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EXHIBIT 10.6
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 DAVID L.
PRYSOCK ("Executive").
RECITALS
A. The Executive is employed by
the Company as its Executive Vice President,
Chief Credit
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 following
circumstances shall qualify as "Cause" under this Agreement:
(A) Embezzlement,
dishonesty or other fraudulent acts involving
the Company or the Company's business operations;
(B) Material breach of
any confidentiality agreement or policy;
(C) 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;
(D) 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
(E) 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 Company specifying in detail the
performance issues; and
(ii) A reasonable opportunity to cure the issues specified
in the notice.
(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.
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(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;
(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
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(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.
(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;
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(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.
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
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(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
(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.
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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.
(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
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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
(xi) Other
similar recurring or non-recurring payments.
(3) The Executive's
"average bonus" is the average of:
(A) The actual
bonus paid or payable for the bonus computation
year that ended before the bonus computation year in which
the Termination Event occurs; and
(B) The
annualized amount of the bonus the Executive earned,
determined as of the end of the month in which the
Termination Event occurs, for the bonus computation year in
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