EXHIBIT 10.5
PUYALLUP VALLEY BANK
SUPPLEMENTAL RETIREMENT BENEFIT AGREEMENT
THIS AGREEMENT is dated to be effective as of the 1st day of
January, 1997, by PUYALLUP VALLEY BANK (hereinafter referred to as the
"Employer") and XXXXX X. XXXXX (hereinafter referred to as the "Employee").
In consideration of the mutual benefits set forth herein, it is hereby agreed
as follows:
I. PURPOSE
The Employer desires to retain the services of the Employee as
President of Puyallup Valley Bank. In order to provide an incentive for the
Employee's continued employment, the Employer has agreed to provide the
Employee with the supplemental retirement benefits set forth under the terms
of this Agreement. All such benefits set forth herein are in addition to any
other retirement benefits that are not specifically included herein.
II. DEFINITIONS
The principle definitions to apply in construing this Agreement are
as follows:
2.01 AGREEMENT: This plan of deferred compensation and other
benefits as set forth under the terms of this document.
2.02 BENEFICIARY: The Employee's surviving spouse or, if no spouse
is surviving, the Employee's designee or designees.
2.03 BOARD: The Board of Directors of the Employer.
2.04 CAUSE: As referred to herein, the term "termination for cause"
shall be limited to the termination of the Employee's employment with the
Employer as a result of the Employee's:
(a) Failure to diligently perform the duties of employment
or directions of the Employer's Board after written notice specifying the
exact nature of the failure being given to the Employee with the Employee
failing to correct the failure within a period of thirty (30) days following
the Employee's receipt of that written notice; provided, however, that the
Board may not, in the event of a Change of Control, materially alter the
Employee's present duties without the consent of the Employee; and, provided
further, that failure to diligently perform duties or
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directions as set forth in this Section 2.04(a) shall not constitute "cause"
for a period of twelve (12) months following the effective date of any Change
of Control;
(b) Conviction of or entry of a plea of guilty to any crime
involving a breach of any fiduciary obligation that the Employee may owe to
the Employer or its shareholders by virtue of the Employee's position as an
employee of the Employer or a failure to comply with any law, rule or
regulation related to the operations of the Employer's business or order of
any governmental agency having jurisdiction over the Employer without having
a reasonable basis for contesting or opposing such law, rule, regulation or
order; or
(c) Commission of any act Constituting misrepresentation,
fraud, deception, immorality, breach of ethics or other act tending to injure
the Employer's business, reputation or good will and including, but not
limited to, the use of illegal drugs or abuse of alcohol.
2.05 CHANGE OF CONTROL: (a) The purchase or other acquisition by any
person, entity or group of persons as defined under the provisions of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934 (the "Act"
herein), or any comparable successor provisions thereof, of beneficial
ownership within the meaning of Rule 13d-3 promulgated under the Act of more
that fifty percent (50%) of either the outstanding shares of common stock or
the combined voting power of the Employer's then outstanding voting
securities entitled to vote generally; (b) the approval by the stockholders
of the Employer of a reorganization, merger or consolidation with respect to
which persons who were stockholders of the Employer immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own
more than fifty percent (50%) of tile combined voting power of the Employer's
then outstanding securities entitled to vote generally; (c) a liquidation or
dissolution of the Employer; (d) the sale of all or substantially all of the
Employer's assets or (e) a change in the membership of the Board such that
those individuals who at the beginning of any twelve (12) consecutive month
period cease to constitute a majority thereof for any reason within that
twelve (12) month period.
2.06 CONTRACT PERIOD: The period of the Employee's employment with
the Employer from the effective date of this Agreement through the date
on which the Employee's service with the Employer terminates.
2.07 EMPLOYEE: XXXXX X. XXXXX, President of the Employer.
2.08 EMPLOYER: PUYALLUP VALLEY BANK.
2.09 TOTAL DISABILITY: The term "total disability" shall be defined
as a medically determinable physical or mental impairment which, in the
Employer's determination after consultation with at least two (2) physicians
licensed to practice medicine in the state of Washington, results in the
Employee's inability to perform the substantial and material duties of his
position with the Employer.
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III. BENEFITS
3.01 DEFERRED COMPENSATION: The Employer shall create a special
account on its books and records and shall credit the sum of **Thirty-Five
Thousand** Dollars ($**35,000.00**) per YEAR to that account by notation for
a period of ten (10) years. The sums deemed to be so contributed shall be
invested in notational form in securities or other investments that are
consistent with the manner in which the Employer invests its deposits and
other properties in the normal course of its business.
3.02 NO FUNDING: The Employer intends to make payments to this
account by notation only for purposes of calculating the amount of the
benefit to be paid hereunder, neither the Employee nor the Beneficiary has
any right against any such account nor with respect to any asset or assets in
which the account is theoretically invested. All such accounts or assets are
theoretical in nature only and do not constitute general assets of the
Employer. The benefits payable to the Employee and the Beneficiary hereunder
do, however, constitute an unsecured claim against the general assets of the
Employer.
3.03 DISTRIBUTION OF ACCOUNT: Distributions of the account
maintained for the Employee under this Agreement shall be made in accordance
with the following:
(a) FULL DISTRIBUTION OF ACCOUNT BALANCE: The Employer
shall pay to the Employee, or to the Beneficiary if the Employee is disabled
or not then living, the full amount of the account balance held hereunder for
the benefit of the Employee as valued on the last date of the Contract Period
as a result of:
(i) The Employee's total disability or death;
(ii) The Employee's termination of service within
a period of twelve (12) months following a Change of Control. If the Employee
terminates service after the lapse of a period of twelve (12) months
following a Change of Control, the provisions of Paragraph 3.03(b)(ii) shall
control to require a forfeiture of the account balance;
(iii) In the event of a Change of Control, a
material change in the scope of the Employee's duties with diminished
responsibility;
(iv) In the event of a Change of Control, a
relocation or transfer of the Employer's principal place of business that is
more than thirty (30) miles from the Employee's principal place of residence
unless the Employee consents to such relocation; or
(v) The Employer's termination of the Employee's
service without cause at any time.
(vi) Completion of the ten (10) year term
following the date of this Agreement.
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(b) FORFEITURE OF ACCOUNT BALANCE: The Employee and the
Beneficiary shall completely forfeit the full amount of the account balance
held hereunder for the benefit of the Employee as valued on the last date of
the Contract Period as a result of:
(i) The Employer's termination of the Employee's
service for cause prior to the tenth anniversary date of this Agreement. If
the Employer terminates the Employee's service for cause after the tenth
anniversary date of this Agreement, the Employee shall be entitled to receive
the full amount of the account balance maintained for the Employee under this
Agreement; or
(ii) The Employee's termination of service with
the Employer prior to the tenth anniversary date of this Agreement unless
such termination is within a period of twelve (12) months following a Change
of Control. In that latter event, the Employee shall receive a full
distribution of the entire amount that would have been credited to the
account referred to in Paragraph 3.01 had the Employee's employment with the
Employer continued for the ten (10) year term specified under that Paragraph
together with all earnings and accruals related thereto through the date on
which the termination of service occurs.
3.04 NOT SALARY: Any sums accounted for as being set aside for
purposes of providing benefits hereunder shall not be deemed to be salary or
other compensation paid to the Employee for purposes of computing benefits to
which the Employee may be entitled under any other pension, profit sharing or
other benefit arrangement maintained by the Employer for the benefit of its
employees.
IV. MISCELLANEOUS PROVISIONS
4.01 NO AMENDMENT: This Agreement may not be amended, in whole or in
part, without the prior written consent of all of the parties hereto nor
without the prior written consent of the Beneficiary if the Beneficiary is
then receiving benefits under the terms of this Agreement.
4.02 NO ASSIGNMENT: Neither the Employee nor the Beneficiary may
assign, transfer or pledge any benefits under the terms of this Agreement.
Any attempt to so assign, transfer or pledge any benefits hereunder is void.
4.03 BINDING EFFECT: This Agreement is binding upon and shall inure
to the benefit of the parties hereto, the Beneficiary and their respective
successors, heirs and legal representatives.
4.04 GOVERNING LAW: The laws of the State of Washington shall
determine all questions arising with respect to the interpretation of the
provisions of this Agreement except to the extent that such laws are
superseded by federal law.
4.05 NO GUARANTEE OF EMPLOYMENT: Nothing contained in this
Agreement, nor the obtaining of any asset or assets by the Employer for
purposes of providing benefits hereunder, nor the payment of any benefit due
hereunder, shall give the Employee or the Beneficiary any
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right to continued employment with the Employer except as may otherwise be
expressly provided by separate agreement.
4.06 SEVERABILITY: If any provision of this Agreement is deemed to
be null and void by a court of competent jurisdiction, the remaining
provisions shall nevertheless remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
PUYALLUP VALLEY BANK
By /s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxx
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Its Chairman of Board XXXXX X. XXXXX
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"Employer" "Employee"
CONSENT OF SPOUSE
I, the undersigned spouse of the Employee hereby affirms that I have
read and understand the terms and conditions of the Agreement as set forth above
and further agree to be bound by the terms thereof.
/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
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