**Exhibit10.21**

 

SEPARATION AGREEMENT

 

August 27, 2003Revised September 5, 2003

 

Dean D. Kling89 29th Ave. N.Fargo, ND  58102

 

Dear Dean:

 

This letter describes ouragreement regarding the resignation of your position from Community FirstBankshares, Inc. (“CFB”) effective September 30, 2003.  If after reading this letter you feel thereis any discrepancy between our conversations and the contents of this letter,please contact me.

 

Although not obligated todo so, we have offered to provide you with the following benefits inconjunction with your departure from CFB:

 

# 1.                                       Wewill pay you your regular salary, which the annualized amount is $170,000,through September 30, 2003.  Pleasecoordinate your schedule with your supervisor during this time.  It is agreed that you will vacate CommunityFirst Bankshares premises and return your Community First Bankshares propertyby the close of business on August 29, 2003.

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# 2.                                       Wewill pay you separation pay at your regular salary, at regular payroll datesfrom October 1, 2003 through September 30, 2004.  If you enter into *“regularfull-time employment”*(1), you must notify us promptly.  All separation pay payments will ceasefollowing your first full month of employment. At that time, you will be entitled to a lump sum payment of 50 percentof the amount of any remaining payments. If you enter into regular full-time employment, as a Senior Managementlevel position with a financial services organization that is considered to bea major and direct competitor of Community First, all payments hereunder shallcease.

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# (1)          The term *“regular full-time employment”*shallnot mean temporary, casual or “hobby” type employment with a duration ofless than one (1) month.

 

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# 3.                                       Wewill pay you for any unused accrued PTO as of September 30, 2003.  This amount is shown on your pay stub andwill accrue per Community First Bankshares policies until September 30, 2003.

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# 4.                                       Wewill pay you any bonus/incentive amount according to the terms of the CorporateAnnual Incentive Plan (AIP) pro-rated for your 2003 employment dates.  Such amounts, if any, would not be expectedto be determined until February 2004 with payout, if any, made in March 2004.

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# 5.                                       Wewill pay up to $5,000 for our placement services to Drake Beam MorinCompany.  For use of the program pleasecontact Michelle Kommer at 701/298-5652.

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•                                          After yourtermination of employment, you and/or your covered dependents may be eligibleto continue your health, dental, vision, medical reimbursement flexiblespending account coverage under COBRA. COBRA information will be sent under separate cover.

•                                          Basic lifecoverage will cease on the last day of the month during which you were lastactively at work.  You may convert thisinsurance by applying and paying the first premium for an individual policywithin 31 days after any part of your insurance stops.  Contact Human Resources or ReliaStar within31 days, if you are interested.

•                                          Optional lifecoverage will cease on the last day of the month during which you were lastactively at work.

•                                          Long termdisability coverage stops when you are no longer actively at work.  You may convert this insurance if youremployment ends for a reason other than retirement or if you are no longer inan eligible status.  You must apply andpay the first premium for a LTD policy within 31 days after your insurancestops.  Contact Human Resources orReliaStar, if you are interested.

•                                          If you are a401(k) Retirement Plan participant, distribution papers will be sent to youunder separate cover upon your termination. You must receive a distribution of your vested plan account balance ifthis amount is $5,000 or less.  If yourvested plan account balance exceeds $5,000, you may request a distribution nowor leave the balance in the plan until you later request distribution.  Please allow four to six weeks processingtime after the paperwork is received in the Trust Department.  Please refer to your 401(k) Retirement Planinformation regarding possible tax consequences associated with adistribution.  The plan indicates thatyou must be an active employee on the last day of the plan year (12/31) toreceive a matching contribution.

 

# 6.                                       Wewill pay you sixty five percent (65%) of any Community First BanksharesHealth/Dental/Vision COBRA premium you incur according to the terms of thosebenefit plans for the period you are receiving separation pay delineated inparagraph #2 above.

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# 7.                                       Wewill pay you a specific separation payment as additional consideration forentering into this agreement in the amount of $5,737.50.

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# 8.                                       Youwill be allowed to exercise any vested, unexercised stock options under the CFBIncentive Stock Option plan within 30 days of the date of your positionresignation.  No further vesting of anyunexercised stock options will occur after the date of your positionresignation.  Please contact GaleSkarpohl at 701/298-5625 with any questions you may have.

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# 9.                                       Weare providing you with the opportunity to voluntarily resign youremployment.  I will discuss with youmutually agreeable language to be communicated publicly regarding yourresignation.  If any prospectiveemployer of yours wishes to contact CFB for employment information, you agreeto direct all such prospective employers to make a written request only to CFB’sHuman Resources Manager, who will provide the prospective employer only withyour dates of employment, the nature of the position you held with CFB and thefact that you voluntarily resigned your employment with CFB.  No reference will be made to the circumstancessurrounding your resignation.

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# 10.                                 Wehave discussed and agreed on mutually agreeable language to be communicatedpublicly regarding your position resignation.

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# 11.                                 Wewill not dispute or contest any claim which you might make for unemploymentbenefits unless we disagree with the reasons for which said claim is being madeor you are unavailable for employment. Additionally, we will cooperate with you if necessary, in informing theunemployment compensation benefits office that your position resignation wasbased on your employer’s decision.

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In consideration for thebenefits outlined above, you agree to the following things:

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# 1.                                       Youagree to resign your position with CFB.

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# 2.                                       Youhereby release Community First Bankshares, Inc., its affiliates, its and theirpast and present officers, directors, agents, shareholders, employees,attorneys, insurers and indemnitors (collectively, the “Releasees”) from anyand all claims and causes of action, known and unknown, which you may haveagainst any and all of them.  Throughthis Release, you extinguish all causes of action, known and unknown, againstthe Releasees occurring up to the date of this agreement, including but notlimited to any contract, wage or benefit claims; intentional infliction ofemotional distress, defamation or any other tort claims; and all claims arisingfrom any federal, state or municipal law or ordinance.  This release extinguishes any potentialclaims, including employment discrimination claims, arising from youremployment with and position resignation from CFB, including specifically anyclaims under the North Dakota Human Rights Act, the Americans With DisabilitiesAct, Title VII of the Civil Rights Act of 1964, Age Discrimination inEmployment Act, and the Fair Labor Standards Act.  This release does not extinguish any

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# claims or causes ofaction arising from breach of this Separation Agreement.  You may review this Agreement with anattorney of your choosing.  You have 45days from the date you receive this Separation Agreement and Release toconsider whether you wish to sign it. You acknowledge that if you sign this agreement before the end of thisperiod, it is your voluntary decision to do so, and you waive the remainder ofthe period.

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# 3.                                       Inaddition, Mark Anderson and Ron Strand have agreed to be named and contacted asreferences.  They would affirm that yourseparation was due to position elimination and note the accomplishments in ourgroup f/k/a Financial Services Group during your tenure with Community FirstBankshares.

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# 4.                                       Youare hereby notified of your right to rescind the release of claims contained inthe above paragraph with regard to claims arising under the Age Discriminationin Employment Act (ADEA) within seven (7) calendar days.  In order to be effective, the rescissionmust

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## a.                                       Bein writing; and

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## b.                                      Deliveredto the undersigned designated official by hand or mail within the requiredperiod; and

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## c.                                       Ifdelivered by mail, the rescission must be postmarked within the requiredperiod, properly addressed to the undersigned official and sent by certifiedmail, return receipt requested.

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This Agreementwill be effective upon the expiration of the 7 day period withoutrescission.  You understand that if yourescind this Agreement in accordance with this paragraph, you will not receivethe payments described herein and you will be obligated to return any and allpayments already received.

 

If you violate anyterm of this agreement while you are still receiving benefits hereunder,payments and provision of all remaining benefits to you hereunder will immediatelycease and your obligations hereunder shall remain in effect in consideration ofall the benefits which you will have received prior to said violation by you.

 

# 5.                                       Youcertify that you have returned all CFB property in your possession and allcopies thereof, including but not limited to all keys, equipment, proprietarytechnology, all company documents or computerized transactions thereof,including any CFB confidential information as defined in paragraph 4 below, andany other property in your possession belonging to CFB.

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# 6.                                       Effectiveupon the execution of this Agreement by both parties, you agree that you willnot divulge, communicate or use for your benefit or the benefit of any personoutside CFB any of CFB’s confidential information.  Confidential information includes but is not

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# limited to CFB’s tradesecrets, records, data, customer and prospective customer lists andinformation, short term and long range plans, all financial information,including sales, specific customer account sales, gross margin information,operating expense and information, competitive strategies and pricinginformation, procurement resources information concerning CFB’s business or itsmanner of operation, personnel information, sales and marketing strategies andinformation, and any other confidential or technical information which you haveobtained during your employment with CFB. Confidential information shall mean information not generally known inthe business community that has been disclosed to you and is known to you as aconsequence of your employment by CFB. You will not disclose any such information to any person, firm,corporation, association or other entity for any reason whatsoever.  Confidential information also includes theterms and existence of this agreement, which may be disclosed by you only toyour immediate family, attorney or tax advisor, except as otherwise required bycourt order.  This agreement and thisagreement only (not any trade secret et al information) can be disclosed toyour banker.

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# 7.                                       Effectiveupon execution of this agreement by both parties, you agree not to make, eitherdirectly or indirectly, any derogatory or negative comments of any kind, eitheroral or written, to any person or organization about CFB or any officer,director, shareholder, employee or any other person affiliated with CFB whichwould in any way interfere with any of CFB’s business relationships.

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# 8.                                       AtCFB’s request, you agree to cooperate with CFB in any current or future claimsor lawsuits involving CFB where you have knowledge of the underlyingfacts.  In addition, you agree that youwill not voluntarily aid, assist, or cooperate with any claimants or plaintiffsor their attorneys or agents in any claims or lawsuits commenced in the futureagainst CFB, provided, however, that nothing in this agreement will beconstrued to prevent you from testifying truthfully pursuant to a court order.

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# 9.                                       Youagree to make yourself available to me, at my reasonable request, to assistwith any transitional consulting duties associated with your currentresponsibilities.

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This Agreement shall notin any way be construed as an admission of liability by CFB or as an admissionthat CFB has acted wrongfully with respect to you.  CFB specifically denies and disclaims any such liability orwrongful acts.

 

This agreement sets forthour entire agreement and fully supersedes any prior agreements orunderstandings between you and CFB.  CFBasks that our records reflect that you conclude your employment on terms youunderstand and accept.  Therefore, weask you to declare that you have entered into this agreement voluntarily,without coercion or duress, and with the opportunity to review its contentswith legal counsel should you desire.

 

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If this letter accuratelyreflects our understanding and agreement, please sign the original and copy andreturn the original to me.  The copy isfor your file.

 
| Sincerely,                                   |
|----------------------------------------------|
|                                         |
| /s/ Thomas R. Anderson                       |   |
|                                         |
| COMMUNITY FIRST BANKSHARES, Inc.             |
| Thomas R. Anderson                           |
| EVP – Chief Investment Officer          |
|                                         |
|                                         |
| Read and agreed to, with declarations        |
| confirmed, this 5th day of September,  2003. |
|                                         |
|                                         |
|   /s/ Dean D. Kling                |   |
| Dean D. Kling                                |

 

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