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EXHIBIT 10(b)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 27th day of March, 1996, between
Glacier Bancorp, Inc., a corporation incorporated under the laws of the State of
Delaware ("Company"), Glacier Bank FSB, a National corporation and a wholly
owned subsidiary of the Company ("Bank") (collectively, the "Employers"), and
Xxxx X. XxxXxxxxx ("Executive").
RECITALS
A. The Executive presently is the president, Chief Executive Officer
and Chairman of the Bank and of the Company.
B. The parties desire to define and set forth the current duties and
responsibilities of the Executive in all his capacities with the Company, its
subsidiaries and the Bank, provide for contract renewals, and to further induce
the Executive to continue active participation in the business of the Employers.
NOW THEREFORE, in consideration of the mutual agreements herein
contained and for other valuable consideration, the parties agree as follows:
1. Employment. The Employers herein employ the Executive and the Executive
hereby accepts employment upon the terms and conditions hereinafter set
forth.
2. Duties.
(a) The Executive is employed as President/Chief Executive Officer
and Chairman of the Bank and of the Company and his duties and
responsibilities in those capacities are those as set forth in
the document hereto annexed, entitled "President-CEO-Chairman"
and by reference made part of this agreement.
(b) During the term of employment under this agreement, Executive
will apply on a full time basis (allowing for usual vacations
and sick leave) all of his skill and experience to the
performance of his duties in this employment. The Executive
may have other business investments and participate in other
business ventures, provided such activities shall not
interfere or be inconsistent with his duties hereunder.
3. Basic Compensation. For all services rendered by the Executive under
this agreement, the Employer shall pay the Executive a base salary of
$180,000.00 per year.
4. Term. This agreement shall terminate March 27, 1997, the anniversary
date; provided however, on that anniversary date and each anniversary
thereafter the Boards of Directors of the Employers shall consider,
with appropriate corporate documentation thereof, and after taking into
account all relevant factors including Executive's performance
hereunder, renewal of the term of employment under this agreement for
an additional one year and the term of agreement shall be renewed,
unless either the Boards of Directors of the Employers do not approve
such renewal and provide written notice to the Executive of such event,
or the Executive gives written notice to the Employers not less than
thirty (30) days prior to any such anniversary date of the
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Executive's election not to extend the term beyond its then scheduled
expiration date.
5. Covenant not to Compete.
(a) During the term of Executive's employment and for one year
after the termination of such employment, if such employment
is terminated by Employers for cause (as defined under Section
12(b)), or by the Executive (except pursuant to the provisions
of Section 6 following a change in control), Executive will
not, without the prior written approval of the Boards of
Directors of Employers, become an officer, employee, agent,
partner or director of any business enterprise in substantial
direct competition with Employers or any subsidiary of
Employers as the business of Employers or their subsidiaries
may be constituted during the term of Executive's employment
or at the termination thereof.
(b) For the purpose of this paragraph, business enterprise with
which Executive becomes associated as an officer, employee,
agent, partner or director shall be considered in "substantial
direct competition", if such enterprise is a bank, savings and
loan association, credit union or other equivalent financial
institution operating or maintaining an office or branch in
Flathead or Lake or Lincoln or Glacier or Yellowstone
Counties, Montana.
6. Benefits Upon Termination. If the Executive's employment is terminated
subsequent to a Change in Control of the Company by (i) either of the
Employers other than for Cause, Disability, Retirement or as a result
of the Executive's death or (ii) by the Executive for any reason, then
the Employers shall, subject to the provisions of Section 7 hereof, if
applicable:
(a) pay to the Executive, in thirty-six (36) equal monthly
installments beginning with the first day of the month
following the Date of Termination, a cash amount equal to the
product determined by multiplying (i) the Executive's Annual
Compensation by (ii) the lesser of (A) the difference between
the number 65 and the Executive's age in years and fractions
thereof on the Date of Termination, and (B) the number 2.99;
and
(b) maintain and provide for a period ending at the earlier of (i)
three (3) years after the Date of Termination or (ii) the date
of the Executive's full-time employment by another employer
(provided that the Executive is entitled under the terms of
such employment to benefits substantially similar to those
described in this subparagraph (b)), at no cost to the
Executive, the Executive's continued participation in all
group insurance, life insurance, health and accident,
disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination
(other than the Employers' Pension Plan, Profit sharing Plan
and any other retirement plan of the Employers), provided that
in the event that the Executive's participation in any plan,
program or arrangement as provided in subparagraph (b) above
is barred, or during such period any such plan, program or
arrangement is discontinued or the benefits thereunder are
materially reduced, the Employers shall arrange to provide the
Executive with benefits substantially similar to those which
the Executive was entitled to receive under such plans,
programs and arrangements immediately prior to the Date of
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Termination.
7. Limitation of Benefits under Certain Circumstances. If the payments and
benefits pursuant to Section 6 hereof, either alone or together with
other payments and benefits which Executive has the right to receive
from Employers, would constitute a "parachute payment" under Section
280G of the Internal Revenue Code of 1986, as amended ("Code"),
Executive may request that the payments and benefits pursuant to
Section 6 hereof shall be reduced, in the manner determined by the
Executive.
8. Mitigation: Exclusivity of Benefits.
(a) The Executive shall not be required to mitigate the amount of
any benefits hereunder by seeking other employment or
otherwise, nor shall the amount of any such benefits be
reduced by any compensation earned by the Executive as a
result of employment by another employer after the Date of
Termination or otherwise except as specifically provided in
Section 6(b).
(b) The specific arrangements referred to herein are not intended
to exclude any other benefits which may be available to the
Executive upon a termination of employment with Employers
pursuant to employee benefit plans of the Employers or
otherwise.
9. Withholding. All payments required to be made by the Employers
hereunder to the Executive shall be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as the
Employers may reasonably determine should be withheld pursuant to any
applicable law or regulation.
10. Assignability. The Employers may assign this Agreement and their rights
hereunder in whole, but not in part, to any corporation, bank or other
entity with or into which either of the Employers may hereafter merge
or consolidate or to which either of the Employers may transfer all or
substantially all of their respective 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 Employers hereunder
as fully as if it had been originally made a party hereto, but may not
otherwise assign this Agreement or its rights hereunder. The Executive
may not assign or transfer this Agreement or any rights or obligations
hereunder.
11. Nature of Employment and Obligations.
(a) Nothing contained herein shall be deemed to create other than
a terminable at will employment relationship between the
Employers and the Executive, and the Employers may terminate
the Executive's employment at any time, subject to providing
any payments specified herein in accordance with the terms
hereof.
(b) Nothing contained herein shall create or require the Employers
to create a trust of any kind to fund any benefits which may
be payable hereunder, and to the extent that the Executive
acquires a right to receive benefits from the Employers
hereunder, such right shall be no greater than the right of
any unsecured general creditor of the Employers.
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12. Definitions. For the purposes of this agreement the following words and
terms shall have the following meanings:
(a) Annual Compensation. The Executive's "Annual Compensation"
shall be deemed to mean the highest level of compensation paid
to the Executive by the Employers or any subsidiary thereof
during any of the three calendar years ending during the
calendar year in which the Date of Termination occurs,
including base salary and bonuses under any employee benefit
plans of the Employers.
(b) Cause. Termination by the Employers of the Executive's
employment for "Cause" shall mean termination because of
personal dishonesty, incompetence, willful misconduct, breach
of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any
law, rule or regulation other than traffic violations or
similar offenses) or final cease-and-desist order or material
breach of any provision of this Agreement. For purposes of
this paragraph, no act or failure to act on the Executive's
part shall be considered "willful" unless done, or omitted to
be done, by the Executive not in good faith and without
reasonable belief that the Executive's action or omission was
in the best interest of the Employers.
(c) Change in Control of the Company. "Change in Control of the
Company" shall mean a change in control of a nature that would
be required to be reported in response to Item 5(f) of
Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act")
or any successor thereto; provided that, without limitation,
such a change in control shall be deemed to have occurred if
(i) any "person" (as such term is used in section 13(d) and
14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the company
representing 25% or more of the combined voting power of the
Company's then outstanding securities; or (ii) during any
period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of
Company cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who
were directors at the beginning of the period.
(d) Date of Termination. "Date of Termination" shall mean (i) if
the Executive's employment is terminated for Cause or for
Disability, the date specified in the Notice of Termination,
and (ii) if the Executive's employment is terminated for any
other reason, the date on which a Notice of Termination is
given or as specified in such Notice.
(e) Disability. Termination by the Employers of the executive's
employment based on "Disability" shall mean termination
because of the Executive's failure to perform the normal and
usual duties of his employment with the Employers for one
hundred and thirty (130) consecutive business days as a result
of the Executive's incapacity due to physical or mental
illness.
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(f) Notice of Termination. Any purported termination by the
employers for Cause, Disability or Retirement or by the
Executive for any reason shall be communicated by written
"Notice of Termination" to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment
under the provision so indicated.
(g) Retirement. Termination by the Employers of the Executive's
employment based on "Retirement" shall mean voluntary
termination by the Executive in accordance with the Employers'
retirement policies, including early retirement, generally
applicable to their salaried employees.
13. Regulatory Actions. The following provisions shall be applicable to the
parties only to the extent that they are deemed to be required to be
included in severance agreements between a savings association and its
employees pursuant to Section 563.39(b) of the Regulations Applicable
to all Savings Associations, 12 C.F.R. Section 563.39(b), or any
successor thereto, and under such circumstances shall be deemed to be
controlling in the event of a conflict with any other provision of this
Agreement, including without limitation Section 3 hereof.
(a) If Executive is suspended from office and/or
temporarily prohibited from participating in the conduct of
the Bank's affairs pursuant to notice served under Section
8(e)(3) or Section 8(g)(1) of the Federal Deposit Insurance
Act ("FDIC") 12 U.S.C. Section 1818(e)(3) and Section
1818(g)(1), the Bank's obligations under this Agreement shall
be suspended as of the date of service, unless stayed by
appropriate proceedings. If the charges in the notice are
dismissed, the Bank may, in its discretion: (i) pay Executive
all or part of the compensation withheld while its obligations
under this Agreement were suspended, and (ii) reinstate (in
whole or in part) any of its obligations which were suspended.
(b) If Executive is removed from office and/or permanently
prohibited from participating in the conduct of the Bank's
affairs by an order issued under Section S(e)(4) or Section
8(g)(1) of the FDIA (12 U.S.C. Sections 1818(e)(4) and
(g)(1), all obligations of the Bank under this Agreement shall
terminate as of the effective date of the order, but vested
rights of Executive and the Bank as of the date of termination
shall not be affected.
(c) If the Bank is in default, as defined in Section 3(x)(1) of
the FDIA (12 U.S.C. Section 1813(x)(1)), all obligations under
this Agreement shall terminate as of the date of default, but
vested rights of Executive and the Bank as of the date of
termination shall not be affected.
(d) All obligations under this Agreement shall be terminated
pursuant to 12 C.F.R. Section 563.39(b)(5) (except to the
extent that it is determined that continuation of the
Agreement for the continued operation of the Bank is
necessary): (i) by the Director of the Office of Thrift
Supervision ("OTS"), or his/her designee, at the time the
Federal Deposit Insurance Corporation ("FDIC") or Resolution
Trust Corporation enters into an agreement to provide
assistance to or on behalf of the
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Bank under the authority contained in Section 13(3) of the
FDIC (12 U.S.C. Section 1823(c)); or (ii) by the Director of
the OTS, or his/her designee, at the time the Director of
his/her designee approves a supervisory merger to resolve
problems related to operation of the Bank or when the Bank is
determined by the Director of the OTS to be in an unsafe or
unsound condition, but vested rights of Executive and the Bank
as of the date of termination shall not be affected.
14. Regulatory Prohibition. Notwithstanding any other provision of this
Agreement to the contrary, the obligations of the Company and the Bank
hereunder shall be suspended in the event that the FDIC prohibits or
limits, by regulation or order, any payment hereunder pursuant to
Section 18(k) of the FDIA (12 U.S.C. Section 1828(k)).
15. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered or mailed by
certified or registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth below:
To the Employers: Glacier Bancorp, Inc.
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
To the Executive: Xxxx X. XxxXxxxxx
000-0xx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
16. Amendment; Waiver. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and such officer or
officers as may be specifically designated by the Boards of Directors
of the Employers to sign on their behalf. No waiver by any party hereto
at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time.
17. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Montana.
18. Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and
effect.
19. Headings. The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement this 27th
day of March, 1996, signed by the officers of the Employers as authorized and
designed by the Boards of Directors.
Attest: GLACIER BANCORP, INC.
/s/ Xxxx X. Xxxxxxx By:/s/ Xxxxxxx X. Xxxxxxxx
----------------------- ------------------------------
Xxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxx
Assistant Secretary Executive Vice-President
Attest: GLACIER BANK, FSB
/s/ Xxxx X. Xxxxxxx By:/s/ Xxxxxxx X. Xxxxxxxx
----------------------- ------------------------------
Xxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxx
Assistant Secretary Executive Vice-President
/s/ Xxxx X. XxxXxxxxx
-------------------------------
Xxxx X. XxxXxxxxx
Witness:
-----------------------------------
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PRESIDENT/CEO/CHAIRMAN
As President, 1. Oversee the operations of Glacier Bancorp, Inc. and
Glacier Bank FSB to accomplish the goals set at our annual planning
session in a concise and efficient manner. 2. Have Glacier Bancorp, Inc.
and Glacier Bank place in the top quartile in:
a) Peer group
b) A return on assets of 1%
c) A 15% return on equity.
As Chairman, report directly to the Board of Directors, the Bank and Holding
Company's highest authority. The Board directs the activities of the Bank
determining the strategic objectives and the source of all its policies.
Specific responsibilities of the board include (1) selection and supervision of
the President. 2. Establish strategic objectives and long-term goals, 3.
Determine Bank policies, 4. Provide overall direction for the Bank, 5. Monitor
short-term plans and budgets, 6. Monitor Bank performance and 7. Spokesman for
Glacier Bancorp and Glacier Bank.
RESPONSIBLE TO PRICE LOANS TO MAXIMIZE GROSS INCOME AND BE COMPETITIVE IN MARKET
AREAS.
Performance Standards:
1. The net interest margin is in the top quartile on the FHLB
12th District peer group comparison with all Montana Savings
and Loans and 12th District 250-500 sized thrifts/banks.
2. The commercial loan officer is directed to originate
profitable loans and the real estate and consumer loan
departments are directed to increase quality loan volume.
RESPONSIBLE FOR SUPERVISION OF LIABILITY MANAGEMENT.
Performance Standards:
1. Through supervising liability manager, the price of savings
and checking maintains a deposit base with a 5-10% growth and
is priced to be in the median to low quartile peer group.
2. Glacier Bank is in the lowest quartile of FHLB 12th District
peer group comparison with all Montana S&L's and $200-300
million sized thrifts.
3. Oversees liquidity investment portfolio management to maximize
yield and protect principal with concern in matching assets
and liabilities.
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RESPONSIBLE FOR NON-INTEREST INCOME
Performance Standards:
1. Non-interest income is increased over the previous year.
2. Bank is in highest quartile in non-interest income.
RESPONSIBLE FOR SUPERVISION OF ALL MANAGERS.
Performance Standards:
1. All business and regulations are kept current and are
communicated to managers and staff within one week of receipt
of regulation.
2. A branch managers' meeting is conducted once a quarter.
3. Sets performance standards for management employees and
conducts a performance evaluation of senior officers,
department heads and branch managers annually.
4. Makes hiring or promotion decisions at management level.
RESPONSIBLE FOR MEANINGFUL MANAGEMENT REPORTS.
Performance Standards:
1. In supervising the Chief Financial Officer, the following
reporting is accomplished: a) Asset-Liability report
quarterly; b) More accurate computation of net interest spread
daily weighted average; c) 10-K's and 10'Q's are prepared and
sent out during regulation time frame.
2. Monthly operations summary is out the Friday before Board
meeting.
RESPONSIBLE FOR STOCKHOLDER RELATIONS.
Performance Standards:
1. Preparation of quarterly reporting is done on time. Annual
report is audited to report to public within 35 days of fiscal
year end. Proxy and Annual report is completed 25 days before
annual meeting.
2. Information is always current to answer any stockholders
questions.
3. Meet with security analysts from time to time and discuss
financials.
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4. Stock information is coordinated with stock transfer agent.
5. News releases are given out within 24 hours of decisions
RESPONSIBLE FOR THE ADMINISTRATION AND SERVING AS TRUSTEE OF PROFIT SHARING AND
PENSION PLANS.
Performance Standards:
1. Administration committee meets quarterly regarding
investments.
2. Reviews investment and trustee service reports quarterly and
annually. The trustee service agents are supplied with
information as needed.
3. New regulations, as required and provided by plans' trustee,
are reviewed and put in place.
RESPONSIBLE TO BOARD OF DIRECTORS FOR PLANNING AND IMPLEMENTING BOARD
OBJECTIVES AND GOALS.
Performance Standards:
1. Analyzes and directs new projects i.e. acquisitions/ mergers;
assigns responsibilities and tasks to appropriate personnel.
2. Attends workshops/conferences regarding our industry, evaluate
Glacier Bancorp, Inc. and Glacier Bank's standing in industry,
and provides updated information to Board of Directors for
planning.
3. Subscribes to informational material to assist in forecasting
and monitoring, i.e. Sheshunoff.
RESPONSIBLE FOR PLANNING
Performance standards:
1. Coordinate the development of long-range and short-range goals
with the Board of Directors and senior management in January
each year.
2. Coordinates and approves the administration of all major bank
policies and procedures.
3. Review and approve all major physical plant additions or
alterations within the system.
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RESPONSIBLE FOR INITIATING, DIRECTING AND DEVELOPING STRATEGIES FOR EXTERNAL
GROWTH POTENTIAL IN ACQUISITION/BRANCHING ACTIVITIES.
Performance standards:
1. Initiates strategies and reports on timely basis.
2. Uses established external relationships for assistance.
3. Arranges meeting with appropriate participants.
RESPONSIBLE FOR MANAGEMENT SUCCESSION
Performance standards:
1. Assure the selections and development of the Bank's senior
management.
2. Provide salary administration, management incentive,
department performance objectives, to insure team efforts
toward the attainment of Bank, Branch, and department goals.
RESPONSIBLE FOR COMMUNICATIONS THROUGHOUT BANK SYSTEM
Performance standards:
1. Provides leadership to Board of Directors and is liaison
between the Board and Management team in disseminating
information, establishing objectives and in appraising results
of activities of the Bank.
2. Assures that any changes in objectives, policies and plans are
effectively explained to operating personnel by means of
memos, letters, or staffing meetings.
3. Encourages free interchange of operational and personnel
information, opinions, ideas and recommendations.
RESPONSIBLE FOR MAINTAINING EXTERNAL RELATIONSHIP WITH FEDERAL, STATE, AND LOCAL
GOVERNMENTS AND WITH CUSTOMERS.
Performance standards:
1. Stays abreast of governmental issues or regulations in order
to have input in the area affecting the financial industry.
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RESPONSIBLE FOR REPRESENTING BANK AND PROVIDING LEADERSHIP IN KEY
COMMUNITY ACTIVITIES MAINTAINING A PROPER RESPONSIBLE CITIZEN STATURE
FOR THE BANK.
Performance standards:
1. Is involved in the development and growth of the community
through local committees.
2. Is available for committee work or directorship of civic,
social, or charitable organizations.
3. Encourages other Glacier Bancorp and Glacier Bank employees to
belong to organizations whereby appropriate networking is an
opportunity for Glacier Bancorp and Glacier Bank's growth or
goodwill.
RESPONSIBLE FOR SAFETY AND SOUNDNESS AND COMPLIANCE OF GLACIER BANCORP,
INC. AND GLACIER BANK
Performance standards:
1. Conduct assignments through internal auditor and compliance
officers, to staff members responsible for providing
information as requested by the OTS.
2. Assures internal auditor conducts routine compliance meetings.
3. Assigns specific task force committees to assure new
compliance issues such as "fair lending" are implemented.
4. Provide information and oversee policies with regards to
conflict of interest between outside business affiliations and
officers, directors and major stockholders.
5. Assures the bank(s) has a current code of ethics, xxxxxxx
xxxxxxx and reviews it with the Board and staff in April of
each year.
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