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EXHIBIT 10.3
CHANGE IN CONTROL AGREEMENT
EFFECTIVE DATE: JANUARY 1, 2004
This CHANGE IN CONTROL AGREEMENT
("Agreement") is made by WEST COAST BANCORP
("Bancorp") and WEST COAST BANK ("Bank")
(collectively "Company") and ANDERS
GILTVEDT ("Executive").
RECITALS
A. The
Executive is employed by the Company as its Executive Vice
President and Chief Financial Officer.
B. The
Board recognizes that a possible or threatened Change in
Control
may result in key management personnel being concerned about
their
continued employment status or responsibilities. In addition, they
may
be approached by other companies offering competing employment
opportunities. Consequently, they will be distracted from their
duties
and may even leave the Company during a time when their
undivided
attention and commitment to the best interests of the Company
and
Bancorp's shareholders would be vitally important.
C. The
Company considers it essential to its best interests and those
of
Bancorp's shareholders to provide for the continued employment of
key
management personnel in the event of a Change in Control.
D.
Therefore, in order to--
(1) Encourage
the Executive to assist the Company during a Change
in Control and be available during the transition afterwards;
(2) Give
assurance regarding the Executive's continued employment
status and responsibilities in the event of a Change in
Control; and
(3) Provide
the Executive with Change in Control benefits
competitive with the Company's peers
--the parties agree on the following:
TERMS AND CONDITIONS
1.
DEFINITIONS. Words and phrases appearing in this Agreement with
initial
capitalization are defined terms that have the meanings stated
below.
Words appearing in the following definitions which are
themselves
defined terms are also indicated by initial capitalization.
(a) "BENEFICIAL OWNERSHIP"
means direct or indirect ownership
within the meaning of Rule 13(d)(3) under the Exchange Act.
(b) "BOARD"
means Bancorp's Board of Directors.
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(c) "CAUSE"
means either:
(1) Any of the
circumstances that qualify as grounds for
termination for cause under the Executive's
employment agreement as in effect at the time; or
(2) If no
employment agreement is in effect at that time
or if the employment agreement in effect at that time
does not specify grounds for termination for cause,
any of the circumstances listed in subparagraph (A)
below shall qualify as "Cause" under this Agreement,
subject to the due process requirement of
subparagraph (B) below:
(A) Any of the
following circumstances shall
qualify as "Cause:"
(i)
Embezzlement, dishonesty or other
fraudulent acts involving the
Company or the Company's business
operations;
(ii)
Material breach of any
confidentiality agreement or
policy;
(iii) Conviction
(whether entered upon a
verdict or a plea, including a plea
of no contest) on any felony charge
or on a misdemeanor reflecting upon
the Executive's honesty;
(iv)
An act or omission that materially
injures the Company's reputation,
business affairs or financial
condition, if that injury could
have been reasonably avoided by the
Executive; or
(v) Willful
misfeasance or gross
negligence in the performance of
the Executive's duties provided,
however, that the Executive is
first given:
(I) Written
notice by the
Committee specifying in
detail the performance
issues; and
(II)
A reasonable opportunity to
cure the issues specified
in the notice.
(B) The
Company may not terminate the
Executive's employment for Cause unless:
(i) The determination that Cause
exists
is made and approved by two-thirds
of the Board;
(ii) The
Executive is given reasonable
notice of the Board meeting called
to make that determination; and
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(iii) The
Executive and the Executive's
legal counsel are given the
opportunity to address that meeting.
(d) "CHANGE IN
CONTROL" means:
(1)
Except as
provided in subparagraph (B) below, an
acquisition or series of acquisitions as described in
subparagraph (A) below.
(A) The
acquisition by a Person of the
Beneficial Ownership of more than 30% of
either:
(i)
Bancorp's then outstanding shares of
common stock; or
(ii) The
combined voting power of
Bancorp's then outstanding voting
securities entitled to vote
generally in the election of
directors.
(B) This
paragraph (1) does not apply to any
acquisition:
(i) Directly
from the Company;
(ii)
By the Company; or
(iii) Which is
part of a transaction that
satisfies the exception in paragraph
(3)(A), (B) and (C) below;
(2) The
incumbent directors cease for any reason to be a
majority of the Board. The "incumbent directors" are
directors who are either:
(A) Directors
on the Effective Date; or
(B) Elected,
or nominated for election, to the
Board by a majority vote of the members of
the Board or the Nominating Committee of the
Board who were directors on the Effective
Date. However this subparagraph (B) does not
include any director whose election came as
a result of an actual or threatened election
contest regarding the election or removal of
directors or other actual or threatened
solicitation of proxies by or on behalf of a
Person other than the Board;
(3)
Consummation of a merger, reorganization or
consolidation of Bancorp or the sale or other
disposition of substantially all of it assets, except
where:
(A) Persons
who, immediately before the
consummation, had, respectively, a
Controlling Interest in and Voting Control
of Bancorp have, respectively, a Controlling
Interest in, and Voting Control of the
resulting entity;
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(B) No Person
(other than the entity resulting
from the transaction or an employee benefit
plan maintained by that entity) has the
Beneficial Ownership of more than 30% of
either:
(i)
The resulting entity's then
outstanding shares of common stock
or other comparable equity security;
or
(ii) The
combined voting power of the
resulting entity's then outstanding
voting securities entitled to vote
generally in the election of
directors,
except to the extent that Person held that
Beneficial Ownership before the
consummation; and
(C) A majority
of the members of the board of
directors of the resulting entity were
members of the Board at either the time:
(i) The
transaction was approved by the
Board; or
(ii)
The initial agreement for the
transaction was signed; or
(4) Approval
by Bancorp's shareholders of its complete
liquidation or dissolution.
(e) "CHANGE IN
CONTROL PROPOSAL" means any proposal or offer that
is intended to or has the potential to result in a Change in
Control.
(f) "CODE"
means the Internal Revenue Code of 1986.
(g)
"COMMITTEE" means the Compensation and Personnel Committee of
the Board.
(h)
"CONTROLLING INTEREST" means Beneficial Ownership of more than
50% of the outstanding shares common stock of a corporation or
the comparable equity securities of a noncorporate business
entity.
(i)
"DISABILITY" means that either the carrier of any
Company-provided individual or group long-term disability
insurance policy covering the Executive or the Social Security
Administration has determined that the Executive is disabled.
Upon the request of the Committee, the Executive will submit
proof of the carrier's or the Social Security Administration's
determination.
(j) "EFFECTIVE
DATE" means January 1, 2004.
(k) "ERISA"
means the Employee Retirement Security Act of 1974.
(l) "EXCHANGE
ACT" means the Securities Exchange Act of 1934.
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(m) "GOOD
REASON" means any one of the following:
(1) Any
reduction in the Executive's salary or reduction
or elimination of any compensation or benefit plan
benefiting the Executive, which reduction or
elimination does not generally apply to substantially
all similarly situated employees of the Company or
such employees of any successor entity or of any
entity in control of Bancorp or the Bank;
(2) A
relocation or transfer of the Executive's place of
employment to an office or location that is more than
35 miles from the Executive's then current place of
employment; or
(3) A material
diminution in the Executive's
responsibilities, title or duties.
(n) "PERSON"
means any individual, entity or group within the
meaning of Sections 13(d) and 14(d) of the Exchange Act, other
than a trustee or fiduciary holding securities under an
employee benefit plan of the Company.
(o)
"TERMINATION EVENT" means any of the following events:
(1) The
Executive terminates employment for Good Reason
within 24 months after a Change in Control;
(2) The
Company terminates the Executive's employment
other than for Cause, Disability or death within 24
months after a Change in Control;
(3) The
Company terminates the Executive's employment
before a Change in Control if:
(A) The
termination is not for Cause, Disability
or death; and
(B) The
termination occurs either on or after:
(i) The
announcement by Bancorp, or any
other Person, that a Change in
Control is contemplated or
intended; or
(ii)
The date a contemplated or intended
Change in Control should have been
announced under applicable
securities or other laws; or
(4) The date
the Executive's continued employment begins
under Section 3(b).
(p) "VOTING
CONTROL" means holding more than 50% of the combined
voting power of an entity's then outstanding securities
entitled to vote in the election of its directors or other
governing body.
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2.
INITIAL TERM; RENEWALS; EXTENSION.
(a) The
initial term of this Agreement begins on the Effective
Date and ends on December 31, 2004.
(b) Following
this initial term, this Agreement will automatically
renew on January 1 of each year for subsequent one-year terms,
unless not later than the September 30 preceding the upcoming
renewal date, either the Company or the Executive gives the
other written notice terminating this Agreement as of the
upcoming December 31.
(c) If a
definitive agreement providing for a Change in Control is
signed on or before the expiration date of the initial term or
any renewal term, the term of this Agreement then in effect
will automatically be extended to 24 months after the
effective date (as stated in the definitive agreement) of the
Change in Control. During this extended period, the Board may
not terminate this Agreement without the Executive's written
consent.
3.
EXECUTIVE'S OBLIGATIONS.
(a) The
Executive agrees that, upon notification that the Company
has received a Change in Control Proposal, the Executive
shall:
(1) At the
Company's request, assist the Company in
evaluating that proposal; and
(2) Not resign
the Executive's position with the Company
until the transaction contemplated by that proposal
is either consummated or abandoned.
(b) If, within
24 months following a Change in Control, the
Company wants the Executive to continue employment in a
position or under circumstances that would qualify as Good
Reason for the Executive terminating employment:
(1) The
Executive shall nevertheless agree to that
continued employment, provided that:
(A) The term
of this continued employment shall
not exceed 90 days or such shorter or longer
term as agreed by the Company and the
Executive;
(B) The
continued employment will be at an
executive level position that is reasonably
comparable to the Executive's then current
position;
(C) The
continued employment shall be at either:
(i) The Executive's
then current place
of employment; or
(ii) Such
other location as agreed by the
Company and the Executive; and
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(D) As
compensation for this continued
employment, the Executive shall receive:
(i)
The same base pay and bonus
arrangement as in effect on the day
before the continued employment
agreement became effective (or their
hourly equivalent); and
(ii)
Either:
(I)
Continuation of the
Executive's employee
benefits, fringe benefits
and perquisites at their
then current level; or
(II)
If that continuation is not
reasonably feasible, the
Executive shall receive
additional cash
compensation equal to the
amount the Company would
have paid as the employer
contribution for the items
that cannot be continued.
(2) The date
this continued employment begins shall be
treated as a Termination Event, so that benefits will
be payable under this Agreement, in accordance with
its terms and conditions, even though the Executive's
employment with the Company has not terminated.
4.
SEVERANCE BENEFITS. Upon a Termination Event, the Executive
will
receive severance benefits as follows:
(a)
COMPONENTS. The severance benefits will consist of:
(1) The cash
compensation payment under subsection (b)
below;
(2) The equity
acceleration under subsection (c) below;
(3) The health
plan continuation benefits under
subsection (d) below;
(4) The 401(k)
equivalency payment under subsection (e)
below; and
(5) The
outplacement/tax planning benefits under
subsection (f) below.
(b) CASH
COMPENSATION PAYMENT.
(1) This
payment will equal two times the Executive's
cash compensation. The Executive's "cash
compensation" is the sum of:
(A) The
Executive's adjusted salary as
determined under paragraph (2) below; and
(B) The
Executive's average bonus as determined
under paragraph (3) below.
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(2) The
Executive's "adjusted salary" is the Executive's
annualized regular monthly salary in effect on the
date of the Termination Event as reportable on IRS
Form W-2, adjusted by including and excluding the
following items:
(A)
Include
any salary deferral contributions
made under any employee benefit plan
maintained by the Company, including
Bancorp's Executives' Deferred Compensation
Plan;
(B)
Exclude:
(i)
Bonus payments;
(ii) Bonus
amounts deferred including any
made under any employee benefit plan
maintained by the Company, including
Bancorp's Executives' Deferred
Compensation Plan;
(iii)
Reimbursements or other expense
allowances, fringe benefits (cash
and noncash), moving expenses,
severance or disability pay and
welfare benefits;
(iv)
Employer contributions to a deferred
compensation plan to the extent the
contributions are not included in
the Executive's gross income for the
calendar year in which contributed,
and any distributions from a
deferred compensation plan,
regardless of whether those amounts
are includible in the Executive's
gross income when distributed;
(v)
Amounts realized from the exercise
of non-qualified stock options or
when restricted stock (or property)
becomes freely transferable or no
longer subject to a substantial risk
of forfeiture;
(vi)
Amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
stock option;
(vii) The value
of a non-qualified stock
option included in income in the
year in which granted;
(viii) Amounts
includible in income upon
making a Code Section 83(b)
election;
(ix)
Taxable benefits, such as premiums
for excess group term life
insurance;
(x)
Imputed income from any life
insurance on the Executive's life
that is owned by or funded in whole
or in part by the Company; and
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(xi) Other
similar recurring or
non-recurring payments.
(3) The
Executive's "average bonus" is the
