1
Exhibit 10.4
CONFIDENTIAL
SALARY CONTINUATION AGREEMENT
FOR WCB POLICYMAKING EXECUTIVE OFFICERS
This SALARY CONTINUATION AGREEMENT ("Agreement") is dated as of October
17, 2000 (the "Effective Date"). The parties to the Agreement ("Parties") are
WEST COAST BANCORP ("Bancorp"), West Coast Bank ("Bank"), and Xxxxxxx X.
Xxxxxxxxx ("Executive").
RECITALS
A. Executive is employed by Bank in a managerial capacity, presently
holding the position of Executive Vice President, General Counsel, and
Secretary.
B. Bancorp and Bank (collectively, "Company") wishes to ensure the
continued availability of Executive's services in the event of a change
in control of Bancorp, in order to assist Bancorp in maximizing the
benefits obtainable from such a change.
C. To encourage Executive's continued services, Bancorp wishes to provide
an incentive for Executive's continued employment.
Therefore, the parties agree as follows:
AGREEMENT
1. EFFECTIVE DATE AND TERM. As of the Effective Date, this Agreement is a
binding obligation of the parties and is not subject to revocation or
amendment, except by mutual consent or in accordance with its terms. The
initial term of this Agreement ("Initial Term") begins on the Effective
Date and ends on March 31, 2001. Following the Initial Term, this
Agreement will automatically renew on April 1 of each year for
subsequent one-year terms (each a "Renewal Term"), unless (a) the Board,
before the next Renewal Term begins, takes action to cancel the
Agreement at the end of its current term, or (b) Executive, before the
next Renewal Term begins, gives Bancorp written notice of Executive's
election to cancel the Agreement at the end of its current term. If a
definitive agreement providing for a Change in Control (as defined
below) is entered into on or before the expiration of the Initial Term
or any Renewal Term, the term then in effect will automatically be
extended to 24 months after the consummation of the Change in Control,
and the Board will not have authority to cancel this Agreement during
that period, unless Executive consents in writing to the cancellation.
2. COMMITMENT OF EXECUTIVE. If any person extends any proposal or offer
intended to or with the potential to result in a Change in Control (a
"Change in Control Proposal"), Executive must, at Bancorp's request,
assist Bancorp in evaluating the Proposal. Further, as a condition to
receipt of the Salary Continuation Payment described below, Executive
will not resign Executive's position with the Company during the period
beginning when the Company receives a Change in Control Proposal and
ending when the transaction contemplated by the Proposal is either
consummated or abandoned.
1
2
3. SALARY CONTINUATION PAYMENT.
(a) Payment Trigger and Timing. If a Termination Event After a
Change in Control (as defined in Section 4) occurs, Executive
will receive a salary continuation payment ("Salary Continuation
Payment"). Unless limited below, the Salary Continuation Payment
will equal the Regular Salary Continuation Payment plus the
Bonus Continuation Payment. The Company will pay this Salary
Continuation Payment to Executive on the later of (i) the date
Executive's employment terminates or (ii) the date the Change in
Control occurs.
(b) Payment Amount. The Regular Salary Continuation Payment will
equal Executive's regular monthly salary in effect when
Executive's employment terminates (as reportable on Executive's
IRS Form W-2, but including the amount of any voluntary
deferrals of salary, and excluding any expense allowances or
reimbursements, any bonuses, any gain from exercise of stock
options, or any other similar non-recurring payments) that would
be payable to Executive but for the termination from the day
Executive's employment terminates to the date 24 months after
the later of (i) the date the Change in Control occurs or (ii)
the date Executive's employment terminates. The Bonus
Continuation Payment will equal (i) the most recent annual bonus
paid to Executive, multiplied by (ii) the number of days during
which Executive was employed but as to ------------- which no
annual bonus has been paid plus the number of days from the date
of termination of ---- employment to the date 24 months after
the later of (x) the date the Change in Control occurs or (y)
the date Executive's employment terminates, divided by 365. If a
Change in Control occurs before Executive's 2001 bonus is
determined, Executive's most recent annual bonus will be deemed
to be $37,500.
(c) Limitation on Payment. The Salary Continuation Payment will not
exceed an amount equal to $1.00 less than the amount which would
cause the payment, together with any other payments received
from the Company, to be a "parachute payment" as defined in
Section 280G(b)(2)(A) of the Internal Revenue Code.
4. TERMINATION EVENT AFTER CHANGE IN CONTROL. A Termination Event After a
Change in Control will be deemed to occur when, and only when, one or
more of the following events occur:
(a) Executive terminates Executive's employment for any reason, other
than Retirement, Disability, or death within 24 months after a
Change In Control; or
(b) The Company terminates Executive's employment other than for
Cause, Disability, Retirement or death within 24 months after a
Change In Control; or
(c) The Company terminates Executive's employment other than for
Cause, Disability, Retirement, or death before a Change In
Control, if the termination occurs during the period beginning
six months before the execution of a definitive agreement
providing for the Change in Control and ending upon occurrence
of the Change in Control, but only if the Change in Control in
fact occurs.
2
3
5. DEFINITIONS.
(a) Cause. "Cause" means only any one or more of the following:
(i) Willful misfeasance or gross negligence in the
performance of Executive's duties; or
(ii) Conviction of a crime in connection with such duties; or
(iii) Conduct demonstrably and significantly harmful to the
financial condition of the Company.
(b) Disability. "Disability" means a physical or mental impairment
that renders Executive incapable of substantially performing the
duties required under this Agreement and that is expected to
continue rendering Executive so incapable for the reasonably
foreseeable future.
(c) Retirement. "Retirement" means voluntary termination by
Executive in accordance with the Company's applicable retirement
policies, including early retirement, if applicable to its
salaried employees.
(d) Change In Control. "Change In Control" means one of the
following:
(i) A Person or Entity acquiring or otherwise becoming the
owner (as a result of a purchase, merger, stock
exchange, or otherwise) of more than 50% of Bancorp's
outstanding common stock; or
(ii) Bancorp's merger into any corporation or other business
entity, or the merger of any corporation or other
business entity into Bancorp, where more than 50% of the
stock (or other form of ownership) of the corporation or
business entity ("Surviving Corporation") is owned by
other than the owners of the common stock of Bancorp
before the merger; or
(iii) A Person or Entity acquiring more than fifty percent of
the Company's assets, measured by the total fair market
value of all of the Company's assets immediately before
the acquisition, during the twelve-month period ending
on the date of the most recent acquisition. A Change in
Control does not include a transfer of assets by the
Company if the assets are transferred to an Entity, 50%
or more of the total value or voting power of which is
owned, directly or indirectly, by the Company.
(e) Person or Entity. "Person or Entity" includes, without
limitation, any one or more persons and/or entities acting in
concert with respect to their interests in the Surviving
Corporation.
6. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, other than providing for the Salary
Continuation Payment, this Agreement will not affect the determination
of any compensation payable by the Company to Executive, nor will it
affect the other terms of 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
Executive under the Company's employee benefit or other applicable
plans, if his or her employment terminates.
3
4
7. WITHHOLDING. All payments made to Executive under this Agreement are
subject to the withholding of amounts for tax and other payroll
deductions that the Company reasonably determines appropriate under
applicable law or regulation.
8. ASSIGNABILITY. The Company may assign this Agreement and its rights
under it in whole, but not in part, to any corporation, financial
institution or other entity with or into which Bancorp merges or
consolidates or to which Bancorp transfers all or substantially all of
its assets. But, the corporation, financial institution, or other entity
accepting assignment (the "assignee") must by operation of law or
expressly in writing assume all obligations of the Company under this
Agreement, as fully as if the assignee had been an original party. The
Company may not otherwise assign this Agreement or any of its rights
under it. The Company may not through assignment avoid an obligation to
pay a Salary Continuation Payment once the obligation is triggered under
this Agreement, although it may assign to assignee the obligation to
pay, as long as assignee agrees to pay in accordance with this
Agreement. Executive may not assign or transfer this Agreement or any
rights or obligations under it.
9. GENERAL PROVISIONS.
(a) Choice of Law/Venue. The parties intend that Oregon law govern
this Agreement and its interpretation. Any dispute arising out
of this Agreement must be brought in either Clackamas County or
Multnomah County in Oregon, and the parties will submit to
personal jurisdiction in either of those counties.
(b) Arbitration. Any dispute or claim arising out of or brought in
connection with this Agreement, will, if requested by any party,
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 judgement 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) Attorney Fees. If any breach of or default under this Agreement
results in either party incurring attorney or other fees, costs
or expenses (including in arbitration), the substantially
prevailing party is entitled to recover from the non-prevailing
party any and all legal fees, costs and expenses, including
attorney fees.
(d) Waiver. This Agreement supercedes all previous agreements
between Executive and the Company and any of its affiliates
pertaining to this subject matter. By signing this Agreement,
Executive waives any and all rights Executive may have had under
any previous salary continuation, severance, or other similar
Agreements Executive may have entered into with the Company or
any of its affiliates or predecessors.
(e) Successors. This Agreement binds and inures to the benefit of
the parties and each of their respective affiliates, legal
representatives, successors and assigns.
(f) Construction. This Agreement contains the entire agreement among
the parties with respect to its subject matter, and may be
amended only through a written document signed by all of the
parties. Its language is the language chosen by the parties
jointly 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.
4
5
(g) Section Headings. The section headings used in this Agreement
have been included for convenience and reference only.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, and all counterparts will be construed together as
one Agreement.
Signed as of October 17, 2000:
BANCORP AND BANK:
/s/ Xxxxxx X. X Xxxxxxxx
-----------------------------
By: Xxxxxx X. Xxxxxxxx
Its: President and CEO
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxxx
5
