Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered by and
between Columbia State Bank, a Washington banking corporation ("Columbia Bank")
together with Columbia Banking System, Inc., a Washington corporation ("CBSI")
(collectively, the "Employer"), and XXX X. XXXXXXX (the "Executive"). This
Agreement shall become effective as of October 31, 2000.
RECITALS
A. Executive has until recently been serving as a Senior Vice President
and Regional Manager of another financial institution doing business
in King County, Washington.
B. Employer plans to substantially increase its level of business
activity in King County and desires to assure itself of the exclusive
services of Executive to act as Executive Vice President and Northern
Region Manager of Columbia Bank under the terms of this Agreement.
C. Executive desires to accept this management position under the terms
of this Agreement.
In consideration of the mutual promises made in this Agreement, the parties
agree as follows:
AGREEMENT
1. Employment.
Employer employs Executive and Executive accepts employment with Employer
on the terms and conditions set forth in this Agreement.
2. Term.
The term of this Agreement will commence as of October 31, 2000, and will
continue until December 31, 2003, unless extended or sooner terminated as
provided in this Agreement.
3. Duties.
(a) Executive will serve as Executive Vice President of Columbia Bank
and Manager of the Northern Region of the Bank, headquartered in
the metropolitan area of Seattle/Bellevue, Washington. In such
capacity, and subject to the authority of the Chief Executive
Officer and the Boards of Directors of Columbia Bank and CBSI
(separately or collectively, the "Board" as applicable), as
appropriate, Executive will
render the executive management services and perform such tasks
in connection with the affairs of Columbia Bank and CBSI that are
normal and customary to the positions that he holds.
(b) Executive will perform such other duties as may be appropriate to
his position and as may be prescribed from time to time by the
Chief Executive Officer of the Board, or that are provided in the
Bylaws of Columbia Bank of CBSI.
(c) Executive will devote his best efforts and all necessary time,
attention, and effort to the business and affairs of Employer and
its affiliates, as such business and affairs now exist or
hereafter may be changed or supplemented, in order to properly
discharge his responsibilities under this Agreement.
4. Salary, Bonus, and Other Compensation.
4.1 Salary.
(a) During the term of this Agreement, Employer will pay
Executive an annual (calendar year) base salary of not less
than $150,000 per year (payable at the rate of $12,500 per
month) beginning October 31, 2000.
(b) Columbia Bank will guarantee payment of any portion of
Executive's compensation that may be allocated to a
subsidiary of CBSI.
(c) If this Agreement terminates prior to December 31, 2003,
then Employer will pay Executive such greater or lesser
amount of the agreed compensation as provided in Section 5.
4.2 Bonus.
(a) Executive will be paid $50,000 as a signing bonus. The
payment will be made on the first business day following
January 1, 2001. Executive agrees to forfeit the signing
bonus in the event that he terminates his employment without
good reason prior to December 31, 2001.
(b) Executive will be eligible to participate in the bonus
pools, if any, that the Board may establish for senior
executives, either under an executive incentive plan or
otherwise. Executive will be eligible to receive such
bonuses up to 35% of base salary if annual financial targets
are met.
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4.3 Stock Options and Stock Grant
(a) Executive will be awarded an option to purchase 15,000
shares of the common stock of CBSI. The exercise price will
be the price at the close of business on the effective date
of this Agreement. The shares will vest upon completion of
three years employment and the Executive will have five
years from the date of vesting in which to exercise the
options. Earlier vesting will occur in the event that
Executive is terminated without cause prior to the term of
this Agreement.
(b) Executive will be awarded 5,000 restricted shares of CBSI
common stock. The award will be evidenced by a Restricted
Stock Award Agreement in form acceptable to CBSI and will
require that the Executive remain a Senior Executive of
Employer for five years from the date of grant before the
restrictions lapse and that the shares will be held in
escrow pending completion of that requirement. If Executive
is dismissed without cause before that date, all
restrictions will lapse, the escrow will be terminated and
the shares will belong to Executive free of all restrictions
imposed on behalf of Employer.
4.4 Benefits. In addition to the base salary and bonus payable or
potentially payable to Executive pursuant to this Section 4, Executive will be
entitled to receive benefits similar to those offered to other senior executives
of Employer. During the year 2001, Executive will receive a car allowance of
$4,300, a parking allowance of $1,920 and $5,028 reimbursement of country club
dues.
5. Termination of Agreement.
5.1 Early Termination.
(a) This Agreement may be terminated at any time by the Board of
Employer or by Executive, and it shall terminate upon
Executive's death or disability. Any termination by the
Board of Employer other than termination for cause (as
defined below) shall not prejudice Executive's right to
compensation or other benefits under this Agreement. Except
as provided in Section 7, if Executive voluntarily
terminates his employment before December 31, 2003, he will
be entitled only to such payments as he would have the right
to receive upon termination for cause under subsection
5.l(b).
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(b) Except as provided in Section 7, if Employer terminates his
Agreement without cause, Employer shall pay Executive upon
the effective date of such termination all salary earned,
benefits accrued and all reimbursable expenses hereunder
incurred through such termination date and, in addition,
liquidated damages in an amount equal to the greater of (i)
two years' salary, or (ii) salary for the then-remaining
term of the Agreement payable hereunder. If Employer
terminates this Agreement for cause, Employer shall pay
Executive upon the effective date of such termination only
such salary earned, benefits accrued and expenses
reimbursable hereunder incurred through such termination
date. Executive shall have no right to receive compensation
or other benefits for any period after termination for
cause.
(c) For purposes of this Agreement, the term "cause" shall mean
(i) willful misfeasance or gross negligence in the
performance of his duties; (ii) conduct demonstrably and
significantly harmful to Employer or a financial institution
subsidiary); or (iii) conviction of a felony. For purposes
of this Agreement, "disability" shall mean a medically
reimbursable physical or mental impairment that may be
expected to result in death, or to be of long, continued
duration, and that renders Executive incapable of performing
the duties required under this Agreement. The Board or the
Compensation Committee of the Board ("Committee"), acting in
good faith, shall make the final determination of whether
Executive is suffering under any disability as herein
defined and, for purposes of making such determination, may
require Executive to submit himself to a physical
examination by a physician mutually agreed upon by Executive
and the Board or the Committee at Employer's expense.
5.2 Obligations. Except as otherwise provided in Section 4 or Section
7 or in a particular option grant, Executive's rights, if any, to vested but
unexercised stock options will continue for a period of one year after early
termination, other than termination for cause and Executive's unvested stock
options, if any, shall terminate immediately.
6. Restrictive Covenant.
6.1 Noncompetition.
(a) Executive agrees that except as otherwise set forth in this
Agreement, he will not, during the term of this Agreement
and for a period of two years after the later of (i)
expiration of the term of this Agreement, or (ii) completion
of service as an active officer of CBSI or Columbia Bank,
directly or indirectly, become
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interested in, as principal shareholder, director or
officer, any financial institution (other than an
institution controlled by, controlling, or under common
control with Employer and its affiliates) that competes
within the State of Washington with Employer or any of its
affiliates, with respect to activities of the type performed
by such companies within such service area immediately prior
to Executive's termination.
(b) The restrictions concerning competition after termination as
contained in this Section 6.1 shall apply only in the event
that Executive voluntarily terminates employment with
Employer without good reason. For purposes of this
Agreement, termination for "good reason" shall mean
termination by Executive as a result of any material breach
of this Agreement by Employer, or any substantial diminution
of duties of Executive by the Board of either Columbia Bank
or CBSI. The provisions restricting competition by Executive
may be waived by the Employer.
6.2 Noninterference. During the noncompetition period described in
Section 6.1, Executive shall not solicit or attempt to solicit any other
employee of Employer or its affiliates to leave the employ of those companies,
or in any way interfere with the relationship between Employer and any other
employee of Employer or its affiliates.
6.3 Interpretation. If a court or any other administrative body with
jurisdiction over a dispute related to this Agreement should determine that the
restrictive covenants set forth above is unreasonably broad, the parties
authorize such court or administrative body to narrow the covenants so as to
make it reasonable, given all relevant circumstances, and to enforce such
revised covenants. The covenants in this paragraph shall survive termination of
this Agreement.
7. Change of Control.
7.1 Benefits. The parties recognize that a "change of control" of
Employer (as defined in Section 7.2) could be detrimental to Executive's
continued employment. Accordingly, in order to give further assurances to the
Executive to enter into this Agreement, if:
(a) There is a change of control; and either;
(b) Within 730 days of such change in control, Executive
terminates his employment with Employer; or
(c) At any time from and after sixty days prior to the public
announcement by Employer of a transaction that will result
in
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the change of control, Employer (or its successor)
terminates Executive's employment without cause, then
Executive, as of the date of termination of his employment,
subject to the remaining provisions of this Section 7.1,
shall be paid or provided with: (i) continued payment of his
base salary, the pro-rata portion of any incentive payment
expected to be received for the year when termination occurs
and all benefits provided for in this Agreement until two
years following termination or December 31, 2003, whichever
is longer; and (ii) vesting of all stock options and lapse
of all restrictions with respect to any restricted stock
awards shall occur. The provisions of this Section 7.1 shall
survive expiration of the term of the Agreement.
7.2 Definitions. For purposes of this Agreement, the term "change of
control" shall mean the occurrence of one or more of the following events:
(a) One person or entity acquiring or otherwise becoming the
owner of twenty-five percent or more of CBSI's outstanding
common stock;
(b) Replacement of a majority of the incumbent directors of CBSI
by directors whose elections have not been supported by a
majority of the Board of company; or
(c) Dissolution or sale of fifty percent or more in value of the
assets, of either CBSI or Columbia Bank.
8. Miscellaneous.
8.1 This Agreement contains the entire agreement between the parties
with respect to Executive's employment with Employer and his covenant not to
compete with Employer and its affiliates, and is subject to modification or
amendment only upon amendment in writing signed by both parties.
8.2 This Agreement shall bind and inure to the benefit of the heirs,
legal representatives, successors, and assigns of the parties, except that
Employer's rights and obligations may not be assigned. The provisions of Section
6.1 of this Agreement are intended to confer upon CBSI and its subsidiaries and
affiliates the benefits of Executive's covenant not to compete.
8.3 If any provision of this Agreement is invalid or otherwise
unenforceable, all other provisions shall remain unaffected and shall be
enforceable to the fullest extent permitted by law.
8.4 This Agreement is made with reference to and is intended to be
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construed in accordance with the laws of the State of Washington. Venue for any
action arising out of or concerning this Agreement shall lie in Xxxxxx County,
Washington. In the event of a dispute under this Agreement not involving
injunctive relief, the dispute shall be arbitrated pursuant to the Superior
Court Mandatory Arbitration Rules ("MAR") adopted by the Washington State
Supreme Court, irrespective of the amount in controversy. This Agreement shall
be deemed as stipulation to that effect pursuant to MAR 1.2 and 8.1. The
arbitrator, in his or her discretion, may award attorney's fees to the
prevailing party or parties.
8.5 Any notice required to be given under this Agreement to either
party shall be given by personal service or by depositing a copy thereof in the
United States registered or certified mail, postage prepaid, addressed to the
following address, or such other address as addressee shall designate in
writing:
Employer: 0000 Xxxxxxxx
Xxxxxx, XX 00000
Executive: //Address of record//
IN WITNESS WHEREOF, the parties have executed this Agreement effective on
October 31, 2000.
COLUMBIA STATE BANK
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
Its President and CEO
COLUMBIA BANKING SYSTEM, INC.
By: /s/ J. Xxxxx Xxxxxxxxx
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J. Xxxxx Xxxxxxxxx
Its Vice Chairman and CEO
EXECUTIVE
/s/ Xxx X. Xxxxxxx
---------------------------------------
Xxx X. Xxxxxxx
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