EXHIBIT 10.2
CHANGE IN CONTROL AGREEMENT
EFFECTIVE DATE: JANUARY 1, 2004
This CHANGE IN CONTROL AGREEMENT ("Agreement") is made by WEST COAST BANCORP
("Bancorp") and WEST COAST BANK ("Bank") (collectively "Company") XXXXXX X.
XXXXXXXX ("Executive").
RECITALS
A. The Executive is employed by Bank as its President and Chief Executive
Officer.
B. The Board recognizes that a possible or threatened Change in Control
may result in key management personnel being concerned about their
continued employment status or responsibilities. In addition, they may
be approached by other companies offering competing employment
opportunities. Consequently, they will be distracted from their duties
and may even leave the Company during a time when their undivided
attention and commitment to the best interests of the Company and
Bancorp's shareholders would be vitally important.
C. The Company considers it essential to its best interests and those of
Bancorp's shareholders to provide for the continued employment of key
management personnel in the event of a Change in Control.
D. Therefore, in order to--
(1) Encourage the Executive to assist the Company during a Change
in Control and be available during the transition afterwards;
(2) Give assurance regarding the Executive's continued employment
status and responsibilities in the event of a Change in
Control; and
(3) Provide the Executive with Change in Control benefits
competitive with the Company's peers
--the parties agree on the following:
TERMS AND CONDITIONS
1. DEFINITIONS. Words and phrases appearing in this Agreement with initial
capitalization are defined terms that have the meanings stated below.
Words appearing in the following definitions which are themselves
defined terms are also indicated by initial capitalization.
(a) "BENEFICIAL OWNERSHIP" means direct or indirect ownership
within the meaning of Rule 13(d)(3) under the Exchange Act.
(b) "BOARD" means Bancorp's Board of Directors.
Page 1 CHANGE IN CONTROL AGREEMENT
(c) "CAUSE" means either:
(1) Any of the circumstances that qualify as grounds for
termination for cause under the Executive's
employment agreement as in effect at the time; or
(2) If no employment agreement is in effect at that time
or if the employment agreement in effect at that time
does not specify grounds for termination for cause,
any of the circumstances listed in subparagraph (A)
below shall qualify as "Cause" under this Agreement,
subject to the due process requirement of
subparagraph (B) below:
(A) Any of the following circumstances shall
qualify as "Cause:"
(i) Embezzlement, dishonesty or other
fraudulent acts involving the
Company or the Company's business
operations;
(ii) Material breach of any
confidentiality agreement or
policy;
(iii) Conviction (whether entered upon a
verdict or a plea, including a plea
of no contest) on any felony charge
or on a misdemeanor reflecting upon
the Executive's honesty;
(iv) An act or omission that materially
injures the Company's reputation,
business affairs or financial
condition, if that injury could
have been reasonably avoided by the
Executive; or
(v) Willful misfeasance or gross
negligence in the performance of
the Executive's duties provided,
however, that the Executive is
first given:
(I) Written notice by the
Committee specifying in
detail the performance
issues; and
(II) A reasonable opportunity
to cure the issues
specified in the notice.
(B) The Company may not terminate the
Executive's employment for Cause unless:
(i) The determination that Cause exists
is made and approved by two-thirds
of the Board;
(ii) The Executive is given reasonable
notice of the Board meeting called
to make that determination; and
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(iii) The Executive and the Executive's
legal counsel are given the
opportunity to address that meeting.
(d) "CHANGE IN CONTROL" means:
(1) Except as provided in subparagraph (B) below, an
acquisition or series of acquisitions as described in
subparagraph (A) below.
(A) The acquisition by a Person of the
Beneficial Ownership of more than 30% of
either:
(i) Bancorp's then outstanding shares of
common stock; or
(ii) The combined voting power of
Bancorp's then outstanding voting
securities entitled to vote
generally in the election of
directors;
(B) This paragraph (1) does not apply to any
acquisition:
(i) Directly from the Company;
(ii) By the Company; or
(iii) Which is part of a transaction that
satisfies the exception in paragraph
(3)(A), (B) and (C) below;
(2) The incumbent directors cease for any reason to be a
majority of the Board. The "incumbent directors" are
directors who are either:
(A) Directors on the Effective Date; or
(B) Elected, or nominated for election, to the
Board by a majority vote of the members of
the Board or the Nominating Committee of the
Board who were directors on the Effective
Date. However this subparagraph (B) does not
include any director whose election came as
a result of an actual or threatened election
contest regarding the election or removal of
directors or other actual or threatened
solicitation of proxies by or on behalf of a
Person other than the Board;
(3) Consummation of a merger, reorganization or
consolidation of Bancorp or the sale or other
disposition of substantially all of it assets, except
where:
(A) Persons who, immediately before the
consummation, had, respectively, a
Controlling Interest in and Voting Control
of Bancorp have, respectively, a Controlling
Interest in, and Voting Control of the
resulting entity;
Page 3 CHANGE IN CONTROL AGREEMENT
(B) No Person (other than the entity resulting
from the transaction or an employee benefit
plan maintained by that entity) has the
Beneficial Ownership of more than 30% of
either:
(i) The resulting entity's then
outstanding shares of common stock
or other comparable equity security;
or
(ii) The combined voting power of the
resulting entity's then outstanding
voting securities entitled to vote
generally in the election of
directors,
except to the extent that Person held that
Beneficial Ownership before the
consummation; and
(C) A majority of the members of the board of
directors of the resulting entity were
members of the Board at either the time:
(i) The transaction was approved by the
Board; or
(ii) The initial agreement for the
transaction was signed; or
(4) Approval by Bancorp's shareholders of its complete
liquidation or dissolution.
(e) "CHANGE IN CONTROL PROPOSAL" means any proposal or offer that
is intended to or has the potential to result in a Change in
Control.
(f) "CODE" means the Internal Revenue Code of 1986.
(g) "COMMITTEE" means the Compensation and Personnel Committee of
the Board.
(h) "CONTROLLING INTEREST" means Beneficial Ownership of more than
50% of the outstanding shares common stock of a corporation or
the comparable equity securities of a noncorporate business
entity.
(i) "DISABILITY" means that either the carrier of any
Company-provided individual or group long-term disability
insurance policy covering the Executive or the Social Security
Administration has determined that the Executive is disabled.
Upon the request of the Committee, the Executive will submit
proof of the carrier's or the Social Security Administration's
determination.
(j) "EFFECTIVE DATE" means January 1, 2004.
(k) "ERISA" means the Employee Retirement Security Act of 1974.
(l) "EXCHANGE ACT" means the Securities Exchange Act of 1934.
Page 4 CHANGE IN CONTROL AGREEMENT
(m) "GOOD REASON" means any one of the following:
(1) Any reduction in the Executive's salary or reduction
or elimination of any compensation or benefit plan
benefiting the Executive, which reduction or
elimination does not generally apply to substantially
all similarly situated employees of the Company or
such employees of any successor entity or of any
entity in control of Bancorp or the Bank;
(2) A relocation or transfer of the Executive's place of
employment to an office or location that is more than
35 miles from the Executive's then current place of
employment; or
(3) A material diminution in the Executive's
responsibilities, title or duties.
(n) "PERSON" means any individual, entity or group within the
meaning of Sections 13(d) and 14(d) of the Exchange Act, other
than a trustee or fiduciary holding securities under an
employee benefit plan of the Company.
(o) "TERMINATION EVENT" means any of the following events:
(1) The Executive terminates employment for Good Reason
within 36 months after a Change in Control;
(2) The Company terminates the Executive's employment
other than for Cause, Disability or death within 36
months after a Change in Control;
(3) The Company terminates the Executive's employment
before a Change in Control if:
(A) The termination is not for Cause, Disability
or death; and
(B) The termination occurs either on or after:
(i) The announcement by Bancorp, or any
other Person, that a Change in
Control is contemplated or
intended; or
(ii) The date a contemplated or intended
Change in Control should have been
announced under applicable
securities or other laws; or
(4) The date the Executive's continued employment begins
under Section 3(b).
(p) "VOTING CONTROL" means holding more than 50% of the combined
voting power of an entity's then outstanding securities
entitled to vote in the election of its directors or other
governing body.
Page 5 CHANGE IN CONTROL AGREEMENT
2. INITIAL TERM; RENEWALS; EXTENSION.
(a) The initial term of this Agreement begins on the Effective
Date and ends on December 31, 2004.
(b) Following this initial term, this Agreement will automatically
renew on January 1 of each year for subsequent one-year terms,
unless not later than the September 30 preceding the upcoming
renewal date, either the Company or the Executive gives the
other written notice terminating this Agreement as of the
upcoming December 31.
(c) If a definitive agreement providing for a Change in Control is
signed on or before the expiration date of the initial term or
any renewal term, the term of this Agreement then in effect
will automatically be extended to 36 months after the
effective date (as stated in the definitive agreement) of the
Change in Control. During this extended period, the Board may
not terminate this Agreement without the Executive's written
consent.
3. EXECUTIVE'S OBLIGATIONS.
(a) The Executive agrees that, upon notification that the Company
has received a Change in Control Proposal, the Executive
shall:
(1) At the Company's request, assist the Company in
evaluating that proposal; and
(2) Not resign the Executive's position with the Company
until the transaction contemplated by that proposal
is either consummated or abandoned.
(b) If, within 36 months following a Change in Control, the
Company wants the Executive to continue employment in a
position or under circumstances that would qualify as Good
Reason for the Executive terminating employment:
(1) The Executive shall nevertheless agree to that
continued employment, provided that:
(A) The term of this continued employment shall
not exceed 90 days or such shorter or longer
term as agreed by the Company and the
Executive;
(B) The continued employment will be at an
executive level position that is reasonably
comparable to the Executive's then current
position;
(C) The continued employment shall be at either:
(i) The Executive's then current place
of employment; or
(ii) Such other location as agreed by the
Company and the Executive; and
Page 6 CHANGE IN CONTROL AGREEMENT
(D) As compensation for this continued
employment, the Executive shall receive:
(i) The same base pay and bonus
arrangement as in effect on the day
before the continued employment
agreement became effective (or their
hourly equivalent); and
(ii) Either:
(I) Continuation of the
Executive's employee
benefits, fringe benefits
and perquisites at their
then current level; or
(II) If that continuation is not
reasonably feasible, the
Executive shall receive
additional cash
compensation equal to the
amount the Company would
have paid as the employer
contribution for the items
that cannot be continued.
(2) The date this continued employment begins shall be
treated as a Termination Event, so that benefits will
be payable under this Agreement, in accordance with
its terms and conditions, even though the Executive's
employment with the Company has not terminated.
4. SEVERANCE BENEFITS. Upon a Termination Event, the Executive will
receive severance benefits as follows:
(a) COMPONENTS. The severance benefits will consist of:
(1) The cash compensation payment under subsection (b)
below;
(2) The equity acceleration under subsection (c) below;
(3) The health plan continuation benefits under
subsection (d) below;
(4) The 401(k) equivalency payment under subsection (e)
below; and
(5) The outplacement/tax planning benefits under
subsection (f) below.
(b) CASH COMPENSATION PAYMENT.
(1) This payment will equal three times the Executive's
cash compensation. The Executive's "cash
compensation" is the sum of:
(A) The Executive's adjusted salary as
determined under paragraph (2) below; and
(B) The Executive's average bonus as determined
under paragraph (3) below.
Page 7 CHANGE IN CONTROL AGREEMENT
(2) The Executive's "adjusted salary" is the Executive's
annualized regular monthly salary in effect on the
date of the Termination Event as reportable on IRS
Form W-2, adjusted by including and excluding the
following items:
(A) Include any salary deferral contributions
made under any employee benefit plan
maintained by the Company, including
Bancorp's Executives' Deferred Compensation
Plan;
(B) Exclude:
(i) Bonus payments;
(ii) Bonus amounts deferred including any
made under any employee benefit plan
maintained by the Company, including
Bancorp's Executives' Deferred
Compensation Plan;
(iii) Reimbursements or other expense
allowances, fringe benefits (cash
and noncash), moving expenses,
severance or disability pay and
welfare benefits;
(iv) Employer contributions to a deferred
compensation plan to the extent the
contributions are not included in
the Executive's gross income for the
calendar year in which contributed,
and any distributions from a
deferred compensation plan,
regardless of whether those amounts
are includible in the Executive's
gross income when distributed;
(v) Amounts realized from the exercise
of non-qualified stock options or
when restricted stock (or property)
becomes freely transferable or no
longer subject to a substantial risk
of forfeiture;
(vi) Amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
stock option;
(vii) The value of a non-qualified stock
option included in income in the
year in which granted;
(viii) Amounts includible in income upon
making a Code Section 83(b)
election;
(ix) Taxable benefits, such as premiums
for excess group term life
insurance;
(x) Imputed income from any life
insurance on the Executive's life
that is owned by or funded in whole
or in part by the Company; and
Page 8 CHANGE IN CONTROL AGREEMENT
(xi) Other similar recurring or
non-recurring payments.
(3) The Executive's "average bonus" is the average of:
(A) The actual bonus paid for the year before
the year in which the Termination Event
occurs; and
(B) The annualized amount of the bonus the
Executive earned through the date of the
Termination Event for the bonus computation
year in which the Termination Event occurs.
(c) EQUITY ACCELERATION.
(1) Subject to paragraph (2) below, upon the date of the
Termination Event:
(A) All stock options held by the Executive that
are not otherwise vested as of that date
shall become immediately vested and
exercisable notwithstanding any vesting
provisions in the grant of those options;
and
(B) Any restrictions on the restricted stock
held by the Executive shall immediately
lapse.
(2) The Board may exclude any particular grant of stock
options or restricted stock from the acceleration
provisions of paragraph (1) above, but only as
follows:
(A) Any current grants as of the Effective Date
that are to be excluded must be listed in a
separate appendix to this Agreement.
(B) Any grants made after the Effective Date
will be excluded only if the exclusion is
made at the time the grant is made.
(d) HEALTH PLAN CONTINUATION BENEFITS. The Company will provide
health plan continuation benefits as follows:
(1) For the period specified in paragraph (3) below, the
Company will pay the premiums (both the employer and
employee portions) for COBRA continuation coverage
under the Company's group health plans as in effect
at that time.
(2) The Executive will have all the rights available
under COBRA to change plans and coverage category
(i.e., employee only, employee plus spouse or full
family or such other categories that are in effect at
that time).
Page 9 CHANGE IN CONTROL AGREEMENT
(3) The Company will make the COBRA premium payments
until the earliest of the following events occurs:
(A) The date COBRA coverage would otherwise end
by law; or
(B) 18 months of premiums have been paid.
(e) 401(k) EQUIVALENCY PAYMENT. The Company shall pay the
Executive a lump sum cash payment equal to three times the sum
of the Executive's "deemed matching contribution" (as
determined under paragraph (2) below) and the Executive's
"deemed profit-sharing contribution" (as determined under
paragraph (3) below.
(1) For purposes of determining the Executive's deemed
matching and profit-sharing contributions, the
Executive's "deemed 401(k) Plan compensation" will be
the Executive's cash compensation under subsection
(b)(1) above, but limited to the maximum amount
allowable under the 401(k) Plan's definition of
"compensation" as in effect at that time;
(2) The deemed matching contributions will be determined
as follows:
(A) First, the Executive's "deemed elective
deferral contributions" will be determined
by multiplying the Executive's deemed 401(k)
Plan compensation under paragraph (1) above
by the lesser of:
(i) The deferral percentage the
Executive had in effect under the
401(k) Plan on the date of the
Termination Event; or
(ii) The maximum deferral percentage
allowed by the 401(k) Plan for
highly compensated employees (if
applicable to the Executive) for the
plan year in which the Termination
Event occurs, if that percentage has
been determined by the date of
Termination Event.
(B) Second, the deemed matching contribution
formula will be applied to the amount of the
deemed elective deferral contributions as
calculated under subparagraph (A) above, to
determine the amount of the deemed matching
contributions. For this purpose, the "deemed
matching contribution formula" is:
(i) The 401(k) Plan's matching
contribution formula for the plan
year in which the Termination Event
occurs; or
(ii) If that formula has not been
determined by the date of the
Termination Event, the formula for
the previous plan year.
Page 10 CHANGE IN CONTROL AGREEMENT
(3) The deemed profit-sharing contributions will be
determined by multiplying the Executive's deemed
401(k) Plan compensation under paragraph (1) above
by:
(A) The actual bonus paid or payable for the
bonus computation year that ended before the
bonus computation year in which the
Termination Event occurs; and
(B) The annualized amount of the bonus the
Executive earned, determined as of the end
of the month in which the Termination Event
occurs, for the bonus computation year in
which the Termination Event occurs.
(f) OUTPLACEMENT/TAX PLANNING SERVICES. At the Executive's
election, for up to 12 months from the date of the Termination
Event, the Executive may receive up to $10,000 in outplacement
and/or tax planning services from service providers selected
by the Company. The Company will pay the service providers
directly for these benefits. The Executive will not have an
option to receive cash in lieu of these outplacement or tax
planning benefits.
(g) TIMES FOR PAYMENT.
(1) The cash compensation payment under subsection (b)
and the 401(k) equivalency payment under subsection
(e) will be paid within 30 days after the date of the
Termination Event;
(2) The COBRA premiums under subsection (d) will be paid
as due under the terms of the applicable group health
plan; and
(3) Outplacement services will be paid as billed by the
service provider.
5. GROSS-UP PAYMENT. If any or all of the severance benefits under Section
4 constitute a "parachute payment" under Code Section 280G, the Company
shall pay the Executive a "Gross-Up Payment" as follows:
(a) AMOUNT OF PAYMENT. The Gross-Up Payment shall be equal to the
amount necessary so that the net amount of the severance
benefits retained by the Executive, after subtracting the
excise tax imposed under Code Section 4999 ("excise tax"), and
after also subtracting all federal, state or local income tax,
FICA and the excise tax on the Gross-Up Payment itself, shall
be equal to the net amount the Executive would have retained
if no excise tax had been imposed and no Gross-Up Payment had
been paid.
(b) CALCULATION OF PAYMENT AMOUNT. The amount of the Gross-Up
Payment shall be determined as follows:
(1) The determination will be made by independent
accountants and/or tax counsel (the "consultant")
selected by the Company with the Executive's consent
(which consent will not be unreasonably withheld).
The Company shall pay all of the consultant's fees
and expenses.
Page 11 CHANGE IN CONTROL AGREEMENT
(2) As part of this determination, the consultant will
provide the Company and the Executive with a detailed
analysis and supporting calculations of:
(A) The extent to which any payments or benefits
paid or payable to the Executive are subject
to Code Section 280G (including the
reasonableness of any compensation provided
for services rendered before or after the
Change in Control); and
(B) The calculation of the excise tax under Code
Section 4999.
(3) The consultant may make such assumptions and
approximations concerning applicable tax rates and
rely on such interpretations regarding the
application of Code Sections 280G and 4999 as it
deems reasonable. The Company and the Executive will
provide the consultant with any information or
documentation the consultant may reasonably request.
(c) TIME FOR PAYMENT. The Gross-Up Payment shall be made within 30
days after the date of the Termination Event, provided that if
the Gross-Up Payment cannot be determined within that time,
the following will apply:
(1) The Company shall pay the Executive within that time
an estimate, determined in good faith by the Company,
of the minimum amount of the Gross-Up Payment;
(2) The Company shall pay the remainder (plus interest as
determined under Code Section 7872(f)(2)(B)) as soon
as the amount can be determined, but in no event
later than the 45 days after the date of the
Termination Event; and
(3) If the estimated payment is more than the amount
later determined to have been due, the excess (plus
interest as determined under Code Section
7872(f)(2)(B)) shall be repaid by the Executive
within 30 days after written demand by the Company.
(d) ADJUSTMENTS. Subject to the Company's right under subsection
(e) below to contest an excise tax assessment by the Internal
Revenue Service, the amount of the Gross-Up Payment will be
adjusted as follows:
(1) OVERPAYMENT. If the actual excise tax imposed is less
than the amount that was taken into account in
determining the amount of the Gross-Up Payment, the
Executive shall repay at the time that the amount of
the reduced excise tax is finally determined the
portion of the Gross-Up Payment attributable to that
reduction (plus the portion of the Gross-Up Payment
attributable to the excise tax, FICA and federal,
state and local income tax imposed on the portion of
the Gross-Up Payment being repaid by the Executive,
to the extent the repayment results in a reduction in
or refund of excise tax, FICA or federal, state or
local income tax), plus interest as determined under
Code Section 7872(f)(2)(B) on the amount of the
repayment.
Page 12 CHANGE IN CONTROL AGREEMENT
(2) UNDERPAYMENT. If the actual excise tax imposed is
more than the amount that was taken into account in
determining the amount of the Gross-Up Payment, the
Company shall make an additional gross-up payment to
compensate for that excess (plus interest as
determined under Code Section 7872(f)(2)(B)) within
10 days of the date the amount of the excess is
finally determined.
(e) COMPANY'S RIGHT TO CONTEST. The Company has the right to
contest any excise tax assessment made by the Internal Revenue
Service on the following terms and conditions:
(1) The Executive must notify the Company in writing of
any claim by the Internal Revenue Service that, if
upheld, would result in the payment of excise taxes
in amounts different from the amount initially
determined by the consultant. The Executive shall
give this notice as soon as possible but in no event
later than 15 days after the Executive receives the
notice from the Internal Revenue Service.
(2) If the Company decides to contest the assessment, it
must notify the Executive within 30 days of receiving
the notice from the Executive.
(3) The Company will have full control of the
proceedings, including settlement authority and the
right to appeal.
(4) The Executive will cooperate fully in providing any
testimony, information or documentation reasonably
required by the Company in connection with the
proceedings.
(5) The adjustments required under subsection (d) above
shall not be made until the Company has concluded a
settlement agreement with the Internal Revenue
Service, exhausted its (or the Executive's) rights to
contest the Internal Revenue Service's determination
or notified the Executive that it intends to concede
the matter, whichever occurs first.
(6) The Company shall bear all fees and costs associated
with the contest.
(7) The Company will indemnify the Executive from any
taxes, interest and penalties that may be imposed
upon the Executive with respect to the payments made
under paragraph (6) above and this paragraph (7).
(f) EFFECT OF REPEAL. If Code Sections 280G and 4999 are repealed
without successor provisions being enacted, this Section shall
be of no further force or effect.
6. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, other than providing for the
benefits payable upon a Change in Control, this Agreement will not
affect the determination of any compensation payable by the Company to
the Executive, nor will it affect the other terms of the Executive's
employment with the Company. The specific arrangements referred to in
this Agreement are not intended to exclude or circumvent any other
benefits that may be available to the Executive under the Company's
employee benefit or other applicable plans, programs or arrangements
upon the termination of the Executive's employment.
Page 13 CHANGE IN CONTROL AGREEMENT
7. WITHHOLDING. All payments made to the Executive under this Agreement
are subject to the withholding of income and payroll taxes and other
payroll deductions that the Company reasonably determines are
appropriate under applicable law or regulations.
8. ASSIGNMENT.
(a) The Company will require any successor (by purchase, merger,
consolidation or otherwise, whether direct or indirect) to all
or substantially all of its business or assets to expressly
assume this Agreement. This assumption shall be obtained
before the effective date of the succession. Failure of the
Company to obtain this assumption shall be a breach of this
Agreement and shall entitle the Executive to compensation from
the Company in the same amount and on the same terms that the
Executive would be entitled to under this Agreement following
a Change in Control, except that for this purpose:
(1) The date the definitive agreement providing for the
succession is signed shall be deemed to be the date
of the Termination Event (the "deemed Termination
Event"), regardless of whether the Executive's
employment terminates on that date;
(2) The Executive will have no continued employment
obligation under Section 3(b) as of the deemed
Termination Event;
(3) The equity acceleration under Section 4(c) will be
effective on the date of the deemed Termination
Event;
(4) Within five (5) business days of the deemed
Termination Event, the Company with pay the Executive
a lump sum cash payment equal to the sum of:
(A) The cash compensation payment under Section
4(b);
(B) Thirty-six times the monthly COBRA premium
amount for the group health plan coverage
the Executive had in effect on the date of
the deemed Termination Event;
(C) The 401(k) equivalency payment under Section
4(e); and
(D) The maximum amount that would have been paid
under Section 4(f) to the outplacement
service provider; and
(5) Section 6 will no longer apply as of the date of the
deemed Termination Event.
(b) The Executive may not assign or transfer this Agreement or any
rights or obligations under it.
Page 14 CHANGE IN CONTROL AGREEMENT
9. UNSECURED GENERAL CREDITOR. Neither the Executive nor anyone else
claiming on behalf of or through the Executive shall have any right
with respect to, or claim against, any insurance policy or other asset
the Company may acquire to assist it in financing its obligations under
this Agreement. The Executive shall be an unsecured general creditor of
the Company with respect to any amount payable under this Agreement.
10. JOINT AND SEVERAL OBLIGATION. Bancorp and Bank will be jointly and
severally liable for the payment obligations under this Agreement.
11. DEATH BENEFIT.
(a) Any severance benefits under Section 4 remaining unpaid at the
Executive's death shall be paid under the terms and conditions
of this Agreement, to the Beneficiary or Beneficiaries
determined under subsection (b) below.
(b) The Executive may designate the Beneficiary or Beneficiaries
(who may be designated concurrently or contingently) to
receive the death benefit under the Plan under the following
terms and conditions:
(1) The beneficiary designation must be in a form
satisfactory to the Committee and must be signed by
the Executive.
(2) A beneficiary designation shall be effective upon
receipt by the Committee or its designee and shall
cancel all beneficiary designations previously filed
by the Executive, provided it is received before the
Executive's death.
(3) The Executive may revoke a previous beneficiary
designation without the consent of the previously
designated Beneficiary. This revocation is made by
filing a new beneficiary designation form with the
Committee or its designee, and shall be effective
upon receipt.
(4) A divorce will automatically revoke the portion of a
beneficiary designation designating the former spouse
as a Beneficiary.
(5) If a Beneficiary disclaims a death benefit, the
benefit will be paid as if the Beneficiary had
predeceased the Executive.
(6) If a Beneficiary who is in pay status dies before
full distribution is made to the Beneficiary, the
unpaid balance of the distribution will be paid to
the Beneficiary's estate.
(7) If, at the time of the Executive's death, the
Executive has failed to designate a Beneficiary, the
Executive's beneficiary designation has become
completely invalid under the provisions of this
subsection or there is no surviving Beneficiary, the
benefit will be paid in the following order of
priority:
(A) To the Executive's spouse, if living; or
(B) To the Executive's estate.
Page 15 CHANGE IN CONTROL AGREEMENT
12. GENERAL PROVISIONS.
(a) CHOICE OF LAW/VENUE.
(1) This Agreement shall be construed and its validity
determined according to the laws of the State of
Oregon, other than its law regarding conflicts of law
or choice of law, to the extent not preempted by
federal law.
(2) Any dispute arising out of this Agreement must be
brought in either Clackamas County or Multnomah
County, Oregon, and the parties will submit to
personal jurisdiction in either of those counties.
(b) ARBITRATION. Any dispute or claim arising out of or brought in
connection with this Agreement, shall be submitted to final
and binding arbitration as follows:
(1) Before proceeding to arbitration, the parties shall
first attempt, in good faith, to resolve the dispute
or claim by informal meetings and discussions between
them and/or their attorneys. The Chairman of the
Board will act on behalf of the Company at these
meetings and discussions. This informal dispute
resolution process will be concluded within 30 days
or such longer or shorter period as may be mutually
agreed by the parties.
(2) After exhausting the informal dispute resolution
process under paragraph (1) above, upon the request
of any party, the matter will be submitted to and
settled by arbitration under the rules then in effect
of the American Arbitration Association (or under any
other form of arbitration mutually acceptable to the
parties involved). Any award rendered in arbitration
will be final and will bind the parties, and a
judgment on it may be entered in the highest court of
the forum having jurisdiction. The arbitrator will
render a written decision, naming the substantially
prevailing party in the action and will award such
party all costs and expenses incurred, including
reasonable attorneys' fees.
(c) ATTORNEYS' FEES.
(1) If any breach of or default under this Agreement
results in either party incurring attorneys' or other
fees, costs or expenses (including those incurred in
an arbitration), the substantially prevailing party
is entitled to recover from the non-prevailing party
its reasonable legal fees, costs and expenses,
including attorneys' fees and the costs of the
arbitration, except as provided in paragraph (2)
below.
(2) If the Executive is not the substantially prevailing
party, the Executive shall be liable to pay the
Company under paragraph (1) above only if the
arbitrator determines that:
(A) There was no reasonable basis for the
Executive's claim (or the Executive's
response to the Company's claim); or
Page 16 CHANGE IN CONTROL AGREEMENT
(B) The Executive had engaged in unreasonable
delay, failed to comply with a discovery
order or otherwise acted in bad faith in the
arbitration.
(3) Either party shall be entitled to recover any
reasonable attorneys' fees and other costs and
expenses it incurs in enforcing or collecting an
arbitration award.
(4) If an award under this subsection is made to the
Executive and accountants or tax counsel selected by
Company with the Executive's consent (which shall not
be unreasonably withheld) determine that the award is
includible in Executive's gross income, Company shall
also pay Executive a gross-up payment to offset the
taxes imposed on that award, including the taxes on
the gross-up payment itself. This gross-up payment
shall be determined following the methodology
employed in Section 5(b).
(d) ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties with respect to its subject matter, and it
supercedes all previous agreements between the Executive and
the Company and any of its subsidiaries pertaining to this
subject matter. By signing this Agreement, The Executive
waives any and all rights the Executive may have had under any
previous agreement providing for benefits upon a Change in
Control (regardless of how that term is defined in those prior
agreements) that the Executive may have entered into with the
Company or any of its subsidiaries.
(e) SUCCESSORS. This Agreement binds and inures to the benefit of
the parties and each of their respective affiliates, legal
representatives, heirs and, to the extent permitted in this
Agreement, their successors and assigns.
(f) AMENDMENT. This Agreement may be amended only through a
written document signed by all of the parties.
(g) CONSTRUCTION. The language of this Agreement was chosen
jointly by the parties 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.
(h) SECTION HEADINGS. The section headings used in this Agreement
have been included for convenience and reference only.
(i) CITATIONS. Citations to a statute, act or rule are to that
statute, act or rule as amended or to its successor at the
relevant time. Citations to a particular section of a statute,
act or rule are to that section as amended or renumbered or to
the comparable provision of any successor as in effect at the
relevant date.
(j) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and all counterparts will be construed together
as one Agreement.
Page 17 CHANGE IN CONTROL AGREEMENT
(k) SEVERABILITY. If any provision of this Agreement is, to any
extent, held to be invalid or unenforceable, it will be deemed
amended as necessary to conform to the applicable laws or
regulations. However, if it cannot be amended without
materially altering the intentions of the parties, it will be
deleted and the remainder of this Agreement will be enforced
to the extent permitted by law.
EXECUTIVE: COMPANY:
WEST COAST BANCORP
________________________________ By:_________________________________
Xxxxxx Xxxxxxxx
Title ______________________________
Date: __________________________ Date: ______________________________
WEST COAST BANK
By:_________________________________
Title: _____________________________
Date: ______________________________
Page 18 CHANGE IN CONTROL AGREEMENT
