Document:

EX-10.1

 Exhibit 10.1 

CONSULTING AGREEMENT 
 This Consulting Agreement is made as of
this 30th day of July, 2019, by and between Schmitt Industries, Inc. (the “Company”) and Sententia Capital Management, LLC (“Consultant”). 

RECITALS: 
 WHEREAS, the Board of Directors (the
“Board”) of the Company has appointed Michael R. Zapata (“Zapata”) to serve as the Company’s president and chief executive officer; 

WHEREAS, Zapata is owner of the Consultant; 
 WHEREAS, the
Consultant has agreed to provide such executive management services to the Company, upon the terms and conditions hereinafter set forth. 
 NOW, THEREFORE,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 

1.    Engagement. The Company hereby agrees to engage Consultant to render the consulting services described herein, and Consultant hereby
accepts such engagement. 
 2.    Term. The engagement of Consultant by the Company as provided in Section 1 shall commence on the
date hereof and continue through and until July 31, 2020 unless further extended or earlier terminated as hereinafter provided (the period of such engagement, the “Term”). 

3.    Services. Consultant shall make the services of Zapata available to the Company and shall provide such other services to the Company
as the Consultant and the Company shall mutually agree upon from time to time. The Consultant shall cause Zapata to serve as the Company’s principal executive officer in the capacities of president and chief executive officer, with all the
power and authority and executing all the functions associated with such offices, and to cause Zapata to commit sufficient business time to effectively discharge the responsibilities of the Company’s president and chief executive officer,
without any additional compensation. The foregoing notwithstanding, nothing in this Agreement shall restrict Zapata from performing other duties and/or accepting consulting or employment arrangements or other positions outside of his activities for
the Company. 

 4.    Payment and Expenses. 

(a)    Cash Payment. The Company shall pay to Consultant compensation in the amount of $14,000.00 per month during the
Term. 
 (b)    Restricted Stock Units (“RSUs”). Effective August 6, 2019, Zapata shall be granted 17,777
RSUs in accordance with the Company’s 2014 Equity Incentive Plan. The RSUs shall vest immediately. 

(c)    Bonuses. Zapata shall be eligible for each of the following bonuses from the Company: 

 

	 	(i)	 Payable upon achieving Performance Based objectives determined by the Compensation Committee and agreed upon by
Zapata, an RSU bonus up to 100% of annual cash payment compensation; 

  

	 	(ii)	 Discretionary bonuses to Consultant determined by Compensation Committee and approved by the Board.

 (d)    Expenses. Zapata shall be entitled to reimbursement for any out of pocket expenses (travel,
transportation, office, etc.) incurred in connection with the consulting services rendered pursuant hereto. 

(e)    D&O Coverage. The Company has confirmed that Zapata will be covered by the Company’s primary and excess
D&O insurance policy in his capacities of director as well as president and chief executive officer, notwithstanding the fact that he is not an employee of the Company, on the same basis as the other directors and executive officers of the
Company. 
 (f)    Death. If Zapata dies, this Agreement shall automatically terminate on the date of his death.
Consultant shall be entitled to receive that portion of the payments and expenses that Consultant or Zapata earned through and including the date of Zapata’s death and any bonus earned prior to the date of Zapata’s death that remains
unpaid. All restricted stock and/or RSUs (or comparable forms of equity compensation, if any) held by Zapata, as of the date of the death of Zapata, which are not then subject to any performance conditions for vesting, shall be fully vested and
shall not be subject to any risk of forfeiture or repurchase as of the date of Zapata’s death. 
 (g)
    Disability. Zapata shall be deemed “Permanently Disabled” when he has suffered any medically determinable physical or mental illness, injury or infirmity that prevents Zapata from performing his responsibilities
under this Agreement and which disability has lasted or that the Board in good faith has determined can be expected to last for a continuous period of not less than 120 calendar days. The Board has the discretion to determine whether Zapata is
disabled and that determination shall be 

 
binding and conclusive on Consultant and Zapata (and any guardians or representatives for him). If Zapata becomes Permanently Disabled, the Company may terminate this Agreement as a result of the
Permanent Disability by providing written notice to Consultant thirty (30) calendar days prior to the Termination Date, or Consultant may terminate this Agreement with the Company by providing written notice to the Company thirty
(30) calendar days prior to the Resignation Date. In the event Consultant terminates this Agreement as a result of Zapata’s disability, or Zapata resigns as a result of a Permanent Disability, Consultant shall be entitled to receive that
portion of the payment and expenses that Consultant or Zapata earned through and including the Termination Date or Resignation Date, as applicable and any bonus earned prior to such date. All restricted stock and/or RSUs (or comparable forms of
equity compensation, if any) held by Zapata which, as of the date of the disability of Zapata, are not then subject to any performance conditions for vesting, shall be fully vested and shall not be subject to any risk of forfeiture or repurchase as
of the date of Zapata’s termination due to disability (as defined in this paragraph). 
 (h)    No Other
Compensation. Other than as set forth herein or otherwise agreed in writing or required by applicable law, neither Consultant or Zapata shall be entitled to any other compensation or benefits in connection with this Agreement or Zapata’s
service as a director and president and chief executive officer of the Company. 
 5.    Termination. Either party may terminate this
Agreement for any or no reason upon thirty (30) days’ notice to the other party, provided however, that in the event of termination by the Company, Consultant and Zapata shall still be entitled to the payments and expenses provided for in
Section 4(a) through the end of the given Term subject to the limitations set forth in Sections 4(f) and 4(g). 
 6.
    Confidentiality. For purposes of this Section 6, the term “Company” shall include, in addition to the Company, its affiliates, subsidiaries and any of their respective predecessors, successors and assigns, and
the term “Zapata” shall include Consultant. 
 (a)    Confidential Information. As used in this Agreement,
“Confidential Information” means any and all confidential, proprietary or other information, whether or not originated by Zapata or the Company, which is in any way related to the past or present Company’s business and is either
designated as confidential or not generally known by or available to the public. Confidential Information includes, but is not limited to (whether or not reduced to writing or designated as confidential) (i) information regarding the
Company’s existing and potential customers and vendors; (ii) any contracts (including the existence and contents thereof and parties thereto) to which the Company is a party or is bound; (iii) information regarding products and
services being purchased or leased by or provided to the Company; (iv) information received by the Company from third parties under an obligation of confidentiality, restricted disclosure or restricted use;

 (v)    personnel and financial information of the Company; (vi) information with
respect to the Company’s products, services, facilities, business methods, systems, trade secrets, technical know-how, and other intellectual property; and (vii) marketing and developmental plans and
techniques, price and cost data, forecasts and forecast assumptions, and potential strategies of the Company. 
 (b)    Non-Disclosure and Non-Use of Confidential Information. Zapata acknowledges that the Confidential Information of the Company is a valuable, unique
asset of the Company and Zapata’s use or disclosure thereof could cause irreparable harm to the Company for which no remedy at law could be adequate. Accordingly, Zapata agrees that he shall hold all Confidential Information of the Company in
strict confidence and solely for the benefit of the Company, and that, except as necessary in the course of Zapata’s duties as CEO of the Company, he shall not, directly or indirectly, disclose or use or authorize any third party to disclose or
use any Confidential Information. Zapata shall follow all the Company policies and procedures to protect all Confidential Information and take any additional precautions necessary to preserve and protect the use or disclosure of any Confidential
Information at all times. 
 (c)    Ownership of Confidential Information. Zapata acknowledges and agrees that all
Confidential Information is and shall remain the exclusive property of the Company, whether or not prepared in whole or in part by Zapata and whether or not disclosed to or entrusted to the custody of Zapata. Upon the termination or resignation of
this agreement by the Company, or at any other time at the request of the Company, Zapata shall promptly deliver to the Company all documents, tapes, disks, or other storage media and any other materials, and all copies thereof in whatever form, in
the possession of Zapata pertaining to the Company’s Business, including, but not limited to, any containing Confidential Information. 

(d)    Confidentiality Policy. Zapata’s obligations under this Section 6 are in addition to those imposed by the
Board’s Confidentiality Policy which Zapata has executed. 
 (e)    During the Term and for one year thereafter,
Zapata shall not, except pursuant to and in furtherance of Zapata’s duties hereunder, directly or indirectly solicit or initiate contact with any employee of the Company or its subsidiaries with a view to inducing or encouraging such employee
to leave the employ of the Company for the purpose of being hired by Zapata, an employer affiliated with Zapata or any competitor of the Company. 

(f)    Survival. Zapata’s obligations set forth in this Section 6, and the Company’s rights and remedies
with respect hereto, shall indefinitely survive the termination of this Agreement, regardless of the reason therefor. 

 (g)    Zapata acknowledges that the provisions of this Section 6
are reasonable and necessary for the protection of the Company and that the Company will be irrevocably damaged if such covenants are not specifically enforced. Accordingly, Zapata agrees that, in addition to any other relief to which the Company
may be entitled in the form of actual or punitive damages, the Company shall be entitled to seek and obtain injunctive relief from a court of competent jurisdiction for the purposes of restraining Zapata from any actual or threatened breach of such
covenants. 
 7.    Independent Contractor Status. Nothing contained in this Agreement is intended or shall be construed to create the
relationship of employer/employee or principal/agent. Consultant is an independent contractor for all purposes, and shall be solely responsible for all federal, state, and local taxes due with respect to compensation received pursuant to this
Agreement. As such, the Company shall not pay for, carry or obtain workers’ compensation insurance, unemployment compensation insurance, or any other insurance on behalf of Consultant other than pursuant to Section 4(e) hereof. Consultant
shall be responsible for providing any such coverages and shall not make any claim against the Company for any such coverage, and further shall indemnify and hold the Company harmless from any claims arising out of the absence of any such coverage.
This indemnity obligation shall survive any termination of this Agreement. The time to be expended by the Consultant in the performance of its duties is solely within its discretion, and the means and manner in which it carries out this Agreement
are also in its sole discretion. 
 8.    Entire Agreement. This Agreement contains the entire understanding of the parties with respect
to the subject matter hereof. This Agreement may not be modified or extended except by a writing signed by both parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties and their respective legal representatives,
successors and assigns. 
 9.    Governing Law. This Agreement and all matters and issues collateral thereto shall be governed by the
laws of the State of Oregon applicable to contracts performed entirely therein. 
 10.    Severability. If any provision of this
Agreement, as applied to either party or to any circumstance, shall be adjudged by a court to be void and unenforceable, the same shall in no way affect any other provision of this Agreement or the validity or enforceability thereof. 

11.    Notices. All notices or other communications hereunder shall be given in writing and shall be deemed given if served personally,
mailed by registered or certified mail, return receipt requested or sent by nationally recognized courier service, to the parties at the addresses below, or at such other address or addresses as they may hereafter designate in writing. 

 If to the Company: 

Schmitt Industries, Inc. 
 2765 NW Nicolai Street 

Portland, OR 97210 
 Attention: Chief Financial Officer 

If to Consultant: 
 Sententia Capital Management, LLC 

102 W. 87th #1s 

New York, New York 
 10024 

[Remainder of page intentionally left blank] 
 IN WITNESS
WHEREOF, the parties have executed this Agreement as of the date and year first above written. 
  

							
	SCHMITT INDUSTRIES, INC.	  

		  		  			
	By:	  	/s/ Ann Ferguson	  			
	Name:	  	Ann Ferguson	  			
	Title:	  	Chief Financial Officer	  			

  

							
	SENTENTIA CAPITAL MANAGEMENT, LLC	  

		  		  			
	By:	  	/s/ Michael R. Zapata	  			
	Name:	  	Michael R. Zapata	  			
	Title:	  	Founder, CEO	  			

  

			
	        	 	 
		 	Michael R. Zapata (as to provisions applicable to him individually)Exhibit

         EXHIBIT 10.1
COLUMBIA STATE BANK  
CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (“Agreement”) is made and entered into effective this  23rd day of May 2019, by and between COLUMBIA STATE BANK, a Washington banking corporation (the “Bank”) and wholly owned subsidiary of Columbia Banking System, Inc. (“CBSI” and, together with the Bank, the “Company”) and Andrew McDonald (“Employee”).

Recitals
A. The Bank currently receives the exclusive services of Employee as its employee, and Employee desires that this employment relationship continue.

B. The Bank desires to provide a severance benefit to Employee (i) to encourage Employee to continue employment with the Bank; (ii) to continue obtaining Employee’s services in the event of a potential Change in Control (as defined below) of CBSI that may be detrimental to Employee; and (iii) to allow CBSI to maximize the benefits obtainable by its shareholders from any Change in Control.

In consideration of the mutual promises, covenants, agreements and undertakings contained in this Agreement, the parties hereby contract and agree as follows:

Agreement
1.Term.  The term of this Agreement (“Term”) shall commence as of the date first above written and shall end on the earlier of the termination of Employee’s employment in a manner that does not constitute a Termination Event or on the fifth anniversary of the date first above written, unless extended in writing by the parties.

2. Severance Benefit. In the case of a Termination Event, as defined in Section 4:

(a) the Bank shall pay to Employee all salary and benefits earned through the effective date of Employee’s termination and a severance benefit (“Severance Benefit”) in an amount equal to two times the amount of Employee’s then-current annual base salary;

(b) vesting of any stock options and lapse of all restrictions with respect to any restricted stock awards shall occur; and

(c) Bank shall pay or promptly reimburse Employee for the full amount of COBRA premiums incurred by Employee for coverage under the Bank’s group health plans for Employee and his or her eligible dependents (the “COBRA Amount”) during the period commencing on the effective date of termination and ending on the 18-month anniversary thereof, provided such reimbursement shall immediately cease in the event Employee becomes eligible to participate in the health insurance plan of a subsequent employer.  If Employee’s termination of employment occurs prior to the effective date of a Change in Control, then, within 60 days following the 

Termination Event, the Bank shall provide Employee the COBRA Amount for each month in which Employee and/or Employee’s eligible dependents elected to continue healthcare coverage prior to the date of the Change in Control.

Payment of the Severance Benefit shall begin, and vesting and lapse of restrictions described in paragraph 2(b) above shall occur, (i) in the case of a Termination Event described in paragraph 4.1, upon the effective date of termination, and (ii) in the case of a Termination Event described in paragraph 4.2, upon the effective date of the Change in Control which is then pending (or announced within sixty days of the date when the Employee’s employment terminated). The Severance Benefit shall be paid over a two year period in equal monthly payments without interest on the last day of each month, beginning with the month in which the Termination Event described in paragraphs 4.1 or 4.2, as the case may be, occurs.

3. Other Compensation and Terms of Employment. Except with respect to the Severance Benefit, this Agreement shall have no effect on the determination of any compensation payable by the Bank to the Employee, or upon any of the other terms of Employee’s employment with the Bank. 

4. Termination Events.  A Termination Event shall be deemed to occur upon, and only upon, one or more of the following:

4.1 Termination of Employee’s employment by the Bank without Cause (as defined below) or by Employee for Good Reason (as defined below) within 730 days following the effective date of a Change in Control; or

4.2 Termination of Employee’s employment by the Bank without Cause prior to a Change in Control if such termination occurs at any time from and after sixty days prior to the public announcement by the CBSI or any other party of a transaction which will result in a Change in Control; provided that the effective date of the Change in Control occurs within eighteen (18) months of Employee’s termination.

5. Restrictive Covenant. 

5.1 Non-competition.  Employee agrees that, during Employee’s employment with the Bank or any of its affiliates, and for a period of two years after commencement of the payment to Employee of the Severance Benefit, Employee will not directly or indirectly, be employed by, perform services for, or act directly or indirectly as an employee, agent, stockholder (other than passive holdings of less than two percent (2%) of the outstanding shares of a publicly-traded company), member, officer, director, co-partner, advisor, or in any other individual or representative capacity, on behalf of a Conflicting Organization in the Bank’s Market Area (each capitalized term as defined below); provided that Employee’s covenant not to compete as set forth herein shall terminate in the event Employee waives the right to payment of any balance of the Severance Benefit then payable. The provisions restricting competition by Employee may be waived by action of the Board. Employee acknowledges that the Company currently has operations in various counties within the states of Washington and Oregon, that the Company plans to continue to expand its operations and presence within these states and other states, and that as a member of the Company’s senior management, Employee’s services 

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are integral to these operations and expansion plans. Employee recognizes and agrees that any breach of this covenant by Employee will cause immediate and irreparable injury to the Company, and Employee hereby authorizes recourse by the Bank or CBSI to injunction and/or specific performance, as well as to other legal or equitable remedies to which either may be entitled.

5.2 Non-interference.  During the non-competition period described in paragraph 5.1, Employee shall not (a) solicit or attempt to solicit any other employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any other employee of the Company, (b) solicit or attempt to solicit any customer of the Company to cease doing business with the Company or to otherwise divert such customer’s business from the Company, or (c) solicit or attempt to solicit any supplier, licensee, or other business relations of the Company to cease doing business with the Company. Solicitation prohibited under this paragraph 5.2 includes solicitation by any means, including, without limitation, meetings, phone calls, letters or other mailings, and electronic and internet communications of any kind, or any other type of conduct intended or reasonably calculated to induce or urge a client, customer, or employee to discontinue, in whole or in part, its employment or business relationship with the Bank.

5.3 Confidentiality.  Unless disclosure is otherwise required by legal or regulatory requirements, Employee shall keep all terms of this Agreement, including the existence of this Agreement and the amount of the Severance Benefit, strictly confidential. Employee shall keep this Agreement in a private location and shall use his or her best efforts to prevent this Agreement from being seen by others, including co-workers. 

6. Section 280G of the Code. 

6.1 Payments.  In the event that any payments or benefits (whether under this Agreement or otherwise) payable to Employee (a) constitute “parachute payments” within the meaning of Section 280G of the Code, and (b) but for this Section 6, would be subject to the excise tax imposed by Section 4999 of the Code, then such payments and benefits will be either (x) delivered in full, or (y) delivered as to such lesser extent that would result in no portion of such payments and benefits being subject to excise tax under Section 4999 of the Code, whichever of the foregoing amounts, taking into account the applicable federal, state and local income and employment taxes and the excise tax imposed by Section 4999 of the Code (and any equivalent state or local excise taxes), results in the receipt by  Employee, on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some portion of such payments and benefits may be taxable under Section 4999 of the Code.  Any reduction in payments and/or benefits required by this provision will occur in the following order: (i) reduction of cash payments; (ii) reduction of vesting acceleration of equity awards; and (iii) reduction of other benefits paid or provided to Employee. In the event that acceleration of vesting of equity awards is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant for equity awards. If two or more equity awards are granted on the same date, each award will be reduced on a pro-rata basis.

6.2 Accounting Firm.  All determinations required to be made under this Section 6, including the reduction payments hereunder and the assumptions to be utilized in

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arriving at such determinations, will be made by a public accounting firm or other advisor that is retained by the Company in its reasonable discretion (the “Accounting Firm”) and whose determination will be conclusive and binding upon Employee and the Company for all purposes.  For purposes of making the calculations required by this Section 6, the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Employee agree to furnish to the Accounting Firm such information and documents as the Accounting Firm may reasonably request in order to make a determination under this provision. The Company will bear all costs the Accounting Firm may reasonably incur in connection with any calculations contemplated by this provision.  Any determinations by the Accounting Firm with respect to whether any payments or benefits are subject to reduction under this Section 6 will be binding upon the Company and Employee.

7. Definitions.

7.1 Bank’s Market Area. “Bank’s Market Area” shall include the following locations, either during Employee’s employment or at the time of Employee’s termination from employment: (a) any counties in the States of Washington, Oregon and Idaho in which the Bank (or any Bank subsidiary, affiliate, related business entity, successor, or assign) maintains a branch or other office, and all counties bordering on any such county, or (b) any counties in other States in which the Bank (or any Bank subsidiary, affiliate, related business entity, successor, or assign) maintains a branch or other office, and all counties bordering on any such county, or (c) any other county in which the Bank or an affiliate or related business entity has bona fide documented plans to establish a branch or office, as demonstrated by minutes of board of director meetings, regulatory correspondence, or other written communications with third parties (including legal or financial advisers) with respect to such geographic expansion, and of which Employee is aware due to his employment with the Bank.

7.2 Cause.  “Cause” shall mean only (a) willful misfeasance or gross negligence in the performance of Employee’s duties, (b) conduct demonstrably and significantly harmful to the Bank (which would include willful violation of any final cease and desist order applicable to the Bank), or (c) conviction of a felony.

7.3 Change in Control.  “Change in Control” shall mean the occurrence of one or more of the following events: 

7.3.1 A person, or more than one person acting as a group (as defined in IRC 409A), acquires ownership of stock in CBSI or the Bank that, together with stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of, respectively, CBSI or the Bank;

7.3.2 A person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) ownership of stock in CBSI or the Bank that comprises thirty percent (30%) or more of the total voting power of the stock of, respectively, CBSI or the Bank; 

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7.3.3 A majority of the members of the board of directors of either CBSI or the Bank is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the such board of directors before the date of the appointment or election; or

7.3.4 A person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from CBSI or the Bank that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of, respectively, CBSI or the Bank immediately before such acquisition or acquisitions. No Change in Control shall result if the assets are transferred to certain entities controlled directly or indirectly by the shareholders of the transferring entity.

This definition of “Change in Control” is intended to comply with, and shall be interpreted in a manner consistent with, the requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended, as U.S. Treasury regulation issued thereunder. 

7.4 Conflicting Organization. “Conflicting Organization” shall mean any person, entity, or organization engaged (or about to become engaged) in a business similar to, or that competes with, the business of the Bank in the Bank’s Market Area, including without limitation any bank or financial institution (including without limitation any trust company, finance company, or leasing company) in the Bank’s Market Area.

7.5 Good Reason.  “Good Reason” shall mean (a) a material diminution in Employee’s base compensation, (b) a material diminution in Employee’s authority, duties or responsibilities, or (c) a relocation or transfer of Employee’s principal place of employment that would increase Employee’s commute on a regular basis by more than forty five (45) miles each way from his current residence to his current office location.

7.6 Termination of Employment.  “Termination,” when used in reference to termination of employment, shall mean “separation from service,” as defined in Section 409A of the U.S. Internal Revenue Code of 1986, as amended, as U.S. Treasury regulation issued thereunder. 

8. Specified Employee - Delay in Payments.  If Employee is a “specified employee,” then amounts payable to him under this Agreement on account of a “separation from service” that could cause him to be subject to the gross income inclusion, interest and additional tax provisions of U.S. Internal Revenue Code § 409A(a)(1) shall not be paid until after the end of the sixth calendar month beginning after such separation from service (the “Suspension Period”). Within fourteen (14) calendar days after the end of the Suspension Period, the Company shall make a lump sum payment to Employee in cash in an amount equal to the sum of all payments delayed because of the preceding sentence. Thereafter, Employee shall receive any remaining payments under this Agreement as if the immediately preceding provisions of this paragraph 8 were not a part of the Agreement. For purposes of this Agreement, the terms “specified employee” and “separation from service” shall have the meanings given to those terms in U.S. Internal Revenue Code § 409A and the Treasury regulations issued thereunder.”

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9. Miscellaneous.

9.1 Amendment.  This Agreement may be modified or amended only upon amendment in writing signed by both parties. Employee and the Company understand, acknowledge, and agree that Employee and the Bank or CBSI have entered into other agreements which contain either change-in-control terms or restrictive covenants, including without limitation the Supplemental Executive Retirement Plan Agreement (and any amendments or restatements thereto). The parties understand, acknowledge, and agree that the terms of this Agreement are not intended by Employee, the Bank, or CBSI, and shall not be interpreted by any party, court or arbitrator, to supersede, modify, amend, change, negate, cancel or render null or void any other change-in-control terms or restrictive covenants between the parties contained in any other agreements, including without limitation, any change-in-control terms or restrictive covenants contained in the Supplemental Executive Retirement Plan Agreement (or any amendments or restatements thereof). 

9.2 Binding Effect.  This Agreement shall bind and inure to the benefit of the heirs, legal representatives, successors, and assign of the parties.

9.3 Enforceability.  If an arbitrator or a court of competent jurisdiction shall find any provision of this Agreement illegal or unenforceable, the arbitrator or court may reform such provision to the extent necessary to render the otherwise unenforceable provision, and the rest of the Agreement, valid and enforceable, and so as to permit maximum restrictions that are legal and enforceable to be applied to the Employee’s ability to compete with the Bank. If an arbitrator or court declines to amend any such provision as provided herein, the invalidity or unenforceability of any such provision shall not affect the validity or enforceability of the remaining provisions, which shall be enforced as if the offending provision had not been included in this Agreement.

9.4 Governing Law; Venue.  This Agreement is made with reference to and is intended to be construed in accordance with the laws of the State of Washington. Venue for any action arising out of or concerning this Agreement shall lie in Pierce County, Washington. In the event of a dispute under this Agreement, the disputes shall be arbitrated pursuant to the Superior Court Mandatory Arbitration Rules (“MAR”) adopted by the Washington State Supreme Court, irrespective of the amount in controversy. This Agreement shall be deemed as stipulation to that effect pursuant to MAR 1.2 and 8.1. The arbitrator, in his or her discretion, may award attorney’s fees to the prevailing party or parties.

9.5 Notices.  Any notice required to be given under this Agreement to either party shall be given by personal service or by depositing a copy thereof in the United States registered or certified mail, postage prepaid, addressed to the following address or such other address as addressee shall designate in writing:
	
			
	 
	 

	Company:
	Columbia Bank  
1301 ‘A’ Street, Ste. 800  
Tacoma, WA 98402-4200  
Attn: Chief Human Resources Officer

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	Employee:
	Andrew McDonald  

	 

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the date first above written.

BANK: COLUMBIA STATE BANK

By  /s/ Hadley S. Robbins              
Hadley S. Robbins  
President and Chief Executive Officer

EMPLOYEE:

By /s/ Andrew McDonald              
Andrew McDonald  
EVP and Chief Credit Officer

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