SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[_] Definitive Additional Materials by Rule 14a-6(e)(2))
[_] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
GLACIER BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
________________________________________________________________________________
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
[_] Fee paid previously with preliminary materials:
________________________________________________________________________________
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
STEPHEN M. KLEIN
(206) 340-9648
March 30, 1999 [email protected]
VIA EDGAR
Securities and Exchange Commission
450 Fifth St NW
Judiciary Plaza
Washington, D.C. 20549-1004
Re: Glacier Bancorp, Kalispell, Montana
Definitive Proxy Materials
File No. 0-18911
Ladies and Gentlemen:
On behalf of Glacier Bancorp, Kalispell, Montana (the "Company"), we are
transmitting the Definitive Proxy Materials for the Company's 1999 annual
shareholder meeting which are being filed electronically via the EDGAR system.
The definitive proxy materials for the Annual Meeting of Shareholders were sent
or distributed to shareholders on or about March 30, 1999. The Proxy Materials
are being forwarded pursuant to Rule 14a-6(c).
In accordance with Rule 14a-3, seven copies of the 1998 Annual Report to
Shareholders will be submitted to your office.
In the event there are any questions concerning the enclosed materials,
please feel free to contact me at (206) 340-9648.
Sincerely,
GRAHAM & DUNN
/s/ Stephen M. Klein
Stephen M. Klein
Enclosure
cc: Glacier Bancorp, Inc.
<PAGE>
[LETTERHEAD OF GLACIER BANCORP, INC.]
March 31, 1999
Dear Fellow Stockholder:
You are cordially invited to attend the Annual Meeting ("Annual Meeting")
of Stockholders of Glacier Bancorp, Inc., a Delaware corporation and bank
holding company. The Annual Meeting will be held on Wednesday, April 28, 1999,
at 9:00 a.m. local time, in The Stage Room at The Outlaw Inn, 1701 Highway 93
South, Kalispell, Montana.
It is very important that you be represented at the Annual Meeting
regardless of the number of shares you own or whether you are able to attend the
meeting in person. We urge you to mark, sign and date your proxy card today and
return it in the envelope provided, even if you plan to attend the Annual
Meeting. This will not prevent you from voting in person, but will ensure that
your vote is counted if you are unable to attend.
Your continued support of and interest in Glacier Bancorp, Inc. are
sincerely appreciated.
Sincerely,
/s/JOHN S. MACMILLAN /s/MICHAEL J. BLODNICK
John S. MacMillan Michael J. Blodnick
Chairman President and Chief
Executive Officer
<PAGE>
GLACIER BANCORP, INC.
49 Commons Loop
Kalispell, Montana 59901
(406) 756-4200
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 28, 1999
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Glacier
Bancorp, Inc. (the "Company") will be held at The Stage Room of the Outlaw Inn,
1701 Highway 93 South, Kalispell, Montana, on Wednesday, April 28, 1999, at 9:00
a.m., local time, for the following purposes:
1. ELECTION OF DIRECTORS. To elect three directors of the Company for a
three-year term and until their successors are elected and have qualified.
2. AMENDMENT TO THE 1995 EMPLOYEE STOCK OPTION PLAN. A proposal to amend
the 1995 Employee Stock Option Plan (as fully described in the attached Proxy
Statement).
3. AMENDMENT TO THE 1994 DIRECTORS' STOCK OPTION PLAN. A proposal to amend
the 1994 Directors' Stock Option Plan (as fully described in the attached Proxy
Statement).
4. OTHER MATTERS. To transact such other business as may properly come
before the meeting or any adjournment thereof. Management is not aware of any
other such business.
The Board of Directors of the Company has fixed March 9, 1999 as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting. Only those stockholders of record as of the close of
business on that date will be entitled to vote at the Annual Meeting or at any
adjournment of such meeting.
By Order of the Board of Directors
/s/JAMES H. STROSAHL
James H. Strosahl
Secretary
March 31, 1999
Kalispell, Montana
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YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN TO
BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY
PROMPTLY IN THE ENVELOPE PROVIDED. IF YOU ATTEND THIS MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY YOUR PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU IN
WRITING OR IN PERSON AT ANY TIME PRIOR TO THE EXERCISE THEREOF.
- --------------------------------------------------------------------------------
<PAGE>
GLACIER BANCORP, INC.
49 Commons Loop
Kalispell, Montana 59901
(406) 756-4200
PROXY STATEMENT
General
Date, Time and Place of Meeting. This Proxy Statement and the accompanying
Proxy are being sent to shareholders on or about March 31, 1999, for use in
connection with the annual meeting of shareholders ("Annual Meeting") of Glacier
Bancorp, Inc. (the "Company") to be held on Wednesday, April 28, 1999. Only
those shareholders of record at the close of business on March 9, 1999 ("Voting
Record Date"), are entitled to vote. The number of shares of the Company's $.01
par value common stock ("Common Stock"), outstanding on the Voting Record Date
and entitled to vote at the Annual Meeting is 8,640,087.
Solicitation of Proxies. The enclosed Proxy is solicited by and on behalf
of the Company's board of directors ("Board"), with the cost of solicitation
borne by the Company. Solicitation may be made by directors and officers of the
Company and its subsidiaries, Glacier Bank, Glacier Bank of Whitefish ("GBW"),
Glacier Bank of Eureka ("GBE"), First Security Bank of Missoula ("FSB"), Valley
Bank of Helena ("VB"), and Big Sky Western Bank ("Big Sky") (collectively, the
"Subsidiaries"). Solicitation may be made through the mail, or by telephone,
facsimile, or personal interview. The Company does not expect to pay any
compensation for the solicitation of proxies, except to brokers, nominees, and
similar recordholders for reasonable expenses in mailing proxy materials to
beneficial owners.
Quorum. The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of Common Stock entitled to vote is necessary
to constitute a quorum at the Annual Meeting. Abstentions will be counted as
shares present and entitled to vote at the Annual Meeting for purposes of
determining the presence of a quorum. Broker non-votes will not be considered
shares present and will not be included in determining whether a quorum is
present.
Voting Rights
Voting on Matters Presented. The three nominees for election as directors
at the Annual Meeting who receive the highest number of affirmative votes will
be elected. Shareholders are not permitted to cumulate their votes for the
election of directors. Votes may be cast for or withheld from each nominee.
Votes that are withheld and broker non-votes will have no effect on the outcome
of the election because directors will be elected by a plurality of votes cast.
With respect to the proposals to approve the amendments to the employee and
director stock option plans, stockholders may vote for the proposal, against the
proposal or may abstain from voting. The affirmative vote of at least a majority
of the total votes present, in person or by proxy, at the Annual Meeting is
required for the approval to amend the stock option plans. Holders of record of
the Common Stock will be entitled to one vote per share on any matter that may
properly come before the Annual Meeting.
1
<PAGE>
Voting of Proxies. Shares of Common Stock represented by properly executed
proxies, if such proxies are received in time and not revoked, will be voted in
accordance with the instructions indicated on the proxies. If no instructions
are indicated, such proxies will be voted (i) FOR the election of all of the
nominees for director; (ii) FOR the amendment to the 1995 Employee Stock Option
Plan; and (iii) FOR the amendment to the 1994 Director Stock Option Plan, and in
the discretion of the proxy holder, as to any other matter which may properly
come before the Annual Meeting. A stockholder of the Company who has given a
proxy may revoke it at any time prior to its exercise at the Annual Meeting by
(i) giving written notice of revocation to the Corporate Secretary of the
Company, (ii) properly submitting to the Company a duly-executed proxy bearing a
later date, or (iii) attending the Annual Meeting and voting in person. All
written notices of revocation and other communications with respect to
revocation of proxies should be addressed as follows: Glacier Bancorp, Inc., 49
Commons Loop, Kalispell, Montana 59901, Attention: Corporate Secretary. The
shares represented by properly executed, unrevoked proxies will be voted in
accordance with the specifications in the Proxy.
Recent Developments
Acquisition of HUB Financial Corporation
Effective August 31, 1998, HUB Financial Corporation ("HUB") was merged
with and into the Company. As a result of the merger and share exchange with the
minority shareholders of Valley Bank of Helena VB became a separate subsidiary
of the Company. Consistent with the terms of the merger and share exchange
agreement governing the transaction, shareholders of HUB and the minority
shareholders of VB, each of whom became shareholders of the Company, will be
eligible to vote at the 1999 Annual Meeting of Shareholders.
Acquisition of Big Sky Western Bank
Effective January 20, 1999, Big Sky Western Bank became a wholly owned
subsidiary of the Company. Consistent with the terms of the agreement governing
the transaction, shareholders of Big Sky who became shareholders of the Company,
will be eligible to vote at the 1999 Annual Meeting of Shareholders.
Proposal No. 1 - Election of Directors
General
The Certificate of Incorporation of the Company provides that the Board of
Directors will be divided into three classes as nearly equal in number as
possible, and that the members of each class will be elected for terms of three
years and until their successors are elected and qualified, with one of the
three classes of directors to be elected each year. The Bylaws provide that
there shall be a minimum of seven (7) and a maximum of twelve (12) directors,
the exact number to be determined by resolution of the Board. The Bylaws further
allow that by resolution, the Board may be increased or decreased within the
minimum and maximum limits. The number of directors set by the Board is nine.
Consistent with the terms of the agreement governing the merger with HUB, Fred
J. Flanders was appointed a director of the Company at the time of consummation
of the merger and is up for reelection at the 1999 Annual Meeting.
2
<PAGE>
At the Annual Meeting, stockholders of the Company will be asked to elect
three directors of the Company for a three-year term expiring in 2002 and until
their successors are elected and qualified. The three nominees for election as
directors who were selected by the Nominating Committee of the Board of
Directors are Michael J. Blodnick, Fred J. Flanders, and Harold A. Tutvedt, each
of whom currently serve as directors of the Company. Darrel R. Martin, a current
director of the Company, whose term expires at the 1999 Annual Meeting, has
retired from the Board, and therefore, will not stand for reelection. There are
no arrangements or understandings between the persons named and any other person
pursuant to which such person was selected as a nominee for election as a
director at the Annual Meeting, and no director or nominee for director is
related to any other director or executive officer of the Company by blood,
marriage or adoption.
If any person named as nominee should be unable or unwilling to stand for
election at the time of the Annual Meeting, the proxies will nominate and vote
for any replacement nominee or nominees recommended by the Board of Directors of
the Company. At this time, the Board of Directors knows of no reason why any of
the nominees may not be able to serve as a director if elected.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR ELECTION OF THE
NOMINEES FOR DIRECTOR.
3
<PAGE>
Information with Respect to Nominees for Director and Continuing Directors
The following table sets forth certain information with respect to the
nominees for director for a three-year term expiring in 2002 and the continuing
directors of the Company. The table includes (i) principal occupations during
the past five years; (ii) the term of office; and (iii) the number and
percentage of shares of Common Stock beneficially owned by each individual on
January 15, 1999.
<TABLE>
<CAPTION>
Amount and Nature of
Age as of Beneficial Ownership of
January 15, Director Term Common Stock as of
Name 1999 Position Since Expires January 15, 1999(1)
- ---- ---- -------- -------- ------- -----------------------
<S> <C> <C> <C> <C> <C>
NOMINEES FOR DIRECTOR
Michael J. Blodnick 46 Director, 1993 1999 107,762 (1.29%)(2)
President and CEO
Fred J. Flanders 62 Director, Chairman 1998 1999 15,639 (0.19%)(3)
of VB
Harold A. Tutvedt 69 Director 1983 1999 129,342 (1.54%)(4)
CONTINUING DIRECTORS
William L. Bouchee 57 Director, 1996 2000 155,323 (1.85%)(5)
President of FSB
L. Peter Larson 60 Director 1985 2000 263,630 (3.15%)
Everit A. Sliter 60 Director 1973 2000 162,984 (1.95%)(6)
Allen J. Fetscher 53 Director, Chairman 1996 2001 147,867 (1.77%)(7)
of FSB
John S. MacMillan 62 Chairman 1977 2001 192,230 (2.29%)(8)
F. Charles Mercord 67 Director 1975 2001 146,401 (1.75%)(9)
</TABLE>
(1) Pursuant to rules adopted by the SEC under the Exchange Act, an individual
is considered to beneficially own shares of Common Stock if he or she has
or shares: (1) voting power, which includes the power to vote, or direct
the voting of the shares; or (2) investment power, which includes the power
to dispose, or direct the disposition of the shares. Unless otherwise
indicated, the individual has sole voting and sole investment power with
respect to such holdings. Share amounts have been adjusted to reflect a 10%
stock dividend paid October 1, 1998.
(2) Includes 39,473 shares held jointly with Mr. Blodnick's wife; 29,700 shares
owned by Mr. Blodnick's wife; 1,324 shares which Mr. Blodnick is custodian
for his children; 8,354 shares held for Mr. Blodnick's account in the
Company's Pension and Profit Sharing Plans; 8,593 shares held in an IRA
account for the benefit of Mr. Blodnick's wife; 229 held in a family
partnership; and 20,089 shares which could be acquired within 60 days by
the exercise of stock options.
4
<PAGE>
(3) Includes 12,540 shares held in an IRA Account for the benefit of Mr.
Flanders.
(4) Includes 69,360 shares owned jointly with Mr. Tutvedt's wife, 7,830 shares
owned jointly by Mr. Tutvedt's wife and daughter; 36,986 held jointly with
brother; 3,121 shares held in an IRA account for the benefit of Mr.
Tutvedt; 2,934 shares held in an IRA account for the benefit of Mr.
Tutvedt's wife; and 9,111 shares which could be acquired within 60 days by
the exercise of stock options.
(5) Includes 9,323 shares which could be acquired by Mr. Bouchee within 60 days
by the exercise of stock options.
(6) Includes 43,154 shares held jointly with Mr. Sliter's wife; 36,829 shares
owned by Mr. Sliter's wife; 38,728 shares held in an IRA account for the
benefit of Mr. Sliter; 12,865 shares held in an IRA account for the benefit
of Mr. Sliter's wife; 3,986 shares held in a simplified employee pension
plan; 706 shares held in a savings retirement account; 750 shares held in a
family partnership; and 14,611 shares which could be acquired within 60
days by the exercise of stock options.
(7) Includes 36,768 shares owned by Mr. Fetscher's wife; 31,984 considered
beneficially held as Trustee for shares held in a trust for the benefit of
Mr. Fetscher's minor children; and 42,523 held by a family corporation, of
which Mr. Fetscher is a principal and 2,024 shares which could be acquired
within 60 days by the exercise of stock options.
(8) Includes 34,519 shares owned jointly with Mr. MacMillan's wife; 34,855
owned by Mr. MacMillan's wife; 50,100 shares held for Mr. MacMillan's
account in the Company's Pension and Profit Sharing Plans; 2,426 held in an
IRA account for the benefit of Mr. MacMillan; 4,241 shares held in an IRA
account for the benefit of Mr. MacMillan's wife, 548 shares held in a
family partnership; and 6,985 shares which could be acquired within 60 days
by the exercise of stock options.
(9) Includes 96,473 shares held in an IRA for the benefit of Mr. Mercord;
19,554 shares owned by Mr. Mercord's wife; 4,873 shares held in an IRA
account for the benefit of Mr. Mercord's wife; and 14,611 shares which
could be acquired by the exercise of stock options.
Stockholder Nominations
Section 4.15 of the Company's Bylaws governs nominations for election to
the Board of Directors and requires all nominations by stockholders to be made
in compliance with the notice provisions in that section. Written notice of a
stockholder nomination for an election to be held at an annual meeting must be
given either by personal delivery or by United States mail, postage prepaid to
the Secretary of the Company not later than sixty days prior to the anniversary
date of the mailing of proxy materials by the Company in connection with the
immediately preceding annual meeting. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the nomination and of
the person or persons to be nominated; (b) a representation that the stockholder
is a holder of record of stock of the Company entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all arrangements
or understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the SEC; and
(e) the consent of each nominee to serve as a director of the Company if so
elected. The presiding officer of the meeting may refuse to acknowledge the
nomination of any person not made in compliance with the foregoing procedures.
The Company did not receive any stockholder nominations for director in
connection with the upcoming Annual Meeting.
5
<PAGE>
Background of Directors
Michael J. Blodnick was appointed President and Chief Executive Officer of
the Company in July 1998. Prior to that time, he served as the Executive Vice
President and Secretary of the Company since 1994 and 1993, respectively. Mr.
Blodnick is also the Chief Executive Officer of Glacier Bank, and Executive Vice
President of GBE, and serves as a director of GBW, FSB,VB and Big Sky. Mr.
Blodnick has been employed by the Bank since 1978.
William L. Bouchee has served as the President and Chief Executive Officer
of FSB since 1991. Mr. Bouchee is also a director of FSB and has served on the
Board of Directors of the Company since 1996.
Allen J. Fetscher was appointed to the Board of Directors of the Company in
December 1996. Mr. Fetscher also serves as the Chairman of FSB. Mr. Fetscher is
the President of Fetscher's Inc. He is also the Vice President of American
Public Land Exchange Co., Inc. and the owner of Associated Agency, a company
involved in real estate.
Fred J. Flanders was appointed to the Board of Directors in August 1998 in
connection with the acquisition of HUB. Mr. Flanders is the Chairman of the
Board of VB, and served as the President of VB from 1992 to 1998. Mr. Flanders
also serves as a director of Big Sky.
L. Peter Larson has been the President and CEO of American Timber Company
since 1978 and also serves as a director of GBE. Mr. Larson is the President and
CEO of L. Peter Larson Co. and Glacier Gold Compost, as well as a Partner and
CEO of Larson and Sparling Co., and has served as a director of the Company
and/or Glacier Bank since 1985.
John S. MacMillan, who joined the Bank in 1967, has been the Chairman of
the Company since January 1, 1993. In July 1998, Mr. MacMillan retired as
President, a position that he held since 1989, and Chief Executive Officer, a
position that he held since 1993. Mr. MacMillan is also the Chairman of Glacier
Bank, GBW and GBE, and a director of FSB and VB. Prior to 1993, he served as
President and Chief Operating Officer of Glacier Bank from 1989 to July 1998, as
Executive Vice President of Glacier Bank from 1979 to 1989, and has been a
director of the Company and/or Glacier Bank since 1977.
F. Charles Mercord served as President and Managing Officer of the Bank
from 1977 to 1989 and as Chairman and Chief Executive Officer of Glacier Bank
from 1989 until December 1992. Mr. Mercord, who joined Glacier Bank in 1961,
also served as Chairman and Chief Executive Officer of the Company from 1990
until December 1992, and has been a director of the Company and/or Glacier Bank
since 1975.
Everit A. Sliter has been a partner of Jordahl & Sliter, a certified public
accounting firm since 1965 and has served as a director of the Company and/or
Glacier Bank since 1973.
Harold A. Tutvedt is the owner of Harold Tutvedt Farm and served as a
director of the Company and/or Glacier Bank since 1983.
6
<PAGE>
Board Meetings and Committees
The Board of Directors of the Company met 22 times during the year ended
December 31, 1998. Each of the present directors attended at least 75% of the
meetings of the Board of Directors held in 1998, except for Mr. Mercord who
attended 73% of the meetings. The Company has established standing committees of
the Board of Directors that includes an Audit Committee and a Compensation
Committee.
The Audit Committee consists of seven non-employee members of the Board of
Directors of the Company, whose members include: Messrs. Fetscher, Larson,
Martin, MacMillan (who was appointed in July of 1998), Mercord, Sliter
(Chairman) and Tutvedt. The Audit Committee meets monthly with the Company's
independent auditor to review the audit and reports, and evaluate internal
controls, and at such other times as are necessary or appropriate. The Audit
Committee met 12 times during 1998.
The Compensation Committee consists of seven non-employee members of the
Board of Directors of the Company whose members include: Messrs. Fetscher,
Larson, Martin, MacMillan (who was appointed in July of 1998), Mercord, Sliter
and Tutvedt (Chairman). The responsibilities of the Compensation Committee
include reviewing management compensation, investigating new and different forms
of compensation and making recommendations on compensation to the Board of
Directors. The Compensation Committee met once during 1998.
The Board of Directors of the Company acts as The Nominating Committee for
selecting nominees for election as directors. The Nominating Committee met once
during 1998.
Compensation of Directors
Board Fees. The Company has established a program through which
non-employee directors receive annual retainers as members of the Board. Each
director earns $1,350 per month for services as a member of the Board of
Directors of the Company, except that Messrs. Sliter and Larson were paid $2,246
and $1,526 per month, respectively, for additional services performed. Mr.
MacMillan, as Chairman of the Board earned $2,220 per month, beginning upon his
retirement July 1, 1998. Directors who are employed by the Company receive no
additional compensation for their services as members of the Board.
A similar program for directors of the Subsidiaries has been established
which is commensurate with the size of the institution and the procedures of its
peer and affiliate banks.
Directors' Stock Option Plan. In 1994, the Board of Directors and
Shareholders of the Company adopted the 1994 Directors' Stock Option Plan
("DSOP") for outside directors. Under the DSOP, 50,000 shares of Common Stock
were reserved for issuance upon the exercise of nonqualified stock options
granted to non-employee directors of the Company and each of the Subsidiaries,
subject to appropriate adjustment for any future stock split, stock dividends,
or other changes in the capitalization of the Company. Under the DSOP, directors
of the Company and its Subsidiaries were each granted options to purchase shares
of Common Stock at a per share price equal to the fair market value of a share
of such stock on the date of grant as follows: 7,000 shares to directors of the
Company; 1,500 shares to directors of GBW and GBE; and 1,000 shares to directors
of FSB. Each option granted under the DSOP expires upon the earlier of five
years following the date of grant or three years following the date the optionee
ceases to be a director, except in the event of death, in which case the period
is one year from the date of death. In 1998, no options to purchase shares of
the Company's Common Stock were granted to directors and 12,000 shares were
issued pursuant to the exercise of options. At the 1999 Annual Meeting, the
shareholders will be
7
<PAGE>
asked to approve amendments to the DSOP. See "Proposal No. 3 - Amendments to
1994 Directors' Stock Option Plan."
Flanders Employment Agreement. Effective August 31, 1998, the Company and
VB entered into a two-year employment agreement with Fred J. Flanders, as
President of VB, that provides for severance benefits payable to Mr. Flanders if
he should be improperly terminated or voluntarily terminates his employment for
good reason following a change in control. In the event of termination after a
change in control, as defined in the agreement, Mr. Flanders would be entitled
to receive an amount equal to one year's annual compensation, plus benefits. In
addition, upon termination with VB, Mr. Flanders is prohibited from competing
with the Company or VB for a period of two years from termination (up to three
years from the effective date of the acquisition of VB).
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Executive Officers who are not Directors
The following table sets forth information with respect to the executive
officers who are not directors or nominees for director of the Company, and
executive officers and directors as a group. All executive officers are elected
annually by the Board of Directors and serve at the discretion of the Board of
Directors.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership of
Common Stock as of
Name and Age Position January 15, 1999*
- ------------ -------- -----------------------
<S> <C> <C>
James H. Strosahl, 57 Executive Vice President, Chief Financial 33,349(1)
Officer, Secretary and Treasurer of the 0.40%
Company; Senior Vice President and Chief
Financial Officer of Glacier Bank; employed
since 1993
Stephen J. Van Helden, 49 President of Glacier Bank; employed since 1974 102,935(2)
1.23%
Executive officers and directors 1,575,537(3)
as a group (12 individuals) 18.81%
</TABLE>
- ----------
* Share amounts have been adjusted to reflect a 10% stock dividend paid
October 1, 1998.
(1) Includes 13,726 shares held jointly with Mr. Strosahl's wife with whom
voting and dispositive power is shared; 9,777 shares held in an IRA
account; and 9,846 shares which could be acquired within 60 days by the
exercise of stock options
(2) Includes 49,765 shares held jointly with Mr. Van Helden's wife with whom
voting and dispositive power is shared; 39,317 shares held in the Company's
Pension and Profit Sharing Plans; 220 held in a trust for his son; 50
shares owned by the Affordable Housing Foundation, of which Mr. Van Helden
is the Chairman, and 13,583 shares which could be acquired within 60 days
by the exercise of stock options.
8
<PAGE>
(3) Includes 118,075 shares beneficially held by Darrel R. Martin, who will
retire from the Board of Directors effective at the 1999 Annual Meeting,
and 103,813 shares held by executive officers and directors as a group,
which could be acquired within 60 days by the exercise of stock options.
Beneficial Owners
The following table includes information concerning the only persons or
entities, including any "group" as that term is used in Section 13(d) (3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), who or which
was known to the Company to be the beneficial owner of more than 5% of the
issued and outstanding Common Stock on the Voting Record Date.
Amount and Nature
Name and Address of of Beneficial
Beneficial Owner Ownership (1) Percent of Class
- ---------------- ------------- ----------------
T. Rowe Price Associates, Inc. 773,570 (2) 9.24%
100 E. Pratt Street
Baltimore, Maryland 21202
- ----------
(1) Pursuant to rules promulgated by the Securities and Exchange Commission
("SEC") under the Exchange Act, a person or entity is considered to
beneficially own shares of Common Stock if the person or entity has or
shares (i) voting power, which includes the power to vote or to direct the
voting of the shares, or (ii) investment power, which includes the power to
dispose or direct the disposition of the shares.
(2) Based on an amended Schedule 13G filed under the Exchange Act. These
securities are owned by various individual and institutional investors
including the T. Rowe Price Small Cap Fund, Inc., (which owns 429,000
shares, representing 5.1% of the outstanding shares), which T. Rowe Price
Associates, Inc. ("Price Associates") serves as investment adviser with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Exchange Act, Price
Associates is deemed to be a beneficial owner of such securities; however,
Price Associates expressly disclaims that it is, in fact, the beneficial
owner of such securities.
9
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth a summary of certain information concerning
the compensation awarded to or paid by the Company for the year ended December
31, 1998 for services rendered in all capacities during the last three fiscal
years to the Chief Executive Officer and the four most highly compensated
executive officers of the Company whose total compensation during the last
fiscal year exceeded $100,000.
Summary Compensation Table
<TABLE>
<CAPTION>
=================================================================================================================================
Annual Compensation Long Term Compensation
----------------------------------------- --------------------------------------
Awards Payouts
------------ ----------
Securities
Name and Other Annual Underlying LTIP All Other
Principal Position Year Salary (1) Bonus (2) Compensation Options Payouts Compensation
(3) (4)(5)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John S. MacMillan (6) 1998 $143,893 $ 0 0 6,985 0 $ 27,213
Chairman of the Board 1997 189,616 80,000 0 9,323 0 46,426
1996 179,615 110,000 0 10,766 0 23,588
- ---------------------------------------------------------------------------------------------------------------------------------
Michael J. Blodnick 1998 $171,346 $ 50,000 0 6,985 0 $ 36,244
President and Chief 1997 164,423 50,000 0 9,323 0 41,707
Executive Officer 1996 148,846 75,000 0 10,766 0 20,857
- ---------------------------------------------------------------------------------------------------------------------------------
William L. Bouchee 1998 $132,378 $ 21,437 0 6,985 0 $ 24,153
President, First Security 1997 106,692 18,739 0 9,323 0 19,211
Bank
- ---------------------------------------------------------------------------------------------------------------------------------
Stephen J. Van Helden 1998 $105,539 $ 30,000 0 6,985 0 $ 20,580
President, Glacier Bank 1997 84,938 30,000 0 9,323 0 17,146
1996 77,346 40,000 0 7,260 0 17,362
- ---------------------------------------------------------------------------------------------------------------------------------
James H. Strosahl 1998 $ 84,248 $ 30,000 0 4,656 0 $ 17,878
Executive Vice President, 1997 76,729 28,000 0 6,216 0 16,825
Chief Financial Officer, 1996 69,934 32,500 0 7,260 0 13,905
Treasurer and Secretary
=================================================================================================================================
</TABLE>
- ----------
(1) Includes $6,733, $10,474 and $7,729 deferred, and earnings on amounts
previously deferred by Messrs. MacMillan, Blodnick and Strosahl,
respectively, pursuant to the Company's Deferred Compensation Plan.
(2) Does not include amounts attributable to miscellaneous benefits received by
executive officers, including the use of Company-owned automobiles and the
payment of certain club dues. In the opinion of management of the Company
the costs to the Company of providing such benefits to any individual
executive officer during the year ended December 31, 1998 did not exceed
the lesser of $50,000 or 10% of the total of annual salary and bonus
reported for the individual.
(3) Includes awards granted pursuant to the Company's Incentive Stock Option
Plans. Amounts have been adjusted to reflect a 10% stock dividend paid
October 1, 1998.
(4) Includes amounts allocated or paid by the Company during the year ended
December 31, 1998 on behalf of Messrs. MacMillan, Blodnick, Bouchee, Van
Helden and Strosahl pursuant to the Company's noncontributory defined
contribution "Money Purchase" Pension Plan, 401(k), Profit Sharing and SERP
in the amounts of $25,056, $35,200, $22,674, $19,954 and $16,654,
respectively.
(5) Includes life insurance premiums paid by the Company during the year ended
December 31, 1998 on behalf of Messrs. MacMillan, Blodnick, Bouchee, Van
Helden and Strosahl in the amounts of $2,157, $1,044, $1,479, $626 and
$1,224, respectively.
(6) Reflects salary paid to Mr. MacMillan in 1998 as President and Chief
Executive Officer until his retirement in July 1998.
10
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth certain information concerning individual grants
of stock options pursuant to the Company's stock option plans awarded to the
named executive officers during the year ended December 31, 1998.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
====================================================================================================================================
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants for Option Term(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Number of
Securities % of Total
Underlying Options
Options Granted Exercise Expiration
Name Granted (2) to Employees Price(3) Date 5% 10%
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John S. MacMillan 6,985 4.7% $ 22.16 1/28/03 $42,750 $97,370
- ------------------------------------------------------------------------------------------------------------------------------------
Michael J. Blodnick 6,985 4.7% $ 22.16 1/28/03 $42,750 $97,370
- ------------------------------------------------------------------------------------------------------------------------------------
William L. Bouchee 6,985 4.7% $ 22.16 1/28/03 $42,750 $97,370
- ------------------------------------------------------------------------------------------------------------------------------------
Stephen J. Van Helden 6,985 4.7% $ 22.16 1/28/03 $42,750 $97,370
- ------------------------------------------------------------------------------------------------------------------------------------
James H. Strosahl 4,656 3.5% $ 22.16 1/28/03 $28,495 $64,905
====================================================================================================================================
</TABLE>
- ----------
(1) The potential realizable value portion is based on the assumption that the
stock price of the Common Stock appreciates at the annual rate shown
(compounded annually) from the date of grant until the end of the five-year
option term. These numbers are calculated based on the requirements of the
Securities and Exchange Commission and do not reflect the Company's
estimate of future stock price performance.
(2) The options were granted on January 28, 1998 and vest over two years from
the date of grant. The Company's stock option plan is administered by a
Committee of the Board of Directors, which determines to whom options are
granted, as well as the number of shares and the exercise price. Options
are granted at the fair market value and are exercisable for a period up to
five years. Options may be exercised for a period of 90 days following
termination of employment and for one year following death or disability,
or upon the original expiration date, whichever is earlier. The share
amounts have been adjusted to reflect a 10% stock dividend paid on October
1, 1998.
(3) The exercise price was based on the market price of the Common Stock on the
date of grant.
11
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
The following table sets forth certain information concerning exercises of
stock options pursuant to the Company's stock option plans by the named
executive officers during the year ended December 31, 1998 and stock options
held at year end.
<TABLE>
<CAPTION>
=============================================================================================================================
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR END OPTION VALUES
=============================================================================================================================
Number of Value of
Unexercised Unexercised Options at
Shares Options at Year End(1) Year End(2)
Acquired on Value
Name Exercise(1) Realized
---------------------------- ----------------------------
Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John S. MacMillan 2,983 $ 48,444 6,985 0 $151,050 $ 0
10,766 100,770
9,323 48,573
- -----------------------------------------------------------------------------------------------------------------------------
Michael J. Blodnick 3,083 $ 52,565 10,766 16,308 $232,815 $352,660
- -----------------------------------------------------------------------------------------------------------------------------
William L. Bouchee 13,266 $271,024 0 16,308 $ 0 $352,660
- -----------------------------------------------------------------------------------------------------------------------------
Stephen J. Van Helden 3,000 $ 30,990 4,260 16,308 $ 92,122 $352,660
- -----------------------------------------------------------------------------------------------------------------------------
James H. Strosahl 3,630 $ 38,601 3,630 10,872 $ 78,499 $235,107
=============================================================================================================================
</TABLE>
- ----------
(1) The share amounts have been adjusted to reflect a 10% stock dividend paid
October 1, 1998.
(2) The average of the high and low sales prices of a share of Common Stock as
reported on the NASDAQ National Market System on December 31, 1998 was
$21.625.
Employment Agreements
Blodnick Employment Agreement. On August 31, 1996, the Company and Glacier
Bank, following approval of the Board of Directors, entered into an employment
agreement ("Agreement") with Mr. Blodnick. The Agreement terminates annually on
August 31st (the anniversary date) and is renewable on an annual basis on the
anniversary date, and each anniversary date thereafter, upon recommendation of
the Board of Directors, unless certain advance notice is given, or upon a change
in control (as defined), in which case the Agreement is automatically extended
for an additional year. Under the Agreement, Mr. Blodnick is entitled to receive
a minimum annual base salary, which may be adjusted, as appropriate, by the
Compensation Committee. The Agreement provides that, subsequent to a change in
control, if Mr. Blodnick is discharged otherwise than for cause (as defined) or
resigns for good reason, e.g., a significant diminution of responsibility or
adverse change in working conditions, then he is entitled to his full
compensation for three years. In addition, the Agreement restricts Mr. Blodnick
from competing with the Company or its Subsidiaries during the term of the
Agreement.
12
<PAGE>
Severance Agreements. The Company and Glacier Bank entered into agreements
with each of Messrs. Strosahl and Van Helden. These agreements are for an
initial one year term, which is extended each year for an additional year upon
the review and approval of the Boards of Directors of the Company and Glacier
Bank, and provides for severance benefits payable to Messrs. Strosahl and Van
Helden if either party is improperly terminated or voluntarily terminates his or
her employment for good reason following a change in control of the Company.
Messrs. Strosahl and Van Helden are entitled to receive annual salaries, which
may be adjusted, as appropriate, by the Compensation Committee. In the event of
termination after a change in control, as defined in the agreement, each of
Messrs. Strosahl and Van Helden would be entitled to receive two times his
annual compensation payable over 24 months.
Bouchee Employment Agreement. On August 9, 1996, FSB entered into a
three-year employment agreement with Mr. Bouchee that provides for severance
benefits payable to Mr. Bouchee if he should be improperly terminated or
voluntarily terminates his employment for good reason following a change in
control. Mr. Bouchee is entitled to receive an annual salary, which may be
adjusted, as appropriate, by the Compensation Committee. In the event of
termination after a change in control, as defined in the agreement, Mr. Bouchee
would be entitled to receive an amount equal to one year's annual compensation,
payable in one lump sum, as well as insurance benefits and pension and 401(k)
contributions for a year following termination.
Deferred Compensation Plan
In December, 1995, the Board of Directors adopted a Deferred Compensation
Plan ("DCP") for directors and certain officers and key employees, as designated
by resolution of the Board of Directors. The DCP generally provides for the
deferral of certain taxable income earned by participants in the DCP.
Non-employee directors may elect to have any portion of his or her director's
fees deferred. Designated officers or key employees may elect to defer annually
under the DCP up to 25% of his or her salary to be earned in the calendar year,
and up to 100% of any cash bonuses.
Supplemental Executive Retirement Plan
In December, 1995, the Board of Directors adopted a nonqualified and
nonfunded Supplemental Executive Retirement Plan ("SERP") for senior executive
officers. The SERP is intended to supplement payments due to participants upon
retirement under the Company's other qualified plans. The SERP generally
provides that the Company will credit qualified participants' account on an
annual basis, an amount equal to employer contributions that would have
otherwise been allocated to the executive's accounts under the tax-qualified
plans were it not for limitations imposed by the Internal Revenue Service, or
participation in the deferred compensation plan. Messrs. MacMillan, Blodnick,
Bouchee and Strosahl are the only participants in the SERP. Messrs. MacMillan,
Blodnick, Bouchee and Strosahl received an allocation under the plan in the
amounts of $5,558, $15,702, $1,903 and $1,802, respectively, for the fiscal year
1998.
1989 Incentive Stock Option Plan
In 1989, the Company adopted and the shareholders approved the 1989
Incentive Stock Option Plan (the "1989 Plan") which authorized the grant and
issuance of 316,151 shares of Common Stock (as adjusted for subsequent stock
splits and dividends) to key employees of the Company. At December 31, 1998, all
options to purchase shares under the 1989 Plan have been granted and no shares
remain available for future grants. The 1989 Plan was supplemented by the 1995
Employee Stock Option Plan as described below.
13
<PAGE>
1995 Employee Stock Option Plan
At the 1995 Annual Meeting, the shareholders adopted the 1995 Employee
Stock Option Plan (the "1995 Plan"). The 1995 Plan is administered by the Board
of Directors (or a Committee appointed by the Board). It allows stock options to
be granted to key employees of the Company in any combination up to an aggregate
of 507,779 shares of Company Common Stock, subject to appropriate adjustments
for any stock splits, stock dividends, or other changes in the capitalization of
the Company. The 1995 Plan provides for the issuance of options which qualify as
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, and nonqualified stock options.
As of December 31, 1998, options to purchase an aggregate of 345,444 shares
have been granted and 162,335 shares remain available for further grant. At the
1999 Annual Meeting, the shareholders will be asked to approve amendments to the
1995 Plan. See "Proposal No. 2 - Amendments to 1995 Employee Stock Option Plan."
Report of the Compensation Committee
The Compensation Committee of the Board of Directors of the Company is
composed of Committee Chairperson Harold Tutvedt, Allen J. Fetscher, L. Peter
Larson, Darrel R. Martin, John S. MacMillan, F. Charles Mercord and Everit A.
Sliter.
The Company, acting through the Committee, believes compensation of its
Executives and other key personnel should reflect and support the goals and
strategies of the Company.
The Committee's objectives in determining executive compensation are to
attract, reward and retain key executive officers; and to motivate executive
officers to perform to the best of their abilities and to achieve short-term and
long-term corporate objectives that will contribute to the overall goal of
enhancing stockholder value. To further these objectives, the Committee has
adopted the following policies:
o The Company will compensate competitively with the practices of peer
groups, and like performing financial companies;
o Performance at the corporate, subsidiary and individual executive
officer level will determine a significant portion of compensation;
with due regard to financial performance relative to peer groups;
o The attainment of realizable but challenging objectives will determine
performance-based compensation; and o The Company will encourage
executive officers to hold substantial, long-term equity stakes in the
Company so that the interest of executive officers will coincide with
the interest of stockholders - accordingly stock options will
constitute a significant portion of compensation.
Elements of the Company's compensation of executive officers are: (1) Base
salary and bonuses, (2) Incentive compensation in the form of stock options
granted under the Company's 1995 Incentive Stock Option Plan, (3) Salary
Deferral Plan, and (4) Other compensation and employee benefits generally
available to all employees of the Company, such as health, life and long term
disability insurance and employee contributions under the Company's 401-K and
Pension Plans.
14
<PAGE>
The Committee believes the Company's goals are best supported by attracting
and retaining well-qualified executive officers and other personnel through
competitive compensation arrangements, with emphasis on rewards for outstanding
contributions to the Company's success, with a special emphasis on aligning the
interests of executive officers and other personnel with those of the Company's
shareholders.
Executive Compensation Committee
Harold Tutvedt (Chairperson) o Allen J. Fetscher o L. Peter Larson
Darrel R. Martin o John S. MacMillan o F. Charles Mercord o Everit A. Sliter
15
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly cumulative total return of the
Common Stock over a five-year measurement period with (i) the yearly cumulative
total return on the stocks included in the Standard & Poor's ("S&P") 500
Composite Index and (ii) the SNL Bank Index comprised of banks between
$500M-$1B. All of these cumulative returns are computed assuming the
reinvestment of dividends at the frequency with which dividends were paid during
the applicable years.
-----------------------------------------------------------------------
Glacier Bancorp Stock Price Performance
-----------------------------------------------------------------------
[THE FOLLOWING TABLE WAS REPRESENTED BY A LINE CHART IN THE PRINTED MATERIAL.]
<TABLE>
<CAPTION>
Period Ending
---------------------------------------------------------------------------
Index 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Glacier Bancorp, Inc. $100.00 $ 89.77 $124.97 $171.24 $268.95 $266.23
S&P 500 $100.00 $101.32 $139.39 $171.26 $228.42 $293.69
SNL $500M-$1B Bank Index $100.00 $106.76 $141.74 $177.19 $288.03 $283.20
</TABLE>
16
<PAGE>
TRANSACTIONS WITH MANAGEMENT
Certain Transactions
Jordahl & Sliter, a certified public accounting firm in which Everit A.
Sliter is a partner, performs tax services for the Company in the ordinary
course of business. The Company believes that these services have been provided
on terms which are no less favorable than which could have been obtained in
dealings with non-affiliates and that any future transactions will be conducted
on such basis.
Employee Loan Program
Federal regulations require that all loans or extensions of credit to
executive officers and directors of the Company and the Subsidiaries must be
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other
nonaffiliated persons and must not involve more than the normal risk of
repayment or present other unfavorable features. The regulations authorize that
a bank may make extensions of credit pursuant to a benefit or compensation
program that (i) is available to all employees of the bank or its affiliates;
and (ii) does not give preference to any insider over other employees of the
bank or its affiliates. The regulations govern the amount of credit that a bank
may extend to an insider, and, in those instances where the loan exceeds the
allowed limit, requires that (i) the loan be approved by a majority of the board
of directors; and (ii) the insider abstain from participating directly or
indirectly in the voting.
The Company has adopted an Employee Loan Program, providing that loans be
made to executive officers and directors and all other employees of the Company
and its Subsidiaries on equal terms. Set forth below is certain information as
of December 31, 1998 relating to loans which, in the aggregate, exceed $60,000
and which were made on preferential terms, as explained above, to executive
officers and directors of the Company. All loans are secured by real estate,
except as noted. The table does not include loans which have been made on the
same terms, including interest rates and collateral, as those made to
non-affiliated parties and which in the opinion of management do not involve
more than the normal risk of repayment or present other unfavorable features.
<TABLE>
<CAPTION>
Largest Aggregate
Nature of Amount during Interest Note Rate at
Transaction January 1, 1998 to Balance at Rate to December 31,
Name and Indebtedness December 31, 1998 December 31, 1998 Employee(1) 1998(2)
---- ---------------- ----------------- ----------------- ----------- ------------
<S> <C> <C> <C> <C>
Michael J. Blodnick, First Mortgage on 46,232 42,767 5.61% 7.55%
President and CEO primary residence
Home Equity Line 49,804 49,091 8.25% 9.25%
(2nd)
John S. MacMillan First Mortgage on 50,000 49,674 5.45% 7.05%
Chairman primary residence
Home Equity Line 32,046 18,617 8.50% 9.25%
(2nd)
F. Charles Mercord, First Mortgage on 147,338 140,622 5.45% 7.87%
Director primary residence
Home Equity Line 58,388 57,988 7.75% 8.75%
(2nd)
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Largest Aggregate
Nature of Amount during Interest Note Rate at
Transaction January 1, 1998 to Balance at Rate to December 31,
Name and Indebtedness December 31, 1998 December 31, 1998 Employee(1) 1998(2)
---- ---------------- ----------------- ----------------- ----------- ------------
<S> <C> <C> <C> <C>
Everit A. Sliter, First Mortgage on 86,427 81,039 5.61% 8.23%
Director primary residence
Home Equity Line 58,381 57,899 8.25% 9.25%
(2nd)
James H. Strosahl, First Mortgage on 168,029 159,971 5.45% 7.87%
Executive Vice primary residence
President, CFO, Home Equity Line 49,548 22,371 8.25% 9.25%
Treasurer and (2nd)
Secretary
Stephen J. Van First Mortgage on 148,115 145,604 5.61% 7.48%
Helden, President, primary residence
Glacier Bank Home Equity Line 58,100 42,201 7.14% 8.14%
(2nd)
</TABLE>
- ----------
(1) This reflects borrowing to finance home improvements or to purchase homes
and is 1% above Glacier Bank's cost of money. For Home Equity Line, the
rate charged is 1% less than the rate charged to non-employees.
(2) This will become the applicable interest rate if the officer or director's
employment with the Company is resigned or otherwise terminated.
Proposal No. 2 - Amendment to 1995 Employee Stock Option Plan
In 1995, the Company adopted, and the shareholders approved, the 1995
Employee Stock Option Plan. As described in "Executive Compensation - 1995
Employee Stock Option Plan" the 1995 Plan currently provides that up to 507,779
shares of Common Stock be available for issuance pursuant to the grant of stock
options, as adjusted for stock splits and stock dividends. The Company believes
that the 1995 Plan has contributed to the Company's ability to attract and
retain valued key employees, thereby strengthening their incentive to achieve
the objectives of the Company's shareholders.
Subject to shareholder approval, the Board of Directors has approved
certain amendments to the 1995 Plan that will (i) increase the number of shares
available under the 1995 Plan by 600,000 shares, to an aggregate of 1,107,779
shares; and (ii) allow for the cashless exercise of stock options.
The following is a summary description of certain provisions of the 1995
Plan:
o Section 6(f) would be amended to allow for the cashless exercise of stock
options as follows:
(f) Manner of Exercise. An Option shall be deemed to be exercised when
written notice of exercise has been given to Bancorp in accordance
with the terms of the Option by the person entitled to exercise the
Option, together with full payment for the shares of Common Stock
specified in the notice. The Option price is payable upon exercise of
the Option, in either (i) U.S. dollars, (ii) effective as February 24,
1999, Common Stock, or (iii) if approved by the Board, other
consideration (including services or other property).
The Board believes that it is desirable to have this flexibility permitted
under the 1999 Plan so that, at the discretion of the Board, an employee, could,
for example, exercise an option using Company Common Stock previously acquired
as payment toward the exercise price of the stock option.
Participants. Employees that the Board or the Committee determines to be
"key employees" of the Company or its Subsidiaries are eligible to participate
in the 1995 Plan.
18
<PAGE>
Administration of the Plan. The 1995 Plan is administered by the Board of
Directors (or a Committee appointed by the Board). It allows additional stock
options to be granted in any combination up to an aggregate of 1,107,779 shares
of Common Stock, subject to appropriate adjustments for any stock splits, stock
dividends, or other changes in the capitalization of the Company. The Board
believes that stock options are an important element in attracting and incenting
the best employees available. The Board also believes that stock ownership by
employees also more closely aligns their interests with those of the
shareholders. The 1995 Plan provides for the issuance of options which qualify
as "incentive stock options" ("ISO") within the meaning of Section 422 of the
Internal Revenue Code of 1986, and nonqualified stock options ("NQSO").
Term of Plan. The 1995 Plan will expire in the year 2005. The Board of
Directors has the authority to terminate the 1995 Plan at any time. The 1995
Plan may subsequently be amended by the Board of Directors without shareholder
approval, except that no such amendment may (i) increase the number of shares of
Common Stock that may be issued pursuant to the 1995 Plan, or (ii) change the
class of employees who may be granted options, without shareholder approval.
Grant and Price of Options. The Board of Directors (or a committee of the
Board) will determine the terms and conditions of the options granted under the
1995 Plan, including the price, the date or conditions upon which the options
become exercisable and the termination date (subject to the terms of the plan).
The 1995 Plan provides that the exercise price of any option granted under
the 1995 Plan may be no less than the greater of the fair market value or net
book value of the stock at the date the option is granted. The exercise price of
an ISO may not be less than the fair market value of the Common Stock at the
date the option is granted, and in some cases must be at least 110% of such fair
market value. No option may in any event be exercisable more than ten years from
the date of the grant of such option, and under certain circumstances ISOs may
not be exercisable more than five years from the date of grant.
Federal Tax Treatment. The 1995 Plan provides for the issuance of options
which qualify as "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code of 1986, and nonqualified stock options. Holders of
incentive stock options incur no tax (and the Company is not entitled to a
deduction) on the grant or exercise of such options. When stock received upon
exercise of an incentive stock option is sold, the holder incurs tax at capital
gain rates. In order to qualify under Section 422, incentive stock options are
subject to a number of restrictions, including the following: (i) the option
price may not be less than the fair market value of the stock at the time the
option is granted, and (ii) the market value of the stock for which an
employee's incentive stock options become exercisable in any year may not exceed
$100,000.
Vote Required and Director's Recommendation. The affirmative vote of a
majority of the votes present in person or represented by proxy at the Annual
meeting will be required to approve the amendments to the 1995 Plan.
The Board of Directors unanimously recommends a vote FOR the proposed
amendments to the 1995 Employee Stock Option Plan.
19
<PAGE>
Proposal No. 3 - Amendments to 1994 Directors' Stock Option Plan
The Company has maintained a stock option plan for the benefit of
nonemployee directors since 1994. As described in "Compensation of Directors -
Directors' Stock Option Plan" the DSOP currently provides that up to 90,750
shares of the Company's Common Stock be available for issuance pursuant to the
grant and exercise of stock options, as adjusted for stock dividends and splits.
Subject to shareholder approval, the Board of Directors has approved
amending the DSOP to (i) increase the number of shares available under the DSOP
by 100,000 shares to an aggregate of 190,750 shares; and (ii) extending the term
of the DSOP to fifteen years. The Board believes that having additional shares
available for future stock option grants to directors is important,
particularly, as the Company continues to grow and expand. The Board believes
that stock options are an important component of director compensation designed
to further align the interests of directors with those of the shareholders.
Administration of the DSOP. The DSOP is administered by the Board of
Directors (or a committee of the Board). Options may be granted only to
nonemployee directors. The DSOP will allow additional stock options to be
granted for a total of 190,750 shares of Company Common Stock, subject to
appropriate adjustments for any stock splits, stock dividends or other changes
in the capitalization of the Company.
Grant and Price of Options. All options granted under the DSOP are
nonqualified stock options. The DSOP provides that the exercise price of options
must be equal to the greater of (i) the par value of the Common Stock, and (ii)
the fair market value of the Company's Common Stock on the date of grant.
Term of Plan and Options. The DSOP has a term of fifteen years and will
expire in year 2014. All options granted under the DSOP will expire not more
than five years from the date of grant, and will become vested and exercisable
six months from the date of grant. The Board of Directors would have the
authority to terminate the DSOP at any time. The DSOP may be amended by the
Board of Directors without shareholder approval, except that no such amendment
may (i) increase the number of shares that may be issued pursuant to the DSOP,
or (ii) change the class of individuals who may be granted options, without
shareholder approval.
Federal Tax Treatment. While no taxable income is recognized upon the grant
of a nonqualified stock option, recipients will generally recognize ordinary
income equal to the fair market value of the shares on the date of exercise over
the exercise price. The amount of such income would be a deductible compensation
expense for the Company.
Vote Required and Director's Recommendation. The affirmative vote of a
majority of the votes present in person or represented by proxy at the Annual
meeting will be required to approve the amendments to the DSOP.
The Board of Directors unanimously recommends that you vote FOR the
amendments to the 1994 Director Stock Option Plan.
20
<PAGE>
COMPLIANCE WITH SECTION 16(a) FILING REQUIREMENTS
Section 16(a) of 1934 Act, as amended, ("Section 16(a)") requires that all
executive officers and directors of the Company and all persons who beneficially
own more than 10 percent of the Company 's Common Stock file reports with the
SEC with respect to beneficial ownership of the Company's securities. The
Company has adopted procedures to assist its directors and executive officers in
complying with the Section 16(a) filings.
Based solely upon The Company's review of the copies of the filings which
it received with respect to the fiscal year ended December 31, 1998, or written
representations from certain reporting persons, the Company believes that all
reporting persons made all filings required by Section 16(a) on a timely basis,
except that Mr. Bouchee inadvertently failed to file a Form 4 to report the sale
of 5,766 shares in December 1998; Mr. Mercord inadvertently failed to file a
Form 4 to report the sale of 1,475 shares in September 1998; and Mr. Strosahl
inadvertently failed to file a Form 4 to report the exercise of an option for
3,630 shares in December 1998. All required forms have subsequently been filed
to report these transactions.
AUDITORS
KPMG LLP, independent auditors, performed the audit of the consolidated
financial statements for the Company and its Subsidiaries for the year ended
December 31, 1998. Representatives of KPMG LLP will be present at the Annual
Meeting and available to respond to appropriate questions and will have the
opportunity to make a statement if they so desire.
OTHER MATTERS
Management is not aware of any business to come before the Annual Meeting
other than those matters described in this Proxy Statement. However, if any
other matters should properly come before the Annual Meeting, it is intended
that the proxies solicited hereby will be voted with respect to those other
matters in accordance with the judgment of the persons voting the proxies.
STOCKHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2000 annual
shareholder's meeting must be received by the Secretary of the Company before
December 1, 1999, for inclusion in the 2000 Proxy Statement and form of proxy.
If such proposal is in compliance with all of the requirements of Rule 14a-8 of
the Exchange Act, it will be included in the Proxy Statement and set forth on
the form of proxy issued for the next Annual Meeting Of Stockholders. In
addition, if the Company receives notice of a shareholder proposal after
February 14, 2000, the persons named as proxies in such proxy statement and form
of proxy will have discretionary authority to vote on such shareholder proposal.
ANNUAL REPORTS
Stockholders of the Company as of the record date for the Annual Meeting
are being forwarded a copy of the Company's Annual Report to Stockholders for
the year ended December 31, 1998 ("Annual Report"). The Annual Report is not a
part of the proxy solicitation materials for the Annual Meeting.
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Upon receipt of a written request, the Company will furnish to any
stockholder without charge a copy of its Annual Report on Form 10-K filed with
the SEC under the Exchange Act for the year ended December 31, 1998. Upon
written request and a payment of a copying charge of 10 cents per page, the
Company will furnish to any such stockholder a copy of the exhibits to the
Annual Report on Form 10-K. Such written requests should be directed to Glacier
Bancorp, Inc., 49 Commons Loop, Kalispell, Montana 59901, Attention: Corporate
Secretary. The Annual Report on Form 10-K is not a part of the proxy
solicitation materials for the Annual Meeting.
March 31, 1999 BY ORDER OF THE BOARD OF DIRECTORS
/S/ JAMES H. STROSAHL
James H. Strosahl, Secretary
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GLACIER BANCORP, INC.
PROXY
PLEASE SIGN AND RETURN IMMEDIATELY
This Proxy Is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints John S. MacMillan and Michael J. Blodnick
and each of them (with full power to act alone), my Proxies, with full power of
substitution as Proxy, and hereby authorize Messrs. MacMillan and Blodnick to
represent and to vote, as designated below, all the shares of common stock of
Glacier Bancorp, Inc., held of record by the undersigned on March 9, 1999, at
the Annual Meeting of Shareholders to be held on April 28, 1999, or any
adjournment of such Meeting.
1. ELECTION OF DIRECTORS
A. I vote FOR all nominees listed below (except as marked to the contrary
below) |_|
I WITHHOLD AUTHORITY to vote for any individual nominee whose name I
have struck a line through in the list below:
Michael J. Blodnick Fred J. Flanders Harold A. Tutvedt
B. I WITHHOLD AUTHORITY to vote for all nominees listed above. |_|
2. APPROVAL OF AMENDMENTS TO 1995 EMPLOYEE STOCK OPTION PLAN.
To consider and vote on amendments to the 1995 Employee Stock Option Plan.
FOR |_| AGAINST |_| ABSTAIN |_|
3. APPROVAL OF AMENDMENTS TO 1994 DIRECTORS' STOCK OPTION PLAN.
To consider and vote on amendments to the 1994 Directors' Stock Option
Plan.
FOR |_| AGAINST |_| ABSTAIN |_|
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4. WHATEVER OTHER BUSINESS may properly be brought before the Meeting or any
adjournment thereof.
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" AND WILL BE VOTED "FOR" THE
PROPOSALS LISTED UNLESS AUTHORITY IS WITHHELD OR A VOTE AGAINST OR AN ABSTENTION
IS SPECIFIED, IN WHICH CASE THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE
SPECIFICATIONS SO MADE.
Management knows of no other matters that my properly be, or which are
likely to be, brought before the Meeting. However, if any other matters are
properly presented at the Meeting, this Proxy will be voted in accordance with
the recommendations of management.
The Board of Directors recommends a vote "FOR" the listed proposals.
___________________, 1999 ___________________, 1999
- ------------------------------------- -------------------------------------
Signature of Shareholder Signature of Shareholder
- ------------------------------------- -------------------------------------
Print Name Print Name
ALL JOINT OWNERS MUST SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE
