Exhibit 10.15
SEVERANCE
AGREEMENT
THIS SEVERANCE
AGREEMENT (“Agreement”) is made and entered into
effective this 1 st
day of
April 2007, by and between Heritage Bank, (the “Bank”)
and Edward Cameron (“Executive”). The Bank is the
wholly-owned subsidiary of Heritage Financial Corporation (the
“Company”).
RECITALS
1. The Bank currently receives the
exclusive services of Executive as its employee, and both the Bank
and Executive desire that this employment relationship
continue.
2. In order to encourage Executive
to continue his employment relationship with the Bank, thereby
allowing the Bank to maximize the benefits obtainable by its
shareholder and the shareholders of the Company from any such
change, the Bank desires to provide a severance benefit to
Executive. This Agreement supercedes any severance agreement which
may currently exist.
3. Executive has declared his
intention to retire from his position upon a mutually agreed upon
date of April 30, 2008 (“Retirement
Date”).
In consideration of the mutual
promises, covenants, agreements and undertakings contained in this
Agreement, the parties hereby contract and agree as
follows:
AGREEMENT
1. Term . The term of
this Agreement (“Term”) shall commence as of the date
first above written and shall end on April 30, 2008, unless
extended in writing by the parties.
2. Severance Payment
.
2.1 Determination of Payment
. In the case of a Termination Event, as defined in Section 4,
the Bank shall pay to Executive a severance payment
(“Severance Payment”) in an amount equal to
Executive’s then current annual base salary or equal to his
salary thru his Retirement Date, as defined herein, whichever is
less, in addition to all salary and benefits earned through the
effective date of Executive’s termination, and vesting of all
stock options and lapse of all restrictions with respect to
restricted stock awards shall occur. The severance benefit, vesting
and lapse of all restrictions described in the preceding sentence
shall be paid and shall occur, respectively, (i) in the case
of a Termination Event described in paragraph 4.1, upon the
effective date of termination, and (ii) in the case of a
Termination Event described in paragraph 4.2, upon the effective
date of the Change in Control.
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Notwithstanding any other provision
herein, if the payment under this Section, either alone or together
with other payments for benefits which the Executive has the right
to receive from the Bank, would constitute a “parachute
payment” as defined in Section 280G of the Internal
Revenue Code of 1986, as amended (“Code”), such
Severance Payment shall be reduced to the largest amount as will
result in no portion of the Severance Payment under this
Section 2.1 being subject to the excise tax imposed by
Section 4999 of the Code. The determination of any reduction
in the Severance Payment under this Section, pursuant to the
foregoing provision, shall be made by the Bank in good faith, and
such determination shall be conclusive and binding on the
Executive.
Also not withstanding any other
provision herein, if the Executive is deemed to be a
“Specified Employee” as defined herein, then payment of
his benefits under Section 4.1 that is payable because
Executive’s employment terminates as set forth in
Section 4.1, shall be delayed until six months and one day
after the date the benefit under Section 4.1 is payable,
unless Executive dies between such date and the payment date at
which time all such benefits shall then commence. Benefits
otherwise payable during the six months and one day payment delay
shall be paid in one lump sum without interest on or shortly after
the expiration of the six months and one day period.
3. Other Compensation and
Terms of Employment . Except with respect to the Severance
Payment, this Agreement shall have no effect on the determination
of any compensation payable by the Bank to the Executive, or upon
any of the other terms of Executive’s employment with the
Bank.
4. Termination Events
. A Termination Event shall be deemed to occur upon, and only
upon, one or more of the following:
4.1 Termination of Executive’s
employment by the Bank without Cause (as defined below) or by
Executive for Good Reason (as defined below) prior to
Executive’s Retirement Date following the effective date of a
Change in Control (as defined below); or
4.2 Termination of Executive’s
employment by the Bank without Cause prior to a Change in Control
if such termination occurs at any time from and after sixty days
prior to the public announcement by the Bank or any other party of
a transaction which will result in a Change in Control; provided
that the effective date of the Change in Control occurs within
Eighteen months after Executive’s termination.
5. Definitions
.
5.1 Cause .
“Cause” shall mean only (i) willful misfeasance,
failure to follow direction by a senior officer or gross negligence
in the performance of Executive’s duties, (ii) conduct
demonstrably and significantly harmful to the Bank (which would
include willful violation of any final cease and desist order
applicable to the Bank), or (iii) conviction of a
felony.
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5.2 Change in Control . For
purposes of this Agreement, “Change in Control” shall
mean a change in the ownership of the Company
