EMPLOYMENT AGREEMENT
AGREEMENT effective January 1,
2011 between Glacier Bancorp, Inc., hereinafter called “Company”, and Xxxxxxx X. Xxxxxxxx,
hereinafter called “Executive.”
RECITALS
A.
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Executive
has served as President and
Chief Executive 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
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 President and
Chief Executive Officer of the Company. During the term of this
Agreement, Executive will serve as a director of the Company and of the
Banks.
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2.
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Term.
The term of this Agreement (“Term”) is one year, beginning on January 1,
2011.
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3.
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Duties.
The Company will
employ Executive as its President and
Chief Executive Officer. Executive will faithfully and
diligently perform his
assigned duties, which include the
following:
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(a)
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Company
Performance. Executive will be responsible for all
aspects of the Company’s performance, including
without limitation, directing that daily operational and
managerial matters are
performed in a manner consistent with the Company’s
policies.
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(b)
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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).
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(c)
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Report to
Board. Executive will
report directly to the Company’s board of directors. 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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Company
Board.
During the
term, the Company will use its best efforts to nominate and
recommend Executive for election to the Company’s board of
directors.
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6.
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Salary.
Executive will receive an annual salary of $334,183.00, 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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7.
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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, also taking into account the nature and
extent of incentive bonuses paid to comparable senior officers at
the Company. 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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8.
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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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9.
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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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(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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10.
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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 10(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 10(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 10(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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(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
10(g): (A) within three (3) 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, then Bank will provide Executive with the payment and
benefits described in Section 10(d)(3)
below.
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(2)
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Termination
by Executive. If Executive terminates Executive’s employment with
Good Reason, as defined in Section 10(h), within three (3) years following
a Change in Control, the Company will provide Executive with the payment
and benefits described in Section 10(d)(3)
below.
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(3)
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Payments.
If Section 10(d)(1)(A) or Section 10(d)(2) is triggered in accordance with
its terms, the Company will: (i) subject to Sections 10(e) and 10(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 36 substantially equal monthly installments in
an overall amount equal to 2.99 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 2.99 years following Executive’s
termination, at no cost to Executive, the benefits described in Section
9(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 10(e) and 10(j) below, if Section
10(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 36
substantially equal monthly installments in an overall amount equal to
2.99 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 10(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 10(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 10(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) three 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) | 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;
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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 benefited;
(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
10(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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11.
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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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12.
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Noncompetition. During
the Term of this Agreement and
for a period of three 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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13.
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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 11 and 12 (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 11 or 12 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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14.
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Covenants.
Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 11 and 12 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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15.
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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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16.
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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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(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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9
Signed
this 29th day of
December, 2010.
GLACIER
BANCORP, INC.
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By:
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/s/ Everit X. Xxxxxx |
Everit
X. Xxxxxx,
Chairman
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Attest:
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By:
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/s/ XxxXxx Xxxxxxxxx |
XxxXxx
Xxxxxxxxx, Secretary
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EXECUTIVE
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By:
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/s/ Xxxxxxx X. Xxxxxxxx |
Xxxxxxx
X. Xxxxxxxx
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