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EXHIBIT 10.4
CONFIDENTIAL
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT ("Agreement") is dated as of December
1, 1996 (the "Effective Date"). The parties to the Agreement ("Parties"') are
WEST COAST BANCORP, an Oregon corporation ("Bancorp"), and XXXXXXX X. XXXXXXX
("Executive").
A. Bancorp currently receives the exclusive services of certain employees
including Executive, and both Bancorp and Executive desire to continue
Executive's services in the event of a change in the control of Bancorp,
thereby allowing Bancorp to maximize the benefits obtainable from any
such change.
B. To encourage Executive's continued services, Bancorp desires to provide
a salary continuation benefit to Executive.
In consideration of the mutual promises, covenants, agreements and
undertakings contained in this Agreement, the parties agree as follows:
1. EFFECTIVE DATE AND TERM. As of the Effective Date, this Agreement shall
be a binding obligation of the parties, not subject to revocation or
amendment except by mutual consent or in accordance with its terms. The
term of this Agreement ("Term") shall commence as of the Effective Date
and shall end one (1) year thereafter, provided however, that this
Agreement shall be automatically renewed for successive one year
periods, unless the Board of Directors of Bancorp do not approve such
renewal and provide written notice to Executive of such event, or
Executive gives written notice to Bancorp not less than thirty (30) days
prior to any such anniversary date of Executive's election not to extend
the term beyond its then scheduled expiration date. Notwithstanding the
preceding, if a definitive agreement providing for a Change in Control
(as defined below) is entered into on or before the expiration of the
Term, the term of this Agreement shall be extended to twelve (12) months
after the consummation of such Change in Control.
2. COMMITMENT OF EXECUTIVE. In the event that any person extends any
proposal or offer which is intended to or may result in a Change in
Control, as defined below (a "Change in Control Proposal"), Executive
shall, at Bancorp's request, assist Bancorp in evaluating such proposal
or offer. Further, as a condition to receipt of the Salary Continuation
Payment defined below, Executive agrees not to resign Executive's
position with Bancorp during any period from the receipt of a specific
Change in Control Proposal up to the consummation or abandonment of the
transaction contemplated by such Proposal.
3. SALARY CONTINUATION PAYMENT.
(a) Amount of Payment--Termination Event After Change in Control.
Except as otherwise provided in this Section, in the case of a
Termination Event After a Change in Control, as defined in
Section 4, Executive shall receive a salary continuation payment
(the "Salary Continuation Payment") equal to the sum of
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the Regular Salary Continuation Payment and the Bonus
Continuation Payment. The Regular Salary Continuation Payment
shall equal Executive's regular monthly salary in effect as of
the date of termination of employment (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) which would be payable to Executive but for the
termination from the date of termination of Executive's
employment to the date twelve (12) months after the Change in
Control. The Bonus Continuation Payment shall equal (i) the most
recent annual bonus paid to Executive, multiplied by (ii) (x)
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 twelve (12)
months after the Change in Control divided by (y) 365.
(b) Limitation on Payment. Notwithstanding anything in this
Agreement to the contrary, the Salary Continuation Payment shall
not exceed an amount equal to One Dollar ($1.00) less than the
amount which would cause the payment, together with any other
payments received from Bancorp, 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 shall be deemed to occur upon, and only upon, one or
more of the following:
(a) Termination of Executive's employment by Executive for Good
Reason (as defined herein) within twelve (12) months after a
Change In Control;
(b) Termination of Executive's employment by Bancorp other than for
Cause, Disability, or Retirement (each of which is defined
below) within twelve (12) months after a Change In Control; or
(c) Termination of Executive's employment by Bancorp other than for
Cause, Disability, or Retirement prior to a Change In Control if
such termination occurs either (i) on or after announcement, by
Bancorp or any other party, of a contemplated Change In Control
or an intended Change In Control, or (ii) on or after the date a
contemplated or intended Change In Control should have been
announced in conformity with applicable securities or other
laws, but only if in either case a Change In Control occurs
within twelve (12) months after such termination of Executive's
employment.
5. DEFINITIONS.
(a) Cause. "Cause" shall mean 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.
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(b) Disability. "Disability" shall mean a physical or mental
impairment which renders Executive incapable of substantially
performing the duties required under this Agreement, and which
is expected to continue rendering Executive so incapable for the
reasonably foreseeable future.
(c) Retirement. "Retirement" shall mean voluntary termination by
Executive in accordance with Bancorp's retirement policies,
including early retirement, if applicable to their salaried
employees.
(d) Good Reason. "Good Reason" shall mean only any one or more of
the following:
(i) Any reduction of Executive's salary or any reduction or
elimination of any compensation or benefit plan
benefiting Executive, which reduction or elimination is
not of general application to substantially all
employees of Bancorp or such employees of any successor
entity or of any entity in control of Bancorp;
(ii) A relocation or transfer of Executive's place of
employment which would reasonably require Executive to
commute more than twenty (20) miles each way from
Executive's principal residence; or
(iii) A material diminution in the responsibilities or duties
of Executive.
(e) Change In Control. "Change in Control" shall mean either of the
following:
(i) A Person or Entity (as defined below) acquiring or
otherwise becoming the owner (as a result of a purchase,
merger, stock exchange, or otherwise) of more than fifty
percent (50%) of the outstanding common stock of
Bancorp, or
(ii) The merger of Bancorp into any corporation, or the
merger of any corporation into Bancorp, where more than
fifty percent (50%) of the stock of such corporation or
Bancorp, as the case may be, (the "Surviving
Corporation") is owned by other than the owners of the
common stock of Bancorp prior to such merger.
(f) Person or Entity. "Person or Entity" shall include 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, except with respect to the Salary
Continuation Payment, this Agreement shall have no effect on the
determination of any compensation payable by Bancorp to Executive, or
upon any of the other terms of Executive's employment with Bancorp. The
specific arrangements referred to herein are not intended to exclude any
other benefits which may be available to Executive upon a termination of
employment with Bancorp pursuant to employee benefit plants of Bancorp
or otherwise.
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7. WITHHOLDING. All payments required to be made by Bancorp hereunder to
Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as Bancorp may reasonably
determine should be withheld pursuant to any applicable law or
regulation.
8. ASSIGNABILITY. Bancorp 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 Bancorp may hereafter merge or consolidate or
to which Bancorp 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
Bancorp 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.
9. GENERAL PROVISIONS.
(a) Choice of Law. This Agreement is made with reference to and is
intended to be construed in accordance with the laws of the
State of Oregon.
(b) Arbitration. Any dispute, controversy or claim arising out of or
in connection with, or relating to, this Agreement or any breach
or alleged breach hereof, shall, upon the request of any party
involved, be submitted to, and settled by, arbitration pursuant
to the rules then in effect of the American Arbitration
Association (or under any other form of arbitration mutually
acceptable to the parties so involved). Any award rendered shall
be final and conclusive upon the parties and a judgment thereon
may be entered in the highest court of the forum having
jurisdiction. The arbitrator shall render a written decision,
naming the substantially prevailing party in the action, and
shall award such party all costs and expenses incurred,
including reasonable attorneys' fees.
(c) Attorney Fees. In the event of any breach of or default under
this Agreement which results in either party incurring attorney
or other fees, costs or expenses (including in arbitration), the
prevailing party shall be entitled to recover from the
non-prevailing party any and all such fees, costs and expenses,
including attorney fees.
(d) Successors. This Agreement shall be binding upon and inure to
the benefit of the Parties and each of their respective
affiliates, legal representatives, successors and assigns.
(e) Construction. This Agreement contains the entire agreement among
the Parties with respect to its subject matter, and may be
amended or modified only in a writing executed by all of the
Parties. Its language is and will be deemed to be 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.
This Agreement may be amended only in a writing signed by the
parties.
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(f) Captions. The captions of the respective sections of this
Agreement have been included for convenience of reference only.
They shall not be construed to modify or otherwise affect in any
respect any of the provisions of the Agreement.
(g) Counterparts. This Agreement may be executed in one or more
counterparts by the parties hereto. All counterparts shall be
construed together and shall constitute one Agreement.
EXECUTED by each of the parties effective as of the date first stated
above.
BANCORP:
WEST COAST BANCORP,
an Oregon corporation
By: /s/ Xxxxxx Xxxxx
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Its: Chairman
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxx
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XXXXXXX X. XXXXXXX
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