EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is made and entered into as of
this 17th day of August, 2005, by and between PACIFIC CONTINENTAL BANK, an
Oregon banking corporation (the "BANK") and Xxxxxx Xxxxx ("EXECUTIVE"). This
Agreement will be effective as of the Effective Date determined pursuant to the
Plan and Agreement of Merger dated as of the date hereof among Pacific
Continental Corporation (the "COMPANY"), the Bank, NWB Financial Corporation and
Northwest Business Bank (the "MERGER AGREEMENT"). If the Merger Agreement is
terminated for any reason, this Agreement will be null and void and of no
effect.
RECITALS
A. Executive is employed by Northwest Business Bank in an executive
management capacity, presently holding the position of President and Chief
Executive Officer of Northwest Business Bank.
B. The Bank desires to employ Executive, and Executive wishes to
accept such employment, from and after the Effective Date pursuant to the terms
set forth in this Agreement.
AGREEMENT
1) DEFINITIONS.
a) Cause. "CAUSE" means any one or more of the following:
i. Removal or discharge of Executive pursuant to order of
any federal banking authority;
ii. Executive perpetrates fraud, material dishonesty, or
other act of material misconduct in the rendering of
services to the Company or the Bank or to customers of
the Company or the Bank, or if Executive engages in
conduct which, in the opinion of the Board of Directors,
materially interferes with the performance of
Executive's duties or xxxxx the reputation of the
Company or the Bank by reason of the adverse reaction of
the community to such conduct;
iii. Executive conceals from, or knowingly fails to disclose
to, any federal banking regulatory authority or the
Board of Directors any material matters affecting the
viability of the Company or the Bank; or
iv. Executive fails (or refuses) to faithfully or diligently
perform any of the usual and customary duties of his
employment and either fails to remedy the lapse or
formulate a plan for its correction with the Company or
the Bank (if such failure is not susceptible to
immediate correction) within
thirty (30) days after notice to Executive explaining in
detail the allegations and recommended correction.
Notwithstanding the foregoing, Executive shall not be terminated without:
(a) Ten days written notice setting forth Company's
intention to terminate for Cause;
(b) An opportunity for Executive to rebut
termination for Cause within five business days
after receiving notice; and
(c) A final finding, in good faith, by the Board of
Directors that Cause existed.
b) Change in Control Agreement. "CHANGE IN CONTROL AGREEMENT" means
the Change in Control/Salary Continuation Agreement dated as of
the date hereof among the Company, the Bank and Executive.
c) Compensation. "COMPENSATION" means Executive's current base
compensation, together with the maximum potential bonus amount
payable as set forth in Section 7 of this Agreement.
d) Good Reason. "GOOD REASON" means only any one or more of the
following:
i. Reduction of Executive's base salary or elimination of
any significant compensation or benefit plan benefiting
Executive, unless the reduction or elimination is
generally applicable to substantially all similarly
situated employees (or similarly situated employees of a
successor or controlling entity of the Company or the
Bank) formerly benefited;
ii. The assignment to Executive without his consent of any
authority or duties materially inconsistent with
Executive's position as of the date of the Effective
Date of this Agreement; or
iii. A relocation or transfer of Executive's principal place
of employment that would require Executive to commute on
a regular basis more than 30 miles each way from his
present place of employment.
e) Trade Secret. "TRADE SECRET" means information, including a
drawing, cost data, customer list, formula, pattern,
compilation, program, device, method, technique or process that:
i. Derives independent economic value, actual or potential,
from not being generally known to the public or to other
persons who can obtain economic value from its
disclosure or use; and
ii. Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
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f) Other Terms. Other defined terms shall have the meaning
specifically assigned to them elsewhere in this Agreement.
2) TERM OF AGREEMENT. The term of this employment agreement is two (2)
years, commencing on the Effective Date (the "TERM").
3) EMPLOYMENT. The Bank will continue Executive's employment during the
Term, and Executive accepts employment by the Bank on the terms and
conditions set forth in this Agreement. Executive's title will be
Executive Vice President and Director of Greater Seattle Operations.
4) REPORTING AND DUTIES OF EXECUTIVE. Executive will report directly to the
Bank's President and Chief Executive Officer. Executive will serve on
the Bank's Operating and Planning Committee and will generally be
invited to attend, as a non-voting member, the Bank Board of Directors
and ALCO Committee meetings. Executive will be responsible for
performance and strategic execution relative to the Seattle operations
of the Bank, consistent with his title and position.
5) COMMITMENT OF EXECUTIVE. Executive will use his best efforts to perform
his duties and will devote full time and attention to these duties
during working hours. Executive may engage in non-bank business
activities with prior approval of the Bank's Board of Directors, which
approval will not be unreasonably withheld.
6) SALARY. Executive will initially receive an annual base salary of
$181,125, to be paid in accordance with the Bank's regular payroll
schedule. The Bank's Compensation Committee will first review and adjust
Executive's salary on August 16, 2006, and thereafter, in connection
with its performance review on an annual basis, with the next regularly
scheduled salary adjustment to be effective March 1, 2007. Extraordinary
service may be recognized with unscheduled salary adjustments, but such
adjustments are only made upon the recommendation of the Bank's CEO and
at the discretion and with the approval of the Bank's Compensation
Committee.
7) BONUS. Bonuses are determined annually by the Bank's Board of Directors,
in accordance with the bonus plan currently in effect. Executive's
maximum bonus potential will be 40% of current salary.
8) STOCK OPTIONS. On the Effective Date, Executive will receive an option
to acquire 15,000 shares of Company common stock. On the first
anniversary of the Effective Date, Executive will receive an option to
acquire 5,000 shares of Company common stock. Subsequent option grants
will be discretionary and will be determined by the Bank's board of
directors based on title and criteria applicable to all other the Bank
employees. All options will have a five (5) year expiration period, and
will vest in four equal installments (25% per year), with the first
vesting occurring on the first anniversary of the date of grant. The
terms of the options shall be governed by the Company's current Stock
Option Plan.
9) VACATION AND BENEFITS. Executive is eligible for five weeks of paid
vacation per year. Generally, all paid vacation must be taken in the
year accrued. Additional benefits
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include health, life, disability and 401(k) retirement benefits as
provided under the Bank's current plans, however, it is expected the
Bank will continue the Bank's 401(k) plan through 2005, subject to
annual revision. Medical and dental plans currently provide that the
Bank pays 100% of the premiums for Executive and 50% of the premiums for
Executive's dependents. The Bank will continue to pay current dues for
athletic and country club memberships as are currently held by
Executive, and the Bank will provide a monthly parking stipend covering
100% of Executive's parking. Consistent with Company policies, Company
will reimburse Executive for business mileage and business cell phone.
10) TERMINATION AND SEVERANCE PROVISIONS.
a) Termination By Bank for Cause. If the Bank terminates
Executive's employment for Cause before this Agreement
terminates, the Bank will pay Executive the salary earned and
expenses reimbursable under this Agreement incurred through the
date of his termination. Executive will have no right to receive
compensation or other benefits for any period after termination
under this Section 10(a).
b) Other Termination By Bank. If the Bank terminates Executive's
employment without Cause before this Agreement terminates, or
Executive terminates his employment for Good Reason, then the
Bank will pay Executive a lump sum payment equal to Executive's
Compensation.
c) Death or Disability. This Agreement terminates (1) if Executive
dies or (2) if Executive is unable to perform his duties and
obligations under this Agreement for a period of 90 consecutive
days as a result of a physical or mental disability arising at
any time during the term of this Agreement, unless with
reasonable accommodation Executive could continue to perform his
duties under this Agreement and making these accommodations
would not pose an undue hardship on the Bank. Disability shall
be determined by the definition and procedure set forth in the
Company disability insurance plan. If termination occurs under
this Section 10(c), Executive or his estate will be entitled to
receive all compensation and benefits earned and expenses
reimbursable through the date Executive's employment terminated.
d) Return of Bank Property. If and when Executive ceases, for any
reason, to be employed by the Bank, Executive must return to the
Bank all keys, pass cards, identification cards and any other
property of the Bank or the Company. At the same time, Executive
also must return to the Bank all materials relating to Trade
Secrets of the Bank or the Company, whether in hard copy,
electronic or other form. The obligations in this paragraph
include the return of documents and other materials that may be
in his desk at work, in his car, in place of residence, or in
any other location under his control.
e) Limitation on Payment. Notwithstanding anything in this
Agreement to the contrary, if the total of the payments to be
received under this Agreement, together with any other payments
or benefits received from the Company or the
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Bank (including under the Change in Control Agreement), will be
an amount that would cause them to be a "parachute payment"
within the meaning of Section 280G(b)(2)(A) of the Internal
Revenue Code of 1986, as amended (the "PARACHUTE PAYMENT
AMOUNT"), then the sum of the payments to Executive shall be
reduced so that the total amount thereof is $1 less than the
Parachute Payment Amount.
11) NONCOMPETITION. Except as otherwise expressly provided in this
Agreement, Executive will not become involved with a Competing Business
or serve, directly or indirectly, a Competing Business in any manner,
including, without limitation, as a shareholder, member, partner,
director, officer, manager, investor, organizer, "founder," employee,
consultant, or agent; provided, however, that Executive may acquire and
passively own an interest not exceeding 2% of the total equity interest
in a Competing Business. For purposes of this Agreement, the term
"COMPETING BUSINESS" means any financial service institutions, including
without limitation banks, insurance companies, leasing companies,
mortgage companies, and brokerage firms that engage in business within
King County, Washington and such other markets in which the Bank or the
Company may have offices at the time of separation. The provisions of
this Section 11 will apply while Executive is employed by the Bank and
for a period equal to the greater of (a) twelve (12) months after the
date of separation or (b) if Executive receives a payment pursuant to
Section 10(b)(ii) of this Agreement, then for the remainder of the Term.
Notwithstanding the foregoing, if Executive is entitled to a payment
under Section 10(b)(ii), Executive may forego such payment and be
released from this noncompetition restriction.
12) NONSOLICITATION. During the term of the noncompetition provision set
forth in Section 11, Executive will not, directly or indirectly,
persuade or entice, or attempt to persuade or entice (i) any employee of
the Bank or the Company to terminate his/her employment with the Bank or
the Company, or (ii) any person or entity to terminate, cancel, rescind
or revoke its business or contractual relationships with the Bank or the
Company.
13) CONFIDENTIALITY. Executive will not, after the date this Agreement is
signed, including during and after its term, use for his own purposes or
disclose to any other person or entity any Trade Secret of the Bank or
the Company.
14) ENFORCEMENT.
a) Executive and the Bank stipulate that, in light of all of the
facts and circumstances of the relationship between Executive
and the Bank, the agreements referred to in Sections 11, 12 and
13 (including without limitation their scope) are fair and
reasonably necessary for the protection of the Bank's goodwill
and other protectable interests. If a court of competent
jurisdiction should decline to enforce any of those covenants
and agreements, Executive and the Bank request the court to
reform these provisions to the maximum extent that the court
finds enforceable.
Executive acknowledges that the Bank will suffer immediate and
irreparable harm that will not be compensable by damages alone,
if Executive repudiates or
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breaches any of the provisions of Sections 11, 12 or 13 or
threatens or attempts to do so. For this reason, under these
circumstances, the Bank, in addition to and without limitation
of any other rights, remedies or damages available to them at
law or in equity, will be entitled to obtain temporary,
preliminary, and permanent injunctions in order to prevent or
restrain the breach, and the Bank will not be required to post a
bond as a condition for the granting of this relief.
15) ARBITRATION. Except for as set forth in Section 14 of this Agreement, at
either the Bank's or Executive's request, the parties must submit any
dispute, controversy or claim arising out of or in connection with, or
relating to, this Agreement or any breach or alleged breach of this
Agreement, to arbitration under the American Arbitration Association's
rules then in effect (or under any other form of arbitration mutually
acceptable to the parties). A single arbitrator agreed on by the parties
will conduct the arbitration. If the parties cannot agree on a single
arbitrator, each party must select one arbitrator and those two
arbitrators will select a third arbitrator. This third arbitrator will
hear the dispute. The arbitrator's decision is final (except as
otherwise specifically provided by law) and binds the parties, and
either party may request any court having jurisdiction to enter a
judgment and to enforce the arbitrator's decision. The arbitrator will
provide the parties with a written decision naming the substantially
prevailing party in the action. This prevailing party is entitled to
reimbursement from the other party for its costs and expenses, including
reasonable attorneys' fees. All proceedings will be held at a place
designated by the arbitrator in King County, Washington. The arbitrator,
in rendering a decision as to any state law claims, will apply
Washington law.
16) WITHHOLDING. All payments required to be made by the Bank hereunder to
Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as the Bank may reasonably
determine should be withheld pursuant to any applicable law or
regulation.
17) MISCELLANEOUS PROVISIONS.
a) Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties concerning its
subject matter and supersedes all prior agreements,
correspondence, representations, or understandings between the
parties relating to its subject matter. Notwithstanding the
preceding sentence, the terms of this Agreement are separate
from and do not supercede the terms of the Change in Control
Agreement (except as set forth in Section 10(e) of this
Agreement) or the Amended and Restated Severance Agreement among
NWB Financial Corporation, Northwest Business Bank and
Executive, dated as of January 1, 2005.
b) Binding Effect. This Agreement will be binding and enforceable
against, and will inure to the benefit of, the heirs, legal
representatives, successors and assigns of the Bank and
Executive.
c) Waiver. Any waiver by a party of its rights under this Agreement
must be written and signed by the party waiving its rights. A
party's waiver of the other party's
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breach of any provision of this Agreement will not operate as a
waiver of any other breach by the breaching party.
d) Amendment. This Agreement may be modified only through a written
instrument signed by both parties.
e) Severability. The provisions of this Agreement are severable.
The invalidity of any provision will not affect the validity of
other provisions of this Agreement.
f) Counsel Review. Executive acknowledges that he has had the
opportunity to consult with independent counsel with respect to
the negotiation, preparation, and execution of this Agreement.
g) Governing Law and Venue. This Agreement will be governed by and
construed in accordance with Washington law, except to the
extent that federal law may govern certain matters. The parties
must bring any legal proceeding arising out of this Agreement in
King County, Washington.
h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all
of which taken together will constitute one and the same
document.
i) Assignability. The Bank may assign this Agreement and its rights
hereunder in whole, but not in part, to any corporation, bank or
other entity with or into which the Bank may hereafter merge or
consolidate or to which the Bank may transfer all or
substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Bank
hereunder as fully as if it had been originally made a party
hereto, but may not otherwise assign this Agreement or its
rights hereunder. Executive may not assign or transfer this
Agreement or any rights or obligations hereunder.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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This Employment Agreement is effective as of the date first set forth above.
PACIFIC CONTINENTAL BANK
By /s/ Xxx Xxxxx
-------------------------------------
Its CEO
-------------------------------------
EXECUTIVE:
/s/ Xxxxxx Xxxxx
---------------------------------------
Xxxxxx Xxxxx
Agreed to and ratified as of the date first set forth above.
PACIFIC CONTINENTAL CORPORATION
By /s/ Xxx Xxxxx
-------------------------------------
Its CEO
-------------------------------------
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