Document:

Exhibit 10.2

 

AMENDED AND RESTATED

 

EMPLOYMENT AGREEMENT

 

THIS AGREEMENT, made effective as of March 19, 2005, by and between
STERLING FINANCIAL CORPORATION (“Sterling”) and WILLIAM W. ZUPPE (the “Executive”),

 

WITNESSETH:

 

WHEREAS, the Executive is President and Chief Operating Officer of
Sterling, and Sterling desires to retain the Executive and the Executive is
willing to continue to serve in such capacities on the terms and conditions
herein set forth; and

 

WHEREAS, the parties desire to enter into this Agreement, which is
intended to amend and supersede an existing Employment Agreement, as amended
(the “Prior Agreement”);

 

NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

 

1.                                       Employment.  Sterling agrees to continue to employ the
Executive, and the Executive agrees to continue to be employed by Sterling,
upon the terms and conditions hereinafter provided until December 31, 2009 (the
“Term”).

 

2.                                       Position
and Duties.  During the Term,
Sterling agrees to employ the Executive to serve as the President and Chief
Operating Officer of Sterling, and the Executive will have such powers and duties
as are commensurate with such position and as may be conferred upon him by the
Board of Directors of Sterling (the “Board”). 
During the Term, and except for illness or incapacity and reasonable
vacation periods as shall be consistent with Sterling’s policies for other key
executives, the Executive shall devote all of his business time, attention,
skill and efforts exclusively to the business and affairs of Sterling and its
subsidiaries; provided, however, that the Executive may serve on other boards as
a director or trustee if such service does not interfere with his ability to
discharge his duties and responsibilities to Sterling.

 

3.                                       Compensation.  For all services rendered by the Executive in
any capacity required hereunder during the Term, including, without limitation,
services as an executive

 

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officer, director, or member of any committee of Sterling, or any
subsidiary or division thereof, the Executive shall be compensated as follows:

 

(a)                                  Base
Salary.  Sterling shall pay the Executive
a fixed minimum salary of $375,000 per annum (such amount or such higher annual
amount as is paid from time to time pursuant to the terms hereof being referred
to as the “Base Salary”).  The Base
Salary shall be subject to such periodic review (which shall occur at least
annually) and such periodic increases as the Board shall deem appropriate in
accordance with Sterling’s customary procedures and practices regarding the
salaries of senior officers.  The Base
Salary shall be payable in accordance with the customary payroll practices of
Sterling, but in no event less frequently than monthly.

 

(b)                                 Bonus
Awards.  The Executive shall be entitled
to receive an incentive bonus (the “Incentive Bonus”) for each fiscal year during
the Term.  The Incentive Bonus shall be
paid within thirty days of the end of each fiscal year.  The Incentive Bonus shall be a minimum of ten
percent of the Executive’s Base Salary and the Executive shall be awarded a
minimum of 10,000 nonqualified stock options under Sterling’s stock option or
incentive plan(s) then in effect.  The
Incentive Bonus may be increased, upon the recommendation of the Personnel
Committee and the approval of the Board, depending, among other factors, upon
the attainment of performance goals set by the Board for the Executive and for
Sterling.

 

(c)                                  Stock
Options.  The Executive shall be eligible
to receive grants under Sterling’s stock option or incentive plan(s) then in
effect subject to the terms and conditions of such plan(s).

 

(d)                                 Perquisites.  Sterling also will furnish the Executive
during each fiscal year of the Term, without cost to him except any associated
tax liability, with reasonable (i) payment for tax preparation and financial
planning; (ii) payment for an annual physical examination of the Executive by a
physician selected by the Executive; (iii) reimbursement for club membership
fees or dues; and (iv) payment of an automobile allowance, it being understood
that the club membership fees or dues and the automobile allowance shall be
primarily to further the business of Sterling.

 

(e)                                  Goodwill
Lawsuit.  Sterling is the plaintiff in a
lawsuit in the United States Court of Federal Claims (the “Goodwill Lawsuit”).  Notwithstanding anything to the

 

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contrary herein, if and when a settlement or judgment amount is
received by Sterling or its subsidiaries, successors or assigns, as a result of
the Goodwill Lawsuit or any related lawsuit, the Executive shall be paid two
percent of the gross amount received, in recognition of the Executive’s
substantial contribution in bringing about the settlement or judgment.  The parties recognize and agree that any
material decisions regarding the management, settlement or dismissal of the Goodwill
Lawsuit will be made by the Board.  This
provision shall survive any termination of this Agreement.

 

(f)                                    Additional
Benefits.  Except as modified by this
Agreement, the Executive shall be entitled to participate in all compensation
or employee benefit plans or programs, and to receive all benefits, perquisites
and emoluments, for which any salaried employees of Sterling are eligible under
any plan or program now or hereafter established and maintained by Sterling for
senior officers, to the fullest extent permissible under the general terms and
provisions of such plans or programs and in accordance with the provisions
thereof, including group hospitalization, health, dental care, life or other
insurance, tax-qualified pension, savings, thrift, 401(k) and profit-sharing
plans, termination pay programs, sick-leave plans, travel or accident
insurance, salary continuation plans, disability insurance, automobile
allowance or automobile lease plans, and executive contingent compensation
plans, including, without limitation, stock option or incentive plan(s) then in
effect.

 

4.                                       Business
Expenses.  It is understood that for
the Executive to successfully perform his duties hereunder so as to produce the
greatest economic return to Sterling, it is necessary for the Executive to
entertain persons having an existing or prospective business relationship with
Sterling and to attend seminars, conventions and continuing education
programs.  Sterling, therefore, shall pay
directly or reimburse the Executive for all reasonable travel, entertainment or
other expenses incurred by the Executive (and his spouse where there is a
legitimate business reason for his spouse to accompany him) in connection with
the performance of his duties and obligations under this Agreement, subject to
the Executive’s presentation of appropriate vouchers in accordance with such
procedures as Sterling may from time to time establish for senior officers and
to preserve any deductions for Federal income taxation purposes to which
Sterling may be entitled.

 

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5.                                       Effect
of Termination of Employment Other Than in Connection with a Change in Control.

 

(a)                                  Certain
Terminations.  In the event the Executive’s
employment hereunder terminates due to either Permanent Disability, a Without
Cause Termination or a Constructive Discharge, Sterling shall, as severance
pay, continue, subject to the provisions of Section 7 below, to pay the
Executive’s Base Salary as in effect at the time of such termination until (i)
the expiration of the Term or (ii) for a three-year period beginning on the
date of Termination of Employment, whichever is longer (the “Severance Period”),
provided, that in the case of Permanent Disability, such payments shall be
offset by any amounts otherwise paid to the Executive under Sterling’s
disability program generally available to other employees.  In addition, earned but unpaid Base Salary
and Incentive Bonus amounts and amounts (whether vested or not) held for the
Executive’s account in Sterling=s deferred compensation plan and
supplemental executive retirement plan then in effect as of the date of
Termination of Employment shall be payable in full.  Medical, dental care, life or other
insurance, including travel or accident insurance, disability insurance and the
perquisites set forth in Section 3(d) shall continue through the end of the
Severance Period.  All stock options and
other incentive awards held by the Executive shall become fully exercisable during
the Severance Period.

 

(b)                                 Other
Terminations.  In the event that the
Executive’s employment hereunder terminates due to a Termination for Cause or
the Executive’s death, or the Executive voluntarily terminates employment with
Sterling for reasons other than a Constructive Discharge or Permanent
Disability, earned but unpaid Base Salary and Incentive Bonus amounts as of the
date of Termination of Employment shall be payable in full.  However, no other payments shall be made, or
benefits provided, by Sterling under this Agreement except for stock options
and other incentive awards held by the Executive pursuant to the terms of the
grant(s) thereof, vested benefits payable under the terms of the deferred
compensation plan and supplemental executive retirement plan then in effect,
and any other benefits which the Executive is entitled to receive under the
terms of employee benefit programs maintained by Sterling or its subsidiaries
for its employees.

 

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(c)                                  Definitions.  For purposes of this Agreement, the following
terms have the following meanings:

 

(i)                                     The
term “Termination for Cause” means:

 

(A)                              the
continued failure of Executive to substantially perform the Executive’s duties
with Sterling or one of its subsidiaries (other than any such failure resulting
from incapacity due to physical or mental illness), after a written demand for
substantial performance is delivered to the Executive by the Board, which
specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive’s duties, or

 

(B)                                the
willful engaging by the Executive in illegal conduct that is materially and
demonstrably injurious to Sterling or any of its subsidiaries, or

 

(C)                                conviction
of a felony involving fraud, dishonesty or moral turpitude, or a guilty or nolo
contendere plea by Executive with respect thereto, or

 

(D)                               violation
of the provisions of Section 7 herein.

 

For purposes of this provision, no act or
failure to act on the part of Executive shall be considered “willful” unless it
is done, or omitted to be done, by the Executive in bad faith and without
reasonable belief that the Executive’s action or omission was in the best
interest of Sterling or its subsidiaries. 
Any act or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for
Sterling shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of Sterling and its
subsidiaries.  The cessation of
employment of the Executive shall not be deemed to be a Termination for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than two-thirds of
the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board),

 

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finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (A), (B) or (D) above, and
specifying the particulars thereof in detail.

 

(ii)                                  The
term “Constructive Discharge” means a termination of the Executive’s employment
by the Executive due to a failure of Sterling or its successors, without the
prior consent of the Executive, to fulfill the obligations under this Agreement
in any material respect, including (A) any failure of the shareholders of
Sterling to elect or reelect, or of Sterling to appoint or reappoint, the
Executive as a member of the Board, or to the offices of President and Chief
Operating Officer of Sterling, or (B) any other material adverse change by
Sterling in the functions, duties or responsibilities of the Executive’s
position with Sterling.

 

(iii)                               The
term “Without Cause Termination” means a termination of the Executive’s
employment by Sterling, for a reason other than Permanent Disability,
retirement, expiration of the Term, or Termination for Cause.

 

(iv)                              The
term “Permanent Disability” means the inability of the Executive to work for a
period of six full calendar months during any twelve consecutive calendar
months due to illness or injury of a physical or mental nature.  Any questions as to the existence of the
Permanent Disability of Executive as to which Executive and Sterling cannot
agree shall be determined in writing by a qualified independent physician
mutually acceptable to Executive and Sterling. 
If Executive and Sterling cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing.  Such determination made in writing to
Sterling and Executive shall be final and conclusive for all purposes under
this Agreement.

 

6.                                       Effect
of Termination of Employment in Connection with a Change in Control.

 

(a)                                  Definitions.  For purposes of this Agreement, the following
terms shall have the following meanings:

 

(i)                                     A
“Change in Control” shall be deemed to have occurred at such time as:

 

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(A)                              any
“person” (as that term is used in Section 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) (other than Sterling or
affiliates of Sterling) becomes, directly or indirectly, the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act) of securities representing
25% or more of the then outstanding securities of Sterling;

 

(B)                                during
any period of two (2) consecutive years or less, individuals who at the
beginning of such period constituted the Board of Sterling cease, for any
reason, to constitute at least a majority of the Board, unless the election or
nomination for election of each new member of the Board was approved by a vote
of at least two-thirds of the members of the Board then still in office who
were members of the Board at the beginning of the period; or

 

(C)                                the
Shareholders of Sterling approve: (1) a plan of complete liquidation of
Sterling; (2) an agreement for the sale or disposition of all or substantially
all of Sterling’s assets; or (3) a merger or consolidation of Sterling with any
other corporation, other than a merger or consolidation that would result in
the voting securities of Sterling outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 50% of the combined
voting power of the voting securities of Sterling or such surviving entity
outstanding immediately after such merger or consolidation.

 

(ii)                                  “Separation
Period” means the balance of the Term or a three-year period beginning on the
date of Termination of Employment, whichever is longer.

 

(iii)                               “Termination
of Employment” shall mean the termination of the Executive’s actual employment
with Sterling.

 

(iv)                              “Termination
Upon a Change of Control” shall mean a Termination of Employment upon or within
eighteen months after a Change of Control.

 

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(b)                                 Payments
for Termination upon a Change of Control. 
Within twenty days of the Executive’s Termination upon a Change in
Control, Sterling shall pay to the Executive in a single payment in cash and/or
provide to the Executive, as applicable, the following:

 

(i)                                     the
Executive’s earned but unpaid Base Salary and Incentive Bonus amounts and
amounts (whether vested or not) held for the Executive’s account in the
deferred compensation plan and the supplemental executive retirement plan then
in effect as of the date of Termination of Employment;

 

(ii)                                  the
benefits, if any, to which the Executive is entitled as a former employee under
the employee benefit programs and compensation plans and programs maintained
for the benefit of Sterling’s officers and employees;

 

(iii)                               continued
medical, dental care, life or other insurance, including travel or accident
insurance and disability insurance, and the perquisites set forth in Section
3(d) throughout the Separation Period, with coverage equivalent to the coverage
to which the Executive would have been entitled had the Executive continued
working for Sterling during the Separation Period at the highest annual rate of
Base Salary achieved during the Executive’s period of actual employment with
Sterling; provided, however, that the Executive may upon written notice elect
to receive the present value of such coverage in cash in a lump sum, computed
using a discount rate of 6% per year compounded monthly;

 

(iv)                              an
amount equal to the Base Salary and Incentive Bonus amounts the Executive would
have earned if the Executive had continued working for Sterling during the
Separation Period, at the highest annual rate of Base Salary, and the highest
annual Incentive Bonus achieved during the Executive’s period of actual
employment with Sterling; and

 

(v)                                 an
amount equal to Sterling’s contributions to which the Executive would have been
entitled under Sterling’s 401(k) Plan if the Executive had continued working
for Sterling during the Separation Period at the highest annual rate of Base
Salary achieved during the Executive’s period of actual employment with
Sterling, and the Executive had made the maximum amount of employee
contributions as are permitted under such plans.

 

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(c)                                  Options
and Other Incentive Awards.  All stock
options and other incentive awards held by the Executive shall become fully
vested and exercisable during the Separation Period.

 

(d)                                 Adjustment
for Taxes.  In the event that either
Sterling’s independent public accountants or the Internal Revenue Service
determines that any payment, coverage, benefit or benefit acceleration provided
to Executive, whether specifically provided for in this Agreement or otherwise,
is subject to the excise tax imposed by Section 4999 (or any successor
provision) (“Section 4999”) of the Internal Revenue Code of 1986, as amended
(the “Code”), Sterling, within 30 days thereafter, shall pay to Executive, in addition
to any other payment, coverage or benefit due and owing hereunder, an amount
determined by multiplying the rate of excise tax then imposed by Section 4999
by the amount of the “excess parachute payment” (as defined in Section 280G of
the Code) received by Executive (determined without regard to any payments made
to the Executive pursuant to this paragraph) and dividing the product so
obtained by the amount obtained by subtracting the aggregate local, state and
Federal income tax rate applicable to the receipt by Executive of the “excess
parachute payment” (taking into account the deductibility for Federal income
tax purposes of the payment of state and local income taxes thereon) from the
amount obtained by subtracting from 1.00 the rate of excise tax then imposed by
Section 4999 of the Code, it being Sterling’s intention that the Executive’s
net after tax position be identical to that which would have obtained had
Sections 280G and 4999 not been part of the Code.

 

(e)                                  In
the event that, on or after the occurrence of a Change in Control, Sterling
fails to make any payment or provide any coverage to Executive arising out of
or relating in any way to this Agreement or to the Executive’s employment by
Sterling (collectively, “Employment Rights”), then Sterling shall pay to the
Executive and reimburse the Executive for the Executive’s full costs
(including, without limitation, the fees and expenses of the Executive’s
attorneys and court and related costs) of enforcing the Executive’s Employment
Rights.  In addition, if the
enforceability of this Agreement or the payment of any benefit to the Executive
hereunder is disputed by Sterling on or after the occurrence of a Change in
Control, then the Term of this Agreement shall be extended for the period of
the dispute in the event of a final judicial determination that

 

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the Executive is entitled to at least fifty percent (in dollar amount)
of the benefits which he claimed from, and which were disputed by, Sterling.

 

7.                                       Other
Duties of Executive During and After Term.

 

(a)                                  Confidential
Information.  The Executive recognizes
and acknowledges that all information pertaining to the affairs, business,
clients, or customers of Sterling or any of its subsidiaries (any or all of
such entities being hereinafter referred to as the “Business”), as such
information may exist from time to time, other than information that Sterling
has previously made publicly available or which is in the public domain, is
confidential information and is a unique and valuable asset of the Business,
access to and knowledge of which are essential to the performance of the
Executive’s duties under this Agreement. 
The Executive shall not, through the end of the Term, except to the
extent reasonably necessary in the performance of his duties under this
Agreement, divulge to any person, firm, association, corporation, or
governmental agency, any information concerning the affairs, business, clients,
or customers of the Business (except such information as is required by law to
be divulged to a government agency or pursuant to lawful process), or make use
of any such information for his own purposes or for the benefit of any person,
firm, association or corporation (except the Business) and shall use his
reasonable best efforts to prevent the disclosure of any such information by
others.  All records, memoranda, letters,
books, papers, reports, accountings, experience or other data, and other
records and documents relating to the Business, whether made by the Executive
or otherwise coming into his possession, are confidential information and are,
shall be, and shall remain the property of the Business.  No copies thereof shall be made which are not
retained by the Business, and the Executive agrees, on termination of his
employment or on demand of Sterling, to deliver the same to Sterling.

 

(b)                                 Non-Compete.  For a period of two years following Executive’s
Termination of Employment (the “Non-Compete Period”),  the Executive shall not, without express
prior written approval of Sterling’s Board, directly or indirectly own or hold
any proprietary interest in, or be employed by or receive remuneration from,
any corporation, partnership, sole proprietorship or other entity engaged in
competition with Sterling or any of its subsidiaries (a “Competitor”), other
than severance-type or retirement-type benefits from entities constituting
prior employers of the Executive.

 

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During the Non-Compete Period, the Executive also agrees that he will
not solicit for the account of any Competitor, any customer or client of
Sterling or its subsidiaries.  The
Executive also agrees not to act on behalf of any Competitor to interfere with
the relationship between Sterling or its subsidiaries and their employees
during the Non-Compete Period.  In
addition, if the Executive obtains non-competitive employment during the
Non-Compete Period, for such period the Executive agrees not to solicit
employees of Sterling or its subsidiaries for new employment without the prior
written consent of Sterling.  For
purposes of this section, (i) the term “proprietary interest” means legal or
equitable ownership, whether through stockholdings or otherwise, of greater
than a 20% equity interest in a business, firm or entity, and (ii) an entity
shall be considered to be “engaged in competition” if such entity is, or is a
holding company for, a bank, savings and loan association or other financial
services business engaged in a business that competes with Sterling in the
States of Washington, Idaho, Montana or Oregon. 
Executive acknowledges the receipt and sufficiency of specific
consideration for the agreements in this Section 7.

 

(c)                                  Remedies.  Sterling’s obligation to make payments,
deliver shares of stock or provide for any benefits under this Agreement
(except to the extent vested or exercisable prior to Executive’s Termination of
Employment) shall cease upon a violation of the preceding provisions of this
section.  The provisions of this Section
7 shall: (a) survive the termination of this Agreement, and continue throughout
the duration of the Executive’s employment with Sterling, except as amended or
modified by written agreement of the parties; and (b) survive the Executive’s
Termination of Employment with Sterling.

 

(d)                                 Modification
of Terms.  If any restriction in this
Section 7 is finally adjudicated by a court of competent jurisdiction to exceed
the time, geographic, service or other limitations permitted by applicable law
in any jurisdiction, such restriction may be modified and narrowed by a court
to the maximum time, geographic, service or other limitations permitted by
applicable law so as to preserve and protect Sterling’s legitimate business
interest, without negating or impairing any other restrictions or undertaking
set forth in the Agreement.

 

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(e)                                  Application.  The provisions of this Section 7 shall be
inapplicable if the Executive’s Termination of Employment is due to:  a Permanent Disability; a Without Cause
Termination; a Constructive Discharge; or a Termination Upon a Change in
Control.

 

8.                                       Withholding
Taxes.  Sterling may directly or
indirectly withhold from any payments made under this Agreement all Federal,
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.

 

9.                                       Consolidation,
Merger, or Sale of Assets.  Nothing
in this Agreement shall preclude Sterling from consolidating or merging into or
with, or transferring all or substantially all of its assets to, another
corporation which assumes this Agreement and all obligations and undertakings
of Sterling hereunder.  Upon such a
consolidation, merger or transfer of assets, the term “Sterling” as used herein
shall mean such other corporation and this Agreement shall continue in full
force and effect.

 

10.                                 Notices.  All notices, requests, demands and other
communications required or permitted hereunder shall be given in writing and
shall be deemed to have been duly given if delivered or mailed, postage
prepaid, by same day or overnight mail as follows:

 

(a)                                  To
Sterling:

 

111 Wall Street

Spokane, WA 99201

Attention: Chief Financial Officer

 

With a copy to:

 

Witherspoon, Kelley, Davenport & Toole, P.S.

422 West Riverside, Ste. 1100

Spokane, WA 99201-0390

 

(b)                                 To
the Executive:

 

At his regular office and to his

primary residence

 

or to such other address as either party shall from time-to-time
specify in writing to the other.

 

11.                                 No
Attachment.  Except as required by
law, no right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment,

 

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encumbrance, charge, pledge or hypothecation, or to execution,
attachment, levy or similar process, or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null,
void and of no effect; provided, however, that nothing in this Section 11 shall
preclude the assumption of such rights by executors, administrators or other
legal representatives of the Executive or his estate and their assigning any
rights hereunder to the person or persons entitled thereto.

 

12.                                 No
Mitigation.  The Executive shall not
be required to mitigate the amount of any payment or benefit provided for in
this Agreement by seeking other employment or otherwise, nor shall the amount
of any payment or benefit provided for in this Agreement be reduced by any
compensation earned by other employment or otherwise, except as provided herein.

 

13.                                 Source
of Payment.  All payments provided
for under this Agreement shall be paid in cash from the general funds of
Sterling.  To the extent that any person
acquires a right to receive payments from Sterling hereunder, such right,
without prejudice to rights which employees may have, shall be no greater than
the right of an unsecured creditor of Sterling.

 

14.                                 Further
Action.  Sterling shall perform all
acts and execute all documents as may be reasonably necessary to effect
performance of this Agreement by Sterling. 
In the event Sterling's Deferred Compensation Plan, the 1992 Stock
Option Plan, the 1998 Long-Term Incentive Plan, the 2001 Long-Term Incentive
Plan, and the Supplemental Executive Retirement Plan, or plans which are
substantially similar to such plans are not maintained, Sterling shall provide
the Executive with compensation which is substantially similar in financial
effect to the compensation which would otherwise have been provided through
such plans.  References herein to
deferred compensation, stock option or incentive plan(s) and any other benefit
plans shall be deemed to include all successor plans.  Nothing in this Agreement shall be deemed to
be a modification of Sterling's stock option or incentive plans.

 

15.                                 Severability.  If any provision of this Agreement or
application thereof to anyone or under any circumstances is finally adjudicated
by a court of competent jurisdiction to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application and shall not invalidate or render unenforceable such
provision or application in any other jurisdiction.

 

16.                                 Contents
of Agreement.  This Agreement
supersedes all prior agreements and sets forth the entire understanding among
the parties hereto with respect to the subject matter hereof

 

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and cannot be changed, modified, extended or terminated except upon
written amendment approved by the parties hereto.

 

17.                                 Governing
Law.  The validity, interpretation,
performance, and enforcement of this Agreement shall be governed by the laws of
the State of Washington, and the Executive consents to the jurisdiction of the
state and federal courts of Washington in any dispute arising under this
Agreement.

 

18.                                 Survival
of Benefits.  If the Term expires and
no employment agreement between Sterling and Executive is in effect, but
Executive’s employment relationship with Sterling continues, any section of
this Agreement which provides a benefit to the Executive and which does not
expressly provide for its termination upon the expiration of the Term shall
survive the expiration of the Term and the obligation to provide benefits to
the Executive as set forth in such Section shall remain binding upon Sterling
until such time as the Executive’s employment relationship with Sterling is
terminated and the benefits provided under such Section are paid in full to the
Executive or until such time as a new employment agreement between Sterling and
Executive is in effect.  Anything to the
contrary herein notwithstanding, following any Termination of Employment,
including retirement, but not following a Termination for Cause, Sterling shall
continue to provide the perquisites set forth in Section 3(d)(i), (ii) and
(iii), as well as medical, dental, disability and travel accident insurance
coverages for the Executive and his spouse to the same extent as if the
Executive had continued in Sterling’s employ, provided that such coverages
shall be offset by the receipt of any alternate benefits under Medicare or
similar programs.

 

19.                                 Representations.  The Executive hereby represents and warrants
that he has the legal capacity to execute and perform this Agreement, that it
is a valid and binding agreement against him according to its terms, and that
its execution and performance by him does not and will not violate the terms of
any existing agreement or understanding to which the Executive is a party.  In addition, the Executive represents and
warrants that he knows of no reason why he is not physically capable of
performing his obligations under this Agreement in accordance with its terms.

 

20.                                 Miscellaneous.  All section headings are for convenience
only. This Agreement may be executed in any number of counterparts, each of
which when executed shall be deemed to be an original and all of which together
shall be deemed to be one and the same instrument.  It

 

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shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.

 

21.                                 Compliance
with Section 409A of the Code.  This
Agreement is intended to constitute an enforceable contract for the payment of
compensation, severance and certain other benefits.  The Agreement is not intended to constitute a
“nonqualified deferred compensation plan” within the meaning of Section 409A of
the Code.  Notwithstanding the foregoing,
in the event this Agreement and/or any benefit paid to the Executive hereunder
is deemed to be subject to Section 409A of the Code, this Agreement shall be
amended as reasonably necessary to bring this Agreement and/or any such benefit
into compliance with Section 409A of the Code, without reducing the amounts of
any benefits due to the Executive hereunder.

 

IN WITNESS WHEREOF, and intending to be legally bound, Sterling has
caused this Agreement to be executed by its duly authorized representatives and
the Executive has signed this Agreement, all as of the first date above
written.

 

	
   

  	
  STERLING FINANCIAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BY:

  	
      /s/   Robert D. Larrabee

  	
   

  
	
   

  	
   

  	
  ROBERT D. LARRABEE

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  STERLING FINANCIAL CORPORATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY: 

  	
       /s/   Daniel G. Byrne

  	
   

  	
   

  	
   

  
	
   

  	
  DANIEL G. BYRNE

  	
   

  	
   

  
	
   

  	
  Senior Vice President - Finance

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     /s/   William W. Zuppe

  	
   

  
	
   

  	
   

  	
  WILLIAM W. ZUPPE

  
							

 

15EXHIBIT 10.1

 

GARDENBURGER, INC.

ARRANGEMENTS FOR DIRECTOR COMPENSATION

 

In accordance with guidance
provided by the staff of the Division of Corporation Finance of the Securities
and Exchange Commission (the “SEC”) in late November 2004, Gardenburger, Inc.
(the “Company”) is providing a written description of the oral compensation
arrangements that the Company currently has with its Board of Directors
(“Board”), which the SEC may deem to be material definitive agreements with the
directors.

 

During fiscal 2004, four
non-employee Directors, Charles E. Bergeron, Ronald C. Kesselman, Richard L.
Mazer and Paul F. Wenner, received fees for their participation on our Board
and Board Committees. Mr. Bergeron received a total of $28,000, Mr. Mazer
received a total of $20,000, Mr. Kesselman, who resigned from the Board of
Directors in December 2003, received a total of $7,000 and Mr. Wenner, who
became a non-employee director in May 2004, received a total of $3,000. No
other directors received compensation for their participation on the Board of
Directors. All non-employee Directors are reimbursed for their expenses
incurred in attending meetings of the Board of Directors.

 

We also have a licensing
agreement with Mr. Wenner, which expires in May 2009. This licensing agreement
was filed as an exhibit to the Company’s Form 10-Q for the quarter ended June
30, 2004, filed August 16, 2004.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]