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EXHIBIT 10.3
CONFIDENTIAL
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is dated as of July 16, 1999 (the
"Effective Date"). The parties to the Agreement ("Parties"') are WEST COAST
BANCORP, an Oregon corporation ("Bancorp" or "Company"), and XXXXXX XXXXXX
("Executive").
A. Executive is presently Bancorp's Chief Operating Officer and has
entered into a Salary Continuation Agreement dated April 1, 1999 (the "Salary
Continuation Agreement") governing the respective rights and obligations of
Executive and Bancorp in the event of a Change in Control (as defined in the
Salary Continuation Agreement) in Bancorp.
B. In connection with the recent resignation of the President and Chief
Executive Officer of Bancorp and its wholly owned subsidiary, West Coast Bank
(the "Bank"), Bancorp wishes to appoint Executive as the acting President and
Chief Executive Officer of Bancorp and the Bank, under the terms and conditions
of this Agreement.
C. Under the terms of this Agreement, Executive wishes to serve as the
acting President and Chief Executive Officer of Bancorp and West Coast Bank for
the period provided in this Agreement.
D. The parties acknowledge that while Executive is employed under this
Agreement, the Salary Continuation Agreement remains in full force and effect.
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 (the "Term") shall commence as of the Effective
Date and shall continue until such time as a permanent President and Chief
Executive Officer for Bancorp and West Coast Bank is hired, but not more
than one (1) year from the date hereof.
2. EMPLOYMENT. Bancorp will employ Executive during the Term, and Executive
accepts such employment by Bancorp, on the terms and conditions set forth
in this Agreement. Executive's title will be "Acting President and Chief
Executive Officer."
3. DUTIES. Executive will faithfully and diligently perform the duties
assigned to Executive from time to time by Company's Chairman, consistent
with the duties that have been normal and customary to the position of
President and Chief Executive Officer. Executive will use his best efforts
to perform his duties and will devote full time and attention to these
duties during working hours. Executive will report directly to Bancorp's
board of directors. Executive acknowledges that as Acting President and
Chief Executive Officer, he is expected to facilitate and accommodate
management succession, as well as any other management objectives of
Company. Executive will
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assume any additional positions, duties, and responsibilities as may
reasonably be requested of him with or without additional compensation, as
appropriate and consistent with this Section 3.
4. SALARY; SIGNING BONUS. Initially, Executive will receive a salary of
$150,000 per year ("Base Salary"), to be paid in accordance with Bancorp's
regular payroll schedule. Upon execution of this Agreement, Executive will
receive a gross cash bonus of $25,000. Upon Executive's completion of the
Term or earlier termination as provided in Section 9, Executive will
receive an additional gross cash bonus of $25,000 (the "Supplemental
Bonus") as set forth in Section 9.
5. SEVERANCE PAYMENT. Subject to subparagraph (c) below, if, after
Executive's completion of the Term, Executive's employment with Bancorp is
terminated without Cause or Executive resigns for Good Reason (as such
terms are defined in Section 10), Bancorp will pay Executive a severance
payment in the amount determined pursuant to subsection (a) below (the
"Severance Payment"), payable on the date of termination.
a) The Severance Payment shall be an amount equal to the Payment
Multiple (defined below) multiplied by one-twelfth of Executive's
compensation as reported on Executive's IRS Form W-2 for the most
recent calendar year. The "Payment Multiple" shall be twenty-four
(24).
b) Notwithstanding anything in this Agreement to the contrary, the
Severance 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 of 1986, as amended.
c) If Executive's employment with Bancorp is terminated in connection
with a Change in Control entitling Executive to receive the Salary
Continuation Payment under the Salary Continuation Agreement,
Executive shall not be entitled to receive the Severance Payment
hereunder.
6. INCENTIVE COMPENSATION. Bancorp's board of directors will determine the
amount of additional bonus, if any, to be paid by Bancorp to Executive
during the Term. In making this determination, Bancorp's board of
directors will consider factors such as Executive's performance of his
duties and the safety, soundness, and profitability of Bancorp.
Executive's bonus, if any, will reflect Executive's contribution to the
performance of Bancorp during the Term.
7. INCOME DEFERRAL AND BENEFITS. Subject to eligibility requirements and in
accordance with and subject to any policies adopted by Bancorp's board of
directors with respect to any benefit plans or programs, Executive will be
entitled to receive benefits similar to those offered to other officers of
Bancorp and its subsidiaries with position and duties comparable to those
of Executive. Bancorp does not, through this Agreement, obligate itself to
make any particular benefits available to its employees or executive
officers.
8. BUSINESS EXPENSES. Bancorp will reimburse Executive for ordinary and
necessary expenses (including, without limitation, travel, entertainment,
and similar expenses) incurred in performing and promoting Bancorp's
business. Executive will present from
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time to time itemized accounts of these expenses, subject to any limits of
Bancorp policy or the rules and regulations of the Internal Revenue
Service.
9. TERMINATION.
(a) Termination for Cause. If, before the end of the Term, Bancorp
terminates Executive's employment under this Agreement for Cause (defined
below), Bancorp will pay Executive the Base Salary earned and expenses
reimbursable under this Agreement incurred through the date of Executive's
termination, but Executive will not be entitled to receive the Supplemental
Bonus.
(b) Termination without Cause. If, before the end of the Term, Bancorp
terminates Executive's employment under this Agreement without Cause, Bancorp
will pay Executive the Supplemental Bonus.
(c) Completion of Term. If this Agreement terminates due to expiration of
the Term, whether by passage of time or the hiring of a permanent President and
Chief Executive Officer, Bancorp will pay Executive the Supplemental Bonus.
(d) Death or Disability. Executive's employment with Bancorp under this
Agreement terminates (1) if Executive dies or (2) if Executive becomes Disabled,
unless with reasonable accommodation Executive could continue to perform his
duties under this Agreement and making these accommodations would not pose an
undue hardship on Bancorp. If termination occurs under this Section 9(d),
Executive or his estate will be entitled to receive only the compensation and
benefits earned and expenses reimbursable through the date this Agreement
terminated.
(e) Return of Company Property. If and when Executive ceases, for any
reason, to be employed by Bancorp, Executive must return to Bancorp all keys,
pass cards, identification cards and any other property of Bancorp. At the same
time, Executive also must return to Bancorp all originals and copies (whether in
hard copy, electronic or other form) of any documents, drawings, notes,
memoranda, designs, devices, diskettes, tapes, manuals, and specifications which
constitute proprietary information or material of Bancorp. The obligations in
this paragraph include the return of documents and other materials which may be
in Executive's desk at work, in Executive's car or place of residence, or in any
other location under Executive's control.
10. 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;
(ii) Conviction of a crime in connection with such duties; or
(iii) Conduct demonstrably and significantly harmful to Company as
determined in the reasonable discretion of the board of directors of
Bancorp.
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(b) Disabled. "Disabled" 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) Good Reason. "Good Reason" shall mean any of the following:
(i) Substantial diminution of Executive's duties;
(ii) Substantial diminution of Executive's compensation; or
(iii) Significant relocation, where Significant means a change of
more than 50 miles in the Executive's commute if the Executive
does not move.
11. SALARY CONTINUATION AGREEMENT. This Agreement in no way affects or amends
the Salary Continuation Agreement, which remains in full force and effect.
12. WITHHOLDING. All payments required to be made by Company hereunder to the
Executive shall be subject to the withholding of such amounts, if any,
relating to tax and other payroll deductions as Company may reasonably
determine should be withheld pursuant to any applicable law or regulation.
13. ASSIGNABILITY. Company 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 Company may hereafter merge or consolidate or to which
Company 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 Company hereunder as
fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights hereunder. The Executive may
not assign or transfer this Agreement or any rights or obligations
hereunder.
14. 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
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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) Survival. The severance payment provisions of Section 5 and the
withholding provisions of Section 12 shall survive any termination
of this Agreement.
f) 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.
g) Counsel Review. Executive acknowledges that he has had the
opportunity to consult with independent counsel with respect to the
negotiation, preparation and execution of this Agreement.
h) 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.
i) 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 Xxxx X. Xxxxxx
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Its: Chariman of the Board
EXECUTIVE:
/s/ Xxxxxx XxXxxx
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XXXXXX XXXXXX
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