WEST COAST BANCORP /NEW/OR/
EXHIBIT 10.5
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<TYPE>EX-10.5
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<FILENAME>v79404ex10-5.txt
<DESCRIPTION>EXHIBIT 10.5
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EXHIBIT 10.5



                          SALARY CONTINUATION AGREEMENT
                     FOR WCB POLICYMAKING EXECUTIVE OFFICERS

        This SALARY CONTINUATION AGREEMENT ("Agreement") is dated as of November
28, 2000 (the "Effective Date"). The parties to the Agreement ("Parties") are
WEST COAST BANCORP ("Bancorp"), West Coast Bank ("Bank"), and Xandra McKeown
("Executive").


                                    RECITALS

A.      Executive is employed by Bank in a managerial capacity, presently
        holding the position of Senior Vice President, Business Banking.

B.      Bancorp and Bank (collectively, "Company") wish to ensure the continued
        availability of Executive's services in the event of a change in control
        of Bancorp, in order to assist Bancorp in maximizing the benefits
        obtainable from such a change.

C.      To encourage Executive's continued services, Bancorp wishes to provide
        an incentive for Executive's continued employment.

Therefore, the parties agree as follows:


                                    AGREEMENT

1.      EFFECTIVE DATE AND TERM. As of the Effective Date, this Agreement is a
        binding obligation of the parties and is not subject to revocation or
        amendment, except by mutual consent or in accordance with its terms. The
        term of this Agreement ("Term") begins on the Effective Date and ends on
        March 31, 2001. Following the Initial Term, this Agreement will
        automatically renew on April 1 of each year for subsequent one-year
        terms (each a "Renewal Term"), unless (a) the Board, before the next
        Renewal Term begins, takes action to cancel the Agreement at the and of
        its current term, or (b) Executive, before the next Renewal Term begins,
        gives Bancorp written notice of Executive's election to cancel the
        Agreement at the end of its current term. If a definitive agreement
        providing for a Change in Control (as defined below) is entered into on
        or before the expiration of the Initial Term or any Renewal Term, the
        term then in effect will automatically be extended to twelve months
        after the consummation of the Change in Control, and the Board will not
        have authority to cancel this Agreement during that period, unless
        Executive consents in writing to the cancellation.

2.      COMMITMENT OF EXECUTIVE. If any person extends any proposal or offer
        intended to or with the potential to result in a Change in Control (a
        "Change in Control Proposal"), Executive must, at Bancorp's request,
        assist Bancorp in evaluating the Proposal. Further, as a condition to
        receipt of the Salary Continuation Payment described below, Executive
        will not resign Executive's




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        position with the Company during the period beginning when the Company
        receives a Change in Control Proposal and ending when the transaction
        contemplated by the Proposal is either consummated or abandoned.

3.      SALARY CONTINUATION PAYMENT.

        (a)    Payment Trigger and Timing. If a Termination Event After a Change
               in Control (as defined in Section 4) occurs, Executive will
               receive a salary continuation payment ("Salary Continuation
               Payment"). Unless limited below, the Salary Continuation Payment
               will equal the Regular Salary Continuation Payment plus the Bonus
               Continuation Payment. The Company will pay this Salary
               Continuation Payment to Executive on the later of (i) the date
               Executive's employment terminates or (ii) the date the Change in
               Control occurs.

        (b)    Payment Amount. The Regular Salary Continuation Payment will
               equal Executive's regular monthly salary in effect when
               Executive's employment terminates (as reportable on Executive's
               IRS Form W-2, but including the amount of any voluntary deferrals
               of salary, and excluding any expense allowances or
               reimbursements, any bonuses, any gain from exercise of stock
               options, or any other similar non-recurring payments) that would
               be payable to Executive but for the termination from the day
               Executive's employment terminates to the date twelve months after
               the Change in Control. The Bonus Continuation Payment will equal
               (i) the most recent annual bonus paid to Executive, multiplied by
               (ii) (x) the number of days during which Executive was employed
               but as to which no annual bonus has been paid plus the number of
               days from the date of termination of employment to the date
               twelve months after the Change in Control divided by (y) 365.

        (c)    Limitation on Payment. The Salary Continuation Payment will not
               exceed an amount equal to $1.00 less than the amount which would
               cause the payment, together with any other payments received from
               the Company, to be a "parachute payment" as defined in Section
               280G(b)(2)(A) of the Internal Revenue Code.

4.      TERMINATION EVENT AFTER CHANGE IN CONTROL. A Termination Event After a
        Change in Control will be deemed to occur when, and only when, one or
        more of the following events occur:

        (a)    Executive terminates Executive's employment for Good Reason
               within twelve months after a Change In Control; or

        (b)    The Company terminates Executive's employment other than for
               Cause, Disability, Retirement, or death within twelve months
               after a Change In Control; or




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        (c)    The Company terminates Executive's employment other than for
               Cause, Disability, Retirement, or death before a Change in
               Control, if the termination occurs either (1) on or after the
               announcement by Bancorp, or any other party, that a Change in
               Control is contemplated or intended, or (ii) on or after the date
               a contemplated or intended Change in Control should have been
               announced in conformity with applicable securities or other laws,
               but only if in either case a Change In Control occurs within
               twelve months after the termination of Executive's employment.

5.      DEFINITIONS.

        (a)    Cause. "Cause" means only any one or more of the following:

               (i)    Willful misfeasance or gross negligence in the performance
                      of Executive's duties; or

               (ii)   Conviction of a crime in connection with such duties; or

               (iii)  Conduct demonstrably and significantly harmful to the
                      financial condition of the Company,

        (b)    Disability. "Disability" means a physical or mental impairment
               that renders Executive incapable of substantially performing the
               duties required under this Agreement and that is expected to
               continue rendering Executive so incapable for the reasonably
               foreseeable future.

        (c)    Retirement. "Retirement" means voluntary termination by Executive
               in accordance with the Company's applicable retirement policies,
               including early retirement, if applicable to its salaried
               employees.

        (d)    Good Reason. "Good Reason" means only any one or more of the
               following:

               (i)    Any reduction in Executive's salary or reduction or
                      elimination of any compensation or benefit plan benefiting
                      Executive, which reduction or elimination is not of
                      general application to substantially all similarly
                      situated employees of the Company or such employees of any
                      successor entity or of any entity in control of Bancorp or
                      the Bank;

               (ii)   A relocation or transfer of Executive's place of
                      employment that would reasonably require Executive to
                      commute more than twenty miles each way from Executive's
                      principal residence; or

               (iii)  A material diminution in the responsibilities, title, or
                      duties of Executive.




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        (e)    Change in Control. "Change In Control" means one of the
               following:

               (i)    Person or Entity acquiring or otherwise becoming the owner
                      (as a result of a purchase, merger, stock exchange, or
                      otherwise) of more than 50% of Bancorp's outstanding
                      common stock; or

               (ii)   Bancorp's merger into any corporation or other business
                      entity, or the merger of any corporation or other business
                      entity into Bancorp, where more than 50% of the stock (or
                      other form of ownership) of the corporation or business
                      entity ("Surviving Corporation") is owned by other than
                      the owners of the common stock of Bancorp before the
                      merger; or

               (iii)  A Person or Entity acquiring more than fifty percent of
                      the Company's assets, measured by the total fair market
                      value of all of the Company's assets immediately before
                      the acquisition, during the twelve-month period ending on
                      the date of the most recent acquisition. A Change in
                      Control does not include a transfer of assets by the
                      Company if the assets are transferred to an Entity, 50% or
                      more of the total value or voting power of which is owned,
                      directly or indirectly, by the Company.

        (f)    Person or Entity. "Person or Entity" includes, without
               limitation, any one or more persons and/or entities acting in
               concert with respect to their interests in the Surviving
               Corporation.

6.      OTHER COMPENSATION AND TERMS OF EMPLOYMENT. This Agreement is not an
        employment agreement. Accordingly, other than providing for the Salary
        Continuation Payment, this Agreement will not affect the determination
        of any compensation payable by the Company to Executive, nor will it
        affect the other terms of Executive's employment with the Company. The
        specific arrangements referred to in this Agreement are not intended to
        exclude or circumvent any other benefits that may be available to
        Executive under the Company's employee benefit or other applicable
        plans, if his or her employment terminates.

7.      WITHHOLDING. All payments made to Executive under this Agreement are
        subject to the withholding of amounts for tax and other payroll
        deductions that the Company reasonably determines appropriate under
        applicable law or regulation.

8.      ASSIGNABILITY. The Company may assign this Agreement and its rights
        under it in whole, but not in part, to any corporation, financial
        institution or other entity with or into which Bancorp merges or
        consolidates or to which Bancorp transfers all or substantially all of
        its assets. But, the corporation, financial institution, or other entity
        accepting assignment (the "assignee") must by operation of law or
        expressly in writing assume all obligations of the Company under this
        Agreement, as fully as if the assignee had been an original party. The
        Company may not otherwise assign this Agreement or any of its rights
        under it. The




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        Company may not through assignment avoid an obligation to pay a Salary
        Continuation Payment once the obligation is triggered under this
        Agreement, although it may assign to assignee the obligation to pay, as
        long as assignee agrees to pay in accordance with this Agreement.
        Executive may not assign or transfer this Agreement or any rights or
        obligations under it.

9.      GENERAL PROVISIONS.

        (a)    Choice of Law/Venue. The parties intend that Oregon law govern
               this Agreement and its interpretation. Any dispute arising out of
               this Agreement must be brought in either Clackamas County or
               Multnomah County in Oregon, and the parties will submit to
               personal jurisdiction in either of those counties.

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

        (c)    Attorney Fees. If any breach of or default under this Agreement
               results in either party incurring attorney or other fees, costs
               or expenses (including in arbitration), the substantially
               prevailing party is entitled to recover from the non-prevailing
               party any and all legal fees, costs and expenses, including
               attorney fees.

        (d)    Waiver. This Agreement supercedes all previous agreements between
               Executive and the Company and any of its affiliates pertaining to
               this subject matter. By signing this Agreement, Executive waives
               any and all rights Executive may have had under any previous
               salary continuation, severance, or other similar Agreements
               Executive may have entered into with the Company or any of its
               affiliates or predecessors.

        (e)    Successors. This Agreement binds, and inures to the benefit of
               the parties and each of their respective affiliates, legal
               representatives, successors and assigns.

        (f)    Construction. This Agreement contains the entire agreement among
               the parties with respect to its subject matter, and may be
               amended only through a written document signed by all of the
               parties. Its language is the language chosen by the parties
               jointly to express their mutual intent. No




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               rule of construction based on which party drafted the Agreement
               or certain of its provisions will be applied against any party.

        (g)    Section Headings. The section headings used in this Agreement
               have been included for convenience and reference only.

        (h)    Counterparts. This Agreement may be executed in one or more
               counterparts, and all counterparts will be construed together as
               one Agreement.

Signed as of November 28, 2000:


BANCORP AND BANK:



-------------------------------------------------
By:   Richard Rasmussen
Its:  Executive Vice President & General Counsel



EXECUTIVE:



-------------------------------------------------
Xandra McKeown





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