EXHIBIT 10.4
EMPLOYMENT AGREEMENT
PARTIES: PREMIERWEST BANK (the "Bank")
X.X. Xxx 00
Xxxxxxx, XX 00000
PREMIERWEST BANCORP (the "Company")
X.X. Xxx 00
Xxxxxxx, XX 00000
XXX XXXXXXXX ("Executive")
000 Xxxxxx Xxxxxx Xxxx.
Xxxxx Xxxxx, Xxxxxx 00000
DATE: January 11, 2002
WHEREAS, the Bank desires to employ Executive and Executive wishes to
be employed by the Bank, the parties agree as follows:
AGREEMENT
1. POSITION AND TERM
1.1 Effective as of the date of arrival, which shall be on or about
March 1, 2002 the Bank shall employ Executive, and Executive shall
report for duty at the Bank as Senior Vice President and Chief
Financial Officer of the Bank, and the Executive shall serve the Bank
in such capacity, or in such other capacity as the Bank may, in its
discretion, direct Executive to serve. Executive shall also serve as
Senior Vice President and Chief Financial Officer of the Company, but
shall receive no additional compensation for service in those
capacities.
2. EXTENT OF SERVICES
2.1 Executive shall devote his full time and attention exclusively to
the performance of the work and duties assigned to him for and on
behalf of the Bank.
2.2 Executive shall perform his duties with fidelity and to the best of
his ability and shall, at all times during employment by the Bank and
thereafter, respect the confidential nature of the information received
by his in the course of performing his duties.
2.3 Nothing contained in this Section 2 shall prohibit the Executive from
serving as a director of any other corporation not in direct
competition with the Bank (subject to the Bank's approval which will
not be unreasonably withheld), or from owning or controlling shares of
stock in any other corporation, whether or not the capital stock
thereof is publicly traded (including a corporation that is in direct
competition with the Bank, the Company or any subsidiaries or
affiliates thereof, if the stock of such competing corporation is
publicly traded and the Executive does not beneficially own more than
one percent (1%) of the outstanding shares of such stock).
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3. COMPENSATION AND BENEFIT PLANS
3.1 General. Executive shall be compensated as set forth in this
Section 3. Compensation and benefits to be provided to Executive
pursuant to this Agreement may be provided either by the Bank, the
Company or other affiliate or successor or partly by any of them.
3.2 Base Salary. Executive shall receive an initial annual salary
("Base Salary") of $100,000. The Base Salary shall be paid in
increments equal to one-twelfth the Base Salary on the last day of each
month.
3.3 Increases in Base Salary. When the Bank reviews the compensation of
other Bank officers in accordance with the Bank's regular practices,
Executive's Base Salary shall be subject to adjustment in accord with
the Bank's compensation policies and practices generally applicable to
Bank officers. Executive's Base Salary following any such change shall
be the new Base Salary for purposes of this Agreement. Without limiting
the foregoing, Executive's Base Salary shall be increased, effective
January 1, 2003, to $115,000, and effective January 1, 2004 to
$125,000.
3.4 Stock Options.
3.4.1 As of the first day of Executive's employment, Executive
shall be granted an option to purchase 15,000 shares of the
common stock of PremierWest Bancorp. pursuant to Company's
Stock Option Plan, the provisions of which shall govern the
terms and conditions of such option to the extent not
inconsistent with this Agreement. Executive shall execute a
form of Stock Option Agreement setting forth the terms and
conditions of such option, which agreement shall be effective
as of the first day of Executive's employment.
3.4.2 The option shall be exercisable at the Fair Market Value
of the stock, and vest over a seven (7) year period. The
option agreement shall also contain a provision for
accelerated vesting in the event of a change in control
3.4.3 The portions of the option that become exercisable shall
be cumulative, such that the option may be exercised to the
extent of all exercisable portions not previously exercised.
3.5 Bank 401(k) Plan. Executive shall be entitled to participate in the
Bank's 401(k) Plan in accord with plan terms on the same basis as other
employees.
3.6 Vacation. Executive shall be entitled to accrue up to four (4)
weeks of vacation during each calendar year, and shall be entitled to a
pro rated share of such vacation time for the period of his actual
employment by the Bank in 2002. Vacation time shall be otherwise
subject to the guidelines set forth in the Bank's employee handbook,
including the guidelines governing vacation accruals during partial
years of employment.
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3.7 Automobile Allowance. Executive shall be entitled to receive a
non-accountable monthly Automobile allowance of $300.00.
4. TERMINATION OF EMPLOYMENT
4.1 Executive's employment shall be "at will" and may be terminated by
either the Bank or Executive at any time, with or without cause, upon
two weeks written notice.
4.2 For purposes of this agreement, "cause" shall mean
(a) Executive's death or disability, as "disability" is
defined in Section 6 hereof;
(b) Dishonesty, fraud, gross neglect or misconduct in
connection with the performance of Executive's duties pursuant
to this Agreement, or failure of Executive to perform his
duties in a manner consistent with the Bank's standards
respecting Executive's performance;
(c) Material breach of any fiduciary duty of Executive to the
Company or the Bank;
(d) Executive's removal from office pursuant to an order or
requirement of any state or federal regulatory agency having
jurisdiction over the Company or the Bank;
(e) Chronic drug or alcohol abuse; or
(f) Conviction of Executive, or entry by Executive of a plea
of guilty or nolo contendere, to a felony or other crime
involving moral turpitude.
4.3 Upon termination of Executive's employment with cause, the Bank
shall pay Executive his monthly base salary and any accrued but unpaid
benefits through the effective date of such termination.
4.4 Upon termination of Executive's employment without cause, the Bank
shall pay Executive, in addition to any accrued but unpaid benefits
through the effective date of such termination, six month's Base Salary
payable in six monthly increments on the last day of each month
beginning with the month following the month in which such termination
occurs.
4.5 Without diminishing its obligation to pay Executive through the
effective date of termination under Section 4.3 or 4.4, the Bank may,
at its option, relieve Executive of some or all of his continuing
duties and responsibilities during the notice period.
4.6 In the event that, within 120 days after termination of Executive's
employment without cause, the Company or the Bank enters into a
definitive agreement which would result in a change of control, the
amount payable under Section 4.4 shall be twelve month's Base Salary
payable in twelve monthly increments on the last day of each month
beginning with the month following the month in which such termination
occurs.
5. CHANGE OF CONTROL
5.1 For purposes of this Agreement, a "Change of Control" shall mean:
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(a) the acquisition by a person (which shall include an
individual or an entity), or group of persons acting in
concert, of beneficial ownership of 50 percent or more of the
outstanding common stock of the Bank or the Company; or
(b) the consummation of any merger, consolidation, or
reorganization, to which the Company or the Bank is a party,
that results in the shareholders of the Company immediately
preceding the transaction owning, after the transaction is
consummated, less than 50% of the outstanding voting shares of
the resulting corporation; or
5.2 In the event that, following a Change of Control, the Bank or its
successor, elects, without cause, not to employ Executive, or to
terminate Executive's employment within one year following such Change
of Control, the Bank or its successor shall pay Executive an amount
equal to one year's Base Salary payable in twelve monthly increments on
the last day of each month beginning with the month following the month
in which such termination occurs.
5.3 In the event the Executive is employed by the Bank or its successor
and, within one year following a Change of Control, is assigned a
position or duties not substantially equivalent to those of a Senior
Vice President and Chief Financial Officer (or his then current
position), or his Base Salary is reduced, or he is reassigned to an
office more than 50 miles from Medford, Oregon, such an event or
assignment shall constitute termination without cause pursuant to
Section 5.2.
6. DISABILITY
6.1 For purposes of this Agreement, the term "disability" shall mean
Executive's inability because of sickness or injury to perform the
essential functions of duties assigned to him, with or without
reasonable accommodation.
6.2 The parties agree that Executive's availability to perform services
required of his position on an ongoing basis is an essential function
of his job. If, because of a disability, Executive becomes unable to
perform his duties for an aggregate of six (6) months in any twelve
(12) month period, or for any consecutive three (3) months in
circumstances where Executive's medical prognosis is that he will be
unable to resume performance of his duties within an additional three
(3) months, then the Bank may thereafter terminate Executive's
employment upon thirty (30) days' written notice to Executive.
7. CONFIDENTIALITY
The parties acknowledge that in the course of Executive's duties he
will have access to and become familiar with certain proprietary and
confidential information of the Bank and other information about the Bank not
known by its actual or potential competitors. Executive acknowledges that such
information constitutes valuable, special, and unique assets of the Bank's
business, even though such information may not be of a technical nature and may
not be protected under applicable trade secret or related laws. Executive agrees
that he will hold in a fiduciary capacity and will not use for himself and will
not reveal, communicate, or divulge during the period of his employment with the
Bank or at any time thereafter, and in any manner whatsoever, any such data and
confidential information of any kind, nature, or description concerning any
matters affecting or relating to the Bank's business, its customers, or its
services, to any person, firm, or company other than the Bank or persons, firms,
or companies designated by the Bank. Executive agrees that all memoranda, notes,
records, papers, customer files, and other documents, and all
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copies thereof relating to the Bank's operations or business, or matters related
to any of the Bank's customers, some of which may be prepared by Executive, and
all objects associated therewith in any way obtained by Executive, shall be
Bank's property.
8. GENERAL PROVISIONS
8.1. Modification. This Agreement may not be changed, modified,
released, discharged, abandoned, or otherwise amended, in whole or in
part, except by an instrument in writing, signed by Executive and an
authorized officer of the Bank. Executive acknowledges and agrees that
any subsequent change or changes in his duties or compensation will not
affect the validity or scope of this Agreement.
8.2. Arbitration. Any controversy, claim, dispute or difference arising
out of the interpretation, construction or performance of this
Agreement or Executive's employment with the Bank or the termination
thereof, against the Bank, its parent, subsidiary, affiliated or
related corporations, or its officers, managers, employees or agents,
including, but not limited to, statutory claims under federal and state
laws against discrimination such as Title VII of the Civil Rights Act
of 1964, as amended, the Age Discrimination in Employment Act, the
Americans With Disabilities Act, the Family and Medical Leave Act, the
1966 Civil Rights Act, the Oregon Civil Rights Act, and common law
claims for breach of contract, breach of covenant of good faith and
fair dealing, wrongful termination, intentional interference with
contractual relations, or intentional or negligent infliction of
emotional distress shall be settled by arbitration in the State of
Oregon under the rules and auspices of the employment dispute rules of
the American Arbitration Association, and judgment upon the award
entered in such arbitration may be entered in any court having
jurisdiction thereof.
8.3. Jurisdiction. This Agreement has been made in and shall be
governed by the substantive laws of the State of Oregon, without regard
to its choice of law rules.
8.4. Successors and Assigns. All rights and duties of the Bank under
this Agreement shall be binding on and inure to the benefit of its
successors, assigns or any company which purchases or otherwise
acquires it or all or substantially all of its operating assets by any
method. This Agreement shall not be assignable by the Executive other
than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's
estate or personal representative.
8.5. Integration This Agreement contains the entire agreement of the
parties relating to the subject matter and may not be amended except by
an instrument in writing signed by the parties.
8.6. Notices. All notices required or permitted under this Agreement
shall be in writing and may be personally served or mailed by
registered or certified U.S. mail, postage prepaid. Notices to the Bank
shall be served on or mailed to the Bank's Executive Vice President,
Chief Operating Officer at PremierWest Bank, X.X. Xxx 00, Xxxxxxx,
Xxxxx, Xxxxxx 00000, or to such other person or location as the Bank
shall advise Executive in writing. Notices to Executive shall be served
on or mailed to him at such address as Executive shall advise the Bank
in writing.
8.7. Severability. If any provision of this Agreement shall be found,
in any action, suit or proceeding, to be invalid or ineffective, the
validity and effect of the remaining provisions shall not be affected.
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8.8. Waiver. No waiver of any right arising out of a breach of any
covenant, term or condition of this Agreement shall be a waiver of any
right arising out of any other or subsequent breach of the same or any
other covenant, term or condition or a waiver of the covenant, term or
condition itself.
8.9. Performance by the Bank References to, and obligations of, the
Bank in this Agreement shall include the Company, as applicable.
9. EXECUTION
The parties have executed this Agreement as of the date appearing in
the caption of this Agreement, to be effective upon the Effective Date stated in
Section 1 above.
PREMIERWEST BANCORP
By: _____________________________ ____________________________
Xxx Xxxxxxxx
PREMIERWEST BANK
By: ____________________________
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