EXHIBIT 10(H)
EMPLOYMENT AGREEMENT
AGREEMENT between First Security Bank of Missoula, ("Bank"), and Xxxxxxx X.
Xxxxxxx, ("Executive"), and ratified by Glacier Bancorp, Inc. ("Company"),
RECITALS
A. First Security Bank of Missoula, ("Bank"), is a wholly owned subsidiary of
Glacier Bancorp, Inc., ("Company").
B. Executive is the Chief Executive Officer of the Bank and a director of the
Bank.
C. The Bank desires Executive to continue his employment at the Bank under the
terms and conditions of this Agreement.
D. Executive desires to continue his employment at the Bank under the terms
and conditions of this Agreement.
AGREEMENT
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 the Chief Executive Officer of the
Bank. During the term of this Agreement, Executive will serve as a director
of the Bank.
2. TERM. The term of this Agreement is for one year beginning January 1, 2006.
3. DUTIES. The Bank will employ Executive as its Chief Executive Officer.
Executive will faithfully and diligently perform his assigned duties, which
are as follows:
(a) Bank Performance. Executive will be responsible for all aspects of the
Bank's performance, including without limitation, directing that daily
operational and managerial matters are performed in a manner
consistent with the Bank's and 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) in Missoula County.
(c) Report to Board. Executive will report directly to the Bank's board of
directors and to the Chief Executive Officer of the Company. The
Bank'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 Bank or 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
Bank's prior written consent, make or maintain any investment in a business
with which the Bank or Company has an existing competitive or commercial
relationship.
5. SALARY. Executive will receive an annual salary of $96,000.00 to be paid in
accordance with the Bank's regular payroll schedule.
6. INCENTIVE COMPENSATION. During the Term, the Bank's board of directors,
subject to ratification by Company's board of directors, will determine the
amount of bonus to be paid by the Bank to Executive for that year. In
making this determination, the Bank's board of directors will consider
factors such as Executive's performance of his duties and the safety,
soundness and profitability of the Bank. Executive's bonus will reflect
Executive's contribution to the performance of the Bank 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.
7. INCOME DEFERRAL. Executive will be eligible to participate in any program
available to the Bank's and 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.
8. 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 Bank.
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 Bank or 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 Bank'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). Neither the Bank
nor Company, through this Agreement, obligate 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 the Bank policy
or the rules and regulations of the Internal Revenue Service.
9. TERMINATION OF EMPLOYMENT.
(a) Termination by the Bank for Cause. If the Bank terminates Executive's
employment for Cause (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
9(a).
(b) Other Termination by the Bank. If the Bank terminates Executive's
employment without Cause before this Agreement terminates, or
Executive terminates his employment for Good Reason (defined below),
the Bank 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
Bank. If termination occurs under this Section 9(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 Bank. If the Bank, 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 one year 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 payment and benefits described in Section 9(d)(3) below.
(2) Termination by Executive. If Executive terminates Executive's
employment, with or without Good Reason, within one year
following a Change in Control, the Bank will provide Executive
with the payment and benefits described in Section 9(d)(3).
(3) Payments. If Section 9(d)(1) or (2) is triggered in accordance
with its terms, the Bank will: (i) pay Executive in 12 monthly
installments in an amount equal to the Executive's annual salary
(determined as of the day before the date Executive's employment
was terminated) and (ii) maintain and provide for one year
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 Bank 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
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;
(2) 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 Bank or its successor
after the Change in Control; and
(3) 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 Bank terminates
Executive's employment for Cause, or (ii) one year after a Change
of Control occurs.
(f) 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. At the same time, Executive also must return to the Bank all
originals and copies (whether in memoranda, designs, devices,
diskettes, tapes, manuals, and specifications) which constitute
proprietary information or material of the Bank. 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 Bank, as
reasonably determined on the advice of legal counsel by the
Bank'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 other
executive officers within the Company (or executive officers of a
successor or controlling entity of the Bank) formerly benefitted;
(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 Bank, or
(4) A relocation or transfer of Executive's principal place of
employment outside Missoula 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 and the Bank, within the meaning
of Section 280G of the Internal Revenue Code.
10. 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 its business operations, unless (1) the
Bank 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 Bank or Company. Executive will also
treat the terms of this Agreement as confidential business information.
11. NONCOMPETITION. During the Term and the terms of any extensions or renewals
of this Agreement and for a period equal to one year after Executive's
employment with the Bank and 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 Bank
or Company may have a presence which is competitive with the business
of the Bank or 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 Bank or Company or a subsidiary to terminate his/her employment
with the Bank 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 Bank or Company.
12. 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 10 and 11 (including without
limitation their scope, duration and geographic extent) are fair and
reasonably necessary for the protection of the Bank's and Company'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 Company to the maximum extent, in time, scope of activities
and geography, the court finds enforceable.
(b) Executive acknowledges the Bank and 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 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.
13. COVENANTS. Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 10 or 11 and that the
Bank 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
Bank's enforcement of a remedy by way of injunction will not prevent
Executive from earning a livelihood.
14. 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 10 or 11, the Bank will have the right to initiate
the court proceedings described in Section 12(b), in lieu of an
arbitration proceeding under this Section 14.
15. 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 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 and ratified by the Company.
(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 22nd day of December, 2005.
FIRST SECURITY BANK OF MISSOULA
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Chairman
Attest: By:
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Secretary
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Ratified
GLACIER BANCORP, INC.
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
President/CEO
