EXHIBIT 10.6
CHANGE IN CONTROL AGREEMENT
EFFECTIVE DATE: JANUARY 1, 2004
This CHANGE IN CONTROL AGREEMENT ("Agreement") is made by WEST COAST BANCORP
("Bancorp") and WEST COAST BANK ("Bank") (collectively "Company") and XXXXX X.
XXXXXXX ("Executive").
RECITALS
A. The Executive is employed by the Company as its Executive Vice President,
Chief Credit Officer.
B. The Board recognizes that a possible or threatened Change in Control may
result in key management personnel being concerned about their continued
employment status or responsibilities. In addition, they may be approached
by other companies offering competing employment opportunities.
Consequently, they will be distracted from their duties and may even leave
the Company during a time when their undivided attention and commitment to
the best interests of the Company and Bancorp's shareholders would be
vitally important.
C. The Company considers it essential to its best interests and those of
Bancorp's shareholders to provide for the continued employment of key
management personnel in the event of a Change in Control.
D. Therefore, in order to--
(1) Encourage the Executive to assist the Company during a Change in
Control and be available during the transition afterwards;
(2) Give assurance regarding the Executive's continued employment status
and responsibilities in the event of a Change in Control; and
(3) Provide the Executive with Change in Control benefits competitive with
the Company's peers
--the parties agree on the following:
TERMS AND CONDITIONS
1. DEFINITIONS. Words and phrases appearing in this Agreement with initial
capitalization are defined terms that have the meanings stated below. Words
appearing in the following definitions which are themselves defined terms
are also indicated by initial capitalization.
(a) "BENEFICIAL OWNERSHIP" means direct or indirect ownership within the
meaning of Rule 13(d)(3) under the Exchange Act.
(b) "BOARD" means Bancorp's Board of Directors.
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(c) "CAUSE" means either:
(1) Any of the circumstances that qualify as grounds for termination
for cause under the Executive's employment agreement as in effect
at the time; or
(2) If no employment agreement is in effect at that time or if the
employment agreement in effect at that time does not specify
grounds for termination for cause, any of the following
circumstances shall qualify as "Cause" under this Agreement:
(A) Embezzlement, dishonesty or other fraudulent acts involving
the Company or the Company's business operations;
(B) Material breach of any confidentiality agreement or policy;
(C) Conviction (whether entered upon a verdict or a plea,
including a plea of no contest) on any felony charge or on a
misdemeanor reflecting upon the Executive's honesty;
(D) An act or omission that materially injures the Company's
reputation, business affairs or financial condition, if that
injury could have been reasonably avoided by the Executive;
or
(E) Willful misfeasance or gross negligence in the performance
of the Executive's duties provided, however, that the
Executive is first given:
(i) Written notice by the Company specifying in detail the
performance issues; and
(ii) A reasonable opportunity to cure the issues specified
in the notice.
(d) "CHANGE IN CONTROL" means:
(1) Except as provided in subparagraph (B) below, an acquisition or
series of acquisitions as described in subparagraph (A) below.
(A) The acquisition by a Person of the Beneficial Ownership of
more than 30% of either:
(i) Bancorp's then outstanding shares of common stock; or
(ii) The combined voting power of Bancorp's then outstanding
voting securities entitled to vote generally in the
election of directors.
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(B) This paragraph (1) does not apply to any acquisition:
(i) Directly from the Company;
(ii) By the Company; or
(iii) Which is part of a transaction that satisfies the
exception in paragraph (3)(A), (B) and (C) below;
(2) The incumbent directors cease for any reason to be a majority of
the Board. The "incumbent directors" are directors who are
either:
(A) Directors on the Effective Date; or
(B) Elected, or nominated for election, to the Board by a
majority vote of the members of the Board or the Nominating
Committee of the Board who were directors on the Effective
Date. However this subparagraph (B) does not include any
director whose election came as a result of an actual or
threatened election contest regarding the election or
removal of directors or other actual or threatened
solicitation of proxies by or on behalf of a Person other
than the Board;
(3) Consummation of a merger, reorganization or consolidation of
Bancorp or the sale or other disposition of substantially all of
it assets, except where:
(A) Persons who, immediately before the consummation, had,
respectively, a Controlling Interest in and Voting Control
of Bancorp have, respectively, a Controlling Interest in,
and Voting Control of the resulting entity;
(B) No Person (other than the entity resulting from the
transaction or an employee benefit plan maintained by that
entity) has the Beneficial Ownership of more than 30% of
either:
(i) The resulting entity's then outstanding shares of
common stock or other comparable equity security; or
(ii) The combined voting power of the resulting entity's
then outstanding voting securities entitled to vote
generally in the election of directors,
except to the extent that Person held that Beneficial
Ownership before the consummation; and
(C) A majority of the members of the board of directors of the
resulting entity were members of the Board at either the
time:
(i) The transaction was approved by the Board; or
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(ii) The initial agreement for the transaction was signed;
or
(4) Approval by Bancorp's shareholders of its complete liquidation or
dissolution.
(e) "CHANGE IN CONTROL PROPOSAL" means any proposal or offer that is
intended to or has the potential to result in a Change in Control.
(f) "CODE" means the Internal Revenue Code of 1986.
(g) "COMMITTEE" means the Compensation and Personnel Committee of the
Board.
(h) "CONTROLLING INTEREST" means Beneficial Ownership of more than 50% of
the outstanding shares common stock of a corporation or the comparable
equity securities of a noncorporate business entity.
(i) "DISABILITY" means that either the carrier of any Company-provided
individual or group long-term disability insurance policy covering the
Executive or the Social Security Administration has determined that
the Executive is disabled. Upon the request of the Committee, the
Executive will submit proof of the carrier's or the Social Security
Administration's determination.
(j) "EFFECTIVE DATE" means January 1, 2004.
(k) "ERISA" means the Employee Retirement Security Act of 1974.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934.
(m) "GOOD REASON" means any one of the following:
(1) Any reduction in the Executive's salary or reduction or
elimination of any compensation or benefit plan benefiting the
Executive, which reduction or elimination does not generally
apply to substantially all similarly situated employees of the
Company or such employees of any successor entity or of any
entity in control of Bancorp or the Bank;
(2) A relocation or transfer of the Executive's place of employment
to an office or location that is more than 35 miles from the
Executive's then current place of employment; or
(3) A material diminution in the Executive's responsibilities, title
or duties.
(n) "PERSON" means any individual, entity or group within the meaning of
Sections 13(d) and 14(d) of the Exchange Act, other than a trustee or
fiduciary holding securities under an employee benefit plan of the
Company.
(o) "TERMINATION EVENT" means any of the following events:
(1) The Executive terminates employment for Good Reason within 24
months after a Change in Control;
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(2) The Company terminates the Executive's employment other than for
Cause, Disability or death within 24 months after a Change in
Control;
(3) The Company terminates the Executive's employment before a Change
in Control if:
(A) The termination is not for Cause, Disability or death; and
(B) The termination occurs either on or after:
(i) The announcement by Bancorp, or any other Person, that
a Change in Control is contemplated or intended; or
(ii) The date a contemplated or intended Change in Control
should have been announced under applicable securities
or other laws; or
(4) The date the Executive's continued employment begins under
Section 3(b).
(p) "VOTING CONTROL" means holding more than 50% of the combined voting
power of an entity's then outstanding securities entitled to vote in
the election of its directors or other governing body.
2. INITIAL TERM; RENEWALS; EXTENSION.
(a) The initial term of this Agreement begins on the Effective Date and
ends on December 31, 2004.
(b) Following this initial term, this Agreement will automatically renew
on January 1 of each year for subsequent one-year terms, unless not
later than the September 30 preceding the upcoming renewal date,
either the Company or the Executive gives the other written notice
terminating this Agreement as of the upcoming December 31.
(c) If a definitive agreement providing for a Change in Control is signed
on or before the expiration date of the initial term or any renewal
term, the term of this Agreement then in effect will automatically be
extended to 24 months after the effective date (as stated in the
definitive agreement) of the Change in Control. During this extended
period, the Board may not terminate this Agreement without the
Executive's written consent.
3. EXECUTIVE'S OBLIGATIONS.
(a) The Executive agrees that, upon notification that the Company has
received a Change in Control Proposal, the Executive shall:
(1) At the Company's request, assist the Company in evaluating that
proposal; and
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(2) Not resign the Executive's position with the Company until the
transaction contemplated by that proposal is either consummated
or abandoned.
(b) If, within 24 months following a Change in Control, the Company wants
the Executive to continue employment in a position or under
circumstances that would qualify as Good Reason for the Executive
terminating employment:
(1) The Executive shall nevertheless agree to that continued
employment, provided that:
(A) The term of this continued employment shall not exceed 90
days or such shorter or longer term as agreed by the Company
and the Executive;
(B) The continued employment will be at an executive level
position that is reasonably comparable to the Executive's
then current position;
(C) The continued employment shall be at either:
(i) The Executive's then current place of employment; or
(ii) Such other location as agreed by the Company and the
Executive; and
(D) As compensation for this continued employment, the Executive
shall receive:
(i) The same base pay and bonus arrangement as in effect on
the day before the continued employment agreement
became effective (or their hourly equivalent); and
(ii) Either:
(I) Continuation of the Executive's employee benefits,
fringe benefits and perquisites at their then
current level; or
(II) If that continuation is not reasonably feasible,
the Executive shall receive additional cash
compensation equal to the amount the Company would
have paid as the employer contribution for the
items that cannot be continued.
(2) The date this continued employment begins shall be treated as a
Termination Event, so that benefits will be payable under this
Agreement, in accordance with its terms and conditions, even
though the Executive's employment with the Company has not
terminated.
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4. SEVERANCE BENEFITS. Upon a Termination Event, the Executive will receive
severance benefits as follows:
(a) COMPONENTS. The severance benefits will consist of:
(1) The cash compensation payment under subsection (b) below;
(2) The equity acceleration under subsection (c) below;
(3) The health plan continuation benefits under subsection (d) below;
(4) The 401(k) equivalency payment under subsection (e) below; and
(5) The outplacement/tax planning benefits under subsection (f)
below.
(b) CASH COMPENSATION PAYMENT.
(1) This payment will equal two times the Executive's cash
compensation. The Executive's "cash compensation" is the sum of:
(A) The Executive's adjusted salary as determined under
paragraph (2) below; and
(B) The Executive's average bonus as determined under paragraph
(3) below.
(2) The Executive's "adjusted salary" is the Executive's annualized
regular monthly salary in effect on the date of the Termination
Event as reportable on IRS Form W-2, adjusted by including and
excluding the following items:
(A) Include any salary deferral contributions made under any
employee benefit plan maintained by the Company, including
Bancorp's Executives' Deferred Compensation Plan;
(B) Exclude:
(i) Bonus payments;
(ii) Bonus amounts deferred including any made under any
employee benefit plan maintained by the Company,
including Bancorp's Executives' Deferred Compensation
Plan;
(iii) Reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses,
severance or disability pay and welfare benefits;
(iv) Employer contributions to a deferred compensation
plan to the extent the contributions are not included
in the Executive's gross income for the calendar year
in which
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contributed, and any distributions from a deferred
compensation plan, regardless of whether those
amounts are includible in the Executive's gross
income when distributed;
(v) Amounts realized from the exercise of non-qualified
stock options or when restricted stock (or property)
becomes freely transferable or no longer subject to a
substantial risk of forfeiture;
(vi) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option;
(vii) The value of a non-qualified stock option included in
income in the year in which granted;
(viii) Amounts includible in income upon making a Code
Section 83(b) election;
(ix) Taxable benefits, such as premiums for excess group
term life insurance;
(x) Imputed income from any life insurance on the
Executive's life that is owned by or funded in whole
or in part by the Company; and
(xi) Other similar recurring or non-recurring payments.
(3) The Executive's "average bonus" is the average of:
(A) The actual bonus paid or payable for the bonus computation
year that ended before the bonus computation year in which
the Termination Event occurs; and
(B) The annualized amount of the bonus the Executive earned,
determined as of the end of the month in which the
Termination Event occurs, for the bonus computation year in
which the Termination Event occurs.
(c) EQUITY ACCELERATION.
(1) Subject to paragraph (2) below, upon the date of the Termination
Event:
(A) All stock options held by the Executive that are not
otherwise vested as of that date shall become immediately
vested and exercisable notwithstanding any vesting
provisions in the grant of those options; and
(B) Any restrictions on the restricted stock held by the
Executive shall immediately lapse.
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(2) The Board may exclude any particular grant of stock options or
restricted stock from the acceleration provisions of paragraph
(1) above, but only as follows:
(A) Any current grants as of the Effective Date that are to be
excluded must be listed in a separate appendix to this
Agreement.
(B) Any grants made after the Effective Date will be excluded
only if the exclusion is made at the time the grant is
made.
(d) HEALTH PLAN CONTINUATION BENEFITS. The Company will provide health
plan continuation benefits as follows:
(1) For the period specified in paragraph (3) below, the Company will
pay the premiums (both the employer and employee portions) for
COBRA continuation coverage under the Company's group health
plans as in effect at that time.
(2) The Executive will have all the rights available under COBRA to
change plans and coverage category (i.e., employee only, employee
plus spouse or full family or such other categories that are in
effect at that time).
(3) The Company will make the COBRA premium payments until the
earliest of the following events occurs:
(A) The date COBRA coverage would otherwise end by law; or
(B) 18 months of premiums have been paid.
(e) 401(k) EQUIVALENCY PAYMENT. The Company shall pay the Executive a lump
sum cash payment equal to two times the sum of the Executive's "deemed
matching contribution" (as determined under paragraph (2) below) and
the Executive's "deemed profit-sharing contribution" (as determined
under paragraph (3) below.
(1) For purposes of determining the Executive's deemed matching and
profit-sharing contributions, the Executive's "deemed 401(k) Plan
compensation" will be the Executive's cash compensation under
subsection (b)(1) above, but limited to the maximum amount
allowable under the 401(k) Plan's definition of "compensation" as
in effect at that time;
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(2) The deemed matching contributions will be determined as follows:
(A) First, the Executive's "deemed elective deferral
contributions" will be determined by multiplying the
Executive's deemed 401(k) Plan compensation under paragraph
(1) above by the lesser of:
(i) The deferral percentage the Executive had in effect
under the 401(k) Plan on the date of the Termination
Event; or
(ii) The maximum deferral percentage allowed by the 401(k)
Plan for highly compensated employees (if applicable to
the Executive) for the plan year in which the
Termination Event occurs, if that percentage has been
determined by the date of Termination Event.
(B) Second, the deemed matching contribution formula will be
applied to the amount of the deemed elective deferral
contributions as calculated under subparagraph (A) above, to
determine the amount of the deemed matching contributions.
For this purpose, the "deemed matching contribution formula"
is:
(i) The 401(k) Plan's matching contribution formula for the
plan year in which the Termination Event occurs; or
(ii) If that formula has not been determined by the date of
the Termination Event, the formula for the previous
plan year.
(3) The deemed profit-sharing contributions will be determined by
multiplying the Executive's deemed 401(k) Plan compensation under
paragraph (1) above by:
(A) The 401(k) Plan's profit-sharing contribution rate for the
plan year in which the Termination Event occurs; or
(B) If that rate has not been determined by the date of the
Termination Event, the average of the profit-sharing
contribution rate for the three plan years before the plan
year in which the Termination Event occurs.
(f) OUTPLACEMENT/TAX PLANNING SERVICES. At the Executive's election, for
up to 12 months from the date of the Termination Event, the Executive
may receive up to $5,000 in outplacement and/or tax planning services
from service providers selected by the Company. The Company will pay
the service providers directly for these benefits. The Executive will
not have an option to receive cash in lieu of these outplacement or
tax planning benefits.
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(g) TIMES FOR PAYMENT.
(1) The cash compensation payment under subsection (b) and the 401(k)
equivalency payment under subsection (e) will be paid within 30
days after the date of the Termination Event;
(2) The COBRA premiums under subsection (d) will be paid as due under
the terms of the applicable group health plan; and
(3) Outplacement services will be paid as billed by the service
provider.
5. GROSS-UP PAYMENT. If any or all of the severance benefits under Section 4
constitute a "parachute payment" under Code Section 280G, the Company shall
pay the Executive a "Gross-Up Payment" as follows:
(a) AMOUNT OF PAYMENT. The Gross-Up Payment shall be equal to the amount
necessary so that the net amount of the severance benefits retained by
the Executive, after subtracting the excise tax imposed under Code
Section 4999 ("excise tax"), and after also subtracting all federal,
state or local income tax, FICA and the excise tax on the Gross-Up
Payment itself, shall be equal to the net amount the Executive would
have retained if no excise tax had been imposed and no Gross-Up
Payment had been paid.
(b) CALCULATION OF PAYMENT AMOUNT. The amount of the Gross-Up Payment
shall be determined as follows:
(1) The determination will be made by independent accountants and/or
tax counsel (the "consultant") selected by the Company with the
Executive's consent (which consent will not be unreasonably
withheld). The Company shall pay all of the consultant's fees and
expenses.
(2) As part of this determination, the consultant will provide the
Company and the Executive with a detailed analysis and supporting
calculations of:
(A) The extent to which any payments or benefits paid or payable
to the Executive are subject to Code Section 280G (including
the reasonableness of any compensation provided for services
rendered before or after the Change in Control); and
(B) The calculation of the excise tax under Code Section 4999.
(3) The consultant may make such assumptions and approximations
concerning applicable tax rates and rely on such interpretations
regarding the application of Code Sections 280G and 4999 as it
deems reasonable. The Company and the Executive will provide the
consultant with any information or documentation the consultant
may reasonably request.
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(c) TIME FOR PAYMENT. The Gross-Up Payment shall be made within 30 days
after the date of the Termination Event, provided that if the Gross-Up
Payment cannot be determined within that time, the following will
apply:
(1) The Company shall pay the Executive within that time an estimate,
determined in good faith by the Company, of the minimum amount of
the Gross-Up Payment;
(2) The Company shall pay the remainder (plus interest as determined
under Code Section 7872(f)(2)(B)) as soon as the amount can be
determined, but in no event later than the 45 days after the date
of the Termination Event; and
(3) If the estimated payment is more than the amount later determined
to have been due, the excess (plus interest as determined under
Code Section 7872(f)(2)(B)) shall be repaid by the Executive
within 30 days after written demand by the Company.
(d) ADJUSTMENTS. Subject to the Company's right under subsection (e) below
to contest an excise tax assessment by the Internal Revenue Service,
the amount of the Gross-Up Payment will be adjusted as follows:
(1) OVERPAYMENT. If the actual excise tax imposed is less than the
amount that was taken into account in determining the amount of
the Gross-Up Payment, the Executive shall repay at the time that
the amount of the reduced excise tax is finally determined the
portion of the Gross-Up Payment attributable to that reduction
(plus the portion of the Gross-Up Payment attributable to the
excise tax, FICA and federal, state and local income tax imposed
on the portion of the Gross-Up Payment being repaid by the
Executive, to the extent the repayment results in a reduction in
or refund of excise tax, FICA or federal, state or local income
tax), plus interest as determined under Code Section
7872(f)(2)(B) on the amount of the repayment.
(2) UNDERPAYMENT. If the actual excise tax imposed is more than the
amount that was taken into account in determining the amount of
the Gross-Up Payment, the Company shall make an additional
gross-up payment to compensate for that excess (plus interest as
determined under Code Section 7872(f)(2)(B)) within 10 days of
the date the amount of the excess is finally determined.
(e) COMPANY'S RIGHT TO CONTEST. The Company has the right to contest any
excise tax assessment made by the Internal Revenue Service on the
following terms and conditions:
(1) The Executive must notify the Company in writing of any claim by
the Internal Revenue Service that, if upheld, would result in the
payment of excise taxes in amounts different from the amount
initially determined by the consultant. The Executive shall give
this notice as soon as possible but in no event later than 15
days after the Executive receives the notice from the Internal
Revenue Service.
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(2) If the Company decides to contest the assessment, it must notify
the Executive within 30 days of receiving the notice from the
Executive.
(3) The Company will have full control of the proceedings, including
settlement authority and the right to appeal.
(4) The Executive will cooperate fully in providing any testimony,
information or documentation reasonably required by the Company
in connection with the proceedings.
(5) The adjustments required under subsection (d) above shall not be
made until the Company has concluded a settlement agreement with
the Internal Revenue Service, exhausted its (or the Executive's)
rights to contest the Internal Revenue Service's determination or
notified the Executive that it intends to concede the matter,
whichever occurs first.
(6) The Company shall bear all fees and costs associated with the
contest.
(7) The Company will indemnify the Executive from any taxes, interest
and penalties that may be imposed upon the Executive with respect
to the payments made under paragraph (6) above and this paragraph
(7).
(f) EFFECT OF REPEAL. If Code Sections 280G and 4999 are repealed without
successor provisions being enacted, this Section shall be of no
further force or effect.
6. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, other than providing for the benefits
payable upon a Change in Control, this Agreement will not affect the
determination of any compensation payable by the Company to the Executive,
nor will it affect the other terms of the 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 the Executive under the Company's employee benefit or other applicable
plans, programs or arrangements upon the termination of the Executive's
employment.
7. WITHHOLDING. All payments made to the Executive under this Agreement are
subject to the withholding of income and payroll taxes and other payroll
deductions that the Company reasonably determines are appropriate under
applicable law or regulations.
8. ASSIGNMENT.
(a) The Company will require any successor (by purchase, merger,
consolidation or otherwise, whether direct or indirect) to all or
substantially all of its business or assets to expressly assume this
Agreement. This assumption shall be obtained before the effective date
of the succession. Failure of the Company to obtain this assumption
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms
that the Executive would be entitled to under this Agreement following
a Change in Control, except that for this purpose:
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(1) The date the definitive agreement providing for the succession is
signed shall be deemed to be the date of the Termination Event
(the "deemed Termination Event"), regardless of whether the
Executive's employment terminates on that date;
(2) The Executive will have no continued employment obligation under
Section 3(b) as of the deemed Termination Event;
(3) The equity acceleration under Section 4(c) will be effective on
the date of the deemed Termination Event;
(4) Within five (5) business days of the deemed Termination Event,
the Company with pay the Executive a lump sum cash payment equal
to the sum of:
(A) The cash compensation payment under Section 4(b);
(B) Twenty-four times the monthly COBRA premium amount for the
group health plan coverage the Executive had in effect on
the date of the deemed Termination Event;
(C) The 401(k) equivalency payment under Section 4(e);
(D) The maximum amount that would have been paid under Section
4(f) to the outplacement service provider; and
(5) Section 6 will no longer apply as of the date of the deemed
Termination Event.
(b) The Executive may not assign or transfer this Agreement or any rights
or obligations under it.
9. UNSECURED GENERAL CREDITOR. Neither the Executive nor anyone else claiming
on behalf of or through the Executive shall have any right with respect to,
or claim against, any insurance policy or other asset the Company may
acquire to assist it in financing its obligations under this Agreement. The
Executive shall be an unsecured general creditor of the Company with
respect to any amount payable under this Agreement.
10. JOINT AND SEVERAL OBLIGATION. Bancorp and Bank will be jointly and
severally liable for the payment obligations under this Agreement.
11. DEATH BENEFIT.
(a) Any severance benefits under Section 4 remaining unpaid at the
Executive's death shall be paid under the terms and conditions of this
Agreement, to the Beneficiary or Beneficiaries determined under
subsection (b) below.
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(b) The Executive may designate the Beneficiary or Beneficiaries (who may
be designated concurrently or contingently) to receive the death
benefit under the Plan under the following terms and conditions:
(1) The beneficiary designation must be in a form satisfactory to the
Committee and must be signed by the Executive.
(2) A beneficiary designation shall be effective upon receipt by the
Committee or its designee and shall cancel all beneficiary
designations previously filed by the Executive, provided it is
received before the Executive's death.
(3) The Executive may revoke a previous beneficiary designation
without the consent of the previously designated Beneficiary.
This revocation is made by filing a new beneficiary designation
form with the Committee or its designee, and shall be effective
upon receipt.
(4) A divorce will automatically revoke the portion of a beneficiary
designation designating the former spouse as a Beneficiary.
(5) If a Beneficiary disclaims a death benefit, the benefit will be
paid as if the Beneficiary had predeceased the Executive.
(6) If a Beneficiary who is in pay status dies before full
distribution is made to the Beneficiary, the unpaid balance of
the distribution will be paid to the Beneficiary's estate.
(7) If, at the time of the Executive's death, the Executive has
failed to designate a Beneficiary, the Executive's beneficiary
designation has become completely invalid under the provisions of
this subsection or there is no surviving Beneficiary, the benefit
will be paid in the following order of priority:
(A) To the Executive's spouse, if living; or
(B) To the Executive's estate.
12. GENERAL PROVISIONS.
(a) CHOICE OF LAW/VENUE.
(1) This Agreement shall be construed and its validity determined
according to the laws of the State of Oregon, other than its law
regarding conflicts of law or choice of law, to the extent not
preempted by federal law.
(2) Any dispute arising out of this Agreement must be brought in
either Clackamas County or Multnomah County, Oregon, and the
parties will submit to personal jurisdiction in either of those
counties.
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(b) ARBITRATION. Any dispute or claim arising out of or brought in
connection with this Agreement, shall be submitted to final and
binding arbitration as follows:
(1) Before proceeding to arbitration, the parties shall first
attempt, in good faith, to resolve the dispute or claim by
informal meetings and discussions between them and/or their
attorneys. Acting on behalf of the Company at any of these
meetings and discussions will be, at the discretion of its Chief
Executive Officer, the Chief Executive Officer, the Executive
Vice-President, Human Resources or both of them. The Chief
Executive Officer and the Executive Vice-President, Human
Resources will make their recommendation to the Committee for its
decision on the matter. This informal dispute resolution process
will be concluded within 30 days or such longer or shorter period
as may be mutually agreed by the parties.
(2) After exhausting the informal dispute resolution process under
paragraph (1) above, upon the request of any party, the matter
will 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 judgment 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) ATTORNEYS' FEES.
(1) If any breach of or default under this Agreement results in
either party incurring attorneys' or other fees, costs or
expenses (including those incurred in an arbitration), the
substantially prevailing party is entitled to recover from the
non-prevailing party its reasonable legal fees, costs and
expenses, including attorneys' fees and the costs of the
arbitration, except as provided in paragraph (2) below.
(2) If the Executive is not the substantially prevailing party, the
Executive shall be liable to pay the Company under paragraph (1)
above only if the arbitrator determines that:
(A) There was no reasonable basis for the Executive's claim (or
the Executive's response to the Company's claim); or
(B) The Executive had engaged in unreasonable delay, failed to
comply with a discovery order or otherwise acted in bad
faith in the arbitration.
(3) Either party shall be entitled to recover any reasonable
attorneys' fees and other costs and expenses it incurs in
enforcing or collecting an arbitration award.
Page 16 CHANGE IN CONTROL AGREEMENT (Xxxxxxx)
(4) If an award under this subsection is made to the Executive and
accountants or tax counsel selected by Company with the
Executive's consent (which shall not be unreasonably withheld)
determine that the award is includible in Executive's gross
income, Company shall also pay Executive a gross-up payment to
offset the taxes imposed on that award, including the taxes on
the gross -up payment itself. This gross-up payment shall be
determined following the methodology employed in Section 5(b).
(d) ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to its subject matter, and it supercedes all
previous agreements between the Executive and the Company and any of
its subsidiaries pertaining to this subject matter. By signing this
Agreement, the Executive waives any and all rights the Executive may
have had under any previous agreement providing for benefits upon a
Change in Control (regardless of how that term is defined in those
prior agreements) that the Executive may have entered into with the
Company or any of its subsidiaries.
(e) SUCCESSORS. This Agreement binds and inures to the benefit of the
parties and each of their respective affiliates, legal
representatives, heirs and, to the extent permitted in this Agreement,
their successors and assigns.
(f) AMENDMENT. This Agreement may be amended only through a written
document signed by all of the parties.
(g) CONSTRUCTION. The language of this Agreement was chosen jointly by the
parties 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.
(h) SECTION HEADINGS. The section headings used in this Agreement have
been included for convenience and reference only.
(i) CITATIONS. Citations to a statute, act or rule are to that statute,
act or rule as amended or to its successor at the relevant time.
Citations to a particular section of a statute, act or rule are to
that section as amended or renumbered or to the comparable provision
of any successor as in effect at the relevant date.
(j) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and all counterparts will be construed together as one
Agreement.
Page 17 CHANGE IN CONTROL AGREEMENT (Xxxxxxx)
(k) SEVERABILITY. If any provision of this Agreement is, to any extent,
held to be invalid or unenforceable, it will be deemed amended as
necessary to conform to the applicable laws or regulations. However,
if it cannot be amended without materially altering the intentions of
the parties, it will be deleted and the remainder of this Agreement
will be enforced to the extent permitted by law.
EXECUTIVE: COMPANY:
WEST COAST BANCORP
_________________________________ By: __________________________
Xxxxx X. Xxxxxxx
Title ________________________
Date: ___________________________
Date: ________________________
WEST COAST BANK
By: __________________________
Title: _______________________
Date: ________________________
Page 18 CHANGE IN CONTROL AGREEMENT (Xxxxxxx)
