EXHIBIT 10.8

 

PACIFIC CONTINENTAL

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (“Agreement”), dated and signed as of December 10,
2002, is entered into between PACIFIC CONTINENTAL BANK (“Bank”), PACIFIC
CONTINENTAL CORPORATION (“Corporation”) and HAL M. BROWN (“Executive”).

 

RECITALS

 

A.   Executive currently serves as President and Chief Executive Officer of the
Bank and Corporation.

 

B.   Corporation and Bank desire Executive to continue his employment at the
Bank and Corporation under the terms and conditions of this Agreement.

 

C.   Executive desires to continue his employment at the Bank and Corporation
under the terms and conditions of this Agreement.

 

D.   This Agreement supercedes any and all other employment, severance or
similar agreements that may currently be in effect for Executive with either the
Bank or the Corporation.

 

AGREEMENT

 

In consideration of the promises set forth in this Agreement, the parties agree
as follows.

 

1.   Employment.    The Bank and Corporation agree to employ Executive, and
Executive accepts employment by the Bank and Corporation on the terms and
conditions set forth in this Agreement. Executive’s title will be President and
Chief Executive Officer of both the Bank and Corporation. During the Term of
this Agreement, Executive will serve as a director of both the Bank and
Corporation.

 

2.   Term.    The term of this Agreement (“Term”) commences from the date hereof
and expires on April 30, 2005, unless sooner terminated in accordance with
Section 9 or extended until April 30 of subsequent years in accordance with this
Section 2. Notwithstanding any termination or expiration of this Agreement, so
long as Executive is employed by the Corporation or any of its subsidiaries, the
provisions of Section 10 shall survive until such time as the Corporation’s
Board of Directors specifically terminates Section 10.

 

  a.   Each year, commencing in 2003, Executive may include, as an agenda item
for consideration by the Boards of Directors of the Corporation and the Bank at
their annual organization meetings, the extension of the Term of this Agreement
for an additional one year (the “Extension Notice”). By way of example, if the
Term is extended at the annual meetings in 2003, then this Agreement shall
expire on April 30, 2006 rather than April 30, 2005, and if the Term is
subsequently extended at the annual meetings in 2004, then this Agreement shall
accordingly expire on April 30, 2007.

 

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  b.   If Executive provides the Extension Notice, then the Term of this
Agreement shall be extended for one additional year unless a majority of the
Boards of Directors of both the Corporation and the Bank (excluding Executive)
elect not to extend the Term at their annual organization meetings. If the
Boards of Directors elect not to extend the Term, written notice of such fact
shall be promptly given to Executive.

 

  c.   If Executive fails provide the Extension Notice, then the Term of this
Agreement shall be extended only if a majority of the Boards of Directors of
both the Corporation and the Bank (excluding Executive) elect to extend the Term
for one additional year.

 

3.   Duties.    The Bank and Corporation will employ Executive as its President
and Chief Executive Officer. Executive will faithfully and diligently perform
his assigned duties, which are as follows:

 

  a.   Bank Performance.    Executive will be responsible for all aspects of the
Bank’s performance, including without limitation, directing that daily
operational and managerial matters are performed in a manner consistent with
Corporation’s and the Bank’s policies.

 

  b.   Development and Preservation of Business.    Executive will be
responsible for the development and preservation of banking relationships and
other business development efforts (including appropriate civic and community
activities) in the Bank’s market area.

 

  c.   Report to Board.    Executive will report directly to the Bank’s and the
Corporation’s boards of directors.

 

4.   Extent of Services.    Executive will devote all of his working time,
attention and skill to the duties and responsibilities set forth in Section 3.
To the extent that such activities do not interfere with his duties under
Section 3, Executive may participate in other businesses as a passive investor,
but (a) Executive may not actively participate in the operation or management of
those businesses, and (b) Executive may not, without the Bank’s or the
Corporation’s prior written consent, make or maintain any investment in a
business with which the Bank and/or Corporation has an existing competitive or
commercial relationship.

 

5.   Salary.    In addition to normal fees as a member of the Boards of
Directors of the Bank and the Corporation, Executive will initially receive an
annual base salary of $175,000, to be paid in accordance with the Bank’s regular
payroll schedule. Subsequent salary increases are subject to the Bank’s and
Corporation’s annual review of Executive’s compensation and performance.

 

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6.   Incentive Compensation.    Each year during the Term, the Bank’s board of
directors will determine the amount of bonus to be paid by the Bank to Executive
for that year. Such bonus shall be determined in accordance with the Bank’s
401(k)/bonus formula, as such formula is in effect as of the date of this
Agreement and as it may be modified with Executive’s prior approval. This bonus
will be paid to Executive no later than February 15 of the year following the
year in which the bonus is earned by Executive.

 

7.   Income Deferral.    Executive will be eligible to participate in any
program available to the Bank’s and Corporation’s senior management for income
deferral, for the purpose of deferring receipt of any or all of the compensation
he may become entitled to under this Agreement.

 

8.   Vacation and Benefits.

 

  a.   Vacation and Holidays.    Executive will receive six (6) weeks of paid
vacation each year. Each year, Executive may carry over up to three (3) weeks of
unused vacation to the following year. Any unused vacation time in excess of
three (3) weeks will not accumulate or carry over from one calendar year to the
next.

 

  b.   Benefits.    Executive will be entitled to participate in any group life
insurance, disability, health and accident insurance plans, profit sharing and
pension plans and in other employee fringe benefit programs the Bank or
Corporation may have in effect from time to time for its similarly situated
employees, in accordance with and subject to any policies adopted by the Bank’s
or Corporation’s board of directors with respect to the plans or programs,
including without limitation, any incentive or employee stock option plan,
deferred compensation plan, 401(k) plan (including matching or profit plan), and
Supplemental Executive Retirement Plan (SERP). Neither the Bank nor Corporation
through this Agreement obligates itself to make any particular benefits
available to its employees.

 

  c.   Business Expenses.    The Bank will reimburse Executive for ordinary and
necessary expenses which are consistent with past practice at the Bank
(including, without limitation, travel, entertainment, and similar expenses) and
which are incurred in performing and promoting the Bank’s business. Executive
will present on a monthly basis itemized accounts of these expenses, subject to
any limits of Bank policy or the rules and regulations of the Internal Revenue
Service.

 

9.   Termination of Employment.

 

  a.   Termination By Bank for Cause.    If, during the Term, the Bank
terminates Executive’s employment for Cause (defined below), the Bank will pay
Executive the salary earned and expenses reimbursable under this Agreement
incurred through the date of his termination. Executive will have no right to
receive compensation or other benefits for any period after termination under
this Section 9.

 

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  b.   Other Termination By Bank.    If, during the Term, the Bank terminates
Executive’s employment without Cause, or Executive terminates his employment for
Good Reason (defined below), the Bank will pay Executive the compensation
(including the bonus described in Section 6) and other benefits (described in
Section 8) he would have been entitled to if his employment had not terminated
(the “Termination Payment”), for a period of twelve months. In the event of a
termination related to a Change in Control pursuant to Section 10, the
provisions of Section 10 shall supersede this section.

 

  c.   Death or Disability.    This Agreement terminates (1) if Executive dies
or (2) if Executive is unable to perform his duties and obligations under this
Agreement for a period of 90 days as a result of a physical or mental disability
(such inability being, a “Disability”), unless with reasonable accommodation
Executive could continue to perform his duties under this Agreement and making
these accommodations would not pose an undue hardship on the Bank. If
termination occurs under this Section 9(c), Executive or his estate will be
entitled to receive all compensation and benefits earned and expenses
reimbursable through the date Executive’s employment terminated.

 

  d.   Return of Bank Property.    If and when Executive ceases, for any reason,
to be employed by the Bank or the Corporation, Executive must return to the Bank
all keys, pass cards, identification cards and any other property of the Bank or
Corporation. At the same time, Executive also must return to the Bank all
originals and copies (whether in hard copy, electronic or other form) of any
documents, drawings, notes, memoranda, designs, devices, diskettes, tapes,
manuals, and specifications which constitute proprietary information or material
of the Bank or Corporation. The obligations in this paragraph include the return
of documents and other materials which may be in his desk at work, in his car,
in place of residence, or in any other location under his control.

 

  e.   Cause.    “Cause” means any one or more of the following:

 

  (1)   Willful misfeasance or gross negligence in the performance of
Executive’s duties;

 

  (2)   Conviction of a crime in connection with his duties; or

 

  (3)   Conduct demonstrably and significantly harmful to the Bank, as
reasonably determined on the advice of legal counsel by the Bank’s board of
directors.

 

  f.   Good Reason.    “Good Reason” means only any one or more of the
following:

 

  (1)   Reduction of Executive’s salary or reduction or elimination of any
significant compensation or benefit plan benefiting Executive, unless the
reduction or elimination is generally applicable to substantially all Bank
employees (or employees of a successor or controlling entity of the Bank)
formerly benefited;

 

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  (2)   The assignment to Executive without his consent of any authority or
duties materially inconsistent with Executive’s position as of the date of this
Agreement; or

 

  (3)   A relocation or transfer of Executive’s principal place of employment
that would require Executive to commute on a regular basis more than 50 miles
each way from his present place of employment.

 

  g.   Change in Control.    ”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.

 

10.   Payment Related to a Change in Control.

 

  a.   Payment Triggers.    Upon the occurrence of any of the following, each of
which is a “Triggering Event,” Executive will be entitled to receive the payment
and benefits described in Section 10(b):

 

  (1)   A Change in Control of the Bank and/or the Corporation is consummated
while Executive is employed by the Bank, and Executive is not offered a
Comparable Position (as defined below) with the acquiring company;

 

  (2)   Within one year after accepting a Comparable Position with the acquiring
company, Executive’s employment ceases for any reason other than termination for
Cause; or

 

  (3)   The Bank terminates Executive’s employment without Cause or Executive
resigns for Good Reason, and within one year thereafter the Bank and/or the
Corporation enters into an agreement for a Change in Control or any party
announces or is required by law to announce a prospective Change in Control of
the Bank and/or the Corporation.

 

  (4)   A “Comparable Position” means the position of CEO of the acquiring
company, on financial terms in the aggregate no less favorable than this
Agreement.

 

  b.   Payment Amount.    If a Triggering Event occurs, the Bank will pay
Executive, upon the closing of the Change in Control or termination of
Executive’s employment, whichever is applicable, a single payment in an amount
equal to two and one-half (2.5) times the highest compensation (as reportable on
Executive’s IRS W-2 form) received by Executive from the Bank and/or the
Corporation during any of the most recent three (3) calendar years ending
before, or simultaneously with, the date on which the Change in Control occurs
or the termination of Executive’s employment, as applicable, less the amount of
any Termination Payments that may have been paid to Executive pursuant to
Section 9(b). If Executive’s employment is terminated pursuant to Section 10(a),
the Bank will also maintain and provide for one-year following Executive’s
termination or the closing of the Change in Control, whichever is later, at no
cost to Executive, the benefits described in Section 8(b) to which Executive is
entitled (determined as of the day before the date of such termination); but if
Executive’s participation in any such benefit is thereafter barred or not
feasible, or discontinued or materially reduced, the Bank will arrange to
provide Executive with either benefits substantially similar to those benefits
or a cash payment of substantially similar value in lieu of the benefits.

 

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  c.   Limitations on Payments Related to Change in Control.    The following
apply notwithstanding any other provision of this Agreement:

 

  (1)   If the total of the payments and benefits described in Section 10(b)
will be an amount that would cause them to be a “parachute payment” within the
meaning of Section 280G(b)(2)(A) of the Internal Revenue Code (a “Parachute
Payment Amount”), then such payment(s) shall be reduced so that the total amount
thereof is $1 less than the Parachute Payment Amount; and

 

  (2)   Executive’s right to receive the payments and benefits described in
Section 10(b) terminates immediately if before the Change in Control transaction
closes, Executive terminates his employment without Good Reason or the Bank
terminates Executive’s employment for Cause.

 

  d.   Survival.    The provisions of this Section 10 will survive any
termination or expiration of this Agreement until such time as the Corporation’s
Board of Directors specifically terminates this Section 10.

 

11.   Confidentiality.    Executive will not, after the date this Agreement is
signed, including during and after its Term, use for his own purposes or
disclose to any other person or entity any confidential business information
concerning the Bank or Corporation or their business operations, unless (1) the
Bank or Corporation consents to the use or disclosure of their respective
confidential information; (2) the use or disclosure is consistent with
Executive’s duties under this Agreement or (3) disclosure is required by law or
court order. For purposes of this Agreement, confidential business information
includes, without limitation, trade secrets, various confidential information
concerning all aspects of current and future operations, nonpublic information
on investment management practices, marketing plans, pricing structure and
technology of either the Bank or Corporation. Executive will also treat the
terms of this Agreement as confidential business information.

 

12.   Nonsolicitation.    For two years after Executive’s employment under this
Agreement terminates, Executive will not, directly or indirectly, persuade or
entice, or attempt to persuade or entice, (i) any employee of the Bank or
Corporation to terminate his/her employment with the Bank or Corporation, or
(ii) any customer of the Bank or Corporation to terminate his/her relationship
with the Bank or Corporation or to otherwise direct any portion of his/her
business away from the Bank or Corporation.

 

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13.   Enforcement.

 

  a.   The Bank and Executive stipulate that, in light of all of the facts and
circumstances of the relationship between Executive and the Bank, the agreements
referred to in Sections 11 and 12 are fair and reasonably necessary for the
protection of the Bank’s and Corporation’s confidential information, goodwill
and other protectable interests. If a court of competent jurisdiction should
decline to enforce any of those covenants and agreements, Executive and the Bank
request the court to reform these provisions to restrict Executive’s use of
confidential information and Executive’s ability to solicit employees to the
maximum extent, in time and scope, the court finds enforceable.

 

  b.   Executive acknowledges the Bank and Corporation will suffer immediate and
irreparable harm that will not be compensable by damages alone if Executive
repudiates or breaches any of the provisions of Sections 11 and 12 or threatens
or attempts to do so. For this reason, under these circumstances, the Bank, in
addition to and without limitation of any other rights, remedies or damages
available to it at law or in equity, will be entitled to obtain temporary,
preliminary and permanent injunctions in order to prevent or restrain the
breach, and the Bank will not be required to post a bond as a condition for the
granting of this relief.

 

14.   Covenants.    Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 11 and 12 and that the
Bank is entitled to require him to comply with these Sections. These Sections
will survive termination of this Agreement.

 

15.   Arbitration.

 

  a.   Arbitration.    At either party’s request, the parties must submit any
dispute, controversy or claim arising out of or in connection with, or relating
to, this Agreement or any breach or alleged breach of this Agreement, to
arbitration under the American Arbitration Association’s rules then in effect
(or under any other form of arbitration mutually acceptable to the parties). A
single arbitrator agreed on by the parties will conduct the arbitration. If the
parties cannot agree on a single arbitrator, each party must select one
arbitrator and those two arbitrators will select a third arbitrator. This third
arbitrator will hear the dispute. The arbitrator’s decision is final (except as
otherwise specifically provided by law) and binds the parties, and either party
may request any court having jurisdiction to enter a judgment and to enforce the
arbitrator’s decision. The arbitrator will provide the parties with a written
decision naming the substantially prevailing party in the action. This
prevailing party is entitled to reimbursement from the other party for its costs
and expenses, including reasonable attorneys’ fees.

 

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  b.   Governing Law.    All proceedings will be held at a place designated by
the arbitrator in Lane County, Oregon.

 

  c.   Exception to Arbitration.    Notwithstanding the above, if Executive
violates Section 11 or 12, the Bank and/or Corporation will have the right to
initiate the court proceedings described in Section 13b), in lieu of an
arbitration proceeding under this Section 15.

 

16.   Miscellaneous Provisions.

 

  a.   Entire Agreement.    This Agreement constitutes the entire understanding
and agreement between the parties concerning its subject matter and supersedes
all prior agreements, correspondence, representations, or understandings between
the parties relating to its subject matter.

 

  b.   Binding Effect.    This Agreement will bind and inure to the benefit of
the Bank’s, Corporation’s and Executive’s heirs, legal representatives,
successors and assigns.

 

  c.   Litigation Expenses.    If either party successfully seeks to enforce any
provision of this Agreement or to collect any amount claimed to be due under it,
this party will be entitled to reimbursement from the other party for any and
all of its out-of-pocket expenses and costs including, without limitation,
reasonable attorneys’ fees and costs incurred in connection with the enforcement
or collection.

 

  d.   Waiver.    Any waiver by a party of its rights under this Agreement must
be written and signed by the party waiving its rights. A party’s waiver of the
other party’s breach of any provision of this Agreement will not operate as a
waiver of any other breach by the breaching party.

 

  e.   Assignment.    The services to be rendered by Executive under this
Agreement are unique and personal. Accordingly, Executive may not assign any of
his rights or duties under this Agreement.

 

  f.   Amendment.    This Agreement may be modified only through a written
instrument signed by both parties.

 

  g.   Severability.    The provisions of this Agreement are severable. The
invalidity of any provision will not affect the validity of other provisions of
this Agreement.

 

  h.   Governing Law and Venue.    This Agreement will be governed by and
construed in accordance with Oregon law, except to the extent that certain
matters may be governed by federal law. The parties must bring any legal
proceeding arising out of this Agreement in Lane County, Oregon.

 

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  i.   Counterparts.    This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which taken
together will constitute one and the same document.

 

Signed as of: December 10, 2002:

 

EXECUTIVE:

/s/    Hal M. Brown

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Hal M. Brown

 

PACIFIC CONTINENTAL BANK:

By

 

/s/    Robert Ballin

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Robert Ballin

Its: Chairman of the Board

 

PACIFIC CONTINENTAL CORPORATION

By

 

 

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Robert Ballin

Its: Chairman of the Board

 

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