Exhibit 10.2
PRIVILEGED AND CONFIDENTIAL
RETENTION AND NONCOMPETITION AGREEMENT
AGREEMENT by and between U.S.
BANCORP (“Parent”), UNITED FINANCIAL CORP. (the
“Company”), and Steve L. Feurt (the
“Employee”), dated as of the 6 th day of
November, 2006 (the “Effective Date”). In the event
that the Merger Agreement (as defined below) is terminated, this
Agreement shall be void ab initio and of no further
force and effect. Capitalized terms used herein but not otherwise
defined shall have the meanings ascribed to them in the Merger
Agreement.
WHEREAS, the Employee is an employee
of the Company and, pursuant to that certain Agreement and Plan of
Merger, dated as of even date herewith, by and among Parent,
Cascade Merger Corporation (“Merger Sub”), and the
Company (the “Merger Agreement”), Merger Sub will be
merged with and into the Company (the “Merger”) and the
Company will, upon the closing of the transactions contemplated by
the Merger Agreement, become a wholly-owned subsidiary of
Parent.
WHEREAS, Parent and the Company have
determined that it is in the best interests of Parent and the
Company and their respective shareholders to assure that the
Company will have the continued dedication of the Employee pending
the Merger and to provide the surviving corporation after the
Merger with continuity of management.
WHEREAS, as a condition to its
willingness to enter into the Merger Agreement and in consideration
of Parent’s acquisition for value of all of the
Employee’s shares of capital stock of the Company pursuant to
the Merger Agreement, Parent has requested that the Employee shall
have executed and delivered this Agreement in favor of the Company
and Parent and their respective affiliates and successors, and the
Employee wishes to enter into this Agreement.
NOW, THEREFORE, in consideration of
the mutual covenants herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1.
Retention Period . The Company and Parent wish to ensure
that the Employee remains in the employ of the Company for the
period beginning on the Effective Date and ending on the second
anniversary thereof (the “Retention
Period”).
2.
Retention Payments . (a) During the Retention Period, the
Employee shall be entitled to receive cash retention payments in an
aggregate amount (the “Aggregate Retention Amount”)
equal to $125,000, subject to the Employee’s continued
employment with the Company as of the applicable Payment Date (as
defined below) and compliance with the covenants set forth in
Section 4 of this Agreement. The Aggregate Retention Amount shall
vest and be payable in the amounts and on the dates (the
“Payment Dates”) set forth below:
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Payment
Date
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Retention Amount
Payable
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First anniversary of Effective Date
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$62,500
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Second anniversary
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$62,500
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To the extent any such Payment Date
is not a regular pay day for the Company, the Company shall have
the option to elect to postpone the payment of the portion of the
Aggregate Retention Amount then payable until the regular pay day
immediately following such Payment Date.
(b)
Termination of Employment During the Retention Period . (i)
If, during the Retention Period, the Company shall terminate the
Employee’s employment other than for Cause (as defined
herein), subject to the Employee’s continued compliance with
the covenants set forth in Section 4 hereof, then (a) the unpaid
portion of the Aggregate Retention Amount shall become vested and
be paid in the installments and on the Payment Dates set forth
above in Section 2(a) and (b) the Company shall continue to pay to
the Employee the Employee’s base salary (as in effect on the
date of the Employee’s termination of employment pursuant to
this Section 2(b)(i)) from the date of such termination through the
end of the Retention Period (the “Severance Payments”).
Any amounts otherwise payable to the Employee pursuant to the terms
of any severance plan, policy, program or agreement of any Company
Entity (as defined below) shall be reduced (but not below zero) by
the aggregate amount of the Severance Payments. Notwithstanding
anything herein to the contrary, the Severance Payments may be paid
at the time and in the manner determined by the Company to the
extent necessary to comply with the provisions of Section 409A of
the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
(ii) If,
during the Retention Period, the Company shall terminate the
Employee’s employment by reason of the Employee’s
Disability (as defined herein), or the Employee shall terminate
employment due to his death, the Employee or his estate or
beneficiary, as applicable, shall be paid in a lump sum, within
thirty (30) days of the date of termination of the Employee’s
employment, the portion of the Aggregate Retention Amount that
would have vested and been paid on the Payment Date next following
the date of termination due to death or Disability. For purposes of
clarity, to the extent the extent the date of termination due to
death or Disability occurs prior to the first anniversary of the
Effective Date, the first installment of the Aggregate Retention
Amount shall vest and be paid and the second installment shall be
forfeited.
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3.
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Definitions . (a) Cause . For purposes of this
Agreement, “Cause” shall mean:
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(i) the
failure of the Employee to perform the Employee’s duties with
the Company or any Company Entity (other than as a result of
physical or mental illness or injury), which failure continues for
ten (10) days after a written demand for performance is delivered
to the Employee by the Company or Parent;
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(ii)
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breach of a covenant set forth in Section 4 of
this Agreement;
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(iii)
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illegal conduct or gross misconduct by the
Employee;
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(iv) a
material breach of policies or rules of the Company or Parent or a
violation of laws or regulations material to the Employee’s
employment; or
(v) the
Employee’s conviction of, or plea of guilty or nolo
contendere to a charge of commission of a felony.
(b) For
purposes of this Agreement, “Company Entity” shall mean
any entity controlled by, controlling or under common control with
the Company or Parent.
(c)
Disability . For purposes of this Agreement,
“Disability” shall have the meaning specified in the
long-term disability plan of the Company or Company Entity under
which the Employee is covered.
4.
Restrictive Covenants . (a) The Employee acknowledges that
the Employee will have knowledge of certain trade secrets of the
Company. The Employee shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information,
knowledge or data relating to any of the Company Entities and their
respective businesses, (including, without limitation, any client
names, client lists, trade secrets, research, secret data, business
methods, operating procedures or programs), which shall have been
obtained by the Employee during the Employee’s employment by
the Company
