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CONFIDENTIAL
EXECUTIVE SEVERANCE AGREEMENT
This Agreement is made and entered into by and between WHIDBEY ISLAND BANK,
a Washington banking corporation (hereinafter called the "Bank") and __________
___________ (hereinafter called the "Executive").
WHEREAS, the Executive is employed by the Bank in a key managerial
capacity, presently holding the position of ____________________________ of the
Bank; and
WHEREAS, the Bank wishes to ensure that the Executive will be available to
assist the Board of Directors of the Bank (the "Board") in responding to and,
if deemed appropriate by the Board, completing any proposed change in control
of the Bank;
NOW, THEREFORE, the Bank and the Executive agree to the following
provisions:
1. Change in Control. For purposes of this Agreement, the term "Change
in Control" shall mean a change "in the ownership or effective control" or "in
the ownership of a substantial portion of the assets" of the Bank, with the
quoted phrases of this sentence having the same meaning as when used in Section
280G(b)(2)(A) of the Internal Revenue Code.
2. Commitment of Executive. In the event that any person extends any
proposal or offer which could result in a Change in Control, the Executive
will, at the Board's request, assist the Board in evaluating such proposal or
offer. Further, the Executive specifically agrees that he will not resign his
position with the Bank during any period from the receipt of a specific Change
in Control proposal up to the closing or termination of the transaction
contemplated by the proposal.
3. Severance Payment Events. In the event of --
(i) the voluntary or involuntary termination (excluding termination due to
death, disability or commission of a crime) of the Executive's employment
with the Bank within three (3) years after a Change in Control; or
(ii) the involuntary termination (excluding termination due to death,
disability, or commission of a crime) by the Bank of the Executive's
employment on or after the date that any party announces (or should
announce) any prospective Change in Control transaction, if a Change in
Control does occur within Fifteen (15) months of such termination,
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then the Bank shall pay to Executive a severance payment, in the amount
determined pursuant to the next paragraph, payable on the later of the date of
termination or the date of the change in control.
4. Amount of the Severance Payments. The severance payment shall be an
amount equal to _______________ (_____) times the highest compensation (as
reportable on the Executive's IRS W-2 form) received by the Executive from the
Bank during any of the most recent three (3) calendar years ending before, or
simultaneously with, the date on which the Change in Control occurs; provided,
however, that the severance payment shall be less than the amount which would
cause the payment to be a "parachute payment" as defined in section
280G(b)(2)(A) of the Internal Revenue Code; and provided, further, that such
severance payment shall be reduced by any compensation (as reportable on the
Executive's IRS W-2 form) received from the Bank or its successor in interest
after the Change in Control.
5. Revocability. This Agreement may be terminated unilaterally by the
Bank, but (i) only as of a prospective effective date which follows by at least
15 months the date that written notice is given to Executive that the Bank, by a
vote of at least a majority of its directors, has determined to terminate the
Agreement, and (ii) only if no Change in Control occurs prior to such effective
date; provided, however, that this Agreement automatically terminates if, at any
time prior to the closing of a Change in Control transaction, the Executive (a)
voluntarily terminates his employment with the Bank, or (b) is terminated by the
Bank for reasonable cause (i.e. acts of dishonesty, disloyalty, illegality or
moral turpitude adversely impacting the Bank; repeated failure or refusal to
follow reasonable directions from the Board following a written warning). If not
earlier terminated, this Agreement will terminate three (3) years after any
Change in Control occurs.
IN WITNESS WHEREOF, the parties have executed this Agreement this ____ day
of _______, ____.
WHIDBEY ISLAND BANK EXECUTIVE
By
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Xxxxx Xxxxxxx _____________________________
Chairman of the Board _____________________________
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