exv10w21



 





Exhibit 10.21




EXECUTIVE SEVERANCE AGREEMENT




     This EXECUTIVE SEVERANCE AGREEMENT (“Agreement”) is dated as of March 14, 2007 (the
“Effective Date”). The parties to this Agreement (“Parties”) are PANHANDLE STATE BANK (“PSB”), and
Pamela Rasmussen (“Executive”). This Agreement has been ratified by INTERMOUNTAIN
COMMUNITY BANCORP (“IMCB”), the parent company of PSB.




	A.	 	Executive is employed by PSB in a managerial capacity, presently holding the position of
Executive Vice President, Chief Operating Officer, Panhandle State Bank.






	B.	 	PSB wishes to ensure the continued availability of Executive’s services in the event of a
change in the control of PSB, thereby allowing PSB to maximize the benefits obtainable from
any such change. To that end, PSB desires to provide incentive for Executive’s continued
employment with PSB.





NOW THEREFORE, PSB and Executive agree as follows:



Agreement





	1.	 	Effective Date and Term. As of the Effective Date, this Agreement shall be a binding
obligation of the parties, not subject to revocation or amendment except by mutual consent or
in accordance with its terms. The term of this Agreement (“Term”) shall commence as of the
Effective Date and shall expire upon Executive’s termination of employment with PSB.
Notwithstanding the preceding, if a definitive agreement providing for a Change in Control
(defined below) is entered into (i) on or before the expiration of the Term or (ii) within
twelve (12) months after Executive’s involuntary termination other than for Cause,
Disability, Retirement or death, then expiration of such Term shall be extended through the
Severance Protection Period (defined below).






	2.	 	Commitment of Executive. In the event that any person extends any proposal or offer which is
intended to or may result in a Change in Control, defined below (a “Change in Control
Proposal”), Executive shall, at PSB’s request, assist PSB and/or IMCB in evaluating such
proposal or offer. Further, as a condition to receipt of the Severance Payment (defined
below), Executive agrees not to voluntarily resign (including resignation for Good Reason)
Executive’s position with PSB during any period from the receipt of a specific Change in
Control Proposal up to the consummation or abandonment of the transaction contemplated by such
Proposal.
	 
	3.	 	Severance Payment.






	 	a)	 	Payment Events. Subject to the requirements of Section 2 of this
Agreement, in the event of involuntary termination of Executive’s employment with PSB,
other than for Cause, Disability, Retirement, (each defined below) or death, or in
the event of voluntary termination
for Good Reason (defined below), (i) within the Severance Protection




 









 






	 	 	 	Period after a
Change in Control, or (ii) within twelve (12) months before a definitive
agreement providing for a Change in Control is entered into, PSB will pay Executive a
severance payment in the amount determined pursuant to the next section (“Severance
Payment”), payable on the later of the date of termination or the effective
date of the Change in Control. The “Severance Protection Period” shall be the period
beginning on the effective date of the Change of Control and continuing thereafter for
twenty-four (24) months.






	 	b)	 	Amount of Payment. The Severance Payment shall be an amount equal to
two (2) times the average of the total base compensation and short term bonus received
by Executive for each of the two most recent calendar years.






	 	c)	 	Limitation on Payment. Notwithstanding anything in this Agreement to
the contrary, the Severance Payment shall not exceed an amount equal to One Dollar
($1.00) less than the amount which would cause the payment, together with any other
payments received from PSB and/or IMCB to be a “parachute payment” as defined in
Section 280G(b)(2)(A) of the Internal Revenue Code of 1986, as amended.






	4.	 	Definitions






	 	a)	 	IMCB. “IMCB” means Intermountain Community Bancorp.






	 	b)	 	PSB. “PSB” means Panhandle State Bank. PSB is a wholly owned
subsidiary of IMCB.






	 	c)	 	Cause. “Cause means any one or more of the following:






	 	1)	 	Willful misfeasance or gross negligence in the performance of
Executive’s duties;






	 	2)	 	Conviction of a crime in connection with such duties; or






	 	3)	 	Conduct demonstrably and significantly harmful to the
financial condition of the PSB and/or IMCB.






	 	c)	 	Change in Control. “Change in Control” shall mean any of the
following:






	 	1)	 	Merger. IMCB merges into or consolidates with another
corporation, or merges another corporation into IMCB, and as a result less
than 50% of the combined voting power of the resulting corporation immediately
after the merger or consolidation is held by persons who were the holders of
IMCB’s voting securities immediately before the merger or consolidation;






	 	2)	 	Acquisition of Significant Share Ownership. A report on
Schedule 13D or another form or schedule (other than Schedule 13G) is filed or
is required to be filed under sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, if the schedule discloses that the filing person or
persons acting in
concert has or have become the beneficial owner of 25% or more of a class 




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	 	 	 	of IMCB’s voting securities, or if IMCB does not then have equity securities
registered under section 12 of the Securities Exchange Act of 1934 a person or
group acting in concert has or have become the beneficial owner of 25% or more
of a class of IMCB’s voting securities, but this paragraph (2) shall not apply
to beneficial ownership of voting shares of IMCB held in a fiduciary capacity
by an entity in which IMCB directly or indirectly beneficially owns 50% or more
of the outstanding voting securities;






	 	3)	 	Change in Board Composition. During any period of two
consecutive years, individuals who constitute IMCB’s board of directors at the
beginning of the two-year period cease for any reason to constitute at least a
majority thereof; provided, however, that — for purposes of this paragraph
(c) — each director who is first elected by the board (or first nominated by
the board for election by stockholders) by a vote of at least two-thirds (2/3)
of the directors who were directors at the beginning of the period shall be
deemed to have been a director at the beginning of the two-year period; or






	 	4)	 	Sale of Assets. IMCB sells to a third party all or
substantially all of IMCB’s assets. For this purpose, sale of all or
substantially all of IMCB’s assets includes sale of the shares or assets of
the PSB alone.






	 	d)	 	Change in Control Proposal. “Change in Control Proposal” has the
meaning assigned in Section 2 of this Agreement.
	 
	 	e)	 	Disability. “Disability” means a physical or mental impairment
which renders Executive incapable of substantially performing the essential functions
of such Executive’s position, and which is expected to continue rendering Executive
so incapable for the reasonably foreseeable future, with or without reasonable
accommodation.
	 
	 	f)	 	Retirement. “Retirement” shall mean voluntary termination by
Executive in accordance with PSB’s retirement policies, including early retirement,
if applicable to their salaried employees.
	 
	 	g)	 	Good Reason. “Good Reason” shall mean any of the following:






	 	1)	 	Substantial diminution of the Executive’s duties compared to
the Executive’s duties prior to the Change in Control;






	 	2)	 	Substantial diminution of the Executive’s compensation
compared to the Executive’s compensation prior to the Change in Control;






	 	3)	 	Significant relocation, where Significant means a change of
more than 60 miles (one way) in the Executive’s commute if the Executive does
not agree to move.






	5.	 	Not an Employment Agreement. Nothing in this Agreement, express or implied, is intended to
confer upon Executive the right to employment with
PSB. Accordingly, except with respect to the Severance Payment, this




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	 	 	Agreement shall have no
effect on the determination of any compensation payable by PSB to Executive, or upon any of the
other terms of Executive’s employment with PSB. The specific arrangements referred to herein
are not intended to exclude any other benefits which may be available to Executive upon a
termination of employment with PSB pursuant to employee benefit plans of PSB or otherwise.






	6.	 	Withholding. All payments required to be made by PSB hereunder to Executive shall be subject
to the withholding of such amounts, if any, relating to tax and other payroll deductions as
PSB may reasonably determine should be withheld pursuant to any applicable law or regulation.






	7.	 	Assignability. PSB may assign the Agreement and its rights hereunder in whole, but not in
part, to any corporation, bank or other entity with or into which PSB may hereafter merge or
consolidate or to which PSB may transfer all or substantially all of its assets, if in any
such case said corporation, bank or other entity shall by operation of law or expressly in
writing assume all obligations of PSB hereunder as fully as if it had been originally made a
party hereto, but may not otherwise assign this Agreement or its rights hereunder. Executive
may not assign or transfer this Agreement or any rights or obligations hereunder.






	8.	 	Entire Agreement. This agreement constitutes the entire understanding between the parties
concerning its subject matter and supersedes all prior agreements, including that certain
agreement between Executive and PSB dated November 9, 2004. Accordingly, Executive
specifically waives the terms of and all of Executive’s rights under any severance provisions
of any employment and/or change-in-control agreements, whether written or oral, previously
entered into with PSB and/or IMCB.
	 
	9.	 	General Provisions.






	 	a)	 	Choice of Law. This Agreement is made with reference to and is
intended to be construed in accordance with the laws of the State of Idaho.






	 	b)	 	Payment of Legal Fees. PSB and IMCB are aware that after a Change in
Control management could cause or attempt to cause PSB and IMCB to refuse to comply
with the obligations under this Agreement, or could institute or cause or attempt to
cause PSB or IMCB to institute litigation seeking to have this Agreement declared
unenforceable, or could take or attempt to take other action to deny Executive the
benefits intended under this Agreement. In these circumstances the purpose of this
Agreement would be frustrated. It is PSB’s and IMCB’s intention that the Executive not
be required to incur the expenses associated with the enforcement of his rights under
this Agreement, whether by litigation or other legal action, because the cost and
expense thereof would substantially detract from the benefits intended to be granted
to the Executive hereunder. It is PSB’s and IMCB’s intention that the Executive not
be forced to negotiate
settlement of his rights under this Agreement under threat of incurring expenses.





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	 	 	 	Accordingly, if after a Change in Control occurs it appears to the Executive that (a)
either of PSB or IMCB has failed to comply with any of its obligations under this
Agreement, or (b) either of PSB or IMCB or any other person has taken any action to
declare this Agreement void or unenforceable, or instituted any litigation or other
legal action designed to deny, diminish, or to recover from the Executive the benefits
intended to be provided to the Executive hereunder, PSB and IMCB irrevocably authorize
the Executive from time to time to retain counsel of his choice, at PSB’s and IMCB’s
expense as provided in this paragraph (b), to represent the Executive in connection
with the initiation or defense of any litigation or other legal action, whether by or
against PSB or IMCB or any director, officer, stockholder, or other person affiliated
with PSB or IMCB, in any jurisdiction. Notwithstanding any existing or previous
attorney-client relationship between PSB or IMCB and any counsel chosen by the
Executive under this paragraph (b), PSB and IMCB irrevocably consent to the Executive
entering into an attorney-client relationship with that counsel, and PSB and IMCB and
the Executive agree that a confidential relationship shall exist between the Executive
and that counsel. The fees and expenses of counsel selected from time to time by the
Executive as provided in this section shall be paid or reimbursed to the Executive by
PSB or IMCB on a regular, periodic basis upon presentation by the Executive of a
statement or statements prepared by such counsel in accordance with such counsel’s
customary practices, up to a maximum aggregate amount of $250,000, whether suit be
brought or not, and whether or not incurred in trial, bankruptcy, or appellate
proceedings. PSB’s and IMCB’s obligation to pay the Executive’s legal fees provided by
this paragraph (b) operates separately from and in addition to any legal fee
reimbursement obligation PSB or IMCB may have with the Executive under any separate
severance, employment, salary continuation, or other agreement. Anything in this
paragraph (b) to the contrary notwithstanding however, PSB and IMCB shall not be
required to pay or reimburse the Executive’s legal expenses if doing so would violate
section 18(k) of the Federal Deposit Insurance Act [12 U.S.C. 1828(k)] and Rule 359.3
of the Federal Deposit Insurance Corporation [12 CFR 359.3].






	 	c)	 	Successors. This Agreement shall bind and inure to the benefit of
the Parties and each of their respective affiliates, legal representatives, heirs,
successors and assigns.






	 	d)	 	Amendment. This Agreement may be amended only in a writing signed by
the Parties.






	 	e)	 	Headings. The headings of sections of this Agreement have been
included for convenience of reference only. They shall not be construed to modify or
otherwise affect in any respect any of the provisions of the Agreement.




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EXECUTED by each of the Parties effective as of the date first stated above.



	 	 	 	 	 
	PSB	 	Executive
	Panhandle State Bank	 	Exec, Vice President
	 

	 	 	 	Chief Operating Officer
	 
	 	 	 	 
	By:
	 	/s/ Curt Hecker                     3/14/07	 	/s/ Pam Rasmussen       3/14/07
	 

	 	 
	 	 
	 

	 	Chief Executive Officer          Date
	 	Pamela Rasmussen          Date
	 
	 	 	 	 
	AGREED TO AND RATIFIED by:	 	 
	 
	 	 	 	 
	IMCB	 	 
	Intermountain Community Bancorp	 	 
	 
	 	 	 	 
	By:
	 	/s/ Curt Hecker           3/14/07	 	 
	 

	 	 	 	 
	 

	 	President & CEO          Date	 	 







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