PACIFIC CONTINENTAL CORPORATION/PACIFIC CONTINENTAL BANK CHANGE IN CONTROL SEVERANCE/SALARY CONTINUATION AGREEMENT
PACIFIC
CONTINENTAL CORPORATION/PACIFIC CONTINENTAL BANK
CHANGE
IN CONTROL
SEVERANCE/SALARY
CONTINUATION AGREEMENT
THIS
SEVERANCE/SALARY CONTINUATION AGREEMENT (this “Agreement”) is
entered into 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
Xxxxxxxx
Xxxxxxxx the
Executive
Vice President Bank
(“Executive”),
effective as of April
15, 2005.
The
Company, 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. |
| 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. |
| 1.6 |
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; |
| 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 50 miles
each way from his present place of
employment. |
| 1.7 |
Parachute
Payment Amount.
“Parachute
Payment Amount”
has the meaning assigned in Section 5 of
this Agreement. |
| 1.8 |
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. |
| 1.9 |
Salary
Continuation Payment.
“Salary
Continuation Payment”
has the meaning assigned in Section 4 of
this Agreement. |
| 1.10 |
Salary
Continuation Period.
“Salary
Continuation Period”
has the meaning assigned in Section 4 of
this Agreement. |
| 1.11 |
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. |
| 1.12 |
Trade
Secret.
“Trade
Secret”
has the meaning assigned in ORS 646.461 (4), as in effect as of the date
of this Agreement. |
| 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
(1/2)
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.
|
| 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. |
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.
Iif
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.
| 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 Section 6
(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. |
| 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 including that certain Executive
Severance Agreement dated as of January 22,
1998. |
| 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 |
| 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 1.11,
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. |
This
Severance/Salary Continuation Agreement is effective as of the date first set
forth above.
PACIFIC
CONTINENTAL CORPORATION
By
/s/
Xxx Xxxxx
Its
President
and CEO
PACIFIC
CONTINENTAL BANK
By
/s/
Xxx Xxxxx
Its
President
and CEO
EXECUTIVE:
/s/
Xxxxxxxx Xxxxxxxx
Xxxxxxxx
Xxxxxxxx
