EXHIBIT 10.2
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EXECUTIVE SUPPLEMENTAL COMPENSATION AGREEMENT
THIS AGREEMENT is made and entered into effective as of August 1,
2001, by and between COLUMBIA STATE BANK and COLUMBIA BANKING SYSTEM, INC., its
parent holding company (jointly hereafter the "Employer"), and
______________________________, an individual residing in the State of
Washington (the "Executive").
R E C I T A L S
WHEREAS, the Executive is an executive officer of the Employer;
WHEREAS, the Employer desires to establish a compensation benefit
program as a fringe benefit for executive officers of the Employer in order to
attract and retain individuals with extensive and valuable experience in the
banking industry;
WHEREAS, the Executive's experience and knowledge of the affairs of
the Employer and the banking industry are extensive and valuable;
WHEREAS, it is deemed to be in the best interests of the Employer to
provide the Executive with certain fringe benefits, on the terms and conditions
set forth herein, in order to reasonably induce the Executive to remain in the
Employer's employment; and
WHEREAS, the Executive and the Employer wish to specify in writing
the terms and conditions upon which this additional compensatory incentive will
be provided to the Executive;
NOW, THEREFORE, in consideration of the services to be performed by
the Executive in the future, as well as the mutual promises and covenants
contained herein, the Executive and the Employer agree as follows:
A G R E E M E N T
1. TERMS AND DEFINITIONS.
1.1 ADMINISTRATOR. The Employer shall be the
"Administrator" and, solely for the purposes of ERISA as defined in Paragraph
1.9 below, the "fiduciary" of this Agreement where a fiduciary is required by
ERISA.
1.2 APPLICABLE PERCENTAGE. The term "Applicable Percentage"
shall mean that percentage listed on Schedule A attached hereto which is in
effect as of the date indicated on Schedule A. Notwithstanding the foregoing or
the percentages set forth on Schedule A, but subject to all other terms and
conditions set forth herein, the "Applicable Percentage" shall be: one hundred
percent (100%) in the event the Executive's Employment is terminated pursuant to
Paragraph 5.4 upon the occurrence of a "Change in Control" as defined in
Paragraph 1.3 below, or the Executive's Disability (as defined in Paragraph 1.5
below).
1.3 CHANGE IN CONTROL. The term "Change in Control" shall
mean the occurrence of one or more of the following events:
(a) One person or entity acquiring or otherwise
becoming the owner of twenty-five percent (25%) or more of Columbia Bank System,
Inc.'s ("CBSI") outstanding common stock;
(b) Replacement of a majority of the incumbent
directors of CBSI by directors whose elections have not been supported by a
majority of the Board of CBSI; or
(c) Dissolution or sale of fifty percent (50%) or
more in value of the assets, of either CBSI or Columbia State Bank.
1.4 THE CODE. The "Code" shall mean the Internal Revenue
Code of 1986, as amended (the "Code").
1.5 DISABILITY/DISABLED. The term "Disability" or
"Disabled" shall have the same meaning given such terms in any policy of
disability insurance maintained by the Employer for the benefit of the
Executive. In the absence of such a policy which extends coverage to the
Executive in the event of disability, the terms shall mean bodily injury or
disease (mental or physical) which wholly and continuously prevents the
performance of duty for at least six months.
1.6 EARLY RETIREMENT DATE. The term "Early Retirement Date"
shall mean any date after the attainment of age fifty-five (55), provided the
Applicable Percentage equals one hundred percent (100%). And provided further,
the Executive may elect a date after age fifty-five (55) by written election
filed with the Employer and that date shall be the Early Retirement Date
hereunder. Such election shall be irrevocable except that the Early Retirement
Date may be changed at any time prior to age fifty-four and one-half (54 1/2).
1.7 EFFECTIVE DATE. The term "Effective Date" shall mean
the date first written above.
1.8 EMPLOYMENT. The term "Employment" shall mean full time
employment with the Employer or the provision of services by Executive in
connection with a consulting agreement entered into with the Employer.
1.9 ERISA. The term "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
1.10 EXECUTIVE BENEFIT. The term "Executive Benefit" or
"Retirement Benefit Payments" shall mean the benefits determined pursuant to
Paragraph 3, 4 or 5 and in accordance with Schedule B, and forfeited, reduced or
adjusted to the extent: (i) required under the other provisions of this
Agreement, including, but not limited to, Paragraphs 5, 6 and 7 hereof; (ii)
required by reason of the lawful order of any regulatory agency or body having
jurisdiction over the Employer; or (iii) required in order for the Employer to
properly comply with any and all applicable state and federal laws, including,
but not limited to, income, employment and disability income tax laws (E.G.,
FICA, FUTA, SDI).
1.11 NORMAL RETIREMENT DATE. The term "Normal Retirement
Date" means the day the Executive attains age sixty-five (65). Provided, Normal
Retirement Date shall mean the day the Executive attains age sixty-two (62) in
the event the Executive's Employment is terminated pursuant to Paragraph 5.4
following a Change in Control.
1.12 PLAN YEAR. The term "Plan Year" shall mean the
Employer's fiscal year.
1.13 TERMINATION FOR CAUSE. The term "Termination for
Cause" shall mean termination of Employment of the Executive by reason of any of
the following: (i) willful misfeasance or gross negligence in the performance of
his duties; (ii) conduct demonstrably and significantly harmful to the Employer
or a financial institution subsidiary; or (iii) conviction of a felony.
2. SCOPE, PURPOSE AND EFFECT.
2.1 CONTRACT OF EMPLOYMENT. Although this Agreement is
intended to provide the Executive with an additional incentive to remain in the
employ of the Employer, this Agreement shall not be deemed to constitute a
contract of employment between the Executive and the Employer nor shall any
provision of this Agreement restrict or expand the right of the Employer to
terminate the Executive's Employment. This Agreement shall have no impact or
effect upon any separate written Employment Agreement which the Executive may
have with the Employer, it being the parties' intention and agreement that
unless this Agreement is specifically referenced in said Employment Agreement
(or any modification thereto), this Agreement (and the Employer's obligations
hereunder) shall stand separate and apart and shall have no effect on or be
affected by, the terms and provisions of said Employment Agreement.
2.2 FRINGE BENEFIT. The benefits provided by this Agreement
are granted by the Employer as a fringe benefit to the Executive and are not a
part of any salary reduction plan or any arrangement deferring a bonus or a
salary increase. The Executive has no option to take any current payments or
bonus in lieu of the benefits provided by this Agreement.
2.3 PROHIBITED PAYMENTS. Notwithstanding anything in this
Agreement to the contrary, if any payment made under this Agreement is a "golden
parachute payment" as defined in Section 28(k) of the Federal Deposit Insurance
Act (12 U.S.C. section 1828(k) and Part 359 of the Rules and Regulations of the
Federal Deposit Insurance Corporation (collectively, the "FDIC Rules") or is
otherwise prohibited, restricted or subject to the prior approval of a Bank
Regulator, no payment shall be made hereunder without complying with said FDIC
Rules.
3. EXECUTIVE BENEFITS PAYMENTS.
3.1 PAYMENTS COMMENCE UPON EARLY RETIREMENT DATE. In the
event the Executive elects to retire from active Employment by the Employer on a
date which constitutes an Early Retirement Date as defined in Paragraph 1.6
above, subject to Paragraph 6, the Executive shall be entitled to be paid the
Applicable Percentage of the Executive Benefits as described in Schedule B, in
substantially equal monthly installments on the first day of each month,
beginning with the month following the month in which the Executive retires and
continuing until the Executive's death.
3.2 PAYMENTS COMMENCE UPON NORMAL RETIREMENT DATE. In the
event the Executive elects to retire from active Employment by the Employer on a
date which constitutes a Normal Retirement Date as defined in Paragraph 1.11
above, subject to Paragraph 6, the Executive shall be entitled to be paid the
Applicable Percentage of the Executive Benefits as described in Schedule B, in
substantially equal monthly installments on the first day of each month,
beginning with the month following the month in which the Executive retires and
continuing until the Executive's death.
4. PAYMENTS IN THE EVENT DISABILITY OCCURS PRIOR TO RETIREMENT AND
PAYMENTS IN THE EVENT OF DEATH. In the event the Executive becomes Disabled
while actively employed by the Employer at any time after the Effective Date of
this Agreement but prior to retirement, subject to Paragraph 6, the Executive
shall be entitled to be paid the Applicable Percentage of the Executive
Benefits, as defined above, in substantially equal monthly installments on the
first day of each month, beginning with the month following the month in which
the Executive becomes Disabled, payable until the Executive's death. Provided,
benefits hereunder shall be reduced or eliminated to the extent that such
benefits are duplicated by benefits payable under the Employer's long-term
disability plan. There are no death benefits payable under this Agreement.
5. PAYMENTS IN THE EVENT EXECUTIVE IS TERMINATED PRIOR TO RETIREMENT.
As indicated in Paragraph 2.1 above, the Employer reserves the right to
terminate the Executive's Employment, with or without Cause but subject to any
written employment agreement which may then exist, at any time prior to the
Executive's retirement. In the event that the Employment of the Executive shall
be terminated, other than by reason of Disability or retirement, then this
Agreement shall terminate upon the date of such termination of Employment;
provided, however, that the Executive shall be entitled to the following
benefits as may be applicable depending upon the circumstances surrounding the
Executive's termination:
5.1 TERMINATION WITHOUT CAUSE. If the Executive's
Employment is terminated by the Employer without cause, and such termination is
not subject to the provisions of Paragraph 5.4 below, subject to Paragraph 6,
the Executive shall be entitled to be paid the Applicable Percentage of the
Executive Benefits, as defined above, in substantially equal monthly
installments on the first day of each month, beginning with the month following
the month in which the Executive attains fifty-five (55) years of age, unless a
later date has been elected by the Executive pursuant to Paragraph 1.6.
5.2 VOLUNTARY TERMINATION BY THE EXECUTIVE.
(a) If the Applicable Percentage is one hundred
percent (100%), subject to Paragraph 6, the Executive shall be entitled to be
paid the Applicable Percentage of the Executive Benefits, as defined in Schedule
B, in substantially equal monthly installments on the first day of each month,
beginning with the month following the month in which the Executive attains
fifty-five (55) years of age, unless a later date has been elected by the
Executive pursuant to Paragraph 1.6.
(b) If the Executive's Employment is terminated
by voluntary resignation prior to the date specified in Schedule A which
corresponds to an Applicable Percentage equal to one hundred percent (100%) and
such resignation is not subject to the provisions of Paragraph 5.4 below, the
Executive shall forfeit any and all rights and benefits he may have under the
terms of this Agreement and shall have no right to be paid any of the amounts
which would otherwise be due or paid to the Executive by the Employer pursuant
to the terms of this Agreement.
5.3 TERMINATION FOR CAUSE. The Executive agrees that if his
Employment with the Employer is terminated "for cause," as defined in Paragraph
1.13 of this Agreement, he shall forfeit any and all rights and benefits he may
have under the terms of this Agreement and shall have no right to be paid any of
the amounts which would otherwise be due or paid to the Executive by the
Employer pursuant to the terms of this Agreement.
5.4 TERMINATION ON ACCOUNT OF OR AFTER A CHANGE IN CONTROL.
In the event: (i) the Executive's Employment with the Employer is terminated by
the Employer in conjunction with, or by reason of, a "Change in Control" (as
defined in Paragraph 1.3 above); or (ii) by reason of the Employer's actions any
adverse and material change occurs in the scope of the Executive's position,
responsibilities, duties, salary, benefits, or location of Employment after a
Change in Control occurs; or (iii) the Employer causes an event to occur which
reasonably constitutes or results in a demotion, a significant diminution of
responsibilities or authority, or a constructive termination (by forcing a
resignation or otherwise) of the Executive's Employment after a Change in
Control occurs, then, subject to Paragraph 6, the Executive shall be entitled to
be paid the Applicable Percentage of the Executive Benefits, as defined above,
in substantially equal monthly installments on the first day of each month,
beginning with the month following the month in which the Executive attains
fifty-five (55) years of age, unless a later date has been elected by the
Executive pursuant to Paragraph 1.6.
6. FORFEITURE IN THE EVENT OF BREACH OF NON-COMPETITION AGREEMENT.
Notwithstanding any other provision of this Agreement, the Executive Benefit due
the Executive pursuant hereto (if any) shall be forfeited and no Executive
Benefit shall be due the Executive hereunder if the Executive enters into
competitive activity in the Employer's market area within the three (3) year
period beginning on the date of the Executive's termination of Employment.
Competitive activity means acting directly or indirectly as an employee, agent,
stockholder, member, director, co-partner or in any other individual or
representative capacity on behalf of any bank or financial institution
(including without limitation trust company, finance company, leasing company or
any entity that provides credit). The Employer's market area is defined as the
following counties in the State of Washington and all counties bordering on any
such county and any county in which the Employer maintains a branch or other
office, now or at the time of the Executive's termination of Employment:
Cowlitz, King, Kitsap, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇.
7. IRS SECTION 280G ISSUES. If all or any portion of the amounts
payable to the Executive under this Agreement, either alone or together with
other payments which the Executive has the right to receive from the Employer,
constitute "excess parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"), that are subject to the
excise tax imposed by Section 4999 of the Code (or similar tax and/or
assessment), Executive shall be responsible for the payment of such excise tax
and Employer (and its successor) shall be responsible for any loss of
deductibility related thereto; provided, however, that Employer and Executive
shall cooperate with each other and use all reasonable efforts to minimize to
the fullest extent possible the amount of excise tax imposed by Section 4999 of
the Code. If, at a later date, it is determined (pursuant to final regulations
or published rulings of the Internal Revenue Service, final judgment of a court
of competent jurisdiction, or otherwise) that the amount of excise taxes payable
by the Executive is greater than the amount initially so determined, then the
Executive shall pay an amount equal to the sum of such additional excise taxes
and any interest, fines and penalties resulting from such underpayment. The
determination of the amount of any such excise taxes shall be made by the
independent accounting firm employed by the Employer immediately prior to the
change in control or such other independent accounting firm or advisor as may be
mutually agreeable to Employer and Executive in the exercise of their reasonable
good faith judgment.
8. RIGHT TO DETERMINE FUNDING METHODS. The Employer reserves the
right to determine, in its sole and absolute discretion, whether, to what extent
and by what method, if any, to provide for the payment of the amounts which may
be payable to the Executive, under the terms of this Agreement. In the event
that the Employer elects to fund this Agreement, in whole or in part, through
the use of life insurance or annuities, or both, the Employer shall determine
the ownership and beneficial interests of any such policy of life insurance or
annuity. The Employer further reserves the right, in its sole and absolute
discretion, to terminate any such policy, and any other device used to fund its
obligations under this Agreement, at any time, in whole or in part. Consistent
with Paragraph 10 below, the Executive shall have no right, title or interest in
or to any funding source or amount utilized by the Employer pursuant to this
Agreement, and any such funding source or amount shall not constitute security
for the performance of the Employer's obligations pursuant to this Agreement.
In connection with the foregoing, the Executive agrees to execute such documents
and undergo such medical examinations or tests which the Employer may request
and which may be reasonably necessary to facilitate any funding for this
Agreement including, without limitation, the Employer's acquisition of any
policy of insurance or annuity.
9. CLAIMS PROCEDURE. The Employer shall, but only to the extent
necessary to comply with ERISA, be designated as the named fiduciary under this
Agreement and shall have authority to control and manage the operation and
administration of this Agreement. Consistent therewith, the Employer shall make
all determinations as to the rights to benefits under this Agreement. Any
decision by the Employer denying a claim by the Executive for benefits under
this Agreement shall be stated in writing and delivered or mailed, via
registered or certified mail, to the Executive, the Executive's spouse or the
Executive's beneficiaries, as the case may be. Such decision shall set forth the
specific reasons for the denial of a claim. In addition, the Employer shall
provide the Executive, or as applicable, the Executive's spouse or
beneficiaries, with a reasonable opportunity for a full and fair review of the
decision denying such claim.
10. STATUS AS AN UNSECURED GENERAL CREDITOR. Notwithstanding anything
contained herein to the contrary: (i) the Executive shall have no legal or
equitable rights, interests or claims in or to any specific property or assets
of the Employer as a result of this Agreement; (ii) none of the Employer's
assets shall be held in or under any trust for the benefit of the Executive or
held in any way as security for the fulfillment of the obligations of the
Employer under this Agreement; (iii) all of the Employer's assets shall be and
remain the general unpledged and unrestricted assets of the Employer; (iv) the
Employer's obligation under this Agreement shall be that of an unfunded and
unsecured promise by the Employer to pay money in the future; and (v) the
Executive shall be an unsecured general creditor with respect to any benefits
which may be payable under the terms of this Agreement.
Notwithstanding subparagraphs (i) through (v) above, the Employer and
the Executive acknowledge and agree that, in the event of a Change in Control,
upon request of the Executive, or in the Employer's discretion if the Executive
does not so request and the Employer nonetheless deems it appropriate, the
Employer shall establish, not later than the effective date of the Change in
Control, a Rabbi Trust or multiple Rabbi Trusts (the "Trust" or "Trusts") upon
such terms and conditions as the Employer, in its sole discretion, deems
appropriate and in compliance with applicable provisions of the Code, in order
to permit the Employer to make contributions and/or transfer assets to the Trust
or Trusts to discharge its obligations pursuant to this Agreement. The principal
of the Trust or Trusts and any earnings thereon shall be held separate and apart
from other funds of the Employer to be used exclusively for discharge of the
Employer's obligations pursuant to this Agreement and shall continue to be
subject to the claims of the Employer's general creditors until paid to the
Executive in such manner and at such times as specified in this Agreement.
11. MISCELLANEOUS.
11.1 OPPORTUNITY TO CONSULT WITH INDEPENDENT ADVISORS. The
Executive acknowledges that he has been afforded the opportunity to consult with
independent advisors of his choosing including, without limitation, accountants
or tax advisors and counsel regarding both the benefits granted to him under the
terms of this Agreement and the (i) terms and conditions which may affect the
Executive's right to these benefits and (ii) personal tax effects of such
benefits including, without limitation, the effects of any federal or state
taxes, Section 280G of the Code, and any other taxes, costs, expenses or
liabilities whatsoever related to such benefits, which in any of the foregoing
instances the Executive acknowledges and agrees shall be the sole responsibility
of the Executive notwithstanding any other term or provision of this Agreement.
The Executive further acknowledges and agrees that the Employer shall have no
liability whatsoever related to any such personal tax effects or other personal
costs, expenses, or liabilities applicable to the Executive and further
specifically waives any right for himself or herself, and his or her heirs,
beneficiaries, legal representatives, agents, successor and assign to claim or
assert liability on the part of the Employer related to the matters described
above in this Paragraph 11.1. The Executive further acknowledges that he has
read, understands and consents to all of the terms and conditions of this
Agreement, and that he enters into this Agreement with a full understanding of
its terms and conditions.
11.2 ARBITRATION OF DISPUTES. All claims, disputes and
other matters in question arising out of or relating to this Agreement or the
breach or interpretation thereof, other than those matters which are to be
determined by the Employer in its sole and absolute discretion, shall be
resolved by binding arbitration before a representative member, selected by the
mutual agreement of the parties, of the Judicial Arbitration and Mediation
Services, Inc. ("JAMS"), located in Tacoma, Washington. In the event JAMS is
unable or unwilling to conduct the arbitration provided for under the terms of
this paragraph, or has discontinued its business, the parties agree that a
representative member, selected by the mutual agreement of the parties of the
American Arbitration Association ("AAA") located in Tacoma, Washington, shall
conduct the binding arbitration referred to in this paragraph. Notice of the
demand for arbitration shall be filed in writing with the other party to this
Agreement and with JAMS (or AAA, if necessary). In no event shall the demand for
arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be
barred by the applicable statute of limitations. The arbitration shall be
subject to such rules of procedure used or established by JAMS, or if there are
none, the rules of procedure used or established by AAA. Any award rendered by
JAMS or AAA shall be final and binding upon the parties, and as applicable,
their respective heirs, beneficiaries, legal representatives, agents, successors
and assigns, and may be entered in any court having jurisdiction thereof. The
obligation of the parties to arbitrate pursuant to this clause shall be
specifically enforceable in accordance with, and shall be conducted consistently
with, the provisions of the Washington Code of Civil Procedure. Any arbitration
hereunder shall be conducted in Tacoma, Washington, unless otherwise agreed to
by the parties.
11.3 ATTORNEYS' FEES. In the event of any arbitration or
litigation concerning any controversy, claim or dispute between the parties
hereto, arising out of or relating to this Agreement or the breach hereof, or
the interpretation hereof, the prevailing party shall be entitled to recover
from the losing party reasonable expenses, attorneys' fees and costs incurred in
connection therewith or in the enforcement or collection of any judgment or
award rendered therein. The "prevailing party" means the party determined by the
arbitrator(s) or court, as the case may be, to have most nearly prevailed, even
if such party did not prevail in all matters, not necessarily the one in whose
favor a judgment is rendered.
11.4 NOTICE. Any notice required or permitted of either the
Executive or the Employer under this Agreement shall be deemed to have been duly
given, if by personal delivery, upon the date received by the party or its
authorized representative; if by facsimile, upon transmission to a telephone
number previously provided by the party to whom the facsimile is transmitted as
reflected in the records of the party transmitting the facsimile and upon
reasonable confirmation of such transmission; and if by mail, on the third day
after mailing via U.S. first class mail, registered or certified, postage
prepaid and return receipt requested, and addressed to the party at the address
given below for the receipt of notices, or such changed address as may be
requested in writing by a party.
If to the Employer:
Columbia Banking System, Inc.
Attn: Corporate Secretary
▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Executive:
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11.5 ASSIGNMENT. The Executive shall have no power or right
to transfer, assign, anticipate, hypothecate, modify or otherwise encumber any
part or all of the amounts payable hereunder, nor, prior to payment in
accordance with the terms of this Agreement, shall any portion of such amounts
be: (i) subject to seizure by any creditor of the Executive, by a proceeding at
law or in equity, for the payment of any debts, judgments, alimony or separate
maintenance obligations which may be owed by the Executive; or (ii) transferable
by operation of law in the event of bankruptcy, insolvency or otherwise. Any
such attempted assignment or transfer shall be void.
11.6 BINDING EFFECT/MERGER OR REORGANIZATION. This
Agreement shall be binding upon and inure to the benefit of the Executive and
the Employer. Accordingly, the Employer shall not merge or consolidate into or
with another corporation, or reorganize or sell substantially all of its assets
to another corporation, firm or person, unless and until such succeeding or
continuing corporation, firm or person agrees to assume and discharge the
obligations of the Employer under this Agreement.
11.7 NONWAIVER. The failure of either party to enforce at
any time or for any period of time any one or more of the terms or conditions of
this Agreement shall not be a waiver of such term(s) or condition(s) or of that
party's right thereafter to enforce each and every term and condition of this
Agreement.
11.8 PARTIAL INVALIDITY. If any terms, provision, covenant,
or condition of this Agreement is determined by an arbitrator or a court, as the
case may be, to be invalid, void, or unenforceable, such determination shall not
render any other term, provision, covenant or condition invalid, void or
unenforceable, and the Agreement shall remain in full force and effect
notwithstanding such partial invalidity.
11.9 ENTIRE AGREEMENT. This Agreement supersedes any and
all other agreements, either oral or in writing, between the parties with
respect to the subject matter of this Agreement and contains all of the
covenants and agreements between the parties with respect thereto. Each party to
this Agreement acknowledges that no other representations, inducements,
promises, or agreements, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not set forth herein, and that
no other agreement, statement, or promise not contained in this Agreement shall
be valid or binding on either party.
11.10 MODIFICATIONS. Any modification of this Agreement
shall be effective only if it is in writing and signed by each party or such
party's authorized representative.
11.11 PARAGRAPH HEADINGS. The paragraph headings used in
this Agreement are included solely for the convenience of the parties and shall
not affect or be used in connection with the interpretation of this Agreement.
11.12 NO STRICT CONSTRUCTION. The language used in this
Agreement shall be deemed to be the language chosen by the parties hereto to
express their mutual intent, and no rule of strict construction will be applied
against any person.
11.13 GOVERNING LAW. The laws of the State of Washington,
other than those laws denominated choice of law rules, and where applicable, the
rules and regulations of the Board of Governors of the Federal Reserve System,
Federal Deposit Insurance Corporation, Office of the Comptroller of the
Currency, or any other regulatory agency or governmental authority having
jurisdiction over the Employer, shall govern the validity, interpretation,
construction and effect of this Agreement.
IN WITNESS WHEREOF, the Employer and the Executive have executed this
Agreement on the date first above-written in the City of Tacoma, Washington.
EMPLOYER:
COLUMBIA STATE BANK
By
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Its
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COLUMBIA BANKING SYSTEM
By
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Its
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EXECUTIVE:
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SCHEDULE A
CALENDAR YEAR APPLICABLE PERCENTAGE
August 1, 2001 to July 31, 2002 0%
August 1, 2002 to July 31, 2003 20%
August 1, 2003 to July 31, 2004 40%
August 1, 2004 to July 31, 2005 60%
August 1, 2005 to July 31, 2006 80%
August 1, 2006 and thereafter 100%
SCHEDULE B
EXECUTIVE BENEFITS
The Employer shall pay to the Employee pursuant to the Agreement
during the Executive's lifetime, an amount equal to THE LESSER OF 60% OF THE
EMPLOYEE'S FINAL FULL YEAR TOTAL COMPENSATION (AS SHOWN ON THE FORM W-2) OR
_______________ Dollars ($___________ ) per year, payable in twelve equal
monthly installments. The amount of Executive Benefits payable under the
Agreement shall be adjusted each year from the date of commencement of payments
of the Executive Benefits until the death of the Executive as follows:
a. The Executive Benefits shall be increased at the rate of
two percent (2%) each year, subject to further adjustment for an Early
Retirement.
b. If the Executive elects Early Retirement, the Executive
Benefits shall be decreased by a percentage calculated by subtracting the
Executive's age at Early Retirement from the Normal Retirement Age of 65 (62 in
the event of a Change in Control), and multiplying the result by a factor of
five. For example, a 25% reduction of the Executive Benefits would occur if the
Executive's Early Retirement Age is 60, based on the following calculation:
65 - 60 = 5 x 5 = 25%.