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EXHIBIT 10.7
SALARY CONTINUATION AGREEMENT
FOR WCB POLICYMAKING EXECUTIVE OFFICERS
This SALARY CONTINUATION AGREEMENT ("Agreement") is dated as of April
1, 1999 (the "Effective Date"). The parties to the Agreement ("Parties") are
WEST COAST BANCORP ("Bancorp"), West Coast Bank ("Bank"), and Xxxxxx X. Xxxxxxxx
("Executive").
RECITALS
A. Executive is employed by Bank in a managerial capacity, presently
holding the position of Executive Vice-President.
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, 2000. 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.
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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.
(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.
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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
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Executive under the Company's employee benefit or other applicable
plans, if his or her employment terminates.
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 Multnohmah 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.
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(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.
(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 April 1, 1999:
BANCORP AND BANK:
/S/
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By: Xxxxxx X. Xxxxxx
Its: Senior Vice President &
General Counsel
EXECUTIVE:
/S/
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Xxxxxx X. Xxxxxxxx
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