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EX-10.1 2 v20596exv10w1.txt EXHIBIT 10.1 EXHIBIT 10.1 2006-2008 LONG TERM INCENTIVE PLAN PANHANDLE STATE BANK 2006-2008 LONG TERM EXECUTIVE INCENTIVE PLAN PLAN DOCUMENT APPROVED BY THE BOARD OF DIRECTORS ON APRIL 28, 2006 TABLE OF CONTENTS
SECTION PAGE - ----------------------------------- ---- Purpose 3 Administration 3 Plan Description 3 Eligibility 4 Size of Award Opportunities 4 Performance Criteria and Goals 4 Payout and Vesting Schedule 4 Withholding 5 Payment 5 Automatic Vesting 5 No Guarantee of Employment 6 Modification and Termination 6 Extraordinary Items 6 Termination 6 Exhibit "A" Participants Exhibit "B" Matrix of Performance
PANHANDLE STATE BANK 2006-2008 LONG-TERM INCENTIVE PLAN This document describes the 2006-2008 Long-Term Incentive Plan (the Plan) for Panhandle State Bank (the Bank). 1. PURPOSE. The purpose of the Plan is to provide motivation and direction to key executives to achieve the long-term strategic goals of the Bank. Specific objectives of the Plan include: - Support the Bank's long-term strategic plan. - Provide long-term orientation to decision making - Focus participants' attention on maximizing long-term shareholder value. 2. ADMINISTRATION. The Plan will be administered by the Compensation Committee of the Board of Directors of Intermountain Community Bancorp (the Committee). The Committee will assure that the Plan is implemented and maintained according to Plan provisions. 3. PLAN DESCRIPTION. The Plan will provide participants with long-term financial reward opportunities based on achieving minimum levels of long-term performance goals. The Plan consists of a matrix which will reward the participants providing the minimum long-term corporate goals are obtained, and, if achieved, stock awards will be provided to Plan participants such that, if the eligibility requirements are met, a restricted stock award will be granted on January 5, 2009, and will vest one-third at the time of grant, one-third on January 5, 2010 and the remaining one-third on January 5, 2011. The minimum performance levels are to be based upon a three (3) year (2006-2008) running average of return on equity and net asset growth (the "Plan Performance Period"). 4. ELIGIBILITY. Participants in the Plan will include key members of the executive team of the Bank. The CEO of the Bank will recommend who participates in the Plan for Committee approval. Participants must be continuously employed at the Bank during the Plan Performance Period and must further be employed on January 5, 2009, the date the award is granted, and remain employed on each vesting date. The CEO will communicate such participation to each participant at the beginning of the Plan Performance Period. Participants in the Plan are listed on Exhibit "A." At the beginning of each calendar year, the CEO will review and, if appropriate, revise Plan participation for the remaining period of the Long-Term Plan. 5. SIZE OF AWARD OPPORTUNITIES. To be most effective, payout opportunities must be meaningful and competitive. To accomplish this, there has been established a matrix which will award participants for Bank performance so long as minimum levels of return on equity and average asset growth over the Plan Performance Period are met. If the Bank's performance is in excess of the minimums, the Plan's participant benefits will increase as performance increases. The performance matrix for each participant in this Plan is attached hereto as Exhibit "B." The restricted stock award shall be adjusted for any stock splits/dividends issued during the term of the Plan. 6. PERFORMANCE CRITERIA AND GOALS. The performance criteria of consolidated average annual return on equity of Intermountain Community Bancorp and consolidated average annual asset growth of Intermountain Community Bancorp for the Plan Performance Period will support the maximization of long-term shareholder value. At the beginning of each fiscal year, the CEO will provide to the Committee the performance pursuant to the Plan for the prior calendar year. 7. PAYOUT SCHEDULE. The benefits, if any, to be paid to the executives shall vest such that one-third of the benefits paid on January 5, 2009 will vest at the time of grant, one-third on January 5, 2010 and the remaining one-third on January 5, 2011. As a condition precedent to the award of any benefits pursuant to this Plan, the executive will be required to be employed by the Bank on each vesting date. 8. WITHHOLDING. The participant shall be responsible for all related federal and state income tax implications. The Bank will withhold all required regulatory federal income tax, state income tax and payroll taxes when paid. 9. PAYMENT. Benefits to be awarded pursuant to this Plan, if any, shall be in the form of a restricted stock grant to the executive according to the applicable matrix attached as Exhibit "B," the full amount of which will be granted on January 5, 2009, vesting in the amounts and on such dates as set forth in Section 7 of the Plan. 10. AUTOMATIC VESTING. If a change in control of Intermountain Community Bancorp or the Bank occurs before the end of the Plan Performance Period, the stock grants awarded to participants under the Plan shall be determined as of the date the change in control occurred rather than as of the end of the Plan Performance Period. The stock grants shall be determined by the Committee based on Intermountain Community Bancorp's consolidated average annual return on equity and consolidated average annual asset growth through the most recent quarter end before the change in control occurred. If the most recent quarter end is an interim period, the Committee may make annualizing or other appropriate adjustments to consolidated average annual return on equity and consolidated average annual asset growth. The stock awards shall be similarly determined for any participant who dies or who becomes disabled (as determined by the Committee) before the end of the Plan Performance Period, based on consolidated average annual return on equity and consolidated average annual asset growth through the most recent quarter end before death or disability occurred. Once a participant's stock award is determined after a change in control or after the participant's death or disability, the stock award shall be paid to the participant as promptly as practicable, rather than according to the schedule set forth in Section 7 (one-third January 5, 2009,one-third on January 5, 2010 and one-third on January 5, 2011), and the requirement that a participant remain employed through January 5, 2011 to claim entitlement to the full amount of this stock award shall not apply. If a change in control occurs after December 31, 2008, or if the participant dies or becomes disabled after December 31, 2008, but before the stock award fully vests according to the schedule described in Section 7, the stock award shall likewise be considered "fully vested" and the requirement that the participant remain employed through January 5, 2011 to claim entitlement to the full amount of his stock award shall not apply. For purposes of this section 10, the term change in control shall mean a change in the ownership of Intermountain Community Bancorp, a change in effective control of Intermountain Community Bancorp, or a change in the ownership of a substantial portion of the assets of Intermountain Community Bancorp, as those terms are defined in Internal Revenue Code section 409A or in regulations or guidance of general applicability issued by the Treasury Department under Section 409A of the Internal Revenue Code, including the Treasury Department's Notice 2005-1, Part IV.B (questions 11 through 14), contained in Internal Revenue Bulletin 2005-2 (January 10, 2005). For purposes of this section 10, the term disability means that, because of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of at least 12 months, the participant is unable to engage in any substantial gainful activity or the participant is receiving income replacement benefits for a period of at least three months under an accident and health plan covering employees of the Bank. The existence of disability shall be determined by the Committee. 11. NO GUARANTEE OF EMPLOYMENT. Nothing in the Plan or any Plan materials guarantees employment at the Bank. Further, this Plan should not be implied as any contract agreement. 12. MODIFICATION AND TERMINATION. The Committee has the right to amend or terminate the Plan at any time. However, termination or modification of the Plan during the Plan Performance Period will not negatively affect performance goals and payout opportunities up until the point of termination. 13. EXTRAORDINARY ITEMS. The Committee has the authority but no obligation to exclude any extraordinary accounting items such as changes in generally accepted accounting procedures, sales or major assets or regulatory changes. 14. TERMINATION. Participants must be continuously employed by the Bank throughout the Plan Performance Period and must further be employed on January 5, 2009 in order to receive the award, the first one-third of which will vest on the date of grant. The Participant must continue to remain employed on the vesting dates of January 5, 2010 and January 5, 2011 to receive the remaining two-thirds of the award. Participants who become fully disabled or die during the term of the Plan will receive benefits pursuant to the Plan on a pro-rata basis based upon the performance results through the most recent quarter end. Participants who voluntarily or involuntarily terminate their employment prior to receiving benefits under the Plan will forfeit automatically their rights to any unvested portions of the award. Exhibit "A" - Participants 2006 - 2008 Long Term Plan Curt Hecker Chief Executive Officer Jerry Smith President, Branch Administration Doug Wright Executive Vice President & Chief Financial Officer John Nagel Executive Vice President & Credit Administrator Pam Rasmussen Executive Vice President & Chief Operating Officer EXHIBIT B PANHANDLE BANK PROPOSED 2006-2008 LONG-TERM INCENTIVE PROGRAM MATRIX 1.25 COMPANY TOTAL SHARES
ASSET GROWTH -------------------------------------------------------------------------------------------------------- ROE 50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% 64.0% 66.0% 68.0% - ------ ------ ------ ------- ------- ------- ------- ------- ------- ------- ------- 12.00% 25,150 26,800 28,450 30,100 31,750 33,400 35,050 36,700 38,350 40,000 12.25% 25,600 27,300 29,000 30,700 32,400 34,100 35,800 37,500 39,200 40,900 12.50% 39,300 41,925 44,550 47,175 49,800 52,425 55,050 57,675 60,300 62,925 12.75% 40,200 42,900 45,600 48,300 51,000 53,700 56,400 59,100 61,800 64,500 13.00% 41,100 43,875 46,650 49,425 52,200 54,975 57,750 60,525 63,300 66,075 13.25% 42,038 44,813 47,588 50,363 53,138 55,913 58,688 61,463 64,238 67,013 13.50% 43,050 45,900 48,750 51,600 54,450 57,300 60,150 63,000 65,850 68,700 13.75% 44,025 46,988 49,950 52,913 55,875 58,838 61,800 64,763 67,725 70,688 14.00% 45,000 48,000 51,000 54,000 57,000 60,000 63,000 66,000 69,000 72,000 14.25% 46,013 49,088 52,163 55,238 58,313 61,388 64,463 67,538 70,613 73,688 14.50% 47,100 50,250 53,400 56,550 59,700 62,850 66,000 69,150 72,300 75,450 14.75% 48,150 51,375 54,600 57,825 61,050 64,275 67,500 70,725 73,950 77,175 15.00% 49,200 52,500 55,800 59,100 62,400 65,700 69,000 72,300 75,600 78,900 15.25% 50,400 53,775 57,150 60,525 63,900 67,275 70,650 74,025 77,400 80,775 15.50% 51,563 55,013 58,463 61,913 65,363 68,813 72,263 75,713 79,163 82,613 15.75% 52,725 56,288 59,850 63,413 66,975 70,538 74,100 77,663 81,225 84,788 16.00% 53,925 57,525 61,125 64,725 68,325 71,925 75,525 79,125 82,725 86,325 16.25% 55,125 58,763 62,400 66,038 69,675 73,313 76,950 80,588 84,225 87,863 16.50% 56,400 60,188 63,975 67,763 71,550 75,338 79,125 82,913 86,700 90,488 16.75% 57,675 61,500 65,325 69,150 72,975 76,800 80,625 84,450 88,275 92,100 17.00% 59,025 62,963 66,900 70,838 74,775 78,713 82,650 86,588 90,525 94,463 17.25% 60,375 64,425 68,475 72,525 76,575 80,625 84,675 88,725 92,775 96,825 17.50% 61,688 65,813 69,938 74,063 78,188 82,313 86,438 90,563 94,688 98,813 17.75% 63,150 67,350 71,550 75,750 79,950 84,150 88,350 92,550 96,750 100,950 18.00% 64,575 68,850 73,125 77,400 81,675 85,950 90,225 94,500 98,775 103,050 18.25% 66,075 70,500 74,925 79,350 83,775 88,200 92,625 97,050 101,475 105,900 18.50% 67,613 72,075 76,538 81,000 85,463 89,925 94,388 98,850 103,313 107,775 18.75% 69,113 73,725 78,338 82,950 87,563 92,175 96,788 101,400 106,013 110,625 19.00% 70,688 75,413 80,138 84,863 89,588 94,313 99,038 103,763 108,488 113,213 19.25% 72,300 77,138 81,975 86,813 91,650 96,488 101,325 106,163 111,000 115,838 19.50% 73,950 78,900 83,850 88,800 93,750 98,700 103,650 108,600 113,550 118,500 19.75% 75,638 80,663 85,688 90,713 95,738 100,763 105,788 110,813 115,838 120,863 20.00% 77,363 82,538 87,713 92,888 98,063 103,238 108,413 113,588 118,763 123,938 20.25% 79,125 84,375 89,625 94,875 100,125 105,375 110,625 115,875 121,125 126,375 20.50% 80,963 86,363 91,763 97,163 102,563 107,963 113,363 118,763 124,163 129,563 20.75% 82,800 88,350 93,900 99,450 105,000 110,550 116,100 121,650 127,200 132,750 21.00% 84,713 90,375 96,038 101,700 107,363 113,025 118,688 124,350 130,013 135,675 21.25% 86,625 92,400 98,175 103,950 109,725 115,500 121,275 127,050 132,825 138,600 21.50% 88,575 94,500 100,425 106,350 112,275 118,200 124,125 130,050 135,975 141,900 21.75% 90,600 96,675 102,750 108,825 114,900 120,975 127,050 133,125 139,200 145,275 22.00% 92,850 99,000 105,150 111,300 117,450 123,600 129,750 135,900 142,050 148,200 ASSET GROWTH ----------------------------------------------------------------------------------------------- ROE 70.0% 72.0% 74.0% 76.0% 78.0% 80.0% 82.0% 84.0% 86.0% - ------ ------- ------- ------- ------- ------- ------- ------- ------- ------- 12.00% 41,750 43,325 44,900 46,475 48,050 49,625 51,200 52,775 54,350 12.25% 42,700 44,300 45,900 47,500 49,100 50,700 52,300 53,900 55,500 12.50% 65,513 67,988 70,463 72,938 75,413 77,888 80,363 82,838 85,313 12.75% 66,975 69,488 72,000 74,513 77,025 79,538 82,050 84,563 87,075 13.00% 68,513 71,063 73,613 76,163 78,713 81,263 83,813 86,363 88,913 13.25% 70,088 72,713 75,338 77,963 80,588 83,213 85,838 88,463 91,088 13.50% 71,700 74,400 77,100 79,800 82,500 85,200 87,900 90,600 93,300 13.75% 73,350 76,125 78,900 81,675 84,450 87,225 90,000 92,775 95,550 14.00% 75,000 77,813 80,625 83,438 86,250 89,063 91,875 94,688 97,500 14.25% 76,725 79,575 82,425 85,275 88,125 90,975 93,825 96,675 99,525 14.50% 78,450 81,413 84,375 87,338 90,300 93,263 96,225 99,188 102,150 14.75% 80,250 83,250 86,250 89,250 92,250 95,250 98,250 101,250 104,250 15.00% 82,088 85,163 88,238 91,313 94,388 97,463 100,538 103,613 106,688 15.25% 83,963 87,113 90,263 93,413 96,563 99,713 102,863 106,013 109,163 15.50% 85,913 89,138 92,363 95,588 98,813 102,038 105,263 108,488 111,713 15.75% 87,863 91,163 94,463 97,763 101,063 104,363 107,663 110,963 114,263 16.00% 89,850 93,225 96,600 99,975 103,350 106,725 110,100 113,475 116,850 16.25% 91,875 95,325 98,775 102,225 105,675 109,125 112,575 116,025 119,475 16.50% 93,975 97,538 101,100 104,663 108,225 111,788 115,350 118,913 122,475 16.75% 96,150 99,750 103,350 106,950 110,550 114,150 117,750 121,350 124,950 17.00% 98,325 101,963 105,600 109,238 112,875 116,513 120,150 123,788 127,425 17.25% 100,575 104,363 108,150 111,938 115,725 119,513 123,300 127,088 130,875 17.50% 102,863 106,688 110,513 114,338 118,163 121,988 125,813 129,638 133,463 17.75% 105,225 109,200 113,175 117,150 121,125 125,100 129,075 133,050 137,025 18.00% 107,625 111,675 115,725 119,775 123,825 127,875 131,925 135,975 140,025 18.25% 110,100 114,225 118,350 122,475 126,600 130,725 134,850 138,975 143,100 18.50% 112,650 116,850 121,050 125,250 129,450 133,650 137,850 142,050 146,250 18.75% 115,200 119,550 123,900 128,250 132,600 136,950 141,300 145,650 150,000 19.00% 117,825 122,250 126,675 131,100 135,525 139,950 144,375 148,800 153,225 19.25% 120,525 125,025 129,525 134,025 138,525 143,025 147,525 152,025 156,525 19.50% 123,300 127,950 132,600 137,250 141,900 146,550 151,200 155,850 160,500 19.75% 126,113 130,838 135,563 140,288 145,013 149,738 154,463 159,188 163,913 20.00% 128,963 133,838 138,713 143,588 148,463 153,338 158,213 163,088 167,963 20.25% 131,925 136,875 141,825 146,775 151,725 156,675 161,625 166,575 171,525 20.50% 134,925 139,950 144,975 150,000 155,025 160,050 165,075 170,100 175,125 20.75% 138,000 143,175 148,350 153,525 158,700 163,875 169,050 174,225 179,400 21.00% 141,150 146,438 151,725 157,013 162,300 167,588 172,875 178,163 183,450 21.25% 144,375 149,813 155,250 160,688 166,125 171,563 177,000 182,438 187,875 21.50% 147,675 153,225 158,775 164,325 169,875 175,425 180,975 186,525 192,075 21.75% 151,050 156,750 162,450 168,150 173,850 179,550 185,250 190,950 196,650 22.00% 154,650 160,425 166,200 171,975 177,750 183,525 189,300 195,075 201,000
2008 AVG ANNUAL ASSETS 1,153,162 ###-###-#### AVG ROE 13.17% Distribution of Awards: 2005 AVG ANNUAL ASSETS 678,872 ###-###-#### AVG ROE 13.74% 50% - CEO ------------- TOTAL INCREASE 474,289 ###-###-#### AVG ROE 14.94% 50% - Executive Team - by approval of CEO ----- TOTAL GROWTH % 69.9% 3-YEAR AVG ROE 13.95%