exv10w14



 





Exhibit 10.14




EXECUTIVE SEVERANCE AGREEMENT

(Amended and Restated)




     This Amended and Restated EXECUTIVE SEVERANCE AGREEMENT (“Agreement”) is dated as of December
28, 2007. 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.






	C.	 	This amendment and restatement of Executive Severance Agreement is intended to incorporate
and make such modifications as shall be necessary to comply with Internal Revenue Code section
409A and rules, regulations, and guidance of general application thereunder issued by the
Department of the Treasury.





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, (ii) within twelve (12) months
before a definitive agreement providing for a Change in Control is entered into or
(iii) within the period between the date a definitive agreement is executed and the
effective date of the Change of Control, 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, the effective date of the Change in
Control, or the first day of the seventh month after the month in which the
Executive’s termination of employment occurs. 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” shall mean termination of the Executive’s employment
for any of the following reasons:






	 	1)	 	the Executive’s gross negligence or gross neglect of duties
or intentional and material failure to perform stated duties after written
notice thereof, or;
	 
	 	2)	 	disloyalty or dishonesty by the Executive in the performance
of the Executive’s duties, or a breach of the Executive’s fiduciary duties for
personal profit, in any case whether in the Executive’s capacity as a director
or officer, or
	 
	 	3)	 	intentional wrongful damage by the Executive to the business
or property of the Bank or its affiliates, including without limitation the
reputation of the Bank, which in the judgment of the Bank causes material harm
to the Bank or affiliates, or




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	 	4)	 	a willful violation by the Executive of any applicable law or
significant policy of the Bank or an affiliate that, in the Bank’s judgment,
results in an adverse effect on the Bank or the affiliate, regardless of
whether the violation leads to criminal prosecution or conviction. For
purposes of this Agreement, applicable laws include any statute, rule,
regulatory order, statement of policy, or final cease-and-desist order of any
governmental agency or body having regulatory authority over the Bank, or
	 
	 	5)	 	the occurrence of any event that results in the Executive
being excluded from coverage, or having coverage limited for the Executive as
compared to other executives of the Bank, under the Bank’s blanket bond or
other fidelity or insurance policy covering its directors, officers, or
employees, or
	 
	 	6)	 	the Executive is removed from office or permanently
prohibited from participating in the Bank’s affairs by an order issued under
section 8(e)(4) or section 8(g)(1) of the Federal Deposit Insurance Act, 12
U.S.C. 1818(e)(4) or (g)(1), or
	 
	 	7)	 	conviction of the Executive for or plea of no contest to a
felony or conviction of or plea of no contest to a misdemeanor involving moral
turpitude, or the actual incarceration of the Executive for 45 consecutive
days or more..






	 	d)	 	Change in Control. “Change in Control” means a change in control as
defined in Code section 409A and rules, regulations, and guidance of general
application thereunder issued by the Department of the Treasury, including:






	 	1)	 	Change in ownership: a change in ownership of Intermountain
Community Bancorp, an Idaho corporation of which the Employer is a wholly
owned subsidiary, occurs on the date any one person or group accumulates
ownership of Intermountain Community Bancorp stock constituting more than 50%
of the total fair market value or total voting power of Intermountain
Community Bancorp stock,;
	 
	 	2)	 	Change in effective control: (i) any one person, or more than
one person acting as a group, acquires within a 12-month period ownership of
Intermountain Community Bancorp stock possessing 30% or more of the total
voting power of Intermountain Community Bancorp stock, or (ii) a majority of
Intermountain Community Bancorp’s board of directors is replaced during any
12-month period by directors whose appointment or election is not endorsed in
advance by a majority of Intermountain Community Bancorp’s board of directors,
or;
	 
	 	3)	 	Change in ownership of a substantial portion of assets: a
change in ownership of a substantial portion of Intermountain Community
Bancorp’s assets occurs if in a 12-month period any one person or more than
one person acting as a group acquires from Intermountain Community Bancorp
assets having a total gross fair market value equal to or exceeding 40% of the
total gross fair 




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	 	 	 	market value of all of Intermountain Community Bancorp’s assets
immediately before the acquisition or acquisitions. For this purpose, gross
fair market value means the value of Intermountain Community Bancorp’s assets,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with the assets.






	 	e)	 	Change in Control Proposal. “Change in Control Proposal” has the
meaning assigned in Section 2 of this Agreement.
	 
	 	f)	 	Effective Date. The “Effective Date” shall be March 14, 2007.
	 
	 	g)	 	Disability. “Disability” means, because of a medically determinable
physical or mental impairment that can be expected to result in death or that can be
expected to last for a continuous period of at least 12 months, (i) the Executive is
unable to engage in any substantial gainful activity, or (ii) the Executive is
receiving income replacement benefits for a period of at least three months under an
accident and health plan of the employer. Medical determination of disability may be
made either by the Social Security Administration or by the provider of an accident or
health plan covering employees of the Employer. Upon request of the Plan
Administrator, the Executive must submit proof to the Plan Administrator of the Social
Security Administration’s or provider’s determination.
	 
	 	h)	 	Retirement. “Retirement” shall mean voluntary termination by
Executive in accordance with PSB’s retirement policies, including early retirement, if
applicable to their salaried employees.
	 
	 	i)	 	Good Reason. “Voluntary Termination for Good Reason” means a
voluntary termination of employment by the Executive if any one or more of the
following conditions occur without the Executive’s advance written consent, provided
that (i) Executive shall have given notice to the Employer of the existence of one or
more of the following conditions within ninety (90) days following the initial
existence of the condition(s), (ii) that within thirty (30) days after such notice
Employer shall have failed to remedy such condition(s) and (iii) the Executive’s
voluntary termination due to one or more of such conditions shall have occurred within
twenty-four (24) months following the initial existence of at least one of the
conditions:






	 	1)	 	a material diminution of the Executive’s base salary;
	 
	 	2)	 	a material diminution of the Executive’s authority, duties,
or responsibilities;
	 
	 	3)	 	a material diminution in the authority, duties, or
responsibilities of the supervisor to whom the Executive is required to
report, including a requirement that the Executive report to a corporate
officer or employee instead of reporting directly to the board of directors;
	 
	 	4)	 	a material diminution in the budget over which the Executive
retains authority;




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	 	5)	 	a material change in the geographic location at which the
Executive must perform services for the Employer, or;
	 
	 	6)	 	any other action or inaction that constitutes a material
breach by the Employer of this agreement or of any other agreement under which
the Executive provides services to the Employer.






	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 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 but not limited
to 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 previously executed severance agreement, severance provisions of any employment and/or
change-in-control agreements, whether written or oral, previously entered into with PSB and/or
IMCB.






	9.	 	Savings Clause Relating to Compliance with Code Section 409A. Despite any contrary provision
of this Agreement, if when the Executive’s employment terminates the Executive is a specified
employee, as defined in Code section 409A, and if any payments under Article 3 of this
Agreement will result in additional tax or interest to the Executive because of section 409A,
the Executive shall not be entitled to the payments under Article 3 until the earliest of (i)
the date that is at least six months after termination of the Executive’s employment for
reasons other than the Executive’s death, (ii) the date of the Executive’s death, or (iii) any
earlier date that does not result in additional tax or interest to the Executive under section
409A. If any provision 




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	 	 	of this Agreement would subject the Executive to additional tax or
interest under section 409A, PSB shall reform the provision. However, PSB
shall maintain to the maximum extent practicable the original intent of the applicable
provision without subjecting the Executive to additional tax or interest, and PSB shall not be
required to incur any additional compensation expense as a result of the reformed provision.






	10.	 	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. 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




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	 	 	 	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.





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




	 	 	 	 	 	 	 
	PSB

	 	 	 	 	 	Executive
	Panhandle State Bank	 	 	 	Executive Vice President
	 

	 	 	 	 	 	Chief Operating Officer
	 
	 	 	 	 	 	 
	By:

	 	/s/
	 	 	 	/s/
	 

	 	 
	 	 	 	 
	 

	 	Chief Executive Officer                    Date
	 	 	 	Pamela Rasmussen                     Date
	 
	 	 	 	 	 	 
	AGREED TO AND RATIFIED by:	 	 	 	 
	 
	 	 	 	 	 	 
	IMCB
	 	 	 	 	 	 
	Intermountain Community Bancorp	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	President & CEO                    Date	 	 	 	 







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