Document:

Agreement for Mitch Hagstrom

PACIFIC
CONTINENTAL CORPORATION/PACIFIC CONTINENTAL BANK

 

CHANGE
IN CONTROL

 

SEVERANCE/SALARY
CONTINUATION AGREEMENT

 

 

THIS
SEVERANCE/SALARY CONTINUATION AGREEMENT (this “Agreement”) is
entered into by and between PACIFIC CONTINENTAL CORPORATION, an Oregon
corporation (the “Company”), its
wholly owned subsidiary PACIFIC CONTINENTAL BANK, an Oregon state-chartered bank
(the “Bank”), and
Mitchell
Hagstrom the
Executive
Vice President Bank
(“Executive”),
effective as of April
15, 2005.

 

The
Company, Bank and Executive agree as follows:

 

	1.  	
      Definitions.

 

	1.1  	
      Cause.
      “Cause”
      means any one or more of the following:

 

	a.  	
      Removal
      or discharge of Executive pursuant to order of any federal banking
      authority;

 

	b.  	
      Executive
      perpetrates fraud, dishonesty, or other act of misconduct in the rendering
      of services to the Company or the Bank or to customers of the Company or
      the Bank, or if Executive engages in conduct which, in the opinion of the
      Board of Directors, materially interferes with the performance of
      Executive’s duties or harms the reputation of the Company or the Bank by
      reason of the adverse reaction of the community to such
      conduct;

 

	c.  	
      Executive
      conceals from, or knowingly fails to disclose to, any federal banking
      regulatory authority or the Board of Directors any material matters
      affecting the viability of the Company or the Bank;
or

 

	d.  	
      Executive
      fails (or refuses) to faithfully or diligently perform any of the usual
      and customary duties of his employment and either fails to remedy the
      lapse or formulate a plan for its correction with the Company or the Bank
      (if such failure is not susceptible to immediate correction) within thirty
      (30) days after notice to Executive.

 

	1.2  	
      Change
      in Control.
      “Change
      in Control”
      means a change "in the ownership or effective control" or "in the
      ownership of a substantial portion of the assets" of the Company or the
      Bank, within the meaning of Section 280G of the Internal Revenue Code of
      1986, as amended; provided
      however,
      that an internal reorganization of the Company or the Bank shall not
      constitute a Change in Control.

 

	1.3  	
      Change
      in Control Payment.
      “Change
      in Control Payment”
      has the meaning assigned in Section 3 of
      this Agreement.

 

	1.4  	
      Compensation.
      “Compensation”
      means
      Executive’s highest base compensation, together with bonuses earned
      pursuant to the Company and/or Bank’s then-existing bonus plan(s), for
      each of the three most recent calendar years, including the current
      calendar year. For purposes of the current calendar year determination,
      Executive’s base compensation will be annualized and it will be assumed
      that Executive will earn the maximum bonus amount payable pursuant to the
      Company and/or Bank’s then-existing bonus
plan(s).

 

	1.5  	
      Disability.
      “Disability”
      means a physical or mental impairment that renders Executive incapable of
      substantially performing the usual
      and customary duties of his employment for a period of 90 consecutive
      days, unless with
      reasonable accommodation Executive could continue to perform such duties,
      and making these accommodations would not pose an undue hardship on the
      Company or the Bank.

 

	1.6  	
      Good
      Reason.
      “Good
      Reason”
      means only any one or more of the
following:

 

	a.  	
      Reduction
      of Executive’s Post Change in Control Salary or elimination of any
      significant compensation or benefit plan benefiting Executive, unless the
      reduction or elimination is generally applicable to substantially all
      similarly situated employees (or similarly situated employees of a
      successor or controlling entity of the Company or the Bank) formerly
      benefited;

 

	b.  	
      The
      Post Change in Control assignment to Executive without his consent of any
      authority or duties materially inconsistent with Executive’s position as
      of the date of the Change of Control; or

 

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

 

	1.7  	
      Parachute
      Payment Amount.
      “Parachute
      Payment Amount”
      has the meaning assigned in Section 5 of
      this Agreement.

 

	1.8  	
      Post
      Change in Control Salary.
      For purposes of Section 4 of
      this Agreement, “Post
      Change in Control Salary”
      means, for the Salary Continuation Period, the base compensation and
      bonus(es) that Executive would have been entitled to if his/her employment
      had not been terminated. For purposes of determining the bonus(es) that
      Executive would have been entitled to, it will be assumed that Executive
      would have earned the maximum bonus amount payable pursuant to the Company
      and/or Bank’s bonus plan(s) in existence at the time of the Change in
      Control.

 

	1.9  	
      Salary
      Continuation Payment.
      “Salary
      Continuation Payment”
      has the meaning assigned in Section 4 of
      this Agreement.

 

	1.10  	
      Salary
      Continuation Period.
      “Salary
      Continuation Period”
      has the meaning assigned in Section 4 of
      this Agreement.

 

	1.11  	
      Termination
      Event After Change in Control. A
      “Termination
      Event After Change in Control”
      shall be deemed to occur upon, and only upon, any one or more of the
      following:

 

	a.  	
      Termination
      of Executive’s employment by Executive for Good Reason within the Salary
      Continuation Period;

 

	b.  	
      Termination
      of Executive’s employment by the Bank and/or the Company other than for
      Cause or Disability, or death within the Salary Continuation Period;
      or

 

	c.  	
      Termination
      of Executive’s employment or of this Agreement by the Bank and/or the
      Company other than for Cause, Disability or death prior to a Change in
      Control if such termination occurs within twelve (12) months before the
      execution of a definitive agreement providing for a Change in
      Control.

 

	1.12  	
      Trade
      Secret.
      “Trade
      Secret”
      has the meaning assigned in ORS 646.461 (4), as in effect as of the date
      of this Agreement.

 

	2.  	
      Commitment
      of Executive. In
      the event that any person extends any proposal or offer that is intended
      to or may result in a Change in Control, Executive shall, at the Company’s
      or the Bank’s request, assist the Company and/or the Bank in evaluating
      such proposal or offer. Further, subject to the additional terms and
      conditions of this Agreement, in order to receive the Salary Continuation
      Payment, Executive cannot resign from the Company or the Bank during any
      period from the receipt of a specific Change in Control proposal up to the
      consummation or abandonment of the transaction contemplated by such
      proposal.

 

	3.  	
      Severance
      Payment Obligations.

 

	3.1  	
      Closing
      of Change In Control. If,
      consistent with Section 2,
      Executive remains employed with the Company and the Bank through the
      closing of a Change in Control, then concurrent with such closing,
      Executive shall receive a single cash payment in an amount equal to
      one-half
      (1/2)
      times Executive’s Compensation (the “Change
      in Control Payment”).
      

 

	3.2  	
      Termination
      Prior to Change In Control. If
      (i) the Company or the Bank terminates Executive’s employment without
      Cause, Executive resigns for Good Reason before a Change in Control, or
      the Company or the Bank unilaterally terminates this Agreement, and (ii)
      within twelve (12) months thereafter, the Company or the Bank enters into
      an agreement for a Change in Control or any party announces or is required
      by law to announce a prospective Change in Control of the Company or the
      Bank, then upon the closing of such Change in Control, Executive shall
      receive the Change in Control Payment. 

 

	4.  	
      Salary
      Continuation Payment. 

 

	4.1  	
      Payment
      Events.
      Except
      as otherwise provided in this Section, in the case of a Termination Event
      After a Change in Control, Executive shall receive a salary continuation
      payment (the “Salary
      Continuation Payment”),
      payable in a lump sum on the later of the date of termination or the date
      of the Change in Control.

 

	4.2  	
      Amount
      of Payment.  The
      Salary Continuation Payment shall be an amount equal to the Executive’s
      Post Change in Control Salary, for the balance of the Salary Continuation
      Period. The “Salary
      Continuation Period”
      shall be the period beginning on the Change of Control and continuing
      thereafter for eighteen
      (18)
      months.
      

 

	4.3  	
      Adjustment
      of Salary Continuation Payment.
      Notwithstanding the foregoing, if Executive’s Good Reason for terminating
      his or her employment is a reduction of Post Change in Control Salary,
      then the Salary Continuation Payment shall be calculated based on
      Executive’s Post Change in Control Salary in effect prior to such
      reduction. 

 

	5.  	
      Parachute
      Payment Limitation. Notwithstanding
      anything in this Agreement to the contrary, if the total of the Change in
      Control Payment and the Salary Continuation Payment, together with any
      other payments or benefits received from the Company or the Bank, will be
      an amount that would cause them to be a "parachute payment" within the
      meaning of Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as
      amended (the “Parachute
      Payment Amount”),
      then the sum of the Change in Control Payment and the Salary Continuation
      Payment shall be reduced so that the total amount thereof is $1 less than
      the Parachute Payment Amount. 

 

	6.  	
      Nonsolicitation.
      Iif
      the Executive receives a Salary Continuation Payment, then
      during the Salary Continuation Period, Executive will not, directly or
      indirectly, persuade or entice, or attempt to persuade or entice,
      (i) any employee of the Bank or the Company to terminate his/her
      employment with the Bank or the Company, or (ii) any person or entity
      to terminate, cancel, rescind or revoke its business or contractual
      relationships with the Bank or the Company.

 

Not
withstanding the preceding, if the Executive receives a Change in Control
Payment, but not a Salary Continuation Payment, the nonsolicitation provisions
shall apply for a period beginning on the Change of Control date and shall
extend for a period of six
(6) months.

 

	7.  	
      Confidentiality
      Executive will not, after the date this Agreement is signed, including
      during and after its term, use for his own purposes or disclose to any
      other person or entity any Trade Secret of the Bank or the Company.
      

 

	8.  	
      Enforcement. 

 

	8.1  	
      Executive,
      the Bank and the Company stipulate that, in light of all of the facts and
      circumstances of the relationship between Executive and the Bank/Company,
      the agreements referred to in Section 6
      (including without limitation their scope) are fair and reasonably
      necessary for the protection of the Bank’s/Company’s goodwill and other
      protectable interests. If a court of competent jurisdiction should decline
      to enforce any of those covenants and agreements, Executive and the
      Bank/Company request the court to reform these provisions to the maximum
      extent that the court finds enforceable.

 

	8.2  	
      Executive
      acknowledges that the Bank/Company will suffer immediate and irreparable
      harm that will not be compensable by damages alone, if Executive
      repudiates or breaches any of the provisions of Sections 6 or 7 or
      threatens or attempts to do so. For this reason, under these
      circumstances, the Bank/Company, in addition to and without limitation of
      any other rights, remedies or damages available to them at law or in
      equity, will be entitled to obtain temporary, preliminary, and permanent
      injunctions in order to prevent or restrain the breach, and the
      Bank/Company will not be required to post a bond as a condition for the
      granting of this relief.

 

	9.  	
      Arbitration.
      Except for as set forth in Section 8 of this Agreement, at either the
      Company’s, the Bank’s or Executive’s request, the parties must submit any
      dispute, controversy or claim arising out of or in connection with, or
      relating to, this Agreement or any breach or alleged breach of this
      Agreement, to arbitration under the American Arbitration Association's
      rules then in effect (or under any other form of arbitration mutually
      acceptable to the parties). A single arbitrator agreed on by the parties
      will conduct the arbitration. If the parties cannot agree on a single
      arbitrator, each party must select one arbitrator and those two
      arbitrators will select a third arbitrator. This third arbitrator will
      hear the dispute. The arbitrator's decision is final (except as otherwise
      specifically provided by law) and binds the parties, and any party may
      request any court having jurisdiction to enter a judgment and to enforce
      the arbitrator's decision. The arbitrator will provide the parties with a
      written decision naming the substantially prevailing party in the action.
      This prevailing party is entitled to reimbursement from the other parties
      for its costs and expenses, including reasonable attorneys' fees.
      All
      proceedings will be held at a place designated by the arbitrator in Lane
      County, Oregon. The arbitrator, in rendering a decision as to any state
      law claims, will apply Oregon law. 

 

	10.  	
      Withholding.
      All payments required to be made by the Company or the Bank hereunder to
      Executive shall be subject to the withholding of such amounts, if any,
      relating to tax and other payroll deductions as the Company or the Bank
      may reasonably determine should be withheld pursuant to any applicable law
      or regulation.

 

	11.  	
      Other
      Compensation and Terms of Employment.
      This Agreement is not an employment agreement. Accordingly, except with
      respect to the Change in Control Payment and the Salary Continuation
      Payment, this Agreement shall have no effect on the determination of any
      compensation payable by the Company or the Bank to Executive, or upon any
      of the other terms of Executive's employment with the Company or the Bank.
      The specific arrangements referred to herein are not intended to exclude
      any other benefits which may be available to Executive upon a termination
      of employment with the Company or the Bank pursuant to employee benefit
      plans of the Company or the Bank or otherwise.

 

	12.  	
      Miscellaneous
      Provisions.

 

	12.1  	
      Entire
      Agreement.
      This Agreement constitutes the entire understanding and agreement between
      the parties concerning its subject matter and supersedes all prior
      agreements, correspondence, representations, or understandings between the
      parties relating to its subject matter including that certain Executive
      Severance Agreement dated as of January 22,
1998.

 

	12.2  	
      Binding
      Effect.
      This Agreement will be binding and enforceable against, and will inure to
      the benefit of, the heirs, legal representatives, successors and assigns
      of the Company, the Bank, and Executive.

 

	12.3  	
      Waiver.
      Any waiver by a party of its rights under this Agreement must be written
      and signed by the party waiving its rights. A party's waiver of the other
      party's breach of any provision of this Agreement will not operate as a
      waiver of any other breach by the breaching
party.

 

	12.4  	
      Amendment.
      This Agreement may be modified only through a written instrument signed by
      both parties. 

 

	12.5  	
      Severability.
      The provisions of this Agreement are severable. The invalidity of any
      provision will not affect the validity of other provisions of this
      Agreement.

 

	12.6  	
      Counsel
      Review.
      Executive acknowledges that he has had the opportunity to consult with
      independent counsel with respect to the negotiation, preparation, and
      execution of this Agreement.

 

	12.7  	
      Governing
      Law and Venue.
      This Agreement will be governed by and construed in accordance with Oregon
      law, except to the extent that federal law may govern certain matters. The
      parties must bring any legal proceeding arising out of this Agreement in
      Lane County, Oregon.

 

	12.8  	
      Counterparts.
      This Agreement may be executed in one or more counterparts, each of which
      will be deemed an original, but all of which taken together will
      constitute one and the same document.

 

	12.9  	
      Assignability.
      The Company and/or the Bank may assign this Agreement and its rights
      hereunder in whole, but not in part, to any corporation, bank or other
      entity with or into which the Company and/or the Bank may hereafter merge
      or consolidate or to which the Company and/or the Bank may transfer all or
      substantially all of its assets, if in any such case said corporation,
      bank or other entity shall by operation of law or expressly in writing
      assume all obligations of the Company and/or the Bank hereunder as fully
      as if it had been originally made a party hereto, but may not otherwise
      assign this Agreement or its rights hereunder. Executive may not assign or
      transfer this Agreement or any rights or obligations hereunder.
      

 

	12.10  	
      Revocability.
      Subject to the provisions of Sections 1.11,
      3.2
      and 4.1 of
      this Agreement, this Agreement may be terminated unilaterally by a
      majority vote of the board of directors of the Company and/or the
      Bank.

 

This
Severance/Salary Continuation Agreement is effective as of the date first set
forth above.

 

 

PACIFIC
CONTINENTAL CORPORATION

By
 /s/
Hal Brown    

Its
 President
and CEO   

PACIFIC
CONTINENTAL BANK

By
 /s/
Hal Brown    

Its
 President
and CEO   

EXECUTIVE:

/s/
Mitchell Hagstrom   

Mitchell
HagstromAgreement for Hempy

PACIFIC
CONTINENTAL CORPORATION/PACIFIC CONTINENTAL BANK

 

CHANGE
IN CONTROL

 

SEVERANCE/SALARY
CONTINUATION AGREEMENT

 

 

THIS
SEVERANCE/SALARY CONTINUATION AGREEMENT (this “Agreement”) is
entered into by and between PACIFIC CONTINENTAL CORPORATION, an Oregon
corporation (the “Company”), its
wholly owned subsidiary PACIFIC CONTINENTAL BANK, an Oregon state-chartered bank
(the “Bank”), and
Daniel
Hempy the
Executive
Vice President Bank
(“Executive”),
effective as of April
15, 2005.

 

The
Company, Bank and Executive agree as follows:

 

	1.  	
      Definitions.

 

	1.1  	
      Cause.
      “Cause”
      means any one or more of the following:

 

	a.  	
      Removal
      or discharge of Executive pursuant to order of any federal banking
      authority;

 

	b.  	
      Executive
      perpetrates fraud, dishonesty, or other act of misconduct in the rendering
      of services to the Company or the Bank or to customers of the Company or
      the Bank, or if Executive engages in conduct which, in the opinion of the
      Board of Directors, materially interferes with the performance of
      Executive’s duties or harms the reputation of the Company or the Bank by
      reason of the adverse reaction of the community to such
      conduct;

 

	c.  	
      Executive
      conceals from, or knowingly fails to disclose to, any federal banking
      regulatory authority or the Board of Directors any material matters
      affecting the viability of the Company or the Bank;
or

 

	d.  	
      Executive
      fails (or refuses) to faithfully or diligently perform any of the usual
      and customary duties of his employment and either fails to remedy the
      lapse or formulate a plan for its correction with the Company or the Bank
      (if such failure is not susceptible to immediate correction) within thirty
      (30) days after notice to Executive.

 

	1.2  	
      Change
      in Control.
      “Change
      in Control”
      means a change "in the ownership or effective control" or "in the
      ownership of a substantial portion of the assets" of the Company or the
      Bank, within the meaning of Section 280G of the Internal Revenue Code of
      1986, as amended; provided
      however,
      that an internal reorganization of the Company or the Bank shall not
      constitute a Change in Control.

 

	1.3  	
      Change
      in Control Payment.
      “Change
      in Control Payment”
      has the meaning assigned in Section 3 of
      this Agreement.

 

	1.4  	
      Compensation.
      “Compensation”
      means
      Executive’s highest base compensation, together with bonuses earned
      pursuant to the Company and/or Bank’s then-existing bonus plan(s), for
      each of the three most recent calendar years, including the current
      calendar year. For purposes of the current calendar year determination,
      Executive’s base compensation will be annualized and it will be assumed
      that Executive will earn the maximum bonus amount payable pursuant to the
      Company and/or Bank’s then-existing bonus
plan(s).

 

	1.5  	
      Disability.
      “Disability”
      means a physical or mental impairment that renders Executive incapable of
      substantially performing the usual
      and customary duties of his employment for a period of 90 consecutive
      days, unless with
      reasonable accommodation Executive could continue to perform such duties,
      and making these accommodations would not pose an undue hardship on the
      Company or the Bank.

 

	1.6  	
      Good
      Reason.
      “Good
      Reason”
      means only any one or more of the
following:

 

	a.  	
      Reduction
      of Executive’s Post Change in Control Salary or elimination of any
      significant compensation or benefit plan benefiting Executive, unless the
      reduction or elimination is generally applicable to substantially all
      similarly situated employees (or similarly situated employees of a
      successor or controlling entity of the Company or the Bank) formerly
      benefited;

 

	b.  	
      The
      Post Change in Control assignment to Executive without his consent of any
      authority or duties materially inconsistent with Executive’s position as
      of the date of the Change of Control; or

 

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

 

	1.7  	
      Parachute
      Payment Amount.
      “Parachute
      Payment Amount”
      has the meaning assigned in Section 5 of
      this Agreement.

 

	1.8  	
      Post
      Change in Control Salary.
      For purposes of Section 4 of
      this Agreement, “Post
      Change in Control Salary”
      means, for the Salary Continuation Period, the base compensation and
      bonus(es) that Executive would have been entitled to if his/her employment
      had not been terminated. For purposes of determining the bonus(es) that
      Executive would have been entitled to, it will be assumed that Executive
      would have earned the maximum bonus amount payable pursuant to the Company
      and/or Bank’s bonus plan(s) in existence at the time of the Change in
      Control.

 

	1.9  	
      Salary
      Continuation Payment.
      “Salary
      Continuation Payment”
      has the meaning assigned in Section 4 of
      this Agreement.

 

	1.10  	
      Salary
      Continuation Period.
      “Salary
      Continuation Period”
      has the meaning assigned in Section 4 of
      this Agreement.

 

	1.11  	
      Termination
      Event After Change in Control. A
      “Termination
      Event After Change in Control”
      shall be deemed to occur upon, and only upon, any one or more of the
      following:

 

	a.  	
      Termination
      of Executive’s employment by Executive for Good Reason within the Salary
      Continuation Period;

 

	b.  	
      Termination
      of Executive’s employment by the Bank and/or the Company other than for
      Cause or Disability, or death within the Salary Continuation Period;
      or

 

	c.  	
      Termination
      of Executive’s employment or of this Agreement by the Bank and/or the
      Company other than for Cause, Disability or death prior to a Change in
      Control if such termination occurs within twelve (12) months before the
      execution of a definitive agreement providing for a Change in
      Control.

 

	1.12  	
      Trade
      Secret.
      “Trade
      Secret”
      has the meaning assigned in ORS 646.461 (4), as in effect as of the date
      of this Agreement.

 

	2.  	
      Commitment
      of Executive. In
      the event that any person extends any proposal or offer that is intended
      to or may result in a Change in Control, Executive shall, at the Company’s
      or the Bank’s request, assist the Company and/or the Bank in evaluating
      such proposal or offer. Further, subject to the additional terms and
      conditions of this Agreement, in order to receive the Salary Continuation
      Payment, Executive cannot resign from the Company or the Bank during any
      period from the receipt of a specific Change in Control proposal up to the
      consummation or abandonment of the transaction contemplated by such
      proposal.

 

	3.  	
      Severance
      Payment Obligations.

 

	3.1  	
      Closing
      of Change In Control. If,
      consistent with Section 2,
      Executive remains employed with the Company and the Bank through the
      closing of a Change in Control, then concurrent with such closing,
      Executive shall receive a single cash payment in an amount equal to
      one-half
      (1/2)
      times Executive’s Compensation (the “Change
      in Control Payment”).
      

 

	3.2  	
      Termination
      Prior to Change In Control. If
      (i) the Company or the Bank terminates Executive’s employment without
      Cause, Executive resigns for Good Reason before a Change in Control, or
      the Company or the Bank unilaterally terminates this Agreement, and (ii)
      within twelve (12) months thereafter, the Company or the Bank enters into
      an agreement for a Change in Control or any party announces or is required
      by law to announce a prospective Change in Control of the Company or the
      Bank, then upon the closing of such Change in Control, Executive shall
      receive the Change in Control Payment. 

 

	4.  	
      Salary
      Continuation Payment. 

 

	4.1  	
      Payment
      Events.
      Except
      as otherwise provided in this Section, in the case of a Termination Event
      After a Change in Control, Executive shall receive a salary continuation
      payment (the “Salary
      Continuation Payment”),
      payable in a lump sum on the later of the date of termination or the date
      of the Change in Control.

 

	4.2  	
      Amount
      of Payment.  The
      Salary Continuation Payment shall be an amount equal to the Executive’s
      Post Change in Control Salary, for the balance of the Salary Continuation
      Period. The “Salary
      Continuation Period”
      shall be the period beginning on the Change of Control and continuing
      thereafter for eighteen
      (18)
      months.
      

 

	4.3  	
      Adjustment
      of Salary Continuation Payment.
      Notwithstanding the foregoing, if Executive’s Good Reason for terminating
      his or her employment is a reduction of Post Change in Control Salary,
      then the Salary Continuation Payment shall be calculated based on
      Executive’s Post Change in Control Salary in effect prior to such
      reduction. 

 

	5.  	
      Parachute
      Payment Limitation. Notwithstanding
      anything in this Agreement to the contrary, if the total of the Change in
      Control Payment and the Salary Continuation Payment, together with any
      other payments or benefits received from the Company or the Bank, will be
      an amount that would cause them to be a "parachute payment" within the
      meaning of Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as
      amended (the “Parachute
      Payment Amount”),
      then the sum of the Change in Control Payment and the Salary Continuation
      Payment shall be reduced so that the total amount thereof is $1 less than
      the Parachute Payment Amount. 

 

	6.  	
      Nonsolicitation.
      Iif
      the Executive receives a Salary Continuation Payment, then
      during the Salary Continuation Period, Executive will not, directly or
      indirectly, persuade or entice, or attempt to persuade or entice,
      (i) any employee of the Bank or the Company to terminate his/her
      employment with the Bank or the Company, or (ii) any person or entity
      to terminate, cancel, rescind or revoke its business or contractual
      relationships with the Bank or the Company.

 

Not
withstanding the preceding, if the Executive receives a Change in Control
Payment, but not a Salary Continuation Payment, the nonsolicitation provisions
shall apply for a period beginning on the Change of Control date and shall
extend for a period of six
(6) months.

 

	7.  	
      Confidentiality
      Executive will not, after the date this Agreement is signed, including
      during and after its term, use for his own purposes or disclose to any
      other person or entity any Trade Secret of the Bank or the Company.
      

 

	8.  	
      Enforcement. 

 

	8.1  	
      Executive,
      the Bank and the Company stipulate that, in light of all of the facts and
      circumstances of the relationship between Executive and the Bank/Company,
      the agreements referred to in Section 6
      (including without limitation their scope) are fair and reasonably
      necessary for the protection of the Bank’s/Company’s goodwill and other
      protectable interests. If a court of competent jurisdiction should decline
      to enforce any of those covenants and agreements, Executive and the
      Bank/Company request the court to reform these provisions to the maximum
      extent that the court finds enforceable.

 

	8.2  	
      Executive
      acknowledges that the Bank/Company will suffer immediate and irreparable
      harm that will not be compensable by damages alone, if Executive
      repudiates or breaches any of the provisions of Sections 6 or 7 or
      threatens or attempts to do so. For this reason, under these
      circumstances, the Bank/Company, in addition to and without limitation of
      any other rights, remedies or damages available to them at law or in
      equity, will be entitled to obtain temporary, preliminary, and permanent
      injunctions in order to prevent or restrain the breach, and the
      Bank/Company will not be required to post a bond as a condition for the
      granting of this relief.

 

	9.  	
      Arbitration.
      Except for as set forth in Section 8 of this Agreement, at either the
      Company’s, the Bank’s or Executive’s request, the parties must submit any
      dispute, controversy or claim arising out of or in connection with, or
      relating to, this Agreement or any breach or alleged breach of this
      Agreement, to arbitration under the American Arbitration Association's
      rules then in effect (or under any other form of arbitration mutually
      acceptable to the parties). A single arbitrator agreed on by the parties
      will conduct the arbitration. If the parties cannot agree on a single
      arbitrator, each party must select one arbitrator and those two
      arbitrators will select a third arbitrator. This third arbitrator will
      hear the dispute. The arbitrator's decision is final (except as otherwise
      specifically provided by law) and binds the parties, and any party may
      request any court having jurisdiction to enter a judgment and to enforce
      the arbitrator's decision. The arbitrator will provide the parties with a
      written decision naming the substantially prevailing party in the action.
      This prevailing party is entitled to reimbursement from the other parties
      for its costs and expenses, including reasonable attorneys' fees.
      All
      proceedings will be held at a place designated by the arbitrator in Lane
      County, Oregon. The arbitrator, in rendering a decision as to any state
      law claims, will apply Oregon law. 

 

	10.  	
      Withholding.
      All payments required to be made by the Company or the Bank hereunder to
      Executive shall be subject to the withholding of such amounts, if any,
      relating to tax and other payroll deductions as the Company or the Bank
      may reasonably determine should be withheld pursuant to any applicable law
      or regulation.

 

	11.  	
      Other
      Compensation and Terms of Employment.
      This Agreement is not an employment agreement. Accordingly, except with
      respect to the Change in Control Payment and the Salary Continuation
      Payment, this Agreement shall have no effect on the determination of any
      compensation payable by the Company or the Bank to Executive, or upon any
      of the other terms of Executive's employment with the Company or the Bank.
      The specific arrangements referred to herein are not intended to exclude
      any other benefits which may be available to Executive upon a termination
      of employment with the Company or the Bank pursuant to employee benefit
      plans of the Company or the Bank or otherwise.

 

	12.  	
      Miscellaneous
      Provisions.

 

	12.1  	
      Entire
      Agreement.
      This Agreement constitutes the entire understanding and agreement between
      the parties concerning its subject matter and supersedes all prior
      agreements, correspondence, representations, or understandings between the
      parties relating to its subject matter including that certain Employment
      Agreement dated as of May 23, 2002.

 

	12.2  	
      Binding
      Effect.
      This Agreement will be binding and enforceable against, and will inure to
      the benefit of, the heirs, legal representatives, successors and assigns
      of the Company, the Bank, and Executive.

 

	12.3  	
      Waiver.
      Any waiver by a party of its rights under this Agreement must be written
      and signed by the party waiving its rights. A party's waiver of the other
      party's breach of any provision of this Agreement will not operate as a
      waiver of any other breach by the breaching
party.

 

	12.4  	
      Amendment.
      This Agreement may be modified only through a written instrument signed by
      both parties. 

 

	12.5  	
      Severability.
      The provisions of this Agreement are severable. The invalidity of any
      provision will not affect the validity of other provisions of this
      Agreement.

 

	12.6  	
      Counsel
      Review.
      Executive acknowledges that he has had the opportunity to consult with
      independent counsel with respect to the negotiation, preparation, and
      execution of this Agreement.

 

	12.7  	
      Governing
      Law and Venue.
      This Agreement will be governed by and construed in accordance with Oregon
      law, except to the extent that federal law may govern certain matters. The
      parties must bring any legal proceeding arising out of this Agreement in
      Lane County, Oregon.

 

	12.8  	
      Counterparts.
      This Agreement may be executed in one or more counterparts, each of which
      will be deemed an original, but all of which taken together will
      constitute one and the same document.

 

	12.9  	
      Assignability.
      The Company and/or the Bank may assign this Agreement and its rights
      hereunder in whole, but not in part, to any corporation, bank or other
      entity with or into which the Company and/or the Bank may hereafter merge
      or consolidate or to which the Company and/or the Bank may transfer all or
      substantially all of its assets, if in any such case said corporation,
      bank or other entity shall by operation of law or expressly in writing
      assume all obligations of the Company and/or the Bank hereunder as fully
      as if it had been originally made a party hereto, but may not otherwise
      assign this Agreement or its rights hereunder. Executive may not assign or
      transfer this Agreement or any rights or obligations hereunder.
      

 

	12.10  	
      Revocability.
      Subject to the provisions of Sections 1.11,
      3.2
      and 4.1 of
      this Agreement, this Agreement may be terminated unilaterally by a
      majority vote of the board of directors of the Company and/or the
      Bank.

 

This
Severance/Salary Continuation Agreement is effective as of the date first set
forth above.

 

 

PACIFIC
CONTINENTAL CORPORATION

By
 /s/
Hal Brown    

Its
 President
and CEO   

PACIFIC
CONTINENTAL BANK

By
 /s/
Hal Brown    

Its
 President
and CEO   

EXECUTIVE:

/s/
Daniel Hempy   

Daniel
Hempy

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