PACIFIC CONTINENTAL EMPLOYMENT AGREEMENT
PACIFIC
CONTINENTAL
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT ("Agreement"), dated and signed as of May 16, 2006, is
entered into between PACIFIC CONTINENTAL BANK (`Bark"), PACIFIC CONTINENTAL
CORPORATION ("Corporation")
and
XXXXX X.. XXXXX ("Executive").
RECITALS
| A. |
Executive
currently
serves as President and Chief Operating Officer of the Bank and Vice
President of the Corporation,
|
| B. |
Corporation
and Bak
desire Executive to continue his employment at the Bank and Corporation
under the terms and conditions of this
Agreement.
|
| C. |
Executive
desires to continue his employment at the Bank and Corporation under
the
terms and conditions of this
Agreement.
|
| D. |
This
Agreement supercedes 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.
1.
Employment. The
Bank
and Corporation agree to employ Executive, and Executive accepts
employment by the Bank and Corporation on the terms and conditions
set forth
in
this
Agreement. Executive's title will be President and Chief Operating Officer
of
the Bank and Vice President of the Corporation.
2,
Term.
The
term
of this Agreement ("Term") commences from the date hereof and expires on April
30, 2009, 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 I0.
a.
Each
year, commencing in 2007, 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 2007, then this Agreement shall
expire on April 30, 2010 rather than April 30, 2009, and if the Term is
subsequently
extended
at the annual meetings in 2008, then this Agreement shall accordingly expire
on
April 30, 2011.
b.
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 the Bank (excluding Executive) 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.
c,
If
Executive fails 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 the Bafflc (excluding Executive) elect to extend the Term for
one
additional year and Executive agrees to such extension.
| 3. |
Duties.
The
Bank will employ Executive as its President and the Corporation will
employ Executive as its Vice President. Executive will faithfully
and
diligently perform his assigned duties, which are as
follows:
|
a..
Barrie
Performance.
Executive, under the direction of the Chief Executive Officer, 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 mamler consistent with Corporation's and the Bank's policies.
| b. |
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,
|
| c. |
Report
to the Chief Executive Officer.
Executive will report directly to the Bank's Chief Executive
Officer,
|
| 4. |
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 the
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.
|
| 5. |
Salary.
In
addition to normal fees as a member of the Boards of Directors of
the Bank
and the Corporation, Executive will initially receive an annual base
salary of $190,000, 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.
|
| 6. |
Incentive
Compensation. Each
year during the Term, the Bank's board of directors will determine
the
amount of bonus to be paid by the Bank to Executive for that year.
Such
bonus 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
bonus
will be paid to Executive no later than February 15 of the year following
the year in which the bonus is earned by
Executive.
|
| 7. |
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. Vacation
and Benefits.
| a. |
Vacation and Holidays.
Executive will receive five (5) weeks of paid vacation each year.
Each
year, Executive may carry over up to two (2) 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,
|
| b. |
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
(SERF). Neither the Bank nor Corporation though this Agreement obligates
itself to make any particular benefits available to its
employees.
|
| c. |
Business
Expenses.
The Bar l< 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.
|
9. Termination
of Employment.
a.
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.
| b. |
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 the bonus 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. 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.
|
| c. |
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,
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| d. |
Return
of Bank Property.
If
and when Executive ceases, for any reason, to be employed by the
Bank or
the 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 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.
|
e. Cause,
"Cause"
means any one or more of the following:
| (1) |
Willful
misfeasance or gross negligence in the performance of Executive's
duties;
|
(2) Conviction
of a crime in connection with his duties; or
| (3) |
Conduct
demonstrably and significantly harmful to the Bank, as reasonably
determined on the advice of legal counsel by the Bank's board of
directors.
|
f. Good
Reason.
"Good
Reason" means only any one or more of the following:
(I)
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 Banlc) formerly
benefited;
| (2) |
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
|
| (3) |
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.
|
g-
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,
10. Payment
Related to a Change in Control.
a.
Pa
ment Trio
ers.
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):
| (1) |
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;
|
| (2) |
Within
one year after accepting a Comparable Position with the acquiring
company,
Executive's employment ceases for any reason other than termination
for
Cause; or
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| (3) |
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 Iaw to announce a prospective Change
in
Control of the Bank and/or the
Corporation.
|
| (4) |
A
"Comparable
Position"
means the position of CEO of the acquiring company, on financial
terms in
the aggregate no less favorable than this
Agreement,
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b.
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 (2.0) 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 bonus incentive, as
determined by the Bank's Compensation Committee pursuant to the
Bank's
incentive programs then in effect. 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.
|
c..
|
Limitations
on Payments Related to Change in ControI..
The following apply
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notwithstanding
any other provision of this Agreement:
| (1) |
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) |
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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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.
| 11. |
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. Executive will also treat the terms of this Agreement
as
confidential business information.
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| 12. |
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
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employment
with the Bank or Corporation, or (ii) any customer of the Bank or Corporation
to
terminate his/her relationship with the Barak or Corporation or to otherwise
direct any portion of his/her business away from the Bank or
Corporation.
13. Enforcement.
a,
The
Bank and Executive stipulate that, in light of all of the facts and
circumstances of the relationship between Executive and the Banlc, the
agreements referred to in Sections 11 and 12 are fair and reasonably necessary
for the protection of the Bank's and Corporation's confidential information,
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 request the court to reform
these provisions to restrict Executive's use of confidential information and
Executive's ability to solicit employees to the maximum extent, in time and
scope, the court finds enforceable,
b.
Executive acknowledges the Barak and Corporation 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 11 and 12 or threatens
or attempts to do so. For this reason, under these circumstances, the Bank,
in
addition to and without limitation of any other rights, remedies or damages
available to it 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
Barak will not be required to post a bond as a condition for the granting
of
this
relief.
| 14. |
Covenants.
Executive
specifically acknowledges the receipt of adequate consideration for
the
covenants contained in Sections 11 and 12 and that the Bank is
entitled
to
require him to comply with these Sections. These Sections will survive
termination of this Agreement.
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15. Arbitration.
a.
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,
| b. |
Governing
Law.
All proceedings will be held at a place designated by the arbitrator
in
Lane County, Oregon.
|
| c. |
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.
a.
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 Agreement
among the parties dated April 15, 2005.
b.. Binding
Effect.
This
Agreement will bind and inure to the benefit of the Banks, Corporation's and
Executive's heirs, legal representatives, successors and assigns.
c.
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.,
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.
e.
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.
Amendment,
This
Agreement may be modified only through a written instrument signed by both
parties.
g, Severability.
The
provisions of this Agreement are severable. The invalidity of any provision
will
not affect the validity of other provisions of this Agreement,
h.
Governing
Law and Venue.
This
Agreement will be governed by and construed in accordance with Oregon law,
except to the extent that certain matters may be governed by federal law. The
parties must bring any legal proceeding arising out of this Agreement in Lane
County, Oregon..
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
as of: May 16, 2006:
Executive:
/s/
Xxxxx X. Xxxxx
Xxxxx
X.
Xxxxx
Pacific
Continental Bank:
By:
/s/ Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx
Its:
Chairman of the Board
Pacific
Continental Corporation:
By:
/s/ Xxxxxx Xxxxxx
Xxxxxx
Xxxxxx
Its:
Chairman of the Board
