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EXHIBIT 10.1
BIG SKY WESTERN BANK
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), signed as of October ____,
1998, between BIG SKY WESTERN BANK ("Bank") and XXXXXXX X. XXXXXXXX
("Executive") and ratified by GLACIER BANCORP, INC., takes effect on the
effective date of the Share Exchange ("Effective Date").
RECITALS
A. Glacier Bancorp, Inc. ("Glacier") has entered into a Plan and Agreement
of Share Exchange ("Share Exchange Agreement") with the Bank, pursuant
to which all of the outstanding shares of Bank common stock will be
exchanged for shares of Glacier common stock ("Share Exchange"). As a
result of the Share Exchange, the Bank will become a subsidiary of
Glacier.
B. Before the Share Exchange, Executive has served as President of the
Bank.
C. Glacier and the Bank desire Executive to continue his employment at the
Bank under the terms and conditions of this Agreement.
D. Executive desires to continue his employment at the Bank under the terms
and conditions of this Agreement.
E. Executive and Bank are parties to an Executive Salary Continuation
Agreement dated March 20, 1996 ("Continuation Agreement"), and both
parties desire that such agreement remain in full force and effect.
AGREEMENT
In consideration of the promises set forth in this Agreement, the
parties agree as follows.
1. 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 of the Bank. During the
Term of this Agreement, Executive will serve as a director of the Bank.
2. EFFECTIVE DATE AND TERM.
a. Term. The term of this Agreement ("Term") is three years,
beginning on the Effective Date.
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b. Abandonment or Termination of the Share Exchange. This Agreement
is void if the Share Exchange Agreement is terminated in
accordance with its terms.
3. DUTIES. The Bank will employ Executive as its President. Executive will
faithfully and diligently perform his assigned duties, which are as
follows:
a. 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 Glacier's and the Bank'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) in Gallatin County,
Montana.
c. Report to Board. Executive 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 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 Glacier. 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 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, Executive will receive an annual salary of $95,000,
to be paid in accordance with the Bank's regular payroll schedule.
Subsequent salary increases are subject to the Bank's annual review of
Executive's compensation and performance, but will not be less than five
percent (5%) annually for the duration of this Agreement.
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 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, also taking into account the nature and extent of
incentive bonuses paid to comparable senior
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officers at Glacier. 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.
7. INCOME DEFERRAL. Executive 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.
8. EXECUTIVE EVALUATION. During the last year of this Agreement and upon
Executive's request, Glacier will use its best efforts to review
Executive's performance and to notify Executive whether this Agreement
will be extended, modified or terminated. It will be the Executive's
responsibility to request such evaluation from Glacier.
9. VACATION AND BENEFITS.
a. Vacation and Holidays. Executive will receive the greater of (a)
four weeks of paid vacation each year or (b) the vacation
benefits set forth in Glacier's schedule for senior employees
with Executive's years of service with the Bank, in addition to
all holidays observed by the Bank. Each year, Executive may
carry over up to two weeks of unused vacation to the following
year. Any unused vacation time in excess of two weeks will not
accumulate or carry over from one calendar year to the next.
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 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). The
Bank will continue to operate under Executive's fully funded
key-man life insurance policy in place on the Effective Date.
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 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 Bank policy or the rules and
regulations of the Internal Revenue Service.
10. TERMINATION OF EMPLOYMENT.
a. Termination By Bank for Cause. If the Bank terminates
Executive's employment for Cause (defined below) before this
Agreement terminates, the Bank will pay
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Executive the salary earned and expenses reimbursable under this
Agreement incurred through the date of his termination, and the
Continuation Agreement will remain in effect according to its
terms. Executive will have no right to receive compensation or
other benefits for any period after termination under this
Section 10.
b. Other Termination By Bank. If the Bank terminates Executive's
employment without Cause before this Agreement terminates, or
Executive terminates his employment for Good Reason (defined
below), the Bank 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, and the
Continuation Agreement will remain in effect according to its
terms for the remainder of the Term.
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 180 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 10(c), subject to the Continuation Agreement,
Executive or his estate will be entitled to receive all
compensation (less any long-term disability payments received by
Executive) and benefits earned and expenses reimbursable through
the date Executive's 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 Executive's death, disability, or Cause) (1)
terminates Executive's employment within one year
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
greater of (1) the payment and benefits described in
Section 10(d)(3) or (2) the compensation and other
benefits he would have been entitled to for the
remainder of the Term if his employment had not been
terminated.
(2) 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 10(d)(3).
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(3) Payments. If Section 10(d)(1) or (2) is triggered in
accordance with its terms, the Bank will: (i) pay
Executive a single payment in an amount equal to
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 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 Bank 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 payments 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 Bank
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 Bank terminates Executive's employment for
Cause, or (ii) one year after a Change in Control
occurs.
f. 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 or Glacier. At the same time, Executive
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:
(1) Willful misfeasance or gross negligence in the
performance of Executive's duties;
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(2) Conviction of a crime, other than a misdemeanor traffic
violation, in connection with his duties;
(3) Conduct demonstrably and significantly harmful to the
Bank from a financial point of view, as reasonably
determined on the advice of legal counsel by the Bank's
board of directors; or
(4) Subject to Section 10(c), 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
Bank employees (or employees of a successor or
controlling entity of the Bank) 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;
or
(3) A relocation or transfer of Executive's principal place
of employment that would require Executive to commute on
a regular basis more than sixty (60) miles each way from
Big Sky, 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 Bank, 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 (which term is not intended to include his personal
knowledge or experience) 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 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 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.
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Executive will also treat the terms of this Agreement as confidential
business information.
12. NONCOMPETITION. During (i) the Term and the terms of any extensions or
renewals of this Agreement; (ii) any time period during which Executive
is receiving termination payments under Section 10 (except pursuant to
the Continuation Agreement); and (iii) for a period of one year after
Executive's employment with the Bank and/or Glacier has terminated for
Cause pursuant to Section 10, 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 Gallatin County,
Montana which is directly competitive with the business of the
Bank or Glacier 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
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.
13. ENFORCEMENT.
a. 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 11 and 12
(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, 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 Glacier to the maximum extent, in time, scope of
activities, and geography, the court finds enforceable.
b. Executive acknowledges the Bank and Glacier 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 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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14. COVENANTS. Executive specifically acknowledges the receipt of adequate
consideration for the covenants contained in Sections 11 and 12 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.
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 Bank 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 Bank's, Glacier's and Executive's heirs, legal
representatives, successors and assigns.
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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 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 will be deemed an original, but all
of which taken together will constitute one and the same
document.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
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Signed October ____, 1998:
BIG SKY WESTERN BANK:
By
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Xxxxxx X. Xxxxxx
Its: Chairman and CEO
EXECUTIVE:
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Xxxxxxx X. Xxxxxxxx
Ratified October ____, 1998
GLACIER BANCORP, INC.
By
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Xxxxxxx X. Xxxxxxxx
Its: President and CEO
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