Columbia Bancorp - Roger L. Christensen
2008
EMPLOYMENT AGREEMENT
Columbia
Bancorp - Xxxxx X. Xxxxxxxxxxx
This
Employment Agreement (the "Agreement") is made and entered into this 16th day
of
April, 2008 by and between Columbia Bancorp, an Oregon corporation and bank
holding company (“Bancorp”) and Xxxxx X. Xxxxxxxxxxx ("Employee").
RECITALS
(1) Bancorp
is an Oregon corporation and is the holding company of Columbia River Bank,
a
state-chartered Oregon financial institution. Bancorp’s principal office is at
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxx, Xxxxxx 00000.
(2) Bancorp
desires to employ Employee as an officer of Bancorp and of its subsidiary
Columbia River Bank (the “Bank”) on the terms and conditions set forth herein.
Now,
therefore, it is agreed:
1. Relationship
and Duties.
1.1 Employment
and Title.
Bancorp
shall employ Employee as an officer of Bancorp with the title of President
and
Chief Executive Officer of Columbia Bancorp and Chief Executive Officer of
Columbia River Bank. Subject to the terms and conditions hereof, employee shall
perform such duties and exercise such authority as are customarily performed
and
exercised by persons holding such office, subject to the general direction
of
the Boards of Directors of Bancorp and the Bank. Such services and duties shall
be exercised in good faith and in accordance with standards of reasonable
business judgment. As used herein, references to “Bancorp” shall be deemed to
also refer to and include the Bank where the context requires.
1.2 Duties;
Conflicts. Employee
shall devote his full time, attention and efforts to the diligent performance
of
his duties as an officer of Bancorp. Employee will not accept employment with
any other individual, corporation, partnership, governmental authority or any
other entity, or engage in any other venture for profit which Bancorp, or any
subsidiary, parent, sister or affiliated corporation of Bancorp, considers
to be
in conflict with their best interests or to be in competition with their
business, or which may interfere in any way with Employee's performance of
his
duties hereunder.
1.3 Service
on Other Company Boards.
Nothing
in the Agreement shall prohibit Employee from serving on the board of directors
of any profit or non-profit corporation not in direct competition with Bancorp
or with any subsidiary, parent, sister or affiliated corporation of Bancorp.
In
addition, Employee may own stock in any other corporation whether or not the
stock is publicly traded; provided, that if such corporation operates a business
in competition with Bancorp Employee may not own more than five percent (5%)
of
the outstanding shares of such corporation.
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2. Term
of Employment.
2.1 Two-Year
Term.
The term
of employment under the Agreement shall begin on April 16, 2008 and end on
April
15, 2010.
3. Termination.
3.1 Definition.
As used
in the Agreement, "termination" shall mean the termination of Employee's
employment relation with Bancorp, whether initiated by Bancorp or by Employee,
and whether for cause or without cause.
3.2 Termination
Events. Notwithstanding
any other provisions of the Agreement, the employment of Employee shall
terminate immediately on the earlier to occur of any of the
following:
3.2.1 Employee's
death;
3.2.2 Employee's
complete disability. "Complete disability" as used herein shall mean the
inability of Employee, due to illness, accident, or other physical or mental
incapacity, to perform the services required under the Agreement for an
aggregate of ninety (90) days within any period of 180 consecutive days during
the term hereof; provided, however, that disability shall not constitute a
basis
for discharge for cause;
3.2.3 The
discharge of Employee by Bancorp for cause. "Cause" as used herein shall mean
(i) Employee's gross negligence or willful misconduct as shall constitute,
as a
matter of law, a breach of the covenants and obligations of Employee hereunder;
(ii) failure or refusal of Employee to comply with the provisions of the
Agreement; (iii) Employee's conviction by any duly constituted court with
competent jurisdiction of a crime (other than traffic offenses); (iv) Employee's
malfeasance or incompetence, provided that in applying this criteria Bancorp
shall not be unreasonable or arbitrary, and provided further that prior to
effecting a dismissal under this Section (iv) Bancorp shall afford Employee
with
fair and reasonable warning and with a fair and reasonable opportunity to cure
any defects in Employee's performance.
3.3 Termination
by Employee. Employee
may terminate his employment with Bancorp with or without cause by giving thirty
(30) days written notice of termination. "Cause" as used herein shall include
Bancorp’s failure or refusal to comply with the provisions of the
Agreement.
3.4 Effect
of Termination. The
termination of Employee's employment shall constitute a tender by Employee
of
his resignation as an officer of Bancorp, and as a member of any board of
directors or board committees of Bancorp or its affiliates if Employee is a
member thereof at the time of termination.
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3.5 Payment
on Termination. If
Employee's employment is terminated by Employee with or without cause, or by
Bancorp with or without cause, Employee shall be paid all base salary and
benefits accrued under the Agreement as of the termination date.
3.6 Severance
Payment. If
Employee’s employment is terminated by Employee with cause, or by Bancorp
without cause, Employee shall be paid all base salary and benefits accrued
under
the Agreement as of the termination date, and in addition, shall be entitled
to
a severance payment equal to the lesser of (i) four month’s base salary as of
the date of termination multiplied by the number of full calendar years Employee
has been employed by Bancorp or any predecessor thereof, or (ii) one month’s
base salary as of the date of termination multiplied by twenty-four (24). For
purposes of Section 3.6(i) a period of continuous full-time employment for
six
months or more in a calendar year shall count as a full calendar year. If for
any period Employee has been employed simultaneously by Bancorp and by one
or
more of its affiliates, such period shall count only once in determining the
severance payment under Section 3.6(i). The severance payment provided herein
shall be paid in full within thirty (30) days of the date of Employee’s
termination. Employee shall not be entitled to such severance payment if
Employee’s employment is terminated by Bancorp with cause, or by Employee
without cause, and in either such case, Employee shall only be entitled to
receive on termination a payment equal to Employee’s base salary and benefits
accrued under the Agreement as of the termination date, and no other
payments.
3.7 Salary
Continuation Plan. If
Employee’s employment is terminated by Employee with cause, or by Bancorp
without cause, Employee shall also be entitled to any severance benefits under
any Executive Salary Continuation Agreement between Bancorp and
Employee.
3.8. Stock
Options. If
Employee's employment is terminated by Employee with cause, or by Bancorp
without cause, all stock options awarded to Employee that have not vested shall
automatically become fully vested on the date of termination.
3.9 Performance
Bonus. If
Employee's employment is terminated by Employee with cause, or by Bancorp
without cause, Employee shall be paid, in addition to all other amounts payable
under the Agreement: (i) all nonforfeitable deferred compensation, if any;
and
(ii) unpaid performance bonus payments, if any, payable under Section 4.2 of
the
Agreement, which shall be declared earned and payable based upon performance
up
to, and shall be pro-rated as of, the date of termination. Employee shall not
be
entitled to such unpaid performance bonus payments if Employee's employment
is
terminated by Bancorp with cause, or by Employee without cause.
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4. Compensation.
4.1 Base
Salary. For
the
period beginning April 16, 2008 and ending April 15, 2010, Employee shall be
paid an annual base salary of $260,000 payable in equal bi-monthly installments
and subject to any deductions required by law.
4.2 Performance
Bonus. Employee
shall be entitled to consideration for annual performance bonus compensation
for
each calendar year constituting a percentage of annual base salary earned from
his employment by Bancorp during such calendar year. Bonus compensation shall
be
subject to any deductions required by law. The Bancorp Board shall timely,
and
at least once yearly, determine the amount of and the formulas and methods
for
establishing such bonus compensation. The amount of such bonus compensation
shall at all times be discretionary, and Bancorp may decline to award a
performance bonus to Employee in any year.
4.2.1 Employee
shall be entitled to a pro-rata performance bonus for less than a full year
of
performance if Employee's employment is terminated by Employee with cause,
or by
Bancorp without cause (including termination following a change of control
as
described in Section 7.4 of the Agreement), prior to the date on which Employee
would otherwise be entitled to consideration for Employee’s annual performance
bonus. In such circumstances, such pro-rata performance bonus shall be declared
earned and payable as of the date of termination.
5. Benefits;
Purchase of Shares.
5.1 Eligibility
for General Benefits.
Employee
shall be eligible to participate in any plan of Bancorp or its affiliates
relating to stock options, stock purchases, profit sharing, group life
insurance, medical coverage, education and other retirement or employee benefits
that Bancorp or its affiliates may adopt for the benefit of employees.
5.2 Car
Allowance. Employee
shall receive the use of Bank-owned vehicle in accordance with Bank
policies.
5.3 Additional
Benefits.
Employee
shall be eligible to participate in any other benefits which may be or become
applicable to Bancorp’s executive employees of similar rank. In addition,
Employee shall be entitled to: (i) a reasonable expense account for use in
connection with Bancorp business; and (ii) any other benefits which in Bancorp’s
judgment are commensurate with the responsibilities and functions to be
performed by Employee under the Agreement, including the payment of reasonable
expenses for attendance by Employee and Employee's spouse at annual meetings
of
the Oregon Bankers Association.
5.4 Share
Ownership. During
the term of the Agreement, including extensions, Employee shall purchase shares
of Bancorp Stock, including purchases through the exercise of stock options,
in
accordance with the share ownership policies and requirements established by
Bancorp management in effect from time to time for employees of comparable
rank.
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6. Vacations
and Leaves.
6.1 Paid
Vacation. During
the term of the Agreement, Employee shall be entitled to annual paid vacation
benefits identical to those offered to employees of Bancorp holding executive
vice president or higher positions. The timing of vacations shall be scheduled
in a reasonable manner by Employee. Employee shall not be entitled to receive
any additional compensation from Bancorp on account of his failure to take
a
vacation, and may not accumulate unused vacation time from one calendar year
to
the next.
6.2 Leaves
With or Without Pay. The
Bancorp Board may grant Employee a leave or leaves of absence, with or without
pay, at such time or times and upon such terms and conditions as the Board
may
determine.
6.3 Mandatory
Absence. In
each
calendar year Employee shall be absent from Bancorp for one period of two
consecutive weeks. Such period may include vacation, leave, sick leave,
attendance at seminars or conventions, or any combination thereof.
7. Change
of Control.
7.1 Survival
of Rights.
Employee's rights on termination of employment under Section 3 of the Agreement,
as well as all other rights of Employee under the Agreement or applicable law,
shall survive a change of control of Bancorp or Bank whether or not Employee
opposed or favored the change of control.
7.2 Rights
on Change of Control.
If a
change of control of Bancorp or Bank occurs while the Agreement is in effect,
Employee shall have ninety (90) days following the date such change of control
becomes effective to elect to terminate Employee’s employment with cause. If
Employee so elects to terminate, such termination shall constitute a termination
by Employee with cause, and Employee shall receive all payments and benefits
due
to Employee on termination by Employee with cause under Section 3 of the
Agreement. Notwithstanding the foregoing, if following such change of control
Employee is offered a position of employment either substantially equivalent
to
Employee’s compensation and position prior to the change of control, or an
executive officer position with significant responsibility and compensation
commensurate (and substantially equivalent to his previous compensation) with
such responsibility, and Employee elects nevertheless to termination Employee’s
employment under this Section 7.2, Employee shall be entitled to a maximum
severance payment under Section 3.6 equal to one month’s base salary as of the
date of termination multiplied by nine (9).
7.3 Base
Compensation.
Following a change of control, Bancorp shall not reduce Employee’s base
compensation in effect prior to the effective date of the change of control
for
a period of time equal to the greater of (i) twenty four (24) months from the
effective date of the change of control; (ii) one (1) month for each full
calendar year Employee has been employed by Bancorp; or (iii) the remaining
term
of the Agreement, including any extensions thereof. For purposes of this
Subsection 7.3, a period of continuous full-time employment for six months
or
more in a calendar year shall count as a full calendar year.
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7.4 Termination
Without Cause. If
following a change of control Bancorp terminates Employee’s employment within
two (2) years of the effective date of the change of control because of a
reduction in force or for any other reason, other than for cause pursuant to
Section 3.3 of the Agreement, such termination shall constitute a termination
by
Bancorp without cause, and Employee shall receive all payments and benefits
due
to Employee on termination under the Agreement, plus: (i) all non-forfeitable
deferred compensation, if any; and (ii) unpaid performance bonus payments,
if
any, payable under Section 4.2 of the Agreement, which shall be declared earned
and payable based upon performance up to, and shall be pro-rated as of, the
date
of termination.
7.5 Options
and Stock.
If
Employee is a participant in a restricted stock plan or share option plan,
and
such plan is terminated involuntarily as a result of the change of control,
all
stock and options shall be declared fully vested and shall be paid, awarded
or
otherwise distributed. With respect to any unexercised options under any stock
option plan, such options may be exercised within the period provided in such
plan. Effective as of the date of the change of control, any holding period
established for stock paid as bonus or other compensation shall be deemed
terminated, except as otherwise provided by law.
7.6 Relocation. If
relocation is required by the acquiring institution the relocation package
option will be at the choice of the Employee. He/She may pick Columbia’s
relocation package at the time of the merger or the package offered by the
acquiring company. This option is available for one year from the merger
date.
7.7 Definition.
As used
in this Section, "control" shall mean the acquisition during Employee’s
employment of twenty-five percent (25%) or more of the voting securities of
Bancorp or Bank by any person, or persons acting as a group within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, or to such acquisition
of a percentage between ten percent (10%) and twenty-five percent (25%) if
the
Board or the Comptroller of the Currency, the FDIC, or the Federal Reserve
Bank
have made a determination that such acquisition constitutes or will constitute
control of Bancorp or Bank. The term "person" refers to an individual,
corporation, bank, bank holding company, or other entity, but excludes any
Employee Stock Ownership Plan established for the benefit of employees of
Bancorp or any of its subsidiaries or other affiliates.
8. Post
Termination Covenants.
8.1 Non-Compete
Covenants.
If
Employee terminates his employment without cause, or if Employee's employment
is
terminated by Bancorp for cause, then for one year from the date of such
termination Employee will not, without the prior written consent of
Bancorp:
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8.1.1 Undertake
full or part-time work, either as an employee or as a consultant, for another
financial institution if such work is to be done, in whole or in part, in or
from an office or other work site in Yamhill, Wasco, Hood River, Jefferson,
Deschutes, Xxxxxxx or Xxxxxxx Counties, Oregon, in Klickitat County, Washington,
or in any other county in Oregon or Washington in which Bancorp or any of its
affiliates has a place of business at the time of termination; or
8.1.2 Hire
for
any financial institution or other employer (including himself) any employee
of
Bancorp or any of its affiliates, or directly or indirectly cause such an
employee to leave his or her employment to work for another employer, if such
employee is to work in or from an office or other work site in Yamhill, Wasco,
Hood River, Jefferson, Deschutes, Xxxxxxx or Xxxxxxx Counties, Oregon, in
Klickitat County, Washington, or in any other county in Oregon or Washington
in
which Bancorp or any of its affiliates has a place of business at the time
of
termination.
8.2 Liquidated
Damages for Breach of Non-Compete Covenants; Other Remedies.
If
Employee breaches the covenants of Section 8.1, Employee shall be liable to
Bancorp for liquidated damages equal to the lesser of (i) $18,000, or (ii)
$1,500 multiplied by the number of months (including fractions thereof) between
the date of breach and one year from the date of Employee’s termination of
employment. For example, if the date of breach occurs six months after the
date
of Employee’s termination, liquidated damages shall be $9,000 (6 x $1,500). The
parties agree that Bancorp’s actual money damages upon Employee’s breach will be
difficult to compute, and further agree that the liquidated damages formula
provided herein reasonably represents Bancorp’s actual money damages. Employee
shall pay the liquidated damages required hereunder within ten (10) days of
the
date Bancorp makes written demand for such payment. Nothing herein shall
preclude Bancorp from enforcing any other legal or equitable remedies it may
have upon Employee’s breach, including injunctive relief. Such other remedies
may be enforced in addition to Bancorp’s right to liquidated damages under this
Section.
8.3 Limitation.
The
covenants in Sections 8.1 and 8.2 do not apply if Employee terminates his
employment for cause, if Employee terminates his employment for any reason
within ninety (90) days after the effective date of a change of control within
the meaning of Section 7 of the Agreement, or if Employee's employment is
terminated by Bancorp without cause.
8.4 Additional
Covenants.
The
following provisions shall apply and be binding on Employee following Employee’s
termination of employment under all circumstances, whether termination occurred
with cause, without cause, following illness or disability, because of a change
of control, or for any other reason:
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8.4.1 Employee
shall fully cooperate in the defense or prosecution of any litigation arising
from or relating to matters about which Employee has knowledge based on his
employment or other work, paid or unpaid, for Bancorp and its affiliates. To
the
extent allowed by law Employee shall receive reasonable compensation in
connection with his performance under this Section 8.4.1;
8.4.2 Employee
shall at all times keep all confidential and proprietary information gained
from
his employment by Bancorp, or from other previous, present or subsequent paid
or
unpaid work for Bancorp and its affiliates, in strictest confidence, and will
not disclose or otherwise disseminate such information to anyone, other than
to
employees of Bancorp or its affiliates, except as may be required by law,
regulation or subpoena; and
8.4.3 Employee
shall not take or use for any purpose confidential or proprietary information
of
Bancorp or its affiliates, including without limitation customer or potential
customer lists and trade secrets.
8.5 Advancement
of Employee. Employee
acknowledges and agrees that the Agreement constitutes a bona fide advancement
of Employee with the Employer under ORS 653.295 in several respects, including
without limitation an increase in base salary and benefits.
9. Miscellaneous.
9.1 Recitals;
Law; Amendments.
Each and
every portion of the Agreement is contractual and not a mere recital, and all
recitals shall be deemed incorporated into the Agreement. The Agreement shall
be
governed by and interpreted according to Oregon law and any applicable federal
law. The Agreement may not be amended except by a subsequent written agreement
signed by all parties hereto.
9.2 Entire
Agreement.
The
Agreement contains the entire understanding and agreement of the parties with
respect to the parties' relationship, and all prior negotiations, discussions
or
understandings, oral or written, are hereby integrated herein. No prior
negotiations, discussions or agreements not contained herein or in such
documents shall be binding or enforceable against the parties.
9.3 Counterparts.
The
Agreement may be signed in several counterparts. The signature of one party
on
any counterpart shall bind such party just as if all parties had signed that
counterpart. Each counterpart shall be considered an original. All counterparts
of the Agreement shall together constitute one original document.
9.4 Successors
and Assigns. All
rights and duties of Bancorp under the Agreement shall be binding on and inure
to the benefit of Bancorp’s successors and assigns, including any person or
entity which acquires a controlling interest in Bancorp and any person or entity
which acquires all or substantially all of Bancorp’s assets. Bancorp and any
such successor or assign shall be and remain jointly and severally liable to
Employee under the Agreement. Employee may not assign or transfer Employee's
rights or interests in or under the Agreement other than by a will or by the
laws of descent and distribution. The Agreement shall inure to the benefit
of
and be enforceable by Employee's estate or legal representative.
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9.5 Waiver.
Any
waiver by any party hereto of any provision of the Agreement, or of any breach
thereof, shall not constitute a waiver of any other provision or of any other
breach. If any provision, paragraph or subparagraph herein shall be deemed
invalid, illegal or unenforceable in any respect, the validity and
enforceability of the remaining provisions, paragraphs and subparagraphs shall
not be affected.
9.6 Arbitration.
Any
dispute, controversy, claim or difference concerning or arising from the
Agreement or the rights or performance of either party under the Agreement,
including disputes about the interpretation or construction of the Agreement,
shall be settled through binding arbitration in the State of Oregon and in
accordance with the rules of the American Arbitration Association. A judgment
upon the award rendered in such arbitration may be entered in any court of
competent jurisdiction.
9.7 Employee
Handbook. Employee
agrees to be bound by the terms and conditions of any employee handbook of
Bancorp or its affiliates as may be in effect from time to time, except that
in
the event of a conflict between such employee handbook and the Agreement, the
Agreement shall control.
9.8 Captions.
All
captions, titles and headings in the Agreement are for convenience only, and
shall not be construed to limit any term of the Agreement.
9.9 Definition.
When
used herein in reference to a corporation, “affiliate” shall mean, without
limitation, any parent or subsidiary of the corporation and any entity
controlled by the corporation.
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9.10 Exceptions.
The
Bancorp Board or the management of Bancorp may, in its discretion, make
exceptions to one or more of the conditions contained in the Agreement, provided
that any such exceptions must be approved in writing.
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