EXHIBIT 10.4
CHANGE IN CONTROL AGREEMENT
EFFECTIVE DATE: JANUARY 1, 2004
This CHANGE IN CONTROL AGREEMENT ("Agreement") is made by WEST COAST BANCORP
("Bancorp") and WEST COAST BANK ("Bank") (collectively "Company") and XXXXXX
XxXXXXX ("Executive").
RECITALS
A. The Executive is employed by the Company as its Executive Vice President,
Commercial Banking Group Manager.
B. The Board recognizes that a possible or threatened Change in Control may
result in key management personnel being concerned about their continued
employment status or responsibilities. In addition, they may be approached
by other companies offering competing employment opportunities.
Consequently, they will be distracted from their duties and may even leave
the Company during a time when their undivided attention and commitment to
the best interests of the Company and Bancorp's shareholders would be
vitally important.
C. The Company considers it essential to its best interests and those of
Bancorp's shareholders to provide for the continued employment of key
management personnel in the event of a Change in Control.
D. Therefore, in order to--
(1) Encourage the Executive to assist the Company during a Change in
Control and be available during the transition afterwards;
(2) Give assurance regarding the Executive's continued employment status
and responsibilities in the event of a Change in Control; and
(3) Provide the Executive with Change in Control benefits competitive
with the Company's peers
--the parties agree on the following:
TERMS AND CONDITIONS
1. DEFINITIONS. Words and phrases appearing in this Agreement with initial
capitalization are defined terms that have the meanings stated below.
Words appearing in the following definitions which are themselves defined
terms are also indicated by initial capitalization.
(a) "BENEFICIAL OWNERSHIP" means direct or indirect ownership within the
meaning of Rule 13(d)(3) under the Exchange Act.
(b) "BOARD" means Bancorp's Board of Directors.
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(c) "CAUSE" means either:
(1) Any of the circumstances that qualify as grounds for
termination for cause under the Executive's employment
agreement as in effect at the time; or
(2) If no employment agreement is in effect at that time or if the
employment agreement in effect at that time does not specify
grounds for termination for cause, any of the following
circumstances shall qualify as "Cause" under this Agreement:
(A) Embezzlement, dishonesty or other fraudulent acts
involving the Company or the Company's business
operations;
(B) Material breach of any confidentiality agreement or
policy;
(C) Conviction (whether entered upon a verdict or a plea,
including a plea of no contest) on any felony charge or
on a misdemeanor reflecting upon the Executive's
honesty;
(D) An act or omission that materially injures the Company's
reputation, business affairs or financial condition, if
that injury could have been reasonably avoided by the
Executive; or
(E) Willful misfeasance or gross negligence in the
performance of the Executive's duties provided, however,
that the Executive is first given:
(i) Written notice by the Company specifying in detail
the performance issues; and
(ii) A reasonable opportunity to cure the issues
specified in the notice.
(d) "CHANGE IN CONTROL" means:
(1) Except as provided in subparagraph (B) below, an acquisition
or series of acquisitions as described in subparagraph (A)
below.
(A) The acquisition by a Person of the Beneficial Ownership
of more than 30% of either:
(i) Bancorp's then outstanding shares of common stock;
or
(ii) The combined voting power of Bancorp's then
outstanding voting securities entitled to vote
generally in the election of directors.
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(B) This paragraph (1) does not apply to any acquisition:
(i) Directly from the Company;
(ii) By the Company; or
(iii) Which is part of a transaction that satisfies the
exception in paragraph (3)(A), (B) and (C) below;
(2) The incumbent directors cease for any reason to be a majority
of the Board. The "incumbent directors" are directors who are
either:
(A) Directors on the Effective Date; or
(B) Elected, or nominated for election, to the Board by a
majority vote of the members of the Board or the
Nominating Committee of the Board who were directors on
the Effective Date. However this subparagraph (B) does
not include any director whose election came as a result
of an actual or threatened election contest regarding
the election or removal of directors or other actual or
threatened solicitation of proxies by or on behalf of a
Person other than the Board;
(3) Consummation of a merger, reorganization or consolidation of
Bancorp or the sale or other disposition of substantially all
of it assets, except where:
(A) Persons who, immediately before the consummation, had,
respectively, a Controlling Interest in and Voting
Control of Bancorp have, respectively, a Controlling
Interest in, and Voting Control of the resulting entity;
(B) No Person (other than the entity resulting from the
transaction or an employee benefit plan maintained by
that entity) has the Beneficial Ownership of more than
30% of either:
(i) The resulting entity's then outstanding shares of
common stock or other comparable equity security;
or
(ii) The combined voting power of the resulting
entity's then outstanding voting securities
entitled to vote generally in the election of
directors,
except to the extent that Person held that Beneficial
Ownership before the consummation; and
(C) A majority of the members of the board of directors of
the resulting entity were members of the Board at either
the time:
(i) The transaction was approved by the Board; or
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(ii) The initial agreement for the transaction was
signed; or
(4) Approval by Bancorp's shareholders of its complete liquidation
or dissolution.
(e) "CHANGE IN CONTROL PROPOSAL" means any proposal or offer that is
intended to or has the potential to result in a Change in Control.
(f) "CODE" means the Internal Revenue Code of 1986.
(g) "COMMITTEE" means the Compensation and Personnel Committee of the
Board.
(h) "CONTROLLING INTEREST" means Beneficial Ownership of more than 50%
of the outstanding shares common stock of a corporation or the
comparable equity securities of a noncorporate business entity.
(i) "DISABILITY" means that either the carrier of any Company-provided
individual or group long-term disability insurance policy covering
the Executive or the Social Security Administration has determined
that the Executive is disabled. Upon the request of the Committee,
the Executive will submit proof of the carrier's or the Social
Security Administration's determination.
(j) "EFFECTIVE DATE" means January 1, 2004.
(k) "ERISA" means the Employee Retirement Security Act of 1974.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934.
(m) "GOOD REASON" means any one of the following:
(1) Any reduction in the Executive's salary or reduction or
elimination of any compensation or benefit plan benefiting the
Executive, which reduction or elimination does not generally
apply to substantially all similarly situated employees of the
Company or such employees of any successor entity or of any
entity in control of Bancorp or the Bank;
(2) A relocation or transfer of the Executive's place of
employment to an office or location that is more than 35 miles
from the Executive's then current place of employment; or
(3) A material diminution in the Executive's responsibilities,
title or duties.
(n) "PERSON" means any individual, entity or group within the meaning of
Sections 13(d) and 14(d) of the Exchange Act, other than a trustee
or fiduciary holding securities under an employee benefit plan of
the Company.
(o) "TERMINATION EVENT" means any of the following events:
(1) The Executive terminates employment for Good Reason within 24
months after a Change in Control;
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(2) The Company terminates the Executive's employment other than
for Cause, Disability or death within 24 months after a Change
in Control;
(3) The Company terminates the Executive's employment before a
Change in Control if:
(A) The termination is not for Cause, Disability or death;
and
(B) The termination occurs either on or after:
(i) The announcement by Bancorp, or any other Person,
that a Change in Control is contemplated or
intended; or
(ii) The date a contemplated or intended Change in
Control should have been announced under
applicable securities or other laws; or
(4) The date the Executive's continued employment begins under
Section 3(b).
(p) "VOTING CONTROL" means holding more than 50% of the combined voting
power of an entity's then outstanding securities entitled to vote in
the election of its directors or other governing body.
2. INITIAL TERM; RENEWALS; EXTENSION.
(a) The initial term of this Agreement begins on the Effective Date and
ends on December 31, 2004.
(b) Following this initial term, this Agreement will automatically renew
on January 1 of each year for subsequent one-year terms, unless not
later than the September 30 preceding the upcoming renewal date,
either the Company or the Executive gives the other written notice
terminating this Agreement as of the upcoming December 31.
(c) If a definitive agreement providing for a Change in Control is
signed on or before the expiration date of the initial term or any
renewal term, the term of this Agreement then in effect will
automatically be extended to 24 months after the effective date (as
stated in the definitive agreement) of the Change in Control. During
this extended period, the Board may not terminate this Agreement
without the Executive's written consent.
3. EXECUTIVE'S OBLIGATIONS.
(a) The Executive agrees that, upon notification that the Company has
received a Change in Control Proposal, the Executive shall:
(1) At the Company's request, assist the Company in evaluating
that proposal; and
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(2) Not resign the Executive's position with the Company until the
transaction contemplated by that proposal is either
consummated or abandoned.
(b) If, within 24 months following a Change in Control, the Company
wants the Executive to continue employment in a position or under
circumstances that would qualify as Good Reason for the Executive
terminating employment:
(1) The Executive shall nevertheless agree to that continued
employment, provided that:
(A) The term of this continued employment shall not exceed
90 days or such shorter or longer term as agreed by the
Company and the Executive;
(B) The continued employment will be at an executive level
position that is reasonably comparable to the
Executive's then current position;
(C) The continued employment shall be at either:
(i) The Executive's then current place of employment;
or
(ii) Such other location as agreed by the Company and
the Executive; and
(D) As compensation for this continued employment, the
Executive shall receive:
(i) The same base pay and bonus arrangement as in
effect on the day before the continued employment
agreement became effective (or their hourly
equivalent); and
(ii) Either:
(I) Continuation of the Executive's employee
benefits, fringe benefits and perquisites at
their then current level; or
(II) If that continuation is not reasonably
feasible, the Executive shall receive
additional cash compensation equal to the
amount the Company would have paid as the
employer contribution for the items that
cannot be continued.
(2) The date this continued employment begins shall be treated as
a Termination Event, so that benefits will be payable under
this Agreement, in accordance with its terms and conditions,
even though the Executive's employment with the Company has
not terminated.
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4. SEVERANCE BENEFITS. Upon a Termination Event, the Executive will receive
severance benefits as follows:
(a) COMPONENTS. The severance benefits will consist of:
(1) The cash compensation payment under subsection (b) below;
(2) The equity acceleration under subsection (c) below;
(3) The health plan continuation benefits under subsection (d)
below;
(4) The 401(k) equivalency payment under subsection (e) below; and
(5) The outplacement/tax planning benefits under subsection (f)
below.
(b) CASH COMPENSATION PAYMENT.
(1) This payment will equal two times the Executive's cash
compensation. The Executive's "cash compensation" is the sum
of:
(A) The Executive's adjusted salary as determined under
paragraph (2) below; and
(B) The Executive's average bonus as determined under
paragraph (3) below.
(2) The Executive's "adjusted salary" is the Executive's
annualized regular monthly salary in effect on the date of the
Termination Event as reportable on IRS Form W-2, adjusted by
including and excluding the following items:
(A) Include any salary deferral contributions made under any
employee benefit plan maintained by the Company,
including Bancorp's Executives' Deferred Compensation
Plan;
(B) Exclude:
(i) Bonus payments;
(ii) Bonus amounts deferred including any made under
any employee benefit plan maintained by the
Company, including Bancorp's Executives' Deferred
Compensation Plan;
(iii) Reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses,
severance or disability pay and welfare benefits;
(iv) Employer contributions to a deferred compensation
plan to the extent the contributions are not
included in the Executive's gross income for the
calendar year in which
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contributed, and any distributions from a deferred
compensation plan, regardless of whether those
amounts are includible in the Executive's gross
income when distributed;
(v) Amounts realized from the exercise of
non-qualified stock options or when restricted
stock (or property) becomes freely transferable or
no longer subject to a substantial risk of
forfeiture;
(vi) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified
stock option;
(vii) The value of a non-qualified stock option included
in income in the year in which granted;
(viii) Amounts includible in income upon making a Code
Section 83(b) election;
(ix) Taxable benefits, such as premiums for excess
group term life insurance;
(x) Imputed income from any life insurance on the
Executive's life that is owned by or funded in
whole or in part by the Company; and
(xi) Other similar recurring or non-recurring payments.
(3) The Executive's "average bonus" is the average of:
(A) The actual bonus paid or payable for the bonus
computation year that ended before the bonus computation
year in which the Termination Event occurs; and
(B) The annualized amount of the bonus the Executive earned,
determined as of the end of the month in which the
Termination Event occurs, for the bonus computation year
in which the Termination Event occurs.
(c) EQUITY ACCELERATION.
(1) Subject to paragraph (2) below, upon the date of the
Termination Event:
(A) All stock options held by the Executive that are not
otherwise vested as of that date shall become
immediately vested and exercisable notwithstanding any
vesting provisions in the grant of those options; and
(B) Any restrictions on the restricted stock held by the
Executive shall immediately lapse.
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(2) The Board may exclude any particular grant of stock options or
restricted stock from the acceleration provisions of paragraph
(1) above, but only as follows:
(A) Any current grants as of the Effective Date that are to
be excluded must be listed in a separate appendix to
this Agreement.
(B) Any grants made after the Effective Date will be
excluded only if the exclusion is made at the time the
grant is made.
(d) HEALTH PLAN CONTINUATION BENEFITS. The Company will provide health
plan continuation benefits as follows:
(1) For the period specified in paragraph (3) below, the Company
will pay the premiums (both the employer and employee
portions) for COBRA continuation coverage under the Company's
group health plans as in effect at that time.
(2) The Executive will have all the rights available under COBRA
to change plans and coverage category (i.e., employee only,
employee plus spouse or full family or such other categories
that are in effect at that time).
(3) The Company will make the COBRA premium payments until the
earliest of the following events occurs:
(A) The date COBRA coverage would otherwise end by law; or
(B) 18 months of premiums have been paid.
(e) 401(k) EQUIVALENCY PAYMENT. The Company shall pay the Executive a
lump sum cash payment equal to two times the sum of the Executive's
"deemed matching contribution" (as determined under paragraph (2)
below) and the Executive's "deemed profit-sharing contribution" (as
determined under paragraph (3) below.
(1) For purposes of determining the Executive's deemed matching
and profit-sharing contributions, the Executive's "deemed
401(k) Plan compensation" will be the Executive's cash
compensation under subsection (b)(1) above, but limited to the
maximum amount allowable under the 401(k) Plan's definition of
"compensation" as in effect at that time;
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(2) The deemed matching contributions will be determined as
follows:
(A) First, the Executive's "deemed elective deferral
contributions" will be determined by multiplying the
Executive's deemed 401(k) Plan compensation under
paragraph (1) above by the lesser of:
(i) The deferral percentage the Executive had in
effect under the 401(k) Plan on the date of the
Termination Event; or
(ii) The maximum deferral percentage allowed by the
401(k) Plan for highly compensated employees (if
applicable to the Executive) for the plan year in
which the Termination Event occurs, if that
percentage has been determined by the date of
Termination Event.
(B) Second, the deemed matching contribution formula will be
applied to the amount of the deemed elective deferral
contributions as calculated under subparagraph (A)
above, to determine the amount of the deemed matching
contributions. For this purpose, the "deemed matching
contribution formula" is:
(i) The 401(k) Plan's matching contribution formula
for the plan year in which the Termination Event
occurs; or
(ii) If that formula has not been determined by the
date of the Termination Event, the formula for the
previous plan year.
(3) The deemed profit-sharing contributions will be determined by
multiplying the Executive's deemed 401(k) Plan compensation
under paragraph (1) above by:
(A) The 401(k) Plan's profit-sharing contribution rate for
the plan year in which the Termination Event occurs; or
(B) If that rate has not been determined by the date of the
Termination Event, the average of the profit-sharing
contribution rate for the three plan years before the
plan year in which the Termination Event occurs.
(f) OUTPLACEMENT/TAX PLANNING SERVICES. At the Executive's election, for
up to 12 months from the date of the Termination Event, the
Executive may receive up to $5,000 in outplacement and/or tax
planning services from service providers selected by the Company.
The Company will pay the service providers directly for these
benefits. The Executive will not have an option to receive cash in
lieu of these outplacement or tax planning benefits.
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(g) TIMES FOR PAYMENT.
(1) The cash compensation payment under subsection (b) and the
401(k) equivalency payment under subsection (e) will be paid
within 30 days after the date of the Termination Event;
(2) The COBRA premiums under subsection (d) will be paid as due
under the terms of the applicable group health plan; and
(3) Outplacement services will be paid as billed by the service
provider.
5. GROSS-UP PAYMENT. If any or all of the severance benefits under Section 4
constitute a "parachute payment" under Code Section 280G, the Company
shall pay the Executive a "Gross-Up Payment" as follows:
(a) AMOUNT OF PAYMENT. The Gross-Up Payment shall be equal to the amount
necessary so that the net amount of the severance benefits retained
by the Executive, after subtracting the excise tax imposed under
Code Section 4999 ("excise tax"), and after also subtracting all
federal, state or local income tax, FICA and the excise tax on the
Gross-Up Payment itself, shall be equal to the net amount the
Executive would have retained if no excise tax had been imposed and
no Gross-Up Payment had been paid.
(b) CALCULATION OF PAYMENT AMOUNT. The amount of the Gross-Up Payment
shall be determined as follows:
(1) The determination will be made by independent accountants
and/or tax counsel (the "consultant") selected by the Company
with the Executive's consent (which consent will not be
unreasonably withheld). The Company shall pay all of the
consultant's fees and expenses.
(2) As part of this determination, the consultant will provide the
Company and the Executive with a detailed analysis and
supporting calculations of:
(A) The extent to which any payments or benefits paid or
payable to the Executive are subject to Code Section
280G (including the reasonableness of any compensation
provided for services rendered before or after the
Change in Control); and
(B) The calculation of the excise tax under Code Section
4999.
(3) The consultant may make such assumptions and approximations
concerning applicable tax rates and rely on such
interpretations regarding the application of Code Sections
280G and 4999 as it deems reasonable. The Company and the
Executive will provide the consultant with any information or
documentation the consultant may reasonably request.
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(c) TIME FOR PAYMENT. The Gross-Up Payment shall be made within 30 days
after the date of the Termination Event, provided that if the
Gross-Up Payment cannot be determined within that time, the
following will apply:
(1) The Company shall pay the Executive within that time an
estimate, determined in good faith by the Company, of the
minimum amount of the Gross-Up Payment;
(2) The Company shall pay the remainder (plus interest as
determined under Code Section 7872(f)(2)(B)) as soon as the
amount can be determined, but in no event later than the 45
days after the date of the Termination Event; and
(3) If the estimated payment is more than the amount later
determined to have been due, the excess (plus interest as
determined under Code Section 7872(f)(2)(B)) shall be repaid
by the Executive within 30 days after written demand by the
Company.
(d) ADJUSTMENTS. Subject to the Company's right under subsection (e)
below to contest an excise tax assessment by the Internal Revenue
Service, the amount of the Gross-Up Payment will be adjusted as
follows:
(1) OVERPAYMENT. If the actual excise tax imposed is less than the
amount that was taken into account in determining the amount
of the Gross-Up Payment, the Executive shall repay at the time
that the amount of the reduced excise tax is finally
determined the portion of the Gross-Up Payment attributable to
that reduction (plus the portion of the Gross-Up Payment
attributable to the excise tax, FICA and federal, state and
local income tax imposed on the portion of the Gross-Up
Payment being repaid by the Executive, to the extent the
repayment results in a reduction in or refund of excise tax,
FICA or federal, state or local income tax), plus interest as
determined under Code Section 7872(f)(2)(B) on the amount of
the repayment.
(2) UNDERPAYMENT. If the actual excise tax imposed is more than
the amount that was taken into account in determining the
amount of the Gross-Up Payment, the Company shall make an
additional gross-up payment to compensate for that excess
(plus interest as determined under Code Section 7872(f)(2)(B))
within 10 days of the date the amount of the excess is finally
determined.
(e) COMPANY'S RIGHT TO CONTEST. The Company has the right to contest any
excise tax assessment made by the Internal Revenue Service on the
following terms and conditions:
(1) The Executive must notify the Company in writing of any claim
by the Internal Revenue Service that, if upheld, would result
in the payment of excise taxes in amounts different from the
amount initially determined by the consultant. The Executive
shall give this notice as soon as possible but in no event
later than 15 days after the Executive receives the notice
from the Internal Revenue Service.
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(2) If the Company decides to contest the assessment, it must
notify the Executive within 30 days of receiving the notice
from the Executive.
(3) The Company will have full control of the proceedings,
including settlement authority and the right to appeal.
(4) The Executive will cooperate fully in providing any testimony,
information or documentation reasonably required by the
Company in connection with the proceedings.
(5) The adjustments required under subsection (d) above shall not
be made until the Company has concluded a settlement agreement
with the Internal Revenue Service, exhausted its (or the
Executive's) rights to contest the Internal Revenue Service's
determination or notified the Executive that it intends to
concede the matter, whichever occurs first.
(6) The Company shall bear all fees and costs associated with the
contest.
(7) The Company will indemnify the Executive from any taxes,
interest and penalties that may be imposed upon the Executive
with respect to the payments made under paragraph (6) above
and this paragraph (7).
(f) EFFECT OF REPEAL. If Code Sections 280G and 4999 are repealed
without successor provisions being enacted, this Section shall be of
no further force or effect.
6. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, other than providing for the benefits
payable upon a Change in Control, this Agreement will not affect the
determination of any compensation payable by the Company to the Executive,
nor will it affect the other terms of the Executive's employment with the
Company. The specific arrangements referred to in this Agreement are not
intended to exclude or circumvent any other benefits that may be available
to the Executive under the Company's employee benefit or other applicable
plans, programs or arrangements upon the termination of the Executive's
employment.
7. WITHHOLDING. All payments made to the Executive under this Agreement are
subject to the withholding of income and payroll taxes and other payroll
deductions that the Company reasonably determines are appropriate under
applicable law or regulations.
8. ASSIGNMENT.
(a) The Company will require any successor (by purchase, merger,
consolidation or otherwise, whether direct or indirect) to all or
substantially all of its business or assets to expressly assume this
Agreement. This assumption shall be obtained before the effective
date of the succession. Failure of the Company to obtain this
assumption shall be a breach of this Agreement and shall entitle the
Executive to compensation from the Company in the same amount and on
the same terms that the Executive would be entitled to under this
Agreement following a Change in Control, except that for this
purpose:
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(1) The date the definitive agreement providing for the succession
is signed shall be deemed to be the date of the Termination
Event (the "deemed Termination Event"), regardless of whether
the Executive's employment terminates on that date;
(2) The Executive will have no continued employment obligation
under Section 3(b) as of the deemed Termination Event;
(3) The equity acceleration under Section 4(c) will be effective
on the date of the deemed Termination Event;
(4) Within five (5) business days of the deemed Termination Event,
the Company with pay the Executive a lump sum cash payment
equal to the sum of:
(A) The cash compensation payment under Section 4(b);
(B) Twenty-four times the monthly COBRA premium amount for
the group health plan coverage the Executive had in
effect on the date of the deemed Termination Event;
(C) The 401(k) equivalency payment under Section 4(e);
(D) The maximum amount that would have been paid under
Section 4(f) to the outplacement service provider; and
(5) Section 6 will no longer apply as of the date of the deemed
Termination Event.
(b) The Executive may not assign or transfer this Agreement or any
rights or obligations under it.
9. UNSECURED GENERAL CREDITOR. Neither the Executive nor anyone else claiming
on behalf of or through the Executive shall have any right with respect
to, or claim against, any insurance policy or other asset the Company may
acquire to assist it in financing its obligations under this Agreement.
The Executive shall be an unsecured general creditor of the Company with
respect to any amount payable under this Agreement.
10. JOINT AND SEVERAL OBLIGATION. Bancorp and Bank will be jointly and
severally liable for the payment obligations under this Agreement.
11. DEATH BENEFIT.
(a) Any severance benefits under Section 4 remaining unpaid at the
Executive's death shall be paid under the terms and conditions of
this Agreement, to the Beneficiary or Beneficiaries determined under
subsection (b) below.
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(b) The Executive may designate the Beneficiary or Beneficiaries (who
may be designated concurrently or contingently) to receive the death
benefit under the Plan under the following terms and conditions:
(1) The beneficiary designation must be in a form satisfactory to
the Committee and must be signed by the Executive.
(2) A beneficiary designation shall be effective upon receipt by
the Committee or its designee and shall cancel all beneficiary
designations previously filed by the Executive, provided it is
received before the Executive's death.
(3) The Executive may revoke a previous beneficiary designation
without the consent of the previously designated Beneficiary.
This revocation is made by filing a new beneficiary
designation form with the Committee or its designee, and shall
be effective upon receipt.
(4) A divorce will automatically revoke the portion of a
beneficiary designation designating the former spouse as a
Beneficiary.
(5) If a Beneficiary disclaims a death benefit, the benefit will
be paid as if the Beneficiary had predeceased the Executive.
(6) If a Beneficiary who is in pay status dies before full
distribution is made to the Beneficiary, the unpaid balance of
the distribution will be paid to the Beneficiary's estate.
(7) If, at the time of the Executive's death, the Executive has
failed to designate a Beneficiary, the Executive's beneficiary
designation has become completely invalid under the provisions
of this subsection or there is no surviving Beneficiary, the
benefit will be paid in the following order of priority:
(A) To the Executive's spouse, if living; or
(B) To the Executive's estate.
12. GENERAL PROVISIONS.
(a) CHOICE OF LAW/VENUE.
(1) This Agreement shall be construed and its validity determined
according to the laws of the State of Oregon, other than its
law regarding conflicts of law or choice of law, to the extent
not preempted by federal law.
(2) Any dispute arising out of this Agreement must be brought in
either Clackamas County or Multnomah County, Oregon, and the
parties will submit to personal jurisdiction in either of
those counties.
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(b) ARBITRATION. Any dispute or claim arising out of or brought in
connection with this Agreement, shall be submitted to final and
binding arbitration as follows:
(1) Before proceeding to arbitration, the parties shall first
attempt, in good faith, to resolve the dispute or claim by
informal meetings and discussions between them and/or their
attorneys. Acting on behalf of the Company at any of these
meetings and discussions will be, at the discretion of its
Chief Executive Officer, the Chief Executive Officer, the
Executive Vice-President, Human Resources or both of them. The
Chief Executive Officer and the Executive Vice-President,
Human Resources will make their recommendation to the
Committee for its decision on the matter. This informal
dispute resolution process will be concluded within 30 days or
such longer or shorter period as may be mutually agreed by the
parties.
(2) After exhausting the informal dispute resolution process under
paragraph (1) above, upon the request of any party, the matter
will be submitted to and settled by arbitration under the
rules then in effect of the American Arbitration Association
(or under any other form of arbitration mutually acceptable to
the parties involved). Any award rendered in arbitration will
be final and will bind the parties, and a judgment on it may
be entered in the highest court of the forum having
jurisdiction. The arbitrator will render a written decision,
naming the substantially prevailing party in the action and
will award such party all costs and expenses incurred,
including reasonable attorneys' fees.
(c) ATTORNEYS' FEES.
(1) If any breach of or default under this Agreement results in
either party incurring attorneys' or other fees, costs or
expenses (including those incurred in an arbitration), the
substantially prevailing party is entitled to recover from the
non-prevailing party its reasonable legal fees, costs and
expenses, including attorneys' fees and the costs of the
arbitration, except as provided in paragraph (2) below.
(2) If the Executive is not the substantially prevailing party,
the Executive shall be liable to pay the Company under
paragraph (1) above only if the arbitrator determines that:
(A) There was no reasonable basis for the Executive's claim
(or the Executive's response to the Company's claim); or
(B) The Executive had engaged in unreasonable delay, failed
to comply with a discovery order or otherwise acted in
bad faith in the arbitration.
(3) Either party shall be entitled to recover any reasonable
attorneys' fees and other costs and expenses it incurs in
enforcing or collecting an arbitration award.
Page 16 CHANGE IN CONTROL AGREEMENT (XxXxxxx)
(4) If an award under this subsection is made to the Executive and
accountants or tax counsel selected by Company with the
Executive's consent (which shall not be unreasonably withheld)
determine that the award is includible in Executive's gross
income, Company shall also pay Executive a gross-up payment to
offset the taxes imposed on that award, including the taxes on
the gross -up payment itself. This gross-up payment shall be
determined following the methodology employed in Section 5(b).
(d) ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to its subject matter, and it supercedes
all previous agreements between the Executive and the Company and
any of its subsidiaries pertaining to this subject matter. By
signing this Agreement, the Executive waives any and all rights the
Executive may have had under any previous agreement providing for
benefits upon a Change in Control (regardless of how that term is
defined in those prior agreements) that the Executive may have
entered into with the Company or any of its subsidiaries.
(e) SUCCESSORS. This Agreement binds and inures to the benefit of the
parties and each of their respective affiliates, legal
representatives, heirs and, to the extent permitted in this
Agreement, their successors and assigns.
(f) AMENDMENT. This Agreement may be amended only through a written
document signed by all of the parties.
(g) CONSTRUCTION. The language of this Agreement was chosen jointly by
the parties to express their mutual intent. No rule of construction
based on which party drafted the Agreement or certain of its
provisions will be applied against any party.
(h) SECTION HEADINGS. The section headings used in this Agreement have
been included for convenience and reference only.
(i) CITATIONS. Citations to a statute, act or rule are to that statute,
act or rule as amended or to its successor at the relevant time.
Citations to a particular section of a statute, act or rule are to
that section as amended or renumbered or to the comparable provision
of any successor as in effect at the relevant date.
(j) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and all counterparts will be construed together as one
Agreement.
Page 17 CHANGE IN CONTROL AGREEMENT (XxXxxxx)
(k) SEVERABILITY. If any provision of this Agreement is, to any extent,
held to be invalid or unenforceable, it will be deemed amended as
necessary to conform to the applicable laws or regulations. However,
if it cannot be amended without materially altering the intentions
of the parties, it will be deleted and the remainder of this
Agreement will be enforced to the extent permitted by law.
EXECUTIVE: COMPANY:
WEST COAST BANCORP
______________________________ By:_____________________________
Xxxxxx XxXxxxx
Title __________________________
Date: ________________________
Date:___________________________
WEST COAST BANK
By: ____________________________
Title:__________________________
Date:___________________________
Page 18 CHANGE IN CONTROL AGREEMENT (XxXxxxx)
