Exhibit 10.10
PACIFIC CONTINENTAL CORPORATION/PACIFIC CONTINENTAL BANK
CHANGE IN CONTROL
SALARY CONTINUATION AGREEMENT
THIS CHANGE IN CONTROL/SALARY CONTINUATION AGREEMENT (this "AGREEMENT") is
entered into as of this 17th day of August, 2005, by and between PACIFIC
CONTINENTAL CORPORATION, an Oregon corporation (the "COMPANY"), its wholly owned
subsidiary PACIFIC CONTINENTAL BANK, an Oregon state-chartered bank (the
"BANK"), and XXXXXX XXXXX ("EXECUTIVE"). This Agreement will be effective as of
the Effective Date determined pursuant to the Plan and Agreement of Merger dated
as of the date hereof among the Company, the Bank, NWB Financial Corporation and
Northwest Business Bank (the "MERGER AGREEMENT"). If the Merger Agreement is
terminated for any reason, this Agreement will be null and void and of no
effect.
The Company, the Bank and Executive agree as follows:
1. DEFINITIONS.
1.1 Cause. "CAUSE" means any one or more of the following:
a. Removal or discharge of Executive pursuant to order
of any federal banking authority;
b. Executive perpetrates fraud, dishonesty, or other act
of misconduct in the rendering of services to the
Company or the Bank or to customers of the Company or
the Bank, or if Executive engages in conduct which,
in the opinion of the Board of Directors, materially
interferes with the performance of Executive's duties
or xxxxx the reputation of the Company or the Bank by
reason of the adverse reaction of the community to
such conduct;
c. Executive conceals from, or knowingly fails to
disclose to, any federal banking regulatory authority
or the Board of Directors any material matters
affecting the viability of the Company or the Bank;
or
d. Executive fails (or refuses) to faithfully or
diligently perform any of the usual and customary
duties of his employment and either fails to remedy
the lapse or formulate a plan for its correction with
the Company or the Bank (if such failure is not
susceptible to immediate correction) within thirty
(30) days after notice to Executive explaining in
detail the allegations and recommended correction.
Notwithstanding the foregoing, Executive shall not be terminated
without:
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a. Ten days written notice setting forth Company's
intention to terminate for Cause;
b. An opportunity for Executive to rebut termination for
Cause within five business days after receiving
notice; and
c. A final finding, in good faith, by the Board of
Directors that Cause existed.
1.2 Change in Control. "CHANGE IN CONTROL" means a change "in the
ownership or effective control" or "in the ownership of a
substantial portion of the assets" of the Company or the Bank,
within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended; provided however, that an internal
reorganization of the Company or the Bank shall not constitute
a Change in Control.
1.3 Change in Control Payment. "CHANGE IN CONTROL PAYMENT" has the
meaning assigned in Section 3 of this Agreement.
1.4 Compensation. "COMPENSATION" Means Executive's highest base
compensation, together with bonuses earned pursuant to the
Company and/or Bank's then-existing bonus plan(s), for each of
the three most recent calendar years, including the current
calendar year. For purposes of the current calendar year
determination, Executive's base compensation will be
annualized and it will be assumed that Executive will earn the
maximum bonus amount payable pursuant to the Company and/or
Bank's then-existing bonus plan(s).
1.5 Disability. "DISABILITY" means a physical or mental impairment
that renders Executive incapable of substantially performing
the usual and customary duties of his employment for a period
of 90 consecutive days, unless with reasonable accommodation
Executive could continue to perform such duties, and making
these accommodations would not pose an undue hardship on the
Company or the Bank. Disability shall be determined by the
definition and procedure set forth in the Company disability
plan.
1.6 Employment Agreement. "EMPLOYMENT AGREEMENT" has the meaning
assigned in Section 5 of this Agreement.
1.7 Good Reason. "GOOD REASON" means only any one or more of the
following:
a. Reduction of Executive's Post Change in Control
Salary or elimination of any significant compensation
or benefit plan benefiting Executive, unless the
reduction or elimination is generally applicable to
substantially all similarly situated employees (or
similarly situated employees of a successor or
controlling entity of the Company or the Bank)
formerly benefited;
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b. The Post Change in Control assignment to Executive
without his consent of any authority or duties
materially inconsistent with Executive's position as
of the date of the Change of Control; or
c. A relocation or transfer of Executive's principal
place of employment that would require Executive to
commute on a regular basis more than 30 miles each
way from his present place of employment.
1.8 Parachute Payment Amount. "PARACHUTE PAYMENT AMOUNT" has the
meaning assigned in Section 5 of this Agreement.
1.9 Post Change in Control Salary. For purposes of Section 4 of
this Agreement, "POST CHANGE IN CONTROL SALARY" means, for the
Salary Continuation Period, the base compensation and
bonus(es) that Executive would have been entitled to if
his/her employment had not been terminated. For purposes of
determining the bonus(es) that Executive would have been
entitled to, it will be assumed that Executive would have
earned the maximum bonus amount payable pursuant to the
Company and/or Bank's bonus plan(s) in existence at the time
of the Change in Control.
1.10 Salary Continuation Payment. "SALARY CONTINUATION PAYMENT" has
the meaning assigned in Section 4 of this Agreement.
1.11 Salary Continuation Period. "SALARY CONTINUATION PERIOD" has
the meaning assigned in Section 4 of this Agreement.
1.12 Termination Event After Change in Control. A "TERMINATION
EVENT AFTER CHANGE IN CONTROL" shall be deemed to occur upon,
and only upon, any one or more of the following:
a. Termination of Executive's employment by Executive
for Good Reason within the Salary Continuation
Period;
b. Termination of Executive's employment by the Bank
and/or the Company other than for Cause or
Disability, or death within the Salary Continuation
Period; or
c. Termination of Executive's employment or of this
Agreement by the Bank and/or the Company other than
for Cause, Disability or death prior to a Change in
Control if such termination occurs within twelve (12)
months before the execution of a definitive agreement
providing for a Change in Control.
1.13 Trade Secret. "TRADE SECRET" means information, including a
drawing, cost data, customer list, formula, pattern,
compilation, program, device, method, technique or process
that:
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a. Derives independent economic value, actual or
potential, from not being generally known to the
public or to other persons who can obtain economic
value from its disclosure or use; and
b. Is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
2. COMMITMENT OF EXECUTIVE. In the event that any person extends any
proposal or offer that is intended to or may result in a Change in
Control, Executive shall, at the Company's or the Bank's request,
assist the Company and/or the Bank in evaluating such proposal or
offer. Further, subject to the additional terms and conditions of this
Agreement, in order to receive the Salary Continuation Payment,
Executive cannot resign from the Company or the Bank during any period
from the receipt of a specific Change in Control proposal up to the
consummation or abandonment of the transaction contemplated by such
proposal.
3. SEVERANCE PAYMENT OBLIGATIONS.
3.1 Closing of Change In Control. If, consistent with Section 2,
Executive remains employed with the Company and the Bank
through the closing of a Change in Control, then concurrent
with such closing, Executive shall receive a single cash
payment in an amount equal to ONE-HALF (0.5) times Executive's
Compensation (the "CHANGE IN CONTROL PAYMENT").
3.2 Termination Prior to Change In Control. If (i) the Company or
the Bank terminates Executive's employment without Cause,
Executive resigns for Good Reason before a Change in Control,
or the Company or the Bank unilaterally terminates this
Agreement, and (ii) within twelve (12) months thereafter, the
Company or the Bank enters into an agreement for a Change in
Control or any party announces or is required by law to
announce a prospective Change in Control of the Company or the
Bank, then upon the closing of such Change in Control,
Executive shall receive the Change in Control Payment.
4. SALARY CONTINUATION PAYMENT.
4.1 Payment Events. Except as otherwise provided in this Section,
in the case of a Termination Event After a Change in Control,
Executive shall receive a salary continuation payment (the
"SALARY CONTINUATION PAYMENT"), payable in a lump sum on the
later of the date of termination or the date of the Change in
Control.
4.2 Amount of Payment. The Salary Continuation Payment shall be an
amount equal to the Executive's Post Change in Control Salary,
for the balance of the SALARY CONTINUATION PERIOD. The "Salary
Continuation Period" shall be the period beginning on the
Change of Control and continuing thereafter for EIGHTEEN (18)
MONTHS.
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4.3 Adjustment of Salary Continuation Payment. Notwithstanding the
foregoing, if Executive's Good Reason for terminating his or
her employment is a reduction of Post Change in Control
Salary, then the Salary Continuation Payment shall be
calculated based on Executive's Post Change in Control Salary
in effect prior to such reduction.
5. LIMITATIONS ON PAYMENT AMOUNTS.
5.1 Payment under Employment Agreement. The Change in Control
Payment and/or Salary Continuation Payment, if any, shall be
reduced by the amount of any payment received by Executive
pursuant to the Employment Agreement dated of as the date
hereof among the Company, the Bank and the Executive (the
"EMPLOYMENT AGREEMENT"). If payments received by Executive
pursuant to the Employment Agreement exceed the amount of the
Change in Control Payment and/or the Salary Continuation
Payment, neither the Company nor the Bank will have any
payment obligations to Executive pursuant to the terms of this
Agreement.
5.2 Parachute Payment Limitation. Notwithstanding anything in this
Agreement to the contrary, if the total of the Change in
Control Payment and the Salary Continuation Payment, together
with any other payments or benefits received from the Company
or the Bank, will be an amount that would cause them to be a
"parachute payment" within the meaning of Section
280G(b)(2)(A) of the Internal Revenue Code of 1986, as amended
(the "PARACHUTE PAYMENT AMOUNT"), then the sum of the Change
in Control Payment and the Salary Continuation Payment shall
be reduced so that the total amount thereof is $1 less than
the Parachute Payment Amount.
6. NONSOLICITATION. If the Executive receives a Salary Continuation
Payment, then during the Salary Continuation Period, Executive will
not, directly or indirectly, persuade or entice, or attempt to persuade
or entice, (i) any employee of the Bank or the Company to terminate
his/her employment with the Bank or the Company, or (ii) any person or
entity to terminate, cancel, rescind or revoke its business or
contractual relationships with the Bank or the Company.
Not withstanding the preceding, if the Executive receives a Change in
Control Payment, but not a Salary Continuation Payment, the
nonsolicitation provisions shall apply for a period beginning on the
Change of Control date and shall extend for a period of six (6) months.
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7. CONFIDENTIALITY. Executive will not, after the date this Agreement is
signed, including during and after its term, use for his own purposes
or disclose to any other person or entity any Trade Secret of the Bank
or the Company.
8. ENFORCEMENT.
8.1 Executive, the Bank and the Company stipulate that, in light
of all of the facts and circumstances of the relationship
between Executive and the Bank/Company, the agreements
referred to in Sections 6 or 7 (including without limitation
their scope) are fair and reasonably necessary for the
protection of the Bank's/Company's goodwill and other
protectable interests. If a court of competent jurisdiction
should decline to enforce any of those covenants and
agreements, Executive and the Bank/Company request the court
to reform these provisions to the maximum extent that the
court finds enforceable.
8.2 Executive acknowledges that the Bank/Company will suffer
immediate and irreparable harm that will not be compensable by
damages alone, if Executive repudiates or breaches any of the
provisions of Sections 6 or 7 or threatens or attempts to do
so. For this reason, under these circumstances, the
Bank/Company, in addition to and without limitation of any
other rights, remedies or damages available to them at law or
in equity, will be entitled to obtain temporary, preliminary,
and permanent injunctions in order to prevent or restrain the
breach, and the Bank/Company will not be required to post a
bond as a condition for the granting of this relief.
9. ARBITRATION. Except for as set forth in Section 8 of this Agreement, at
either the Company's, the Bank's or Executive's request, the parties
must submit any dispute, controversy or claim arising out of or in
connection with, or relating to, this Agreement or any breach or
alleged breach of this Agreement, to arbitration under the American
Arbitration Association's rules then in effect (or under any other form
of arbitration mutually acceptable to the parties). A single arbitrator
agreed on by the parties will conduct the arbitration. If the parties
cannot agree on a single arbitrator, each party must select one
arbitrator and those two arbitrators will select a third arbitrator.
This third arbitrator will hear the dispute. The arbitrator's decision
is final (except as otherwise specifically provided by law) and binds
the parties, and any party may request any court having jurisdiction to
enter a judgment and to enforce the arbitrator's decision. The
arbitrator will provide the parties with a written decision naming the
substantially prevailing party in the action. This prevailing party is
entitled to reimbursement from the other parties for its costs and
expenses, including reasonable attorneys' fees. All proceedings will be
held at a place designated by the arbitrator in Lane County, Oregon.
The arbitrator, in rendering a decision as to any state law claims,
will apply Oregon law.
10. WITHHOLDING. All payments required to be made by the Company or the
Bank hereunder to Executive shall be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as the
Company or the Bank may reasonably determine should be withheld
pursuant to any applicable law or regulation.
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11. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, except with respect to the Change in
Control Payment and the Salary Continuation Payment, this Agreement
shall have no effect on the determination of any compensation payable
by the Company or the Bank to Executive, or upon any of the other terms
of Executive's employment with the Company or the Bank. The specific
arrangements referred to herein are not intended to exclude any other
benefits which may be available to Executive upon a termination of
employment with the Company or the Bank pursuant to employee benefit
plans of the Company or the Bank or otherwise.
12. MISCELLANEOUS PROVISIONS.
12.1 Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties concerning its
subject matter and supersedes all prior agreements,
correspondence, representations, or understandings between the
parties relating to its subject matter. Notwithstanding the
preceding sentence, the terms of this Agreement are separate
from and do not supercede the terms of the Employment
Agreement (except as set forth in Section 5.1 of this
Agreement) or the Amended and Restated Severance Agreement
among NWB Financial Corporation, Northwest Business Bank and
Executive, dated as of January 1, 2005.
12.2 Binding Effect. This Agreement will be binding and enforceable
against, and will inure to the benefit of, the heirs, legal
representatives, successors and assigns of the Company, the
Bank, and Executive.
12.3 Waiver. Any waiver by a party of its rights under this
Agreement must be written and signed by the party waiving its
rights. A party's waiver of the other party's breach of any
provision of this Agreement will not operate as a waiver of
any other breach by the breaching party.
12.4 Amendment. This Agreement may be modified only through a
written instrument signed by both parties.
12.5 Severability. The provisions of this Agreement are severable.
The invalidity of any provision will not affect the validity
of other provisions of this Agreement.
12.6 Counsel Review. Executive acknowledges that he has had the
opportunity to consult with independent counsel with respect
to the negotiation, preparation, and execution of this
Agreement.
12.7 Governing Law and Venue. This Agreement will be governed by
and construed in accordance with Oregon law, except to the
extent that federal law may govern certain matters. The
parties must bring any legal proceeding arising out of this
Agreement in Lane County, Oregon.
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12.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but
all of which taken together will constitute one and the same
document.
12.9 Assignability. The Company and/or the Bank may assign this
Agreement and its rights hereunder in whole, but not in part,
to any corporation, bank or other entity with or into which
the Company and/or the Bank may hereafter merge or consolidate
or to which the Company and/or the Bank may transfer all or
substantially all of its assets, if in any such case said
corporation, bank or other entity shall by operation of law or
expressly in writing assume all obligations of the Company
and/or the Bank hereunder as fully as if it had been
originally made a party hereto, but may not otherwise assign
this Agreement or its rights hereunder. Executive may not
assign or transfer this Agreement or any rights or obligations
hereunder.
12.10 Revocability. Subject to the provisions of Sections 1.12, 3.2
and 4.1 of this Agreement, this Agreement may be terminated
unilaterally by a majority vote of the board of directors of
the Company and/or the Bank.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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This Change in Control/Salary Continuation Agreement is effective as of
the date first set forth above.
PACIFIC CONTINENTAL CORPORATION
By /s/ Xxx Xxxxx
------------------------------
Its CEO
-----------------------------
PACIFIC CONTINENTAL BANK
By /s/ Xxx Xxxxx
------------------------------
Its CEO
-----------------------------
EXECUTIVE:
/s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
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