EXHIBIT 10(b)
EMPLOYMENT AGREEMENT
AGREEMENT between Glacier Bancorp, Inc., hereinafter called "Company",
and Xxxxxxx X. Xxxxxxxx, hereinafter called "Executive",
RECITALS
A. Executive has served as President and Chief Executive Officer of the
Company.
B. The Company desires Executive to continue his employment at the Company
under the terms and conditions of this Agreement.
C. Executive desires to continue his employment at the Company under the
terms and conditions of this Agreement.
AGREEMENT
1. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts employment by the Company on the terms and conditions set forth
in this Agreement. Executive's title will be President and Chief
Executive Officer of the Company. During the term of this Agreement,
Executive will serve as a director of the Company and of the Banks.
2. TERM. The term of this Agreement ("Term") is one year, beginning on
January 1, 2002.
3. DUTIES. The Company will employ Executive as its President and Chief
Executive Officer. Executive will faithfully and diligently perform his
assigned duties, which are as follows:
(a) Company Performance. Executive will be responsible for all
aspects of the Company's performance, including without
limitation, directing that daily operational and managerial
matters are performed in a manner consistent with the
Company's policies.
(b) Development and Preservation of Business. Executive will be
responsible for the development and preservation of banking
relationships and other business development efforts
(including appropriate civic and community activities).
(c) Report to Board. Executive will report directly to the
Company's board of directors. The Company's board of directors
may, from time to time, modify Executive's title or add,
delete, or modify Executive's performance responsibilities to
accommodate management succession, as well as any other
management objectives of the Company. Executive will assume
any additional positions, duties and responsibilities as may
reasonably be requested of him with
or without additional compensation, as appropriate and
consistent with Sections 3(a) and 3(b) of this Agreement.
4. EXTENT OF SERVICES. Executive will devote all of his working time,
attention and skill to the duties and responsibilities set forth in
Section 3. To the extent that such activities do not interfere with his
duties under Section 3, Executive may participate in other businesses
as a passive investor, but (a) Executive may not actively participate
in the operation or management of those businesses, and (b) Executive
may not, without the Company's prior written consent, make or maintain
any investment in a business with which the Company or its subsidiaries
has an existing competitive or commercial relationship.
5. COMPANY BOARD. During the term, the Company will use its best efforts
to nominate and recommend Executive for election to the Company's board
of directors.
6. SALARY. Executive will receive an annual salary of $240,000.00, to be
paid in accordance with the Company's regular payroll schedule.
Subsequent salary increases are subject to the Company's annual review
of Executive's compensation and performance.
7. INCENTIVE COMPENSATION. During the Term, the Company's board of
directors will determine the amount of bonus to be paid by the Company
to Executive for that year. In making this determination, the Company's
board of directors will consider factors such as Executive's
performance of his duties and the safety, soundness and profitability
of the Company. Executive's bonus will reflect Executive's contribution
to the performance of the Company during the year, also taking into
account the nature and extent of incentive bonuses paid to comparable
senior officers at the Company. This bonus will be paid to Executive no
later than January 31 of the year following the year in which the bonus
is earned by Executive.
8. INCOME DEFERRAL. Executive will be eligible to participate in any
program available to the Company's senior management for income
deferral, for the purpose of deferring receipt of any or all of the
compensation he may become entitled to under this Agreement.
9. VACATION AND BENEFITS.
(a) Vacation and Holidays. Executive will receive four weeks of
paid vacation each year in addition to all holidays observed
by the Company and its subsidiaries. Executive may carry over,
in the aggregate, up to four weeks of unused vacation to a
subsequent year. Any unused vacation time in excess of four
weeks will not accumulate or carry over from one calendar year
to the next. Each calendar year, Executive shall take not less
than one (1) week vacation.
(b) Benefits. Executive will be entitled to participate in any
group life insurance, disability, health and accident
insurance plans, profit sharing and pension plans and in other
employee fringe benefit programs the Company may have in
effect from time to time for its similarly situated employees,
in accordance with and subject to any policies adopted by the
Company's board of directors with respect to the plans or
programs, including without limitation, any incentive or
employee stock option plan, deferred compensation plan, 401(k)
plan, and Supplemental
Executive Retirement Plan (SERP). The Company through this
Agreement does not obligate itself to make any particular
benefits available to its employees.
(c) Business Expenses. The Company will reimburse Executive for
ordinary and necessary expenses which are consistent with past
practice at the Company (including, without limitation,
travel, entertainment, and similar expenses) and which are
incurred in performing and promoting the Company's business.
Executive will present from time to time itemized accounts of
these expenses, subject to any limits of the Company policy or
the rules and regulations of the Internal Revenue Service.
10. TERMINATION OF EMPLOYMENT.
(a) Termination by the Company for Cause. If the Company
terminates Executive's employment for Cause (defined below)
before this Agreement terminates, the Company will pay
Executive the salary earned and expenses reimbursable under
this Agreement incurred through the date of his termination.
Executive will have no right to receive compensation or other
benefits for any period after termination under this Section
10(a).
(b) Other Termination by the Company. If the Company terminates
Executive's employment without Cause before this Agreement
terminates, or Executive terminates his employment for Good
Reason (defined below), the Company will pay Executive for the
remainder of the Term the compensation and other benefits he
would have been entitled to if his employment had not
terminated.
(c) Death or Disability. This Agreement terminates (1) if
Executive dies or (2) if Executive is unable to perform his
duties and obligations under this Agreement for a period of 90
consecutive days as a result of a physical or mental
disability arising at any time during the term of this
Agreement, unless with reasonable accommodation Executive
could continue to perform his duties under this Agreement and
making these accommodations would not pose an undue hardship
on the Company. If termination occurs under this Section
10(c), Executive or his estate will be entitled to receive all
compensation and benefits earned and expenses reimbursable
through the date Executive's employment terminated.
(d) Termination Related to a Change in Control.
(1) Termination by Company. If the Company, or its
successor in interest by merger, or its transferee in
the event of a purchase in an assumption transaction
(for reasons other than Executive's death,
disability, or Cause) (1) terminates Executive's
employment within 3 years following a Change in
Control (as defined below), or (2) terminates
Executive's employment before the Change in Control
but on or after the date that any party either
announces or is required by law to announce any
prospective Change in Control transaction and a
Change in Control occurs within six months after the
termination, the Bank will provide Executive with the
greater of (1) the payment and benefits described in
Section 10(d)(3) below, or (2) the compensation and
other benefits he would have been entitled to for the
remainder of the Term if his employment had not been
terminated.
(2) Termination by Executive. If Executive terminates
Executive's employment, with or without Good Reason,
within three years following a Change in Control, the
Company will provide Executive with the payment and
benefits described in Section 9(d)(3).
(3) Payments. If Section 10(d)(1) or (2) is triggered in
accordance with its terms, the Company will: (i) pay
Executive in 36 monthly installments in an amount
equal to 2.99 times the Executive's annual salary
(determined as of the day before the date Executive's
employment was terminated) and (ii) maintain and
provide for 2.99 years following Executive's
termination, at no cost to Executive, the benefits
described in Section 9(b) to which Executive is
entitled (determined as of the day before the date of
such termination); but if Executive's participation
in any such benefit is thereafter barred or not
feasible, or discontinued or materially reduced, the
Company will arrange to provide Executive with either
benefits substantially similar to those benefits or a
cash payment of substantially similar value in lieu
of the benefits.
(e) Limitations on Payments Related to Change in Control. The
following apply notwithstanding any other provision of this
Agreement:
(1) the total of the payments and benefits described in
Section 10(d)(3) will be less than the amount that
would cause them to be a "parachute payment" within
the meaning of Section 280G(b)(2)(A) of the Internal
Revenue Code;
(2) the payment and benefits described in Section
10(d)(3) will be reduced by any compensation (in the
form of cash or other benefits) received by Executive
from the Company or its successor after the Change in
Control; and
(3) Executive's right to receive the payments and
benefits described in Section 10(d)(3) terminates (i)
immediately if before the Change in Control
transaction closes, Executive terminates his
employment without Good Reason, or the Company
terminates Executive's employment for Cause, or (ii)
three years after a Change of Control occurs.
(f) Return of Bank Property. If and when Executive ceases, for any
reason, to be employed by the Company, Executive must return
to the Company all keys, pass cards, identification cards and
any other property of the Company. At the same time, Executive
also must return to the Company all originals and copies
(whether in memoranda, designs, devices, diskettes, tapes,
manuals, and specifications) which constitute proprietary
information or material of the Company and its subsidiaries.
The obligations in this paragraph include the return of
documents and other materials which may be in his desk at
work, in his car, in place of residence, or in any other
location under his control.
(g) Cause. "Cause" means any one or more of the following:
(1) Willful misfeasance or gross negligence in the
performance of Executive's duties;
(2) Conviction of a crime in connection with his duties;
(3) Conduct demonstrably and significantly harmful to the
Company, as reasonably determined on the advice of
legal counsel by the Company's board of directors; or
(4) Permanent disability, meaning a physical or mental
impairment which renders Executive incapable of
substantially performing the duties required under
this Agreement, and which is expected to continue
rendering Executive so incapable for the reasonably
foreseeable future.
(h) Good Reason. "Good Reason" means only any one or more of the
following:
(1) Reduction of Executive's salary or reduction or
elimination of any compensation or benefit plan
benefiting Executive, unless the reduction or
elimination is generally applicable to substantially
all Company employees (or employees of a successor or
controlling entity of the Company) formerly
benefited;
(2) The assignment to Executive without his consent of
any authority or duties materially inconsistent with
Executive's position as of the date of this
Agreement;
(3) The material breach of this Agreement by the Company,
or
(4) A relocation or transfer of Executive's principal
place of employment outside Flathead County, Montana.
(i) Change in Control. "Change in Control" means a change "in the
ownership or effective control" or "in the ownership of a
substantial portion of the assets" of the Company, within the
meaning of Section 280G of the Internal Revenue Code.
11. CONFIDENTIALITY. Executive will not, after the date this Agreement was
signed, including during and after its Term, use for his own purposes
or disclose to any other person or entity any confidential business
information concerning the Company or its business operations or that
of its subsidiaries, unless (1) the Company consents to the use or
disclosure of confidential information; (2) the use or disclosure is
consistent with Executive's duties under this Agreement, or (3)
disclosure is required by law or court order. For purposes of this
Agreement, confidential business information includes, without
limitation, trade secrets (as defined under the Montana Uniform Trade
Secrets Act, Montana Code Section 30-14-402), various confidential
information on investment management practices, marketing plans,
pricing structure and technology of either the Company or its
subsidiaries. Executive will also treat the terms of this Agreement as
confidential business information.
12. NONCOMPETITION. During the Term of this Agreement and for a period of
three years after Executive's employment with the Company has
terminated, Executive will not,
directly or indirectly, as a shareholder, director, officer, employee,
partner, agent, consultant, lessor, creditor or otherwise:
(a) provide management, supervisory or other similar services to
any person or entity engaged in any business in counties in
which the Company or its subsidiaries may have a presence
which is competitive with the business of the Company or a
subsidiary as conducted during the term of this Agreement or
as conducted as of the date of termination of employment,
including any preliminary steps associated with the formation
of a new bank.
(b) persuade or entice, or attempt to persuade or entice any
employee of the Company or a subsidiary to terminate his/her
employment with the Company or a subsidiary.
(c) persuade or entice or attempt to persuade or entice any person
or entity to terminate, cancel, rescind or revoke its business
or contractual relationships with the Company or its
subsidiaries.
13. ENFORCEMENT.
(a) The Company and Executive stipulate that, in light of all of
the facts and circumstances of the relationship between
Executive and the Company, the agreements referred to in
Sections 11 and 12 (including without limitation their scope,
duration and geographic extent) are fair and reasonably
necessary for the protection of the Company and its
subsidiaries confidential information, goodwill and other
protectable interests. If a court of competent jurisdiction
should decline to enforce any of those covenants and
agreements, Executive and the Company request the court to
reform these provisions to restrict Executive's use of
confidential information and Executive's ability to compete
with the Company to the maximum extent, in time, scope of
activities and geography, the court finds enforceable.
(b) Executive acknowledges the Company will suffer immediate and
irreparable harm that will not be compensable by damages alone
if Executive repudiates or breaches any of the provisions of
Sections 11 or 12 or threatens or attempts to do so. For this
reason, under these circumstances, the Company, in addition to
and without limitation of any other rights, remedies or
damages available to it at law or in equity, will be entitled
to obtain temporary, preliminary and permanent injunctions in
order to prevent or restrain the breach, and the Company will
not be required to post a bond as a condition for the granting
of this relief.
14. COVENANTS. Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 11 and 12 and
that the Company is entitled to require him to comply with these
Sections. These Sections will survive termination of this Agreement.
Executive represents that if his employment is terminated, whether
voluntarily or involuntarily, Executive has experience and capabilities
sufficient to enable Executive to obtain employment in areas which do
not violate this Agreement and that the Company's enforcement of a
remedy by way of injunction will not prevent Executive from earning a
livelihood.
15. ARBITRATION.
(a) Arbitration. At either party's request, the parties must
submit any dispute, controversy or claim arising out of or in
connection with, or relating to, this Agreement or any breach
or alleged breach of this Agreement, to arbitration under the
American Arbitration Association's rules then in effect (or
under any other form of arbitration mutually acceptable to the
parties). A single arbitrator agreed on by the parties will
conduct the arbitration. If the parties cannot agree on a
single arbitrator, each party must select one arbitrator and
those two arbitrators will select a third arbitrator. This
third arbitrator will hear the dispute. The arbitrator's
decision is final (except as otherwise specifically provided
by law) and binds the parties, and either party may request
any court having jurisdiction to enter a judgment and to
enforce the arbitrator's decision. The arbitrator will provide
the parties with a written decision naming the substantially
prevailing party in the action. This prevailing party is
entitled to reimbursement from the other party for its costs
and expenses, including reasonable attorneys' fees.
(b) Governing Law. All proceedings will be held at a place
designated by the arbitrator in Flathead County, Montana. The
arbitrator, in rendering a decision as to any state law
claims, will apply Montana law.
(c) Exception to Arbitration. Notwithstanding the above, if
Executive violates Section 11 or 12, the Company will have the
right to initiate the court proceedings described in Section
13(b), in lieu of an arbitration proceeding under this Section
15.
16. MISCELLANEOUS PROVISIONS.
(a) Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties concerning its
subject matter and supersedes all prior agreements,
correspondence, representations, or understandings between the
parties relating to its subject matter.
(b) Binding Effect. This Agreement will bind and inure to the
benefit of the Company's, its subsidiaries' and Executive's
heirs, legal representatives, successors and assigns.
(c) Litigation Expenses. If either party successfully seeks to
enforce any provision of this Agreement or to collect any
amount claimed to be due under it, this party will be entitled
to reimbursement from the other party for any and all of its
out-of-pocket expenses and costs including, without
limitation, reasonable attorneys' fees and costs incurred in
connection with the enforcement or collection.
(d) Waiver. Any waiver by a party of its rights under this
Agreement must be written and signed by the party waiving its
rights. A party's waiver of the other party's breach of any
provision of this Agreement will not operate as a waiver of
any other breach by the breaching party.
(e) Assignment. The services to be rendered by Executive under
this Agreement are unique and personal. Accordingly, Executive
may not assign any of his rights or duties under this
Agreement.
(f) Amendment. This Agreement may be modified only through a
written instrument signed by both parties.
(g) Severability. The provisions of this Agreement are severable.
The invalidity of any provision will not affect the validity
of other provisions of this Agreement.
(h) Governing Law and Venue. This Agreement will be governed by
and construed in accordance with Montana law, except to the
extent that certain regulatory matters may be governed by
federal law. The parties must bring any legal proceeding
arising out of this Agreement in Flathead County, Montana.
(i) 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 taken together will constitute one and the
same instrument.
Signed this 28th day of January, 2002.
GLACIER BANCORP, INC.
By: /s/ Xxxx X. XxxXxxxxx
-------------------------
Its Chairman
Attest:
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Secretary
EXECUTIVE
By: /s/ Xxxxxxx X. Xxxxxxxx
