EMPLOYMENT AGREEMENT
AGREEMENT
effective January 1, 2008 between Mountain West Bank, (“Bank”), and Xxx X.
Xxxxxxx, (“Executive”), and ratified by Glacier Bancorp, Inc.
(“Company”),
RECITALS
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A.
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Mountain
West Bank, (“Bank”), is a wholly owned subsidiary of Glacier Bancorp,
Inc., (“Company”).
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B.
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Executive
is the President and Chief Executive Officer of the Bank and a director
of
the Bank.
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C.
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The
Bank desires Executive to continue his employment at the Bank under
the
terms and conditions of this
Agreement.
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D.
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Executive
desires to continue his employment at the Bank under the terms and
conditions of this Agreement.
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AGREEMENT
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1.
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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.
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2.
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Term.
The term of this Agreement is for one year beginning January 1,
2008.
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3.
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Duties.
The Bank will employ Executive as its President and Chief
Executive Officer. Executive will faithfully and diligently perform
his
assigned duties, which are as
follows:
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(a)
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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 the Bank’s and 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) in Kootenai County.
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(c)
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Report
to Board. Executive will report directly to the Bank’s board of
directors and to the Chief Executive Officer of the Company. 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 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 Bank’s prior
written consent, make or maintain any investment in a business with
which
the Bank or Company has an existing competitive or commercial
relationship.
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5.
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Salary.
Executive will receive an annual salary of $256,256.00 to be paid in
accordance with the Bank’s regular payroll
schedule.
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6.
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Incentive
Compensation. During the Term, the Bank’s board of directors,
subject to ratification by Company’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.
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.
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Income
Deferral. Executive will be eligible to participate in any
program available to the Bank’s and 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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8.
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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 Bank.
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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2
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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 Bank
or
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 Bank’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
Company, through this Agreement, obligate itself to make any particular
benefits available to its
employees.
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(c)
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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 the Bank 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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9.
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Termination of
Employment.
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(a)
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Termination
by the Bank for Cause. If the Bank terminates Executive’s employment
for Cause (defined below) before this Agreement terminates, the Bank
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
9(a).
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(b)
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Other
Termination by the Bank. If the Bank 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 Bank will pay Executive a payment having a present
value
equal to the compensation and other benefits he would have been entitled
to if his employment had not terminated. All payments made pursuant
to
this Section 9(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 Bank. If termination occurs under this
Section 9(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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Termination
Related to a Change in Control.
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(1)
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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) (A) terminates
Executive’s employment within one year following a Change in Control (as
defined below), or (B) 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 9(d)(3) below.
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(2)
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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).
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(3)
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Payments.
If Section 9(d)(1)(A) or Section 9(d)(2) is triggered in accordance
with
its terms, the Bank will: (i) subject to Sections 9(e) and 9(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 12 substantially equal monthly installments in an
overall
amount equal to the 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 benefits substantially similar
to those
benefits or reimburse Executive’s out-of-pocket expenses of substantially
similar type and value. Subject to Sections 9(e) and 9(j) below,
if
Section 9(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 12 substantially equal monthly installments in an overall amount
equal
to the Executive’s annual salary (determined on the day before the date
Executive’s employment was
terminated).
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4
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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 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;
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(2)
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the
payment 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/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 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 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 Bank, Executive must return to the Bank all keys,
pass
cards, identification cards and any other property of the Bank. At
the
same time, Executive also must return to the Bank all originals and
copies
(whether in memoranda, designs, devices, diskettes, tapes, manuals,
and
specifications) which constitute proprietary information or material
of
the Bank. 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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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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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 Bank, as reasonably
determined on the advice of legal counsel by the Bank’s board of
directors; or
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(4)
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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.
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 or elimination is
generally applicable to other executive officers within the Company (or
executive officers of a successor or controlling entity of the Bank) formerly
benefitted;
(B) The
material diminution in Executive’s authority or duties as of the date of this
Agreement;
(C) The
material breach of this Agreement by the Bank, or
(D) A
material relocation or transfer of Executive’s principal place of employment to
a location outside Kootenai County, Idaho.
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(2)
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Executive
gives notice to the Bank of the Condition within 90 days of the initial
existence of the Condition.
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(3)
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The
Bank 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 and the Bank, within the meaning of Treas. Reg. §
1.409A-3(i)(5).
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| (j) |
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 9(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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10.
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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 Bank or its business operations, unless (1) the Bank 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 Bank or Company. Executive will also treat the terms of
this
Agreement as confidential business
information.
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11.
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Noncompetition.
During the Term and the terms of any extensions or renewals of this
Agreement and for a period equal to one year after Executive’s employment
with the Bank and Company has terminated, Executive will not, directly
or
indirectly, as a shareholder, director, officer, employee, partner,
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 Bank or Company
may have
a presence which is competitive with the business of the Bank or
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 Bank
or
Company or a subsidiary to terminate his/her employment with the
Bank 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 Bank or
Company.
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12.
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Enforcement.
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(a)
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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 Company’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 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 Bank and 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 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.
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13.
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Covenants.
Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 10 or 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.
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Arbitration.
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(a)
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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.
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(b)
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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.
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(c)
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Exception
to Arbitration. Notwithstanding the above, if Executive violates
Section 10 or 11, the Bank will have the right to initiate the court
proceedings described in Section 12(b), in lieu of an arbitration
proceeding under this Section 14.
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15.
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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
Bank’s and Executive’s heirs, legal representatives, successors and
assigns.
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(c)
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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.
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(d)
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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)
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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 and ratified by the
Company.
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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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Signed
this 21st
day of
December,
2007.
| MOUNTAIN WEST BANK | ||
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| By: | ||
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Xxxxxxx X. Xxxx, Chairman |
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| Attest: By: | |||
| By: | |||
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Xxx Xxxxxxx, Secretary |
| EXECUTIVE | ||
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| By: | ||
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Xxx X. Xxxxxxx |
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Ratified
GLACIER
BANCORP, INC.
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| By: | |||
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Xxxxxxx X. Xxxxxxxx |
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President/CEO
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