EMPLOYMENT AGREEMENT
AGREEMENT
effective January 1, 2008 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
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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.
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2.
|
Term.
The term of this Agreement (“Term”) is one year, beginning on January 1,
2008.
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3.
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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:
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(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.
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(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).
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(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.
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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.
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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.
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6.
|
Salary.
Executive will receive an annual salary of $324,450.00, 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.
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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.
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8.
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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.
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9.
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Vacation
and
Benefits.
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(a)
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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.
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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 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.
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2
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(c)
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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. Reimbursement will
be
made as soon as practicable but no later than the last day of the
calendar
year following the calendar year in which the expenses were incurred.
The
amount of expenses eligible for reimbursement in one calendar year
will
not affect the amount of expenses eligible for reimbursement in any
other
calendar year.
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10.
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Termination
of Employment.
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(a)
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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, within 10 business days following his
termination of employment, 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).
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(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) before
this
Agreement terminates, the Company will pay Executive a payment having
a
present value equal to the compensation and other benefits he would
have
been entitled to for the remainder of the term if his employment
had not
terminated. All payments made pursuant to this Section 10(b) shall
be
completed no later than March 15 of the calendar year following the
calendar year in which Executive’s employment
terminates.
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(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), the Company shall pay Executive or his estate, within
10
business days following his termination of employment, all compensation
and benefits earned and expenses reimbursable through the date Executive’s
employment terminated.
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3
| (d) |
Termination
Related to a Change in Control.
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(1)
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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) (A) terminates Executive’s
employment within 3 years following a Change in Control (as defined
below), or (B) 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 payment
and
benefits
described in Section 10(d)(3) below.
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(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
10(d)(3) below.
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(3)
|
Payments.
If Section 10(d)(1)(A) or Section 10(d)(2) is triggered in accordance
with
its terms, the Company will: (i) subject to Sections 10(e) and 10(j)
below, beginning within 30 days after Executive’s separation from service
as defined by Treasury Regulation § 1.409A-1(h) (“Separation from
Service”), pay Executive in 36 substantially equal monthly installments in
an overall 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 benefits substantially
similar to those benefits or reimburse Executive’s out-of-pocket expenses
of substantially similar type and value. Subject to Sections 10(e)
and
10(j) below, if Section 10(d)(1)(B) is triggered in accordance with
its
terms, beginning within 30 days after a Change in Control, the Company
will pay Executive in 36 substantially equal monthly installments
in an
overall amount equal to 2.99 times the Executive’s annual salary
(determined on the day before the date Executive’s employment was
terminated).
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4
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(e)
|
Limitations
on Payments Related to Change in Control.
The following apply notwithstanding any other provision of this
Agreement:
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(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;
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(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/or
after
Executive’s termination of employment;
and
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(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.
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(f)
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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.
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(g)
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Cause.
“Cause” means any one or more of the
following:
|
| (1) |
Willful
misfeasance or gross negligence in the performance of Executive’s
duties;
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| (2) |
Conviction
of a crime in connection with his
duties;
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(3)
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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
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(4)
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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.
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(h)
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Good
Reason.
Executive terminates employment for “Good Reason” if all four of the
following criteria are satisfied:
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(1)
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Any
one or more of the following conditions (each a “Condition”) arises
without Executive’s consent:
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(A) The
material reduction of Executive’s salary, 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;
5
(B) The
material diminution in Executive’s authority or duties as of the date of this
Agreement;
(C)
The
material breach of this Agreement by the Company, or
(D) A
material relocation or transfer of Executive’s principal place of employment to
a location outside Flathead County, Montana.
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(2)
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Executive
gives notice to the Company of the Condition within 90 days of the
initial
existence of the Condition.
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(3)
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The
Company fails to reasonably remedy the Condition within 30 days following
receipt of the notice described in paragraph (2)
above.
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(4)
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Executive
terminates employment within 180 days following the initial existence
of
the Condition.
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(i)
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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 Treas Reg. §
1.409A-3(i)(5).
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(j)
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Section
409A Compliance. Notwithstanding
anything in this Agreement to the contrary, if any amounts that become
due
under this Agreement on account of the termination of Executive’s
employment constitute “nonqualified deferred compensation” within the
meaning of Code Section 409A, payment of such amounts shall not commence
until Executive incurs a Separation from Service (as defined in Section
10(d)(3)). If, at the time of Executive’s Separation from Service under
this Agreement, Executive is a “specified employee” (under Internal
Revenue Code Section 409A), any amount that constitutes “nonqualified
deferred compensation” within the meaning of Code Section 409A that
becomes payable to Executive on account of Executive’s Separation from
Service (including any amounts payable pursuant to the preceding
sentence)
will not be paid until after the end of the sixth calendar month
beginning
after Executive’s Separation from Service (the “409A Suspension Period”).
Within 14 calendar days after the end of the 409A Suspension Period,
Executive shall be paid a lump sum payment in cash equal to any payments
delayed because of the preceding sentence, together with interest
on them
for the period of delay at a rate not less than the average prime
interest
rate published in the Wall Street Journal on any day chosen by the
Company
during that period. Thereafter, Executive shall receive any remaining
payments as if there had not been an earlier
delay.
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6
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11.
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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 §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.
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12.
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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:
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(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.
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(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.
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(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.
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13.
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Enforcement.
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(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.
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7
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(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.
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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.
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15.
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Arbitration.
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(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.
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(b)
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(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.
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8
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16.
|
Miscellaneous
Provisions.
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(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.
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(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.
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(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.
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(d)
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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.
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(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.
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(f)
|
Amendment.
This Agreement may be modified only through a written instrument
signed by
both parties.
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(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.
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(h)
|
|
(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 27th
day of
December, 2007.
| GLACIER BANCORP, INC. | ||
| |
|
|
| By: | ||
|
Everit X. Xxxxxx, Chairman |
||
9
| Attest: | |||
| By: | |||
|
XxxXxx Xxxxxxxxx, Secretary |
| EXECUTIVE | ||
| |
|
|
| By: | ||
|
Xxxxxxx
X. Xxxxxxxx
|
||
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