EXHIBIT 10.4
SALARY CONTINUATION AGREEMENT
FOR WCB POLICYMAKING EXECUTIVE OFFICERS
This SALARY CONTINUATION AGREEMENT ("Agreement) is dated as of April 1,
2001 (the "Effective Date"). The parties to the Agreement ("Parties") are West
Coast Bancorp ("Bancorp"), West Coast Bank ("Bank"), and Xxxxxxx X. Xxxxxxxxx
("Executive").
RECITALS
A. Executive is employed by Bank in a managerial capacity, presently
holding the position of Executive Vice President and General Counsel.
B. Bancorp and Bank (collectively, "Company") wishes to ensure the
continued availability of Executive's services in the event of a change
in control of Bancorp, in order to assist Bancorp in maximizing the
benefits obtainable from such a change.
C. To encourage Executive's continued services, Bancorp wishes to provide
an incentive for Executive's continued employment.
Therefore, the parties agree as follows:
AGREEMENT
1. EFFECTIVE DATE AND TERM. As of the Effective Date, this Agreement is a
binding obligation of the parties and is not subject to revocation or
amendment, except by mutual consent or in accordance with its terms. The
term of this Agreement begins on the Effective Date and ends on the
second March 31 after the Effective Date (March 31, 2003); provided
however, that commencing on the first March 31 after the Effective Date
(such date and each anniversary thereof herein referred to as the
"Renewal Date), and on each March 31 thereafter, the term of this
Agreement shall be automatically extended for an additional one year
period, unless prior to the Renewal Date the Company shall give written
notice to the Executive that this Agreement has been terminated. If a
definitive agreement providing for a Change in Control (as defined
below) is entered into on or before the expiration of the term of this
Agreement, the term of this Agreement will be automatically extended to
a date, if later than the expiration date then in effect, 24 months
after the consummation of the Change in Control, and the Board will not
have authority to cancel this Agreement during that period, unless
Executive consents in writing to the cancellation.
2. COMMITMENT OF EXECUTIVE. If any person extends any proposal or offer
intended to or with the potential to result in a Change in Control (a
"Change in Control Proposal"), Executive must, at Bancorp's request,
assist Bancorp in evaluating the Proposal. Further, as a condition to
receipt of the Salary Continuation Payment described below, Executive
will not resign Executive's
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position with the Company during the period beginning when the Company
receives a Change in Control Proposal and ending when the transaction
contemplated by the Proposal is either consummated or abandoned.
3. SALARY CONTINUATION PAYMENT.
(a) Payment Trigger and Timing. If a Termination Event After a Change
in Control (as defined in Section 4) occurs, Executive will
receive a salary continuation payment ("Salary Continuation
Payment"). Unless limited below, the Salary Continuation Payment
will equal the Regular Salary Continuation Payment plus the Bonus
Continuation Payment. The Company will pay this Salary
Continuation Payment to Executive on the later of (i) the date
Executive's employment terminates or (ii) the date the Change in
Control occurs.
(b) Payment Amount. The Regular Salary Continuation Payment will
equal Executive's regular monthly salary in effect when
Executive's employment terminates (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) that would
be payable to Executive but for the termination from the day
Executive's employment terminates to the date 24 months after the
later of (i) the date the Change in Control occurs or (ii) the
date Executive's employment terminates. The Bonus Continuation
Payment will equal (i) the most recent annual bonus paid to
Executive, multiplied by (ii) 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 24 months after the later of (x) the date
the Change in Control occurs or (y) the date Executive's
employment terminates, divided by 365. If a Change in Control
occurs before Executive's 2001 bonus is determined, Executive's
most recent annual bonus will be deemed to be $37,500.
(c) Limitation on Payment. The Salary Continuation Payment will not
exceed an amount equal to $1.00 less than the amount which would
cause the payment, together with any other payments received from
the 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 will be deemed to occur when, and only when, one or
more of the following events occur:
(a) Executive terminates Executive's employment for Good Reason
within 24 months after a Change In Control; or
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(b) The Company terminates Executive's employment other than for
Cause, Disability, Retirement or death within 24 months after a
Change in Control; or
(c) The Company terminates Executive's employment other than for
Cause, Disability, Retirement, or death before a Change in
Control, if the termination occurs during the period beginning
six months before the execution of a definitive agreement
providing for the Change in Control and ending upon occurrence of
the Change in Control, but only if the Change in Control in fact
occurs.
5. DEFINITIONS.
(a) Cause. "Cause" means only any one or more of the following:
(i) Willful misfeasance or gross negligence in the
performance of Executive's duties; or
(ii) Conviction of a crime in connection with such duties; or
(iii) Conduct demonstrably and significantly harmful to the
financial condition of the Company.
(b) Disability. "Disability" means a physical or mental impairment
that renders Executive incapable of substantially performing the
duties required under this Agreement and that is expected to
continue rendering Executive so incapable for the reasonably
foreseeable future.
(c) Retirement. "Retirement" means voluntary termination by Executive
in accordance with the Company's applicable retirement policies,
including early retirement, if applicable to its salaried
employees.
(d) Good Reason. "Good Reason" means only any one or more of the
following:
(i) Any reduction in Executive's salary or reduction or
elimination of any compensation or benefit plan benefiting
Executive, which reduction or elimination is not of
general application 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;
(ii) A relocation or transfer of Executive's place of
employment that would reasonably require Executive to
commute more than twenty miles each way from Executive's
principal residence; or
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(iii) A material diminution in the responsibilities, title, or
duties of Executive.
(e) Change in Control. "Change in Control" means one of the
following:
(i) A Person or Entity acquiring or otherwise becoming the
owner (as a result of a purchase, merger, stock exchange,
or otherwise) of more than 50% of Bancorp's outstanding
common stock; or
(ii) Bancorp's merger into any corporation or other business
entity, or the merger of any corporation or other business
entity into Bancorp, where more than 50% of the stock (or
other form of ownership) of the corporation or business
entity ("Surviving Corporation") is owned by other than
the owners of the common stock of Bancorp before the
merger; or
(iii) A Person or Entity acquiring more than fifty percent of
the Company's assets, measured by the total fair market
value of all of the Company's assets immediately before
the acquisition, during the 24-month period ending on the
date of the most recent acquisition. A Change in Control
does not include a transfer of assets by the Company if
the assets are transferred to an Entity, 50% or more of
the total value or voting power of which is owned,
directly or indirectly, by the Company.
(f) Person or Entity. "Person or Entity" includes, without
limitation, any one or more persons 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, other than providing for the Salary
Continuation Payment, this Agreement will not affect the determination
of any compensation payable by the Company to Executive, nor will it
affect the other terms of 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
Executive under the Company's employee benefit or other applicable
plans, if his or her employment terminates.
7. WITHHOLDING. All payments made to Executive under this Agreement are
subject to the withholding of amounts for tax and other payroll
deductions that the Company reasonably determines appropriate under
applicable law or regulation.
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8. ASSIGNABILITY. The Company may assign this Agreement and its rights
under it in whole, but not in part, to any corporation, financial
institution or other entity with or into which Bancorp merges or
consolidates or to which Bancorp transfers all or substantially all of
its assets. But, the corporation, financial institution, or other entity
accepting assignment (the "assignee") must by operation of law or
expressly in writing assume all obligations of the Company under this
Agreement, as fully as if the assignee had been an original party. The
Company may not otherwise assign this Agreement or any of its rights
under it. The Company may not through assignment avoid an obligation to
pay a Salary Continuation Payment once the obligation is triggered under
this Agreement, although it may assign to assignee the obligation to
pay, as long as assignee agrees to pay in accordance with this
Agreement. Executive may not assign or transfer this Agreement or any
rights or obligations under it.
9. GENERAL PROVISIONS.
(a) Choice of Law/Venue. The parties intend that Oregon law govern
this Agreement and its interpretation. Any dispute arising out of
this Agreement must be brought in either Clackamas County or
Multnomah County in Oregon, and the parties will submit to
personal jurisdiction in either of those counties.
(b) Arbitration. Any dispute or claim arising out of or brought in
connection with this Agreement, will, if requested by any party,
be submitted to and settled by, arbitration under the rules of
the American Arbitration Association then in effect (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 judgement 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) Attorney Fees. If any breach of or default under this Agreement
results in either party incurring attorney or other fees, costs
or expenses (including in arbitration), the substantially
prevailing party is entitled to recover from the non-prevailing
party any and all legal fees, costs and expenses, including
attorney fees.
(d) Waiver. This Agreement supercedes all previous agreements between
Executive and the Company and any of its affiliates pertaining to
this subject matter. By signing this Agreement, Executive waives
any and all rights Executive may have had under any previous
salary continuation, severance, or other similar Agreements
Executive may have entered into with the Company or any of its
affiliates or predecessors.
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(e) Successors. This Agreement binds and inures 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 only through a written document signed by all of the
parties. Its language is 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.
(g) Section Headings. The section headings used in this Agreement
have been included for convenience and reference only.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, and all counterparts will be construed together as
one Agreement.
Signed as of April 1, 2001:
BANCORP AND BANK: EXECUTIVE:
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By: Xxxxxx X. Xxxxxxxx By: Xxxxxxx X. Xxxxxxxxx
Its: President and CEO
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