PACIFIC CONTINENTAL EMPLOYMENT AGREEMENT
PACIFIC
CONTINENTAL
THIS
EMPLOYMENT AGREEMENT (“Agreement”), dated and signed as of November 9, 2007, is
entered into between PACIFIC CONTINENTAL BANK (“Bank”), PACIFIC CONTINENTAL
CORPORATION (“Corporation”) and XXX X. XXXXX (“Executive”).
RECITALS
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A.
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Executive
currently serves as Chief Executive Officer of the Bank and the
Corporation.
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B.
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Corporation
and Bank desire Executive to continue his employment at the Bank and the
Corporation under the terms and conditions of this
Agreement.
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C.
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Executive
desires to continue his employment at the Bank and the Corporation under
the terms and conditions of this
Agreement.
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D.
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This
Agreement supersedes any and all other employment, severance or similar
agreements that may currently be in effect for Executive with either the
Bank or the Corporation.
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AGREEMENT
In
consideration of the promises set forth in this Agreement, the parties agree as
follows.
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1. Employment. The Bank
and the Corporation agree to employ Executive, and Executive accepts
employment by the Bank and the Corporation on the terms and conditions set
forth
in this Agreement. Executive's title will be Chief Executive
Officer of the Bank and the
Corporation.
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2. Term. The term of this
Agreement (“Term”) commences from the date hereof and expires on April 30,
2010, unless sooner terminated in accordance with Section 9 or extended
until April 30 of subsequent years in accordance with this Section 2.
Notwithstanding any termination or expiration of this Agreement, so long
as Executive is employed by the Corporation or any of its subsidiaries,
the provisions of Section 10 shall survive until such time as the
Corporation's Board of Directors specifically terminates Section
10.
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a.
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Each
year, commencing in 2008, Executive may include, as an agenda item for
consideration by the Boards of Directors of the Corporation and the Bank
at their annual organization meetings, the extension of the Term of this
Agreement for an additional one year (the “Extension Notice”). By way of
example, if the Term is extended at the annual meetings in 2008, then this
Agreement shall expire on April 30, 2011 rather than April 30, 2010, and
if the Term is subsequently extended at the
annual meetings in 2009, then this Agreement shall accordingly expire on
April 30, 2012.
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b.
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If
Executive provides the Extension Notice, then the Term of this Agreement
shall be extended for one additional year unless a majority of the Boards
of Directors of both the Corporation and Bank (excluding Executive, if the
Executive serves on the Board of Directors) elect not to extend the Term
at their annual organization meetings. If the Boards of
Directors elect not to extend the Term, written notice of such fact shall
be promptly given to Executive.
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c.
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If
Executive fails to provide the Extension Notice, then the Term of this
Agreement shall be extended only if a majority of the Boards of Directors
of both the Corporation and Bank (excluding Executive, if the Executive
serves on the Board of Directors) elect to extend the Term for one
additional year and Executive agrees to such
extension.
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3.
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Duties. The Corporation
and Bank will employ Executive as its Chief Executive Officer. Executive
will faithfully and diligently perform his assigned duties, which are as
follows:
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a.
Performance.
Executive will be responsible for establishing and executing the strategic
objectives for the Bank and the Corporation. Executive will
direct the President of the Bank and the Corporation, and together they
will be responsible for all aspects of the Bank’s performance, including
without limitation, seeing that daily operational and managerial matters
are performed in a manner consistent with the Corporation's and the Bank's
policies.
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b.
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Development and
Preservation of Business. Executive will be responsible for the
development and preservation of banking relationships and other business
development efforts (including appropriate civic and community activities)
in the Bank's market area.
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c.
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Development and
Preservation of Investor Awareness. Executive will be responsible
for the development and preservation of the Corporation’s retail and
institutional investor relations.
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d.
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Report to
Board. Executive will report directly to the Corporation’s and
Bank’s boards of directors..
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4.
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Extent of Services.
Executive will devote all of his working time, attention and skill
to the duties and responsibilities set forth in Section 3. To the extent
that such activities do not interfere with his duties under Section 3,
Executive may participate in other businesses as a passive investor, but
(a) Executive may not actively participate in the operation or management
of those businesses, and (b) Executive may not, without the Bank's or
Corporation's prior written consent, make or maintain any investment in a
business with which the Bank and/or Corporation has an existing
competitive or commercial
relationship.
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5.
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Salary. Executive will
initially receive an annual base salary of $290,000, to be paid in
accordance with the Bank's regular payroll schedule. Subsequent salary
increases are subject to the Bank's and Corporation's annual review of
Executive's compensation and
performance.
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6.
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Incentive Compensation.
Each year during the Term, the Bank's board of directors will
determine the amount of incentive compensation to be paid by the Bank to
Executive for that year. Such incentive compensation shall be determined
in accordance with the Bank's incentive programs, as such programs are in
effect as of the date of this Agreement and as they may be modified with
Executive's prior approval. This incentive compensation will be paid to
Executive no later than March 31 of the year following the year in which
the incentive compensation is earned by
Executive.
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7.
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Income Deferral.
Executive will be eligible to participate in any program available
to the Bank's and Corporation's senior management for income deferral, for
the purpose of deferring receipt of any or all of the compensation he may
become entitled to under this
Agreement.
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8.
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Vacation
and Benefits.
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a.
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Vacation and
Holidays. Executive will receive six (6) weeks of paid vacation
each year. Each year, Executive may carry over up to three (3) weeks of
unused vacation to the following year. Any unused vacation time in excess
of four (4) weeks will not accumulate or carry over from one calendar year
to the next.
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b.
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Benefits.
Executive will be entitled to participate in any group life insurance,
disability, health and accident insurance plans, profit sharing and
pension plans and in other employee fringe benefit programs the Bank or
Corporation may have in effect from time to time for its similarly
situated employees, in accordance with and subject to any policies adopted
by the Bank's or Corporation's Board of Directors with respect to the
plans or programs, including without limitation, any incentive or employee
stock option plan, deferred compensation plan, 401(k) plan (including
matching or profit plan), and Supplemental Executive Retirement Plan
(SERP). Neither the Bank nor Corporation though this Agreement obligates
itself to make any particular benefits available to its
employees.
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c.
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Business
Expenses. The bank will reimburse Executive for ordinary and
necessary expenses which are consistent with past practice at the Bank
(including, without limitation, travel, entertainment, and similar
expenses) and which are incurred in performing and promoting the Bank's
business. Executive will present on a monthly basis itemized accounts of
these expenses, subject to any limits of Bank policy or the rules and
regulations of the Internal Revenue
Service.
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9. Termination of
Employment.
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a.
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Termination by Bank
for Cause. If, during the Term, the Bank terminates Executive's
employment for Cause (defined below), the Bank will pay Executive the
salary earned and expenses reimbursable under this Agreement incurred
through the date of his termination. Executive will have no right to
receive compensation or other benefits for any period after termination
under this Section 9. Additionally, and immediately upon
termination, all equity grants that are vested and all equity grants not
yet vested shall terminate and may no longer be
exercised.
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b.
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Other Termination by
Bank. If, during the Term, the Bank terminates Executive's
employment without Cause, or Executive terminates his employment for Good
Reason (defined below), the Bank will pay Executive the compensation
(including 100% of the potential incentive compensation described in
Section 6) and other benefits (described in Section 8) he would have been
entitled to if his employment had not terminated (the "Termination
Payment"), for a period of twelve months. Additionally, all unvested
equity grants will become immediately vested upon
termination. All equity awards other than options shall be
settled immediately. All vested options, including any
accelerated vesting as a result of termination, shall expire on, if not
exercised before, the earlier of (i) the same day of the third month after
the date of termination, or (ii) the expiration date of the option
provided in the award agreement. In the event of a termination
related to a Change in Control pursuant to Section 10, the provisions of
Section 10 shall supersede this
section.
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c.
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Death or
Disability. This Agreement terminates (1) if Executive dies or (2)
if Executive is unable to perform his duties and obligations under this
Agreement for a period of 90 days as a result of a physical or mental
disability (such inability being, a "Disability"), unless with reasonable
accommodation Executive could continue to perform his duties under this
Agreement and making these accommodations would not pose an undue hardship
on the Bank. If termination occurs under this Section 9(c), Executive or
his estate will be entitled to receive all compensation and benefits
earned and expenses reimbursable through the date Executive's employment
terminated. Additionally, all unvested equity grants will become
immediately vested upon Death or Disability. All equity awards
other than options shall be settled immediately. All vested
options, including any accelerated vesting as a result of Death or
Disability, shall expire on, if not exercised before, the earlier of (i)
one year after the date of Death or Disability, or (ii) the expiration
date of the option provided in the award
agreement.
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d.
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Return of Bank
Property. If and when Executive ceases, for any reason, to be
employed by the Bank or Corporation, Executive must return to the Bank all
keys, pass cards, identification cards and any other property of the Bank
or Corporation, At the same time, Executive also must return to the Bank
all originals and copies (whether in hard copy, electronic or other form)
of any documents, drawings, notes, memoranda, designs, devices, diskettes,
tapes, manuals, and specifications which constitute proprietary
information or material of the Bank or the Corporation. The obligations in
this paragraph include the return of documents and other materials which
may be in his desk at work, in his car, in place of residence, or in any
other location under his control.
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e. Cause. "Cause" means
any one or more of the following:
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(1)
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Willful
misfeasance or gross negligence in the performance of Executive's
duties;
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(2) Conviction
of a crime in connection with his duties; or
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(3)
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Conduct
demonstrably and significantly harmful to the Bank, as reasonably
determined on the advice of legal counsel by the Bank's Board of
Directors.
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f. Good Reason. "Good
Reason" means only any one or more of the following:
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(1)
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Reduction
of Executive's salary or reduction or elimination of any significant
compensation or benefit plan benefiting Executive, unless the reduction or
elimination is generally applicable to substantially all Bank employees
(or employees of a successor or controlling entity of the Bank) formerly
benefited;
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(2)
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The
assignment to Executive without his consent of any authority or duties
materially inconsistent with Executive's position as of the date of this
Agreement; or
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(3)
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A
relocation or transfer, without Executive’s consent, 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, currently 000 X.X. Xxxxxxxx, Xxxxxxxx,
XX,.
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g.
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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 Bank, within the meaning of section 280G of the Internal
Revenue Code.
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10. Payment
Related to a Change in Control.
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a.
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Payment
Triggers. Upon the occurrence of any of the following, each of which is a
"Triggering Event," Executive will be entitled to receive the payment and
benefits described in Section
10(b):
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(1)
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A
Change in Control of the Bank and/or the Corporation is consummated while
Executive is employed by the Bank, and Executive is not offered a
Comparable Position (as defined below) with the acquiring
company;
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(2)
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Within
one year after accepting a Comparable Position with the acquiring company,
Executive's employment ceases for any reason other than termination for
Cause;
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(3)
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The
Bank terminates Executive's employment without Cause or Executive resigns
for Good Reason, and within one year thereafter the Bank and/or the
Corporation 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 Bank and/or the
Corporation;
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(4)
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A
"Comparable Position" means the position of President and Chief Operating
Officer of the acquiring company, on financial terms in the aggregate no
less favorable than this Agreement.
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b.
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Payment Amount.
If a Triggering Event occurs, the Bank will pay Executive, upon the
closing of the Change in Control or termination of Executive's employment,
whichever is applicable, a single payment in an amount equal to two and
one-half (2.5) times the Executive's potential annual compensation less
the amount of any Termination Payments that may have been paid to
Executive pursuant to Section 9(b). Executive's potential annual
compensation is the Executive's current annual salary plus 100% of the
Executive's current potential incentive compensation, as described in
Section 6. If Executive's employment is terminated pursuant to Section
10(a), the Bank will also maintain and provide for one-year following
Executive's termination or the closing of the Change in Control, whichever
is later, at no cost to Executive, the benefits described in Section 8(b)
to which Executive is entitled (determined as of the day before the date
of such termination); but if Executive's participation in any such benefit
is thereafter barred or not feasible, or discontinued or materially
reduced, the Bank will arrange to provide Executive with either benefits
substantially similar to those benefits or a cash payment of substantially
similar value in lieu of the benefits. Additionally, if
Executive's employment is terminated pursuant to Section 10(a), all
unvested equity grants will become immediately vested upon closing of the
Change in Control or termination of employment, whichever is
later. All equity awards other than options shall be settled
immediately. All vested options, including any accelerated
vesting as a result of termination or Change in Control, shall expire on,
if not exercised before, the earlier of (i) the same day of the third
month after the date of termination, or (ii) the expiration date of the
option provided in the award
agreement.
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c.
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Limitations on
Payments Related to Change in Control. The following
apply
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notwithstanding
any other provision of this
Agreement:
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(1)
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If
the total of the payments and benefits described in Section 10(b) 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 (a
"Parachute Payment Amount"), then such payment(s) shall be reduced so that
the total amount thereof is $1 less than the Parachute Payment Amount;
and
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(2)
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Executive's
right to receive the payments and benefits described in Section 10(b)
terminates immediately if before the Change in Control transaction closes,
Executive terminates his employment without Good Reason or the Bank
terminates Executive's employment for
Cause.
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d.
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Survival. The
provisions of this Section 10 will survive any termination or expiration
of this Agreement until such time as the Corporation's Board of Directors
specifically terminates this Section
10.
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11.
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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 confidential business information
concerning the Bank or Corporation or their business operations, unless
(1) the Bank or Corporation consents to the use or disclosure of their
respective confidential information; (2) the use or disclosure is
consistent with Executive's duties under this Agreement; or (3) disclosure
is required by law or court order. For purposes of this Agreement,
confidential business information includes, without limitation, trade
secrets, various confidential information concerning all aspects of
current and future operations, nonpublic information on investment
management practices, marketing plans, pricing structure and technology of
either the Bank or Corporation.
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12.
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Nonsolicitation.
For two years after Executive's employment under this Agreement
terminates, Executive will not, directly or indirectly, persuade or
entice, or attempt to persuade or entice, (i) any employee of the Bank or
Corporation to terminate his/her employment with the Bank or Corporation,
or (ii) any customer of the Bank or Corporation to terminate his/her
relationship with the Bank or Corporation or to otherwise direct any
portion of his/her business away from the Bank or
Corporation.
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13.
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Injunctive
Relief. Executive acknowledges that the Corporation and
the Bank would be irreparably harmed if Executive breaches any of its
obligations under Sections 11 or 12 and that, in light of all of the facts
and circumstances of the relationship between Executive, the Corporation
and the Bank, the obligations referred to in Sections 11 and 12 are fair
and reasonably necessary for the protection of the Corporation’s and the
Bank's confidential information, goodwill and other protectable
interests.. Accordingly Executive agrees that in the event of a
breach or threatened breach thereof, the Corporation and/or the Bank shall
be entitled to injunctive relief to prevent such breach and to secure
enforcement (which shall be in addition to any other rights or remedies
available to the Corporation or the Bank) and neither the Corporation nor
the Bank shall not be required to post a bond as a condition for the
granting of this relief.. In addition, if a court, arbitrator
or other person called upon to adjudicate a dispute involving the
foregoing Sections 11 or 12 finds that the obligations thereunder are not
enforceable under applicable law because they are too broad in any
respect, then the court, arbitrator or other person may revise the
obligations to the minimum extent necessary to make such obligations
enforceable.
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14.
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Covenants. Executive
specifically acknowledges the receipt of adequate consideration for the
covenants contained in Sections 11 and 12 and that the Corporation and/or
the Bank are entitled
to require him to comply with these Sections. These Sections will
survive termination of this
Agreement.
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15.
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Arbitration.
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a.
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Arbitration. At
either party'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 either 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 party
for its costs and expenses, including reasonable attorneys'
fees,
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b.
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Governing Law.
All proceedings will be held at a place designated by the arbitrator in
Lane County, Oregon.
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c.
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Exception to
Arbitration. Notwithstanding the above, if Executive violates
Section 11 or 12, the Bank and/or Corporation will have the right to
initiate the court proceedings described in Section 13b, in lieu of an
arbitration proceeding under this Section
15.
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16. Miscellaneous
Provisions.
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a.
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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 without
limitation the Employment Agreements among the parties dated April 15,
2005 and May 16, 2006.
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b.
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Binding Effect.
This Agreement will bind and inure to the benefit of the Bank’s,
Corporation's and Executive's heirs, legal representatives, successors and
assigns.
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c.
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Litigation
Expenses. If either party successfully seeks to enforce any
provision of this Agreement or to collect any amount claimed to be due
under it, this party will be entitled to reimbursement from the other
party for any and all of its out-of-pocket expenses and costs including,
without limitation, reasonable attorneys' fees and costs incurred in
connection with the enforcement or
collection.
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d.
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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.
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e.
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Assignment. The
services to be rendered by Executive under this Agreement are unique and
personal. Accordingly, Executive may not assign any of his rights or
duties under this Agreement.
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f.
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Amendment. This
Agreement may be modified only through a written instrument signed by both
parties.
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g.
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Severability.
The provisions of this Agreement are severable. The invalidity of any
provision will not affect the validity of other provisions of this
Agreement.
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h.
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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.
Signed:
November 9, 2007
EXECUTIVE:
/s/
Xxx X. Xxxxx
Xxx X. Xxxxx
PACIFIC
CONTINENTAL BANK:
/s/ Xxxxxx
Xxxxxx
By: Xxxxxx
Xxxxxx
Chairman of the Board
PACIFIC
CONTINENTAL CORPORATION:
/s/Xxxxx
Xxxxxx
By: Xxxxxx
Xxxxxx
Chairman
of the Board
