EXHIBIT 10.3
PRINCIPAL SHAREHOLDER NON-COMPETITION AGREEMENT
This Principal Shareholder Non-Competition Agreement ("NON-COMPETITION
AGREEMENT"), dated as of April 20, 2006, is made by and among CITIZENS
DEVELOPMENT COMPANY ("CDC"), GLACIER BANCORP, INC. ("GLACIER") and the
undersigned shareholders of CDC identified on Schedule I ("SHAREHOLDER").
RECITALS
A. Glacier and CDC have entered into a Plan and Agreement of Merger (the
"MERGER AGREEMENT") dated as of the date hereof, pursuant to which (i) CDC
will merge (the "MERGER") with and into a Montana corporation to be formed
by Glacier ("HOLDINGS"), (ii) CDC's subsidiaries, Citizens State Bank,
First Citizens Bank of Billings, First National Bank of Lewistown, Western
Bank of Chinook, N.A., and First Citizens Bank, N.A. (each, a "CDC BANK"
and collectively, the "CDC BANKS") will become subsidiaries of Holdings,
and (iii) following a transition period, the CDC Banks will be merged with
and into Glacier's other subsidiary banks.
B. As the beneficial owner of 5% or more of any class of CDC's outstanding
securities, each Shareholder will receive substantial benefits from the
consummation of the Merger and accordingly desires to facilitate the
Merger. The parties to this Non-Competition Agreement believe that the
future success and profitability of Glacier, the CDC Banks and the CDC
Banks' successors (collectively, the "COMBINED ENTITY") require that each
Shareholder not be affiliated in any substantial way with a Competing
Business (as defined herein) for a reasonable period of time after closing
of the Merger.
AGREEMENT
In consideration of the parties' performance under the Merger Agreement,
each Shareholder agrees as follows:
1. DEFINITIONS. Capitalized terms not defined in this Non-Competition
Agreement have the meaning assigned to those terms in the Merger
Agreement. The following definitions also apply to this Non-Competition
Agreement:
a. Competing Business. "COMPETING BUSINESS" means any commercial bank
(including without limitation, any start-up or other commercial bank
in formation) or bank holding company thereof that competes or will
compete within the Covered Area with the Combined Entity or any of
its subsidiaries or affiliates.
b. Covered Area. "COVERED AREA" means Yellowstone, Ravalli, Xxxxxx,
Xxxxxx and Flathead Counties in Montana.
c. Term. "TERM" means the period of time beginning on the Effective
Date and ending two (2) years after the Effective Date. If the
Merger Agreement is terminated for any reason, this Non-Competition
Agreement shall be void.
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2. PARTICIPATION IN COMPETING BUSINESS. Except as provided in Section 5 or 6,
during the Term, no Shareholder may become involved with a Competing
Business or serve, directly or indirectly, a Competing Business in any
manner, including without limitation, (a) as a shareholder, member,
partner, director, officer, manager, investor, organizer, founder,
employee, consultant, agent, or representative, or (b) during the
organization and pre-opening phases in the formation of a Competing
Business.
3. NO SOLICITATION. During the Term, no Shareholder may, directly or
indirectly, solicit or attempt to solicit (a) any employees of the
Combined Entity or any of its subsidiaries or affiliates to participate,
as an employee or otherwise, in any manner in a Competing Business, or (b)
any customers of the Combined Entity or its subsidiaries or affiliates to
transfer their business to a Competing Business. Solicitation prohibited
under this section includes solicitation by any means, including, without
limitation, meetings, letters or other mailings, electronic communications
of any kind, and internet communications.
4. CONFIDENTIAL INFORMATION. During and after the Term, no Shareholder may
disclose any confidential information of the Combined Entity or its
subsidiaries or affiliates obtained by such person as a result of his, her
or its status as a principal shareholder of CDC, except in accordance with
a judicial or other governmental order.
5. OUTSIDE COVERED AREA. Nothing in this Non-Competition Agreement prevents a
Shareholder from becoming involved with, as a shareholder, member,
partner, director, officer, manager, investor, organizer, founder,
employee, consultant, agent, representative, or otherwise, a Competing
Business that has no operations in the Covered Area. To that end, the
parties acknowledge and agree that the Trust and/or the Foundation's
ownership of commercial banks' (or bank holding companies') securities as
of the date hereof does not violate this Non-Competition Agreement, as
none of such commercial banks or bank holding companies has operations in
the Covered Area.
6. PASSIVE INTEREST. Nothing in this Non-Competition Agreement prevents a
Shareholder from owning 5% or less of any class of security of a Competing
Business. To the extent a Shareholder owns more than 5% of any class of
security of a Competing Business as of the date hereof, such ownership
shall not violate Section 2 if (a) the Shareholder has disclosed such
ownership on a schedule attached to this Non-Competition Agreement, and
(b) the Shareholder does not acquire additional shares of such Competing
Business during the Term (other than pursuant to stock splits or stock
dividends).
7. REMEDIES. Any breach of this Non-Competition Agreement by a Shareholder
will entitle the Combined Entity, together with its successors and
assigns, to injunctive relief and/or specific performance, as well as to
any other legal or equitable remedies to which they may be entitled.
8. GOVERNING LAW AND ENFORCEABILITY. This Non-Competition Agreement is
governed by, and will be interpreted in accordance with, the laws of the
State of Montana. If any court determines that the restrictions set forth
in this Non-Competition Agreement are unenforceable, then the parties
request such court to reform these provisions to the
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maximum restrictions, term, scope or geographical area that such court
finds enforceable. Venue of any legal action or proceeding between the
parties related to this Non-Competition Agreement shall be in Yellowstone
County, Montana, and the parties each consent to the personal jurisdiction
of the courts of the State of Montana and the federal courts located in
Montana. Each Shareholder agrees not to claim that Yellowstone County,
Montana is an inconvenient place for trial.
9. INDIVIDUAL OBLIGATIONS. The obligations of each of the Shareholder under
this Non-Competition Agreement are intended to be several and not joint.
10. ADDITIONAL SIGNATURES. CDC will use its reasonable best efforts to obtain,
within 30 days following the date hereof, the signatures to this
Non-Competition Agreement of those persons identified on Schedule II. Upon
each such person's execution of this Non-Competition Agreement, he will be
a "Shareholder" within the meaning of this Non-Competition Agreement and
subject to all of its terms and obligations.
11. COUNTERPARTS. The parties may execute this Non-Competition Agreement in
one or more counterparts, including facsimile counterparts. All the
counterparts will be construed together and will constitute one agreement.
The parties have signed this Principal Shareholder Non-Competition Agreement as
of April 20, 2006:
GLACIER BANCORP, INC. CITIZENS DEVELOPMENT COMPANY
By /s/ Xxxxxxx X. Xxxxxxxx By /s/ Xxxx Comes
----------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxxx Xxxx Comes
President & Chief Executive Officer President
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SCHEDULE I
PRINCIPAL SHAREHOLDER NON-COMPETITION AGREEMENT
XXXXX FARGO BANK, NATIONAL THE FIRST NATIONAL BANK OF
ASSOCIATION, AS TRUSTEE OF THE SIOUX FALLS, AS TRUSTEE OF THE
XXXX X. XXXXXXXXXX FOUNDATION XXXX X. XXXXXXXXXX LIVING TRUST
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxx Xxxxxxxx
----------------------------------- --------------------------------
Xxxx Xxxxxxxxx, Trust Officer Xxxxx Xxxxxxxx, Assistant
Vice President and Trust Officer
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SCHEDULE II
PRINCIPAL SHAREHOLDER NON-COMPETITION AGREEMENT
______________________________________ ___________________________________
Xxxxx Xxxxxx Xxxx Xxxxxxxx
______________________________________ ___________________________________
Xxxxxx Xxxxx Xxxxxxx Xxxxxx
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