SEPARATION AND RELEASE AGREEMENT
EXHIBIT 10.2
SEPARATION AND RELEASE AGREEMENT
THIS
SEPARATION AGREEMENT (“Agreement”), dated as of July 15, 2002, is by and between J. Xxxxx Xxxxxx (“Xxxxxx”), and Pacific Continental Bank, an Oregon state-chartered bank (the “Bank”), and Pacific Continental Corporation
(the “Corporation”).
Xxxxxx, the Bank and the Corporation are parties to an Employment Agreement dated
April 24, 2001 (the “Employment Agreement”). The parties desire that Xxxxxx’x employment with the Bank and the Corporation terminate effective on July 15, 2002 and intend for this Agreement to fully satisfy and supercede the
provisions set forth in Sections 1 through 9(f) of the Employment Agreement. However, Sections 9(g) through 16 of the Employment Agreement shall remain in full force and effect.
In exchange for the mutual promises and covenants contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged,
Xxxxxx, the Bank and the Corporation agree as follows:
1. Termination of
Employment. The parties agree that Xxxxxx’x employment as President and Chief Executive Officer of the Bank and Corporation, and his related service on all official and unofficial committees or bodies of the Bank and
the Corporation in his capacity as an officer of the Bank and the Corporation terminated effective as of July 15, 2002. Xxxxxx hereby resigns from the Board of Directors of the Bank and the Corporation effective as of July 15, 2002.
2. Severance Pay. As severance pay, the Bank and the Corporation shall
continue to pay to Xxxxxx his current base salary, less normal tax withholdings, in accordance with the Bank’s normal payroll schedule through July 15, 2003, with the final payment to be made on July 15, 2003.
3. Vacation. Concurrently with the execution of this Agreement, Bank shall pay to
Xxxxxx $24,175, approximately the cash of value of all vacation accrued but unused through July 15, 2002.
4. Bonus. In January 2003 (but in any event not later than the date the Bank and/or Corporation pays related bonuses to its other officers), the Bank and Corporation will pay to Xxxxxx
$177,500, the amount agreed to between the parties as satisfaction of the bonus payment required in Section 6 of the Employment Agreement.
5. Bank Automobile. The Bank hereby sells to Xxxxxx the 1998 Suburban that the Bank currently furnishes for his use and will, promptly after the execution of
this Agreement, transfer title to such vehicle to Xxxxxx free and clear of all liens or encumbrances (other than liens attributable to Xxxxxx). The parties agree that the value for vehicle is $2,500; such amount shall be deducted from the amount
payable by the Bank and/or the Corporation to Xxxxxx under the terms of this Agreement. The parties agree that Bank and Corporation shall no longer be responsible for any charges relating to the Suburban, including insurance, maintenance and fuel,
after July 15, 2002.
6. Club
Memberships. During his employment, the Bank has provided Xxxxxx with memberships to the Xxxxxx Country Club, the Downtown Athletic Club, and the Arlington Club in Portland (the “Memberships”). In order to enable
Xxxxxx to maintain the Memberships through July 31, 2003, concurrently with the execution of this Agreement the Bank and/or the Corporation will pay to Xxxxxx a lump sum of $6,339 ($1,605—Downtown Athletic Club; $3,888—Eugene Country Club
(including food allowance); and $846—Arlington Club). The Bank and/or the Corporation will have no further obligations to Xxxxxx with respect to the Memberships.
7. Sporting Tickets. For the 2002-2003 University of Oregon sports season, the Bank and Corporation will permit
Xxxxxx to use four (4) football season tickets and two (2) basketball season tickets (collectively, the “Tickets”). With regard to the football tickets, the Bank will be entitled to initially select four (4) tickets and Xxxxxx will be
entitled to select his four (4) tickets from the remaining tickets available to the Bank and the Corporation. With regard to the basketball tickets, Xxxxxx will be entitled to the two (2) tickets that he used during the 2001-2002 season. The Bank
will deliver the Tickets to Xxxxxx promptly after receipt thereof. At the conclusion of the 2002-2003 sports season, the Bank and/or the Corporation will use their best efforts to transfer the rights to the Tickets to Xxxxxx and will thereafter have
no further obligations to Xxxxxx with respect to the Tickets. If the Bank and/or the Corporation are unable to transfer the Tickets to Xxxxxx, Xxxxxx will be entitled to continued use of the Tickets, so long as Xxxxxx pays to the Bank or the
Corporation, prior to the start of the applicable sporting season, (a) the amount that the Bank and/or the Corporation are required to pay for the Tickets; and (b) the pro rata portion that the Bank and/or the Corporation are required to contribute
to the Duck Fund to be eligible to purchase season tickets.
8. Health, Dental, Life
and Disability Coverage. The Bank and Corporation will continue Xxxxxx’x participation in the group health, dental, life and disability insurance plans, or, if that is not possible, the Bank and Corporation shall pay
on a monthly basis an amount equivalent to the monthly cost of premiums for Xxxxxx’x health, dental, life and disability insurance continuation coverage on a monthly basis through July 31, 2003, plus any amount equal to cover any applicable
income taxes to Xxxxxx, unless he obtains such coverages or is eligible to obtain such coverages sooner from another employer at no cost to Xxxxxx. Xxxxxx agrees to promptly notify the Bank and Corporation when he obtains such other health, dental,
life or disability insurance or becomes eligible to do so. After July 31, 2003, Xxxxxx will be entitled to extend COBRA benefits an additional six months at his own expense. Through June 1, 2003, the Bank and/or the Corporation will continue to pay
the COBRA benefits for Xxxxxx’x former spouse.
9. Expense
Reimbursement. Xxxxxx acknowledges that he has presented and been reimbursed for all expense account charges to which he is entitled, and that the Bank and Corporation have no further obligation for any such expenses
incurred by him.
10. Return of Property. Xxxxxx
acknowledges that he has taken all of his personal property from Bank premises, and confirms that he has returned to the Bank and Corporation any of its property, including but not limited to: keys, computer equipment, software, customer lists,
documents, files and correspondence. The Bank and Corporation acknowledge that Xxxxxx may
2
retain originals and/or copies of any agreements, correspondence and/or other
communications personal to him or to which he is a party.
11. Stock
Options. The Company agrees to accelerate the vesting on 2,200 of the options granted to Xxxxxx in September 2000 (such that a total of 6,600 of such options are now vested and fully exercisable) and 1,650 of the options
granted in August 2001 (such that a total of 3,300 of such options are now vested and fully exercisable). Xxxxxx acknowledges that, pursuant to the Company’s Employee Stock Option Plan, all of his vested stock options will terminate if not
exercised by Xxxxxx within ninety (90) days of the date Xxxxxx’x employment terminated.
12. Triggering Event. The parties agree that for purposes of Section 10(a)(3) of the Employment Agreement termination of Xxxxxx’x employment relationship with the Bank and Corporation
shall be deemed a termination of Xxxxxx’x employment by the Bank “without Cause” and that upon the occurrence of a Triggering Event as described in such Section 10(a)(3), Xxxxxx will be entitled to receive the payment and benefits
described in Section 10(b) of the Employment Agreement. The parties further agree that, notwithstanding anything that may be contained herein or in the Employment Agreement to the contrary, Xxxxxx’x rights under Section 10 of the Employment
Agreement may not be further modified, amended or terminated without the express written agreement of Xxxxxx.
13. Nondisparagement. The parties agree that they shall refrain (and the Bank and Corporation shall cause its officers, directors and employees to refrain) from making any remarks or
statements about each other, whether oral or written, that disparage the other party’s character, goodwill or reputation.
14. Release by Xxxxxx. Xxxxxx hereby releases and forever discharges the Bank and Corporation and its proposed parent corporation, directors, officers,
attorneys and other affiliates of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, and any and all claims, demands and liabilities whatsoever of every name and nature, both in law
and in equity, against the Bank and Corporation or its parent or affiliates or their successors and assigns which Xxxxxx now has or ever had to this date, including without limitation all rights and any claims under any state or federal
discrimination law; except that this paragraph does not release the Bank and Corporation’s obligations under this Agreement, the Bank and Corporation’s under Sections 9(g) through 16 of the Employment Agreement, or any claims Xxxxxx may
have under the Age Discrimination Employment Act of 1967, as amended, that may arise after the effective date of this Agreement.
15. Cooperation. Xxxxxx further agrees that, for a period of four years after the date of this Agreement, at the reasonable written request of the Bank and
Corporation, he will, without compensation, reasonably cooperate with the Bank and Corporation with respect to any actual or potential litigation, investigation, legal proceedings or dispute arising out of or in connection with the financial
affairs, legal affairs and/or business matters of the Bank and Corporation within his knowledge, including providing truthful and accurate information, to his knowledge, concerning such matters, testifying in regards to such matters and/or appearing
in person with respect to such matters (at times and places reasonably acceptable to Xxxxxx); provided that (a) the Bank and Corporation shall be responsible for any reasonable travel and/or other out-of-
3
pocket costs or expenses that Xxxxxx may reasonably incur in connection
therewith, and (b) after the one-year anniversary of this Agreement (July 15, 2003), in the event that such cooperation requires that Xxxxxx travel out of town or spend more than one business day on any such matter, the Bank and Corporation shall
also compensate Xxxxxx at the rate of $100 per hour for such time, up to a maximum of $1,000 per day. For his actions as a director of the Bank and the Corporation, the Bank and Corporation agree to indemnify and hold harmless Xxxxxx to the full
extent permitted by the Bank’s and the Corporation’s Articles of Incorporation. With regard to the indemnification of Xxxxxx, the parties will enter into an indemnification agreement, substantially in the form attached as Exhibit A to this
Agreement.
16. Release by the Bank and Corporation. The
Bank and Corporation, on behalf of themselves and their respective parent corporations, subsidiary corporations, directors, officers, attorneys and other affiliates, and their respective successors, heirs and assigns, each hereby releases and
forever discharges Xxxxxx, his attorneys and other affiliates, and their respective successors, heirs, assigns, of and from all debts, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, damages, and any and all
claims, demands and liabilities whatsoever of every name and nature, both in law and in equity, against Xxxxxx or his attorneys and other affiliates, and their respective successors, heirs, assigns, which the Bank, Corporation, or any of their
respective parent corporations, subsidiary corporations, directors, officers, attorneys and other affiliates, or their respective successors, heirs and assigns, now has or ever had to this date; except that this paragraph does not release any claims
in respect of fraud, larceny or misappropriation of funds by Xxxxxx or any of Xxxxxx’x obligations under this Agreement or under Sections 9(g) through 16 of the Employment Agreement, that may arise after the effective date of this Agreement.
17. OWBPA Compliance. Xxxxxx acknowledges that his
assent to this Agreement’s terms is wholly voluntary and that he has retained and had the opportunity to consult with counsel and that he fully understands said Agreement. Xxxxxx acknowledges that he has been given a period of at least
twenty-one (21) days to consider this Agreement. Xxxxxx may revoke this Settlement and Release Agreement at any time during the seven (7) day period after he signs it. This Agreement shall not become effective until said revocation period has
expired.
18. Continuing Provisions of Employment
Agreement. The parties acknowledge and agree that the provisions of Sections 9(g) through 16 of the Employment Agreement shall survive the termination of Xxxxxx’x employment relationship with the Bank and Corporation.
19. Entire Agreement. Except for Sections 9(g) through
16 of the Employment Agreement, this Agreement sets forth the entire agreement between Xxxxxx and the Bank and Corporation. Xxxxxx acknowledges that in considering whether to sign this Agreement he has not relied upon any representation, written or
oral, not set forth herein.
20. Modifications and
Waivers. No variations or modifications hereof shall be deemed valid unless reduced to writing and signed by the parties. No waiver, express or implied, of any breach of any covenant or agreement shall ever be held or
construed as a waiver of any other breach of the same or any other covenant or agreement.
4
21. Governing Law. This
Agreement shall be governed by and construed under the laws of Oregon. This Agreement was made and executed in Oregon, and shall be deemed an Oregon contract.
22. Venue. Any dispute arising out of this Agreement may only be litigated in a court of competent jurisdiction in
Oregon, and the parties expressly waive any rights they may have to have any dispute litigated in any jurisdiction other than Oregon.
23. Notices. Any notices given pursuant to this Agreement shall be in writing and shall be given by either hand delivery, overnight courier (Federal
Express or similar courier service) or certified mail, return receipt requested, addressed as follows:
| To the Bank and Corporation: |
Pacific Continental Bank | |
| Attention: Xxx Xxxxx, President and CEO | ||
| 000 Xxxx 0xx
Xxxxxx | ||
| Xxxxxx, Xxxxxx 00000 |
| To Xxxxxx: |
J. Xxxxx Xxxxxx | |
| 0000 Xxxxxx Xxxx. | ||
| Xxxxxx, Xxxxxx 00000 |
or to such other address of which notice has been given in
accordance with this provision.
24. Legal Fees. All
parties are responsible for their own costs and expenses, including legal fees.
25. Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of the Bank and Corporation and its respective successors and assigns, and Xxxxxx, and his
respective heirs, executors, administrators, successors and assigns.
26. Severability. The parties intend this Agreement to be enforced as written. However, (i) if any portion or provision of this Agreement shall to any extent be declared illegal or
unenforceable by a duly authorized court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this Agreement shall be valid and be enforceable to the fullest extent permitted by law; and (ii) if any provision, or any part thereof, is held to be unenforceable because of the duration
of such provision or the area covered thereby, the Bank and Corporation and Xxxxxx agree that the court making such determination shall have the power to reduce the duration and/or area of such provision, and/or to delete specific words and phrases
(“blue-penciling”) and in its reduced or blue-penciled form such provisions shall then be enforceable and shall be enforced.
27. Captions. All captions in this Agreement are intended solely for the convenience of the parties, and none shall be deemed to affect the meaning or
construction of any provision hereof.
5
28. Counterparts;
Facsimile. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same document. Delivery of an executed signature
page to this Agreement shall be as effective as delivery of a manually signed counterpart.
[signatures appear on
following page]
6
IN WITNESS WHEREOF, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT AS OF THE DATE
FIRST ABOVE WRITTEN.
| By: |
/s/ J. XXXXX
XXXXXX | |
| J. Xxxxx Xxxxxx |
| PACIFIC CONTINENTAL BANK | ||
| By: |
/s/ XXX XXXXX | |
| Xxx Xxxxx President &
CEO | ||
| PACIFIC CONTINENTAL CORPORATION | ||
| By: |
/s/ XXX XXXXX
| |
| Xxx Xxxxx President &
CEO | ||
7
