EXHIBIT 10.1
EXECUTIVE RETIREMENT PAYMENT AGREEMENT
THIS EXECUTIVE RETIREMENT AGREEMENT ("Agreement"), dated as of the 31st
day of March, 2004, is made and entered into by and between DAVID SMITH
("Executive") and PANHANDLE STATE BANK, an Idaho corporation ("PSB"). This
Agreement has been ratified by INTERMOUNTAIN COMMUNITY BANCORP ("IMCB"), the
parent company of PSB.
Recitals
A. Executive is currently employed by PSB as a Senior Vice President.
B. Executive and PSB had previously entered into an Executive Severance
Agreement, dated September 15, 1999 ("Severance Agreement").
C. Executive and PSB would like to make provisions for retirement of
Executive and to replace the Severance Agreement by substituting
this Agreement in its stead.
NOW, THEREFORE, for and in consideration of the above, the mutual
covenants, terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
Agreement
1. Definitions. The following terms shall have the meanings shown
below, opposite each such term:
"Affiliate" means, with respect to PSB, any corporation or entity,
that controls, is controlled by, or is under common control with
PSB. As used herein, the term "control" means the ownership,
directly or indirectly, of issued and outstanding shares of stock or
other equity interests entitled to more than fifty percent (50%) of
the voting rights represented thereby.
"Agreement" is defined in the first paragraph hereof.
"Cause" means the occurrence of any of the following events:
(i) Executive engages in willful misfeasance or gross
negligence in the performance of his duties as an
employee of PSB or any of its Affiliates;
(ii) Executive is convicted of a crime in connection with the
performance of his duties as an employee of PSB or any
of its Affiliates; or
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(iii) Executive engages in conduct demonstrably and
significantly harmful to the financial condition of PSB
or any of its Affiliates.
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"Disabled" means a physical or mental impairment that both renders
Executive incapable of substantially performing the essential
functions of his position and is expected to continue for the
reasonably foreseeable future, as determined by PSB in its sole
discretion.
"Executive" is defined in the first paragraph hereof.
"PSB" is defined in the first paragraph hereof.
"Retirement Date" means the later of (i) May 1, 2005, or (ii) the
date Executive ceases to be an employee of PSB and its Affiliates.
"Retirement Payment Amount" means the sum of two hundred thousand
dollars ($200,000), plus up to eight thousand dollars ($8,000) for
reimbursement of medical and dental benefits.
"Severance Agreement" is defined in paragraph B of the Recitals
hereof.
2. Termination of Severance Agreement. Executive and PSB hereby agree
that the Severance Agreement is terminated as of the date hereof,
without the need for further action on the part of any person.
3. Retirement Payments. Under the terms and conditions set forth in
this Agreement (including, without limitation, paragraph 4),
Executive shall be entitled to receive from PSB, and PSB shall be
obligated to pay to Executive, the Retirement Payment Amount. Such
amount shall be paid at the times and in the manner described below:
a. Timing of Payments. The chief executive officer of PSB
shall determine, in his or her sole discretion, the date
following the Retirement Date on which PSB shall
commence payment of the Retirement Payment Amount, which
date shall be no later than May 1, 2006.
b. Manner of Payment. PSB shall pay the two hundred
thousand dollar ($200,000) portion of the Retirement
Payment Amount to Executive in twenty-four (24) equal
monthly installments, without interest, of one
twenty-fourth (1/24th) of two hundred thousand dollar
($200,000) each, with the first such installment being
due and payable on the date described in paragraph 3.a
and subsequent installments being due and payable on the
same date in each subsequent month in the payment
period. PSB shall pay the reimbursement of medical and
dental benefits portion of the Retirement Payment Amount
to Executive, from time to time, upon receipt of
evidence reasonably satisfactory to it that Executive
has paid for such benefits for himself or members of his
household.
4. Termination for Cause. Notwithstanding any contrary provisions of
this Agreement, PSB shall have no obligation to pay Executive, and
Executive shall have no right to
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receive, any part of the Retirement Payment Amount if Executive is
terminated from employment with PSB or any of its Affiliates for
Cause.
5. Death or Disability. Notwithstanding any contrary provisions of this
Agreement, if Executive becomes Disabled or dies prior to the
Retirement Date, PSB shall pay the entire Retirement Payment Amount
to Executive or Executive's estate, as the case may be, within sixty
(60) days after such event.
6. Not An Employment Agreement. Nothing in this Agreement, expressed or
implied, is intended to confer upon Executive a right to be employed
by PSB or any of its Affiliates. Except with respect to the
Retirement Payment Amount, this Agreement shall have no effect on
the determination of compensation payable by PSB to Executive or the
other terms of Executive's employment with PSB. The specific
arrangements referred to herein are not intended to exclude other
benefits that may be available to Executive upon a termination of
employment with PSB pursuant to employee benefit plans of PSB or
otherwise.
7. Withholding. Notwithstanding any contrary provisions of this
Agreement, PSB shall withhold from the Retirement Payment Amount,
and pay to the appropriate government agencies, all taxes that PSB
is required by law to so withhold and pay. Amounts so withheld and
paid shall be treated as having been paid to Executive hereunder,
and PSB shall be relieved from further liability to Executive for
such amounts.
8. Assignability. PSB may assign the Agreement, and its rights and
obligations hereunder, 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
and obligations hereunder. Executive may not assign or transfer this
Agreement or any rights or obligations hereunder.
9. Entire Agreement. This agreement constitutes the entire
understanding between the parties concerning its subject matter and
supersedes the Severance Agreement and all agreements and rights
superceded by, or waived under, the Severance Agreement.
10. Funding. In the event PSB decides to fund its obligations hereunder
by setting aside assets, crediting a special account, creating
reserves, purchasing insurance policies or through any other means
whatsoever, Executive shall have no rights therein, but shall
remain, at all times, an unsecured general creditor of PSB with
respect to any claims it may have to payments under this Agreement.
11. General Provisions.
a. Choice of Law. This Agreement is made with reference to,
and shall be construed in accordance with, the laws of
the State of Idaho.
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b. Arbitration. Any dispute, controversy or claim arising
out of, in connection with, or relating to this
Agreement or any breach or alleged breach hereof, shall,
upon the request of any party involved, be submitted to,
and be settled by, arbitration pursuant to the rules
then in effect of the American Arbitration Association
(or under any other form of arbitration mutually
acceptable to the parties so involved). Any award
rendered shall be final and conclusive upon the parties
and a judgment thereon may be entered in the highest
court having jurisdiction over the parties or the
matter. The arbitrator shall render a written decision,
naming the substantially prevailing party in the action,
and shall award to such party all costs and expenses
incurred in the dispute, including reasonable attorneys'
fees.
c. Attorney Fees. In the event of a breach of, or default
under, this Agreement that results in either party
incurring attorney or other fees, costs or expenses
(including in arbitration), the substantially prevailing
party shall be entitled to recover from the
non-prevailing party any and all such fees, costs and
expenses, including attorneys' fees.
d. 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.
e. Amendment. This Agreement may be amended only by a
writing signed by the parties.
f. Headings. The headings of sections and paragraphs of
this Agreement have been included for convenience of
reference only and shall not be construed to modify or
otherwise affect in any respect any of the provisions of
the Agreement.
IN WITNESS WHEREOF, each of the parties have executed, or have caused its duly
authorized representative to execute, this Agreement, which shall be effective
as of the date first stated above.
PANHANDLE STATE BANK,
an Idaho corporation
By: /s/ Curt Hecker /s/ David Smith
----------------------------- -------------------------------
Chief Executive Officer David Smith
Date: 3/31/04 Date: 4/12/04
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AGREED TO AND RATIFIED by:
IMCB
Intermountain Community Bancorp
By: /s/ Curt Hecker
--------------------------------------
Curt Hecker
President and Chief Executive Officer
Date: 3/31/04
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