EXHIBIT 10.24
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of
this 23rd day of July, 2004, by and between PANHANDLE STATE BANK, an Idaho
banking corporation ("PSB") and XXXXXXX XXXXXXX ("Employee"). This Agreement
will be effective as of the date (the "Effective Date") that the merger (the
"Merger") of Magic Valley Bank ("Magic Valley") with and into PSB becomes
effective under the terms of the Plan and Agreement of Merger dated as of the
date hereof (the "Bank Merger Agreement"). If the Bank Merger Agreement is
terminated for any reason, this Agreement will be null and void and of no
effect.
RECITALS
A. Employee is employed by Magic Valley in an executive management
capacity, presently holding the position of President and CEO of Magic Valley.
B. PSB desires to employ Employee, and Employee wishes to accept such
employment, from and after the Effective Date pursuant to the terms set forth in
this Agreement.
AGREEMENT
1) TERM OF AGREEMENT. The term of this employment agreement is two (2) years,
commencing on the Effective Date (the "Term"). Should Employee's employment
with PSB continue beyond the Term, he will be considered an at-will employee.
2) EMPLOYMENT. PSB will continue Employee's employment during the Term, and
Employee accepts employment by PSB on the terms and conditions set forth in
this Agreement. Employee's title will be "President, Magic Valley Bank, a
division of Panhandle State Bank."
3) DUTIES OF EMPLOYEE. Employee will report directly to PSB's President.
Employee will be responsible for Magic Valley's performance, as determined by
PSB's President.
4) COMMITMENT OF EMPLOYEE. Employee will use his best efforts to perform his
duties and will devote full time and attention to these duties during working
hours. Employee may engage in non-bank business activities with prior
approval of the PSB Board of Directors, which approval will not be
unreasonably withheld.
5) SALARY. Employee will receive an annual base salary of $118,180, to be paid
in accordance with PSB's regular payroll schedule. The Human Resource
Committee of the PSB Board will review Employee's salary in connection with
its performance review on an annual basis. During the Term, Employee's base
salary may not be decreased.
6) OTHER COMPENSATION. For 2004, Employee will be eligible to receive a bonus
pursuant to Magic Valley's bonus plan in effect as of the date of this
agreement. Commencing in 2005,
Employee will participate in PSB's Short-Term Bonus Program and will be
eligible for other incentives that will be administered by PSB's Human
Resource Committee. In addition:
a) Employee is eligible to participate in PSB's 401K retirement plan with
employer match of 50% of first 8% of salary contributed.
b) Employee may receive stock options annually, based on performance
evaluation at the discretion of the Board of Directors.
c) Following the Effective Date, PSB will cause Intermountain Community
Bancorp ("IMCB"), the parent company of PSB, to enter into a Stock
Purchase Agreement with Employee, substantially in the form attached to
this Agreement as Exhibit A.
7) VACATION AND BENEFITS. Employee is eligible for five (5) weeks of paid
vacation per year. Unused vacation time will not be carried over. Additional
benefits include life insurance of $50,000 for Employee and $2,000 for
Employee's spouse and $2,000 for each dependent, and miscellaneous firm-wide
benefits such as free checking account, safe deposit box, no fee investments,
etc. Employee will be eligible to participate in such other of PSB's employee
benefit plans and to receive such other benefits for which his level of
employment makes him eligible, in accordance with PSB's policies in effect
from time to time during the Term. Employee will also be entitled to use of a
company automobile with gas card, as well as membership to Blue Lakes Country
Club.
8) TERMINATION AND SEVERANCE PROVISIONS.
a) Termination Benefit. If, during the Term, PSB terminates Employee's
employment with PSB without Cause (as defined below) or Employee
terminates for Good Reason (as defined below), Employee will be entitled
to receive a termination payment equal to two (2) times Employee's annual
base salary at the time of termination (the "Termination Benefit"). The
Termination Benefit will be paid over a two-year period in accordance with
the payroll schedule that applies to other salaried employees of PSB.
b) Definition of Cause. "Cause" means any one or more of the following:
i) Willful misfeasance or gross negligence in the performance of
Employee's duties;
ii) Conviction of a crime in connection with such duties; or
iii) Conduct demonstrably and significantly harmful to the financial
condition of the Magic Valley, PSB and/or IMCB.
c) Good Reason. "Good Reason" means any of the following:
i) Substantial diminution of Employee's duties;
ii) Diminution of Employee's compensation; or
iii) Significant relocation, where Significant means a change of more than
60 miles (one way) in Employee's commute if Employee does not agree
to move.
d) Voluntary Termination. Notwithstanding the provisions of Section 8(a) of
this Agreement, if after the first anniversary of the Effective Date,
Employee voluntarily terminates his employment with PSB, Employee will be
entitled to receive his then-current base salary for the remainder of the
Term (the "Voluntary Termination Benefit"). The Voluntary Termination
Benefit will be paid over the remainder of the Term in equal
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regular periodic payments without interest in accordance with the payroll
schedule that applies to other salaried employees of PSB.
9) CONFIDENTIALITY. Employee will not, after signing this Agreement, including
during and after its Term, use for his own purposes or disclose to any other
person or entity any confidential information concerning Magic Valley, PSB or
their business operations or customers, unless (a) PSB consents to the use or
disclosure of its confidential information, (b) the use or disclosure is
consistent with Employee's duties under this Agreement, (c) disclosure is
required by law or court order, or (d) the information becomes or is made
public. Confidential information includes, but is not limited to, financial
information, customer lists, marketing strategies, and business plans.
10) RETURN OF PSB PROPERTY. If and when Employee ceases, for any reason, to be
employed by PSB, Employee must return to PSB all keys, pass cards,
identification cards and any other property of PSB. At the same time,
Employee also must return to PSB all originals and copies (whether in hard
copy, electronic or other form) of any documents, notes, memoranda, designs,
devices, diskettes, tapes, manuals, and specifications which constitute
proprietary information or material of PSB. The obligations in this Section
10 include the return of documents and other materials which may be in
Employee's desk at work, in Employee's car or place of residence, or in any
other location under Employee's control.
11) NON-SOLICITATION. Employee will not solicit or cause to be solicited for
employment any employee of PSB for a period of two (2) years following
Employee's termination; nor solicit or cause to be solicited the business
and/or accounts of customers of PSB for a period of two years following
Employee's termination.
12) NON-COMPETITION. Except as otherwise expressly provided in this Agreement,
while Employee is employed by PSB and for any period which Employee is
receiving or is entitled to receive payments pursuant to Section 8 (a) or (c)
of this Agreement, Employee will not become involved with a Competing
Business or serve, directly or indirectly, a Competing Business in any
manner, including, without limitation, as a shareholder, member, partner,
director, officer, manager, investor, organizer, "founder," employee,
consultant, or agent; provided, however, that Employee may acquire and
passively own an interest not exceeding 2% of the total equity interest in a
Competing Business. For purposes of this Agreement, the term "Competing
Business" means any financial service institutions, including without
limitation banks, insurance companies, leasing companies, mortgage companies,
and brokerage firms that engage in business within a 90 mile radius of Twin
Falls, Idaho (the "Noncompetition Area"). Notwithstanding the previous
sentence, "Competing Business" does not include a financial service
institution with an office located within the Noncompetition Area, so long as
Employee will not be engaged in any business activity within the
Noncompetition Area.
13) ENFORCEMENT.
a) PSB and Employee stipulate that, in light of all of the facts and
circumstances of the relationship between Employee and PSB, the agreements
referred to in Sections 11 and 12
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(including without limitation their scope, duration and geographic extent) are
fair and reasonably necessary for the protection of PSB's goodwill and other
protectable interests. If a court of competent jurisdiction should decline to
enforce any of those covenants and agreements, Employee and PSB request the
court to reform these provisions to restrict Employee's ability to compete with
PSB to the maximum extent, in time, scope of activities, and geography, the
court finds enforceable.
b) Employee acknowledges that PSB will suffer immediate and irreparable harm
that will not be compensable by damages alone, if Employee repudiates or
breaches any of the provisions of Sections 11 and 12 or threatens or attempts to
do so. For this reason, under these circumstances, PSB, in addition to and
without limitation of any other rights, remedies or damages available to it at
law or in equity, will be entitled to obtain temporary, preliminary, and
permanent injunctions in order to prevent or restrain the breach, and PSB will
not be required to post a bond as a condition for the granting of this relief.
14) ADEQUATE CONSIDERATION. Employee specifically acknowledges the receipt of
adequate consideration, including without limitation the Termination Benefit,
identified in Section 8, if due and owing, for the covenants contained in
Sections 11 and 12 and that PSB is entitled to require him to comply with those
Sections regardless of the reason(s) for Employee's separation of employment
with PSB. Sections 11 and 12 will survive termination of this Agreement, but
will expire no later than two years from the date of the termination of
employment. Employee represents that if his employment is terminated, whether
voluntarily or involuntarily, Employee has experience and capabilities
sufficient to enable Employee to obtain employment in areas which do not violate
this Agreement and that PSB's enforcement of a remedy by way of injunction will
not prevent Employee from earning a livelihood.
15) ENTIRE AGREEMENT. This Agreement and Exhibit A to this Agreement constitute
the entire understanding between the parties concerning its subject matter and
supersede all prior agreements. Accordingly, Employee specifically waives the
terms of and all of Employee's rights under any severance provisions of any
employment and/or change-in-control agreements, whether written or oral,
previously entered into with Magic Valley and/or PSB, including without
limitation the Employment Agreement between Employee and Magic Valley dated
August 15, 1997.
16) MISCELLANEOUS 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) Arbitration. Any dispute, controversy or claim arising out of or in
connection with, or relating to, this Agreement or any breach or
alleged breach hereof, will, upon the request of any party involved, be
submitted to, and 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 will be final and conclusive upon the parties and a
judgment thereon may be entered in the highest court of the forum
having jurisdiction. The arbitrator will render a written decision,
naming the substantially prevailing party in the action, and
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will award such party all costs and expenses incurred, including
reasonable attorneys' fees. Notwithstanding the foregoing, if Employee
violates Sections 11 or 12, PSB will have the right to initiate the
court proceedings described in Section 13(b), in lieu of an arbitration
proceeding under this Section 16. PSB may initiate these proceedings
wherever appropriate within the State of Idaho; but Employee will
consent to venue and jurisdiction in Twin Falls County, Idaho.
c) Attorney Fees. In the event of any breach of or default under this
Agreement which results in either party incurring attorney or other
fees, costs or expenses (including in arbitration), the prevailing
party will be entitled to recover from the non-prevailing party any and
all such fees, costs and expenses, including attorneys' fees.
d) Successors.
(i) This Agreement will bind and inure to the benefit of the Parties
and each of their respective affiliates, legal representatives,
heirs, Successors and Assigns (as defined below).
(ii) For PSB only, the term "Successors and Assigns" means any person
or entity which buys all or substantially all of PSB's or IMCB's
assets, or with which either of them merger or consolidate.
e) Amendment. This Agreement may be amended only in a writing signed by
the Parties.
f) Headings. The headings of sections of this Agreement have been included
for convenience of reference only. They will not be construed to modify
or otherwise affect in any respect any of the provisions of the
Agreement.
g) Counsel Review. Employee acknowledges that he has had the opportunity
to consult with independent counsel with respect to the negotiation,
preparation, and execution of this Agreement.
h) Severability. The provisions of this Agreement are severable. The
invalidity of any provision will not affect the validity of other
provisions of this Agreement.
EXECUTED by each of the Parties effective as of the date first stated above.
PSB EMPLOYEE
Panhandle State Bank
By: /s/ Xxxx Xxxxxx /s/ Xxxxxxx Xxxxxxx
----------------------------- -------------------------------------
Chief Executive Officer Xxxxxxx Xxxxxxx
Date 7/23/04 Date 7/23/04
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Exhibit A
FORM OF
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is effective the ____ day of ____________, 200__ between
Intermountain Community Bancorp (IMCB) and XXXXXXX XXXXXXX (Employee).
RECITALS
A. On date of execution hereof, IMCB is willing to provide a
bonus to Employee upon the terms and conditions set forth
herein.
B. As consideration for receipt of said bonus, Employee will be
bound to a right of first refusal for repurchase of the shares
by IMCB of any and all IMCB stock obtained as part of this
Agreement.
WHEREFORE, BASED UPON THE FOREGOING RECITALS AND THE TERMS AND CONDITIONS
CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. Prior to December 15, 2005, Employee shall purchase shares of IMCB
stock for an aggregate purchase price of up to $9,000.00. Such purchases shall
be made on the open market. In the event Employee completes the stock purchase
as required by this agreement, IMCB shall pay to Employee in the form of a bonus
the lesser of the actual dollar amount of stock purchased including fees and/or
commissions or $9,000, which shall be paid in three annual installments of
$3,000.00 per year, with the first payment due on or before December 15, 2005,
and like annual payments due on or before the 15th day of December of 2006 and
2007. All annual payments shall be subject to standard withholding taxes.
2. All shares of IMCB stock obtained as part of this Agreement are subject
to a right of first refusal for repurchase by IMCB.
3. The annual bonus payments identified herein shall not be considered
earned until actually paid pursuant to this agreement and to qualify for each
annual payment, Employee must still be a full time employee on each payment
date. Any vested and unpaid bonus will be
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forfeited if Employee leaves the employment of the bank (1) by his own volition;
or (2) is terminated for just cause. Under the following circumstances, Employee
will become fully vested and will be entitled to be paid, in cash, the balance
of the bonus amount upon the following events:
(a) Death;
(b) Permanent disability;
(c) In the event more than fifty (50%) percent of the stock of IMCB is
sold constituting a change of control as a result of a merger or
similar acquisition transaction;
(d) In the event that the Employee is re-assigned by IMCB to another
organization that is not directly controlled by IMCB; or
(e) By mutual consent of IMCB and the Employee.
4. The benefits contemplated by this agreement are hereby expressly
declared to be non-assignable and any such attempt at assignment shall be void
and of no effect.
5. This agreement shall be binding upon and shall inure to the benefit of
the parties and their successors or assigns.
IMCB EMPLOYEE
By: /s/ Xxxx Xxxxxx /s/ Xxxxxxx Xxxxxxx
----------------------------- -----------------------------------
Chief Executive Officer Xxxxxxx Xxxxxxx
Date 7/23/04 Date 7/23/04
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