Document:

Unassociated Document

    Exhibit
99.2

    

    WEST
COAST BANK

    SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

    (SERP)

    

    Effective
Date:  August 1, 2003

    Restated
January 1, 2011

    
 

    THIS SERP
is adopted by WEST COAST BANK (the “Bank”), WEST COAST BANCORP (“Bancorp”), its
parent holding company, (collectively referred to as the “Company”) and ROBERT
D. SZNEWAJS (the “Executive”).

    

    ARTICLE
1

    PURPOSE

    

    1.1         Dual
Purposes.  This SERP is
intended to:

    

    
      	
               
      

            	
              (a)

            	
              Assist
      in assuring the Executive’s continued service to the Company by providing
      supplemental retirement benefits that are competitive with the Company’s
      peers; and

            

    

    

    
      	
               
      

            	
              (b)

            	
              Discourage
      the Executive from engaging in any competitive business after the
      Executive leaves the Company.

            

    

    

    
      	
              1.2

            	
              Top-Hat
      Plan Status.  This is an
      unfunded plan maintained primarily for the purpose of providing deferred
      compensation for the Executive, who is a member of a select group of
      management or highly compensated employees.  As such, this SERP
      is intended to qualify as a “top-hat plan” exempt from Part 2 (minimum
      participation and vesting standards), Part 3 (minimum funding standards)
      and Part 4 (fiduciary responsibility provisions) of Title I of the
      Employee Retirement Income Security Act of 1974 (“ERISA”).  The
      provisions of the SERP shall be interpreted and administered according to
      this intention.

            

    

    
 

    ARTICLE
2

    
      DEFINITIONS

    

    
 

    Words and
phrases appearing in this SERP with initial capitalization are defined terms
that have the meanings stated below.  Words appearing in the following
definitions which are themselves defined terms are also indicated by initial
capitalization.

    

    
      	
              2.1

            	
              Accrual
      Balance means the benefit liability accrued by the Company under
      Article 5 which shall include the benefit accrued under this SERP before
      the Effective Date of
this Restatement.

            

    

     

    
      
        
          Page 1
 SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              2.2

            	
              Accrual
      Completion Date means the date the Accrual Balance is scheduled to
      be fully accrued by the Company.

            

    

    

    
      	
              2.3

            	
              Beneficiary
      means the person or persons or estate, trust or charitable organization
      entitled under Article 4 to receive the death benefit payable under
      this SERP.

            

    

    

    
      	
              2.4

            	
              Change
      In Control Agreement means the “Change In Control Agreement” as
      restated December 30, 2008, between the Executive and the Company, as
      amended.

            

    

    

    
      	
              2.5

            	
              Compensation
      Committee means the Compensation and Personnel Committee of
      Bancorp’s Board of Directors.

            

    

    

    
      	
              2.6

            	
              Effective
      Date means the original effective date as first stated above
      (immediately below the title of this SERP), however, the Effective
      Date of this SERP as restated is January 1,
  2011.

            

    

    

    
      	
              2.7

            	
              Termination
      Event means the termination of the Executive’s employment under
      circumstances that entitle the Executive to benefits under the Change In
      Control Agreement.

            

    

    

    
      	
              2.8

            	
              Termination
      for Cause means that the Company has terminated the Executive’s
      employment for “cause” as defined in the Change In
      Control Agreement.

            

    

    

    
      	
              2.9

            	
              Termination
      of Employment means that the Executive’s employment with the
      Company has terminated for any reason, voluntary or
      involuntary.

            

    

    

    ARTICLE
3

    BENEFITS

    

    
      	
              3.1

            	
              Fully
      Accrued Benefit.  Effective
      January 1, 2011, upon Termination of Employment on or after the
      Accrual Completion Date, other than a Termination for Cause, the Executive
      shall be entitled to receive a benefit equal to the present value of a
      stream of annual installment payments, each in the amount of 45% of the
      Executive’s annual base salary as in effect January 1, 2011, payable
      for 15 years and commencing on the Accrual Completion
      Date.  Present value shall be determined using a 6.0%
      discount rate.

            

    

    

    
      	
              3.2

            	
              Partially
      Accrued Benefits.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Amount of
      Benefit.  Upon Termination of Employment before the
      Accrual Completion Date for any reason other than death, Termination for
      Cause or a Termination Event, subject to adjustment under
      subsection (b) below, the Executive shall be entitled to receive the
      Accrual Balance as determined as of the first day of the month in which
      the Termination of Employment
occurs.

            

    

     

    
      
        
          Page
2   SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              Benefit
      Increase.  In its sole discretion, the Compensation
      Committee may, from time to time as of any anniversary of the Effective
      Date of this Restatement, separately increase the amount of the benefit
      payable under subsection (a) above without increasing the benefit
      payable under Section 3.1.

            

    

    

    
      	
              3.3

            	
              Death
      Benefit.   If
      the Executive dies before the Accrual Completion Date, the Executive’s
      Beneficiary shall be paid the fully accrued benefit that would have been
      payable under Section 3.1 had the Executive had a Termination of
      Employment on the Accrual Completion
Date.

            

    

    

    
      	
              3.4

            	
              Change
      In Control Benefit.   If a
      Termination Event occurs before the Accrual Completion Date, the Company
      will pay the Executive the fully accrued benefit that would have been
      payable under Section 3.1 had the Executive had a Termination of
      Employment on the Accrual Completion
Date.

            

    

    

    
      	
              3.5

            	
              Form
      and Time of Payment.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Payment
      of any type of benefit under this Plan shall be made in a lump sum
      cash payment.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Subject
      to the six-month delay under Section 3.6, the benefit payment shall be
      paid, without interest, within 60 days of the date of the occurrence of
      the event entitling the Executive to the benefit
  payment.

            

    

    

    
      	
              3.6

            	
              Six-Month
      Delay for Distributions.  Except to
      the extent a benefit payment is exempt from the requirements of Code §
      409A, the payment shall not be made before the date which is six months
      after the date of the Executive’s Termination of Employment or, if earlier
      than the end of the six-month period, the date of the Executive’s
      death.

            

    

    

    ARTICLE
4

    BENEFICIARIES

    

    
      	
              4.1

            	
              Designation
      of Beneficiary. The Executive may
      designate the Beneficiary or Beneficiaries (who may be designated
      concurrently or contingently) to receive the death benefit under the
      SERP.  The designation is subject to the following terms
      and conditions:

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      beneficiary designation must be in a form satisfactory to the Compensation
      Committee and must be signed by the
Executive.

            

    

    

    
      	
               
      

            	
              (b)

            	
              A
      beneficiary designation form shall be effective upon receipt by the
      Compensation Committee or its designee, provided it is received before the
      Executive’s death.

            

    

     

    
      
        
          Page
3  SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              The
      Executive may revoke a previous beneficiary designation without the
      consent of the previously designated Beneficiary.  This
      revocation is made by filing a new beneficiary designation form with the
      Compensation Committee or its designee, and shall be effective upon
      receipt.

            

    

    

    
      	
               
      

            	
              (d)

            	
              A
      beneficiary designation made before the Effective Date of this Restatement
      that complied with the rules in subsections (a), (b) and (c) above shall
      continue in effect unless and until a new beneficiary designation is made
      by the Executive.

            

    

    

    
      	
              4.2

            	
              Divorce.  A divorce
      will automatically revoke the portion of a beneficiary designation
      designating the former spouse as a Beneficiary.  The former
      spouse will be a Beneficiary under this SERP only if a new such
      beneficiary designation form naming the former spouse as a beneficiary is
      filed after the date the dissolution decree is
  entered.

            

    

    

    
      	
              4.3

            	
              Disclaimers.  If a
      Beneficiary disclaims a death benefit, the benefit will be paid as if the
      Beneficiary had predeceased the
Executive.

            

    

    

    
      	
              4.4

            	
              Default
      Beneficiary.  If, at the
      time of the Executive’s death, the Executive has failed to designate a
      Beneficiary, the Executive’s beneficiary designation has become completely
      invalid under the provisions of this Article or there is no surviving
      Beneficiary, payment of the death benefit will be made in the following
      order of priority:

            

    

    

    
      	
               
      

            	
              (a)

            	
              To
      the Executive’s spouse, if living;

            

    

    

    
      	
               
      

            	
              (b)

            	
              To
      the Executive’s surviving children, in equal shares;
  or

            

    

    

    
      	
               
      

            	
              (c)

            	
              To
      the Executive’s estate.

            

    

    

    ARTICLE
5

    ACCRUAL
BALANCE

    

    
      	
              5.1

            	
              Compensation
      Liability.  The Accrual
      Balance shall be equal to the financial statement compensation liability
      accrued by the Company (under Section 5.2) as of any applicable
      determination date (as defined in Section 5.3) for its payment obligation
      under this SERP.

            

    

    

    
      	
              5.2

            	
              Accrual
      Calculation.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      value of the Accrual Balance shall equal the sum of
  the:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Principal
      accrual (service cost); plus

            

    

    

    
      	
               
      

            	
              (2)

            	
              Interest
      accrual at 6.0%.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Accrual Balance shall be fully accrued on April 1,
  2013.

            

    

     

    
      
        
          Page
4   SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              The
      value shall be determined by using Generally Accepted Accounting
      Principles applying APB 12 as amended by FAS
  106.

            

    

    

    
      	
              5.3

            	
              Determination
      Dates.  The Accrual
      Balance shall be determined as of the first day of each
    month.

            

    

    

    
      	
              5.4

            	
              Reporting.  The
      Compensation Committee will report the Accrual Balance to the Executive at
      least annually and within a reasonable period of time not to exceed
      30 days after the date of the Termination of Employment if the
      Executive is to be paid the partially accrued benefit under
      Section 3.2.

            

    

    

    ARTICLE
6

    FORFEITURE

    

    
      	
              6.1

            	
              Grounds
      For Forfeiture.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Executive will forfeit any benefits payable under this SERP upon a
      Termination for Cause.

            

    

    

    
      	
               
      

            	
              (b)

            	
              The
      Executive will forfeit any benefits payable under this SERP if the
      Executive violates the noncompetition restrictions of
      Section 6.2.

            

    

    

    
      	
              6.2

            	
              Noncompetition
      Restrictions.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Definitions.  For
      purposes of this section, the following terms have the meanings stated
      below:

            

    

    

    
      	
               
      

            	
              (1)

            	
              “Banking
      institution” means any state
      or national bank, state or federal savings and loan association, mutual
      savings bank or state or federal credit union or any of their holding
      companies.

            

    

    

    
      	
               
      

            	
              (2)

            	
              “Competing
      activities” mean any activities that are competitive with the
      business activities of Bancorp, the Bank or any of their subsidiaries as
      conducted at the commencement of, or during the term of, the
      restricted period.

            

    

    

    
      	
               
      

            	
              (3)

            	
              “Financial
      institution” means any banking institution (as defined in
      paragraph (1) above), trust company or mortgage company regardless
      of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              Its
      legal form of organization; or

            

    

    

    
      	
               
      

            	
              (B)

            	
              Whether
      it is in existence or is in
formation.

            

    

     

    
      
        
          Page
5   SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (4)

            	
              “Restricted
      area” means any county in Oregon or Washington in which Bancorp,
      the Bank or any of their subsidiaries
either:

            

    

    

    
      	
               
      

            	
              (A)

            	
              Has
      a branch or other office at the commencement of the restricted period;
      or

            

    

    

    
      	
               
      

            	
              (B)

            	
              Has
      decided to open a branch or other office during the restricted period,
      provided that fact has been communicated to the Executive before the
      Executive’s Termination of
Employment.

            

    

    

    
      	
               
      

            	
              (5)

            	
              “Restricted
      period” means a period of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              24
      months from the date of the Executive’s Termination of Employment;
      or

            

    

    

    
      	
               
      

            	
              (B)

            	
              36
      months from the date of the Executive’s Termination Event if the Change in
      Control Benefit under Section 3.4 is
  payable.

            

    

    

    
      	
               
      

            	
              (6)

            	
              “Subsidiaries”
      mean any current or future subsidiary of Bancorp or the Bank, regardless
      of whether it is 100% owned by Bancorp or the
  Bank.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Restrictions.  The
      Executive agrees that, during the restricted period, the Executive will
      not, directly or indirectly:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Except
      as provided in subsection (c) below, be employed by or provide services to
      any financial institution that engages in competing activities in the
      restricted area, whether as an employee, officer, director, agent,
      consultant, promoter or in any similar position, function or
      title;

            

    

    

    
      	
               
      

            	
              (2)

            	
              Have
      any ownership or financial interest in any financial institution that
      engages in competing activities in the restricted area that violates the
      Company’s then current published ethical standards on ownership interests
      in competing businesses;

            

    

    

    
      	
               
      

            	
              (3)

            	
              Induce
      any employee of Bancorp, the Bank or their subsidiaries to terminate their
      employment with Bancorp, the Bank or their
  subsidiaries;

            

    

    

    
      	
               
      

            	
              (4)

            	
              Hire
      or assist in the hiring of any employee of Bancorp, the Bank or their
      subsidiaries for or by any financial institution that is not affiliated
      with Bancorp, the Bank or their subsidiaries;
or

            

    

    

    
      	
               
      

            	
              (5)

            	
              Induce
      any person or entity (other than the Executive’s relatives or entities
      controlled by them) to terminate or curtail its business or contractual
      relationships with the Bank, Bancorp or their
  subsidiaries.

            

    

     

    
      
        
          Page
6  SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              Exceptions.  Regardless
      of the restriction in subsection (b)(1) above, the Executive may be
      employed outside the restricted area as an employee, officer, agent,
      consultant or promoter of a financial institution that engages in
      competing activities in the restricted area, provided the Executive will
      not:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Act
      within the restricted area as an employee or other representative or agent
      of that financial institution;

            

    

    

    
      	
               
      

            	
              (2)

            	
              Have
      any responsibilities for that financial institution’s operations within
      the restricted area; or

            

    

    

    
      	
               
      

            	
              (3)

            	
              Directly
      or indirectly violate the restrictions of subsection (b)(3),
      (4) and (5) above.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Forfeiture.  If
      the Executive breaches the restrictions under subsection (b) above, the
      Executive will:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Forfeit
      any benefits payable under this SERP that were unpaid as of the date of
      the breach; and

            

    

    

    
      	
               
      

            	
              (2)

            	
              Promptly
      repay the Company, upon demand, any payments that were made.  If
      the Executive does not repay that amount within fifteen (15) days after
      the date of the demand, the Executive will also pay interest on that
      amount at the rate of 9% per annum.

            

    

    

    ARTICLE
7

    CLAIMS
AND APPEALS PROCEDURE

    

    
      	
              7.1

            	
              Claims
      Procedure.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Routine
      Payments.  The Compensation Committee may authorize
      distribution of payments to the Executive or the Executive’s Beneficiary
      even though a formal claim has not been
filed.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Formal
      Claims.

            

    

    

    
      	
               
      

            	
              (1)

            	
              Mandatory
      Procedure.  Any claim that the Executive or a Beneficiary
      or anyone claiming on behalf of or through the Executive or a Beneficiary
      may make under ERISA or under any other applicable federal or state law
      must first be brought as a formal claim under this section.  If
      that claim is denied, it will be subject to the claims appeal procedures
      of Section 7.2.

            

    

    

    
      	
               
      

            	
              (2)

            	
              Form and
      Content of Claim.  The claim shall be in any form
      reasonably acceptable to the Compensation Committee and must state the
      basis of the claim and also authorize the Compensation Committee and its
      designees to conduct any examinations necessary to determine the validity
      of the claim and take any steps necessary to facilitate the benefit
      payment.

            

    

     

    
      
        
          Page
7  SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (3)

            	
              Submissions
      by Claimant.  The claimant shall file the claim with the
      Executive Vice-President, Human Resources.  The claimant may
      also submit written comments, documents, records and other information
      relating to the claim.

            

    

    

    
      	
               
      

            	
              (4)

            	
              Access to
      Information.  The claimant will be provided, upon request
      and free of charge, reasonable access to, and copies of, all
      nonconfidential or nonprivileged Company documents, records and other
      information relevant to the claim.

            

    

    

    
      	
               
      

            	
              (5)

            	
              Authorized
      Representative.  The claimant may be represented by an
      individual authorized to act on behalf of the claimant.  A
      representative’s authorization to act on behalf of the claimant must be
      established to the Compensation Committee’s reasonable
      satisfaction.

            

    

    

    
      	
               
      

            	
              (6)

            	
              Review and
      Recommendation.  The claim shall be reviewed by the
      Company’s Executive Vice-President, Human Resources and the Chief
      Executive Officer (if that office is not held by the Executive at that
      time), who shall make a recommendation to the Compensation
      Committee.

            

    

      

    
      	
               
      

            	
              (c)

            	
              Timeline.  The
      Compensation Committee shall make a determination on the claim within
      90 days after the date the claimant filed it with the Executive
      Vice-President, Human Resources.  If more time is required for a
      special case, the Compensation Committee may take up to an additional 90
      days to render a determination, but the claimant must be notified of the
      need for the extension of time within the initial 90-day
      period.  This notification will explain the special
      circumstances requiring the extension of time as well as the date by which
      a determination is expected.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Explanation of
      Denial.  If a claim is wholly or partially denied, the
      Compensation Committee shall provide the claimant with a notice of the
      decision, written in a manner calculated to be understood by the claimant,
      containing the following
information:

            

    

    

    
      	
               
      

            	
              (1)

            	
              The
      specific reason or reasons for the denial and a discussion of why the
      specific reason or reasons apply;

            

    

    

    
      	
               
      

            	
              (2)

            	
              References
      to the specific provisions of this SERP upon which the denial was
      based;

            

    

    

    
      	
               
      

            	
              (3)

            	
              A
      description of any additional material or information necessary for the
      claimant to perfect the claim; and

            

    

    

    
      	
               
      

            	
              (4)

            	
              An
      explanation of the claims appeals procedures under this
    SERP.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Deemed
      Denial.  If a determination is not furnished to the
      claimant within 90 days of the date the claim was filed—or 180 days
      if it is a special case—the claim shall be deemed to be
      denied.

            

    

     

    
      
        
          Page
8  SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (f)

            	
              Appeal of
      Denial.  If the claimant disagrees with the denial, the
      claimant’s sole remedy shall be to proceed with the claims appeal
      procedures under Section 7.2.

            

    

    

    
      	
              7.2 

            	
              Claims
      Appeal Procedures.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Written
      Request.  If a claim is denied in whole or in part, the
      claimant or the claimant’s authorized representative may submit a written
      request for a review of the denial, including a statement of the reasons
      for the review.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Deadline.  This
      request must be filed with the Compensation Committee within 60 days after
      the claimant receives notice of the denial.  This time limit may
      be extended by the Compensation Committee if an extension appears to be
      reasonable in view of the nature of the claim and the pertinent
      circumstances.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Conduct of
      Appeal.  Upon receipt of such a request, the Compensation
      Committee shall afford the claimant an opportunity to review relevant
      documents and to submit issues and comments in writing.  The
      Compensation Committee may hold a hearing or conduct an independent
      investigation.  The Compensation Committee will consider all of
      the claimant’s submissions regardless of whether they were submitted or
      considered in the initial determination of the
  claim.

            

    

    

    
      	
               
      

            	
              (d)

            	
              Timeline.  A
      decision on the review shall be rendered by the Compensation Committee not
      later than 60 days after receipt of the claimant’s request for the
      review.  If more time is required for a special case, the
      Compensation Committee may take up to an additional 60 days to render a
      decision, but the claimant must be notified of the need for the extension
      of time within the initial 60-day period.  This notification
      shall explain the special circumstances (such as the need to hold a
      hearing) which require the extension of
time.

            

    

    

    
      	
               
      

            	
              (e)

            	
              Decision on
      Appeal.  The decision shall be written in a manner
      calculated to be understood by the claimant and shall
    include:

            

    

    

    
      	
            	
              (1)

            	
              Specific
      reasons for the decision;

            

    

    
 

    
      	
               
      

            	
              (2)

            	
              Specific
      references to the provisions of this SERP on which the decision
      is based;

            

    

    

    
      	
               
      

            	
              (3)

            	
              A
      statement that the claimant is entitled to receive, upon request and free
      of charge, reasonable access to, and copies of, all documents, records and
      other information relevant (as defined in applicable ERISA regulations) to
      the claimant’s claim for benefits;
and

            

    

    

    
      	
               
      

            	
              (4)

            	
              A
      statement of the claimant’s right to bring a civil action under
      ERISA § 502(a), to the extent such an action is not preempted by
      the mandatory arbitration provision of Section
  9.10.

            

    

     

    
      
        
          Page
9  SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (f)

            	
              Deemed
      Denial.  If the determination on the appeal is not
      furnished to the claimant within 60 days—or 120 days if it is a special
      case—the appeal shall be deemed to be
denied.

            

    

    

    
      	
               
      

            	
              (g)

            	
              Exhaustion of Appeal Process
      Required.  A claimant whose claim has been denied is
      required to exhaust the claims appeal procedures set forth in this section
      before commencing any arbitration or legal
  action.

            

    

    

    
      	
              7.3

            	
              Discretionary
      Authority; Standards of Proof and Review; Record
      on Review.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Compensation Committee is the “named fiduciary” for purposes of
      ERISA.  This SERP confers full discretionary authority on the
      Compensation Committee with regard to the administration of this SERP,
      including the discretion to:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Make
      findings of fact and determine the sufficiency of the evidence presented
      regarding a claim; and

            

    

    

    
      	
               
      

            	
              (2)

            	
              Interpret
      and construe the provisions of this SERP and related administrative
      documents, if any, (including words and phrases that are not defined in
      this SERP or those documents) and correct any defect, supply any omission
      or reconcile any ambiguity or
inconsistency.

            

    

    

    
      	
               
      

            	
              (b)

            	
              A
      decision by the Compensation Committee is required to be supported by
      substantial evidence only.  That is, proof by a preponderance of
      the evidence, clear and convincing evidence or beyond a reasonable doubt
      is not required.

            

    

    

    
      	
               
      

            	
              (c)

            	
              A
      court of law or arbitrator reviewing any decision of the Compensation
      Committee, including those relating to the interpretation of this SERP or
      a claim for benefits under this SERP, shall be required to use the
      arbitrary and capricious standard of review.  That is, the
      Compensation Committee’s determination may be reversed only if it was made
      in bad faith, is not supported by substantial evidence or is erroneous as
      to a question of law.

            

    

    

    
      	
               
      

            	
              (d)

            	
              In
      conducting its review of the Compensation Committee’s decision, a court or
      arbitrator shall be limited to the record of documents, testimony and
      facts presented to or actually known to the Compensation Committee at the
      time the decision was made.

            

    

     

    
      
        
          Page
10  SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    ARTICLE
8

    AMENDMENT
AND TERMINATION

    

    
      	
              8.1

            	
              By
      Mutual Agreement.  Except as
      provided in Section 8.2, this SERP may be amended or terminated only by a
      written agreement signed by the Company and
      the Executive.

            

    

    

    
      	
              8.2

            	
              By
      the Company.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Subject
      to the restrictions in subsection (b) below, the Company may
      unilaterally amend or terminate this SERP at any time if in the opinion of
      the Company’s counsel or accountants, as a result of legislative, judicial
      or regulatory action, continuation of the SERP
  would:

            

    

    

    
      	
               
      

            	
              (1)

            	
              Cause
      benefits to be taxable to the Executive before their actual receipt;
      or

            

    

    

    
      	
               
      

            	
              (2)

            	
              Result
      in material financial penalties or other materially detrimental
      ramifications to the Company (other than the financial impact of paying
      the benefits).

            

    

    

    
      	
               
      

            	
              (b)

            	
              Except
      as required by law, banking regulatory requirements or financial
      accounting requirements, an amendment or termination under
      subsection (a) above may not
reduce:

            

    

    

    
      	
               
      

            	
              (1)

            	
              The
      amount of the Executive’s Accrual Balance as determined as of the later
      of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              The
      effective date of the amendment or termination;
  or

            

    

    

    
      	
               
      

            	
              (B)

            	
              The
      date it is adopted or approved; or

            

    

    

    
      	
               
      

            	
              (2)

            	
              The
      amount of the benefit payable if the Executive’s benefit was in pay status
      as of the earlier of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              The
      effective date of the amendment or termination;
  or

            

    

    

    
      	
               
      

            	
              (B)

            	
              The
      date it is adopted or approved.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Except
      as required by law, banking regulatory requirements or financial
      accounting requirements, upon the termination of this SERP under
      subsection (a) above:

            

    

    

    
      	
               
      

            	
              (1)

            	
              The
      Executive’s Accrual Balance will be frozen as of the
      later of:

            

    

    

    
      	
               
      

            	
              (A)

            	
              The
      effective date of the amendment or termination;
  or

            

    

    

    
      	
               
      

            	
              (B)

            	
              The
      date it is adopted or approved;

            

    

     

    
      
        
          Page
11  SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (2)

            	
              Interest
      will be credited on the Executive’s frozen Accrual Balance at an annual
      rate of 6% compounded monthly; and

            

    

    

    
      	
               
      

            	
              (3)

            	
              The
      Company may either:

            

    

    

    
      	
               
      

            	
              (A)

            	
              Hold
      and disburse the Executive’s frozen Accrual Balance (as adjusted under
      paragraph (2) above) in accordance with the otherwise applicable terms and
      conditions of this SERP; or

            

    

    

    
      	
               
      

            	
              (B)

            	
              Disburse
      that amount in a lump sum at such earlier date as is permissible under
      Treas. Reg. § 1.409A-3(j)(ix).

            

    

    

    ARTICLE
9

    GENERAL
PROVISIONS

    

    
      	
              9.1

            	
              Administration.  The
      Compensation Committee shall have all powers necessary or desirable to
      administer this SERP, including but not limited
  to:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Establishing
      and revising the method of accounting for the
  SERP;

            

    

    

    
      	
               
      

            	
              (b)

            	
              Maintaining
      a record of benefit payments;

            

    

    

    
      	
               
      

            	
              (c)

            	
              Establishing
      rules and prescribing any forms necessary or desirable to administer the
      SERP;

            

    

    

    
      	
               
      

            	
              (d)

            	
              Interpreting
      the provisions of the SERP; and

            

    

    

    
      	
               
      

            	
              (e)

            	
              Delegating
      to others certain aspects of the Compensation Committee’s managerial and
      operational responsibilities, including employing advisors and delegating
      ministerial duties.

            

    

    

    
      	
              9.2

            	
              Receipt
      and Release for Payments.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Compensation Committee may require the recipient of a payment, as a
      condition precedent to the payment, to execute a receipt and, in the case
      of a payment in full, a release for the payment.  The receipt
      and the release shall be in a form satisfactory to the Compensation
      Committee.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Payment
      may be made by a deposit to the credit of the Executive or a Beneficiary,
      as applicable, in any bank or trust
company.

            

    

     

    
      
        
          Page
12  SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              Payment
      may be made to the individual or institution maintaining or having custody
      of the Executive or Beneficiary, as applicable, if the Compensation
      Committee receives satisfactory evidence
that:

            

    

    

    
      	
               
      

            	
              (1)

            	
              A
      person entitled to receive any benefit under this SERP is, at the time the
      benefit is payable, physically, mentally or legally incompetent to receive
      payment and provides a valid receipt for
it;

            

    

    

    
      	
               
      

            	
              (2)

            	
              An
      individual or institution is maintaining or has custody of that
      person; and

            

    

    

    
      	
               
      

            	
              (3)

            	
              No
      guardian, custodian or other representative of the estate of that person
      has been appointed.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      receipt of the recipient or a canceled check shall be a sufficient voucher
      for the Company.  The Company is not required to obtain from the
      recipient an accounting for the
payment.

            

    

    

    
      	
               
      

            	
              (e)

            	
              If
      a dispute arises over a distribution, payment may be withheld until the
      dispute is determined by a court of competent jurisdiction or settled, to
      the satisfaction of the Compensation Committee, by the parties
      concerned.  The Compensation Committee may require a hold
      harmless agreement on behalf of the Company and the SERP before making
      payment.

            

    

    

    
      	
              9.3

            	
              Other
      Compensation and Terms of Employment.  This SERP
      is not an express or implied employment agreement.  Accordingly,
      other than providing for certain benefits payable upon a Termination of
      Employment, this SERP will not affect the determination of any
      compensation payable by the Company to the Executive, nor will it affect
      the other terms of the Executive’s employment with the Company. The
      specific arrangements referred to in this SERP are not intended to exclude
      or circumvent any other benefits that may be available to the Executive
      under the Company’s employee benefit or other applicable plans, upon the
      Executive’s Termination of
Employment.

            

    

    

    
      	
              9.4 

            	
              Withholding.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Income
      Tax.  Applicable federal, state and local income tax
      withholding will be withheld from all payments made under this
      SERP.

            

    

    

    
      	
               
      

            	
              (b)

            	
              FICA.  To the
      extent allowable under applicable
regulations:

            

    

    

    
      	
               
      

            	
              (1)

            	
              The
      present value of the vested benefits under this SERP will be taken into
      account as FICA wages in the year they become
  vested;

            

    

    

    
      	
               
      

            	
              (2)

            	
              Present
      value will be determined using reasonable actuarial equivalency factors
      acceptable to the Compensation
Committee;

            

    

     

    
      
        
          Page 13
  SERP
(Sznewajs)

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (3)

            	
              The
      employee portion of each year’s FICA liability will be deducted from the
      Executive’s other cash compensation for that year;
  and

            

    

    

    
      	
               
      

            	
              (4)

            	
              FICA
      will not be deducted from any payments made under this
    SERP.

            

    

    

    
      	
              9.5

            	
              Unfunded
      Arrangement.

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Company’s payment obligation under this SERP is purely contractual and is
      not funded or secured in any manner by any asset, pledge or encumbrance of
      the Company’s property.

            

    

    

    
      	
               
      

            	
              (b)

            	
              This
      SERP is not intended to create, and should not be construed as creating,
      any trust or trust fund.  The benefits accrued under this SERP
      and any assets acquired by the Company to finance its payment obligations
      under this SERP shall not be held in a trust (other than a grantor trust
      of the Company), escrow or similar fiduciary
  capacity.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Any
      insurance policy on the Executive’s life the Company may acquire to assist
      it in financing its obligations under this SERP is a general asset of the
      Company and neither the Executive nor anyone else claiming on behalf of or
      through the Executive shall have any right with respect to, or claim
      against, that policy.

            

    

    

    
      	
               
      

            	
              (d)

            	
              The
      Executive and any Beneficiary are general unsecured creditors of the
      Company with respect to the payment of the benefits under this
      SERP.

            

    

    

    
      	
              9.6

            	
              Benefits
      Not Assignable.  The accrued
      benefits under this SERP shall not be considered assets under state law or
      bankruptcy law of the Executive or of any Beneficiary.  The
      Executive and any Beneficiary shall not have any right to alienate,
      anticipate, pledge, encumber or assign any of the benefits payable under
      this SERP.  The Executive’s or any Beneficiary’s benefits shall
      not be subject to any claim of, or any attachment, garnishment or other
      legal process brought by, any of his or her
  creditors.

            

    

    

    
      	
              9.7

            	
              Binding
      Effect.  This SERP
      binds and inures to the benefit of the parties and their respective legal
      representatives, heirs, successors and
assigns.

            

    

    

    
      	
              9.8

            	
              Reorganization.  The Company
      shall not merge or consolidate into or with another company, or
      reorganize, or sell substantially all of its assets to another company,
      firm, or person unless that succeeding or continuing company, firm or
      person agrees to assume and discharge the obligations of the Company under
      this SERP.  Upon the occurrence of such an event, the term
      “Company” as used in this SERP shall be deemed to refer to the successor
      or survivor company.

            

    

    

    
      	
              9.9 

            	
              Applicable
      Law.

            

    

    

    
      	
               
      

            	
              (a)

            	
              This
      SERP shall be construed and its validity determined according to the laws
      of the State of Oregon, other than its law regarding conflicts of law or
      choice of law, to the extent not preempted by federal
  law.

            

    

     

    
      
        
          Page
14  SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              Any
      dispute arising out of this SERP must be brought in either Clackamas
      County or Multnomah County, Oregon, and the parties will submit to
      personal jurisdiction in either of those
  counties.

            

    

    

    
      	
              9.10

            	
              Arbitration.  Any dispute
      or claim arising out of or brought in connection with this SERP, will, if
      requested by any party, be submitted to and settled by arbitration under
      the rules then in effect of the American Arbitration Association (or under
      any other form of arbitration mutually acceptable to the parties
      involved).  Any award rendered in arbitration will be final and
      will bind the parties, and a judgment on it may be entered in the highest
      court of the forum having jurisdiction.  The arbitrator will
      render a written decision, naming the substantially prevailing party in
      the action, and, subject to Section 9.11(b), will award that party
      all costs and expenses incurred, including reasonable attorneys’
      fees.

            

    

    

    
      	
              9.11

            	
              Attorneys’
      Fees.

            

    

    

    
      	
               
      

            	
              (a)

            	
              If
      any breach of or default under this SERP results in either party incurring
      attorneys’ or other fees, costs or expenses (including those incurred in
      an arbitration), the substantially prevailing party is entitled to recover
      from the non-prevailing party its reasonable legal fees, costs and
      expenses, including attorneys’ fees and the costs of the arbitration,
      except as provided in subsection (b)
below.

            

    

    

    
      	
               
      

            	
              (b)

            	
              If
      the Executive is not the substantially prevailing party, the Executive
      shall be liable to pay the Company under subsection (a) above only if
      the arbitrator determines that:

            

    

    

    
      	
               
      

            	
              (1)

            	
              There
      was no reasonable basis for the Executive’s claim (or the Executive’s
      response to the Company’s claim);
or

            

    

    

    
      	
               
      

            	
              (2)

            	
              The
      Executive had engaged in unreasonable delay, failed to comply with a
      discovery order or otherwise acted in bad faith in the
      arbitration.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Either
      party shall be entitled to recover any reasonable attorneys’ fees and
      other costs and expenses it incurs in enforcing or collecting an
      arbitration award.

            

    

    

    
      	
               
      

            	
              (d)

            	
              If
      an award under this section is made to the Executive and accountants or
      tax counsel selected by Company with the Executive’s consent (which shall
      not be unreasonably withheld) determine that the award is includible in
      Executive’s gross income, the Company shall also pay the Executive a
      gross-up payment to offset the taxes imposed on that award, including the
      taxes on the gross-up payment itself.  This gross-up payment
      shall be determined following the methodology employed in the Change in
      Control Agreement.

            

    

    

    
      	
              9.12

            	
              Entire
      Agreement.  This SERP
      constitutes the entire agreement between the Company and the Executive as
      to its subject matter.  No rights are granted to the Executive
      by virtue of this SERP other than those specifically set forth in this
      document and any amendments to it.

            

    

     

    
      
        
          Page
15  SERP
(Sznewajs)

        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              9.13

            	
              Construction.  The
      language of this SERP was chosen jointly by the parties to express their
      mutual intent.  No rule of construction based on which party
      drafted the SERP or certain of its provisions will be applied against any
      party.

            

    

    

    
      	
              9.14

            	
              Section
      Headings; Citations.  The section
      headings used in this SERP have been included for convenience of reference
      only.  Citations to statutes, regulations or FASB policies or
      statements are to those provisions as amended or to any successor
      provision.

            

    

    

    
      	
              9.15

            	
              Counterparts.  This SERP
      may be executed in one or more counterparts, and all counterparts will be
      construed together as one plan.

            

    

    

    
      	
              9.16

            	
              Severability.  If any
      provision of this SERP is, to any extent, held to be invalid or
      unenforceable, it will be deemed amended as necessary to conform to the
      applicable laws or regulations.  However, if it cannot be
      amended without materially altering the intentions of the parties, it will
      be deleted and the remainder of this SERP will be enforced to the extent
      permitted by law.

            

    

    

    
      	
              9.17

            	
              Joint
      and Several Obligation.  Bancorp and
      the Bank will be jointly and severally liable for the payment obligations
      under this Agreement.

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                EXECUTIVE:

                              	 
      	
                                COMPANY:

                              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                WEST
      COAST BANCORP

                              
	 
      	 
      	 
      	 
      
	
                                /s/ Robert D. Sznewajs

                              	 
      	
                                By:

                              	/s/
      Lloyd D. Ankeny  
	
                                Robert
      D. Sznewajs

                              	 
      	 
      	 
      
	 
      	 
      	
                                Title:

                              	Chairman 
      
	
                                Date:

                              	January
      12, 2011  	 
      	 
      	 
      
	 
      	 
      	
                                Date:

                              	December
      16, 2010  
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                WEST
      COAST BANK

                              
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                By:

                              	/s/
      Lloyd D. Ankeny  
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                Title:

                              	Chairman 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                Date:

                              	December
      16, 2010 

                      

                    

                  

                

              

            

          

        

      

    
 

    
      
        
          Page
16   SERP
(Sznewajs)ex10-05.htm

Exhibit 10.05

EMPLOYMENT AGREEMENT

BIOMODA, INC., for and on behalf of its affiliated corporations (collectively referred to as the "Company") and John Cousins (the "Employee") hereby enter into this EMPLOYMENT AGREEMENT ("Agreement") dated as of November 1, 2008 as follows:

1) EMPLOYMENT.

The Company shall employ Employee, and Employee shall be employed by the Company upon the terms and subject to the conditions set forth in this Agreement.

2) TERM OF EMPLOYMENT.

The period of Employee's employment under this Agreement shall begin as of November 1, 2008. and shall continue for a period of five (5) years thereafter (the "Initial Term") and shall be automatically renewed for successive three (3) year periods thereafter, unless Employee's employment is terminated in accordance with Section 6 below.

3) DUTIES AND RESPONSIBILITIES.

a) Employee shall serve as President, Biomoda, Inc.  In such capacity, Employee shall perform such duties as may be assigned to Employee from time to time by the Board of Directors.

b) Employee shall faithfully serve the Company, devote Employee's full working time, attention and energies to the business of the Company and/or its affiliated corporations, and perform the duties under this Agreement to the best of Employee's abilities.

c) Employee shall

i) comply with all applicable regulatory, self-regulatory, and administrative bodies;

ii) comply with the Company's rules, procedures, policies, requirements, and directions;  and

iii) not engage in any other business or employment without the written consent of the Company, except as otherwise specifically provided herein.

4) COMPENSATION AND BENEFITS.

a) BASE SALARY. During the Employment Term, the Company shall pay Employee a base salary at the annual rate of one hundred thirty five thousand ($135,000) Dollars per year, or such higher rate as may be determined from time to time by the Company ("Base Salary"). Such Base Salary shall be paid in accordance with the Company's standard payroll practice for employees.

b) EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Employee for the ordinary and necessary business expenses incurred by Employee in the performance of Employee's duties hereunder in accordance with the Company's customary practices applicable to employees, provided that such expenses are incurred and accounted for in accordance with the Company's policy.

  

  

  

 

c) BENEFIT PLANS. Employee shall be eligible to participate in or receive benefits under any pension plan, profit sharing plan, medical and dental benefits plan, life insurance plan, short-term and long-term disability plans, supplemental and/or incentive compensation plans, or any other benefit plan or arrangement generally made available by the Company to employees of similar status and responsibilities (hereinafter referred to as "similarly situated employees").

d) INCENTIVE/BONUS. Employee shall be eligible for a bonus or incentive compensation payment ("bonus").  Qualification for the bonus shall be determined by the Board of Directors or pursuant to the applicable Bonus Plan in effect for the year in which the bonus is earned..

5) TERMINATION OF EMPLOYMENT.

Employee's employment hereunder may be terminated under the following circumstances:

a) DEATH. Employee's employment hereunder shall terminate upon Employee's death.

b) TOTAL DISABILITY. The Company may terminate Employee's employment hereunder upon Employee's becoming "Totally Disabled". For purposes of this Agreement, Employee shall be "Totally Disabled" if Employee is physically or mentally incapacitated so as to render Employee incapable of performing Employee's usual and customary duties under this Agreement. Employee's receipt of disability benefits under any long-term disability plan, or receipt of Social Security disability benefits, shall be deemed conclusive evidence of Total Disability for purpose of this Agreement; provided, however, that in the absence of Employee's receipt of such long-term disability benefits or Social Security benefits, the Company may, in its reasonable discretion (but based upon appropriate medical evidence), determine that Employee is Totally Disabled.

c) TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate Employee's employment hereunder for "Cause" at any time after providing written notice to Employee.

i) For purposes of this Agreement, the term "Cause" shall mean any of the following:

(a) conviction of a crime (including conviction on a nolo contendere plea) involving a felony or, in the good faith judgment of the Company, fraud, dishonesty, or moral turpitude;

(b) deliberate and continual refusal to perform employment duties reasonably requested by the Company after thirty (30) days' written notice by  certified mail of such failure to perform, specifying that the failure constitutes cause (other than as a result of vacation, sickness, illness or injury);

(c)  fraud or embezzlement determined in accordance with the Company's normal, internal investigative procedures  consistently applied in comparable circumstances;

(d) gross  misconduct or gross negligence in connection with the business of the Company or an affiliate which has substantial effect on the Company or the affiliate; or

(e) breach of any of the covenants set forth in Section 8 hereof.

(f)       An individual will be considered to have been terminated for Cause if the Company determines that the individual engaged in an act constituting Cause at any time prior to a payment date for an award, regardless of whether the individual terminates employment voluntarily or is terminated involuntarily, and regardless of whether the individual's termination initially was considered to have been for Cause.

(g) Any determination of Cause under this Agreement shall be made by the Company after giving Employee a reasonable opportunity to be heard.

 

  

  

  

 

d) VOLUNTARY TERMINATION BY EMPLOYEE. Employee may terminate employment hereunder at any time after providing ninety (90) days' written notice to the Company.

e)    TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate Employee's employment hereunder without Cause at any time after providing written notice to Employee.

6) COMPENSATION FOLLOWING TERMINATION OF EMPLOYMENT.

In the event that Employee's employment hereunder is terminated, Employee shall be entitled to the following compensation and benefits upon such termination:

a)   TERMINATION BY REASON OF DEATH. In the event that Employee's employment is terminated by reason of Employee's death, the Company shall pay the following amounts to Employee's beneficiary or estate:

i) Any accrued but unpaid Base Salary for services rendered to the date of death, any accrued but unpaid expenses required to be reimbursed under this Agreement, and any vacation accrued to the date of death.

ii) Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof as determined and paid in accordance with the terms of such plans, policies and arrangements.

iii) An amount equal to the Base Salary (at the rate in effect as of the date of Employee's death) which would have been payable to Employee if Employee had continued in employment until the end of the 30 day period beginning on the date of Employee's death. Such amount shall be paid in a single lump sum cash payment within thirty (30) days after Employee's death.

b) TERMINATION BY REASON OF TOTAL DISABILITY. In the event that Employee's employment is terminated by reason of Employee's Total Disability as determined in accordance with Section 5(b), the Company shall pay the following amounts to Employee:

i) Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination.

ii) Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements.

  

  

  

 

iii) An amount equal to

(a) The Base Salary (at the rate in effect as of the date of Employee's Total Disability) which would have been payable to Employee if Employee had continued in active employment until the end of the 12-month period beginning on the date of Employee's termination.  Payment shall be made at the same time and in the same manner as such compensation would have been paid if Employee had remained in active employment until the end of such period.

c) TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION BY EMPLOYEE. In the event that Employee's employment is terminated by the Company for Cause pursuant to Section 5(c), or Employee terminates employment pursuant to  Section 5(d), the Company shall pay the following amounts to Employee:

i) Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination.

ii) Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements.

d) TERMINATION BY THE COMPANY WITHOUT CAUSE. In the event that Employee's employment is terminated by the Company pursuant to Section 5(e) for reasons other than death, Total Disability or Cause, the Company shall pay the following amounts to Employee:

i) Any accrued but unpaid Base Salary for services rendered to the date of termination, any accrued but unpaid expenses required to be reimbursed under this Agreement, any vacation accrued to the date of termination.

ii) Any benefits to which Employee may be entitled pursuant to the plans, policies and arrangements referred to in Section 4(c) hereof shall be determined and paid in accordance with the terms of such plans, policies and arrangements.

iii) The Base Salary (at the rate in effect as of the date of Employee's termination) which would have been payable to Employee if Employee had continued in active employment until the later of: (a) the period ending on the last day of the Initial Term; or (b) the end of the 36-month period beginning on the date of Employee's termination. Payment shall be made at the same time and in the same manner as such compensation would have been paid if Employee had remained in active employment until the end of such period. The Employee shall also be eligible for a bonus or incentive compensation payment, to the extent and in the amount bonuses had been paid in the year prior to termination.

  

  

  

 

iv) One-million shares of Biomoda Common Stock.

v) The Company, completely at its expense, will continue for  Employee and Employee's spouse and dependents, group health plans, programs or arrangements, in which Employee was entitled to participate at any time during the twelve-month period prior to the date of termination, until the earlier of: (a) last day of period during which Employee receives payment in accordance with clause (iii) above; (b) Employee's death (provided that benefits payable to Employee's beneficiaries shall not terminate upon Employee's death); or (c) with respect to any particular plan, program or arrangement, the date Employee becomes covered by a comparable benefit provided by a subsequent employer.

7) RESTRICTIVE COVENANTS

a)    COMPETITIVE ACTIVITY. Employee covenants and agrees that at all times during Employee's period of employment with the Company, and while Employee is receiving payments pursuant to Section 6 of this Agreement, Employee will not, directly or indirectly, engage in, assist, or have any active interest or involvement, whether as an employee, agent, consultant, creditor, advisor, officer, director, stockholder (excluding holding of less than 1% of the stock of a public company), partner, proprietor or any type of principal whatsoever in any person, firm, or business entity which, directly or indirectly, is engaged in the same business as that conducted and carried on by the Company, without the Company's specific written consent to do so.

b) NON-DISPARAGEMENT. Employee covenants and agrees that Employee shall not engage in any pattern of conduct that involves the making or publishing of written or oral statements or remarks (including, without limitation, the repetition or distribution of derogatory rumors, allegations, negative reports or comments) which are disparaging, deleterious or damaging to the integrity, reputation or good will of the Company, or its management.

c)    PROTECTED INFORMATION. Employee recognizes and acknowledges that Employee has had and will continue to have access to various confidential or proprietary information concerning the Company of a special and unique value which may include, without limitation, (i) books and records relating to operation, finance, accounting, sales, personnel and management, (ii) policies and matters relating particularly to operations such as customer service requirements, costs of providing service and equipment, operating costs and pricing matters, and (iii) various trade or business secrets, including business opportunities, marketing or business diversification plans, business development and bidding techniques, methods and processes, financial data and the like (collectively, the "Protected Information"). Employee therefore covenants and agrees that Employee will not at any time, either while employed by the Company or afterwards, knowingly make any independent use of, or knowingly disclose to any other person or organization (except as authorized by the Company) any of the Protected Information.

8) ENFORCEMENT OF COVENANTS.

a) TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION. Employee agrees that any breach by Employee of any of the covenants set forth in Section 7 hereof during Employee's employment by the Company, shall be grounds for immediate dismissal of Employee and forfeiture of any accrued and unpaid salary, bonus, commissions or other compensation of such Employee as liquidated damages, which shall be in addition to and not exclusive of any and all other rights and remedies the Company may have against Employee.

  

  

  

 

b) RIGHT TO INJUNCTION. Employee acknowledges that a breach of the covenants set forth in Section 7 hereof will cause irreparable damage to the Company with respect to which the Company's remedy at law for damages will be inadequate. Therefore, in the event of breach of anticipatory breach of the covenants set forth in this section by Employee, Employee and the Company agree that the Company shall be entitled to the following particular forms of relief, in addition to remedies otherwise available to it at law or equity; (i) injunctions,  both preliminary and permanent, enjoining or restraining such breach or anticipatory breach and Employee hereby consents to the issuance thereof forthwith and without bond by any court of competent jurisdiction; and (ii) recovery of all reasonable sums expended and costs, including reasonable attorney's fees, incurred by the Company to enforce the covenants set forth in this section.

c) SEPARABILITY OF COVENANTS. The covenants contained in Section 7 hereof constitute a series of separate covenants, one for each applicable State in the United States and the District of Columbia, and one for each applicable foreign country. If in any judicial proceeding, a court shall hold that any of the covenants set forth in Section 7 exceed the time, geographic, or occupational limitations permitted by applicable laws, Employee and the Company agree that such provisions shall and are hereby reformed to the maximum time, geographic, or occupational limitations permitted by such laws. Further, in the event a court shall hold unenforceable any of the separate covenants deemed included herein, then such unenforceable covenant or covenants shall be deemed eliminated from the provisions of this Agreement for the purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be enforced in such proceeding. Employee and the Company further agree that the covenants in Section 7 shall each be construed as a separate agreement independent of any other provisions of this Agreement, and the existence of any claim or cause of action by Employee against the  Company whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of any of the covenants of Section 7.

9) WITHHOLDING OF TAXES.

The Company may withhold from any compensation and benefits payable under this Agreement all applicable federal, state, local, or other taxes.

10) NON-DISCLOSURE OF AGREEMENT TERMS.

Employee agrees that Employee will not disclose the terms of this Agreement to any third party other than Employee's immediate family, attorney, accountants, or other consultants or advisors or except as may be required by any governmental authority.

11) SOURCE OF PAYMENTS.

All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets made, to assure payment. Employee shall have no right, title or interest whatever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.

 

  

  

  

 

12) ASSIGNMENT.

Except as otherwise provided in this Agreement, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. This Agreement shall not be assignable by Employee.

13) ENTIRE AGREEMENT; AMENDMENT.

This Agreement shall supersede any and all existing oral or written agreements, representations, or warranties between Employee and the Company or any of its subsidiaries or affiliated entities relating to the terms of Employee's employment by the Company. It may not be amended except by a written agreement signed by both parties.

14) GOVERNING LAW.

This Agreement shall be governed by and construed in accordance with the laws of the State of New Mexico, applicable to agreements made and to be performed in that State, without regard to its conflict of laws provisions.

15) NOTICES.

Any notice, consent, request or other communication made or given in connection with this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by registered or certified mail, return receipt requested, or by facsimile or by hand delivery, to those listed below at their following respective addresses or at such other address as each may specify by notice to the others:

 

	
To the Company:

	
Biomoda, Inc.

	  	
P.O. Box 11342

	  	
Albuquerque, NM 87192

	  	  
	
To Employee:

	
John Cousins

	  	
9180 Coors NW #1609

	  	
Albuquerque, NM 87120

  

  

  

 

16) MISCELLANEOUS.

a) WAIVER. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

b) SEPARABILITY. Subject to Section 8 hereof, if any term or provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such term or provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

c) HEADINGS. Section headings are used herein for convenience of reference only and shall not affect the meaning of any provision of this Agreement.

d) RULES OF CONSTRUCTION. Whenever the context so requires, the use of the singular shall be deemed to include the plural and vice versa.

e) COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts will together constitute but one Agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

 

	
EMPLOYEE

	
 BIOMODA, INC.

	  
	  	  	  
	
By: /s/ JOHN J. COUSINS

	
By: /s/ DAVID LAMBROS

	  
	
Name: John J. Cousins, President

	
Name: David Lambros, Director

	  
	
Date: ______________________________

	
Date: _____________________________

	  
	  	  	  
	
   

	
By: /s/ HERBERT WHITAKER

	  
	
   

	Name: Herbert Whitaker, Director	  
	
   

	Date: _____________________________	  
	  	  	  
	
   

	
By: /s/ LEWIS WHITE

	  
	
   

	Name: Lewis White, Director	  
	
   

	Date: _____________________________	  
	  	  	  
	
 

	
By: /s/ MARIA ZANNES

	  
	
   

	Name: Maria Zannes, Director	  
	 	Date: _____________________________

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