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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
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PARTIES: CENTENNIAL BANCORP ("Company")
XXXXXXX X. XXXXXXXX ("Executive").
EFFECTIVE DATE: December 1, 1997
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This First Amendment is made in respect of the following facts:
A. The parties entered into an Employment Agreement dated
October 1, 1995 (the "Agreement") respecting Executive's
employment by Company for a term ending December 31,
2001.
B. The parties have agreed to amend the Agreement as
provided in and subject to the conditions stated in this
First Amendment.
AGREEMENT:
Section 3.1.3 of the Agreement is amended to provide as follows:
3.1.3 $300,000 for the year beginning December 1, 1997 and
ending November 30, 1998, and amounts approved by
Company's board of directors for periods after
November 30, 1998, but not less than $300,000 for
each 12 months.
The following Sections 7.3 and 7.4 are added to the Agreement:
7.3 UPON OR FOLLOWING CHANGE IN CONTROL. In the event of any Change
in Control (as defined in Section 7.3.3) of Company or Bank,
Company and Executive shall each have the elective right to
terminate the Employment Period, effective at the closing of the
event resulting in the Change in Control.
7.3.1 TERMINATION UPON CHANGE IN CONTROL. If the
Employment Period is so terminated upon a Change in
Control, Company's only obligations to Executive
shall be: (a) to pay a lump-sum cash payment in an
amount equal to two and one-half (2.5) times
Executive's "Final Compensation," being the greater
of: (i) Executive's Base Salary and Cash Bonus for
the most recently ended calendar year, or (ii)
Executive's Base Salary for the current calendar
year; (b) to pay Deferred Compensation; (c) to
provide Post-Retirement Medical Coverage as
described in Section 6.2; and (d) to provide
Employee Group Benefits until December 31, 2001;
provided, however, Company's obligation to provide
Employee Group Benefits to Executive shall exist
only so long as Executive meets the eligibility
requirements for participation in the insurance,
plans and programs maintained or provided by Company
for its employees or executive officers generally.
Company shall be obligated to use its best efforts
to maintain Executive's eligibility to participate
in such insurance, plans and programs.
7.3.2 TERMINATION FOLLOWING A CHANGE IN CONTROL. If the
Employment Period is not so terminated upon a Change
in Control, then any subsequent termination of the
Employment Period shall be governed by the other
provisions of this Agreement; provided, however, if
the Employment Period continues after a Change in
Control, and if the Employment Period is
subsequently terminated other than by reason of
Executive's death or disability (by either Company
or Executive, with or without cause or good reason)
within 36 months after the Change in Control and
before December 31, 2001, then Company shall pay to
Executive a lump-sum cash payment in an amount equal
to two and one-half (2.5) times Executive's Final
Compensation, and shall pay or provide the other
amounts and benefits described in subsections (b),
(c), and (d) of Section 7.3.1.
7.3.3 DEFINITION OF "CHANGE IN CONTROL". For purposes of
this Agreement, "Change in Control" shall occur if
during the Employment Period:
(a) Any individual, entity or group, within the
meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than Company or Bank, any
trustee or other fiduciary holding securities
under an employee benefit plan of Company or
Bank, or any corporation owned, directly or
indirectly, by the stockholders of Company or
Bank in substantially the same proportions as
their ownership of stock of Company or Bank), is
or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly, or securities representing thirty
percent (30%) or more of the combined voting
power of Company's or Bank's then outstanding
voting securities; or
(b) Company or Bank effects a merger,
consolidation, share exchange or other corporate
reorganization of Company or Bank with any other
corporation, other than (i) a merger,
consolidation, share exchange or other corporate
reorganization which would result in the voting
securities of Company or Bank outstanding
immediately prior thereto continuing to represent
(either by remaining outstanding or by being
converted into voting securities of the surviving
entity) more than seventy percent (70%) of the
combined voting power of the voting securities of
Company or Bank or such surviving entity
outstanding immediately after such merger,
consolidation, share exchange or other corporate
reorganization, or (ii) a merger, consolidation,
share exchange or other corporate reorganization
effected to implement a recapitalization of
Company or Bank (or similar transaction) in which
no individual, entity or group acquires more than
thirty percent (30%) of the combined voting power
of Company's or Bank's then outstanding voting
securities; or
(c) Company or Bank effects complete liquidation
of Company or Bank or the sale or disposition of
all or substantially all of Company's or Bank's
assets.
7.3.4 LIMITATIONS ON CHANGE IN CONTROL PAYMENTS. In the
event that any payment or benefit to be received by
Executive in connection with a Change in Control of
Company or Bank, whether payable pursuant to the
terms of this Agreement or any other plan,
arrangement or agreement with Company, would not be
deductible (in whole or in part) as a result of
Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), the payment under Section
7.3.1 shall be reduced until Section 280G of the
Code does not limit the deductibility of the
payment. If the payment under Section 7.3.1 is
completely eliminated on account of the preceding
sentence, no other payments or benefits shall be
reduced, even if such payments or benefits are
non-deductible as a result of Section 280G. For this
purpose, (1) no payment or benefit, which Executive
has effectively waived in writing prior to the date
of payment, shall be taken into account; (2) no
portion of any payment or benefit which, in the
opinion of tax counsel selected by Company's
independent auditors and acceptable to Executive,
does not constitute a "parachute payment" within the
meaning of Section 280G(b)(2) of the Code shall be
taken into account; (3) the payment under Section
7.3.1 shall be reduced only to the extent necessary
so that such payment, together with all other
compensation paid by Company to Executive,
represents reasonable compensation for services
actually rendered within the meaning of Section
280G(b)(4) of the Code, in the opinion of such tax
counsel; and (4) the value of any non-cash benefit
or any deferred payment or benefit shall be
determined by Company's independent auditors in
accordance with the principles of Section 280G(d)(3)
and (4) of the Code.
Section 9.4.3 of the Agreement is entirely deleted, and shall be of no further
effect.
EFFECT OF AMENDMENT
Except as expressly modified by this First Amendment, all terms, conditions, and
provisions of the Agreement, and all rights and obligations of the parties
thereunder, shall continue in full force and effect.
LEGAL COUNSEL AND EXPENSES
The parties acknowledge and agree that: (a) the law firm of Xxxxxxx Xxxxxxxxxx
Xxxxxx Xxxxxx Xxxxx & Xxxxx LLP ("GSLPSS") has acted as legal counsel to
Company, Bank, and Executive, respectively, on various matters in the past; (b)
GSLPSS represents Executive only, and not Company or Bank, in connection with
this First Amendment; (c) neither Company nor Bank has sought or relied on any
advice from GSLPSS in connection with the Agreement or this First Amendment; (d)
prior to executing this First Amendment, Company and Bank have obtained and
relied upon review by, and advice from their general legal counsel, Xxxxxx Xxxx
Xxxxx Xxxxxxxxx & Xxxxx, concerning Company's and Bank's rights and obligations
under the Agreement as modified by this First Amendment. Company shall reimburse
Executive the amount of legal fees incurred by Executive in having this First
Amendment prepared by GSLPSS.
NOTICES TO EXECUTIVE
Section 17 of the Agreement is amended to provide that, until changed in the
manner provided in the Agreement, Executive's address for receiving any notice
under the Agreement shall be: Xxxxxxx X. Xxxxxxxx, 0000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxx 00000.
EXECUTION
The parties have executed this First Amendment to be effective at the date
appearing in the caption on page 1.
COMPANY EXECUTIVE
CENTENNIAL BANCORP
By /s/ Xxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx
Director and Secretary
