EXHIBIT 10.5
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") and XXXXX X.
XXXXXXX ("Executive").
RECITALS
A. The Executive is employed by the Company as its Executive Vice
President, Chief Information 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 (Bygland)
(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 following circumstances shall qualify as
"Cause" under this Agreement:
(A) Embezzlement, dishonesty or other fraudulent
acts involving the Company or the Company's
business operations;
(B) Material breach of any confidentiality
agreement or policy;
(C) 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;
(D) 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
(E) 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 Company
specifying in detail the
performance issues; and
(ii) A reasonable opportunity to cure
the issues specified in the notice.
(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.
Page 2 CHANGE IN CONTROL AGREEMENT (Bygland)
(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;
(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
Page 3 CHANGE IN CONTROL AGREEMENT (Bygland)
(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.
(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 24 months after a Change in Control;
Page 4 CHANGE IN CONTROL AGREEMENT (Bygland)
(2) The Company terminates the Executive's employment
other than for Cause, Disability or death within 24
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.
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 24 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
Page 5 CHANGE IN CONTROL AGREEMENT (Bygland)
(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 24 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
(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.
Page 6 CHANGE IN CONTROL AGREEMENT (Bygland)
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 two 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.
(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
Page 7 CHANGE IN CONTROL AGREEMENT (Bygland)
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
(xi) Other similar recurring or
non-recurring payments.
(3) The Executive's "average bonus" is the average of:
(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.
(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.
Page 8 CHANGE IN CONTROL AGREEMENT (Bygland)
(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).
(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 two 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;
Page 9 CHANGE IN CONTROL AGREEMENT (Bygland)
(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.
(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 401(k) Plan's profit-sharing
contribution rate for the plan year in which
the Termination Event occurs; or
(B) If that rate has not been determined by the
date of the Termination Event, the average
of the profit-sharing contribution rate for
the three plan years before the plan 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 $5,000 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.
Page 10 CHANGE IN CONTROL AGREEMENT (Bygland)
(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.
(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.
Page 11 CHANGE IN CONTROL AGREEMENT (Bygland)
(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.
(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.
Page 12 CHANGE IN CONTROL AGREEMENT (Bygland)
(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.
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:
Page 13 CHANGE IN CONTROL AGREEMENT (Bygland)
(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) Twenty-four 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);
(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.
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.
Page 14 CHANGE IN CONTROL AGREEMENT (Bygland)
(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.
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.
Page 15 CHANGE IN CONTROL AGREEMENT (Bygland)
(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. Acting on behalf of the Company at any of these
meetings and discussions will be, at the discretion of its Chief
Executive Officer, the Chief Executive Officer, the Executive
Vice-President, Human Resources or both of them. The Chief
Executive Officer and the Executive Vice-President, Human
Resources will make their recommendation to the Committee for its
decision on the matter. 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
(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.
Page 16 CHANGE IN CONTROL AGREEMENT (Bygland)
(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 (Bygland)
(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: _________________________________
Xxxxx X. Xxxxxxx
Title _______________________________
Date: ____________________________ Date: _______________________________
WEST COAST BANK
By: _______________________________
Title: _____________________________
Date: _______________________________
Page 18 CHANGE IN CONTROL AGREEMENT (Bygland)
