Document:

Manpower Inc.

	Exhibit 10.4

	 
	100 Manpower Place

	 

	 
	Milwaukee, Wisconsin 53212

	 

	 
	 
	 

	 
	Effective November 10, 2009

	 

Owen Sullivan

Executive Vice President – Manpower Inc.

CEO – Right Management Consultants

CEO – Jefferson Wells International

Dear Owen:

Manpower Inc. (the “Corporation”) desires to retain experienced, well-qualified executives, like you, to assure the continued growth and success of the Corporation and its direct and indirect subsidiaries (collectively, the “Manpower Group”).  Accordingly, as an inducement for you to continue your employment in order to assure the continued availability of your services to the Manpower Group, we have agreed as follows:

1.

Definitions.  For purposes of this letter:

(a)

Benefit Plans.  “Benefit Plans” means all benefits of employment generally made available to executives of the Corporation from time to time.

(b)

Cause.  Termination by the Manpower Group of your employment with the Manpower Group for “Cause” will mean termination upon (i) your repeated failure to perform your duties with the Manpower Group in a competent, diligent and satisfactory manner as determined by the Corporation’s Chief Executive Officer in his reasonable judgment, (ii) failure or refusal to follow the reasonable instructions or direction of the Corporation’s Chief Executive Officer, which failure or refusal remains uncured, if subject to cure, to the reasonable satisfaction of the Corporation’s Chief Executive Officer for five (5) business days after receiving notice thereof from the Corporation’s Chief Executive Officer, or repeated failure or refusal to follow the reasonable instructions or directions of the Corporation’s Chief Executive Officer, (iii) any act by you of fraud, material dishonesty or material disloyalty involving the Manpower Group, (iv) any violation by you of a Manpower Group policy of material import, (v) any act by you of moral turpitude which is likely to result in discredit to or loss of business, reputation or goodwill of the Manpower Group, (vi) your chronic absence from work other than by reason of a serious health condition, (vii) your commission of a crime the circumstances of which substantially relate to your employment duties with the Manpower Group, or (viii) the willful engaging by you in conduct which is demonstrably and materially injurious to the Manpower Group.  For purposes of this Subsection 1(b), no act, or failure to act, on your part will be deemed “willful” unless done, or omitted to be done, by you not in good faith.

(c)

Change of Control.  A “Change of Control” will mean the first to occur of the following: 

(i)

the acquisition (other than from the Corporation), by any Person (as defined in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), directly or indirectly, of beneficial ownership (within the meaning of Exchange Act Rule 13d-3) of more than 50% of the then outstanding shares of common stock of the Corporation or voting securities representing more than 50% of the combined voting power of the Corporation’s then outstanding voting securities entitled to vote generally in the election of directors; provided, however, no Change of Control shall be deemed to have occurred as a result of an acquisition of shares of common stock or voting securities of the Corporation (A) by the Corporation, any of its subsidiaries, or any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its subsidiaries or (B) by any other corporation or other entity with respect to which, following such acquisition, more than 60% of the outstanding shares of the common stock, and voting securities representing more than 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of such other corporation or entity are then beneficially owned, directly or indirectly, by the persons who were the Corporation’s shareholders immediately prior to such acquisition in substantially the same proportions as their ownership, immediately prior to such acquisition, of the Corporation’s then outstanding common stock or then outstanding voting securities, as the case may be; or

(ii)

the consummation of any merger or consolidation of the Corporation with any other corporation, other than a merger or consolidation which results in more than 60% of the outstanding shares of the common stock, and voting securities representing more than 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the surviving or consolidated corporation being then beneficially owned, directly or indirectly, by the persons who were the Corporation’s shareholders immediately prior to such merger or consolidation in substantially the same proportions as their ownership, immediately prior to such merger or consolidation, of the Corporation’s then outstanding common stock or then outstanding voting securities, as the case may be; or

(iii)

the consummation of any liquidation or dissolution of the Corporation or a sale or other disposition of all or substantially all of the assets of the Corporation; or

(iv)

individuals who, as of the date of this letter, constitute the Board of 

2

Directors of the Corporation (as of such date, the “Incumbent Board”) cease for any reason to constitute at least a majority of such Board; provided, however, that any person becoming a director subsequent to the date of this letter whose election, or nomination for election by the shareholders of the Corporation, was approved by at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this letter, considered as though such person were a member of the Incumbent Board but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest which was (or, if threatened, would have been) subject to Exchange Act Rule 14a-12(c); or

(v)

whether or not conditioned on shareholder approval, the issuance by the Corporation of common stock of the Corporation representing a majority of the outstanding common stock, or voting securities representing a majority of the combined voting power of the outstanding voting securities of the Corporation entitled to vote generally in the election of directors, after giving effect to such transaction.

Following the occurrence of an event which is not a Change of Control whereby there is a successor holding company to the Corporation, or, if there is no such successor, whereby the Corporation is not the surviving corporation in a merger or consolidation, the surviving corporation or successor holding company (as the case may be), for purposes of this letter, shall thereafter be referred to as the Corporation.

(d)

Good Reason.  “Good Reason” will mean, without your consent, the occurrence of any one or more of the following during the Term:

(i)

a material dimunition in your authority, duties or responsibilities; 

(ii)

any material breach of this agreement by the Corporation or of any material obligation of any member of the Manpower Group for the payment or provision of compensation or other benefits to you;

(iii)

a material dimunition in your base salary or a failure by the Manpower Group to provide an arrangement for you for any fiscal year of the Manpower Group giving you the opportunity to earn an incentive bonus for such year;

(iv)

your being required by the Corporation to materially change the location of your principal office; provided such new location is one in excess of fifty miles from the location of your principal office before such change; or

(v)

a material dimunition in your annual target bonus opportunity for a given fiscal year within two years after the occurrence of a Change of Control, as compared to the annual target bonus opportunity for the fiscal year 

3

immediately preceding the fiscal year in which a Change of Control occurred. 

Notwithstanding Subsections 1(d)(i) – (v) above, Good Reason does not exist unless (i) you object to any material dimunition or breach described above by written notice to the Corporation within twenty (20) business days after such dimunition or breach occurs, (ii) the Corporation fails to cure such dimunition or breach within thirty (30) days after such notice is given and (iii) your employment with the Manpower Group is terminated by you within ninety (90) days after such dimunition or breach occurs.  Further, notwithstanding Subsections 1(d)(i)-(v), above, Good Reason does not exist if, at a time that is not during a Protected Period or within two years after the occurrence of a Change of Control, the Corporation’s Chief Executive Officer, in good faith and with a reasonable belief that the reassignment is in the best interest of the Manpower Group, reassigns you to another senior executive level position in the Manpower Group provided that your base compensation (either base salary or target bonus opportunity for any year ending after the date of reassignment) is not less than such base salary or target bonus opportunity in effect prior to such reassignment for the year in which such reassignment occurs.

(e)

Notice of Termination.  Any termination of your employment by the Manpower Group, or termination by you for Good Reason, during the Term will be communicated by Notice of Termination to the other party hereto.  A “Notice of Termination” will mean a written notice which specifies a Date of Termination (which date shall be on or after the date of the Notice of Termination) and, if applicable, indicates the provision in this letter applying to the termination and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

(f)

Date of Termination.  “Date of Termination” will mean the date specified in the Notice of Termination where required (which date shall be on or after the date of the Notice of Termination) or in any other case upon your ceasing to perform services for the Manpower Group.

(g)

Protected Period.  The “Protected Period” shall be a period of time determined in accordance with the following:

(i)

if a Change of Control is triggered by an acquisition of shares of common stock of the Corporation pursuant to a tender offer, the Protected Period shall commence on the date of the initial tender offer and shall continue through and including the date of the Change of Control, provided that in no case will the Protected Period commence earlier than the date that is six months prior to the Change of Control;

(ii)

if a Change of Control is triggered by a merger or consolidation of the Corporation with any other corporation, the Protected Period shall commence on the date that serious and substantial discussions first take place to effect the merger or consolidation and shall continue through and including the date of the Change of Control, provided that in no case will 

4

the Protected Period commence earlier than the date that is six months prior to the Change of Control; and

(iii)

in the case of any Change of Control not described in Subsections 1(g)(i) or (ii), above, the Protected Period shall commence on the date that is six months prior to the Change of Control and shall continue through and including the date of the Change of Control.

(h)

Term.  The “Term” will be a period beginning on November 10, 2009 and ending on the first to occur of the following:  (a) the date which is the two-year anniversary of the occurrence of a Change of Control; (b) the date which is the three-year anniversary of September 6, 2009 if no Change of Control occurs between November 10, 2009 and such three-year anniversary; or (c) the Date of Termination.

2.

Compensation and Benefits on Termination.

(a)

Termination by the Manpower Group for Cause or by You Other Than for Good Reason.  If your employment with the Manpower Group is terminated by the Manpower Group for Cause or by you other than for Good Reason, the Corporation will pay or provide you with (i) your full base salary as then in effect through the Date of Termination, (ii) your unpaid bonus, if any, attributable to any complete fiscal year of the Manpower Group ended before the Date of Termination (but no incentive bonus will be payable for the fiscal year in which termination occurs), and (iii) all benefits to which you are entitled under any Benefit Plans in accordance with the terms of such plans.  The Manpower Group will have no further obligations to you.

(b)

Termination by Reason of Disability or Death.  If your employment with the Manpower Group terminates during the Term by reason of your disability or death, the Corporation will pay or provide you with (i) your full base salary as then in effect through the Date of Termination, (ii) your unpaid bonus, if any, attributable to any complete fiscal year of the Manpower Group ended before the Date of Termination, (iii) a bonus for the fiscal year during which the Date of Termination occurs equal to your target annual bonus for the fiscal year in which the Date of Termination occurs, but prorated for the actual number of days you were employed during such fiscal year, payable within sixty days after the Date of Termination, and (iv) all benefits to which you are entitled under any Benefit Plans in accordance with the terms of such plans.  For purposes of this letter, “disability” means that you (i) are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, or (ii) are, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, receiving income replacement benefits for a period of not less 

5

than three months under an accident and health plan covering employees of the Corporation or the Manpower Group.  The Manpower Group will have no further obligations to you.

(c)

Termination for Any Other Reason.  

(i)

If, during the Term and either during a Protected Period or within two years after the occurrence of a Change of Control, your employment with the Manpower Group is terminated for any reason not specified in Subsections 2(a) or (b), above, you will be entitled to the following:

(A)

the Corporation will pay you, your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given;

(B)

the Corporation will pay you, your unpaid bonus, if any, attributable to any complete fiscal year of the Manpower Group ended before the Date of Termination;

(C)

the Corporation will pay you, a bonus for the fiscal year during which the Date of Termination occurs equal in amount to your target annual bonus for the fiscal year in which the Change of Control occurs; provided, however, that if the Change of Control occurs prior to the date on which the Executive Compensation Committee of the Board approves a bona fide target annual bonus for the fiscal year in which the Change of Control occurs, the bonus paid hereunder shall be equal in amount to your target annual bonus for the fiscal year prior to the fiscal year in which the Change of Control occurs;

(D)

the Corporation will pay, as a severance benefit to you, a lump-sum payment equal to two times the sum of (1) your annual base salary at the highest rate in effect during the Term and (2)  your target annual bonus for the fiscal year in which the Change of Control occurs (or, to the extent the Change of Control occurs prior to the date on which the Executive Compensation Committee of the Board approves a bona fide target annual bonus for the fiscal year in which the Change of Control occurs, your target annual bonus for the fiscal year prior to the fiscal year in which the Change of Control occurs);  

(E)

for up to an eighteen-month period after the Date of Termination, the Corporation will arrange to provide you and your eligible dependents, at the Manpower Group’s expense, with Health Insurance Continuation (defined below), or other substantially similar coverage, in which you were participating on the Date of Termination; provided, however, that benefits otherwise 

6

receivable by you pursuant to this Subsection 2(c)(i)(E) will be reduced to the extent other comparable benefits are actually received by you during the eighteen-month period following your termination, and any such benefits actually received by you or your dependents will be reported to the Corpora­tion; and provided, further that any insurance continuation coverage that you may be entitled to receive under the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”), or similar foreign or state laws will commence on the Date of Termination.

For purposes of this Subsection 2(c)(i)(E), “Health Insurance Continuation” means that, if, and to the extent, you or any of your eligible dependents, following the Date of Termination, elect to continue coverage under the Corporation’s group medical and dental insurance plans, in accordance with the requirements of COBRA or similar foreign or state laws, the Manpower Group will pay the total cost of such COBRA coverage for the first eighteen months for which you and/or your eligible dependents are eligible for such coverage; provided, however, that if you, your spouse or any other eligible dependent commences new employment during such eighteen-month period and becomes eligible for health insurance benefits from such new employer, the Corporation’s obligation to provide such Corporation-subsidized COBRA coverage to you or such eligible dependent shall terminate as of the date you or such dependent becomes eligible to receive such health insurance benefits from such new employer.  Immediately following this period of Corporation-subsidized COBRA coverage, you and/or your eligible dependents, as applicable, will be solely responsible for payment of the entire cost of COBRA coverage if such coverage remains available and you and/or your eligible dependents choose to continue such coverage.  Within five calendar days of you or any of your eligible dependents becoming eligible to receive health insurance benefits from a new employer, you agree to inform the Corporation of such fact in writing.  If the Manpower Group determines that the Corporation-subsidized COBRA payments provided by this Subsection 2(c)(i)(E) are taxable, the payments will be grossed-up so that the net amount received by you, after subtraction of all taxes applicable to the payments plus the gross-up amount, will equal the cost of such COBRA coverage; and

(F)

the Corporation will make available to you, an outplacement service program, chosen by the Corporation, and provided by the Corporation or its subsidiaries or an outplacement service provider selected by the Corporation.  Such outplacement service 

7

program will be of a duration chosen by the Corporation but will not, in any instance, end later than one (1) year following the Date of Termination.  Upon completion of the outplacement program specified in this Subsection 2(c)(i)(F), you will be solely responsible for payment of any additional costs incurred as a result of your use of such outplacement services.  The Corporation will not substitute cash or other compensation in lieu of the outplacement service program specified in this Subsection 2(c)(i)(F).

(ii)

If your employment with the Manpower Group is terminated during the Term for any reason not specified in Subsections 2(a) or (b), above, and Subsection 2(c)(i), above, does not apply to the termination, you will be entitled to the following:

(A)

the Corporation will pay you, your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given;

(B)

the Corporation will pay you, your unpaid bonus, if any, attributable to any complete fiscal year of the Manpower Group ended before the Date of Termination;

(C)

the Corporation will pay you, a bonus for the fiscal year during which the Date of Termination occurs equal in amount to the bonus you would have received for the full fiscal year had your employment not terminated, determined by the actual financial results of the Corporation at year-end towards any non-discretionary financial goals and by basing any discretionary component at the target level of such component; provided, however, that such bonus will be prorated for the actual number of days you were employed during the fiscal year during which the Date of Termination occurs;

(D)

the Corporation will pay, as a severance benefit to you, a lump sum payment equal to (1) the amount of your annual base salary at the highest rate in effect during the Term plus (2) your target annual bonus for the fiscal year in which the Date of Termination occurs (or, to the extent the Date of Termination occurs prior to the date on which the Executive Compensation Committee of the Board approves a bona fide target annual bonus for you for the fiscal year in which the Date of Termination occurs, your target annual bonus for the fiscal year prior to the fiscal year in which the Date of Termination occurs);

(E)

for up to a twelve-month period after the Date of Termination, the Corporation will arrange to provide you and your eligible 

8

dependents with Health Insurance Continuation (defined below); provided, however, that benefits otherwise receivable by you pursuant to this Subsection 2(c)(ii)(E) will be reduced to the extent other comparable benefits are actually received by you during the twelve-month period following your termination, and any such benefits actually received by you or your dependents will be reported to the Corporation; and provided, further that any insurance continuation coverage that you may be entitled to receive under COBRA or similar foreign or state laws will commence on the Date of Termination.

For purposes of this Subsection 2(c)(ii)(E), “Health Insurance Continuation” means that, if, and to the extent, you or any of your eligible dependents, following the Date of Termination, elect to continue coverage under the Corporation’s group medical and dental insurance plans, in accordance with the requirements of COBRA or similar foreign or state laws, the Manpower Group will pay the normal monthly employer’s cost of coverage under the Corporation’s group medical and dental insurance plans toward such COBRA coverage for the first twelve months for which you and/or your eligible dependents are eligible for such coverage; provided, however, that if you, your spouse or any other eligible dependent commences new employment during such twelve-month period and becomes eligible for health insurance benefits from such new employer, the Corporation’s obligation to provide such Corporation-subsidized COBRA coverage to you or such eligible dependent shall terminate as of the date you or such dependent becomes eligible to receive such health insurance benefits from such new employer.  During this period of Corporation-subsidized COBRA coverage, you will be responsible for paying the balance of any costs not paid for by the Manpower Group under this Subsection 2(c)(ii)(E) which are associated with your participation in the Corporation’s medical and dental insurance plans and your failure to pay such costs may result in the termination of your participation in such plans.  The Corporation may deduct from any amounts payable to you under this Subsection 2(c)(ii) any amounts that you are responsible to pay for Health Insurance Continuation under this Subsection 2(c)(ii)(E).  Immediately following this period of Corporation-subsidized COBRA coverage, you and/or your eligible dependents, as applicable, will be solely responsible for payment of the entire cost of COBRA coverage if such coverage remains available and you and/or your eligible dependents choose to continue such coverage.  Within five calendar days of you or any of your eligible dependents becoming eligible to receive health insurance benefits from a new employer, you agree to inform the Corporation of such fact in writing.  If the 

9

Manpower Group determines that the Corporation-subsidized COBRA payments provided by this Subsection 2(c)(ii)(E) are taxable, the payments will be grossed-up so that the net amount received by you, after subtraction of all taxes applicable to the payments plus the gross-up amount, will equal the cost of such COBRA coverage; and

(F)

the Corporation will make available to you, an outplacement service program, chosen by the Corporation, and provided by the Corporation or its subsidiaries or an outplacement service provider selected by the Corporation.  Such outplacement service program will be of a duration chosen by the Corporation but will not, in any instance, end later than one (1) year following the Date of Termination.  Upon completion of the outplacement program specified in this Subsection 2(c)(ii)(F), you will be solely responsible for payment of any additional costs incurred as a result of your use of such outplacement services.  The Corporation will not substitute cash or other compensation in lieu of the outplacement service program specified in this Subsection 2(c)(ii)(F).

The amounts paid to you pursuant to Subsection 2(c)(i)(D) or 2(c)(ii)(D) will not be included as compensation for purposes of any qualified or nonqualified pension or welfare benefit plan of the Manpower Group.  Notwithstanding anything contained herein to the contrary, the Corporation, based on the advice of its legal or tax counsel, shall compute whether there would be any “excess parachute payments” payable to you, within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), taking into account the total ‘‘parachute payments,” within the meaning of Section 280G of the Code, payable to you by the Corporation under this letter agreement and any other plan, agreement or otherwise.  If there would be any excess parachute payments, the Corporation, based on the advice of its legal or tax counsel, shall compute the net after-tax proceeds to you, taking into account the excise tax imposed by Section 4999 of the Code, as if (i) amount to be paid to you pursuant to Subsection 2(c)(i)(D) were reduced, but not below zero, such that the total parachute payments payable to you would not exceed three (3) times the “base amount” as defined in Section 280G of the Code, less One Dollar ($1.00), or (ii) the full amount to be paid to you pursuant to Subsection 2(c)(i)(D) were not reduced.  If reducing the amount otherwise payable to you pursuant to Subsection 2(c)(i)(D) hereof would result in a greater after-tax amount to you, such reduced amount shall be paid to you and the remainder shall be forfeited by you as of the Date of Termination.  If not reducing the amount otherwise payable to you pursuant to Subsection 2(c)(i)(D) would result in a greater after-tax amount to you, the amount payable to you pursuant to Subsection 2(c)(i)(D) shall not be reduced.

(d)

Payment.  The payments provided for in Subsection 2(c)(i)(A) or 2(c)(ii)(A), above, will be made no later than required by applicable law.  The bonus payment provided for in Subsection 2(c)(i)(B) or 2(c)(ii)(B) will be made pursuant to the terms of the applicable bonus plan.  The bonus payment provided for in Subsection 2(c)(i)(C) will be paid no later than thirty (30) days after the Date of 

10

Termination.  The bonus payment provided for in Subsection 2(c)(ii)(C) will between January 1 and March 15 of the calendar year following the Date of Termination.  The severance benefit provided for in Subsection 2(c)(i)(D) or 2(c)(ii)(D) will be paid in one lump sum no later than thirty (30) days after the Date of Termination.  While the parties acknowledge that the payments in the previous three sentences are intended to be “short-term deferrals” and therefore are exempt from the application of Section 409A of the Code, to the extent (i) further guidance or interpretation is issued by the IRS after the date of this letter agreement which would indicate that the payments do not qualify as “short-term deferrals,” and (ii) you are a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code upon the Date of Termination, such payments shall be delayed and instead shall be paid in one lump sum on the date that is six months after the Date of Termination.  If any of such payment is not made when due (hereinafter a “Delinquent Payment”), in addition to such principal sum, the Corporation will pay you interest on any and all such Delinquent Payments from the date due computed at the prime rate, compounded monthly.  Such prime rate shall be the prime rate (currently the base rate on corporate loans posted by at least 75% of the 30 largest U.S. banks) in effect from time to time as reported in The Wall Street Journal, Midwest edition (or, if not so reported, as reported in such other similar source(s) as the Corporation shall select).

(e)

Release of Claims.  Notwithstanding the foregoing, you will have no right to receive any payment or benefit described in Subsections 2(c)(i)(C)-(F) or 2(c)(ii)(C)-(F), above, unless and until you execute, and there shall be effective following any statutory period for revocation, a release, in a form reasonably acceptable to the Corporation, that irrevocably and unconditionally releases, waives, and fully and forever discharges the Manpower Group and its past and current directors, officers, stockholders, members, partners, employees, and agents from and against any and all claims, liabilities, obligations, covenants, rights, demands and damages of any nature whatsoever, whether known or unknown, anticipated or unanticipated, relating to or arising out of your employment with the Manpower Group, including without limitation claims arising under the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, and the Civil Rights Act of 1991, but excluding any claims covered under any applicable workers’ compensation act.

(f)

Forfeiture.  Notwithstanding the foregoing, your right to receive the payments and benefits to be provided to you under this Section 2 beyond those described in Subsection 2(a), above, is conditioned upon your performance of the obligations stated in Sections 3-6, below, and upon your breach of any such obligations, you will immediately return to the Corporation the amount of such payments and benefits and you will no longer have any right to receive any such payments or benefits.  

11

3.

Nondisclosure.

(a)

You will not, directly or indirectly, at any time during the term of your employment with the Manpower Group, or during the two-year period following your termination, for whatever reason, of employment with the Manpower Group, use or possess for yourself or others or disclose to others except in the good faith performance of your duties for the Manpower Group any Confidential Information (as defined below), whether or not conceived, developed, or perfected by you and no matter how it became known to you, unless (i) you first secure written consent of the Corporation to such disclosure, possession or use, (ii) the same shall have lawfully become a matter of public knowledge other than by your act or omission, or (iii) you are ordered to disclose the same by a court of competent jurisdiction or are otherwise required to disclose the same by law, and you promptly notify the Corporation of such disclosure. “Confidential Information” shall mean all non-Trade Secret business information (whether or not in written form) which relates to the Manpower Group and which is not known to the public generally (absent your disclosure), including, but not limited to, confidential knowledge, operating instructions, training materials and systems, customer lists, sales records and documents, marketing and sales strategies and plans, market surveys, cost and profitability analyses, pricing information, competitive strategies, personnel-related information, and supplier lists.  This obligation will survive the termination of your employment for a period of two years and, notwithstanding the foregoing, this Subsection 3(a) shall not be construed to in any way limit the rights of the Manpower Group to protect information subject to attorney-client privilege even after such two-year period.

(b)

You will not directly or indirectly at any time during the term of your employment with the Manpower Group, or at any time thereafter, use or possess for yourself or others or disclose to others, except in the good faith performance of your duties for the Manpower Group, any Trade Secret, as defined by applicable law, so long as such information remains a Trade Secret.

(c)

Upon your termination, for whatever reason, of employment with the Manpower Group, or at any other time upon request of the Corporation, you will promptly surrender to the Corporation, or with the permission of the Corporation destroy and certify such destruction to the Corporation, any documents, materials, or computer or electronic records containing any Confidential Information which are in your possession or under your control.

4.

Nonsolicitation of Employees.  You agree that you will not, at any time during the term of your employment with the Manpower Group or during the one-year period following your termination, for whatever reason, of employment with the Manpower Group, either on your own account or in conjunction with or on behalf of any other person, company, business entity, or other organization whatsoever, directly or indirectly induce, solicit, entice or procure any person who is a managerial employee of any company in the 

12

Manpower Group (but in the event of your termination, any such managerial employee that you have had contact with in the two years prior to your termination) to terminate his or her employment with the Manpower Group so as to accept employment elsewhere or to diminish or curtail the services such person provides to the Manpower Group.

5.

Customer Nonsolicitation.  

(a)

During the term of your employment with the Manpower Group, you will not assist any competitor of any company in the Manpower Group in any capacity anywhere the Manpower Group does business.

(b)

During the one-year period which immediately follows the termination, for whatever reason, of your employment with the Manpower Group, you will not, directly or indirectly, contact any customer of the Manpower Group with whom/which you have had contact on behalf of the Manpower Group during the two-year period preceding the Date of Termination or about whom/which you obtained confidential information in connection with your employment with the Manpower Group during such two-year period so as to cause or attempt to cause such customer not to do business or to reduce such customer’s business with the Manpower Group or divert any business from any company in the Manpower Group.

6.

Noncompetition.  During the one-year period which immediately follows the termination, for whatever reason, of your employment with the Manpower Group, you will not, directly or indirectly, provide services or assistance of a nature similar to the services you provided to the Manpower Group during the two-year period immediately preceding the Date of Termination to any entity (i) engaged in the business of providing temporary staffing services anywhere in the United States or any other country in which the Manpower Group conducts business as of the Date of Termination which has, together with its affiliated entities, annual revenues from such business in excess of US $500,000,000 or (ii) engaged in the business of providing permanent placement, professional staffing, outplacement or human resources consulting services anywhere in the United States or any other country in which the Manpower Group conducts business as of the Date of Termination which has, together with its affiliated entities, annual revenues from such business in excess of US $250,000,000.  You acknowledge that the scope of this limitation is reasonable in that, among other things, providing any such services or assistance during such one-year period would permit you to use unfairly your close identification with the Manpower Group and the customer contacts you developed while employed by the Manpower Group and would involve the use or disclosure of Confidential Information pertaining to the Manpower Group.

7.

Injunctive and Other Interim Measures.  

(a)

Injunction.  You recognize that irreparable and incalculable injury will result to the Manpower Group and its businesses and properties in the event of your breach of any of the restrictions imposed by Sections 3-6, above.  You therefore agree that, in the event of any such actual, impending or threatened breach, the 

13

Corporation will be entitled, in addition to the remedies set forth in Subsection 2(f), above (which the parties agree would not be an adequate remedy), and any other remedies and damages, to, including, but not limited to, provisional or interim measures, including temporary and permanent injunctive relief, without the necessity of posting a bond or other security, from a court of competent jurisdiction restraining the actual, impending or threatened violation, or further violation, of such restrictions by you and by any other person or entity for whom you may be acting or who is acting for you or in concert with you.

(b)

Equitable Extension.  The duration of any restriction in Section 3-6, above, will be extended by any period during which such restriction is violated by you.

(c)

Nonapplication.  Notwithstanding the above, Sections 5 and 6, above, will not apply if your employment with the Manpower Group is terminated by you for Good Reason or by the Corporation without Cause either during a Protected Period or within two years after the occurrence of a Change of Control.

8.

Unemployment Compensation.  The severance benefits provided for in Subsection 2(c)(i)(D) will be assigned for unemployment compensation benefit purposes to the two-year period following the Date of Termination, and the severance benefits provided for in Subsection 2(c)(ii)(D) will be assigned for unemployment compensation purposes to the one-year period following the Date of Termination, and you will be ineligible to receive, and you agree not to apply for, unemployment compensation during such periods.

9.

Nondisparagement.  Upon your termination, for whatever reason, of employment with the Manpower Group, the Corporation agrees that its directors and officers, during their employment by or service to the Manpower Group, will refrain from making any statements that disparage or otherwise impair your reputation or commercial interests.  Upon your termination, for whatever reason, of employment with the Manpower Group, you agree to refrain from making any statements that disparage or otherwise impair the reputation, goodwill, or commercial interests of the Manpower Group, or its officers, directors, or employees.  However, the foregoing will not preclude the Corporation from providing truthful information about you concerning your employment or termination of employment with the Manpower Group in response to an inquiry from a prospective employer in connection with your possible employment, and will not preclude either party from providing truthful testimony pursuant to subpoena or other legal process or in the course of any proceeding that may be commenced for purposes of enforcing this letter agreement.

10.

Successors; Binding Agreement.  This letter agreement will be binding on the Corporation and its successors and will inure to the benefit of and be enforceable by your personal or legal representatives, heirs and successors.

11.

Notice.  Notices and all other communications provided for in this letter will be in writing and will be deemed to have been duly given when delivered in person, sent by telecopy, or two days after mailed by United States registered or certified mail, return receipt 

14

requested, postage prepaid, and properly addressed to the other party.

12.

No Right to Remain Employed.  Nothing contained in this letter will be construed as conferring upon you any right to remain employed by the Corporation or any member of the Manpower Group or affect the right of the Corporation or any member of the Manpower Group to terminate your employment at any time for any reason or no reason, with or without cause, subject to the obligations of the Corporation as set forth herein.

13.

Modification.  No provision of this letter may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing by you and the Corporation.

14.

Withholding.  The Manpower Group shall be entitled to withhold from amounts to be paid to you hereunder any federal, state, or local withholding or other taxes or charges which it is, from time to time, required to withhold under applicable law.  

15.

Applicable Law.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, United States of America, without regard to its conflict of law provisions.

16.

Reduction of Amounts Due Under Law.  You agree that any severance payment (i.e, any payment other than a payment for salary through your Date of Termination or for a bonus earned in the prior fiscal year but not yet paid) to you pursuant to this agreement will be counted towards any severance type payments otherwise due you under law.  By way of illustration, English law requires notice period of one (1) week for every year of service up to a maximum of twelve (12) weeks of notice.  In the event you are terminated without notice and you would otherwise be entitled to a severance payment hereunder, such severance payment will be considered to be payment in lieu of such notice.  

17.

Previous Agreements.  To the extent your Date of Termination does not occur prior to the effective date of this letter indicated above and you accept this letter with your signature below, this letter, upon its effective date indicated above, expressly supersedes any and all previous agreements or understandings relating to your employment by the Corporation or the Manpower Group or the termination of such employment, and any such agreements or understandings shall, as of the date of your acceptance, have no further force or effect.  

18.

Dispute Resolution.  Section 7 to the contrary notwithstanding, the parties shall, to the extent feasible, attempt in good faith to resolve promptly by negotiation any dispute arising out of or relating to your employment by the Manpower Group pursuant to this letter agreement.  In the event any such dispute has not been resolved within 30 days after a party’s request for negotiation, either party may initiate arbitration as hereinafter provided.  For purposes of this Section 18, the party initiating arbitration shall be denominated the “Claimant” and the other party shall be denominated the “Respondent.”

(a) 

If your principal place of employment with the Manpower Group is outside the 

15

United States, any dispute arising out of or relating to this letter agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration before a sole arbitrator in accordance with the International Institute for Conflict Prevention and Resolution International Rules for Non-Administered Arbitration (the “CPR International Rules”) as then in effect.  If the parties are unable to select the arbitrator within 30 days after Respondent’s receipt of Claimant’s Notice of Arbitration and the 30-day deadline has not been extended by the parties’ agreement, the arbitrator shall be selected by CPR as provided in CPR International Rule 6.  The seat of the arbitration shall be the Borough of Manhattan in the City, County and State of New York, United States of America.  The arbitration shall be conducted in the English language.  Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.  Anything in the foregoing to the contrary notwithstanding, the parties expressly agree that at any time before the arbitrator has been selected and the initial pre-hearing conference provided for in International Rule 9.3 has been held, either of them shall have the right to apply to any court located in Milwaukee County, Wisconsin, United States of America, to whose jurisdiction they agree to submit, or to any other court that otherwise has jurisdiction over the parties, for provisional or interim measures including, but not limited to, temporary or permanent injunctive relief.

(b)

If your principal place of employment with the Manpower Group is within the United States, any dispute arising out of or relating to this letter agreement, including the breach, termination or validity thereof, shall be finally resolved by arbitration before a sole arbitrator in accordance with the International Institute for Conflict Prevention and Resolution Rules for Non-Administered Arbitration (the “CPR Rules”) as then in effect.  If the parties are unable to select the arbitrator within 30 days after Respondent’s receipt of Claimant’s Notice of Arbitration and the 30-day deadline has not been extended by the parties’ agreement, the arbitrator shall be selected by CPR as provided in Rule 6 of the CPR Rules.  The seat of the arbitration shall be Milwaukee, Wisconsin, United States of America.  The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.  Judgment upon the award rendered by the arbitrator may be entered by any court having jurisdiction thereof.  Anything in the foregoing to the contrary notwithstanding, the parties expressly agree that at any time before the arbitrator has been selected and the initial pre-hearing conference has been held as provided in Rule 9.3 of the CPR Rules, either of them shall have the right to apply to any court located in Milwaukee County, Wisconsin, United States of America to whose jurisdiction they agree to submit, or to any other court that otherwise has jurisdiction over the parties, for provisional or interim measures, including, but not limited to, temporary or permanent injunctive relief.

19.

Severability. The obligations imposed by Paragraphs 3-7, above, of this agreement are severable and should be construed independently of each other.  The invalidity of one such provision shall not affect the validity of any other such provision.

16

If you are in agreement with the foregoing, please sign and return one copy of this letter which will constitute our agreement with respect to the subject matter of this letter.

Sincerely,

MANPOWER INC.

By:  /s/ Jeffrey A. Joerres                              

  Jeffrey A. Joerres, President and

  Chief Executive Officer

Agreed as of the 10th day of November, 2009.

/s/ Owen Sullivan                                             

Owen Sullivan

17f8kprwt111309yarbenet.htm - Generated by SEC Publisher for SEC Filing

 
 

 EXHIBIT 10.1

EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) by and among PremierWest Bancorp, an Oregon corporation, PremierWest Bank, an Oregon state chartered bank (the “Bank”, and together with PremierWest Bancorp, “PremierWest”) and William M. Yarbenet (“Executive”), is dated as of November 12, 2009.

AGREEMENT

     1. EMPLOYMENT. PremierWest employs Executive according to the terms and conditions of this Agreement, for the period stated in Section 2 below. Initially, Executive shall serve as Executive Vice President and Chief Credit Officer.

     2. TERM OF AGREEMENT. The initial term of this Agreement and Executive’s employment shall commence on August 3, 2009 and expire on December 31, 2010. On the expiration date and each anniversary thereof, this Agreement shall be extended automatically for one (1) additional year unless PremierWest determines that the term shall not be extended. If the term is not extended, PremierWest shall notify Executive in writing on or before September 30 of each year and this Agreement will remain in full force only until the then current term expires. While the election not to extend the term of this Agreement may be exercised at any time, at PremierWest’s sole discretion, the termination of employment that results from such action shall be deemed a termination prior to the expiration of this Agreement pursuant to the provisions of Section 6 below.

     3. NO TERM OF EMPLOYMENT. Notwithstanding the term of this Agreement, PremierWest may terminate Executive’s employment at any time for any lawful reason or for no reason at all, subject to the provisions of this Agreement.

     4. DUTIES; RELOCATION.

          4.1 Duties and Obligations.

               (a)  As Executive Vice President and Chief Credit Officer, Executive shall serve under the direction of the President & Chief Executive Officer (the “Supervisor”) and in accordance with the Articles of Incorporation and Bylaws (as each may be amended or restated from time to time) of PremierWest Bancorp and the Bank, respectively.

               (b)  Executive agrees that to the best of Executive’s ability Executive will at all times loyally and conscientiously perform all of the duties and obligations required of Executive pursuant to the express and implicit terms of this Agreement and as directed by the Supervisor.

               (c)  Executive shall devote Executive’s entire working time, attention and efforts to PremierWest’s business and affairs, shall faithfully and diligently serve PremierWest’s interests and shall not engage in any business or employment activity that is not on PremierWest’s behalf (whether or not pursued for gain or profit) except for (i) activities

- 1 -

 

approved in writing in advance by the Supervisor and (ii) passive investments that do not involve Executive providing any advice or services to the businesses in which the investments are made.

          4.2 Relocation of Permanent Residence. On or before October 30, 2009, Executive will have established residency in Josephine or Jackson County, Oregon.

     5. COMPENSATION. For all services performed under this Agreement, PremierWest agrees to pay, subject to Section 17, the following compensation and benefits:

          5.1 Base Salary. Executive’s annual base salary is $180,000 payable in semi-monthly installments (the “Base Salary”). The Base Salary shall be subject to annual review by the Supervisor.

          5.2 Vacation. Executive is entitled to not less than four (4) weeks of paid vacation per calendar year to be used in accordance with the terms and conditions of the Bank’s personnel policies. Paid vacation for a partial year’s employment shall be prorated as set forth in the Bank’s Employee Handbook. Notwithstanding anything in the Bank’s personnel policies to the contrary, with prior approval of Supervisor, up to two weeks of Executive’s four weeks of paid vacation may be carried over from one year to the next if unused by the end of the year, but Executive shall not be entitled, under any circumstance, to payment for unused vacation.

          5.3 Restricted Stock Grant. Upon execution of this Agreement, PremierWest Bancorp will grant Executive a restricted stock grant for 5,000 shares of PremierWest Bancorp common stock pursuant to the 2002 PremierWest Bancorp Stock Incentive Plan (the “Restricted Stock Grant”). The Restricted Stock Grant will be subject to the terms and conditions of the 2002 PremierWest Bancorp Stock Incentive Plan, restrictions applicable to PremierWest Bancorp as a TARP Capital Purchase Program participant and a restricted stock agreement to evidence such grant, the form of which is attached to this Agreement as Exhibit B.

          5.4 Disability. Executive may participate in the group disability income insurance coverage program, offered from time to time by PremierWest to its employees.

          5.5 Automobile. PremierWest shall provide a vehicle of its choosing for use by Executive during the term of his employment.

          5.6 Club Dues. During the term of this Agreement, PremierWest shall pay Executive’s monthly golf and social dues at the Rogue Valley Country Club.

          5.7 Relocation. Provided Executive is employed on December 31, 2009 and has not given or received notice of his resignation or other termination, Executive shall receive a relocation payment on December 31, 2009 in the amount equal to $90,000 less all sums Executive received as reimbursement of reasonable expenses incurred for moving, including, if applicable, costs incurred in the selling of Executive’s home and purchasing a new home in Josephine or Jackson County, Oregon, and costs of moving household furniture and furnishings (collectively, “Relocation Expenses”). All requests for reimbursement of Relocation Expenses must be submitted for payment prior to December 31, 2009. Executive shall immediately

- 2 -

 

reimburse PremierWest for all amounts paid as pursuant to this Section 5.7 in the event that Executive is terminated for Cause or Executive terminates his employment other than for Good Reason on or before August 3, 2011.

          5.8 Other Benefits. Executive is entitled to participate in all officer or employee compensation, bonus, incentive, and benefit plans in effect from time to time throughout the term of this Agreement, which PremierWest generally makes available to its officers and employees, including, without limitation, plans providing pension, medical, dental, disability, and group life benefits, and 401(k) retirement plans, and to receive any and all other fringe benefits generally made available by PremierWest to its officers and employees, from time to time, provided that Executive satisfies the eligibility requirements for any such plans or benefits.

          5.9 Reimbursements. Executive shall be entitled to reimbursement for all reasonable business expenses incurred in performing his obligations under this Agreement, including, without limitation, all reasonable business travel and entertainment expenses incurred while acting at the request of or in the service of PremierWest, provided such expenses are incurred and accounted for in accordance with the policies and procedures established from time to time by PremierWest. All reimbursements to the Executive by PremierWest shall be paid no later than the last day of the calendar month following the calendar month in which the expense was incurred.

     6. TERMINATION. When used in this Agreement, the phrase “Termination of Employment” means a “separation from service” under Code Section 409A and the regulations thereunder, as such regulations may change from time to time, or any successor provision of the Code and regulations. If a Termination of Employment occurs before the expiration of the term of this Agreement, Executive’s compensation and benefits shall terminate except as otherwise expressly provided in this Agreement. Any purported Termination of Employment by PremierWest or by Executive shall be communicated by written notice of termination to the other. The notice must state (a) the specific termination provision of this Agreement relied upon, (b) the date on which termination shall become effective, and (c) if Termination of Employment is For Cause or Termination of Employment is For Good Reason, the notice must state in reasonable detail the facts and circumstances forming the basis for termination. Executive’s Termination of Employment shall occur:

          6.1 For Cause. Upon delivery to Executive of notice of Executive’s termination for Cause (“Termination of Employment For Cause”). “Cause” for Executive’s termination will exist upon the occurrence of one or more of the following events:

               (a) Fraudulent Conduct. An intentional act of fraud, embezzlement, or theft by Executive in the course of his employment with PremierWest Bancorp or the Bank. No act or failure to act on Executive’s part shall be deemed to have been intentional if it was due primarily to an error in judgment or negligence. An act or failure to act on Executive’s part shall be considered intentional if it is not in good faith and if it is without a reasonable belief that the action or failure to act is in PremierWest’s best interests;

- 3 -

 

               (b) Material Breach of Agreement. A material breach by Executive of this Agreement if such breach is not remedied or is not being remedied to the Board or the Bank Board’s satisfaction within 30 days after written notice, including a detailed description of the breach, has been delivered by the respective Board to Executive;

               (c) Gross Negligence/Insubordination. Gross negligence or insubordination by Executive in the performance of his duties as an officer of PremierWest Bancorp or the Bank if such gross negligence or insubordination is not remedied or is not being remedied to the Board or the Bank Board’s satisfaction within 30 days after written notice, including a detailed description of the gross negligence or insubordination, has been delivered by the respective Board to Executive;

               (d) Breach of Fiduciary Duties. A breach by Executive of his fiduciary duties to PremierWest Bancorp and its stockholders or misconduct involving dishonesty, in either case whether in his capacity as an officer of PremierWest Bancorp or the Bank;

               (e) Criminal Conviction. Conviction of Executive for a felony or conviction of a misdemeanor involving moral turpitude;

               (f) Violation of Law. Intentional violation of any law or significant policy of PremierWest Bancorp or the Bank committed in connection with Executive’s employment, which has a material adverse effect on PremierWest Bancorp or the Bank;

               (g) FDIC Removal Order. Removal of Executive from office or prohibition of Executive from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) or (g)(1) of the Federal Deposit Insurance Act, 12 U.S.C. 1818(e)(4) or (g)(1); or

               (h) Unsatisfactory Performance. If Executive’s annual performance review results in a rating of less than satisfactory and such performance is not brought to at least a satisfactory level within 30 days after the performance review is complete and thereafter sustained at such level; provided, however, this Section 6.1(h) shall not be applicable and shall not be an event that could give rise to Termination of Employment For Cause after a Change in Control.

          6.2 Without Cause. Upon PremierWest’s termination of Executive, upon 90 days’ written notice, at any time in PremierWest’s sole discretion, for any reason other than for Cause including PremierWest’s non-renewal of the term of this Agreement pursuant to Section 2 (“Termination of Employment Without Cause”). A Change in Control does not in and of itself constitute Termination of Employment Without Cause.

          6.3 For Good Reason. Upon Executive’s resignation for Good Reason (“Termination of Employment For Good Reason”). “Good Reason” will exist upon the occurrence, without Executive’s consent, of one or more of the following events, if Executive has informed PremierWest in writing of the circumstances described below that could give rise to Termination of Employment For Good Reason within 90 days of the occurrence of such event

- 4 -

 

and PremierWest has not removed the circumstances (or notified Executive that PremierWest disputes that such circumstances qualify as a Good Reason) within 30 days of the written notice:

               (a) Reduction in Base Salary. A material reduction of Executive’s Base Salary;

               (b) A Material Reduction in Responsibilities or Status. Except such changes made after Executive has announced his intention to retire or within twelve months of his Retirement Age, as defined in Section 6.6, as are consistent with his anticipated retirement, the occurrence of one of the following:

                         (i) Assignment to Executive of duties or responsibilities that are materially inconsistent with Executive’s position as stated in this Agreement or that represent a material reduction of his authority;

                         (ii) Any other action by PremierWest that results in a material reduction or material adverse change in Executive’s position, authority, duties or responsibilities;

                         (iii) Failure to appoint or reappoint Executive to the position stated in this Agreement; or

                         (iv) Following a Change in Control, failure to retain Executive in an executive officer position with authority, duties or responsibilities consistent with that of an executive officer (Subsections (b)(i), (ii) and (iii) do not apply following a Change in Control);

               (c) Failure to Obtain Assumption Agreement. The failure of a successor or assign of the Bank to assume and agree to perform this Agreement, if assignment and assumption does not occur automatically under operation of law;

               (d) Termination without Compliance with this Agreement. Termination by PremierWest of Executive’s employment without the notice required under this Agreement;

               (e) Material Breach. A material breach of this Agreement by PremierWest that is not corrected within a reasonable time; or

               (f) Relocation of Executive. Requiring Executive to change his principal work location to any location that is more than 35 miles from the location of PremierWest Bancorp’s principal executive offices on the date of this Agreement.

          6.4 Resignation. Upon Executive’s voluntary resignation without Good Reason (“Resignation”), written notice of which Executive must give to PremierWest at least 90 days in advance of Resignation.

          6.5 Death or Disability. Upon Executive’s death or Disability. “Disability” means (a) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or

- 5 -

 

can be expected to last for a continuous period of not less than 12 months; or (ii) Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering PremierWest employees.

          6.6 Retirement. Upon Executive’s Resignation after reaching the retirement age of 65 (“Retirement Age”).

     7. DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement, a “Change in Control” shall be deemed to have occurred when any of the following events take place:

                    (a) Merger. PremierWest Bancorp merges into or consolidates with another corporation, or merges another corporation into PremierWest Bancorp, and as a result, less than 50% of the combined voting power of the resulting corporation immediately after the merger or consolidation is held by persons who were the holders of PremierWest Bancorp’s voting securities immediately before the merger or consolidation. The term “person” means an individual, corporation, partnership, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated organization or other entity.

                    (b) Acquisition of Significant Share Ownership. A report on Schedule 13D or another form or schedule (other than Schedule 13G) is filed or is required to be filed under Sections 13(d) or 14(d) of the Securities Exchange Act of 1934, if the schedule discloses that the filing person or persons acting in concert has or have become the beneficial owner of 25% or more of a class of PremierWest Bancorp’s voting securities, but this paragraph (b) shall not apply to beneficial ownership of voting shares of PremierWest Bancorp owned by a qualified retirement plan or held in a fiduciary capacity by an entity in which PremierWest Bancorp or the Bank, directly or indirectly beneficially owns, or has the right to vote, 50% or more of the outstanding voting securities.

                    (c) Change in Board Composition. During any period of two (2) consecutive years, individuals who constitute PremierWest Bancorp’s Board of Directors at the beginning of the two-year period cease for any reason to constitute at least a majority thereof; provided, however, that for purposes of this paragraph (c), each director who is first elected by the Board (or first nominated by the Board for election by stockholders) by a vote of at least two-thirds of the directors who were directors at the beginning of the period shall be deemed to have been a director at the beginning of the two-year period.

                    (d) Sale of Assets. PremierWest Bancorp sells to a third party all or substantially all of PremierWest Bancorp’s assets. For this purpose, sale of all or substantially all of PremierWest Bancorp’s assets includes sale of the Bank.

     8. PAYMENT UPON TERMINATION. Upon Executive’s Termination of Employment for any of the reasons set forth in Section 6 above, Executive or Executive’s estate, as appropriate, will receive payment, subject to Section 17, for all Base Salary earned through

- 6 -

 

the date of termination and, except in the event of Termination of Employment For Cause or Resignation, all unpaid bonus or incentive compensation due to Executive for the previous calendar year (“Earned Compensation”). Earned Compensation, unless deferred under a plan of deferred compensation, shall be paid by the end of the business day following termination, or sooner, if required by applicable law.

     9.POST-TERMINATION BENEFITS.

          9.1 Earned Compensation and Post-Termination Benefit. In the event of (a) Termination of Employment Without Cause, (b) Termination of Employment For Good Reason, or (c) if Termination of Employment occurs for any reason (other than Termination of Employment For Cause) more than six months after a Change in Control (each an “Eligible Termination Event”), in addition to receiving Earned Compensation, Executive will be eligible to receive the benefits described in Section 9.2 (the “Post-Termination Benefit”) provided, however, that (i) receipt of the Post-Termination Benefit is expressly conditioned on Executive having executed the Separation Agreement and the revocation period having expired without Executive having revoked the Separation Agreement, and (ii) receipt and continued receipt of the Post-Termination Benefit is further conditioned on Executive not being in violation of any material term of this Agreement or in violation of any material term of the Separation Agreement.

          9.2 Payment of Post-Termination Benefit. As consideration for each month during the period in which Executive does not engage in the Competitive Activities (defined below) following an Eligible Termination Event, up to a maximum of two years (the “Restriction Period”), PremierWest will continue to pay Executive’s monthly Base Salary in effect immediately prior to termination. Subject to Sections 14 and 16 payments will commence starting the next regular pay period following the Eligible Termination Event and satisfaction of the conditions set forth in Section 9.1.

          9.3 Competitive Activities. “Competitive Activities” means any activity as an officer, director, partner, principal, trustee, agent, owner (except for an ownership of less than one percent (1%) of any publicly traded security), employee, organizer, founder, advisor or consultant of, or otherwise becoming associated with, a financial services company with an office or doing business within 50 miles of any office or branch of PremierWest or of any of its subsidiaries in existence at the time of termination of Executive’s employment.

          9.4 Restrictions on Competitive Activities. Executive shall not engage in Competitive Activities (a) during Executive’s employment, (b) following an Eligible Termination Event, for the period of time in which Executive is entitled to payment of the Post-Termination Benefit, or (c) if Executive’s employment terminates other than an Eligible Termination Event for two years following such termination.

          9.5 Subsequent Employer Notification. Executive agrees to give PremierWest, at the time of termination of employment, a declaration under penalty of perjury of the name of

- 7 -

 

Executive’s new employer, if known, or if not known, that subsequent employer is not known. Executive further agrees to disclose to PremierWest, during the Restricted Period, the name of any subsequent employer, wherever located and regardless of whether such employer is a competitor of PremierWest.

          9.6 Acknowledgment of Notice. Executive acknowledges that he was informed in a written employment offer received at least two weeks before the first day of the employment that a noncompetition agreement is required as a condition of employment.

          9.7 Non-Solicitation. For a period of two years following Termination of Employment, Executive shall not solicit any customer of PremierWest Bancorp, Bank or of any of their respective subsidiaries for services or products then provided by PremierWest Bancorp or Bank or any of their respective subsidiaries. For purposes of this Section, “customers” are defined as (a) all customers serviced by PremierWest Bancorp or Bank, or any of PremierWest Bancorp’s or Bank’s subsidiaries, at any time within 12 months before termination of Executive’s employment, (b) all customers and potential customers whom PremierWest Bancorp, Bank or any of PremierWest Bancorp’s or Bank’s subsidiaries, with the knowledge or participation of Executive, actively solicited at any time within 12 months before termination of Executive’s employment, and (c) all successors, owners, directors, partners and management personnel of the customers just described in (a) and (b).

          9.8 Non-raiding of Employees. Executive recognizes that PremierWest’s workforce is a vital part of its business; therefore, Executive agrees that for a period of two years following Termination of Employment, Executive will not to directly or indirectly solicit any employee to leave his or her employment with PremierWest Bancorp, Bank or any of PremierWest Bancorp’s or Bank’s subsidiaries, including, without limitation, that Executive will not (a) disclose to any third party the names, backgrounds or qualifications of any of PremierWest Bancorp’s, Bank’s or PremierWest Bancorp’s or Bank’s subsidiaries’ employees or otherwise identify them as potential candidates for employment, or (b) personally or through any other person approach, recruit, interview or otherwise solicit employees of PremierWest Bancorp’s, Bank’s or PremierWest Bancorp’s or Bank’s subsidiaries to work for any other employer. For purposes of this Section, employees include all employees working for PremierWest Bancorp, Bank or PremierWest Bancorp’s or Bank’s subsidiaries at any time during the twelve (12) months prior to the time of Termination of Employment.

          9.9 Reasonableness. Executive acknowledges and agrees that the restrictive covenants in Sections 9.4, 9.7 and 9.8 are fair and reasonable and are the result of negotiation between PremierWest and Executive (and Executive’s counsel, if Executive has sought the benefit of counsel). Executive further acknowledges and agrees that the covenants and obligations in this Agreement relate to special, unique, and extraordinary matters and that a violation of any of the terms of the covenants and obligations will cause irreparable injury to PremierWest, for which adequate remedies are not available at law. Therefore, Executive agrees that PremierWest shall be entitled to an injunction, restraining order, or such other equitable relief as a court of competent jurisdiction may deem necessary or appropriate to restrain Executive from committing any violation of the covenants and obligations set forth in Sections 9.4, 9.7 and 9.8 of this Agreement. These injunctive remedies are cumulative and are in addition to any other rights and remedies PremierWest may have at law or in equity. If PremierWest

- 8 -

 

institutes an action to enforce the provisions hereof, Executive hereby waives the claim or defense that an adequate remedy at law is available, and Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.

     10.IRC 280G.

          10.1 Adjustment of Benefits. In the event Executive becomes entitled to a payment or benefit pursuant to the terms of this Agreement or of any other plan, arrangement or agreement (collectively, the “Payments”) of PremierWest or its successor (collectively, the “Employer”), and the Employer’s Auditor or such other independent accounting firm or advisor as may be mutually agreeable to PremierWest and Executive in the exercise of their reasonable good judgment determines that the Payments result in “excess parachute payments” under section 280G of the Internal Revenue Code (the “Code”), then Executive shall receive, instead of the Payments, aggregate payments equal to the Reduced Amount (defined below). Executive shall direct in which order the payments are to be reduced, but no change in the timing of any payment shall be made without the consent of the Employer. For purposes of this Section 13, the “Reduced Amount” shall be the amount, expressed as a present value, that maximizes the aggregate present value of the payments without causing any payment to be nondeductible by the Employer under section 280G of the Code and PremierWest and Executive shall cooperate with each other and use all reasonable efforts to maximize such amount. “Employer’s Auditor” shall mean the independent auditors retained most recently prior to the transaction implicating section 280G of the Code by the Employer, or, if the Employer is not the surviving entity following the Change in Control, by the Employer’s successor (or any affiliate). In computing the maximum amount payable, the Employer’s Auditor shall take into account the independent value to the Employer of Executive’s restrictive covenants following a Change in Control as set forth in the Separation Agreement, which value should constitute separate consideration outside of sections 280G and 4999 of the Code.

          10.2 Adjustment for Overpayments and Underpayments. As a result of uncertainty in the application of sections 280G and 4999 of the Code at the time of an initial determination by the Employer’s Auditor, it is possible that a payment will have been made by the Employer that should not have been made (an “Overpayment”) or that an additional payment that will not have been made by the Employer could have been made (an “Underpayment”). In the event that the Employer’s Auditor, based upon the assertion of a deficiency by the Internal Revenue Service against the Employer or Executive that the Employer’s Auditor believes has a high probability of success, determines that an Overpayment has been made, such Overpayment shall be treated for all purposes as a bilateral error subject to adjustment which Executive shall repay to the Employer, together with interest at the applicable federal rate specified in section 7872(f)(2) of the Code. In the event that the Employer’s Auditor determines that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Employer to, or for the benefit of, Executive, together with interest at the applicable federal rate specified in section 7872(f)(2) of the Code.

     11.CONFIDENTIALITY AND CREATIVE WORK.

          11.1 Nondisclosure. Executive covenants and agrees that he will not reveal to any person, firm, or corporation any Confidential Information of any nature concerning

- 9 -

 

PremierWest or its business, or anything connected therewith. “Confidential Information” means all of PremierWest’s confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including, without limitation:

                    (a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

                    (b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

                    (c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

                    (d) trade secrets, as defined from time to time by the laws of the State of Oregon.

Notwithstanding the foregoing, Confidential Information excludes information that, as of the date hereof or at any time after the date hereof, is published or disseminated without obligation of confidence or that becomes a part of the public domain (i) by or through action of PremierWest, or (ii) by or through action of another person not in violation of a non-disclosure covenant with PremierWest. This Section does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by Executive in the ordinary course of business and within the scope of his authority.

          11.2 Return of Material. Executive agrees to deliver or return to PremierWest upon termination of employment, or as soon thereafter as possible, all written information and any other similar items furnished by PremierWest or prepared by Executive in connection with his services hereunder. Executive will retain no copies thereof after termination of Executive’s employment.

          11.3 Injunctive Relief. Executive acknowledges that it is impossible to measure in money the damages that will accrue to PremierWest if Executive fails to observe the obligations imposed on him by this Section. Accordingly, if PremierWest institutes an action to enforce the provisions hereof, Executive hereby waives the claim or defense that an adequate remedy at law is available to PremierWest, and Executive agrees not to urge in any such action the claim or defense that an adequate remedy at law exists.

          11.4 Creative Work. Executive agrees that all creative work and work product, including, without limitation, all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by Executive during his employment with PremierWest, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by PremierWest. Executive hereby assigns to PremierWest Bancorp and to the Bank all rights, title, and interest, whether by way of

- 10 -

 

copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

     12. DISPUTE RESOLUTION.

          12.1 Arbitration. The parties agree to submit any dispute arising under this Agreement to final, binding, private arbitration in Medford, Oregon. The disputes subject to arbitration include not only disputes involving the meaning or performance of the Agreement, but disputes about its negotiation, drafting, or execution. The dispute will be determined by a single arbitrator and governed by the then-existing rules of arbitration procedure in Jackson County Circuit Court, except as set forth herein. Instead of filing of a civil complaint in Jackson County Circuit Court, a party will commence the arbitration process by noticing the other party. The parties will choose an arbitrator who specializes in employment conflicts from the arbitration list for Jackson County Circuit Court. If no such arbitrator is available, the parties will choose a similarly qualified arbitrator from any other arbitration list for other Circuit Courts in Oregon. If the parties are unable to agree on an arbitrator within ten (10) days of receipt of the list of arbitrators, each party will select one attorney from the list, and those two attorneys shall select the arbitrator from the list (with each of the two selecting attorneys then concluding their services and each being compensated by the party selecting each attorney, subject to recovery of such fees under Section 12.2). The arbitrator may charge his or her standard arbitration fees rather than the fees prescribed in the Jackson County Circuit Court arbitration procedures. The arbitrator will have full authority to determine all issues, including arbitrability, to award any remedy, including permanent injunctive relief, and to determine any request for attorneys’ fees, costs and expenses in accordance with Section 12.2. There shall be no right to a review of the arbitrator’s decision in court. The arbitrator’s award may be reduced to final judgment or decree in Jackson County Circuit Court.

          12.2 Expenses/Attorneys’ Fees. The prevailing party shall be awarded all costs and expenses of the proceeding, including, without limitation, attorneys’ fees, filing and service fees, witness fees, and arbitrators’ fees. If arbitration is commenced, the arbitrator will have full authority and complete discretion to determine the “prevailing party” and the amount of costs and expenses to be awarded.

          12.3 Injunctive Relief. Notwithstanding any other provision of this Agreement, an aggrieved party may seek a temporary restraining order or preliminary injunction in Jackson County Circuit Court to preserve the status quo during the arbitration proceeding, provided however, that the party seeking relief agrees that ultimate resolution of the dispute will still be determined through arbitration and not through court process. The filing of the court action for injunctive relief shall not hinder or delay the arbitration process.

          13. NOTICES. All notices, requests, demands, and other communications provided for by this Agreement will be in writing and shall be deemed sufficient upon receipt, when delivered personally or by a nationally-recognized delivery service (such as Federal Express), or three (3) business days after being deposited in the U.S. mail as certified mail, return receipt requested, with postage prepaid, if such notice is properly addressed. Unless otherwise changed in writing, notice shall be properly addressed to Executive if addressed to the address of

- 11 -

 

Executive on the books and records of PremierWest at the time of mailing of such notice, and properly addressed to PremierWest if addressed to PremierWest Bancorp, 503 Airport Road, Medford, OR 97504, Attention: Corporate Secretary.

     14.TARP COMPENSATION STANDARDS.

          14.1 Definitions. As used in this Section 17, the following terms have the meanings specified:

                    (a)“ARRA” means the American Recovery and Reinvestment Act of 2009;

                    (b)“CPP” means the Capital Purchase Program component of the TARP;

                    (c)“EESA” means the Emergency Economic Stabilization Act of 2008;

                    (d)“TARP” means the Troubled Asset Relief Program established by the Treasury pursuant to the EESA;

                    (e) “TARP Compensation Standards” means provisions of the EESA and the ARRA governing compensation and associated regulations, interpretations and guidance that are now, or may in the future be, issued, including the Treasury’s Interim Final Rule under 31 CFR Part 30; and

                    (f) “Treasury” means the United States Department of the Treasury.

Capitalized terms used but not defined in this Section 17 have the meanings set forth in the TARP Compensation Standards.

          14.2 TARP Compensation Standards. As a participant in the CPP, PremierWest is subject to various executive compensation restrictions under the TARP Compensation Standards. Among other requirements, the TARP Compensation Standards:

                    (a) prohibit PremierWest from making any Golden Parachute Payment to its Senior Executive Officers or any of the next five Most Highly-Compensated Employees;

                    (b) prohibit PremierWest from paying or accruing any Bonus Payment to the five Most Highly-Compensated Employees, except as permitted by the TARP Compensation Standards;

                    (c) require PremierWest to recover or “clawback” any Bonus Payment to its Senior Executive Officers or any of the next 20 Most Highly-Compensated Employees if payment was based on materially inaccurate financial statements or performance metric criteria;

- 12 -

 

                    (d) prohibit PremierWest from maintaining any Employee Compensation Plan that would encourage the manipulation of reported earnings to enhance the compensation of any employee;

                    (e) prohibit PremierWest from maintaining any SEO Compensation Plan that encourages Senior Executive Officers to take unnecessary and excessive risks that threaten the value of PremierWest; and

                    (f) prohibit PremierWest from providing Gross-Ups to its Senior Executive Officers or the next 20 Most Highly-Compensated Employees.

This Section 14 evidences Executive’s and PremierWest’s intent to comply with the TARP Compensation Standards.

          14.3 Amendment and Modification. In the event that all or any portion of this Agreement is found to be in conflict with the requirements of the TARP Compensation Standards, this Agreement shall be automatically amended or modified to the extent necessary to comply with the TARP Compensation Standards, and this Agreement shall be interpreted and administered accordingly. To the extent that future revisions of this Agreement are required to give effect to or for PremierWest to comply with the TARP Compensation Standards, Executive shall accept such revisions promptly.

          14.4 Golden Parachute Restriction. In the event Executive’s employment terminates and at such time (a) Executive is one of the Senior Executive Officers or employees that PremierWest is prohibited from making a Golden Parachute Payment to under the TARP Compensation Standards and (b) any payment under this Agreement is a Golden Parachute Payment under the TARP Compensation Standards, Executive shall not be entitled to receive such payment only to the extent such payment is prohibited by the TARP Compensation Standards.

          14.5 Bonus Payment Restriction. In the event that any payment or accrual under this Agreement is a Bonus Payment under the TARP Compensation Standards and at the time such Bonus Payment is to be paid or accrual is to be made Executive is one of the employees that PremierWest is prohibited from making a Bonus Payment to under the TARP Compensation Standards, Executive shall not be entitled to receive such payment or accrual only to the extent such payment or accrual is prohibited by the TARP Compensation Standards.

          14.6 Clawback. Notwithstanding any provision in this Agreement to the contrary, if it is later determined that payments under this Agreement were based on materially inaccurate financial statements or performance metric criteria, the full amount of any and all payment(s) that have been made to Executive under this Agreement shall become immediately due and owing to PremierWest, and Executive shall repay the full amount of such payment(s) to PremierWest in accordance with and in a manner that complies with the requirements of the TARP Compensation Standards. Notwithstanding the foregoing, any such recovery shall be required hereunder only to the minimum extent necessary to comply with the applicable requirements of the TARP Compensation Standards.

- 13 -

 

          14.7 Waiver. In consideration for the benefits Executive will receive as a result of PremierWest Bancorp’s participation in the United States Department of the Treasury’s TARP Capital Purchase Program, Executive hereby voluntarily waives any claim against the United States or PremierWest for any changes to my compensation or benefits that are required to comply with regulations issued by the Department of the Treasury. Executive acknowledges that such regulations may require modification of the compensation, bonus, incentive and other benefit plans, arrangements, policies and agreements that Executive has with PremierWest or in which Executive participate as they relate to the period the United States holds any equity securities of Executive acquired through the TARP Capital Purchase Program. This waiver includes all claims Executive may have under the laws of the United States or any state related to the requirements imposed by the aforementioned regulation, including without limitation a claim for any compensation or other payments Executive would otherwise receive, any challenge to the process by which this regulation was adopted and any tort or constitutional claim about the effect of these regulations on Executive’s employment relationship.

          14.8 Miscellaneous. This Section 14 shall remain in force and effect only during the TARP Period. This Section 14 is not determinative of Executive’s status as a Senior Executive Officer or as an employee affected by the TARP Compensation Standards, and Executive reserves the right to contest his designation as such now or in the future. Executive shall not be deemed to waive any right to contest the determination of PremierWest or the Treasury as to the amounts owed to Executive by PremierWest pursuant to this Agreement. In the event that any of the TARP Compensation Standards are overturned by a non-appealable determination of a court of competent jurisdiction or otherwise rescinded or revised, with the effect that all or any portion of any formerly withheld or recovered payment could be made to Executive, such amount shall become immediately due and payable to Executive.

     15.GENERAL PROVISIONS.

          15.1 Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Oregon.

          15.2 Saving Provision. If any part of this Agreement is held to be unenforceable, it shall not affect any other part. If any part of this Agreement is held to be unenforceable as written, it shall be enforced to the maximum extent allowed by applicable law.

          15.3 Survival Provision. If any benefits provided under this Agreement are still owed, or claims pursuant to this Agreement are still pending, at the time of termination of this Agreement, this Agreement shall continue in force, with respect to those obligations or claims, until such benefits are paid in full or claims are resolved in full. The sections related to Confidential Information and creative work shall survive after termination of this Agreement and shall be enforceable regardless of any claim Executive may have against PremierWest.

          15.4 Captions and Counterparts. The captions in this Agreement are solely for convenience. The captions in no way define, limit, or describe the scope or intent of this

- 14 -

 

Agreement. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

          15.5 Entire Agreement. Except as otherwise stated herein, this Agreement constitutes the sole agreement of the parties regarding Executive’s benefits upon Termination of Employment and together with PremierWest’s employee handbook govern the terms of Executive’s employment. Where there is a conflict between the employee handbook and this Agreement, the terms of this Agreement shall govern.

          15.6 Previous Agreement. This Agreement supersedes all prior oral and written agreements between Executive and PremierWest, or any affiliates or representatives of PremierWest regarding the subject matters set forth herein.

          15.7 Waiver/Amendment. This Agreement may not be amended, released, discharged, abandoned, changed, or modified in any manner, except by an instrument in writing signed by each of the parties hereto. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver or any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.

          15.8 Assignment.

                    (a) Executive shall not assign or transfer any of Executive’s rights pursuant to this Agreement, wholly or partially, to any other person or to delegate the performance of its duties under the terms of this Agreement. If Executive attempts an assignment or transfer that is contrary to this Section, PremierWest shall have no liability to pay any amount to the assignee or transferee.

                    (b) The rights and obligations of PremierWest under this Agreement shall inure to the benefit of and be binding in each and every respect upon the direct and indirect successors and assigns of PremierWest, regardless of the manner in which the successors or assigns succeed to the interests or assets of PremierWest. If this Agreement is not otherwise transferred to and assumed by PremierWest’s successor or assign by operation of law, PremierWest shall require such successor of substantially all of the business or assets of PremierWest Bancorp to expressly assume and agree to perform PremierWest’s obligations hereunder.

                    (c) This Agreement shall not be terminated by the voluntary or involuntary dissolution of PremierWest, by any merger, consolidation or acquisition where PremierWest is not the surviving corporation, by any transfer of all or substantially all of PremierWest’s assets, or by any other change in PremierWest’s structure or the manner in which PremierWest’s business or assets are held. Executive’s employment shall not be deemed terminated upon the occurrence of one of the foregoing events.

- 15 -

 

                    (d) This Agreement will inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executives, administrators, successors, heirs, distributees and legatees.

     16. ADDITIONAL RESTRICTIONS.

          16.1 No Anticipated Events. As of the date of this Agreement, none of the conditions or events included in the definition of the term “golden parachute payment” that is set

forth in Section 18(k)(4)(A)(ii) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)(4)(A)(ii)] and in Federal Deposit Insurance Corporation Rule 359.1(f)(1)(ii) [12 CFR 359.1(f)(1)(ii)] exists or, to the best knowledge of PremierWest, is contemplated insofar as PremierWest or any affiliates are concerned.

          16.2 FDIC Rules. Notwithstanding any other provision in this Agreement, PremierWest shall make no payment of any benefit provided for herein to the extent that such payment would be prohibited by the provisions of Part 359 of the regulations of the Federal Deposit Insurance Corporation (the “FDIC”) as the same may be amended from time to time, and if such payment is so prohibited, PremierWest shall use its best efforts to secure the consent of the FDIC or other applicable banking agencies to make such payments in the highest amount permissible, up to the amount provided for in this Agreement.

          16.3 IRC 409A. To the extent the Change in Control Benefit is subject to Section 409A of the Code and Executive is deemed to be a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, commencement of payment shall be delayed for six (6) months following Executive’s termination of employment and the first installment payment made in the seventh month following termination of employment shall equal the aggregate installment payments Executive would have received during the first six months of the Installment Period (the “Aggregate Payments”), plus the payment Executive is otherwise entitled to receive for the seventh month of the Installment Period. If PremierWest or Executive believe, at any time, that this Agreement does not comply with Section 409A, it will promptly advise the other party and will negotiate reasonably and in good faith to amend the terms of the Agreement, if permitted under Section 409A, with the most limited possible economic effect on PremierWest and Executive, such that it complies.

     17. ADVICE OF COUNSEL. Executive acknowledges that, in executing this Agreement, Executive has had the opportunity to seek the advice of independent legal counsel, and has read and understood all of the terms and provisions of this Agreement. This Agreement shall not be construed against any party by reason of the drafting or preparation hereof.

[Signatures Follow]

- 16 -

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

	PREMIERWEST BANCORP	

EXECUTIVE

		
	By: /s/James M. Ford	/s/ William M. Yarbenet
	James M. Ford 	William M. Yarbenet 
	President and Chief Executive Officer 	 
		
		
	PREMIERWEST BANK	
		
	By: /s/ James M. Ford	
	James M. Ford	
	President and Chief Executive Officer	

 

 

- 17 -

 

Exhibit A – Employment Agreement

SEPARATION AGREEMENT

     This SEPARATION AGREEMENT (this “Agreement”) is entered into as of this ____ day of __________, 20___, by and among PremierWest Bancorp (“Bancorp”), an Oregon corporation, PremierWest Bank (the “Bank”), an Oregon-chartered bank and wholly owned subsidiary of PremierWest Bancorp, and William M. Yarbenet (the “Executive”). (PremierWest Bancorp, the Bank, and their subsidiaries and affiliates, including any entity or organization controlling, controlled by, or under common control with PremierWest Bancorp or the Bank, are hereinafter sometimes referred to collectively or individually as “PremierWest.”)

     WHEREAS, Executive, PremierWest Bancorp, and the Bank entered into an Employment Agreement dated effective as of August 3, 2009 (as the same may be amended, the “Employment Agreement”) which provided that PremierWest would provide certain benefits to Executive after Termination of his Employment (as defined in the Employment Agreement) under certain circumstances specified in the Employment Agreement as consideration for Executive’s release of claims against PremierWest and certain other benefits as consideration for Executive’s agreement not to engage in certain competitive activities for a specified period of time;

     WHEREAS, Executive’s employment will terminate on _____________, 20____ (the “Termination Date”);

     WHEREAS, Executive has consulted with counsel of Executive’s choice concerning this Agreement, or Executive has chosen not to consult with counsel, and Executive, and as applicable Executive’s counsel, have had the opportunity to discuss with PremierWest the terms and conditions of this Agreement; and

     NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, PremierWest and Executive hereby agree as follows:

     1. Consideration for Release of Claims. Provided Executive does not revoke Section 6(a) and complies with the terms of this Agreement, PremierWest will provide, subject to the terms of the Employment Agreement, Executive the benefits set forth in Section 9 of the Employment Agreement.

     2. Nondisclosure. Executive covenants and agrees that he will not reveal to any person, firm, or corporation any Confidential Information of any nature concerning PremierWest or concerning the business of any of them. As used in this Agreement, the term “Confidential Information” means all of PremierWest’s confidential and proprietary information and trade secrets in existence on the date hereof or existing at any time during the term of this Agreement, including, without limitation:

- 1 -

 

               (a) the whole or any portion or phase of any business plans, financial information, purchasing data, supplier data, accounting data, or other financial information;

               (b) the whole or any portion or phase of any research and development information, design procedures, algorithms or processes, or other technical information;

               (c) the whole or any portion or phase of any marketing or sales information, sales records, customer lists, prices, sales projections, or other sales information; and

               (d) trade secrets, as defined from time to time by the laws of the State of Oregon.

Notwithstanding the foregoing, Confidential Information excludes information that, as of the date hereof or at any time after the date hereof, is published or disseminated without obligation of confidence or that becomes a part of the public domain (i) by or through action of PremierWest, or (ii) by or through action of another person not in violation of a nondisclosure covenant with PremierWest. This Section does not prohibit disclosure required by an order of a court having jurisdiction or a subpoena from an appropriate governmental agency or disclosure made by Executive in the ordinary course of business and within the scope of his authority.

     3. Return of Materials. Executive agrees to deliver or return to the Bank upon termination of employment or as soon thereafter as possible all written information and any other similar items furnished by PremierWest or prepared by Executive in connection with his service to PremierWest. Executive will retain no copies thereof after Termination of Employment.

     4. Creative Work. Executive agrees that all creative work and work product, including, without limitation, all technology, business management tools, processes, software, patents, trademarks, and copyrights developed by Executive during the term of his employment with PremierWest, regardless of when or where such work or work product was produced, constitutes work made for hire, all rights of which are owned by PremierWest. Executive hereby assigns to PremierWest Bancorp and to the Bank all rights, title, and interest, whether by way of copyrights, trade secret, trademark, patent, or otherwise, in all such work or work product, regardless of whether the same is subject to protection by patent, trademark, or copyright laws.

     5. Agreement to Cooperate with PremierWest Through the Executive’s Termination Date. Executive agrees to cooperate as directed by PremierWest with PremierWest and its customers through the date of the Executive’s Termination of Employment and throughout the term of any post-employment consulting agreement, if any. If Executive fails to cooperate to PremierWest’s satisfaction as reasonably determined by PremierWest, Executive shall be deemed to have resigned for purposes of determining benefits under the Employment Agreement, but the other provisions of this Agreement shall remain in full force and effect.

     6. Release of Claims.

- 2 -

 

                    (a) Release and Covenant Not to Sue. As consideration for receipt of certain benefits specified in the Employment Agreement, Executive, on his or her own behalf and on behalf of Executive’s heirs, executors, successors, and assigns hereby releases PremierWest, its directors, officers, executives, managers, and employees from any and all debts, claims, demands, rights, actions, causes of action, suits, or damages whatsoever and of every kind and nature, whether known or unknown, contingent or otherwise (collectively the “Claims”), against PremierWest and the others released herein, relating to or arising out of Executive’s termination, except to the extent such Claims cannot, under applicable law, be released. Executive also covenants not to sue or file or cause to be filed any complaint with any federal, state, or local agency or in any court against PremierWest or the others released herein regarding any matter related to Executive’s Termination of Employment with PremierWest, including, without limitation, any Claims under the Age Discrimination in Employment Act or any similar federal, state or local law, except to the extent such Claims cannot, under applicable law, be released. The release of liability set forth herein does not extend to rights or claims that may arise from events occurring after execution of this Agreement, including, without limitation, claims for the enforcement of this Agreement, or to Executive’s exercise of rights under the Consolidated Omnibus Budget Reconciliation Act of 1986 to continued insurance, if applicable.

                    (b) Acceptance and Revocation Period. Executive shall have a period of 21 days from the date of delivery of this Agreement to accept Section 7(a) of this Agreement. Executive shall have a period of seven days after his execution of this Agreement during which Executive may revoke his acceptance of Section 7(a) of this Agreement by providing written notice of revocation to PremierWest Bancorp. Any such acceptance or revocation must be addressed to the Chairman, PremierWest Bancorp, 503 Airport Road, Medford, Oregon 97504, or such other address as Executive may be directed in writing by PremierWest Bancorp to provide such acceptance or revocation. To be effective, the acceptance or revocation must be received no later than 5:00 p.m. Pacific Time within the applicable time period. The 21-day acceptance period may be waived by Executive, but the seven-day revocation period may not be waived. If Executive’s acceptance of Section 7(a) of this Agreement is not affirmatively revoked in writing by Executive during the seven-day revocation period, it shall be deemed to have been accepted and not revoked. Section 7(a) of this Agreement shall not be effective or enforceable until the seven-day revocation period has expired. If Executive properly executes his right to revoke acceptance of Section 7(a), the remainder of this Agreement shall nevertheless remain in full force and effect.

     7. No Admission of Wrongdoing. Executive acknowledges and agrees that nothing in this Agreement constitutes or shall be construed as an admission of liability or wrongdoing on the part of PremierWest or the others released herein.

     8. Successors. This Agreement shall be binding upon and inure to the benefit of and be enforceable by PremierWest and its successors and assigns.

     9. Severability. The provisions of this Agreement shall be deemed severable. The invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions of this Agreement. Any provision held to be invalid or unenforceable shall be reformed to the extent (and only to the extent) necessary to make it valid and enforceable.

- 3 -

 

     10. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by and construed in accordance with the substantive laws of the State of Oregon, without giving effect to the principles of conflict of laws of such State.

     11. Arbitration. The parties agree to submit any dispute arising under this Agreement to final, binding, private arbitration in Medford, Oregon. The disputes subject to arbitration include not only disputes involving the meaning or performance of the Agreement, but disputes about its negotiation, drafting, or execution. The dispute will be determined by a single arbitrator and governed by the then-existing rules of arbitration procedure in Jackson County Circuit Court, except as set forth herein. Instead of filing a civil complaint in Jackson County Circuit Court, a party will commence the arbitration process by noticing the other party. The parties will choose an arbitrator who specializes in employment conflicts from the arbitration list for Jackson County Circuit Court. If no such arbitrator is available, the parties will choose a similarly qualified arbitrator from any other arbitration list for other Circuit Courts in Oregon. If the parties are unable to agree on an arbitrator within ten (10) days of receipt of the list of arbitrators, each party will select one attorney from the list, and those two attorneys shall select the arbitrator from the list (with each of the two selecting attorneys then concluding their services and each being compensated by the party selecting each attorney, subject to recovery of such fees under Section 11). The arbitrator may charge his or her standard arbitration fees rather than the fees prescribed in the Jackson County Circuit Court arbitration procedures. The arbitrator will have full authority to determine all issues, including arbitrability, to award any remedy, including permanent injunctive relief, and to determine any request for attorney’s fees, costs and expenses in accordance with Section 12. There shall be no right to review the arbitrator’s decision in court. The arbitrator’s award may be reduced to final judgment or decree in Jackson County Circuit Court.

     12. Expense/Attorneys’ Fees. The prevailing party shall be awarded all costs and expenses of the proceeding, including, without limitation, attorneys’ fees, filing and service fees, witness fees, and arbitrators’ fees. If arbitration is commenced, the arbitrator will have full authority and complete discretion to determine the “prevailing party” and the amount of costs and expenses to be awarded.

     13. Injunctive Relief. Notwithstanding any other provision of this Agreement, an aggrieved party may seek a temporary restraining order or preliminary injunction in Jackson County Circuit Court to preserve the status quo during the arbitration proceeding, provided however, that the party seeking relief agrees that ultimate resolution of the dispute will still be determined through arbitration and not through court process. The filing of the court action for injunctive relief shall not hinder or delay the arbitration process.

     14. This Agreement is Not Exclusive. This Agreement does not supersede any other agreement to which Executive may be party with PremierWest relating to noncompetition, nondisclosure, or the other matters referred to in this Agreement, whether those noncompetition, nondisclosure, or other provisions are contained in an employment agreement, a severance agreement, a salary continuation agreement, or any other agreement. This Agreement is in addition to any such other agreement(s). In case of conflict between this Agreement, on one

- 4 -

 

hand, and any such other agreement(s), on the other, the agreement that was executed last shall govern.

     15. Defined Terms. Terms used but not defined in this Agreement shall have the meanings given to them in the Employment Agreement.

     IN WITNESS WHEREOF, Executive, PremierWest Bancorp, and the Bank have executed this Separation Agreement effective as of the day and year first set forth above.

PREMIERWEST BANCORP:

By: ____________________ 

      James M. Ford 

      President and Chief Executive Officer

PREMIERWEST BANK:

By: ____________________

     James M. Ford

     President and Chief Executive Officer

By signing below, I hereby agree to and accept all provisions of this Separation Agreement, specifically including, without limitation, the release and covenant not to sue that is set forth in Section 6(a) of this Separation Agreement. I understand that I have seven days after the date of my execution of this Separation Agreement to revoke my acceptance of the release and covenant not to sue contained in Section 6(a) of the Separation Agreement, and that if I do not revoke my acceptance by 5:00 p.m. Pacific Time on that date, the release and covenant not to sue will become effective. I understand that if I do revoke my acceptance of the release and covenant not to sue, I will forfeit all consideration for the release of claims as set forth in Section 10 of the Employment Agreement.

EXECUTIVE:

____________________

William M. Yarbenet

Date signed: _____, 20__

- 5 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]