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EXHIBIT 10.2
VALLEY BANK OF HELENA
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), signed December 30, 1997,
between VALLEY BANK OF HELENA ("Bank") and XXXX X. XXXXXXXX ("Xxxxxxxx") 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 HUB Financial Corporation ("HUB"),
under which HUB will merge with and into Glacier ("Merger"). HUB
presently owns approximately 86.5% of the outstanding shares of common
stock of the Bank. Immediately following the Merger, the Bank will be a
subsidiary of Glacier.
B. Before the Merger, Flanders has served as President and CEO of the Bank.
C. Glacier and the Bank desire Flanders to continue his employment at the
Bank under the terms and conditions of this Agreement.
X. Xxxxxxxx desires to continue his employment at the Bank under the terms
and conditions of this Agreement.
AGREEMENT
The parties agree as follows.
1. EMPLOYMENT. The Bank agrees to employ Flanders and Flanders accepts
employment by the Bank on the terms and conditions set forth in this Agreement.
Flanders' title will be President of the Bank. During the Term of this
Agreement, Flanders will serve as a director of the Bank and, if elected by
Glacier's shareholders, will also serve as a director of Glacier. Glacier will
nominate Flanders at shareholder meetings where directors are elected to serve
as a director of Glacier throughout the term of this Agreement.
2. EFFECTIVE DATE AND TERM.
(a) Effective Date. This Agreement is effective as of the Effective
Date.
(b) Term. The term of this Agreement ("Term") is two years, beginning
on the Effective Date.
(c) Abandonment or Termination of the Merger. If the Merger Agreement
terminates before closing the Merger, this Agreement will not
become effective and will be void.
3. DUTIES. The Bank will employ Flanders as its President. Flanders will
faithfully and diligently perform his assigned duties, which are as follows:
(a) Bank Performance. Flanders will be responsible for all aspects of
the Bank's performance, including without limitation, directing
that daily operational and
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managerial matters are performed in a manner consistent with
Glacier's and the Bank's policies. Flanders will exert his best
efforts and devote his time and attention to Bank's affairs for a
maximum of 80 hours per month. Flanders may delegate
responsibility for the day-to-day operation of Bank's business to
the Executive Vice President subject to the general direction and
control of Bank's board of directors; however, he will continue to
hold ultimate responsibility for the Bank's performance. Flanders
will perform the duties of President consistent with the Bank's
bylaws and the direction of its board of directors.
(b) Development and Preservation of Business. Flanders will be
responsible for the development and preservation of banking
relationships and other business development efforts (including
appropriate civic and community activities) in Xxxxx and Xxxxx
County, Montana.
(c) Report to Board. Flanders 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 Flanders'
title or add, delete, or modify Flanders' performance
responsibilities to accommodate management succession, as well as
any other management objectives of the Bank or of Glacier.
Flanders 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. Flanders will at all times faithfully, industriously, and
to the best of his ability, experience and talents, perform all the duties that
may be required of and from the Bank's President under this Agreement. To the
extent that such activities do not interfere with his duties under Section 3,
Flanders may participate in other businesses as a passive investor, but (a)
Flanders may not actively participate in the operation or management of those
businesses, and (b) Flanders 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. SALARY. Initially, Flanders will receive a salary of $42,000 per year, to be
paid monthly in accordance with the Bank's regular payroll schedule. The Bank
will annually review Flanders' compensation, in connection with the advice and
recommendations of the Chief Executive Officer of Glacier.
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 Flanders for that year.
In making this determination, the Bank's board of directors will consider
factors such as Flanders' performance of his duties and the safety, soundness
and profitability of the Bank. Flanders' bonus will reflect Flanders'
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 Flanders no later than January
31 of the year following the year in which the bonus is earned by Flanders.
7. INCOME DEFERRAL. Flanders 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.
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8. VACATION AND BENEFITS.
(a) Vacation and Holidays. Flanders will receive the greater of (1)
four weeks of paid vacation each year or (2) the vacation benefits
set forth in Glacier's schedule for senior employees with
Flanders' years of service with the Bank, in addition to all
holidays observed by the Bank. Each year, Flanders may carry over
only up to two weeks of unused vacation. Any unused vacation time
in excess of two weeks will not accumulate or carry over from one
calendar year to the next.
(b) Benefits. Flanders 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.
(c) Business Expenses. The Bank will reimburse Flanders for ordinary
and necessary expenses (including, without limitation, travel,
entertainment, and similar expenses) incurred in performing and
promoting the Bank's business. Flanders 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 Flanders'
employment for Cause (defined below) before this Agreement
terminates the Bank will pay Flanders the salary earned and
expenses reimbursable under this Agreement incurred through the
date of his termination. Flanders will have no right to receive
compensation or other benefits for any period after termination
under this Section 9(a).
(b) Other Termination By Bank. If the Bank terminates Flanders'
employment without Cause before this Agreement terminates, or
Flanders terminates his employment for Good Reason (defined
below), the Bank will pay Flanders 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 Flanders
dies or (2) if Flanders is unable to perform his duties and
obligations under this Agreement for a period of 90 days as a
result of a physical or mental disability arising at any time
during the term of this Agreement, unless with reasonable
accommodation Flanders could continue to perform his duties under
this Agreement and making these accommodations would not require
the Bank to expend any funds. If termination occurs under this
Section 9(c), Flanders or his estate will be entitled
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to receive all compensation and benefits earned and expenses
reimbursable through the date Flanders' 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 Flanders' death, disability, or Cause) (1) terminates
Flanders' employment within one year following a Change in
Control (as defined below) or (2) terminates Flanders'
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 Flanders with the
payment and benefits described in Section 9(d)(3).
(2) Termination by Flanders. If Flanders terminates Flanders'
employment, with or without Good Reason, within one year
following a Change in Control, the Bank will provide
Flanders with the payment and benefits described in Section
9(d)(3).
(3) Payments. If Section 9(d)(1) or (2) is triggered as
described in those Sections, the Bank will: (i) pay
Flanders a single payment in an amount equal to Flanders'
annual salary (determined as of the day before the date
Flanders' employment was terminated) and (ii) maintain and
provide for one-year following Flanders' termination, at no
cost to Flanders, the benefits described in Section 8(b) to
which Flanders is entitled (determined as of the day before
the date of such termination); but if Flanders'
participation in any such benefit is thereafter barred or
not feasible, or discontinued or materially reduced, the
Bank will arrange to provide Flanders 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
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 Flanders from the Bank or its
successor after the Change in Control; and
(3) Flanders' right to receive the payments and benefits
described in Section 9(d)(3) terminates (i) immediately, if
before the Change in Control transaction closes, Flanders
terminates his employment without Good Reason or the Bank
terminates Flanders' employment for Cause, or (ii) one year
after a Change in Control occurs.
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(f) Return of Bank Property. If and when Flanders ceases, for any
reason, to be employed by the Bank, Flanders must return to the
Bank all keys, pass cards, identification cards and any other
property of the Bank or Glacier. At the same time, Flanders 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:
(i) Willful misfeasance or gross negligence in the
performance of Flanders' duties;
(ii) Conviction of a crime in connection with his duties;
(iii) 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
(iv) Permanent disability, meaning a physical or mental
impairment which renders Flanders incapable of
substantially performing the duties required under
this Agreement, and which is expected to continue
rendering Flanders so incapable for the reasonably
foreseeable future.
(h) Good Reason. "Good Reason" means only any one or more of the
following:
(i) Reduction, without Flanders' consent, of Flanders'
salary or reduction or elimination of any
compensation or benefit plan benefitting Flanders,
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 benefitted;
(ii) The assignment to Flanders without his consent of
any authority or duties materially inconsistent with
Flanders' position as of the date of this Agreement
or the substantive diminishment of his duties; or
(iii) A relocation or transfer of Flanders' principal
place of employment that would require Flanders to
commute on a regular basis more than 30 miles each
way from Helena.
(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.
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10. CONFIDENTIALITY. Flanders 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 Flanders' 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. Flanders 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 lesser of (a) two years after
Flanders' employment with the Bank and Glacier has terminated or (b) three years
from Closing of the Merger, Flanders will not, directly or indirectly, as a
shareholder, "founder," director, officer, employee, partner, agent, consultant,
lessor, creditor or otherwise:
(a) provide management, supervisory or other services to any person or
entity engaged or, in the case of a business to be formed or in
formation, that will engage in any business in Xxxxx and Xxxxx
County, Montana which is competitive with the business of the Bank
or Glacier or any of their subsidiaries as conducted during the
term of this Agreement or as conducted as of the date of
termination of employment;
(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 to participate in any manner in the formation
of any business referenced under Section 11(a); 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 Flanders stipulate that, in light of all of the facts
and circumstances of the relationship between Flanders 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, Flanders
and the Bank request the court to reform these provisions to
restrict Flanders' use of confidential information and Flanders'
ability to compete with the Bank and Glacier to the maximum
extent, in time, scope of activities, and geography, the court
finds enforceable.
(b) Flanders acknowledges the Bank and Glacier will suffer immediate
and irreparable harm that will not be compensable by damages alone
if Flanders
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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. Flanders 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. Flanders represents that if his
employment is terminated, whether voluntarily or involuntarily, Flanders has
experience and capabilities sufficient to enable Flanders 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 Flanders from earning a
livelihood.
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 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 Flanders
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.
15. MISCELLANEOUS PROVISIONS.
(a) Defined Terms. Capitalized terms used as defined terms, but not
defined in this Agreement, will have the meanings assigned to
those terms in the Merger Agreement.
(b) Entire Agreement. This Agreement constitutes the entire
understanding and agreement between the parties concerning its
subject matter and supersedes all
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prior agreements, correspondence, representations, or
understandings between the parties relating to its subject matter.
(c) Binding Effect. This Agreement will bind and inure to the benefit
of the Bank's, Glacier's and Flanders' heirs, legal
representatives, successors and assigns.
(d) 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.
(e) 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.
(f) Assignment. The services to be rendered by Flanders under this
Agreement are unique and personal. Accordingly, Flanders may not
assign any of his rights or duties under this Agreement.
(g) Amendment. This Agreement may be modified only through a written
instrument signed by both parties.
(h) Severability. The provisions of this Agreement are severable. The
invalidity of any provision will not affect the validity of other
provisions of this Agreement.
(i) Governing Law and Venue. This Agreement will be governed by and
construed in accordance with Montana law, except to the extent
that certain matters may be governed by federal law. The parties
must bring any legal proceeding arising out of this Agreement in
Flathead County, Montana.
(j) 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 ON NEXT PAGE]
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Signed December 19, 1997:
VALLEY BANK OF HELENA
By: /s/ XXXX XXXXXX
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Its: Chairman of the Board
XXXX X. XXXXXXXX, individually
/s/ XXXX X. XXXXXXXX
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Xxxx X. Xxxxxxxx
Ratified December 19, 1996: GLACIER BANCORP, INC.
By: /s/ XXXX X. XXXXXXXXX
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Xxxx X. XxxXxxxxx
Its: President and CEO
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