EMPLOYMENT AGREEMENT
AGREEMENT effective
January 1, 2011 between Glacier Bancorp, Inc., hereinafter called
“Company” and Xxx X. Xxxxxx, hereinafter called
“Executive.”
RECITALS
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A.
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Executive
has served as Senior Vice President and Chief Financial Officer of the
Company.
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B.
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The
Company desires Executive to continue his
employment at the Company under the
terms and
conditions of this
Agreement.
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C.
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Executive
desires to continue his
employment at the Company under the terms and conditions of this
Agreement.
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AGREEMENT
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1.
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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 Senior Vice President and Chief Financial
Officer of the
Company.
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2.
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Term.
The term of this Agreement (“Term”) is one year, beginning January 1,
2011.
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3.
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Duties.
The Company will employ Executive as its Senior Vice President and Chief
Financial Officer. Executive will faithfully and
diligently perform his assigned duties, which include the
following:
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(a)
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Chief
Financial Officer. The Executive shall have such duties
and responsibilities as assigned by the Company's President and Chief
Executive Officer, which shall be customary for Chief Financial Officers
of comparable publicly reporting
companies.
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(b)
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Report
to Board. Executive will
report directly to the Company’s President and
Chief Executive Officer. 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.
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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.
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Salary.
Executive will receive an annual salary of $205,602.00, 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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6.
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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, if any. 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. 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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7.
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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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8.
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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)
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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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9.
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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
9(a).
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(b)
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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 9(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)
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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 9(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
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(d)
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Termination
Related to a Change in Control. The following provisions
shall survive the expiration of the Term of this Agreement and the
termination of Executive’s
employment.
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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
terminates Executive’s employment without Cause, as defined in Section
9(g); (A) within
2 years following a Change in Control (as defined below); or (B)
before a 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 9(d)(3)
below.
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(2)
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Termination
by Executive. If Executive terminates Executive’s employment with
Good Reason, within two years following a Change in Control, the Company
will provide Executive with the payment and
benefits described in Section
9(d)(3).
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(3)
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Payments.
If Section 9(d)(1)(A) or Section 9(d)(2) is triggered in accordance with
its terms, the Company will: (i) subject to Sections 9(e) and 9(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 24 substantially equal monthly installments in an overall
amount equal to two 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 years following Executive’s termination, at no
cost to Executive, the benefits described in Section 8(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
9(e) and 9(j) below, if Section 9(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 24 substantially equal monthly installments in an
overall amount equal to two times the Executive’s annual salary
(determined on the day before the date Executive’s employment was
terminated).
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(e)
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Limitations
on Payments Related to Change in Control. The following apply
notwithstanding any other provision of this
Agreement:
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(1)
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the
total of the
payments and
benefits described in Section 9(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)
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the
payment and benefits described in Section 9(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)
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Executive’s
right to receive the
payments and benefits described in Section 9(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) two 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 or confidential
information or material of the Company or 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:
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(1)
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Willful
misfeasance or gross
negligence in the performance of Executive’s
duties;
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(2)
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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 of the Company’s board of
directors;
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(4)
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Death
or permanent disability, for purposes of this section permanent disability
means 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;
or
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(5)
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Any
other legitimate business reason as determined by the Company’s board of
directors.
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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 is generally
applicable to substantially all
Company employees (or employees of a successor or controlling entity of
the Company) formerly benefitted;
(B) The
material diminution in Executive’s authority or duties as they exist on 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
9(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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10.
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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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11.
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Noncompetition.
During the Term of this Agreement and for a period of two years after
Executive’s employment with the Company has terminated, Executive will
not, directly or indirectly, as a shareholder, director, officer,
employee, proprietor, partner, member, agent, consultant, lessor, creditor
or otherwise:
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(a)
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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)
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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)
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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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12.
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Enforcement.
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(a)
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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 10 and 11 (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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(b)
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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 10 or 11 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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13.
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Covenants.
Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 10 and 11 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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14.
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Jury
Waiver. THE
PARTIES TO THIS AGREEMENT ACKNOWLEDGE AND UNDERSTAND THAT ARTICLE II,
SECTION 26 OF THE MONTANA CONSTITUTION PROVIDES THE RIGHT TO A TRIAL BY
JURY. THE
PARTIES FURTHER ACKNOWLEDGE AND UNDERSTAND THAT BY WAIVING THEIR RIGHT TO
A TRIAL BY JURY ANY LITIGATION SUBJECT TO THIS JURY WAIVER WILL BE DECIDED
SOLELY BY THE JUDGE ASSIGNED TO THE CASE. BEING
FULLY AWARE OF THEIR CONSTITUTIONAL RIGHT TO A TRIAL BY JURY, THE PARTIES
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER
VERBAL OR WRITTEN) OR ACTION OF EITHER PARTY OR ANY EXERCISE BY ANY PARTY
OF THEIR RESPECTIVE RIGHTS UNDER THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AGREEMENT, AND ANY CLAIM
OR DEFENSE ASSERTING THAT THIS AGREEMENT WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR
VOIDABLE).
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15.
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Miscellaneous
Provisions.
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(a)
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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)
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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)
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Litigation
Expenses. In the event of any dispute or legal or
equitable action arising from this Agreement, the prevailing party shall
be entitled to all
of its out-of-pocket expenses and
costs including, without limitation, reasonable attorneys’ fees and
costs.
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(d)
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Waiver.
The failure of any party to insist upon strict performance of any of the
terms and provisions of this Agreement shall not be construed as a waiver
or relinquishment of any such terms or conditions or of any other term or
condition and the same shall be and remain in full force and
effect. 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)
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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)
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Amendment.
This Agreement may be modified only through a written instrument signed by
both parties.
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(g)
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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)
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9
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(i)
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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.
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Signed
this 29th day of
December, 2010.
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GLACIER
BANCORP, INC.
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By:
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/s/ Xxxxxxx X. Xxxxxxxx |
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Xxxxxxx
X. Xxxxxxxx
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President/CEO
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Attest:
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By:
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/s/ XxxXxx Xxxxxxxxx |
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XxxXxx
Xxxxxxxxx
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Secretary
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EXECUTIVE
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By:
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/s/ Xxx X. Xxxxxx |
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Xxx
X. Xxxxxx
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10
