Exhibit 10.3
FIRST NATIONAL BANK OF XXXXXX
EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXXX
THIS EMPLOYMENT AGREEMENT (this "Agreement"), signed as of May 31, 2006,
between FIRST NATIONAL BANK OF XXXXXX (the "Bank") and Xxxxxxx X. Xxxxxxx
("Executive") and ratified by GLACIER BANCORP, INC. ("GBCI"), takes effect on
the effective date of the pending Merger (the "Effective Date") referenced
below.
RECITALS
A. The Bank has entered into a Plan and Agreement Merger (the "Merger
Agreement") with GBCI, acting on its own behalf and on behalf of a national
banking association to be formed by GBCI (the "New Bank"). Pursuant to the
terms of the Merger Agreement, the Bank will merge with and into the New
Bank, and the combined bank will become a wholly owned subsidiary of GBCI
(the "Merger").
B. Throughout this Agreement, for periods after the Effective Date, references
to "the Bank" mean the combined bank formed pursuant to the Merger
Agreement.
C. Executive presently serves as President and Chief Executive Officer of the
Bank and will continue to do so until the Effective Date.
D. GBCI and the Bank desire Executive to be employed by the Bank from and
after the Effective Date, under the terms and conditions of this Agreement.
E. Executive desires to be employed by the Bank from and after the Effective
Date, under the terms and conditions of this Agreement.
F. This Agreement supercedes any and all other employment or similar
agreements that may currently be in effect for Executive.
AGREEMENT
In consideration of the promises set forth in this Agreement, the parties
agree as follows.
1. EMPLOYMENT. The Bank agrees to employ Executive, and Executive accepts
employment by the Bank on the terms and conditions set forth in this
Agreement. Executive's title will be President and Chief Executive Officer
of the Bank.
2. EFFECTIVE DATE AND TERM.
a. Term. The term of this Agreement ("Term") is three years, beginning on
the Effective Date.
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b. Abandonment or Termination of the Merger. This Agreement is void if
the Merger Agreement is terminated for any reason.
3. DUTIES. The Bank will employ Executive as its President and Chief Executive
Officer. Executive will faithfully and diligently perform the duties
assigned to him, which duties will be consistent with his title and
position. Executive will report directly to GBCI's President and Chief
Executive Officer. The Bank's or GBCI's board of directors may, from time
to time, modify Executive's performance responsibilities to accommodate
management objectives of the Bank or of GBCI. 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 his title and position.
4. EXTENT OF SERVICES. Executive will devote all of his working time,
attention and skill to the duties and responsibilities referenced 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 Bank's prior written consent, make or maintain any investment
in a business with which the Bank and/or GBCI has an existing competitive
or commercial relationship.
5. SALARY. For the period beginning on the Effective Date and ending December
31, 2006, Executive will receive an annualized salary of $77,160. For the
period beginning January 1, 2007 and ending December 31, 2007, Executive
will receive an annual salary of $86,000. Executive's salary will be paid
in accordance with the Bank's regular payroll schedule. Subsequent salary
increases are subject to the Bank's annual review of Executive's
compensation and performance. Executive will not receive additional
compensation for his service on the Bank's board of directors.
6. INCENTIVE COMPENSATION.
a. For 2006. On January 31, 2007, Executive will receive a bonus of
$23,000, unless prior to such date Executive's employment has been
terminated pursuant to Section 8(a) of this Agreement.
b. Remaining Years in Term. For the year ending December 31, 2007 and
subsequent years in the Term, Executive's bonus will be determined in
accordance with GBCI's Bank President Short-Term Incentive Plan. In
addition, Executive will be eligible to participate in GBCI's Bank
President Long-Term Incentive Plan.
7. VACATION AND BENEFITS.
a. Vacation and Holidays. Executive will receive four weeks of paid
vacation each year. Executive's ability to carry over or accumulate
vacation will be governed by the Bank's and/or GBCI's applicable
policies.
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b. Benefits. Executive will be entitled to participate in any group life
insurance, disability, health and accident insurance plans, profit
sharing plan and in other employee fringe benefit programs the Bank or
GBCI may have in effect from time to time for its similarly situated
employees, in accordance with and subject to any policies adopted by
the Bank's or GBCI's board of directors with respect to the plans or
programs, including without limitation, any incentive or employee
stock option plan, deferred compensation plan and 401(k) plan. Neither
the Bank nor GBCI through this Agreement obligates itself to make any
particular benefits available to its employees.
c. Business Expenses. The Bank will reimburse Executive for ordinary and
necessary expenses which are consistent with past practice at the Bank
(including, without limitation, travel, entertainment, and similar
expenses) and which are incurred in performing and promoting the
Bank's business. Executive will present from time to time itemized
accounts of these expenses, subject to any limits of Bank policy or
the rules and regulations of the Internal Revenue Service.
8. TERMINATION OF EMPLOYMENT.
a. Termination By Bank for Cause. If the Bank terminates Executive's
employment for Cause (defined below) or Executive terminates his
employment without Good Reason (defined below) before this Agreement
terminates, the Bank 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
8(a).
b. Other Termination By Bank. If the Bank terminates Executive's
employment without Cause before this Agreement terminates, or
Executive terminates his employment for Good Reason, the Bank will pay
Executive a lump sum payment equal to one times Executive's annual
base salary at the time of termination.
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 Bank. If
termination occurs under this Section 8(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. Return of Bank Property. If and when Executive ceases, for any reason,
to be employed by the Bank, Executive must return to the Bank all
keys, pass cards, identification cards and any other property of the
Bank or GBCI. At the same time, Executive also must return to the Bank
all originals and copies (whether in
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hard copy, electronic or other form) of any documents, drawings,
notes, memoranda, designs, devices, diskettes, tapes, manuals, and
specifications which constitute proprietary information or material of
the Bank or GBCI. The obligations in this paragraph include the return
of documents and other materials that may be in his desk at work, in
his car, in place of residence, or in any other location under his
control.
e. 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; or
(3) Conduct demonstrably and significantly harmful to the Bank, as
reasonably determined on the advice of legal counsel by the
Bank's board of directors.
f. 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 Bank employees (or employees of a successor or controlling
entity of the Bank) 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) A relocation or transfer of Executive's principal place of
employment that would require Executive to commute on a regular
basis more than sixty (60) miles each way from the Bank's present
main office location.
9. 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 Bank or GBCI or their business operations,
unless (1) the Bank or GBCI consents to the use or disclosure of their
respective confidential information; (2) the use or disclosure is
consistent with Executive's duties under this Agreement; (3) disclosure is
required by law or court order; or (4) the information is made or otherwise
becomes public. For purposes of this Agreement, confidential business
information includes, without limitation, trade secrets (as defined under
the Utah Trade Secrets Act, Section 13-24-2 of the Utah Statutes), various
confidential information concerning all aspects of current and future
operations, nonpublic information on investment management practices,
marketing plans, pricing structure and technology of either the Bank or
GBCI. Executive will also treat the terms of this Agreement as confidential
business information.
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10. RESTRICTIVE COVENANTS.
a. Competitive Activities. During the period of his employment and, if
Executive's employment with the Bank terminates pursuant to Section
8(a) or 8(b) of this Agreement, then for one year after Executive's
employment with the Bank has ended, Executive will not, directly or
indirectly, as a shareholder, director, officer, employee, partner,
agent, consultant, lessor, creditor or otherwise, provide management,
supervisory or other similar services to any person or entity engaged
in any business in Xxxxxx, Xxxxx and/or or Summit Counties, Utah,
which is competitive with the business of the Bank or GBCI 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. Non-Interference. During the period of his employment and, if
Executive's employment with the Bank terminates pursuant to Section
8(a) or 8(b) of this Agreement, then for one year after Executive's
employment with the Bank has ended, Executive will not, directly or
indirectly, persuade or entice, or attempt to persuade or entice, (i)
any employee of the Bank or GBCI to terminate his/her employment with
the Bank or GBCI, or (ii) any person or entity to terminate, cancel,
rescind or revoke its business or contractual relationships with the
Bank or GBCI.
11. ENFORCEMENT.
a. The Bank and Executive stipulate that, in light of all of the facts
and circumstances of the relationship between Executive and the Bank,
the agreements referred to in Sections 9 and 10 (including without
limitation their scope, duration and geographic extent) are fair and
reasonably necessary for the protection of the Bank's and GBCI's
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 Bank request the
court to reform these provisions to restrict Executive's use of
confidential information and Executive's ability to compete with the
Bank and GBCI to the maximum extent, in time, scope of activities, and
geography, the court finds enforceable.
b. Executive acknowledges the Bank and GBCI 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 9
or 10 or threatens or attempts to do so. For this reason, under these
circumstances, the Bank, 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 Bank
will not be required to post a bond as a condition for the granting of
this relief.
12. COVENANTS. Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 9 and 10 and that the
Bank is entitled to require
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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 Bank's enforcement
of a remedy by way of injunction will not prevent Executive from earning a
livelihood.
13. 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 Salt Lake County, Utah. The arbitrator, in rendering
a decision as to any state law claims, will apply Utah law.
c. Exception to Arbitration. Notwithstanding the above, if Executive
violates Section 9 or 10, the Bank will have the right to initiate the
court proceedings described in Section 11(b), in lieu of an
arbitration proceeding under this Section 13.
14. 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 Bank's, GBCI's 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-
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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 Utah 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
Xxxxxx County, Utah.
i. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of
which taken together will constitute one and the same document.
j. Counsel Review. Executive acknowledges that he has had the opportunity
to consult with independent counsel with respect to the negotiation,
preparation, and execution of this Agreement.
k. IRC Section 409A. The provisions of this Agreement are intended to
comply with Section 409A of the U.S. Internal Code of 1986, as
amended, U.S. Treasury regulations issued thereunder, and related U.S.
Internal Revenue Service guidance ("409A Rules"). Such provisions will
be interpreted and applied in a manner consistent with the 409A Rules
so that payments and benefits provided to Executive hereunder will
not, to the greatest extent possible, be subject to taxation under
such Section 409A. Notwithstanding any contrary provisions hereof,
this Agreement may be amended if and to the extent GBCI and/or the
Bank determines that such amendment is necessary to comply with the
409A Rules.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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This Employment Agreement is executed as of May 31, 2006.
FIRST NATIONAL BANK OF XXXXXX:
By /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxx
Its: Chairman
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
Ratified as of May 31, 2006:
GLACIER BANCORP, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
Its: President & Chief Executive Officer
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