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EXHIBIT 10.5
DIRECTOR NONCOMPETITION AGREEMENT
(Mountain West Bank)
This Director Noncompetition Agreement ("Director Agreement"), dated as
of September 9, 1999, is between MOUNTAIN WEST BANK ("Mountain West"), and the
undersigned, who are Directors ("Directors") of Mountain West.
RECITALS
A. Mountain West has entered into an Agreement and Plan of Merger (the
"Agreement") with Glacier Bancorp, Inc. ("Glacier") and New Mountain
West Bank, dated as of June 9, 1999, under which all the outstanding
shares of Mountain West common stock will be exchanged for common stock
shares of Glacier.
B. The obligation of Mountain West and Glacier to consummate the
transactions contemplated by the Agreement are conditioned on their
receipt of noncompetition agreements from all directors of Mountain
West.
C. Mountain West, Glacier, and the Directors believe that the future
success and profitability of the combined bank following the Merger (the
"Combined Bank") require that existing directors of Mountain West be
available to continue to serve as directors of the Combined Bank and not
be affiliated in any substantial way with a Competing Business for a
reasonable period of time after Closing.
AGREEMENT
In consideration of Glacier's and Mountain West's performance under the
Agreement, the Directors agree as follows:
1. DEFINITIONS. Capitalized terms not defined in this Director
Noncompetition Agreement ("Director Agreement"), have the meaning
assigned to those terms in the Agreement. The following definitions also
apply to this Director Agreement:
a. Competing Business. "Competing Business" means any financial
institution or trust company that competes or will compete within
the Covered Area with Mountain West, Glacier or any of their
subsidiaries or affiliates. The term "Competing Business"
includes, without limitation, any start-up or other financial
institution or trust company in formation.
b. Covered Area. Kootenai, Ada and Canyon Counties in Idaho.
c. Term. The Term of this Director Agreement begins at Closing and
will end on the later of: (1) three years after Closing, or (2)
one year after the Director
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ceases to be a director of Mountain West if Director resigns or
refuses to stand for reelection. Provided, however, if at any
time during the three years following Closing, a Director is
removed without Good Cause or is not reelected as a director of
Mountain West, the Term of this Director Agreement will continue
for only one year after such Director ceases to be a director of
Mountain West.
d. Good Cause. "Good Cause" means any one or more of the following:
(1) Willful misfeasance or gross negligence in the performance
of the Director's duties;
(2) Conviction of a crime in connection with his or her
duties;
(3) Conduct demonstrably and significantly harmful to Mountain
West, as reasonably determined on the advice of legal
counsel by Mountain West's board of directors; or
(4) Permanent disability, meaning a physical or mental
impairment which renders the Director incapable of
substantially performing the duties required under this
Agreement, and which is expected to continue rendering the
Director so incapable for the reasonably foreseeable
future.
2. AVAILABILITY. The Directors will be available to serve, at the Combined
Bank's request, as a director of the Combined Bank and/or its subsidiary
banks for a period of at least one year after Closing.
3. PARTICIPATION IN COMPETING BUSINESS. Except as provided in Section 6,
during the Term of this Director Agreement, the Directors will not
become involved, directly or indirectly, as a stockholder, member,
partner, director, officer, manager, investor, organizer, "founder",
consultant, agent, or representative of a Competing Business.
4. NO SOLICITATION. During the Term of this Director Agreement, the
Directors will not directly or indirectly solicit or attempt to solicit
(1) any employees of the Combined Bank or any of its Subsidiaries to
leave their employment or participate in any manner in a Competing
Business, or (2) any customers of the Combined Bank or any of its
Subsidiaries, to remove their business from the Combined Bank or any of
its Subsidiaries, or to participate in any manner in 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.
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5. CONFIDENTIAL INFORMATION. During and after the Term of this Director
Agreement, the Directors will not disclose any confidential information
of the Combined Bank, Glacier or any of their Subsidiaries obtained by
the Directors while serving as a director of the Combined Bank or any of
its Subsidiaries.
6. EMPLOYMENT OUTSIDE COVERED AREA. Nothing in this Director Agreement
prevents the Directors from (a) continuing to work in the same general
kind of business in which such Director was employed at the time this
Director Agreement was executed; or (b) accepting employment outside the
Covered Area from a Competing Business, if, during the Term, the
Directors: (i) will not act as an employee or other representative or
agent of the Competing Business within the Covered Area and (ii) will
have no responsibilities for the Competing Business' operations within
the Covered Area.
7. PASSIVE INTEREST. Nothing in this Director Agreement prevents the
Directors from owning 2% or less of any class of security of a Competing
Business.
8. REMEDIES. Any breach of this Director Agreement by the Directors
entitles Mountain West and Glacier, together with their successors and
assigns, to injunctive relief and/or specific performance, as well as to
any other legal or equitable remedies they may be entitled to.
9. EARLY TERMINATION. This Director Agreement will terminate if Glacier is
in material breach of Section 1.3 of the Agreement.
10. GOVERNING LAW AND ENFORCEABILITY. This Director Agreement is governed by
Idaho State law. If any court determines that the restrictions set forth
in this Director Agreement are unenforceable, the maximum restrictions,
term, scope or geographical area that is enforceable will be substituted
in place of the unenforceable provisions.
11. COUNTERPARTS. The parties may execute this Agreement in one or more
counterparts. All the counterparts will be construed together and will
constitute one Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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SIGNED as of September 9, 1999:
DIRECTORS:
/s/ Xxxxxxx Xxxx /s/ Xxxxxxx Xxxxxxx
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/s/ Xxxxxxx X. Xxxxx /s/ Xxx X. Xxxxxxx
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/s/ Xxx Xxxxxxx /s/ Xxxx Xxxxxx
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/s/ Xxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxxxxx
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/s/ Xxx Xxxxxxx /s/ Xxx Xxxxx
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MOUNTAIN WEST BANK
By: /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
President and Chief Executive Officer