AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.2
AMENDED
AND RESTATED
THIS
AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”), between The Bank of
the Pacific, a Washington business corporation ("The Bank”), and Xxxx Van Dijk,
(“Executive”), initially entered into effective July 1, 2005, is being amended
and restated as set forth herein effective December 29, 2008.
RECITALS
A. The Bank of the Pacific is a
Washington banking corporation. The Bank is engaged in the business
of commercial banking in Grays Harbor County, Pacific County, Skagit County,
Whatcom County, and Wahkiakum County, Washington. The Bank also
engages in business in Oregon counties.
B. The Executive represents that he has
considerable experience, expertise and training in management related to banking
and services offered by The Bank. The Bank desires and intends to
employ the Executive pursuant to the terms and conditions set forth in this
Agreement.
C. Both
The Bank and the Executive have read and understand the terms and provisions set
forth in this Agreement, and have been afforded a reasonable opportunity to
review this Agreement and to consult with an attorney.
AGREEMENT
The
parties agree as follows:
1. Employment. The Bank will
employ the Executive for the Term, except as specifically stated herein, and the
Executive accepts employment with The Bank on the terms and conditions set forth
in this Agreement. The Executive’s title will be “President” for The
Bank.
2. Effective Date and
Term.
(a) Effective
Date. This Agreement is effective as of the 1st day of
July, 2005
(b) Term. The
initial term of this Agreement is three years (36 months), beginning on the
Effective Date stated in paragraph 2(a), and shall automatically renew for an
additional term of one year on each anniversary date of the Agreement, so as to
create a three year term on each anniversary date, unless notice of termination
is provided by either party pursuant to paragraph 5(a).
3. Duties. The Executive
will serve as the President for The Bank and faithfully and diligently perform
the duties assigned to the Executive by the Chief Executive Officer
(“CEO”). The Executive will report directly to the CEO of The
Bank. The Executive will use his best efforts to perform his duties
and will devote all his working time and attention to these duties.
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4. Compensation.
(a) Salary. Initially,
the Executive will receive an annualized salary of $125,000 per year, to be paid
at regular intervals by The Bank in accordance with its regular payroll
schedules. The Executive’s salary will be subject to annual review
and adjustment as set forth in paragraph 4(f).
(b) Incentive
Compensation. Executive will be eligible to participate in The
Bank's approved incentive plan. A disinterested majority of The
Bank’s Board of Directors will determine the amount of the bonus pool, if any,
based on the profitability, safety, and soundness of The Bank. The
Executive’s bonus, if any, will reflect the Executive’s performance in his area
of responsibility and his contribution to the overall performance of The Bank
during the year, as determined in the sole discretion of The Bank’s Board of
Directors. No incentive compensation bonus shall be paid for any
calendar year or portion thereof, in which this Agreement is terminated, or in
which notice of termination is given, regardless of reasons for termination, and
regardless of which party terminates this Agreement. The Executive
will also be entitled to participate in stock bonus or option plans generally
available to senior executives of The Bank.
(c) Standard
Benefits. The Bank will provide to the Executive the standard
Executive benefits provided in accordance with The Bank’s benefit plans and
policies, including but not limited to health insurance, disability insurance,
life insurance and five (5) weeks of paid vacation per year accrued in
accordance with The Bank’s benefit plans and policies. The Executive
also will be entitled to participate in retirement plans, including 401(k)
plans.
(d) Automobile. The
Bank will provide the Executive with the use of an automobile, of a model
typically appropriate for the performance of the services by a Bank
President.
(e) Expenses. The
Bank will reimburse the Executive for all reasonable expenses that the Executive
may incur in the performance of his duties including monthly country club dues.
The Executive will request reimbursement and provide documentation of such
expenses within a reasonable time, but no later than 90 days after the expense
has been incurred.
(f) Annual Review and
Adjustment. The Executive’s compensation as set forth in this
Section 4(a), will be subject to annual review and adjustment by a disinterested
majority of The Bank’s Board of Directors or Compensation
Committee. In no case, however, will the Executive’s salary, vacation
and expense reimbursement be less than the amounts set forth in paragraphs
4(a)-(e).
5. Termination.
(a) Notice of
Termination. Either party may unilaterally terminate this
Agreement for any reason by providing the other party with written notice of the
termination no less than ninety (90) days prior to the termination
date.
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(b) Termination by The
Bank. In the event that The Bank provides the Executive with a
notice of termination without cause under paragraph 5(a), The Bank
will pay to the Executive an amount equal to the salary he would have received
from the date of termination through the end of the then current
Term. Such payment will be made in equal monthly payments beginning
on the 15th day of
the calendar month immediately following the termination date and ending on the
date which is the 15th day of
the third calendar month of the calendar year immediately following the
termination date. All forfeiture provisions affecting restricted
stock awards and all vesting requirements affecting stock options shall lapse or
be deemed fully completed.
(c) Termination by the
Executive. If the Executive voluntarily terminates employment
with The Bank, other than for "good reason" as provided in paragraph 5(f), the
Executive will be entitled to salary through the date of termination and to such
other benefits as may be provided under the terms of the Bank benefit
plans. In the event the Executive seeks to terminate this Agreement
without providing at least (90) days’ written notice prior to the termination
date, the Executive will pay to The Bank liquidated damages as
follows: (A) in the event the Executive provides notice of
termination 29 days or less prior to the termination date, the Executive shall
pay The Bank $25,000 in liquidated damages; (B) in the event the Executive
provides notice of termination at least 30 days but not more than 59 days prior
to the termination date, the Executive shall pay The Bank $20,000 in
liquidated damages; (C) in the event the Executive provides notice of
termination at least 60 days but not more than 89 days prior to termination
date, the Executive shall pay to The Bank $15,000 in liquidated
damages.
(d) Termination by The Bank for
Cause. Notwithstanding paragraph 4(a), The Bank may
immediately terminate this Agreement without advance notice if the termination
is for cause. For purposes of this Agreement, "cause" means
dishonesty; fraud; commission of a felony or of a crime involving moral
turpitude; deliberate violation of statutes, regulations, or orders pertaining
to financial institutions or reckless disregard of such statutes, regulations,
or orders; destruction or theft of property or assets of The Bank or its
customers; physical attack of a fellow employee or a customer; intoxication at
work; use of narcotics or alcohol to an extent that materially impairs
Executive's performance of his duties; willful malfeasance or gross negligence
in the performance of Executive's duties; violation of law in the course of
employment that has a material adverse impact on The Bank, its employees, or its
customers; Executive's refusal to perform Executive's duties; Executive's
refusal to follow reasonable instructions or directions; misconduct materially
injurious to The Bank; significant neglect of duty; or any material breach of
Executive's duties or obligations to The Bank that results in material harm to
The Bank. If termination occurs under this paragraph, the Executive
will be entitled to receive only the salary earned through the date this
Agreement is terminated, and except as otherwise provided by law, participation
in benefit plans ceases upon termination of this Agreement.
(e) Death or
Disability. Notwithstanding paragraph 5(a), this Agreement
will terminate immediately upon:
(i) The
Executive’s death; or
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(ii) If
the Executive is unable to perform his duties and obligations under this
Agreement for a period of 90 days as a result of a disability that substantially
limits one or more of his major life activities.
If
termination occurs under this paragraph 5(e): (a) the Executive or his estate
will be entitled to receive only the salary earned through the date this
Agreement is terminated; (b) except as otherwise provided by law, participation
in benefit plans ceases upon termination of this Agreement; and (c) as of such
termination date, all vesting requirements affecting outstanding stock options
shall lapse or be deemed fully completed.
(f) Termination Related to a
Change in Control. This paragraph will apply to any
termination related to a Change in Control, as set forth herein.
(i)
“Change in Control” means a change “in the ownership or effective control” or
“in the ownership of a substantial portion of the assets” of The Bank, within
the meaning of Section 280G of the Internal Revenue Code. An initial
public offering by The Bank will not, however, be deemed to be a Change in
Control under this Agreement.
(ii)
Termination by The
Bank. In the event The Bank or its successors in interest
terminates this Agreement within twenty-four months following a Change in
Control for reasons other than for cause pursuant to paragraph 5(d), or as the
result of the Executive's death or disability pursuant to paragraph 5(e), The
Bank will pay the Executive thirty six (36) times the base compensation received
by the Executive during the most recent calendar month ending on or prior to the
effective date of termination, less statutory payroll
deductions. Payment under this paragraph shall be made in accordance
with The Bank’s ordinary payroll policies and procedures in equal monthly
payments beginning on the 15th day of
the calendar month immediately following the termination date and ending on the
date which is the 15th day of
the third calendar month of the calendar year immediately following the
termination date.
(iii)
Change in Assignment
Related to Change in Control. If, within twenty-four months
following a Change in Control, the Executive’s assignment with The Bank is
changed in a way that results in a material diminution of Executive's authority,
duties, or responsibilities, without the Executive’s express written consent,
then any termination by Executive within 90 days of such reassignment will be
deemed to have been for “good reason” and the provisions of paragraph 5(f)(ii)
shall apply.
(iv)
Limitations on
Payments Related to Change in Control. Notwithstanding the
foregoing, the payment described in paragraph 5(f)(ii) shall be automatically
reduced to an amount that is less than the amount that would cause it to be a
“parachute payment” within the meaning of Section 280G(b)(2)(A) of the Internal
Revenue Code.
6. Compliance with IRC Section
409A. To the extent required by IRC § 409A, and regulations
thereunder, payment of severance benefits to Executive under any provision of
paragraph 5 of this Agreement will not be paid, or commenced, until the
expiration of six months following the date of termination of Executive's
employment with Corporation. If monthly payments are deferred
pursuant to this paragraph, all such deferred amounts will be paid in a lump sum
on the first business day following the expiration of the six-month
period.
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7. Confidentiality. The
Executive will not, after signing this Agreement, including during and after its
Term, disclose to any other person or entity any confidential information
concerning The Bank or its business operations or customers, or use for his own
purposes or permit or assist in the use of such confidential information by
third parties unless The Bank consents to the use or disclosures of their
respective information, or disclosure is required by law or court
order. The provisions of this paragraph survive the termination of
the Executive's employment by The Bank.
8. Noncompetition. During
the Term and for twenty-four months after the Executive’s employment with The
Bank ends, the Executive will not become involved with a Competing Business or
serve, directly or indirectly, a Competing Business in any
matter. “Competing Business” means any company that competes with or
will compete with The Bank in Grays Harbor, Pacific, Wahkiakum, Whatcom, and
Skagit Counties, or any other Washington or Oregon county in which The Bank
maintains a banking office(s) at the time of the termination of this
Agreement. “Competing Business” includes, without limitation, any
existing or newly formed financial institution or trust company.
9. Enforcement. The Bank and the
Executive agree that, in light of all of the facts and circumstances of the
relationship between The Bank and the Executive, the agreements referred to in
paragraphs 5(a), 7 and 8 are fair and reasonably necessary for the protection of
The Bank’s confidential information, goodwill and other protectible
interests. The parties acknowledge and agree that the time and
expense involved in proving in any forum the actual damage or loss suffered by
The Bank if there is a breach of paragraphs 5(a), 7 or 8 make this case
appropriate for liquidated damages. Accordingly, The Bank and the
Executive agree that the following schedule of liquidated damages is reasonable
and fair, and shall be the amount of damages which the Executive shall pay to
The Bank for each separate breach of paragraphs 5(a), 7 or 8 by the
Executive:
(a) for a
breach of paragraph 5(a), up to the sum of $25,000 as described in paragraph
5(c);
(b) for a
breach of paragraph 7, the sum of $75,000;
(c) for a
breach of paragraph 8, the sum of $150,000.
For
purposes of paragraph 8, a “separate breach” shall be deemed to have occurred
with each Competing Business with which the Executive becomes involved or serves
in violation of paragraph 8.
Neither
the breach of paragraphs 5(a), 7, or 8, nor the payment of liquidated damages by
the Executive, shall affect the continuing validity or enforceability of this
Agreement, or The Bank’s right to seek and obtain injunctive
relief. If a court of competent jurisdiction should decline to
enforce any of these covenants and agreements, the Executive and The Bank hereby
stipulate that the Court shall reform these provisions to restrict the
Executive’s use of confidential information and the Executive’s ability to
compete with The Bank to the maximum extent, in time, scope of activities, and
geography, as the court finds enforceable.
10. Adequate
Consideration. The Executive specifically acknowledges the
receipt of adequate consideration for the covenants contained in paragraphs
5(a), 7, and 8, and that The Bank is entitled to require him to comply with
these paragraphs. These paragraphs will survive termination of this
agreement. The Executive represents that if his employment is
terminated, whether voluntarily or involuntarily, the Executive has experience
and capabilities sufficient to enable the Executive to obtain employment in
areas which do not violate this Agreement and that The Bank’s enforcement of a
remedy by way of injunction will not prevent the Executive from earning a
livelihood.
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11. Miscellaneous
Provisions. This Agreement constitutes the entire
understanding between the parties concerning its subject matter. This
Agreement will bind and inure to the benefit of The Bank’s and the Executive’s
heirs, legal representatives, successors and assigns. This Agreement
may be modified only through a written instrument signed by both
parties. This Agreement will be governed and construed in accordance
with Washington law, except that certain matters may be governed by federal
law. Venue for enforcement of any terms of this Agreement shall be in
Grays Harbor County, Washington Superior Court.
Signed
as of December 29, 2008:
| THE BANK OF THE PACIFIC | EXECUTIVE |
| /s/ Xxxxxx X. Xxxx | /s/ Xxxx Van Dijk |
| Xxxxxx X. Xxxx | Xxxx Van Dijk |
| Chief Executive Officer |
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