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EXHIBIT 10.3
MOUNTAIN WEST BANK
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), signed as of September 9, 1999,
between MOUNTAIN WEST BANK ("Bank") and XXX X. XXXXXXX ("Executive") and
ratified by GLACIER BANCORP, INC., takes effect on the effective date of the
Merger ("Effective Date").
RECITALS
A. Glacier Bancorp, Inc. ("Glacier") has entered into a Plan and Agreement
of Merger ("Merger Agreement") with the Bank, pursuant to which the Bank
will merge with a newly-formed subsidiary of Glacier (the "Merger"). As
a result of the Merger, the Bank will be a subsidiary of Glacier.
B. Before the Merger, Executive has served as President and Chief Executive
Officer of the Bank.
C. Glacier and the Bank desire 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.
E. 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. During the Term of this Agreement, Executive will
serve as a director of the Bank and of Glacier.
2. EFFECTIVE DATE AND TERM.
a. Term. The term of this Agreement ("Term") is three years,
beginning on the Effective Date.
b. Abandonment or Termination of the Merger. This Agreement is void
if the Merger Agreement is terminated in accordance with its
terms.
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3. DUTIES. The Bank will employ Executive as its President. 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 Glacier's and the Bank'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 Kootenai, Ada and
Canyon County, Idaho.
c. Report to Board. Executive will report directly to the Bank's
board of directors and to the Chief Executive Officer of Glacier.
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 Glacier. 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 0(a) and 0(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 0. To the extent that such activities do not interfere with his
duties under Section 0, 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 Glacier has an
existing competitive or commercial relationship.
5. GLACIER BOARD. During the Term, Glacier will use its best efforts to
nominate and recommend Executive for election to Glacier's board of
directors.
5. SALARY. Initially, Executive will receive an annual salary of $125,000,
to 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.
6. INCENTIVE COMPENSATION. Each year during the Term, the Bank's board of
directors, subject to ratification by Glacier'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, also taking into account the nature and extent of
incentive bonuses paid to comparable senior officers at Glacier. 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. INCOME DEFERRAL. Executive will be eligible to participate in any
program available to the Bank's and Glacier'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 the greater of (a)
four weeks of paid vacation each year or (b) the vacation
benefits set forth in Glacier's schedule for senior employees
with Executive's years of service with the Bank, in addition to
all holidays observed by the Bank. Executive may carry over, in
the aggregate, up to six week(s) of unused vacation to a
subsequent year. Any unused vacation time in excess of six weeks
will not accumulate or carry over from one calendar year to the
next.
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 Glacier 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 Glacier'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 Glacier through this Agreement obligates itself to make any
particular benefits available to its employees. During the Term
and consistent with past practice, Executive will also receive
(1) the use of a Bank automobile and (2) an annual membership to
Hayden Lake Country Club.
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.
9. TERMINATION OF EMPLOYMENT.
a. Termination By 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).
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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 (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 0(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 10(d)(3).
(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 a single payment in an amount equal to
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.
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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 payments 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 in 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 or Glacier. At the same time, Executive also
must return to the Bank all originals and copies (whether in 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 Glacier. 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.
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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 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) The material breach of this Agreement by Glacier; or
(4) A relocation or transfer of Executive's principal place of
employment that would require Executive to commute on a
regular basis more than 20 miles each way from Coeur
d'Alene, Idaho, with the exception of travel to and from
Boise, Idaho.
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 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
Glacier or their business operations, unless (1) the Bank or
Glacier 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 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 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 Glacier. 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 the
greater of (a) two years after Executive's employment with the
Bank and/or Glacier has terminated (one year if Glacier does not
offer Executive comparable employment at the end of the Term) or
(b) three years from the Closing of the Merger, 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 Kootenai, Ada or
Canyon County, Idaho (or any other counties in which the Bank or
Glacier may have a presence) which is competitive with the
business of the Bank or Glacier 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 Glacier to terminate his/her employment
with the Bank or Glacier; or
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 Glacier.
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 Glacier'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
Glacier to the maximum extent, in time, scope of activities, and
geography, the court finds enforceable.
b. Executive acknowledges the Bank and Glacier 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 and 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.
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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 Kootenai County, Idaho. The arbitrator, in
rendering a decision as to any state law claims, will apply Idaho
law.
c. Exception to Arbitration. Notwithstanding the above, if Executive
violates Section 11 or 12, the Bank will have the right to
initiate the court proceedings described in Section 13(b), in
lieu of an arbitration proceeding under this Section 15.
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, Glacier'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.
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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.
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 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 Kootenai County, Idaho.
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.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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Signed: September 9, 1999:
MOUNTAIN WEST BANK:
By /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Its: President
EXECUTIVE:
/s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
Ratified: September 9, 1999
GLACIER BANCORP, INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
Its: President and CEO
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