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EX 10.3
October 30, 1997
Xx. Xxxxxx X. Xxxxx
Chairman and CEO
Centennial Holdings, Ltd.
0000 Xxxxxxxx Xxxxxx X.X.
Olympia, WA 98502
Dear Xxx:
The purpose of this letter is to confirm our agreement regarding your
continuing employment with Centennial Bank ("Bank") and related benefits
following closing of the pending Merger of Centennial Holdings, Ltd.
("Centennial") into West Coast Bancorp ("WCB"). Please sign in the space
provided at the end of this letter to indicate your acceptance of and agreement
to be bound by the terms set forth below. This letter supplements the Salary
Continuation Agreement, dated October 30, 1997, between you, the Bank, and WCB.
Accordingly, the terms set forth in that Agreement are not repeated here. This
letter does not constitute a waiver by you, WCB, or the Bank of any provisions
in the Salary Continuation Agreement. Likewise, no provision in the Salary
Continuation Agreement will constitute a waiver of any provisions in this
letter. Capitalized terms used but not defined in this letter have the meanings
assigned to those terms in the Plan and Agreement of Merger ("Merger Agreement")
between Centennial and WCB, dated October 30, 1997.
Salary. We currently anticipate that you will continue as Chief Executive
Officer ("CEO") of the Bank following Closing of the Merger. After the Merger,
your initial annual salary will be $180,000, to be paid in monthly installments
in accordance with the Bank's regular payroll schedule. The Bank will review
your compensation annually in accordance with WCB policies and criteria and in
connection with the advice and recommendations of WCB's Chief Executive Officer.
Your annual salary will be adjusted in the future to reflect your performance
and the extent of your continued involvement in the management of the Bank.
Incentive Bonus. As CEO of the Bank, you will, after the Merger, be eligible for
annual incentive bonuses on the same basis as other WCB employees of equivalent
position. Your annual incentive bonus could be as high as 30% of your annual
salary, if you meet certain Bank performance targets. These performance targets
will be based on the goals set forth in the Bank's budget and strategic plan.
You will be evaluated with respect to your success in achieving these goals.
Medical, Insurance and Employee Plans. After the Merger, You will be entitled to
participate in any group life insurance, disability, health and accident
insurance plans, profit sharing plans and pension plans and in other employee
benefit programs the Bank or WCB may have in effect from time to time for its
similarly situated employees, in accordance with and subject to any policies
adopted by either the Bank's or WCB's board of directors with respect to the
plans or programs. So long as you are employed by WCB or the Bank, WCB will
provide medical coverage to you and make it available at your expense to your
dependents. Regardless of your
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Xx. Xxxxxx X. Xxxxx
October 30, 1997
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continued employment, WCB will make medical coverage available to you and your
dependents, at your expense, until you reach age 65. This medical coverage will
be the same as that provided or made available to senior executives of WCB and
their dependents.
Deferred Compensation. After the Effective Date, regardless of whether you
continue your employment with the Bank, WCB, or any of WCB's Subsidiaries
following the Merger, the Bank will after Closing, until you reach age 65,
contribute $8,333 per month (beginning on the month following the month in which
Closing occurs) on your behalf to WCB's deferred compensation plan, unless such
contributions cannot be so held under the terms of WCB's deferred compensation
plan as it may be amended before Closing, in which case, these contributions
will be held on your behalf in a substantially equivalent deferred compensation
plan. The amount held for your retirement by the Bank at Closing, which amount
we understand will be $262,500 plus monthly contributions from Centennial of
$8,333 for each month following the date of this letter through the month of
Closing, will be held on your behalf following Closing in WCB's deferred
compensation plan, unless such amount cannot be so held under the terms of WCB's
deferred compensation plan as it may be amended before Closing, in which case,
this amount will be held on your behalf in a substantially equivalent deferred
compensation plan. The parties will prepare and execute, effective as of
Closing, any additional documents necessary to carry out the intent of this
paragraph.
Use of Personnel and Facilities. While you are employed at the Bank (and after
your employment terminates to the extent mutually agreed upon by you and WCB),
the Bank will make available to you certain personnel and facilities for your
personal business use, as long as such use does not interfere with the business
of the Bank or WCB or with your duties as an employee of the Bank. Subject to
reasonable limits WCB may implement from time to time at its discretion, the
facilities you may use for this purpose include office space, supplies, copying,
telephone and facsimile services, and any other facilities WCB agrees to allow
you to use. You agree that you will pay WCB or the Bank (as applicable) at
reasonable rates established by WCB for your use of personnel and facilities and
that you will reimburse WCB or the Bank (as applicable) for any expenses they
incur in connection with your use of facilities or personnel.
Insurance Contract. We understand that Centennial owns an insurance policy on
your life in the amount of $1.5 million. If at any time after Closing, WCB
ceases to have an insurable interest in your life or for any other reason
decides to dispose of this policy, WCB will provide you with 30 days' advance
notice. During the 30-day notice period, you or your trust will have the option
to buy this insurance policy at fair market value for the benefit of your trust,
subject to any restrictions on the transfer of the insurance policy.
Centennial Capital Corporation. You recognize that WCB will own the name
"Centennial" following the Merger, and that WCB has an interest in protecting
and preserving that name and its use. Accordingly, before Closing of the Merger,
you agree to change the name of your independent corporation from "Centennial
Capital Corporation" to another name that does not contain the word
"Centennial." On and after the Effective Date, you agree to discontinue use of
the name "Centennial" in connection with any of your business activities that
are independent of your employment at the Bank. However, Centennial Limited
Partnership and Centennial Properties Partnership may retain their names until
June 30, 1999, as long as they remain inactive and conduct no business
whatsoever.
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Xx. Xxxxxx X. Xxxxx
October 30, 1997
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Benefits under Merger Agreement. WCB confirms to you its covenants set forth in
the Merger Agreement in Sections 6.2 and 6.3 (relating to WCB's appointment of
you as a director of WCB and as a member of its executive committee) and in
Section 6.7 (relating to indemnification of Centennial and Bank directors).
"At Will" Employment. You understand that your continued employment with the
Bank is "at will." Thus, signing this letter does not obligate you to continue
your employment with the Bank following Closing of the Merger, nor does it
obligate WCB or the Bank to continue your employment following Closing of the
Merger.
Waiver. By signing this letter, you agree to waive all of your rights under any
employment agreements you have entered into with Centennial or the Bank,
including, without limitation, the Employment Agreement between you and
Centennial, dated March 11, 1996, which, along with any amendments to it, will
terminate at Closing.
Sincerely,
Xxxxxx X. Xxxxxxxx
President and CEO
Accepted and Agreed:
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Xxxxxx X. Xxxxx
