Columbia River Bank —
Exhibit 10.26
2008 EMPLOYMENT AGREEMENT
Columbia River Bank —
This Employment Agreement (the “Agreement”) is made and entered into this 16th day of April,
2008 by and between Columbia River Bank, an Oregon corporation (“Bank”) and
(“Employee”).
RECITALS
(1) Bank is a state-chartered Oregon financial institution, and is the wholly owned subsidiary
of Columbia Bancorp (“Bancorp“). Bancorp’s principal office is at 000 Xxxx Xxxxx Xxxxxx, Xxxxx
000, Xxx Xxxxxx, Xxxxxx 00000.
(2) Bank desires to employ Employee as an officer of Bank on the terms and conditions set
forth herein.
Now, therefore, it is agreed:
1. Relationship and Duties.
1.1 Employment and Title. Bank shall employ Employee as an officer of Bank with such title as
the Chief Executive Officer of the Bank shall designate. 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 Chief
Executive Officer of the Bank and 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 “Bank” shall be deemed to also refer to and
include Bancorp 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 the Bank. 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
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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.
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 Bank, whether initiated by Bank 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 Bank 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 Bank shall not be unreasonable
or arbitrary, and provided further that prior to effecting a dismissal under this Section (iv) Bank
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 Bank with or without
cause by giving thirty (30) days written notice of termination. “Cause” as used herein shall
include Bank’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 Bank, and as a member
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of any board of directors or board committees of Bancorp or its affiliates if Employee is a member
thereof at the time of termination.
3.5 Payment on Termination. If Employee’s employment is terminated by Employee with or
without cause, or by Bank 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
Bank 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 Bank 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 Bank 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 Bank 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 Performance Bonus. If Employee’s employment is terminated by Employee with cause, or by
Bancorp without cause, Employee shall be paid, in addition to the amounts payable under Sections
3.5 and 3.6 of the Agreement: (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. 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.
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 , payable in equal bimonthly 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 Bank during such calendar year. Bonus compensation shall be subject to any
deductions required by law. The Bank or
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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 Bank 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 the Bank 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 Bank or its affiliates relating to stock options, stock purchases, profit sharing, group life
insurance, medical coverage, education and other retirement or employee benefits that Bank or its
affiliates may adopt for the benefit of employees.
5.2 Additional Benefits. Employee shall be eligible to participate in any other benefits
which may be or become applicable to Bank’s executive employees of similar rank. In addition,
Employee shall be entitled to: (i) a reasonable expense account for use in connection with Bank
business; and (ii) any other benefits which in Bank’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.
5.3 Car Allowance. Employee shall receive the use of Bank-owned vehicle in accordance with Bank
policies.
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 or Bank
management in effect from time to time for employees of comparable rank.
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 Bank 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
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receive any additional compensation from Bank 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 Bank 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 Bank 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, Bank 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 Bank; 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.
7.4 Termination Without Cause. If following a change of control Bank terminates Employee’s
employment within two (2) years of the effective date of the
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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 Bank
without cause, and Employee shall receive all payments and benefits due to Employee on termination
under Sections 3.5 and 3.6 of 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 Bank for cause, then for one year from the date of such
termination Employee will not, without the prior written consent of Bank:
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
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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 Bank 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 Bank’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 Bank’s actual money damages.
Employee shall pay the liquidated damages required hereunder within ten (10) days of the date Bank
makes written demand for such payment. Nothing herein shall preclude Bank 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 Bank’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 Bank 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:
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 Bank 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 Bank, or from other previous, present or subsequent paid or unpaid work for
Bank and its affiliates, in strictest confidence, and
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will not disclose or otherwise disseminate such information to anyone, other than to employees of
Bank 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 Bank 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 Bank under the Agreement shall be
binding on and inure to the benefit of Bank’s successors and assigns, including any person or
entity which acquires a controlling interest in Bank and any person or entity which acquires all or
substantially all of Bank’s assets. Bank 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.
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
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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 Bank 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.
9.10 Exceptions. The Bank Board or the management of Bank 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.
9.11 Prior Contracts. The Agreement replaces and supersedes all prior written employment
agreements and amendments thereof between the parties.
Date: |
COLUMBIA RIVER BANK
By: |
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Title: |
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