EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") dated as of July 29th, 1997, between
CENTENNIAL BANK, an Oregon corporation (the "Employer"), and XXXXXXXX (Xxx) X.
XXXXXXXXX (the "Executive").
RECITALS
The Employer desires to employ the Executive, and the Executive wishes
to accept such employment, upon the terms and conditions set forth in this
Agreement.
AGREEMENT
In consideration of the mutual promises and covenants set forth below,
the parties hereby agree as follows:
1. DEFINITIONS
For the purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1.
"AGREEMENT"--this Employment Agreement.
"BASE SALARY"--as defined in Section 3.1.1.
"BENEFITS"--as defined in Section 3.1.2.
"BOARD OF DIRECTORS"--the board of directors of the Employer.
"CASH BONUS"--as defined in Section 3.2.
"CENTENNIAL BANCORP"--the parent corporation of the Employer.
"CHANGE OF CONTROL"--For purposes of this Agreement, "Change of
Control" shall occur if during the Employment Period:
(a) Any individual, entity or group, within the meaning of Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Employer or Centennial Bancorp, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Employer or Centennial Bancorp, or any corporation owned, directly or
indirectly, by the stockholders of the Employer or Centennial Bancorp in
substantially the same proportions as their ownership of stock of the Employer
or Centennial Bancorp), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
representing thirty percent (30%) or more of the combined voting power of the
Employer's or Centennial Bancorp's then outstanding voting securities;
(b) Employer or Centennial Bancorp effects a merger, consolidation,
share exchange or other corporate reorganization of the Employer or Centennial
Bancorp with any other corporation, other than (i) a merger, consolidation,
share exchange or other corporate reorganization which would result in the
voting securities of the Employer or Centennial Bancorp outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than
seventy percent (70%) of the combined voting power of the voting securities of
the Employer or Centennial Bancorp or such surviving entity outstanding
immediately after such merger, consolidation, share exchange or other corporate
reorganization, or (ii) a merger, consolidation, share exchange or other
corporate reorganization effected to implement a recapitalization of the
Employer or Centennial Bancorp (or similar transaction) in which no individual,
entity or group acquires more than thirty percent (30%) of the combined voting
power of the Employer's or Centennial Bancorp's then outstanding voting
securities; or
(c) Employer or Centennial Bancorp effects complete liquidation of the
Employer or Centennial Bancorp or the sale or disposition of all or
substantially all of the Employer's or Centennial Bancorp's assets.
"CONFIDENTIAL INFORMATION"--any and all trade secrets and other
proprietary information concerning the business and affairs of the Employer,
including products, services, customers, pricing, market studies, business
plans, financial statements, financial projections and budgets, projected sales,
capital spending budgets and plans, computer software and programs (including
object code and source code), and any other information, however documented,
that is a trade secret within the meaning of the Oregon Uniform Trade Secrets
Act (ORS 646.461 to 646.475).
"DISABILITY"--as defined in Section 6.2.
"EMPLOYMENT PERIOD"--the term of the Executive's employment under this
Agreement.
"FISCAL YEAR"--the Employer's fiscal year, as it now exists or as
changed from time to time.
"FOR CAUSE"--as defined in Section 6.3.
"FOR GOOD REASON"--as defined in Section 6.4.
"PERSON"--any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or governmental body.
"POST-EMPLOYMENT PERIOD"--as defined in Section 8.2.
"WITHOUT CAUSE"--not "for Cause."
"WITHOUT GOOD REASON"--not "for Good Reason."
2. EMPLOYMENT TERMS AND DUTIES
2.1 EMPLOYMENT
The Employer hereby employs the Executive, and the Executive hereby
accepts employment by the Employer, upon the terms and conditions set forth in
this Agreement.
2.2 TERM
The term of the Executive's employment under this Agreement shall begin
on January 20, 1998 (or such other date as may be mutually agreed) and shall end
on December 31, 2002 (or such earlier date as the employment may be terminated
in accordance with other provisions of this Agreement).
2.3 DUTIES
2.3.1 During the Employment Period, the Executive shall serve
as the President and Chief Executive Officer of the Employer and perform such
duties as are typically performed by such officers in a commercial bank with
operations similar to those of the Employer and other duties as are assigned or
delegated to him by the Board of Directors. The Executive will devote his full
time, attention, skill, and energy to the business of the Employer. Nothing in
this Section 2.3, however, will prevent the Executive from engaging in
additional activities in connection with personal investments and community
affairs that are not inconsistent with the Executive's duties under this
Agreement. The Executive shall, if duly elected, also serve during the
Employment Period as a director of Centennial Bancorp and the Employer, and the
Executive will fulfill his duties as such director without additional
compensation.
2.3.2 The Executive shall perform his duties with fidelity and
to the best of his ability during the Employment Period, and shall at all times
during the Employment Period and thereafter respect the confidential nature of
the information received by him in the course of performing his duties as
provided in Section 7.2.
2.3.3 Nothing contained in this Section 2.3 shall prohibit
Executive from serving on the board of directors of any other corporation that
is not in direct competition with Centennial Bancorp or any of its subsidiaries
(subject to Employer's approval, which will not be unreasonably withheld).
Executive shall be entitled to keep all compensation received by him for service
as a director of any other corporation so approved by Employer. Executive may
own or control shares of stock in any corporation that is not in direct
competition with Centennial Bancorp or any of its subsidiaries, and may own or
control shares of stock in a corporation that is in direct competition with
Centennial Bancorp or any of its subsidiaries if such stock is publicly traded
and Executive does not beneficially own more than five percent (5%) of the
outstanding shares of such stock.
3. COMPENSATION
3.1 BASIC COMPENSATION
3.1.1 BASE SALARY. The Executive will be paid an annual salary
of $225,000 for the period beginning January 20, 1998 (or other mutually agreed
beginning date of the Employment Period) and ending on December 31, 1998,
subject to adjustment as provided below ("Base Salary"), which will be payable
in semi-monthly installments on the first and 15th days of each month. The Base
Salary will be reviewed by the Board of Directors not less frequently than
annually, and may be adjusted in the sole discretion of the Board of Directors,
but in no event will the Base Salary be less than $225,000 per year.
3.1.2 BENEFITS. The Executive will, during the Employment
Period, be entitled to participate in such pension, profit sharing, life,
disability, and medical plans, and other employee benefit plans of the Employer
(excluding any cash bonus, incentive compensation, and stock option plans or
benefits) that may be in effect from time to time for other peer executives of
Employer, to the extent the Executive is eligible under the terms of those
plans, including the following plans which are currently in effect
(collectively, the "Benefits"):
(a) Medical/vision plan;
(b) Dental plan;
(c) Life and accidental death and dismemberment benefits
group policy;
(d) Long term disability income insurance group policy;
and
(e) Employee Savings & Profit Sharing [401(k)] Plan.
However: (1) if Executive elects not to be covered by the Employer's group
medical plan, then Executive's Base Salary will be increased by an amount equal
to the lesser of the amount of premiums that would have been payable for
covering Executive under the Employer's plan, or the amount of premiums payable
for coverage of Executive's wife under the KeyCorp Indemnity Health Plan; (2) if
Executive elects not to be covered by the Employer's group disability income
plan, then Employer will provide to Executive a special disability income
insurance policy comparable to the one Employer currently provides to Xxxxxxx X.
Xxxxxxxx; and (3) if Executive elects to be covered by the Employer's group
disability income plan, then Employer will pay or reimburse Executive up to
$7,500 annually for life insurance coverage. If Executive's employment with
Employer terminates on or after December 31, 2002, and if, by reason of such
termination, Executive's account under the Employee Savings & Profit Sharing
[401(k)] Plan is not then fully vested, Employer will make a cash payment to
Executive in an amount equal to the nonvested portion of such account.
3.2 INCENTIVE COMPENSATION
3.2.1 Since Executive will have the benefits of the cash
bonuses, incentive compensation, and stock options provided in this Section 3
and other provisions of this Agreement, Executive shall be entitled to
participate in any cash bonus or other incentive compensation program and stock
option plans established by the Employer for its other executives only to the
extent Executive's participation is specifically approved by the Board of
Directors in the exercise of its discretion.
3.2.2 In addition to the Base Salary, if the Employer achieves
the performance goals under the bonus program for each Fiscal Year that are
established by the Board of Directors prior to the beginning of such Fiscal
Year, the Executive shall be paid an annual cash bonus as provided in the bonus
program for that Fiscal Year (the "Cash Bonus"). Any Cash Bonus earned shall be
paid to the Executive on the following schedule: 20% on the 15th day of each
April, July, and October and 40% on the 15th day of January. The Cash Bonus, if
any, payable to the Executive hereunder shall be:
(a) $100,000 for the Fiscal Year beginning January 1, 1998 and
ending December 31, 1998. An additional $25,000 is payable to the Executive if
110% of 1998 after-tax profitability goal is achieved.
(b) Amounts determined by the Board of Directors for periods
after December 31, 1998, but not less than $100,000 for each Fiscal Year during
the Employment Period in which the performance goals established for that Fiscal
Year are met, and an additional amount of not less than $25,000 for each Fiscal
Year during the Employment Period in which 110% of the after-tax profitability
goal for that Fiscal Year is achieved.
3.3 CHANGE OF CONTROL
3.3.1 In the event of any Change of Control in the Employer or
Centennial Bancorp, the Employer and the Executive shall each have the elective
right to terminate this Agreement, effective at the closing of the event
resulting in the Change of Control. If this Agreement is so terminated upon a
Change of Control, the Executive shall be provided with Benefits through the
date of termination and shall be paid a lump-sum cash payment in an amount equal
to two and one-half (2.5) times his "Final Compensation," being the greater of:
(a) Executive's Base Salary and Cash Bonus for the most recently ended Fiscal
Year, or (b) Executive's Base Salary for the current Fiscal Year; and the
Employer shall have no obligation to make the payments or provide the Benefits
described in Section 6.5.1. If this Agreement is not so terminated upon a Change
of Control, then the Agreement shall continue in effect and any subsequent
termination of Executive's employment shall be governed by the other provisions
of this Agreement; provided, however, if this Agreement continues in effect
following a Change of Control, and if Executive's employment is subsequently
terminated other than by reason of Executive's death or Disability (by either
the Employer or the Executive, with or without Cause or Good Reason) within 36
months after the Change of Control and before December 31, 2002, then the
Employer shall pay to Executive a lump-sum cash payment in an amount equal to
two and one-half (2.5) times his Final Compensation.
3.3.2 The Employer and the Executive agree that because there
can be no exact measure of damages which would occur upon the termination of
this Agreement as provided in Section 3.3.1, the payments made thereunder shall
be deemed to constitute liquidated damages and not a penalty under this
Agreement.
3.4 DEFERRED COMPENSATION
Executive shall have the elective right to participate in the
Centennial Bank Deferred Compensation Plan dated effective January 1, 1996, in
accordance with and subject to the terms and conditions stated in the Plan, and
subject to the Employer's right to amend or terminate the Plan. Executive
acknowledges that the Employer does not currently make and is under no
obligation to make matching contributions as permitted by the provisions of
Section 5.05 of the Deferred Compensation Plan.
3.5 STOCK OPTIONS
Effective at commencement of Executive's employment, the Employer will
grant to the Executive an option to purchase 75,000 shares of the common stock
of Centennial Bancorp pursuant to and subject to the terms and conditions of the
Restated 1995 Stock Incentive Plan (the "Stock Plan"). An additional grant of an
option to purchase 25,000 shares under the Stock Plan (or under a similar
subsequent plan adopted by the Employer) will be made by the Employer to the
Executive by January 20, 1999, conditioned upon the Employer's achieving the
1998 performance goals established by the Board of Directors. Annually,
beginning effective at January 1, 1999, the Executive will be granted an option
to purchase 10,000 shares conditioned upon Employer's achieving the performance
goals established by the Board of Directors for the prior Fiscal Year, and an
additional 5,000 shares option if such 10,000 shares option is earned and the
Employer achieves 110% of the prior Fiscal Year's after-tax profitability goal.
Executive understands and acknowledges that Employer's grant of all stock
options other than the initial 75,000 shares option is conditioned upon approval
of a Stock Plan amendment or adoption of a successor Stock Plan by the
shareholders of Employer and Centennial Bancorp, and that each stock option will
be subject to a stock option agreement to be executed pursuant to the Stock
Plan. If the shareholders fail to approve an amendment or successor Stock Plan
permitting grant of all stock options due to Executive hereunder, then the Board
of Directors may, instead, grant to the Executive nonstatutory stock options at
the same exercise price and on the same other terms and conditions as if the
options had been granted pursuant to the Stock Plan. Vesting of Executive's
right to exercise each stock option shall accrue as to one-third of the option
shares for each completed year of Executive's employment following the effective
date of the grant of the option, except that all unexercised options shall be
fully vested upon Executive's death or Disability, or upon a Change of Control,
or upon termination of this Agreement by the Employer without Cause or by the
Executive with Good Reason. Executive's right to exercise a vested stock option
shall not be forfeited on account of the termination of Executive's employment
by Employer with Cause or by Executive without Good Reason.
4. FACILITIES AND EXPENSES
4.1 GENERAL
The Employer will furnish the Executive office space, equipment,
supplies, and such other facilities and personnel as is necessary or appropriate
for the performance of the Executive's duties under this Agreement. The Employer
will pay the membership fee and dues for a social membership for Executive at
the Xxxxxx Country Club during the time the Executive is residing in Eugene,
Oregon. Upon approval of the Executive's application for regular membership, the
Employer will pay the initiation fee and membership dues of the Executive at the
Waverly Country Club for the remainder of the Employment Period. Following
payment of the initiation fee for Executive's membership in Waverly Country
Club, the membership shall belong to the Executive, and may be retained by him
following expiration or any termination of this Agreement. The Employer will pay
the Executive's dues in such other professional societies, organizations and
clubs as the Board of Directors deems appropriate, and will pay on behalf of the
Executive (or reimburse the Executive for) reasonable expenses incurred by the
Executive in the performance of the Executive's duties pursuant to this
Agreement, and in accordance with the Employer's employment policies, including
reasonable expenses incurred by the Executive in attending conventions,
seminars, and other business meetings, in appropriate business entertainment
activities, and for promotional expenses. The Executive must file expense
reports with respect to such expenses in accordance with the Employer's
policies.
4.2 MOVING EXPENSES AND PLACE OF RESIDENCE
The Employer shall pay the moving expenses of the Executive from
Seattle, Washington to Eugene, Oregon, to the extent such expenses are not paid
by the Executive's former employer, and shall pay the Executive a lump sum
payment of $5,000 upon his move to Eugene to be used to establish his household.
If the Executive moves from Eugene to Portland, as required for the performance
of his duties hereunder, the Employer will pay his moving expenses in connection
with such move. The Employer shall reimburse the Executive for any state or
federal income taxes payable by the Executive as a result of payments made by
the Employer under this Section 4.2. The Employer shall have the right, at all
times during the Employment Period, to require the Executive to maintain his
principal residence within 20 miles of the Employer's principal executive
headquarters (both in Eugene and in the Portland area).
4.3 ANNUAL EXPENSES
The Employer shall pay the professional fees incurred by the Executive
in connection with an annual medical examination to the extent such fees are not
paid by Executive's former employer or pursuant to any medical plan or insurance
contract. If the Employer pays any such professional medical fees, then the
Executive shall, upon request by the Employer, authorize the disclosure and
release to the Employer of the physician's report on the medical examination.
4.4 AUTOMOBILE AND PARKING
The Employer shall provide the Executive with the use of an automobile
in accordance with the Employer's policy with respect to peer executives, and
the Executive shall file reports as required by such policy. The Employer shall
also provide and pay for parking for the Executive convenient to the offices
where he is performing his duties hereunder.
5. VACATIONS
The Executive will be entitled to five (5) weeks' paid vacation each
Fiscal Year in accordance with the vacation policies of the Employer in effect
for its executive officers from time to time. Vacation must be taken by the
Executive at such time or times as approved by the Board of Directors. The
Executive will also be entitled to the paid holidays and other paid leave set
forth in the Employer's policies. Vacation days and holidays during any Fiscal
Year that are not used by the Executive during such Fiscal Year may be used in
any subsequent Fiscal Year, except that a maximum of 25 unused vacation days and
holidays may be carried over for use in subsequent Fiscal Years.
6. TERMINATION
6.1 EVENTS OF TERMINATION
The Employment Period, the Executive's Base Salary, Cash Bonus and
Benefits, and any and all other rights of the Executive under this Agreement
will terminate as provided in this Section 6:
6.1.1 upon the death of the Executive;
6.1.2 upon the Disability of the Executive (as defined in
Section 6.2) immediately upon notice from either party to the other;
6.1.3 for Cause (as defined in Section 6.3), immediately upon
notice from the Employer to the Executive, or at such later time as such notice
may specify;
6.1.4 without Cause;
6.1.5 for Good reason (as defined in Section 6.4) upon not
less than 30 days' prior notice from the Executive to the Employer; or
6.1.6 without Good Reason.
6.2 DEFINITION OF DISABILITY
For purposes of Section 6.1, the Executive will be deemed to have a
"Disability" if, for physical or mental reasons, the Executive is unable to
perform the essential functions of the Executive's duties under this Agreement
for six months in the aggregate in any 12-months' period, or for any consecutive
three months in circumstances where Executive's medical prognosis is that he
will be unable to resume performance of his duties within an additional three
months, as determined in accordance with this Section 6.2. The disability of the
Executive will be determined by a medical doctor selected by written agreement
of the Employer and the Executive upon the request of either party by notice to
the other. If the Employer and the Executive cannot agree on the selection of a
medical doctor, each of them will select a medical doctor and the two medical
doctors will select a third medical doctor who will determine whether the
Executive has a disability. The Employer will pay all professional fees incurred
in connection with medical examinations under this Section 6.2. The
determination of the medical doctor selected under this Section 6.2 will be
binding on both parties. The Executive must submit to a reasonable number of
examinations by the medical doctor making the determination of disability under
this Section 6.2, and the Executive hereby authorizes the disclosure and release
to the Employer of such determination and all supporting medical records. If the
Executive is not legally competent, the Executive's legal guardian or duly
authorized attorney-in-fact will act in the Executive's stead, under this
Section 6.2, for the purposes of submitting the Executive to the examinations,
and providing the authorization of disclosure, required under this Section 6.2.
6.3 DEFINITION OF "FOR CAUSE"
For purposes of Section 6.1, the phrase "for Cause" means any of the
following:
6.3.1 Dishonesty, gross negligence, or deliberate misconduct
by the Executive in performance of his duties under this Agreement or the
Executive's conviction of or entry of a plea of guilty or NOLO CONTENDERE to a
felony or other crime that has or may have a material adverse effect on the
Executive's ability to carry out his duties under this Agreement or upon the
reputation of the Employer or its affiliates.
6.3.2 Willful and material breach of this Agreement by the
Executive, which breach continues uncorrected for 30 days following written
notice thereof by the Employer to the Executive.
6.3.3 The Executive's removal from office because of the
requirement or recommendation of a regulatory agency having jurisdiction over
the Employer or its affiliates.
6.3.4 Uncorrected failure of the Executive to perform his
duties in a manner consistent with reasonable standards respecting the
Executive's performance, established by the Board of Directors in discussion
with the Executive during the course of regular review of the Executive's
performance, which failure has a material adverse effect on the business of the
Employer or its affiliates. Any such failure of performance shall be deemed
uncorrected if it continues substantially unrectified for a period of 90 days or
more after written notice thereof by the Employer to the Executive.
6.4 DEFINITION OF "FOR GOOD REASON"
For purposes of Section 6.1, the phrase "for Good Reason" means any of
the following:
6.4.1 the Employer's failure to make any payment, grant any
stock option, or provide any benefit to which the Executive is entitled under
Section 3 or 4, which failure continues uncorrected for 10 days following
written notice thereof by the Executive to the Employer, unless there is a good
faith dispute respecting the obligation of the Employer to make such payment,
grant such stock option, or provide such benefit (in which case either party may
require the dispute to be resolved in accordance with the provisions of Section
10.7 of this Agreement);
6.4.2 the Employer's willful and material breach of this
Agreement, other than under Sections 3 and 4, which continues uncorrected for 30
days following written notice thereof by the Executive to the Employer;
6.4.3 the assignment of the Executive without his consent to a
position, responsibilities, or duties of a lesser status or degree of
responsibility than his position, responsibilities, or duties as President and
Chief Executive Officer of the Employer at the commencement of the Employment
Period;
6.4.4 the relocation (without the Executive's consent) of the
Employer's principal executive headquarters outside the metropolitan Portland
area after the Executive is residing there;
6.4.5 the requirement by the Employer that the Executive
(without the Executive's consent) be based anywhere other than the Employer's
principal executive headquarters; or
6.4.6 the principal executive headquarters of the Employer is
not relocated to Portland, Oregon, by January 1, 2000.
6.5 TERMINATION PAY
Subject to Section 3.3, "Change of Control," effective upon the
termination of this Agreement, the Employer will be obligated to pay the
Executive (or, in event of his death, his designated beneficiary as defined
below) only such compensation as is provided in this Section 6.5. For purposes
of this Section 6.5, the Executive's designated beneficiary shall be such
beneficiary or beneficiaries, which beneficiaries may be individuals, trusts, or
other entities, as the Executive may designate by notice to the Employer from
time to time or, if the Executive fails to give notice to the Employer of such
beneficiary or beneficiaries, the Executive's estate.
6.5.1 TERMINATION BY THE EMPLOYER WITHOUT CAUSE OR BY THE
EXECUTIVE FOR GOOD REASON. If the Employer terminates this Agreement without
Cause or the Executive terminates this Agreement for Good Reason, the Employer
will pay the Executive his Base Salary and Benefits until December 31, 2002,
except that only one-half of such Base Salary, together with all such Benefits,
shall be paid to the Executive if he terminates this Agreement under Section
6.4.6.
6.5.2 TERMINATION BY THE EMPLOYER FOR CAUSE OR BY THE
EXECUTIVE WITHOUT GOOD REASON. If the Employer terminates this Agreement for
Cause or the Executive terminates this Agreement without Good Reason, the
Employer will pay the Executive his Base Salary and Benefits only through the
date such termination is effective.
6.5.3 TERMINATION UPON DISABILITY. If this Agreement is
terminated by either party as a result of the Executive's Disability, as
determined under Section 6.2, the Employer will pay the Executive his Base
Salary and Benefits for the period until disability insurance benefits commence
under the disability insurance coverage furnished by the Employer to the
Executive but not beyond December 31, 2002.
6.5.4 TERMINATION UPON DEATH. If this Agreement is terminated
because of the Executive's death, the Employer shall continue payment of
Executive's Base Salary for a period of six months after the date of his death.
6.5.5 CASH BONUS, BENEFITS AND DEFERRED COMPENSATION. Upon
termination of this Agreement under any circumstances, or upon expiration of the
Employment Period, the Executive's accrual of rights under, or participation in
plans providing for Benefits will cease as provided above, and the Executive
will thereafter be entitled to accrual of Benefits pursuant to such plans only
as provided in such plans. In addition, the Employer shall pay the Executive the
unpaid amount of any Cash Bonus earned through the most recently ended calendar
quarter, and shall pay the amount, if any, of the Executive's Deferred
Compensation Account under the Plan referenced in Section 3.4 of this Agreement
in accordance with the Plan and Executive's related Participation Agreement.
6.5.6 AMENDMENT. The provisions of this Agreement may be
amended at the request of the Executive solely for purposes of accommodating the
Executive's tax and estate planning, provided the amendments do not increase the
Employer's obligations and do not result in any other adverse effect on the
Employer.
7. NON-DISCLOSURE COVENANT
7.1 ACKNOWLEDGMENTS BY THE EXECUTIVE
The Executive acknowledges that (i) during the Employment Period and as
a part of his employment, the Executive will be afforded access to Confidential
Information; (ii) public disclosure of Confidential Information could have an
adverse effect on the Employer and its business; and (iii) the provisions of
this Section 7 are reasonable and necessary to prevent the improper use or
disclosure of Confidential Information.
7.2 CONFIDENTIALITY
During and following the Employment Period, the Executive will hold in
confidence the Confidential Information and will not disclose it to any person
except with the specific prior written consent of the Employer or except as
otherwise expressly permitted by the terms of this Agreement. The foregoing
obligation and restriction does not apply to any part of the Confidential
Information which is known in the industry, generally available to the public or
which can be obtained by reference to public sources. Any trade secrets of the
Employer will be entitled to all of the protections and benefits under the
Oregon Uniform Trade Secrets Act and any other applicable law. Upon termination
of this Agreement by either party, or upon the request of the Employer during
the Employment Period, the Executive will return to the Employer all documents
and all information stored on computer disks or other electronic media which
contain Confidential Information in the Executive's possession or subject to the
Executive's control.
8. COVENANTS OF THE EXECUTIVE
8.1 In consideration of the compensation to be paid to the Executive by
the Employer, the Executive covenants that he will not, directly or indirectly:
8.1.1 during the Employment Period, except in the course of
his employment hereunder, and during the Post-Employment Period, engage or
invest in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, or render services or advice
to, any business whose products or activities directly compete in whole or in
part with the products or activities of the Employer anywhere within its then
market territory; provided, however, that the Executive may purchase or
otherwise acquire up to (but not more than) five percent (5%) of any class of
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934; provided that nothing in this Section 8.1 shall
prohibit or restrict the Executive from engaging in investment banking, merchant
banking or capital formation businesses;
8.1.2 whether for the Executive's own account or for the
account of any other person, at any time during the Employment Period and the
Post-Employment Period, solicit business of the same or similar type being
carried on by the Employer, from any person known by the Executive to be a
customer of the Employer, whether or not the Executive had personal contact with
such person during and by reason of the Executive's employment with the
Employer;
8.1.3 whether for the Executive's own account or the account
of any other person at any time during the Employment Period and the
Post-Employment Period, solicit, employ, or otherwise engage as an employee,
independent contractor, or otherwise, any person who is or was an employee of
the Employer at any time during the Employment Period or in any manner induce or
attempt to induce any employee of the Employer to terminate his employment with
the Employer;
8.1.4 at any time during or after the Employment Period,
disparage the Employer or any of its shareholders, directors, officers,
employees, or agents.
8.2 For purposes of this Section 8, the term "Post-Employment Period"
means the six months' period beginning on the date of termination of this
Agreement.
8.3 If any covenant in this Section 8 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive. The period of time applicable to any covenant in this Section 8 will
be extended by the duration of any violation by the Executive of such covenant.
9. COVENANTS OF THE EMPLOYER
9.1 The Board of Directors has expressed its support for the relocation
of the principal executive headquarters of the Employer from Eugene to Portland
in the near future. The Employer confirms to the Executive that such a
relocation will occur, subject to a Strategic Planning session to be held for
the purpose of determining the most effective and efficient way to implement
this change.
9.2 The Employer agrees that the Executive shall be indemnified as an
employee, officer and director of the Employer, and as a director of Centennial
Bancorp, to the full extent permitted by the laws of Oregon and as set forth in
any indemnification provisions of the Articles of Incorporation, Bylaws or other
corporate documents of the Employer.
9.3 The Employer agrees to provide continuous Directors' and Officers'
liability insurance coverage for the Executive throughout the Employment Period,
with tail coverage following the Employment Period, but only if and to the
extent such insurance coverage is available on a commercially reasonable basis.
Any failure by the Employer to provide such insurance coverage for the Executive
during the Employment Period shall constitute Good Reason for termination of
this Agreement by the Executive, in which event the Employer's only obligation
shall be to continue payment of the Executive's Base Salary for a period ending
at the earlier of: (a) the date 12 months after the date of termination, or (b)
December 31, 2002.
10. GENERAL PROVISIONS
10.1 INJUNCTIVE RELIEF
The Executive acknowledges that the injury that would be suffered by
the Employer as a result of a breach of the provisions of this Agreement
(including any provision of Sections 7 and 8) would be irreparable and that an
award of monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently, the Employer will have the right, in addition
to any other rights it may have, to obtain injunctive relief to restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Agreement.
10.2 COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND INDEPENDENT
COVENANTS.
The covenants by the Executive in Sections 7 and 8 are essential
elements of this Agreement, and without the Executive's agreement to comply with
such covenants, the Employer would not have entered into this Agreement or
employed the Executive. The Employer and the Executive have independently
consulted their respective counsel and have been advised in all respects
concerning the reasonableness and propriety of such covenants, with specific
regard to the nature of the business conducted by the Employer. If the
Executive's employment hereunder expires or is terminated, this Agreement will
continue in full force and effect as is necessary or appropriate to enforce the
covenants and agreements of the Executive in Sections 7 and 8.
10.3 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by either party in
exercising any right, power, or privilege under this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise of
any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege.
10.4 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED
This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns, heirs, and
legal representatives, including any entity with which the Employer may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.
10.5 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by facsimile
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to the Employer: c/o Centennial Bancorp
Attention: Xxxxxxx X. Xxxxxxxx,
President
000 Xxx Xxxxxx
X. X. Xxx 0000
Xxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to: Centennial Bancorp
Attention: Secretary
000 Xxx Xxxxxx
P. O. Box 1560
Xxxxxx, Xxxxxx 00000
Facsimile No.: (000) 000-0000
If to the Executive: Xxxxxxxx X. Xxxxxxxxx
00000 X.X. Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
10.6 ENTIRE AGREEMENT; AMENDMENTS
This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof. This Agreement may not be amended orally, but only by an
agreement in writing signed by the parties hereto; provided that the Employer
and the Executive agree that the terms and conditions of this Agreement shall be
reviewed on an annual basis to determine if any modifications are appropriate.
10.7 ARBITRATION; APPLICABLE LAW
10.7.1 Subject to and except as stated in Section 10.7.2
below, any controversy or claim arising out of or relating to this Agreement, or
any breach hereof, shall be settled by binding arbitration in Portland, Oregon.
Within 10 days of a written request for arbitration by any party, the parties
shall select one qualified, neutral arbitrator. If the parties are unable to
agree on an arbitrator, any party may petition the Multnomah County Circuit
Court for the appointment of an arbitrator. The arbitrator shall determine the
procedural and evidentiary rules governing the arbitration, shall schedule a
hearing no later than three months following the appointment of the arbitrator,
and shall render an award no later than 30 days following completion of the
hearing. The award shall be final and binding upon the parties, and may be
confirmed by a petition to the Multnomah County Circuit Court in accordance with
applicable Oregon law. Judgment upon the award rendered by the arbitrator shall
be final and binding on the parties, not subject to any appeal and may be
entered in any court having jurisdiction thereof. The laws of the State of
Oregon (without regard to choice of law rules) shall govern any controversy or
claim arising out of or relating to this Agreement. The arbitrator shall decide
on the matter of costs of the arbitration and may award reasonable attorneys'
fees and costs.
10.7.2 Notwithstanding the above, any party may bring court
proceedings or assert claims against another party in court proceedings solely
to obtain an injunction or other equitable relief (but not damages) in order to
protect or enforce any rights or duties arising from this Agreement. Each party
irrevocably submits to the exclusive jurisdiction of Multnomah County Circuit
Court or the United States District Court in Portland, Oregon, over any such
proceeding and confirms that such court shall have personal jurisdiction over
such party. Each party irrevocably waives any right to assert, as a defense or
otherwise, any claim that it is not subject to the jurisdiction or the venue of
any such court. The parties agree that such courts offer convenient forums and
proper venues for any such suit.
10.8 SECTION HEADINGS; CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require. Unless
otherwise expressly provided, the word "including" does not limit the preceding
words or terms.
10.9 SURVIVAL
The provisions of Sections 3, 4, 6, 7, 8, 9 and 10 shall survive the
termination of this Agreement.
10.10 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
10.11 GUARANTY
By authority of its board of directors, Centennial Bancorp
unconditionally guarantees full and timely payment and performance of all
obligations of the Employer under this Agreement.
EXECUTED as of the date first above written.
[THE NEXT PAGE OF THIS AGREEMENT IS THE EXECUTION PAGE]
EMPLOYER: GUARANTOR:
CENTENNIAL BANK CENTENNIAL BANCORP
By /s/Xxxxxxx X. Xxxxxxxx By /s/Xxxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Its: Vice Chairman & C.E.O. Its: President & C.E.O.
EXECUTIVE:
/s/Xxxxxxxx X. Xxxxxxxxx
---------------------------
XXXXXXXX (Xxx) X. XXXXXXXXX
