EXHIBIT 10(b)
EMPLOYMENT AGREEMENT
AGREEMENT between Glacier Bancorp, Inc., hereinafter called "Company", and
Xxxxxxx X. Xxxxxxxx, hereinafter called "Executive",
RECITALS
A. Executive has served as President and Chief Executive Officer of the
Company.
B. The Company desires Executive to continue his employment at the Company
under the terms and conditions of this Agreement.
C. Executive desires to continue his employment at the Company under the
terms and conditions of this Agreement.
AGREEMENT
1. 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.
2. TERM. The term of this Agreement ("Term") is one year, beginning on
January 1, 2005.
3. DUTIES. The Company will employ Executive as its President and Chief
Executive Officer. Executive will faithfully and diligently perform his
assigned duties, which are as follows:
(a) 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.
(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).
(c) 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.
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 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.
5. 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.
6. SALARY. Executive will receive an annual salary of $259,375.00, 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.
7. 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. 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.
8. 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.
9. 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
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.
(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 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.
(c) 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.
10. TERMINATION OF EMPLOYMENT.
(a) 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 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).
(b) 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), the Company 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 Company. If termination occurs under this Section 10(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 Company. If the Company, 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 3 years 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) below.
(2) Termination by Executive. If Executive terminates Executive's
employment, with or without Good Reason, within three years
following a Change in Control, the Company will provide
Executive with the payment and benefits described in Section
10(d)(3) below.
(3) Payments. If Section 10(d)(1) or (2) is triggered in
accordance with its terms, the Company will: (i) pay Executive
in 36 monthly installments in an 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 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
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;
(2) 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
(3) 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.
(f) 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 information or material
of the Company and 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.
(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 Company,
as reasonably determined on the advice of legal counsel by the
Company'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
substantially all Company employees (or employees of a
successor or controlling entity of the Company) 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 the Company, or
(4) A relocation or transfer of Executive's principal place of
employment outside Flathead 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, within the
meaning of Section 280G of the Internal Revenue Code.
11. 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 Section 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.
12. 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, 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
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.
(b) 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.
(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 Company or its subsidiaries.
13. ENFORCEMENT.
(a) 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.
(b) 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.
14. 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.
15. 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 11 or 12, the Company will have the right to
initiate the court proceedings described in Section 13(b), in lieu
of an arbitration proceeding under this Section 15.
16. 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 Company's, its subsidiaries' 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.
(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 26th day of January, 2005.
GLACIER BANCORP, INC.
/s/ Xxxx X. XxxXxxxxx
--------------------------
Xxxx X. XxxXxxxxx, Chairman
Attest:
/s/ Xxxxx X. Xxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxx, Secretary
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx
