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 6th 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

Retention Amount Payable

First anniversary of Effective Date

$62,500

Second anniversary

$62,500

 

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.

 

3.

Definitions. (a) Cause. For purposes of this Agreement, “Cause” shall mean:

(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;

 

(ii)

breach of a covenant set forth in Section 4 of this Agreement;

 

(iii)

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 or any
Company Entity and which shall not be or become public knowledge (other than by
acts by the Employee or representatives of the Employee in violation of this
Agreement) (collectively, the “Trade Secrets and Confidential Information”).
After termination of the Employee’s employment with the Company or any Company
Entity the Employee shall not, without the prior written consent of Parent or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company or Parent
and those designated by it. For the purposes of this Section 4(a), information
shall not be deemed to be publicly available merely because it is embraced by
general disclosures or because individual features or combinations thereof are
publicly available. All records, files, memoranda, reports, customer lists,
documents and the like that the Employee uses, prepares or comes into contact
with during the course of the Employee’s employment shall remain the sole
property of the Company or one the Company Entities, as applicable, and shall be
turned over to the Company or such Company Entity upon termination of the
Employee’s employment.

(b)          Noncompetition. During the Restricted Period (as defined below),
the Employee shall not engage in or become associated with a Competitive
Activity. For purposes of this Section 4(b): (i) the “Restricted Period” means
the two-year period following the Closing Date (as defined in the Merger
Agreement); (ii) a “Competitive Activity” means any business or other endeavor,
in any county in Montana, that is engaged in the banking business, whether
through a bank, a savings and loan, a savings bank, a credit union, a mortgage
company, bank holding company, savings and loan holding company or other
depositary institution holding company in such jurisdiction as of the Effective
Time or any time thereafter; and (iii) the Employee shall be considered to have
become “associated with a Competitive Activity” if he becomes directly or
indirectly involved as an owner, principal, employee, officer, director,
independent contractor, representative, stockholder, financial backer, agent,
partner, advisor, lender, or in any other individual or representative capacity
with any individual, partnership, corporation or other organization that is
engaged in a Competitive Activity. Notwithstanding the

 

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foregoing, the Employee may make and retain investments during the Restricted
Period in less than one percent (1%) of the equity of any entity engaged in a
Competitive Activity, if such equity is listed on a national securities exchange
or regularly traded in an over-the-counter market.

(c)          Nonsolicitation. During the Restricted Period, the Employee shall
not, directly or indirectly, on behalf of himself or on behalf of any other
individual, association or entity, as an agent or otherwise (i) contact any of
the customers of any Company Entity for whom the Employee directly performed any
services or had any direct business contact for the purpose of soliciting
business or inducing such client to acquire any product or service that
currently is provided or under development by a Company Entity from any entity
other than a Company Entity, (ii) contact any of the customers or prospective
customers of any Company Entity whose identity or other customer specific
information the Employee discovered or gained access to as a result of the
Employee’s access to the Trade Secrets and Confidential Information of any
Company Entity for the purpose of soliciting or inducing any of such customers
or prospective customers to acquire any product or service that currently is
provided or under development by any Company Entity from any entity other than a
Company Entity or (iii) utilize the Trade Secrets and Confidential Information
to solicit, influence, or encourage any customers or prospective customers of
any Company Entity to divert or direct their business to the Employee or any
other person, association or entity by or with whom the Employee is employed,
associated, engaged as agent or otherwise affiliated. During the Restricted
Period, the Employee shall not, directly or indirectly, encourage, induce or
entice any employee of any Company Entity with access to or possession of Trade
Secrets or Confidential Information to terminate employment with such Company
Entity.

(d)          Acknowledgement. The Employee acknowledges and agrees that: (i) the
purposes of the covenants set forth in this Section 4, are to protect the
goodwill and Trade Secrets and Confidential Information of the Company and
Parent in connection with the acquisition of the Company by Parent and to
prevent the Employee from interfering with the business and client relationships
and employees of the Company Entities as a result of or following termination of
the Employee’s employment with the Company or one of the Company Entities; and
(ii) that the covenants set forth in this Section 4 are being given in
consideration for (A) the payment being received by the Employee as a
shareholder of the Company as a result of the Merger, which the Employee agrees
is a transaction described in Section 28-2-704 of the Montana Code Annotated,
(B) the Employee’s continued employment with the Company following the Merger,
and (C) the Employee’s right to receive the Aggregate Retention Amount and the
Severance Payments on the terms set forth in this Agreement. The Employee
understands that he would not be entitled to any of the consideration set forth
in this paragraph absent his execution of this Agreement.

(e)          Enforcement. In the event of a breach or threatened breach of this
Section 4, the Employee agrees that Parent and the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to remedy any such
breach or threatened breach, and the Employee acknowledges that damages would be
inadequate and insufficient. With respect to any provision of Section 4 finally
determined by a court of competent jurisdiction to be unenforceable, the parties
hereto hereby agree that such court shall have jurisdiction to reform this
Agreement or any provision hereof so that it is enforceable to the maximum
extent permitted

 

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by law, and the parties agree to abide by such court’s determination. If any of
the covenants of Section 4 are determined to be wholly or partially
unenforceable in any jurisdiction, such determination shall not be a bar to or
in any way diminish the rights of Parent or the Company to enforce any such
covenant in any other jurisdiction.

(f)           Survival. Any termination of the Employee’s employment or of this
Agreement shall have no effect on the continuing operation of this Section 4.

5.            Successors. This Agreement is personal to the Employee and,
without the prior written consent of Parent, shall not be assignable by the
Employee otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee’s
legal representatives. This Agreement shall inure to the benefit of and be
binding upon Parent, the Company and their successors and assigns.

6.            Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Minnesota without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.

(b)          All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

If to the Employee:

 

At the most recent address

on file at the Company.

If to the Company:

United Financial Corp.

P.O. Box 2779

120 First Avenue North

Great Falls, Montana 59403

Tel: (763) 542-3001

Fax: (763) 543-8617

Attention: Chairman

If to Parent:

 

U.S. Bancorp

800 Nicollet Mall

Minneapolis, Minnesota 55402

Attention: John Elmore, Vice President of Community Banking

Tel: (913) 652-5126

Fax: (913) 652-5032

 

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or to such other address as either party furnishes to the other in writing in
accordance with this Section 6(b). Notices and communications shall be effective
when actually received by the addressee.

(c)          The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

(d)          The Company may withhold from amounts payable under this Agreement
all federal, state, local and foreign taxes that are required to be withheld by
applicable laws or regulations.

(e)          The failure of the Employee, Parent or the Company to insist upon
strict compliance with any provision of, or to assert any right under, this
Agreement shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.

(f)           This Agreement contains all the understandings between the parties
hereto, and supersedes all undertakings and agreements, whether oral or in
writing, previously entered into by them. The Employee represents that, in
executing this Agreement, the Employee does not rely and has not relied upon any
representation or statement not set forth herein with regard to the subject
matter or effect of this Agreement.

(g)          The Employee, the Company and Parent acknowledge that the
employment of the Employee by the Company, Parent or the Company Entities is “at
will” and that the Employee’s employment may be terminated by either the
Employee or the Company or Parent at any time prior to the expiration of the
Retention Period or thereafter.

(h)          This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.

 

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IN WITNESS WHEREOF, the Employee has hereunto set the Employee’s hand and each
of Parent and the Company have caused this Agreement to be executed in its name
on its behalf, all as of the day and year first above written.

 

  /s/   Steve L. Feurt   Steve L. Feurt       UNITED FINANCIAL CORP.    
/s/   Kurt R. Weise     By:    Kurt R. Weise     Title:  Chairman       U.S.
BANCORP           By:          Title:   

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