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EX-10.2
CONFIDENTIAL
SALARY CONTINUATION AGREEMENT
THIS SALARY CONTINUATION AGREEMENT ("Agreement") dated as of October 30,
1997 is effective upon closing of the Merger (as defined below) ("Effective
Date"). The parties to the Agreement ("Parties"') are WEST COAST BANCORP
("Bancorp"), an Oregon corporation, CENTENNIAL BANK ("Bank"), a Washington state
banking corporation (collectively, "Company"), and XXXXXX X. XXXXX
("Executive").
A. Bancorp and Centennial Holdings, Ltd. ("Centennial"), a Washington
corporation and the parent bank holding company of the Bank, have
entered into a Plan and Agreement of Merger dated as of October 30, 1997
("Merger Agreement") under which Centennial will merge with and into
Bancorp ("Merger").
B. Both the Company and Executive desire to continue Executive's services
with the Company after the Merger is consummated and particularly in the
event of a subsequent change in control of Bancorp.
C. To encourage Executive's continued services, Company desires to provide
a salary continuation benefit to Executive following closing of the
Merger.
In consideration of the mutual promises, covenants, agreements and
undertakings contained in this Agreement, the parties agree as follows:
1. EFFECTIVE DATE AND TERM. As of the Effective Date, this Agreement shall
be a binding obligation of the Parties, not subject to revocation or
amendment except by mutual consent or in accordance with its terms. The
term of this Agreement ("Term") shall commence as of the Effective Date
and shall end one year thereafter, provided however, that this Agreement
shall be automatically renewed for successive one year periods, unless
the Board of Directors of either the Bank or Bancorp do not approve such
renewal and provide written notice to the Executive of such event, or
the Executive gives written notice to Company not less than 30 days
prior to any such anniversary date of the Executive's election not to
extend the term beyond its then scheduled expiration date.
Notwithstanding the preceding, if a definitive agreement providing for a
Change in Control (as defined below) is entered into on or before the
expiration of the Term, the term of this Agreement shall be extended to
18 months after the consummation of such Change in Control. If the
Merger is not consummated in accordance with the Merger Agreement, this
Agreement will not become effective and will be void.
2. COMMITMENT OF EXECUTIVE. In the event that any person extends any
proposal or offer which is intended to or may result in a Change in
Control, as defined below (a "Change in Control Proposal"), Executive
shall, at Company's request, assist Company in evaluating such proposal
or offer. Further, Executive specifically agrees not to resign
Executive's position with Company during any period from the receipt of
a specific Change in Control Proposal until the consummation or
abandonment of the transaction contemplated by such Proposal.
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3. SALARY CONTINUATION PAYMENT.
(a) Amount of Payment--Termination Event After Change in Control.
Except as otherwise provided in this Section, in the case of a
Termination Event After a Change in Control, as defined in
Section 4, Executive shall receive a salary continuation payment
("Salary Continuation Payment") equal to the sum of the Regular
Salary Continuation Payment and the Bonus Continuation Payment.
The Regular Salary Continuation Payment shall equal Executive's
regular monthly salary in effect as of the date of termination
of employment (as reportable on Executive's IRS Form W-2, but
including the amount of any voluntary deferrals of salary, and
excluding any expense allowances or reimbursements, any bonuses,
any gain from exercise of stock options, or any other similar
non-recurring payments) which would be payable to Executive but
for the termination from the date of termination of Executive's
employment to the date 18 months after the Change in Control.
The Bonus Continuation Payment shall equal (i) the most recent
annual bonus paid to Executive, multiplied by (ii) -------------
(x) the number of days during which Executive was employed but
as to which no annual bonus has been paid plus the number of
days from the date of ---- termination of employment to the date
18 months after the Change in Control divided by (y) 365.
(b) Limitation on Payment. Notwithstanding anything in this
Agreement to the contrary, the Salary Continuation Payment shall
not exceed an amount equal to $1.00 less than the amount which
would cause the payment, together with any other payments
received from Company, to be a "parachute payment" as defined in
Section 280G(b)(2)(A) of the Internal Revenue Code.
4. TERMINATION EVENT AFTER CHANGE IN CONTROL. A Termination Event After a
Change in Control shall be deemed to occur upon, and only upon, one or
more of the following:
(a) Termination of Executive's employment by the Executive for Good
Reason (as defined herein) within 18 months after a Change In
Control;
(b) Termination of Executive's employment by Company other than for
Cause, Disability, or Retirement (each of which is defined
below) within 18 months after a Change In Control; or
(c) Termination of Executive's employment by Company other than for
Cause, Disability, or Retirement prior to a Change In Control if
such termination occurs either (i) on or after announcement, by
Company or any other party, of a contemplated Change In Control
or an intended Change In Control, or (ii) on or after the date a
contemplated or intended Change In Control should have been
announced in conformity with applicable securities or other
laws, but only if in either ----------- case a Change In Control
occurs within 12 months after such termination of Executive's
employment.
5. DEFINITIONS.
(a) Cause. "Cause" shall mean only any one or more of the following:
(i) Willful misfeasance or gross negligence in the
performance of Executive's duties;
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(ii) Conviction of a crime in connection with such duties; or
(iii) Conduct demonstrably and significantly harmful to
Company as determined in the reasonable discretion of
the Board of Directors of Bancorp.
(b) Disability. "Disability" shall mean a physical or mental
impairment which renders Executive incapable of substantially
performing the duties required under this Agreement, and which
is expected to continue rendering Executive so incapable for the
reasonably foreseeable future.
(c) Retirement. "Retirement" shall mean voluntary termination by the
Executive in accordance with Company's retirement policies,
including early retirement, if applicable to their salaried
employees.
(d) Good Reason. "Good Reason" shall mean only any one or more of
the following:
(i) Any reduction of Executive's salary or any reduction or
elimination of any compensation or benefit plan
benefiting Executive, which reduction or elimination is
not of general application to substantially all
employees of Company or such employees of any successor
entity or of any entity in control of Company, unless
such reduction or elimination is mutually agreed to
between Executive and Company or is made in connection
with a mutually agreed to reduction in Executive's
duties or involvement in the Company or in the Bank's
management;
(ii) A relocation or transfer of Executive's place of
employment which would reasonably require Executive to
commute more than 50 miles each way from Executive's
principal residence; or
(iii) The assignment to the Executive of any authority or
duties materially inconsistent with Executive's position
as of the date of this Agreement, unless such assignment
is mutually agreed to between Executive and Company.
(e) Change In Control. "Change in Control" shall mean either of the
following:
(i) A Person or Entity (as defined below) acquiring or
otherwise becoming the owner (as a result of a purchase,
merger, stock exchange, or otherwise) of more than 50%
of the outstanding common stock of Bancorp, or
(ii) The merger of Bancorp into any corporation, or the
merger of any corporation into Bancorp, where more than
50% of the stock of such corporation or Bancorp, as the
case may be, (the "Surviving Corporation") is owned by
other than the owners of the common stock of Bancorp
prior to such merger.
(f) Person or Entity. "Person or Entity" shall include any one or
more persons
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and/or entities acting in concert with respect to their
interests in the Surviving Corporation.
6. OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
employment agreement. Accordingly, except with respect to the Salary
Continuation Payment, this Agreement shall have no effect on the
determination of any compensation payable by Company to the Executive,
or upon any of the other terms of Executive's employment with Company.
The specific arrangements referred to herein are not intended to exclude
any other benefits which may be available to the Executive upon a
termination of employment with Company pursuant to employee benefit
plans of Company or otherwise.
7. WITHHOLDING. All payments required to be made by Company hereunder to
the Executive shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as Company may
reasonably determine should be withheld pursuant to any applicable law
or regulation.
8. ASSIGNABILITY. Company 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 Company may hereafter merge or consolidate or
to which Company 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
Company hereunder as fully as if it had been originally made a party
hereto, but may not otherwise assign this Agreement or its rights
hereunder. The Executive may not assign or transfer this Agreement or
any rights or obligations hereunder.
9. GENERAL PROVISIONS.
(a) Choice of Law. This Agreement is made with reference to and is
intended to be construed in accordance with the laws of the
State of Oregon.
(b) Arbitration. Any dispute, controversy or claim arising out of or
in connection with, or relating to, this Agreement or any breach
or alleged breach hereof, shall, upon the request of any party
involved, be submitted to, and settled by, arbitration pursuant
to the rules then in effect of the American Arbitration
Association (or under any other form of arbitration mutually
acceptable to the parties so involved). Any award rendered shall
be final and conclusive upon the parties and a judgment thereon
may be entered in the highest court of the forum having
jurisdiction. The arbitrator shall render a written decision,
naming the substantially prevailing party in the action, and
shall award such party all costs and expenses incurred,
including reasonable attorneys' fees.
(c) Attorney Fees. In the event of any breach of or default under
this Agreement which results in either party incurring attorney
or other fees, costs or expenses (including in arbitration), the
prevailing party shall be entitled to recover from the
non-prevailing party any and all such fees, costs and expenses,
including attorney fees.
(d) Entire Agreement and Understanding. This Agreement constitutes
the entire understanding and agreement between Executive and the
Company concerning its subject
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matter and supersedes all prior agreements, correspondence,
representations, or understandings between the Parties relating
to its subject matter. Executive waives any and all rights which
may have existed under any prior agreements, correspondence,
representations or understandings between Executive and the
Bank, Centennial, or any affiliate of the Bank or Centennial,
including without limitation any rights Executive may have under
the Employment Agreement dated March 11, 1996 between Executive
and Centennial.
(e) Successors. This Agreement shall be binding upon and inure to
the benefit of the Parties and each of their respective
affiliates, legal representatives, successors and assigns.
(f) Construction. This Agreement contains the entire agreement among
the Parties with respect to its subject matter, and may be
amended or modified only in a writing executed by all of the
Parties. Its language is and will be deemed to be the language
chosen by the Parties jointly 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.
This Agreement may be amended only in a writing signed by the
parties.
(g) Captions. The captions of the respective sections of this
Agreement have been included for convenience of reference only.
They shall not be construed to modify or otherwise affect in any
respect any of the provisions of the Agreement.
(h) Counterparts. This Agreement may be executed in one or more
counterparts by the parties hereto. All counterparts shall be
construed together and shall constitute one Agreement.
EXECUTED by each of the parties effective as of the date first stated
above.
BANCORP: CENTENNIAL BANK:
WEST COAST BANCORP, CENTENNIAL BANK, a Washington
an Oregon corporation state banking corporation
By:____________________________ By:_____________________________
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxxxxxxx
Its: President and CEO Its: President
EXECUTIVE:
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XXXXXX X. XXXXX
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