for Good Reason is an alleged breach of
this Agreement by Employer, such notice shall describe in
reasonable detail the alleged breach. If Employer cures such breach
or the basis for Good Reason otherwise ceases to exist within the
thirty (30) day period following Employer’s receipt of such
notice, Executive shall either rescind his notice of intent to
terminate and continue his employment under this Agreement, or
terminate his employment under Section 10(c), in which case
his notice of breach under this Section 10(d) shall be
deemed to satisfy the notice requirement under Section 10(c)
. If Employer fails to cure its breach within, or other bases for
Good Reason continue to the end of, the thirty (30) day period
following Employer’s receipt of such notice,
Executive’s employment shall terminate effective on the last
day of such 30-day period. If Executive decides to terminate his
employment as provided in Section 10(c) , his employment
shall terminate effective on the earlier of the last day of the
notice period or the last day on which Executive performs services
for Employer.
(e) Involuntary Termination
Without Cause . Employer may terminate Executive’s
employment at any time without Cause by giving thirty (30)
days’ written notice thereof to Executive. Executive’s
employment shall terminate effective on the last day of the notice
period or on such earlier date as Employer specifies in the
notice.
(f) Involuntary Termination for
Cause . Employer may terminate Executive’s employment for
Cause by giving Executive written notice of such termination and
the reasons therefor. Executive’s employment shall terminate
immediately upon receipt of the notice.
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11. Benefits on Termination of
Employment . If Executive’s employment is terminated
during the Term, Executive shall be entitled to receive payments
and benefits as follows:
(a) Death; Disability;
Resignation without Good Reason; Termination for Cause
.
If Executive’s employment is
terminated as a result of death, Disability, resignation without
Good Reason or termination for Cause pursuant to subparagraphs
(a), (b), (c) or (f) , respectively, of Section 10 ,
Executive shall receive:
(1) his base salary through the date
his employment terminates;
(2) the pro rata portion of any
incentive compensation earned but not yet paid, which shall be
calculated in the ordinary course and paid in accordance with
Employer’s standard payroll procedures; and
(3) reimbursement of expenses
described in Section 6(d) incurred but not yet
reimbursed.
(b) Change of Control
.
(1) If, within one (1) year
following the effective date of a Change of Control (as defined in
Section 16 ), Executive terminates his employment for Good
Reason pursuant to Section 10(d) or Employer terminates
Executive without Cause pursuant to Section 10(e) ,
Executive shall receive:
(i) An amount equal to
Executive’s then-current annual base salary for the greater
period of (A) one (1) year or (B) the number of months remaining in
the Term, including any Renewal Term then in effect;
(ii) An amount equal to the total
amount of bonus paid to Executive during the calendar year
immediately preceding any such termination, less any bonus paid
Executive during the calendar year in which such termination
occurs;
(iii) The pro rata portion of any
incentive compensation earned but not yet pai
