Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), between The Bank of the Pacific, a
Washington business corporation ("The Bank") and Xxxxxx Xxxxxxxx ("Officer") is
dated as of April 21, 2005 and will be effective April 1, 2005.
RECITALS
A. The Bank of the Pacific is a Washington banking corporation. The Bank is
engaged in the business of commercial banking in Grays Harbor County,
Pacific County, Skagit County, Whatcom County, and Wahkiakum County,
Washington. The Bank also engages business in Oregon Counties.
B. The Officer represents that she has considerable experience, expertise and
training in finance related to banking and services offered by The Bank.
The Bank desires and intends to employ the Officer pursuant to the terms
and conditions set forth in this Agreement.
C. Both The Bank and the Officer have read and understand the terms and
provisions set forth in this Agreement, and have been afforded a
reasonable opportunity to review this Agreement and to consult with an
attorney.
AGREEMENT
The parties agree as follows:
1. Employment. The Bank will employ the Officer for the Term, except as
specifically stated herein, and the Officer accepts employment with The
Bank on the terms and conditions set forth in this Agreement. The
Officer's title will be Senior Vice President.
2. Effective Date and Term.
(a) Effective Date. This Agreement is effective as of the 1st day of
April, 2005
(b) Term. The initial term of this Agreement is two years (24
months), beginning on the Effective Date stated in paragraph
2(a), after which it shall renew annually for a term of one year
(12 months) unless notice of termination or nonrenewal is
provided by either party pursuant to paragraph 4(a).
3. Duties. The Officer will serve as the Senior Vice President for the Bank
and faithfully and diligently perform the duties assigned to the Officer
by the CEO. The Officer will report directly to the CEO of The Bank. The
Officer will use her best efforts to perform her duties and will devote
all her working time and attention to these duties.
4. Compensation.
(a) Salary. Initially, the Officer will receive an annualized salary
of $85,000.00 per year, to be paid at regular intervals by The
Bank in accordance with its regular payroll schedules.
(b) Incentive Compensation. Officer will be eligible to participate
in an incentive plan relative to The Bank's approved plan. The
plan will be approved each year by The Bank's board of directors.
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(c) Standard Benefits. The Bank will provide to the Officer the
standard Officer benefits provided in accordance with The Bank's
benefit plans and policies, including but not limited to health
insurance, disability insurance, life insurance and four (4)
weeks of paid vacation per year accrued in accordance with The
Bank's benefit plans and policies. The Officer also will be
entitled to participate in retirement plans, including 401(k)
plans. The Officer will also be entitled to participate in stock
bonus or stock option plans generally available to senior
executives of The Bank.
(d) Auto Allowance The Bank will provide a monthly auto allowance of
$250.00, unless a bank owned vehicle is assigned to the Officer
in lieu of an auto allowance.
(e) Expense. The Bank will reimburse the Officer for all reasonable
expenses that the Officer may incur in the performance of her
duties. The Officer will request reimbursement and provide
documentation of such expenses within a reasonable time, but no
later than 90 days after the expense has been incurred.
5. Termination.
(a) Notice of Termination or Nonrenewal. Either party may
unilaterally terminate or decline to renew this Agreement for any
reason by providing the other party with written notice of the
termination or nonrenewal no less than ninety (90) days prior to
the termination date or the final date of the then current Term
of this Agreement.
i. Termination or Nonrenewal by The Bank: In the event that the
Bank provides the Officer with a notice of termination
without cause or nonrenewal under this paragraph, The Bank
will pay to the Officer her salary from the date of the
notice for the balance of the then current Term or for six
(6) months from the date of the notice, whichever is greater,
and in its discretion will advise the Officer of those duties
and responsibilities, if any, it wants her to perform during
this time.
(b) Termination by The Bank for Cause. Notwithstanding paragraph
4(a), The Bank may immediately terminate this Agreement with no
advance notice if termination is for cause. For purposes of this
Agreement, "cause" means dishonesty; fraud; commission of a
felony or of a crime involving moral turpitude; deliberate
violation of statutes, regulations, or orders pertaining to
financial institutions or reckless disregard of such statutes,
regulations, or orders; destruction or theft of Bank property or
assets of customers of The Bank; physical attack of a fellow
Officer or a customer; intoxication at work; use of narcotics or
alcohol to an extent that materially impairs Officer's
performance of her duties; willful malfeasance or gross
negligence in the performance of Officer's duties; violation of
law in the course of employment that has a material adverse
impact on The Bank, its Officers, or its customers; Officer's
refusal to perform Officer's duties; Officer's refusal to follow
reasonable instructions or directions; misconduct materially
injurious to The Bank; significant neglect of duty; or any
material breach of Officer's duties or obligations to The Bank
that results in material harm to The Bank. If termination occurs
under this paragraph, the Officer will be entitled to receive
only the salary earned through the date this Agreement is
terminated and shall not be entitled to any payment pursuant to
paragraph 4(a), and except as otherwise provided by law,
participation in benefit plans ceases upon termination of this
Agreement.
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(c) Death or Disability. Notwithstanding paragraph 4(a), this
Agreement will terminate immediately upon the Officer's death.
Notwithstanding paragraph 4(a), if the Officer is unable to
perform her duties and obligations under this Agreement for a
period of 60 days as a result of a disability that substantially
limits one or more of her major life activities, this Agreement
will terminate immediately upon expiration of such 60 day period
unless Officer is thereafter able to perform the essential
functions of the position referenced in paragraph 2(c) with or
without a reasonable accommodation. If termination occurs under
this paragraph, the Officer or her estate will be entitled to
receive only the salary earned through the date this Agreement is
terminated and shall not be entitled to any payment pursuant to
paragraph 4(a), and except as otherwise provided by law,
participation in benefit plans ceases upon termination of this
Agreement, except that as of such termination date, all vesting
requirements regarding then currently pending stock options shall
be deemed fully completed.
(d) Termination Related to a Change in Control. This paragraph will
apply to any termination related to a Change in Control, as set
forth herein.
i. "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. An initial public
offering by The Bank will not, however, be deemed to be a
Change in Control under this Agreement.
ii. Notwithstanding the provisions of paragraph 4(a), if The
Bank or its successors in interest by merger, or their
transferees in the event of a purchase and assumption
transaction, terminates this Agreement within six (6) months
following a Change in Control, The Bank will pay the Officer
eighteen (18) times the base compensation received by the
Officer during the most recent calendar month ending on or
prior to the effective date of termination, less statutory
payroll deductions. Payment under this paragraph shall be
made in accordance with The Bank's ordinary payroll policies
and procedures, unless the parties mutually agree to a
different payment schedule.
iii. Limitations on Payments Related to Change in Control. The
provisions of paragraph 4(d)(ii) shall not be applicable,
and the Officer shall have no claim for payment under
paragraph 4(d)(ii), if termination is pursuant to paragraphs
4(b) or 4(c), or if before the Change in Control transaction
closes the Officer terminates her employment. If during the
six (6) month period after the Change in Control transaction
closes, the Officer voluntarily terminates her employment or
refuses to renew this Agreement, the Officer shall not be
entitled to payment under paragraph 4(d)(ii).
6. Confidentiality. The Officer will not, after signing this Agreement,
including during and after its Term, disclose to any other person or
entity any confidential information concerning The Bank or its business
operations or customers, or use for her own purposes or permit or assist
in the use of such confidential information by third parties unless The
Bank consents to the use or disclosures of their respective information,
or disclosure is required by law or court order. The provisions of this
paragraph survive the termination of the Officers employment by The Bank.
7. Noncompetition. During the Term and for twelve (12) months after the
Officer's employment with The Bank ends, the Officer will not become
involved with a Competing Business or serve,
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directly or indirectly, a Competing Business in any matter. "Competing
Business" means any company that competes with or will compete with The
Bank in Grays Harbor, Pacific, Wahkiakum, Whatcom, and Skagit Counties, or
any other Washington or Oregon county in which The Bank maintains a
banking office(s) at the time of the termination of this Agreement.
"Competing Business" includes, without limitation, any existing or newly
formed financial institution or trust company.
8. Enforcement. The Bank and the Officer agree that, in light of all of the
facts and circumstances of the relationship between The Bank and the
Executive, the agreements referred to in paragraphs 5(a), 6 and 7 are fair
and reasonably necessary for the protection of The Bank's confidential
information, goodwill and other protectible interests. The parties
acknowledge and agree that the time and expense involved in proving in any
forum the actual damage or loss suffered by The Bank if there is a breach
of paragraphs 5(a), 6 or 7 make this case appropriate for liquidated
damages. Accordingly, The Bank and the Executive agree that the following
schedule of liquidated damages is reasonable and fair, and shall be the
amount of damages which the Executive shall pay to The Bank for each,
separate breach of paragraphs 5(a), 6 or 7 by the Executive:
a. for a breach of paragraph 5(a), the sum of $25,000;
b. for a breach of paragraph 6, the sum of $100,000;
c. for a breach of paragraph 7, the sum of $250,000.
For purposes of paragraph 7, a "separate breach" shall be deemed to
have occurred with each Competing Business with which the Executive
becomes involved or serves in violation of paragraph 7.
Neither the breach of paragraphs 5(a), 6 or 7, nor the payment of
liquidated damages by the Executive, shall affect the continuing
validity or enforceability of this Agreement, or The Bank's right to
seek and obtain injunctive relief. If a court of competent jurisdiction
should decline to enforce any of these covenants and agreements, the
Executive and the Bank hereby stipulate that the Court shall reform
these provisions to restrict the Executive's use of confidential
information and the Executive's ability to compete with The Bank to the
maximum extent, in time, scope of activities, and geography, as the
court finds enforceable.
9. Miscellaneous Provisions. This Agreement constitutes the entire
understanding between the parties concerning its subject matter. This
Agreement will bind and inure to the benefit of The Bank's and the
Officer's heirs, legal representatives, successors and assigns. This
Agreement may be modified only through a written instrument signed by both
parties. This Agreement will be governed and construed in accordance with
Washington law, except that certain matters may be governed by federal
law. Venue for enforcement of any terms of this Agreement shall be in
Grays Harbor County, Washington.
Signed as of April 21, 2005:
THE BANK OF THE PACIFIC OFFICER
/s/ Xxxxxx X. Xxxx /s/ Xxxxxx Xxxxxxxx
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Xxxxxx X. Xxxx Xxxxxx Xxxxxxxx
CEO CFO
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