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EXHIBIT 10.19
EXECUTIVE SEVERANCE AGREEMENT
This
Amended and Restated EXECUTIVE SEVERANCE AGREEMENT ("Agreement")
is
dated as of DECEMBER 17, 2003 (the
"Effective Date"). The parties to this
Agreement ("Parties") are PANHANDLE STATE
BANK ("PSB"), and JOHN NAGEL
("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 SENIOR VICE PRESIDENT, CREDIT ADMINISTRATION,
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,
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(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 the Payment Multiple (defined below) multiplied by
one-twelfth of Executive's compensation as reported on
Executive's IRS Form W-2 for the most recent calendar year
less compensation payable to Executive that was deferred or
carried over from prior years. In the event the Executive is
not employed for a full calendar year prior to the Change in
Control, the Severance Payment shall be an amount equal to the
Payment Multiple multiplied by one-twelfth of Executive's
annual base salary. The "Payment Multiple" shall be
twenty-four (24). The Severance Payment shall be reduced by an
amount equal to any compensation which would be reported on
Executive's IRS Form W-2 for the period following the Change
in Control; provided, however, the Severance Payment shall not
be reduced by the amount of any bonus or other compensation
received in the period following the Change in Control that is
based on Executive's performance during the period prior to
the Change in Control.
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 that 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.
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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 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.
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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
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
Executi
