SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement (“Agreement”) is made by and between Peter J. Conner (“Executive”), an individual, and Banner Corporation, a Washington Corporation (the “Company”), Banner Bank (the “Bank”), and the Bank’s subsidiaries (collectively, “Banner”), effective as of ________________, 2023 (the “Agreement Date”).
WHEREAS, the Bank and Executive are parties to the Employment Agreement dated November 5, 2014, as amended on July
1, 2017 (the “Employment Agreement”); and
WHEREAS, the Bank and Executive, in exchange for the consideration provided for in this Agreement, including
continued employment and the attendant salary and benefits and separation pay and benefits as described herein, seek to enter this Agreement, which includes restrictive covenants and a complete general release of all claims.
NOW, THEREFORE, in consideration of the foregoing, the Company and Executive agree as follows:
1. Separation of Employment. Executive hereby irrevocably (a) retires from
Executive’s position as Executive Vice President, Chief Financial Officer of the Bank, as of April 10, 2023; (b) retires from Executive’s position as Executive Vice President, Chief Financial Officer of the Company, as of October 10, 2023;
(c) ceases to hold any duties or responsibilities as an officer or director with the Bank, the Company, and any of their respective subsidiaries as of October 10, 2023; and (d) terminates his employment with Banner Bank and its affiliates as of
the Separation Date (defined below). The retirement dates described in clauses (a) and (b) of this Paragraph 1 each shall be referred to herein as a “Retirement Date.”
2. Separation Date and Expectations During the Notice Period and Transition Period.
Executive’s last day of work will be April 10, 2024 (the “Separation Date”). The period of time between signing of this Agreement and the Retirement
Date applicable to the Company shall be considered the “Notice Period.” The period of time between the end of the Notice Period and the Separation Date shall be considered the “Transition Period,” provided that, in the event Executive voluntarily terminates his
employment or is Terminated for Cause (as defined below) during the Transition Period, the Separation Date shall be adjusted to correspond to the Executive’s last day of employment and the Transition Period shall be correspondingly adjusted.
All pay and benefits under any of Banner’s plans, policies, or programs, shall cease as of the Separation Date unless extended by Executive pursuant to the terms of the applicable plans or unless provided otherwise in this Agreement.
“Terminated for Cause” means the Executive’s termination of employment with Banner because of the Executive’s
personal dishonesty, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties (unless Executive is prevented from performing such duties because Executive is disabled or suffering from
a medical condition that reasonably prevents Executive from performing such duties despite following a treatment plan provided by a physician or licensed medical specialist), willful violation of any law, rule, or regulation (other than traffic
violations or offenses that are classified as misdemeanors) or final cease-and-desist order, acts or failures to act that may have a
material detrimental effect on the reputation or business of the Company or the Bank or would be reasonably likely to result in
regulatory sanctions, penalties or restrictions on the Company’s or the Bank’s operations, or material breach of any provision of this Agreement unless Executive cures such material breach within ten (10) days after a written notice describing
such material breach is received by Executive.
a. During the Notice Period, (i) Executive will be expected to continue to be fully engaged in his role as Chief Financial Officer of the Company and, as applicable, of the
Bank; (ii) the Employment Agreement will remain in effect, except for the restrictive covenants in sections 11(b), (c), (e) of the Employment Agreement, which shall be replaced by the restrictive covenants in Paragraph 11 herein; and
(iii) Executive will continue to receive the same pay and benefits he is entitled to under the Employment Agreement. Notwithstanding any provisions to the contrary in the Employment Agreement, Executive and Banner hereby agree that the “Date of
Termination” for purposes of the Employment Agreement shall be the last day of the Notice Period; as of that date, the Employment Agreement shall be deemed terminated, with the only surviving provisions being those identified as such in the
Employment Agreement. For the avoidance of doubt, section 5 (“Cash Compensation; Bonuses/Incentives; Expenses; Awards”), section 6 (“Benefits”), section 7 (“Vacations; Leave”), and section 8 (“Termination of Employment”) of the Employment
Agreement shall terminate and be of no further force and effect immediately upon the conclusion of the Notice Period. Thereafter, until the Separation Date, Executive shall be subject to the same policies, and entitled to the same benefits, as
are generally applicable to non-executive employees of the Bank except as otherwise described in Paragraph 2(b) below.
b. During the Transition Period, Executive will be expected to engage in activities related to the orderly transition of projects occasioned by the separation, to cooperate
with the transition of any outstanding business matters, and to remain available and free of conflicts of interest to assist with such business matters as may be requested by the Chief Executive Officer. During the Transition Period,
Executive’s base salary shall be 50% of his base salary in effect as of the last day of the Notice Period, and Executive will continue to be entitled to the same automobile allowance, Spokane Club membership fee reimbursement, and Alaska
Airlines lounge fee reimbursement Executive is currently entitled to from Banner.
3. Separation Pay and Benefits.
a. Separation Pay. Commencing on (i) the first regularly scheduled payday after the
Effective Date of the Agreement (as defined in Paragraph 9(c)) or (ii) the Separation Date, whichever date is later (the “Separation
Pay Trigger Date”), and provided the Separation Date occurs on or after April 10, 2024, and subject further to the provisions of
Paragraph 11 of this Agreement and Executive’s execution of the Reaffirmation of Agreement and Supplemental Release of Claims as contemplated in Paragraph 5(c) of this Agreement, Banner Bank shall be obligated to pay Executive the gross sum of
Five Hundred Thousand Dollars ($500,000.00) (“Separation Pay”) less income tax withholding, payroll taxes and other
authorized deductions, through direct deposit. The Separation Pay will be paid in two equal installments: (1) the first payment will be payable to Executive within ten (10) business days after the later of (x) the Separation Pay Trigger Date or
(y) the date on which Executive’s signed Reaffirmation of Agreement and Supplemental Release of Claims document is properly submitted to Banner; and
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(2) the second payment will be payable to Executive within ten (10) business days after the expiration of the Covenant Period (as
defined in Paragraph 11 herein).
b. Equity and Incentive Awards. Executive’s outstanding restricted stock unit and
performance share awards in existence as of the end of the Notice Period will continue to vest, in accordance with the terms of the applicable award agreements, through the Separation Date, and payment in respect of these awards will be made in
accordance with the applicable award agreements and the Company’s 2018 Omnibus Incentive Plan. Executive will also be eligible to receive an equity award pursuant to the Company’s 2023 Long-Term Incentive Plan, subject to the discretion of the
Board of Directors.
c. Group Health Plan Continuation Coverage and Other Benefits. After the Separation
Date, Executive and any spouse and/or covered dependents may elect to purchase continued group medical, dental and vision coverage in accordance with the provisions of COBRA. Executive also may convert other group insurance coverage to
individual policies, if allowed by the plan terms. Executive will be responsible for paying any and all insurance premiums for any continuation coverage that is elected.
d. References. Notwithstanding Banner’s policy of providing neutral reference
information (dates of employment and job title) to third parties, Executive hereby expressly authorizes Banner’s directors and officers to release additional information and serve as references for Executive in connection with his future
professional opportunities.
4. No Admission of Liability; Agreement Inadmissible. Neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in
any proceeding as evidence of or an admission by Banner of any violation of its policies, procedures, state or federal laws or regulations. This Agreement may be introduced, however, in any proceeding to enforce the Agreement. Such introduction
shall be pursuant to an order protecting its confidentiality, if permitted by the tribunal.
5. General Release by Executive.
a. Executive, on behalf of Executive’s descendants, dependents, heirs, executors, administrators, assigns, and successors, and each of them, hereby fully releases and
discharges Banner and any of its sponsored employee benefit plans, past and present, and each of them, as well as its and their respective trustees, directors, officers, agents, attorneys, insurers, employees, stockholders, representatives,
assigns, and successors, and any of their spouses and marital communities, past and present, from any and all claims, actions, causes of action, rights, or damages, including costs and attorneys’ fees, which Executive may have, known, unknown
or later discovered, which arose prior to the date Executive signs this Agreement, related in any way to Executive’s employment and/or its termination (collectively referred to as “Claims”).
b. Executive’s release of Claims includes but is not limited to: any Claims under any local, state or federal laws prohibiting discrimination in employment, including without
limitation Title VII of the federal Civil Rights Act of 1964 as amended, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Genetic Information Nondiscrimination Act, the Ledbetter Fair Pay Act, or the Washington
State Law
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Against Discrimination (or other state anti-discrimination laws or regulations in the state where you reside or worked for the Company);
Claims (other than for vested, nonforfeitable benefits) under the Employee Retirement Income Security Act; Claims under any federal, state or local leave laws, like the Family Medical Leave Act; any Claims of breach of any fiduciary duty or
responsibility by any Company-sponsored employee benefit plan, or the plan’s trustees or administrators; Claims under any state or local laws regarding minimum wages and overtime, or other wage Claims; any whistleblower, False Claims Act or qui
tam Claims; Claims alleging breach of contract, wrongful termination, defamation, whistle-blowing, tortious interference with business expectancy, infliction of emotional distress; or any other Claim alleging a legal restriction on the
Company’s ability to terminate an employee. The foregoing release is not intended to, nor does it in any way discharge or waive Executive’s rights to enforce this Agreement or any Releases related to it or to be held harmless and indemnified in
the future by Banner Bank and any successors-in-interest for claims asserted against Executive in the future under the Articles of Incorporation, Bylaws, or other governing documents of the Company, the Bank or any other Banner entity, or
applicable law.
c. Executive agrees that on the Separation Date, Executive will execute the Reaffirmation of Agreement and Supplemental Release of Claims attached hereto, with the intent that
as of the Separation Date, Executive will have waived and released any and all possible claims against Banner arising in any way out of Executive’s employment and the termination of that employment.
6. General Release by Banner. Banner on behalf of its assigns and successors and each of them hereby fully release and discharge Executive from any and all
Claims which Banner may have, known, unknown or later discovered, which arose prior to the date Banner signs this Agreement, related in any way to Executive’s employment with Banner; provided, however, that (a) Banner’s release of Claims shall
not apply to Claims against Executive for intentional wrongdoing including but not limited to Claims of fraud, theft, embezzlement, securities law violations, misappropriation of trade secrets and the like and (b) all compensation amounts paid
to Executive in connection with his employment at Banner shall be subject to such clawback (recovery) as may be required to be made pursuant to law, rule, regulation or stock exchange listing requirement or any policy of the Company or the Bank
adopted pursuant to any such law, rule, regulation or stock exchange listing requirement.
7. Mutual Covenant Not to Sue. Executive and Banner each affirmatively represent that no Claim has been filed that was released in this Agreement against the
other with any court or government agency, and that in the future, neither party will, unless allowed by applicable law, bring a Claim against the other based on a Claim that is released in this Agreement. However, this Agreement will not limit
either party from filing a Claim in arbitration to enforce the terms of this Agreement. This Agreement also will not limit Executive from: filing a Claim for unemployment, workers compensation, state disability or COBRA benefits; filing a Claim
for any vested, nonforfeitable retirement benefits under ERISA; or from filing any other Claim that may be allowed by applicable law, such as a charge with a government agency that expressly prohibits waivers of an individual’s ability to file
charges with the agency or participate in its investigations. If any third party, like a government agency, allows Executive to file a Claim, brings any Claim or conducts any investigation against Banner, nothing in this Agreement forbids
Executive from cooperating truthfully in such proceedings, but by this Agreement,
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Executive waives and agrees to relinquish any damages or other individual relief that may be awarded as a result of such government
agency’s proceedings.
8. Release of Unknown Claims. Executive and Banner hereby expressly waive any and all rights and benefits conferred by any law, statute, or legal doctrine that
would otherwise prevent the release of unknown claims and expressly consent that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those related to unknown and
unsuspected claims, demands and causes of action, if any. Executive and Banner acknowledge that they may each discover claims or facts in addition to or different from those which each now knows or believes to exist with respect to the subject
matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected this settlement. Nevertheless, each party hereby waives any right, claim or cause of action that might arise as a
result of such different or additional claims or facts and acknowledges the significance and consequence of such release and waiver.
9. Consideration Period / Revocation. Executive acknowledges having been advised:
a. Executive should consult with an attorney before signing this Agreement.
b. Executive has at least twenty-one (21) days to consider this Agreement.
c. Executive has seven (7) days after delivering a signed Agreement to Banner to revoke the ADEA waiver and release. Any notice of revocation must be in writing and received by
Kayleen Kohler, EVP, Human Resources, 3001 112th Ave. NE, Suite 200, Bellevue, WA 98004 (with a copy by email) by the close of the seven-day revocation period. This Agreement shall not be effective until the eighth day after the
signed Agreement has been received by Banner and not revoked (“Effective Date of the Agreement”).
10. Confidential and Proprietary Information. Executive acknowledges that by reason of Executive’s position with the Bank and the Company, Executive is aware of
and has been given access to Banner’s concepts, designs, processes, technologies, trade secrets, customer lists, financial information, marketing plans, business plans, and other forms of confidential and proprietary information, whether or not
developed by Executive (hereafter “Confidential Information”). Executive agrees to return to Banner, no later than the Separation Date, all
Confidential Information in Executive’s custody or control. Executive further represents that Executive has held all such information confidential and will continue to do so and that Executive will not use such information and relationships for
any purpose without the prior written consent of the Company.
11. Restrictive
Covenants
a. During Executive’s employment and continuing for a period of 18 months after the earlier of (x) Executive’s termination of employment with Banner or (y) the first day of the
Transition Period (the “Covenant Period”), Executive
covenants and agrees that Executive will not:
i. without first obtaining the prior written consent of Banner’s CEO, whose approval shall not be unreasonably withheld, directly, indirectly, or otherwise, own,
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manage, operate, control, be employed by, participate in, or be connected, in any manner, with the ownership, management, operation or
control of any bank, savings bank, savings and loan association, credit union or similar financial institution or holding company of any such entity in any county in which Banner Bank (or its subsidiaries) operates a full service branch office
or lending center on the first date of Executive’s employment with such other entity;
ii. directly or indirectly solicit, influence, or entice, or attempt to solicit, influence, or entice, any employee or consultant of the Bank or the Company (a) to cease or
reduce his or her relationship with the Bank or the Company, as applicable, or (b) to solicit, influence, entice or in any way divert any customer of the Bank to cease or reduce their business relationship with the Bank;
iii. directly or indirectly solicit, divert, take away or attempt to solicit, divert, or take away any customers or business of the Bank; and
iv. directly or indirectly solicit, divert, or in any other manner persuade or attempt to persuade any supplier or vendor of the Bank or the Company to alter or discontinue its
relationship with the Bank or the Company, as applicable.
b. Notwithstanding
Executive’s obligations under Paragraph 11, Executive shall be entitled to own, as a passive investor, up to five percent (5%) of any publicly traded company.
c. The Bank, the
Company and Executive agree that the scope of these non-compete provisions should be construed broadly, in light of Executive’s in-depth knowledge of the Bank and the Company and his knowledge of finances, strategic plans, marketing plans,
clients, contract terms and other highly confidential information.
d. In the event any
of the restrictive covenants set forth in Paragraph 11(a) are violated, Banner can, at its sole discretion, cease any remaining payments or compensation due to Executive under this Agreement; however, Executive will remain bound by the terms of
the Agreement, including but not limited to the release set forth in Paragraph 5 and the Reaffirmation of Agreement and Supplemental Release of Claims. Banner shall have the right to recover, at any time and in its sole discretion, all or any
portion of the payments and other compensation (of whatever nature) paid to Executive (or the equivalent value thereof, in the case of insurance or other non-monetary payments) after such violation occurred.
e. Executive
acknowledges that it is impossible to measure in money the damages that will accrue to the Bank and the Company if Executive fails to observe and comply with Paragraph 11; therefore, Paragraph 11 may be enforced by an action at law for damages
and by an injunction or other equitable remedies to prohibit the restricted activity. Executive hereby waives the claim or defense that an adequate remedy at law is available to Banner. Nothing set forth herein shall prohibit Banner from
pursuing all remedies available to it.
12. Cooperation with Investigations. Nothing in this Agreement limits, restricts or precludes either Banner or Executive from cooperating with any governmental
agency in the performance of its investigative or other lawful duties. Further, Executive agrees to cooperate fully with Banner, including but not limited to the prosecution or defense of any civil or criminal
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action or other legal proceedings in which Banner determines that Executive has relevant information or knowledge. Such cooperation
shall include, without limitation, communicating with representatives (including attorneys) for Banner, providing truthful testimony in oral or written form, preparing for such testimony with attorneys for Banner, and reviewing documents in
connection with such communications or preparations. After the Separation Date, Banner will compensate Executive at the rate of $350.00 per hour for all time spent by Executive assisting Banner at Banner’s request, and shall reimburse Executive
for necessary expenses reasonably incurred by Executive in connection with such assistance.
13. Communication; Non-disparagement. Executive and Banner shall agree upon a mutually acceptable format and approach for Executive to announce Executive’s
departure.
Executive agrees not to make any disparaging, uncomplimentary or negative remarks about Banner or its
products/services, business affairs or its officers or directors based on or relating to activities that pre-date the execution of this Agreement. Nothing in this paragraph prevents Executive from discussing or disclosing conduct Executive
reasonably believes constitutes a violation of public policy, discrimination, harassment, retaliation, or wage and hour infractions.
Banner agrees not to make any disparaging, uncomplimentary or negative remarks about Executive based on or
relating to activities that pre-date the execution of this Agreement.
14. No Assignments. Executive warrants and represents that Executive has not heretofore assigned or transferred to any person not a party to this Agreement any
released matter or any part or portion thereof and shall defend, indemnify and hold harmless the Bank, the Company, and each of their affiliates, from and against any Claim (including the payment of attorneys’ fees and costs actually incurred
whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer made, purported or claimed.
15. Entire Agreement. Except as specifically identified above pertaining to the Employment Agreement, this Agreement and the Reaffirmation of Agreement and
Supplemental Release of Claims constitutes and contains the entire agreement and final understanding concerning the subject matters addressed herein. It is intended by the parties as a complete and exclusive statement of the terms of their
agreement. It supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof. Any representation, promise or agreement not specifically included in this
Agreement shall not be binding upon or enforceable against either party. This is a fully integrated agreement.
16. Severability. If any provision of this Agreement or the application thereof is held invalid, such invalidity shall not affect other provisions or
applications of the Agreement which can be given effect without the invalid provisions or applications, and to this end the provisions of this Agreement are declared to be severable.
17. Washington Law Governs. This Agreement shall be deemed to have been executed and delivered within the State of Washington, and the rights and obligations of
the
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20. Notice. All notices given hereunder shall be given in writing, shall specifically refer to this Agreement, and shall be personally delivered or sent by
telecopy or other electronic transmission or by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in compliance with the terms hereof.
If notice is mailed, such notice shall be effective three (3) calendar days after mailing, or if notice is personally delivered or sent by telecopy or other electronic transmission, it shall be effective upon receipt.
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If to Executive:
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[Insert]
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If to Banner Bank:
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Banner Bank
Attn: EVP, Human Resources
3001 112th Ave NE, Suite 200
Bellevue, WA 98004
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With a copy to:
Banner Bank
Attn: General Counsel
3001 112th Ave NE, Suite 200
Bellevue, WA 98004
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21. Section 409A Compliance. It is intended that any amounts payable under this
Agreement shall either be exempt from or comply with Section 409A of the Internal Revenue Code (including the Treasury regulations and other published guidance relating thereto) (“Code Section 409A”) so as not to subject Executive to payment of any additional tax, penalty or interest imposed under Code Section 409A. The provisions of this Agreement shall be construed and interpreted to
avoid the imputation of any such additional tax, penalty, or interest under Code Section 409A yet preserve (to the nearest extent reasonably possible) the intended benefit payable to Executive. Notwithstanding the foregoing, Executive
recognizes and acknowledges that Banner has not provided, and is not providing, any tax advice or any guarantee regarding the tax treatment of payments under this Agreement, and Executive is responsible for assessing the tax consequences of
payments, and has had an opportunity to consult with a tax advisor and negotiate a structure of payments under this Agreement. Under no circumstances may the time or schedule of any payment made or benefit provided pursuant to this Agreement be
accelerated or subject to a further deferral except as otherwise permitted or required pursuant to regulations and other guidance issued pursuant to Code Section 409A. Executive does not have any right to make any election regarding the time or
form of any payment due under this Agreement. If any 21-day consideration and seven-day revocation period spans two calendar years, then the Separation Pay shall be paid on the first regularly scheduled pay date in the calendar year immediately
following the year of the termination. For purposes of this Agreement, the term “termination of employment” and any similar phrase means “separation from service” as defined pursuant to Code Section 409A and corresponding regulations. In addition, notwithstanding anything to the contrary in this
Agreement, if at the time Executive’s employment terminates, he is a “specified employee,” as defined for purposes of Code Section 409A, any and all amounts payable under this Agreement on account of such separation from service that would (but
for this provision) be
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payable within six (6) months following the date of termination, shall instead be paid on the next business day following the expiration
of such six (6) month period or, if earlier, upon Executive’s death; to the extent necessary to comply with Code Section 409A and avoid additional tax, penalty, or interest under Code Section 409A.
22. Executive acknowledges
and represents that:
a. The payments described in this Agreement, including those set forth in Paragraph 3(b) of this Agreement, are the sole and exclusive compensation to which Executive is
entitled from Banner and fully satisfy any salary, wages, bonuses, accrued vacation, incentive compensation, commissions, severance benefits, and any and all other benefits or consideration due to Executive.
b. Executive is not aware of any facts that would establish or support any violation by Banner of any federal False Claims Act (or any similar state or federal qui tam statute)
which generally prohibits fraud against the government, or of any federal or state securities laws.
c. Any questions Executive may have had about this Agreement have been answered to Executive’s satisfaction.
d. Executive knowingly and voluntarily signed this Agreement, without coercion or duress, in order to receive the benefits offered through the Agreement.
[signature page follows]
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Signature Page to Separation and Release Agreement
EXECUTED this _____ day of _______, 2023 at _____________ County, Washington.
EXECUTED this _____ day of _______, 2023 at King County, Washington.
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BANNER CORPORATION and BANNER BANK
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By
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Mark J. Grescovich
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President and Chief Executive Officer
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REAFFIRMATION OF AGREEMENT AND SUPPLEMENTAL RELEASE OF CLAIMS
This Reaffirmation of Agreement and Supplemental Release of Claims (“Reaffirmation”) is made and executed by Peter J. Conner
(“Executive”) pursuant to the Separation and Release Agreement (“Agreement”) previously executed by Executive, Banner Bank (“Banner Bank”) and Banner Corporation (“Banner Corporation”).
Reaffirmation and Supplemental Release.
In consideration of the benefits Executive has and will receive under the Agreement, including (as applicable) continued employment through Separation Date and attendant salary and benefits available as result of that employment and the
separation pay and benefits, Executive hereby affirms, accepts, and agrees to be bound by the terms of and representations in the Agreement, as if set forth anew herein, including the confidentiality provisions and restrictive covenants thereof
and including the general waiver and release of claims set forth in the section of the Agreement titled “General Release by Executive”, as of
the date set forth below.
Acknowledgment of Understanding.
Executive acknowledges that Executive has carefully read and fully understands all aspects of this Reaffirmation and that Executive has not relied upon any representations or statements not set forth herein or made by Banner Bank’s or Banner
Corporation’s agents or representatives.
Opportunity to Consider and Seek Legal
Counsel. Executive acknowledges that Executive has been advised to seek legal counsel of Executive’s choice to review this Reaffirmation and its implications, and that Executive enters into this Reaffirmation freely and without duress of
any kind or nature. Executive has been provided the opportunity to consider for
twenty-one (21) days whether to enter this Reaffirmation. Executive has read this
Reaffirmation and has knowingly and voluntarily chosen to enter the Reaffirmation. Executive may revoke this Reaffirmation within seven (7) days of signing. Notice of revocation may be sent to: Kayleen Kohler, EVP Human Resources at
[email protected].
EXECUTED this _____ day of _______, 2024 at ___________ County, Washington.
