def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. _____)
Filed by
the Registrant þ
Filed by a party other than the Registrant o
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Preliminary Proxy Statement |
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Confidential, for Use of the Common Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 |
INTERMOUNTAIN COMMUNITY BANCORP.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Schedule and the date of its filing. |
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Date Filed: |
Intermountain Community Bancorp
414 Church Street
Sandpoint, Idaho 83864
March 29, 2010
To the Shareholders of Intermountain Community Bancorp:
We cordially invite you to attend the 2010 Annual Shareholders Meeting of Intermountain
Community Bancorp to be held on Wednesday, April 28, 2010 at 10 a.m. at the Sandpoint Center,
located at 414 Church Street, Sandpoint, Idaho.
Your vote is important. Whether or not you plan to attend the annual meeting, we hope that you
will vote as soon as possible. We encourage you to promptly complete and return the enclosed proxy
card or vote by Internet or telephone, as specified in your proxy card; if you attend the meeting
in person, you may withdraw your proxy and vote your shares.
Further information regarding voting rights and the business to be transacted at the annual
meeting is included in the accompanying proxy statement. Your continued interest in and support of
Intermountain Community Bancorp is truly appreciated.
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Sincerely,
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Curt Hecker |
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President and Chief Executive Officer |
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INTERMOUNTAIN COMMUNITY BANCORP
414 Church Street
Sandpoint, Idaho 83864
(208) 263-0505
Notice of Annual Meeting of Shareholders
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TIME
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10:00 a.m. Pacific Daylight Time on Wednesday, April 28, 2010 |
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PLACE
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Sandpoint Center, 414 Church Street, Sandpoint, Idaho |
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ITEMS OF BUSINESS
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(1) To elect three directors to a three-year term. |
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(2) To consider and approve an advisory (non-binding) vote
on executive compensation, as disclosed in the proxy
statement. |
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(3) To ratify the appointment of BDO Seidman, LLP as the
independent registered public accounting firm for the fiscal
year 2010. |
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(4) To act upon such other matters as may properly come
before the meeting or any adjournments or postponements
thereof. |
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RECORD DATE
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You are entitled to vote at the annual meeting and at any
adjournments or postponements thereof if you were a
shareholder at the close of business on February 26, 2010. |
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VOTING BY PROXY
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Please submit your proxy card as soon as possible so that
your shares can be voted at the annual meeting in accordance
with your instructions. For specific instructions on voting,
please refer to the instructions on your enclosed proxy
card. |
Your vote is important. Whether or not you plan to attend the annual meeting, we urge you
to vote and submit your proxy by the Internet, telephone or mail in order to ensure the presence of
a quorum.
Registered holders may vote:
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By Internet: go to www.voteproxy.com |
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By Phone: call toll-free 1-800-776-9437 |
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By Mail: mark, sign, date and mail your proxy card |
Beneficial Holders: If your shares are held in the name of a broker, bank or other
holder of record, you must follow the instructions you receive from the holder of record to
vote your shares.
By Order of the Board
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Dale Schuman
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Curt Hecker |
Corporate Secretary
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President and Chief Executive Officer |
This proxy statement and the accompanying proxy card are being distributed on or about
March 29, 2010
TABLE OF CONTENTS
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ii
PROXY STATEMENT
For Annual Meeting of Shareholders
to be held on April 28, 2010
Important Notice Regarding the Availability of Proxy Materials for the 2010 Shareholder
Meeting:
A copy of this Proxy Statement, the Annual Report to Shareholders and the Annual
Report on Form 10-K for the year ended December 31, 2009 are available at
www.intermountainbank.com.
INFORMATION ABOUT THE MEETING
Why did I receive these proxy materials?
We are providing this Notice of Annual Meeting, proxy statement and the accompanying proxy
card (the proxy materials) for use in connection with the Annual Meeting of Shareholders of
Intermountain Community Bancorp (also referred to in this proxy statement as Intermountain, the
Company, we and us) to be held on Wednesday, April 28, 2010. These proxy materials are first
being mailed to shareholders on or about March 29, 2010.
What proposals will be voted on at the annual meeting?
At the annual meeting, holders of our common stock will be asked to consider and act upon the
following proposals:
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Election of Directors. To elect three nominees as directors at the annual
meeting with three-year terms to expire in 2013. |
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Advisory (non-binding) Vote on Executive Compensation. To consider and
approve in an advisory (non-binding) vote, the compensation of Intermountain
executives. |
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Ratification of the Appointment of Independent Accountants. To ratify the
appointment of Intermountains independent registered public accounting firm for
2010. |
How does the Board of Directors recommend I vote?
The Board of Directors unanimously recommends that you vote:
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FOR the director nominees; |
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FOR the approval of the advisory (non-binding) vote on executive
compensation; and |
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FOR the ratification of the appointment of the independent registered public
accounting firm. |
1
What vote is required to approve each of the proposals?
Election of Directors. The three nominees for election as directors at the annual meeting
with three-year terms to expire in 2013 who receive the highest number of affirmative votes will be
elected. Shareholders are not permitted to cumulate their votes for the election of directors.
Votes may be cast for or withheld from each nominee. Votes that are withheld and broker non-votes
will have no effect on the outcome of the election.
Advisory (non-binding) Vote on Executive Compensation. The advisory (non-binding) vote on
executive compensation requires the affirmative vote FOR the proposal by holders of a majority of
the shares present in person or by proxy and entitled to vote on the proposal. You may vote for,
against or abstain from approving the advisory (non-binding) vote on executive compensation.
Abstentions and broker non-votes will have no effect on the outcome of the votes.
Ratification of the Appointment of the Independent Registered Public Accounting Firm. The
proposal to ratify the appointment of Intermountains independent registered public accounting firm
for 2010 requires the affirmative vote FOR the proposal by holders of a majority of the shares
present in person or by proxy and entitled to vote on the proposal. You may vote for, against or
abstain from the ratification of the independent registered public accounting firm. Abstentions
and broker non-votes will have no effect on the outcome of the votes.
How will my proxy be voted?
Shares represented by properly executed proxies that are received in time and not revoked will
be voted in accordance with the instructions indicated on the proxies. If no instructions are
indicated, the persons named in the proxy will vote the shares represented by the proxy FOR the
director nominees, FOR the approval of the advisory (non-binding) vote on executive compensation
and FOR the ratification of the independent registered public accounting firm.
Can I revoke my proxy?
Any proxy given by a shareholder may be revoked before its exercise by (1) giving notice to us
in writing, (2) delivering to us a subsequently dated proxy, or (3) notifying us at the annual
meeting before the shareholder vote is taken.
Who is soliciting proxies?
Our board of directors is soliciting proxies from the holders of our common stock, and we will
pay the associated costs. Solicitation may be made by Intermountains and Panhandle State Banks
(Bank) directors, officers and employees. In addition, we may engage an outside proxy
solicitation firm to render proxy solicitation services. If we do, we will pay a fee for such
services. Solicitation may be made through the mail, or by telephone, facsimile, or personal
interview. We also may reimburse brokerage firms, custodians and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation material to such
beneficial owners.
Who is entitled to vote?
Shareholders who owned our common stock as of the close of business on February 26, 2010 (the
Record Date) are entitled to vote at the annual meeting. There were approximately 8,438,481
shares of our common stock issued and outstanding on the Record Date, and each share of common
stock is entitled to one vote on each matter properly brought before the annual meeting. Our
outstanding Fixed Rate
2
Cumulative Perpetual Preferred Stock, Series A, no par value (the Series A Preferred Stock),
is not entitled to vote at the annual meeting.
What is the quorum requirement for the annual meeting?
The quorum requirement for holding the annual meeting and transacting business is a majority
of the total votes entitled to be cast at the annual meeting. The shares may be present in person
or represented by proxy at the annual meeting. Both abstentions and broker non-votes (defined
below) are counted as present for the purpose of determining the presence of a quorum.
Are these proxy materials available on-line?
This Notice of Annual Meeting and proxy statement are available on our Website at
www.intermountainbank.com.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Approximately 55% of Intermountain shareholders hold their shares through a stockbroker, bank
or other nominee rather than directly in their own names. As summarized below, there are some
differences between shares held of record and those owned beneficially.
Shareholders of Record. If your shares are registered directly in your name with
Intermountains transfer agent, American Stock Transfer and Trust, you are considered, with respect
to those shares, the shareholder of record, and these proxy materials are being sent to you by
Intermountain through American Stock Transfer and Trust. As the shareholder of record, you have the
right to grant your voting proxy directly to Intermountain or to vote in person at the annual
meeting. Intermountain has enclosed a proxy card for you to use. For instructions on voting by
telephone or the Internet, please refer to your proxy card, the Notice of Annual Meeting delivered
with this proxy statement and the instructions set forth below.
Beneficial Ownership/Broker Non-Votes. If your shares are held in a stock brokerage account
or by a bank or other nominee, you are considered the beneficial owner of shares held in street
name, and these proxy materials are being forwarded to you by your broker or nominee who is
considered, with respect to those shares, the shareholder of record. As the beneficial owner, you
have the right to direct your broker how to vote with respect to the shares you beneficially own.
Your broker or nominee has enclosed a voting instruction card for you to use in directing your
broker or nominee as to how to vote your shares. A broker non-vote occurs when shares held by a
broker for a beneficial owner are not voted with respect to a particular proposal because (1) the
proposal is not routine and the broker therefore lacks discretionary authority to vote the shares,
and (2) the beneficial owner does not submit voting instructions to the broker. If you do not
instruct your broker on how to vote your shares, your broker may vote your shares at this meeting
on the ratification of the appointment of the independent registered accounting firm only. If no
instruction is given with respect to the election of directors or approval of the advisory
(non-binding) resolution on executive compensation, your broker cannot vote your shares on
these proposals.
How do I vote?
You may vote your shares either in person at the annual meeting or by proxy. To vote by
proxy, you should mark, date, sign and mail the enclosed proxy card in the envelope provided. If
your shares are registered in your own name and you attend the meeting, you may deliver your
completed proxy card in
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person. Street name shareholders, that is, those shareholders whose shares are held in the
name of and through a broker or nominee, who wish to vote at the meeting will need to obtain a
proxy form from the institution that holds their shares.
Telephone Voting. You may grant a proxy to vote your shares by telephone by calling
1-800-776-9437. Please see the instructions on the enclosed proxy card.
Internet Voting. You may also grant a proxy to vote your shares by means of the Internet. The
Internet voting procedures below are designed to authenticate your identity, to allow you to grant
a proxy to vote your shares, and to confirm that your instructions have been recorded properly.
For shares registered in your name. As a shareholder of record, you may go to
www.voteproxy.com to grant a proxy to vote your shares by means of the Internet. You will be
required to provide our number and the control number, both of which are contained on your proxy
card. You will then be asked to complete an electronic proxy card. The votes represented by such
proxy will be generated on the computer screen, and you will be prompted to submit or revise them
as desired.
For shares registered in the name of a broker or bank. Most beneficial owners, whose stock is
held in street name, receive instructions for granting proxies from their banks, brokers or other
agents, rather than a proxy card.
A number of brokers and banks are participating in a program provided through Broadridge
Financial Solutions Inc. that offers the means to grant proxies to vote shares over the telephone
and Internet. If your shares are held in an account with a broker or bank participating in the
Broadridge program, you may grant a proxy to vote those shares by calling the telephone number or
accessing the website as shown on the instruction form received from your broker or bank.
General information for all shares voted via the Internet or by phone. We must receive
Internet or telephone votes by 11:59 p.m. on April 27, 2010. Submitting your proxy via the Internet
or by phone will not affect your right to vote in person should you decide to attend the annual
meeting.
PROPOSAL NO. 1 ELECTION OF DIRECTORS
General
Our amended and restated articles of incorporation (articles) and bylaws allow the Board to
set the number of directors on the Board within a range of five to fifteen. The articles also
authorize the Board to fill vacancies that occur on the Board, including vacancies that are a
result of increasing the number of directors. As a result of the retirement of Barbara Strickfaden
from the Board in 2009, the size of the Board was decreased to ten, and accordingly, the Board has
set the number of directors at ten. Information regarding the directors backgrounds and
qualifications is set forth below under each of their biographical summaries.
Directors are elected for terms of three years or until their successors are elected and
qualified. Our articles provide for staggered terms, with approximately one-third of the directors
elected each year, with the classes of directors as near-equal size as possible.
Our Nominating/Corporate Governance Committee has recommended, and the Board has nominated,
James T. Diehl, John B. Parker and Jim Patrick for election as directors for three-year terms to
expire at the 2013 annual meeting of shareholders. If any of the nominees should refuse or become
unable to serve, your proxy will be voted for the person the Board designates to replace that
nominee. We are not aware of any nominee who will be unable to or refuses to serve as a director.
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Vote Required
The three nominees for election as directors at the annual meeting with three-year terms to
expire in 2013 who receive the highest number of affirmative votes will be elected.
The Board of Directors unanimously recommends a vote FOR each of the nominees to the Board.
INFORMATION WITH RESPECT TO NOMINEES
AND OTHER DIRECTORS
The following tables set forth certain information with respect to the director nominees and
the other continuing directors.
Director Nominees
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Age as of |
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Terms To Expire 2013 |
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James T. Diehl
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Attorney Firm of J.T. Diehl |
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John B. Parker
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Retired Auto Dealer |
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Jim Patrick
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Farm Owner/Operator; Idaho State Legislator |
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Continuing Directors |
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Terms Expiring 2011 |
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Charles L. Bauer
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Retired; Former President of Panhandle State Bank |
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Maggie Y. Lyons
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Plan Administrator and Trustee for Metropolitan Creditors
Trusts |
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Ronald Jones
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54 |
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Chief Financial Officer of Ecolotree, Inc; Farm Owner/Operator |
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Terms Expiring 2012 |
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Ford Elsaesser
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58 |
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Attorney Firm of Elsaesser, Jarzabek, Anderson, Marks,
Elliott and Macdonald Chtd. |
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Curt Hecker
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49 |
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President & CEO of Intermountain; CEO of Panhandle State Bank |
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Michael J. Romine
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69 |
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Retired; Former Vice President & CFO of Inland Northwest
Distributing, Inc. |
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Jerry Smith
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53 |
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President of Panhandle State Bank; Executive Vice President
of Intermountain |
Background of Nominees and Continuing Directors
The business experience and any public company directorships of each of the directors for the
past five years are described below. Directors of Intermountain also serve as directors of the
Bank. Six of the directors (Messrs. Bauer, Diehl, Elsaesser, Hecker, Parker and Romine) have been
directors of Intermountain since the Companys inception in 1997.
5
Director Nominees
James T. Diehl has served as Vice Chairman of the Board of Intermountain since its formation
in 1997. Mr. Diehl has been a director of the Bank since 1990 and has served as Vice Chairman of
the Board of the Bank since 2001. He is an attorney and has been the sole proprietor of the law
firm of J. T. Diehl since 1987. In addition to his law degree which he earned from Gonzaga
University, Mr. Diehl also has a degree in Business Administration. He brings to the Board a
familiarity with the north Idaho market based on 25 years of practicing real estate and business
law in the local community, and has an extensive network of business and personal contacts within
the Companys primary market.
John B. Parker has served as Chairman of the Board of Intermountain since its formation in
1997, and has been a director of the Bank since 1980 and Chairman of the Board of the Bank since
1995. Mr. Parker began his career as an auto dealer in Sandpoint in 1957, and retired in June 1999
from Taylor-Parker Motor Company as general manager. Mr. Parker has a degree in business with a
major in marketing from the University of Idaho. In addition to his 42 year management career in
the auto industry, Mr. Parker has also served and chaired local community boards in Bonner County
including 38 years as chairman of the Bonner General Hospital Board, and currently as a member of
the Bonner General Hospital Foundation Advisory Board. As a long time resident and businessman in
Sandpoint, Mr. Parker provides an extensive network of business and personal contacts and a
valuable perspective with regard to the Companys primary market.
Jim Patrick was appointed to the Intermountain Board in November 2004, following
Intermountains merger with Snake River Bancorp, Inc./Magic Valley Bank. Mr. Patrick was a
founding director of Magic Valley Bank, and he served on the Snake River Bancorp, Inc. Board from
the companys formation in 2002 until its merger with Intermountain. Mr. Patrick has been the
owner/operator of a farm in south central Idaho since 1973 and has served on the boards of various
state and national farm organizations. In 2006, Mr. Patrick was elected and continues to serve in
the Idaho State Legislature as Representative for District 23. Mr. Patrick has a Bachelor of
Science degree from the University of Idaho where he studied agricultural economics and business
management. In his role as a member of the Budget Committee of the Idaho State legislature, his
responsibilities include annual distribution of billions of dollars of state revenue, including a
payroll budget for a government workforce of over 20,000 employees. Mr. Patricks agricultural
background includes extensive knowledge of water rights issues and their effects on agriculture in
southern Idaho. Mr. Patricks prior service as a bank director coupled with his extensive
budgeting background and long standing in the community provides the Board with valuable resources.
Continuing Directors
Charles L. Bauer has been a director of Intermountain since 1997 and of the Bank since 1985.
Mr. Bauer served as President of the Bank from 1985 to his retirement in 1996. Mr. Bauer has a
Bachelor of Science degree from the University of Idaho where he majored in business administration
and minored in agriculture. He is also an honors graduate from the Pacific Coast Banking School;
and has both attended and instructed numerous American Institute of Banking classes. His career
spans 39 years in bank management, 19 of which he served in the roles of president and/or chief
executive officer, and provides the Board with extensive in-depth knowledge and valuable
perspective of the financial industry.
Ford Elsaesser has been a director of Intermountain since 1997 and of the Bank since 1992.
Mr. Elsaesser has a Bachelor of Science degree in forestry from Goodard College, and a law degree
from the University of Idaho Law School. Mr. Elsaesser is the managing and senior partner of the
law firm of Elsaesser, Jarzabek, Anderson, Marks, Elliott and Macdonald, Chtd. which he founded in
1980. Mr. Elsaesser has also served as the Idaho Chapter 7 Bankruptcy Trustee in all counties
north of Grangeville
6
since 1984, Chapter 12 Bankruptcy Trustee in northern Idaho and eastern Washington since 1986,
and as court appointed receiver, examiner and Chapter 11 Trustee in numerous cases. This broad
experience in bankruptcy law brings a unique perspective to the Board from a risk management
standpoint.
Curt Hecker has been a director and Intermountains President and Chief Executive Officer
since its inception. Mr. Hecker was hired in 1995 as an Executive Vice President of the Bank. He
has served as Chief Executive Officer and director of the Bank since 1996. From 1996 until 2001,
Mr. Hecker also served as the Banks President. Mr. Hecker earned a Business Administration degree
from Boise State University in 1983, and graduated from Pacific Coast Banking School in 1994. Mr.
Hecker joined the Bank with 11 years of banking experience as a vice president and manager with a
bank that experienced various expansions through numerous mergers and acquisitions. In addition to
the experience and knowledge gained through his early career, Mr. Hecker has served on the Board of
Directors of Coldwater Creek, Inc., a publicly traded retail company based in northern Idaho, since
1996, and in 2009 joined the Board of Pacific Coast Bankers Bank. The Board believes that the CEO
should serve as a director as the primary liaison between the Board and management and as the
executive with overall responsibility for executing our strategic plan.
Ronald Jones was appointed to the Intermountain Board in November 2004, following
Intermountains merger with Snake River Bancorp, Inc./Magic Valley Bank. Mr. Jones served as
Chairman of Magic Valley Bank from its opening in 1997 until April 2004. Mr. Jones has a
Bachelors degree in Agricultural Economics from S. Dakota State University and a Masters degree
in Business Administration from Colorado State University. His 12 years of experience as a bank
director have included three capital expansions. As an independent consultant and expert witness
in the bankruptcy system, he has experience in business modeling and analysis, especially related
to agriculture. In the environmental engineering area, Mr. Jones develops life-cycle cost models
for comparison of alternative treatment methods. Mr. Jones previously operated a business
specializing in computerized accounting systems with an emphasis on clarity of management reports,
sensitivity analysis, and risk recognition. Mr. Jones prior director experience together with his
experience and background in business analysis serves as a valuable resource.
Maggie Y. Lyons has been a director of Intermountain and the Bank since 2001. Ms. Lyons is
currently the sole officer and director of Metropolitan Mortgage and Securities, Inc. and Summit
Securities, Inc., and Plan Administrator and Trustee of Metropolitan and Summit Creditors Trusts.
From July 2004 until February 2006, Ms. Lyons served as the Chief Financial Officer and acting
Chief Executive Officer for Metropolitan Mortgage and Securities, and President and Principal
Financial Officer of Summit Securities, both located in Spokane, Washington and both of which are
in Chapter 11 proceedings. Ms. Lyons was appointed to these positions in July 2004 by the Eastern
District of Washington Bankruptcy Court. Ms. Lyons is a Certified Public Accountant and Microsoft
Certified Systems Engineer and provided business consulting services prior to working on the
Metropolitan and Summit bankruptcy cases. Ms. Lyons experience also includes over 20 years
dealing with operational and accounting functions in the manufacturing and services industries, and
over 5 years dealing with complex financial instruments in her roles stated above. Ms. Lyons has a
Bachelor of Science degree from the University of Idaho where she majored in accounting. In
addition, Ms. Lyons has been an active leader and participant in numerous civic and volunteer
organizations in Kootenai County since 1989. Ms. Lyons financial expertise together with her
extensive business and personal network serves as a valuable resource.
Michael J. Romine has been a director of Intermountain since 1997 and the Bank since 1980. Mr.
Romine served as the Vice President and Chief Financial Officer of Inland Northwest Distributing,
Inc. from 1992 until his retirement in 2007. Mr. Romine has a Bachelor of Science degree in
accounting from Montana State University. In addition, he is retired as a partner in Price
Waterhouse Cooper, and worked
7
as an auditor and consultant to various businesses, including banks, during his career. Mr.
Romines financial experience provides the Board with the experience and expertise needed as Audit
Committee Chair.
Jerry Smith has been a director of Intermountain and the Bank since 2000. Mr. Smith joined the
Bank in 1999 as President of Intermountain Community Bank, a division of the Bank. Since 2001, Mr.
Smith has served as President of the Bank and Executive Vice President of Intermountain. Mr. Smith
earned a bachelors degree in Business Administration from Boise State University in 1979,
graduated from Northwest Intermediate Banking School in 1984, and Pacific Coast Banking School in
1987. Mr. Smith brings over 30 years of banking experience, beginning with Idaho First National
Bank in 1979, to his service on the Board. His experience prior to joining the Bank includes
numerous mergers and acquisitions, experience as a Loan Officer, Branch Manager, and Regional
Manager of an eastern Oregon and western Idaho bank with over $15 billion in total assets. This
prior experience and expertise has been an essential part of Mr. Smiths service as a director as
Panhandle has grown and expanded its operations.
CORPORATE GOVERNANCE
Corporate Governance Guidelines
The Board of Directors is committed to good business practices, transparency in financial
reporting and strong corporate governance. Intermountain operates within a comprehensive plan of
corporate governance for the purpose of defining responsibilities, setting high standards of
professional and personal conduct and assuring compliance with such responsibilities and standards.
The Board regularly monitors developments in the area of corporate governance, and our corporate
governance policies, practices and committee charters are reviewed periodically and updated as
necessary to reflect changes in regulatory requirements and evolving oversight practices.
Board Leadership Structure
The Board of Directors is committed to maintaining an independent Board and for several years,
a substantial majority of our Board has been comprised of independent directors. It has further
been the practice of Intermountain to separate the duties of Chairman and Chief Executive Officer.
In keeping with good corporate governance practices, at this time, the Board believes that the
separation of the duties of Chairman and Chief Executive Officer eliminates any inherent conflict
of interest that may arise when the roles are combined, and that an independent director who has
not served as an executive of the Company can best provide the necessary leadership and objectivity
required as Chairman.
Director Qualifications
The Board of Directors believes that it is necessary for each of the Companys directors to
possess many qualities and skills. All of our directors bring to our Board a wealth of leadership
experience derived from their service in a variety of professional and executive positions and
extensive board experience.
The Nominating/Corporate Governance Committee is responsible for the oversight and nomination
process for director nominees. The Committee has not historically adopted formal director
qualification standards for Committee-recommended nominees. However, the Committee annually
reviews the experience, qualifications, attributes and skills of each director and nominee as part
of its evaluation of whether these are the right individuals to serve on Intermountains Board to
help Intermountain successfully meet its long-term strategic plans. A more detailed discussion
regarding the considerations given by the Committee when considering director nominees is set forth
below in the
8
section entitled Meetings and Committees of the Board of DirectorsNominating/Corporate
Governance Committee.
The director biographical information set forth above summarizes the experience,
qualifications, attributes and skills that Intermountain believes qualifies each director to serve
on the Board. The Nominating/Corporate Governance Committee finds each of the respective
directors professional and business acumen and board experience beneficial to the Company and the
Board.
Code of Ethics
The Company adopted a Code of Ethics for Senior Financial Officers, which applies to its
principal executive officer, principal financial officer, principal accounting officer or
controller, as well as to directors and all other employees of the Company and the Bank and its
divisions.
You can access the Companys current Code of Ethics, as well as our Audit, Compensation and
Nominating/Corporate Governance Committee charters by visiting one of our subsidiary Websites
(www.panhandlebank.com, www.magicvalleybank.com, or
www.intermountainbank.com) and clicking on the Governance Documents link under Investor
Relations, or by writing to: Intermountain Community Bancorp, c/o the Corporate Secretary, P. O.
Box 967, Sandpoint, Idaho 83864.
Director Independence
With the assistance of legal counsel to Intermountain, the Nominating/Corporate Governance
Committee has reviewed the applicable legal standards for Board and Board committee member
independence, and the criteria applied to determine audit committee financial expert status. The
Committee has also reviewed a summary of the answers to annual questionnaires completed by each of
the directors, which also included any potential director-affiliated transactions.
The Board then analyzed the independence of each director and nominee and determined that the
following members of the Board meet the standards regarding independence required by applicable
law, regulation and NASDAQ listing standards, and that each such director is free of relationships
that would interfere with the individual exercise of independent judgment. In determining the
independence of each director, the Board considered many factors, including any lending
arrangements with the directors, each of which were made on the same terms as comparable
transactions made with persons unaffiliated with the Company. Such arrangements are discussed in
detail in the section entitled Transactions with Management.
Based on these standards, the Board determined that each of the following current non-employee
directors is independent:
|
|
|
|
|
|
|
|
|
|
|
Charles L. Bauer
|
|
|
|
Maggie Y. Lyons
|
|
|
|
|
James T. Diehl
|
|
|
|
John B. Parker |
|
|
|
|
Ford Elsaesser
|
|
|
|
Michael J. Romine |
|
|
|
|
Ronald Jones |
|
|
|
|
|
|
In addition, based on such standards, the Board determined that Curt Hecker, the President and
Chief Executive Officer of Intermountain, and Jerry Smith, the Executive Vice President of
Intermountain and President of the Bank, are not independent because they are executive officers of
Intermountain. The Board further determined that Jim Patrick, who was a director of Snake River
Bancorp, Inc. and Magic Valley Bank, does not meet the independence standards of NASDAQ as a result
of his involvement in a transaction between Intermountain, Snake River Bancorp, Inc. and Magic
Valley Bank that closed on
9
January 5, 2007 and for which during 2007 he received a payment in excess of the amount allowed to
be deemed independent.
Shareholder Communications with the Board of Directors
The Company and the Board of Directors welcome communication from shareholders and other
interested parties. Communications may be made by writing to the Chairman of the Board, c/o the
Corporate Secretary, Intermountain Community Bancorp, P. O. Box 967, Sandpoint, Idaho 83864. A copy
of such written communication will also be sent to our Chief Executive Officer. If the Chairman and
the Chief Executive Officer determine that such communications are relevant to our operations and
policies, such communications will be forwarded to the entire Board for review and consideration.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors met 10 times during the fiscal year ended December 31, 2009. Each
director attended at least 75% of the aggregate number of meetings of the Board and of the
committees on which he or she served, except for Jim Patrick who attended 64% of the meetings. We
encourage, but do not require, directors to attend annual shareholder meetings. Last year, all of
our current directors attended the annual shareholder meeting. In 2009, our independent directors
met seven times without management present.
The Board of Directors has established, among others, an Audit Committee, a Compensation
Committee, and a Nominating/Corporate Governance Committee. In addition, the Bank, Intermountains
wholly owned subsidiary, has various committees on which directors serve, including the Loan
Review, Risk Management, and Technology Committees.
The following table shows the membership of certain committees of the Board during 2009.
Committee Membership
|
|
|
|
|
|
|
|
|
|
|
|
|
Name |
|
Audit |
|
Compensation |
|
Nominating |
Charles L. Bauer |
|
|
þ |
|
|
|
þ |
|
|
|
þ |
|
James T. Diehl |
|
|
o |
|
|
|
þ |
* |
|
|
o |
|
Ford Elsaesser |
|
|
o |
|
|
|
þ |
|
|
|
þ |
|
Maggie Y. Lyons |
|
|
þ |
|
|
|
o |
|
|
|
þ |
|
John B. Parker |
|
|
þ |
|
|
|
þ |
|
|
|
þ |
|
Michael J. Romine |
|
|
þ |
* |
|
|
þ |
|
|
|
o |
|
Barbara Strickfaden ** |
|
|
o |
|
|
|
o |
|
|
|
þ |
* |
|
|
|
* |
|
Committee Chair |
|
** |
|
Ms. Strickfaden resigned as a director effective August 7, 2009; Ms. Lyons replaced Ms.
Strickfaden as Chairman of the Nominating Committee. |
Boards Authority for Risk Oversight
The Board has ultimate authority and responsibility for overseeing risk management at
Intermountain. Some aspects of risk oversight are fulfilled at the full Board level. For example,
the Board regularly receives reports from management on overall risk levels in the organization,
and a comprehensive review of the various risks faced by the Company, including a prioritization
ranking of the various risks, and managements mitigation strategies. It also receives more
specific reports on various
10
risk factors including credit risk, liquidity risk, capital risk, interest rate risk,
operational risk, regulatory/compliance risk and technology risk.
The Board delegates other aspects of its risk oversight function to its committees. The Audit
Committee oversees financial, accounting and internal control risk management. The Compensation
Committee oversees the management of risks that may be posed by the Companys personnel and
compensation practices and programs. The Loan Review Committee oversees credit risk management,
and the Technology Committee oversees technology and information security risk management. In
addition to reviewing overall risk levels, the Risk Management Committee oversees liquidity,
capital and interest-rate risk.
The head of the Companys internal audit function reports directly to the Audit Committee.
The executive officers regularly report directly to the entire Board and to appropriate Board
committees with respect to the risks they are responsible for managing. The Company also engages
various external companies to assist in performing risk evaluations and suggesting mitigation
strategies, particularly involving interest rate risk, technology risk and regulatory risk.
The Compensation Committee oversees the management of risks that may be posed by the Companys
compensation practices and programs. As part of this process, the Compensation Committee is
responsible for analyzing the compensation policies and practices for all employees, not just
executive management. In its review of these policies and practices, the Compensation Committee
has determined that the current policies and practices do not create or encourage risks that are
reasonably likely to have a material adverse effect on the Company.
Audit Committee. During 2009, the Audit Committee was comprised of four directors,
each of whom was considered independent as defined by the NASDAQ listing standards and applicable
SEC rules. The Board has determined that Michael J. Romine meets the definition of audit
committee financial expert as defined by applicable SEC rules.
The Committee operates under a formal written charter, a copy of which is available on our
website. As part of its periodic review of audit committee-related matters, the Audit Committee
receives updates on relevant legal and regulatory requirements, including all applicable SEC rules
as revised from time to time. Even though our stock is not currently listed on NASDAQ, the Audit
Committee has also considered the corporate governance listing standards of NASDAQ in reviewing and
updating its charter including with respect to committee membership. The Audit Committee held 12
meetings during 2009.
The Audit Committee is responsible for the oversight of the quality and integrity of
Intermountains financial statements, compliance with legal and regulatory requirements, the
qualifications and independence of its independent auditors, the performance of its internal audit
function and independent auditors, and other significant financial matters. It is the
responsibility of management to prepare our financial statements and to maintain internal controls
over the financial reporting process. In discharging its duties, the Audit Committee, among other
things:
|
|
|
has the sole authority to appoint, retain, compensate, oversee, evaluate and
replace the independent auditors; |
|
|
|
|
reviews and approves the engagement of our independent auditors to perform
audit and non-audit services, and fees related to these services; |
|
|
|
|
meets independently with our internal auditing department, independent auditors
and senior management; |
|
|
|
|
reviews the integrity of our financial reporting process; |
11
|
|
|
reviews our financial reports and disclosures submitted to bank regulatory
authorities; |
|
|
|
|
maintains procedures for the receipt, retention and treatment of complaints
regarding financial matters; and |
|
|
|
|
reviews and has the authority to approve related person transactions. |
Compensation Committee. During 2009, the Compensation Committee was comprised of five
directors, each of whom satisfies independence criteria under the NASDAQ listing standards and
applicable rules of the SEC and IRS. The Compensation Committee reviews the performance of the
Companys Chief Executive Officer and other key employees and determines, approves and reports to
the Board on the elements of their compensation and long-term equity based incentives. The
Committee will periodically retain an independent outside human resources consulting firm to assist
the Committee in its deliberations regarding executive compensation for the Chief Executive Officer
and other key executives. For 2009, the Committee reviewed the annual Moss Adams Bankers
Compensation Survey, the Milliman Northwest Financial Industry Survey, and other public information
relating to other financial institutions when determining executive compensation. In addition to
the process and procedures discussed above, in determining compensation for the other key
executives, the Committee also takes into account the recommendations of the Chief Executive
Officer. The Chair of the Committee reports to the full Board the actions of the Committee.
In addition the Committee:
|
|
|
recommends, if appropriate, new employee benefit plans to the Board of
Directors; |
|
|
|
|
reviews general compensation and employee benefit plans for all employees; and |
|
|
|
|
makes determinations in connection with compensation matters as may be
necessary or advisable. |
The Compensation Committee operates under a formal written charter, a copy of which is
available on our Website. The Compensation Committee met three times during the year for the
purposes of reviewing salary and incentive compensation for the Chief Executive Officer and certain
other executive officers.
Nominating/Corporate Governance Committee. The Nominating/Corporate Governance
Committee (Nominating Committee) is comprised of four directors, each of whom is considered
independent as defined by the NASDAQ listing standards. The Committee is responsible for
recommending a slate of directors for election at Intermountains annual meeting and appointing
directors to fill vacancies as they occur. It is also responsible for (i) considering management
succession plans, the appropriate Board size and committee structure and appointments; (ii)
determining Board and Committee compensation; and (iii) developing and reviewing corporate
governance principles applicable to Intermountain and its subsidiaries in light of emerging
standards and best practices and the needs of the Company and its shareholders, and make such
recommendations to the full Board as the Committee considers appropriate. The Committee operates
under a formal written charter, a copy of which is available on our website. The Committee met
three times during 2009.
The Nominating Committee will consider nominees recommended by shareholders, provided that the
recommendations are made in accordance with the procedures described in this proxy statement under
Shareholder Proposals and Director Nominations. The Committee evaluates all candidates, including
shareholder-proposed candidates, using generally the same methods and criteria, although those
methods and criteria are not standardized and may vary from time to time. In deciding whether to
recommend
12
incumbent directors for re-nomination, the Committee evaluates Intermountains evolving needs,
and assesses the effectiveness and contributions of its existing directors through annual director
evaluations.
The Nominating Committee is authorized to establish guidelines for the qualification,
evaluation and selection of new directors to serve on the Board. The Committee has not, nor does
it anticipate adopting specific minimum qualifications for Committee-recommended nominees, nor has
the Committee adopted a formal policy relating to Board diversity, although the Committee and the
Board value a diversity of backgrounds, professional experience and skills among directors. The
Committee will instead evaluate each nominee on a case-by-case basis, including assessment of each
nominees business experience, involvement in the communities served by the Company, and special
skills. The Nominating Committee will also evaluate whether the nominees skills are complimentary
to existing Board members skills, and the Boards need for operational, managerial, financial,
technological or other expertise, as well as geographical representation of the Companys market
areas.
The Corporate Governance Guidelines require that within 12 months of commencing service as a
director, and continuing thereafter while serving as a director, each director of Intermountain and
each director of the Bank shall own shares of Intermountain common stock having a book value of at
least $500. All directors have met this stock ownership requirement.
Report of Audit Committee
The Audit Committee of the Board of Directors makes the following report which,
notwithstanding anything to the contrary set forth in any of our filings under the Securities Act
of 1933 or the Securities Exchange Act of 1934, will not be incorporated by reference into any such
filings and will not otherwise be deemed to be proxy soliciting materials or to be filed under such
Acts.
The Audit Committee operates under a written charter that is reviewed annually by the Board of
Directors and complies with all current regulatory requirements. Our agendas are controlled by the
Committee Chair. The Audit Committee met 12 times during the year.
The Audit Committee provides assistance to the Board of Directors in fulfilling its oversight
responsibilities relating to our corporate accounting and reporting practices, and the quality and
integrity of our financial reports. The purpose of the Committee is to serve as an independent and
objective party to monitor our financial reporting process and internal control system, review and
appraise the audit effort of our independent accountants and internal auditing department, and
maintain free and open means of communication between the Board of Directors, the independent
accountants, financial management, and the internal audit department.
The Audit Committee is responsible for assuring the independence of the independent auditor
and for retention, supervision and termination of the independent auditor. The independent auditor
reports directly to the Audit Committee. The Committee has established a policy for approval of
non-audit related engagements awarded to the independent auditor. Such engagements must not impair
the independence of the auditor with respect to Intermountain, as prescribed by the Sarbanes Oxley
Act of 2002 (Sarbanes Act). As a result, payment amounts are limited and non-audit related
engagements must be approved in advance by the Committee. The Audit Committee determines the extent
of funding that we must provide to it, and has determined that such amounts are sufficient to carry
out its duties.
Management has the primary responsibility for our financial statements and reporting process,
including the system of internal controls and reporting. Our independent auditors are responsible
for performing an independent audit of our consolidated financial statements in accordance with
generally accepted auditing standards and issuing a report thereon. The Audit Committee monitors
the integrity of
13
our financial reporting process and system of internal controls and monitors the independence
and performance of our independent auditors and internal auditors.
With respect to the year ended December 31, 2009, in addition to its other work, the
Committee:
|
|
|
reviewed and discussed with management the audited consolidated financial
statements of Intermountain as of and for the year ended December 31, 2009; |
|
|
|
|
reviewed and discussed with management the results of managements assessment
of the Companys internal control over financial reporting; |
|
|
|
|
discussed with BDO Seidman, LLP, the matters required to be discussed by
Statement on Auditing Standards No. 61, Communication with Audit Committees, as
amended, with respect to its review of the findings of the independent auditor during
its examination of our financial statements; |
|
|
|
|
received from BDO Seidman, LLP, written disclosures and the letter from the
independent registered public accountants required by Rule 3526, Communications with
Audit Committees Concerning Independence, of the Public Company Accounting Oversight
Board and has discussed with the independent registered public accounting firm the
firms independence; and |
|
|
|
|
discussed with our internal and independent auditors the overall scope and plan
for their respective audits. The Audit Committee met with the internal and independent
auditors, with and without management present, to discuss the results of their
examination, their evaluations of our internal controls and the overall quality of our
financial reporting. |
The Committee recommended, based on the review and discussion summarized above, that the Board
of Directors include the audited consolidated financial statements in Intermountains Annual Report
on Form 10-K for the year ended December 31, 2009 for filing with the SEC. The Audit Committee
also appointed and recommended to the Board for approval and ratification the retention of BDO
Seidman, LLP, as the Companys independent registered public accounting firm for 2010. The Board
has approved and ratified the appointment.
2009 Audit Committee Members
Michael J. Romine (Chairperson) * Charles L. Bauer * Maggie Y. Lyons * John B. Parker
DIRECTOR COMPENSATION
The Nominating Committee has authority over director compensation subject to the Boards
authority to approve changes. All directors, including those who are Company employees, receive
fees for their service on the Board of Directors. We review the level of compensation of our
directors on an annual basis. To determine the appropriate level of compensation for our
directors, we obtain information from a number of different sources, including publicly available
data describing director compensation in peer companies and information obtained directly from
other companies. Directors receive an annual cash retainer based on the chairmanship of the Board
and its committees. In addition to the retainer, we pay per meeting fees, whether in person or by
phone.
The following table reflects the annual retainer and the per meeting fees that were approved
by the Nominating Committee for payments to directors in 2009. The fees schedule for directors did
not change from 2008.
14
|
|
|
|
|
|
|
|
|
Committee/Chair |
|
Annual Retainer |
|
Monthly Meeting Fee (1) |
|
Chairman of the Board |
|
$ |
9,760 |
|
|
$ |
2,324 |
|
Chair Audit Committee |
|
|
9,260 |
|
|
|
1,874 |
|
Chair Compensation Committee |
|
|
8,760 |
|
|
|
1,824 |
|
Chair Loan Committee |
|
|
8,760 |
|
|
|
1,824 |
|
Chair Compliance Committee |
|
|
8,760 |
|
|
|
1,824 |
|
Chair Nominating/Corporate
Governance Committee |
|
|
8,760 |
|
|
|
1,824 |
|
Chair Executive Committee |
|
|
8,260 |
|
|
|
1,774 |
|
Chair Technology Committee |
|
|
8,760 |
|
|
|
1,824 |
|
Chair Trust Committee |
|
|
8,760 |
|
|
|
1,824 |
|
Non-Chair Directors |
|
|
7,260 |
|
|
|
1,074 |
|
Employee Directors |
|
|
5,760 |
|
|
|
924 |
|
|
|
|
(1) |
|
Directors will receive twice the per meeting fee for attending a two-day meeting. |
Historically, non-employee directors also received an annual restricted stock award under
our Amended and Restated Director Stock Plan (Director Plan). However, as discussed below, the
Director Plan expired in 2009 and was not renewed. Accordingly, no awards were granted during
2009.
The following table shows compensation earned during the last fiscal year by our non-employee
directors. The footnotes to the table describe the details of each form of compensation paid to
directors.
2009 Director Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or Paid |
|
All Other |
|
|
|
|
in Cash |
|
Compensation |
|
Total |
Name |
|
($)(1) |
|
($)(2) |
|
($)(3)(4) |
|
Charles L. Bauer |
|
$ |
27,000 |
|
|
$ |
0 |
|
|
$ |
27,000 |
|
James T. Diehl |
|
|
27,000 |
|
|
|
0 |
|
|
|
27,000 |
|
Ford Elsaesser |
|
|
26,000 |
|
|
|
0 |
|
|
|
26,000 |
|
Ronald Jones |
|
|
27,000 |
|
|
|
274 |
|
|
|
27,274 |
|
Maggie Y. Lyons |
|
|
27,000 |
|
|
|
0 |
|
|
|
27,000 |
|
John B. Parker |
|
|
33,000 |
|
|
|
0 |
|
|
|
33,000 |
|
Jim Patrick |
|
|
18,000 |
|
|
|
781 |
|
|
|
18,781 |
|
Michael J. Romine |
|
|
28,000 |
|
|
|
0 |
|
|
|
28,000 |
|
Barbara Strickfaden * |
|
|
15,750 |
|
|
|
0 |
|
|
|
15,750 |
|
|
|
|
* |
|
Ms. Strickfaden retired in August 2009 |
|
(1) |
|
Amounts reflect fees paid to directors in the form of an annual retainer and aggregate
per-day fees for each Board meeting. |
|
(2) |
|
Represents the premiums paid by Intermountain on behalf of Messrs. Jones and Patrick in
connection with the split dollar life insurance arrangements described below in the amounts
of $274 and $781, respectively. |
|
(3) |
|
At fiscal year end, each non-employee director held unvested shares of Intermountain common
stock granted pursuant to restricted stock awards as follows: Mr. Bauer 369 shares; Mr. Diehl
369 shares; Mr. Elsaesser 369 shares; Mr. Jones 329 shares; Ms. Lyons 369 shares; Mr. Parker
369 shares; Mr. Patrick 329 shares; and Mr. Romine 369 shares. |
15
|
|
|
(4) |
|
At fiscal year end, each non-employee director held in the aggregate outstanding vested
stock option awards to purchase shares of Intermountain as follows: Mr. Bauer 364 shares; Mr.
Diehl 908 shares; Mr. Elsaesser 908 shares; Mr. Jones 6,353 shares; Ms. Lyons 545 shares;
Mr. Parker 545 shares; Mr. Patrick 6,353 shares; and Mr. Romine 908 shares. |
Split Dollar Life Insurance. Ronald Jones and Jim Patrick, the two directors of
Intermountain who are former directors of Snake River Bancorp, Inc., are parties to split-dollar
life insurance agreements with Magic Valley Bank. The Bank has assumed these agreements, which are
identical to those with the other former Snake River Bancorp, Inc. directors. Pursuant to the terms
of the agreements, (i) the Bank is obligated to pay the premiums on a bank-owned life insurance
policy; and (ii) beneficiaries of the directors will receive a certain portion of any death
benefits upon the death of the directors.
Amended and Restated Director Stock Plan. Intermountain previously maintained a director
stock option plan (the Director Plan) for the benefit of non-employee directors, under which we
generally made annual stock option grants and restricted stock awards to non-employee directors on
an annual basis. Options and restricted stock awards granted under the Director Plan typically vest
over a five-year period in 20% installments beginning on the first anniversary of the date of
grant. Stock options granted under the Director Plan have an exercise price equal to the fair
market value of our common stock on the date of grant as determined by the Board, and typically
expire ten years from the date of grant. Restricted stock awards do not require payment of a cash
purchase price for the shares. The Director Plan had a term of ten years. On January 14, 2009,
the term of the Director Plan expired and, upon the recommendation of management and approval of
the Board of Directors, it was determined that, due to the economic environment, the Board would
not seek to implement a new plan at that time and the stock portion of the compensation paid to
Intermountain directors was eliminated for 2009. Although no further awards may be granted under
the Director Plan, all outstanding awards are governed by the terms and conditions of the plan.
EXECUTIVE COMPENSATION
The following section describes the compensation that Intermountain paid to its Chief
Executive Officer, Chief Financial Officer and the next four most highly compensated executive
officers in 2009, each of whom is listed in the Summary Compensation Table (the Named Executive
Officers). We have voluntarily included Mr. Nagel as a Named Executive Officer in the interest of
continuity, since he has been a named executive officer in recent years. This section includes:
|
|
|
Compensation Discussion and Analysis (CD&A); |
|
|
|
|
Report of the Compensation Committee; |
|
|
|
|
Detailed tables showing compensation of the Named Executive Officers; and |
|
|
|
|
Narrative disclosure about various compensation plans and arrangements and post
employment and termination benefits. |
16
Compensation Discussion and Analysis
Compensation Philosophy and Objectives
We believe that the most effective executive compensation program is one that is designed to
reward the achievement of specific annual, long-term and strategic goals by the Company, and that
aligns the executives interests with those of the shareholders by rewarding performance against
established goals, with the ultimate objective of improving shareholder value. We evaluate both
performance and compensation to ensure that we are able to attract, retain and motivate executives
of superior ability who are critical to our future success. Under normal circumstances, we believe
that the majority of each executives annual total compensation opportunity should be directly
aligned with our performance, and to this end a significant portion of an executives compensation
normally should be based on achievement of financial and operational goals and other factors that
impact shareholder value. In addition, compensation opportunities provided to our executive
officers must remain competitive relative to the compensation paid to similarly situated executives
of peer companies. To accomplish these objectives, under normal circumstances, we believe
executive compensation packages should include both cash and stock-based compensation with both
short-term and long-term incentives in order to reward performance as measured against established
goals. However, as discussed more fully below, in light of (i) the restrictions applicable to us
as a participant in the U.S. Treasurys Capital Purchase Program (CPP) implemented in connection
with the Troubled Asset Relief Program (TARP), and (ii) the expiration of our former equity
incentive plan, we did not offer the two key executive incentive programs we have historically
offered: an annual cash incentive bonus opportunity and an annual restricted stock award. We
design our executive compensation program to avoid creating incentives that are inconsistent with
the Companys risk management policies and practices or that would motivate executives to take
unnecessary and excessive risks that may threaten the value of the Company in order to achieve such
goals. We believe the compensation programs we have traditionally employed are balanced, avoid
undue risks to the Company, and have allowed us to retain top quality employees. Given the
restrictions under TARP and the expiration of our equity incentive plan, our 2009 executive
compensation program did not reflect our traditional balanced approach and, as a result, created
additional retention risk. However, in light of the economic environment and the regulatory
restrictions applicable to Intermountain, we believe the 2009 executive compensation program was
adequate for the short term. In addition, the Board determined not to propose a new equity
incentive plan for shareholder approval at this time, notwithstanding that it would mitigate
retention risk to some extent, in light of the continuing difficult economic environment and the
resulting challenges facing Intermountain.
Impact of TARP Capital Purchase Program Regulations on Executive Compensation
In December 2008, the Company issued and sold $27.0 million of Series A Preferred Stock to the
U.S. Treasury, together with a warrant to purchase the Companys common stock, as a voluntary
participant in the CPP. As long as it is a participant in the CPP, the Company must comply with
the compensation and corporate governance standards and restrictions under legislation and related
Treasury Department rules applicable to CPP participants (the CPP Rules). When deciding to
participate in the program, our Board evaluated the compensation and governance provisions under
applicable law as the law existed at the time, and the impact those provisions would have on the
Company, and considered them in light of the support this capital would provide to our lending
programs. The CPP Rules, which were adopted after we entered into our agreement with the Treasury,
have impacted Intermountains executive compensation program, and the 2009 compensation of our
Named Executive Officers, in the following key respects:
17
|
|
|
The CPP Rules prohibit, and we did not pay or accrue, any cash incentive bonuses to
Messrs. Hecker, Smith, Wright and Ms. Rasmussen in or for 2009. In order to treat all
executive officers alike, the Board also determined not to provide a cash incentive
bonus opportunity to Messrs. Schuman and Nagel. |
|
|
|
|
The CPP Rules restricted the nature and scope of equity awards we could grant in
2009 to Messrs. Hecker, Smith, Wright and Ms. Rasmussen, and in light of the difficult
economic environment the Board determined not to grant equity awards to the Named
Executive Officers before our former equity plan expired in January 2009. |
|
|
|
|
Although there were no triggering events for any of our Named Executive Officers
during 2009, the CPP Rules provide that no severance or change-in-control benefits can
be paid or accrued to or for them until Intermountain has repaid the Treasurys
investment in the Company. In December 2008, Messrs. Hecker, Smith, Wright, Nagel and
Ms. Rasmussen signed agreements waiving their rights to these benefits for the duration
of the Companys participation in the TARP CPP Program. |
|
|
|
|
In accordance with the CPP Rules, we implemented a policy that incentive
compensation paid to our Named Executive Officers that later is determined to have been
based on materially inaccurate financial or other performance criteria is subject to
recovery or clawback. |
Overview of Executive Compensation Components in 2009
Our executive compensation program in 2009 consisted of several compensation elements, as
illustrated in the table below.
|
|
|
|
|
Pay Element |
|
What the Pay Element Rewards |
|
Purpose of the Pay Element |
Base Salary
|
|
Core competence in the executive role
relative to skills, experience and
contributions to the Company
|
|
Provide fixed compensation based on
competitive market practices and experience
and tenure of each executive |
|
|
|
|
|
Long-Term Incentive
|
|
Stock Purchase Bonus Program
Continued employment with the
Company during a 3-10 year bonus payout
period for purchasing shares under the Stock Purchase Bonus Program. The CPP
Rules prohibit the grant of new awards under this program to covered executives,
which for 2009 included Messrs. Hecker,
Smith, Wright and Ms. Rasmussen.
Retention Bonus Agreements
Continued employment with the
Company during a multi-year bonus payout
period. The CPP Rules prohibit the grant
of new awards under this program to
covered executives, which for 2009
included Messrs. Hecker, Smith, Wright
and Ms. Rasmussen.
|
|
The combination of prior year restricted
stock awards, prior awards under the Stock Purchase Bonus Program and pre-existing
Retention Bonus Agreements provides a
blended focus on
Profitability
and the creation of shareholder value
Executive ownership of Company stock
Retention in a challenging business
environment and competitive labor market |
18
|
|
|
|
|
Pay Element |
|
What the Pay Element Rewards |
|
Purpose of the Pay Element |
Retirement Benefits
|
|
Executive officers are eligible
to participate in employee benefit plans
available to our eligible employees
The Salary Continuation Agreement
(SCA) is a nonqualified,
noncontributory and unfunded program.
The SCA is intended to provide additional
retirement benefits to certain Named
Executive Officers
|
|
The SCA is designed to make total
retirement benefits for certain Named
Executive Officers commensurate with those
in comparable companies |
|
|
|
|
|
Welfare Benefits
|
|
Executives participate in
employee benefit plans generally
available to our employees, including
medical, health, life insurance and
disability plans
Continuation of welfare benefits
may occur as part of severance upon
certain terminations of employment
|
|
These benefits are part of our broad-based
total compensation program |
|
|
|
|
|
Additional Benefits and Perquisites
|
|
Club memberships
Company provided auto or auto
allowance
Life Insurance & Accidental Death
& Dismemberment Coverage
Short-Term and Long-Term
Disability
|
|
Provide additional benefits and perquisites
commensurate with the competitive market |
|
|
|
|
|
Change in Control
and Termination
Benefits
|
|
We have change in control agreements with
certain officers, including our Named
Executive Officers. The agreements
provide severance benefits if an
officers employment is terminated
following a change in control. As noted
above, the CPP Rules prohibit the payment
or accrual of any severance or change in
control benefit to the Named Executive
Officers until we have repaid Treasurys
investment in Intermountain.
|
|
Change in control arrangements are designed
to retain executives and provide continuity
of management in the event of an actual or
threatened change in control. The change
in control agreements are described in more
detail in the section Post Employment and
Termination Benefits. |
As noted above, we have historically offered a short-term cash incentive bonus
opportunity and awards of restricted stock as key elements of our executive compensation program.
Until we have repaid the Treasurys investment in Intermountain under the CPP, we will not be able
to offer our most senior executives a short-term cash incentive bonus opportunity. Moreover, our
former equity incentive plan expired in January 2009 and we have not proposed a new equity
incentive plan for shareholder approval in light of the current economic environment and the impact
on our shareholders of the recession and Intermountains financial performance. Given the
constraints of the CPP Rules and the absence of a current equity incentive plan, we believe the
executive compensation programs used in 2009 and the continuing effects of prior year compensation
programs and awards were adequate for the short-term, but create retention risk over the medium-
and long-term.
Determination of Appropriate Pay Levels
Although we have historically targeted total compensation opportunities and base pay of our
executive officers by reference to compensation levels at peer institutions, benchmarking was not a
material factor in setting 2009 compensation. This was largely due to a salary freeze in 2009 and
the absence of a short-term incentive opportunity and annual equity award for 2009.
19
2009 Base Salary
Our base salary levels reflect a combination of factors including competitive pay levels
relative to comparable institutions, each executives experience and tenure, our overall annual
budget for merit increases, the executives individual performance and changes in responsibility.
We review salary levels annually to recognize these factors. The Named Executive Officers did not
receive a base salary increase in 2009, consistent with a Company-wide salary freeze in light of
the financial challenges facing Intermountain.
Long-Term Incentives in 2009
As noted above, we did not grant any equity awards to the Named Executive Officers in 2009
before the former plan expired. We also did not grant any new awards under our Stock Purchase
Bonus Program, described on page 23, which the CPP Rules prohibit with respect to Messrs. Hecker,
Smith, Wright and Ms. Rasmussen. As shown in the Summary Compensation Table under the Bonus
column, Ms. Rasmussen received a payment in 2009 under a prior-year award.
Impact of Accounting and Tax Treatment of Compensation
The Committee and management have considered the accounting and tax impacts of various
programs designed to balance the potential cost to the Company with the benefit/value to the
executive. The Committee generally seeks to maximize deductibility of executive compensation under
Internal Revenue Code Section 162(m) while retaining discretion to compensate executives in a
manner commensurate with performance and the competitive market for executive talent. Differences
in accounting expense for various forms of equity awards under FASB ASC Topic 718 (formerly FAS
123(R)) relative to the value of the awards to recipients have not had, and are not expected to
have, a material effect on the selection of forms of equity compensation. In addition, the change
in control provisions described in the section Post Employment and Termination Benefits
contemplate that the Company will reimburse the amount of excise tax due under Internal Revenue
Code Section 280G. However, as discussed below, such termination benefits and related excise tax
reimbursement are currently prohibited by the CPP Rules.
Report of Compensation Committee
The Compensation Committee of the Board of Directors makes the following report which,
notwithstanding anything to the contrary set forth in any of Intermountains filings under the
Securities Act of 1933 or the Securities Exchange Act of 1934, will not be incorporated by
reference into any such filings and will not otherwise be deemed to be proxy soliciting materials
or to be filed under such Acts.
The Compensation Committee of the Board (the Committee) met and discussed with management
the Compensation Discussion and Analysis (CD&A) required by Item 402(b) of Regulation S-K, and
based on that review and discussion, the Committee recommended to the Board that the CD&A be
included as part of this proxy statement and 2009 Annual 10-K Report.
Pursuant to the requirements of Sections 111(b)(3)(A), 111(b)(3)(E), 111(b)(3)(F) and 111(c)
of the Emergency Economic Stabilization Act of 2008, and 31 CFR Part 30.4, the Committee hereby
certifies that:
|
1. |
|
It has reviewed with the Companys senior risk officers the senior executive
officer (SEO) compensation plans and has made all reasonable efforts to ensure that
these plans do |
20
|
|
|
not encourage SEOs to take unnecessary and excessive risks that threaten the value of
Intermountain; |
|
2. |
|
It has reviewed with the Companys senior risk officers the Companys employee
compensation plans and has made all reasonable efforts to limit any unnecessary risks
these plans pose to Intermountain; and |
|
|
3. |
|
It has reviewed the Companys employee compensation plans to eliminate any
features of these plans that would encourage the manipulation of reported earnings of
Intermountain to enhance the compensation of any employee. |
The following SEO compensation plans do not contain any features that could reasonably be
interpreted to encourage SEOs to take risks:
|
|
|
SEO Compensation Plan |
|
How the Plan Does Not Encourage Taking Risks |
|
|
|
Stock Purchase Bonus
Program
|
|
Program encourages Company stock ownership of
executive officers; no risk-taking incentives
inherent in the plan. |
|
|
|
Employment/Change in
Control, and Severance
Agreements
|
|
Agreements provide fixed cash compensation
amounts under various circumstances; no
incentive criteria included in the agreements. |
|
|
|
Salary Continuation and
Split Dollar Agreements
|
|
Agreements provide additional retirement
benefits; no incentive criteria included in the
agreements. |
|
|
|
Retention Bonus
Agreements
|
|
Agreements provide for fixed payments subject
only to continued service; no incentive criteria
included in the agreements. |
The Companys other SEO compensation plan is listed in the table below, together with an
explanation of how it does not encourage SEOs to take unnecessary and excessive risks that
threaten the value of Intermountain.
|
|
|
SEO Compensation Plan |
|
How the Plan Does Not Encourage Unnecessary and Excessive Risks that Threaten the Value of Intermountain |
|
|
|
Employee Stock Option and Restricted
Stock Plan (expired, but prior
awards remain outstanding)
|
|
Award values are linked to the
market price of the Companys stock;
awards vest over a period of years;
interests are aligned with
shareholders; no risk-taking
incentives inherent in the plan. |
The following is a list of each general employee compensation plan not listed as an SEO
compensation plan above. No general employee compensation plan has any features that could
reasonably be expected to expose the Company to material risk. Accordingly, the Committee
determined that no plan poses any unnecessary risks to the Company and therefore no plan features
need to be limited on that basis. In addition, the Committee determined that no general employee
compensation plan links the potential for any material payout to the Companys reported earnings,
and so no such plan can reasonably be viewed as encouraging the manipulation of reported earnings
to enhance the compensation of any employee.
21
General Employee Compensation Plans not Included Among SEO Plans Above
|
|
|
General employee incentive bonus plans |
|
|
|
|
Guaranteed annual bonus program for certain key employees |
2009 Compensation Committee Members
James T. Diehl (Chairperson) * Charles L. Bauer * Ford Elsaesser
John B. Parker * Michael J. Romine
Compensation Tables
The following table shows compensation paid or accrued for the last three fiscal years to the
Named Executive Officers.
2009 Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
Deferred |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
Option |
|
Incentive Plan |
|
Compensation |
|
All Other |
|
|
|
|
|
|
|
|
Salary |
|
Bonus |
|
Awards |
|
Awards |
|
Compensation |
|
Earnings |
|
Compensation |
|
|
Name and Principal |
|
|
|
|
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
|
($) |
|
Total |
Position |
|
Year |
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
(6) |
|
(7)(8) |
|
($) |
Curt Hecker, |
|
|
2009 |
|
|
$ |
231,320 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
0 |
|
|
$ |
36,111 |
|
|
$ |
4,918 |
|
|
$ |
272,349 |
|
President and CEO of |
|
|
2008 |
|
|
|
232,244 |
|
|
|
0 |
|
|
|
62,394 |
|
|
|
0 |
|
|
|
0 |
|
|
|
32,163 |
|
|
|
9,053 |
|
|
|
335,854 |
|
the Company and CEO |
|
|
2007 |
|
|
|
223,000 |
|
|
|
0 |
|
|
|
62,400 |
|
|
|
0 |
|
|
|
58,240 |
|
|
|
28,577 |
|
|
|
11,798 |
|
|
|
384,015 |
|
of the Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jerry Smith |
|
|
2009 |
|
|
|
197,640 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
45,057 |
|
|
|
10,833 |
|
|
|
253,530 |
|
President of the Bank, |
|
|
2008 |
|
|
|
198,564 |
|
|
|
0 |
|
|
|
52,679 |
|
|
|
0 |
|
|
|
0 |
|
|
|
40,131 |
|
|
|
10,468 |
|
|
|
301,842 |
|
EVP of the Company |
|
|
2007 |
|
|
|
190,615 |
|
|
|
7,500 |
|
|
|
49,704 |
|
|
|
0 |
|
|
|
49,172 |
|
|
|
35,657 |
|
|
|
14,342 |
|
|
|
346,990 |
|
Douglas Wright, EVP |
|
|
2009 |
|
|
|
175,271 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
10,561 |
|
|
|
185,832 |
|
and Chief Financial |
|
|
2008 |
|
|
|
175,271 |
|
|
|
0 |
|
|
|
50,562 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
12,777 |
|
|
|
238,610 |
|
Officer of the |
|
|
2007 |
|
|
|
168,529 |
|
|
|
15,600 |
|
|
|
47,184 |
|
|
|
0 |
|
|
|
47,188 |
|
|
|
0 |
|
|
|
16,357 |
|
|
|
294,858 |
|
Company and the Bank |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John Nagel |
|
|
2009 |
|
|
|
146,232 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,703 |
|
|
|
148,935 |
|
EVP, Chief Credit |
|
|
2008 |
|
|
|
146,232 |
|
|
|
0 |
|
|
|
42,181 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
5,630 |
|
|
|
194,043 |
|
Officer of the Bank |
|
|
2007 |
|
|
|
140,608 |
|
|
|
10,000 |
|
|
|
40,560 |
|
|
|
0 |
|
|
|
39,370 |
|
|
|
0 |
|
|
|
13,510 |
|
|
|
244,048 |
|
Pamela Rasmussen |
|
|
2009 |
|
|
|
149,044 |
|
|
|
41,370 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
7,795 |
|
|
|
198,209 |
|
EVP, Chief Operating |
|
|
2008 |
|
|
|
149,044 |
|
|
|
41,370 |
|
|
|
42,993 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
15,967 |
|
|
|
249,374 |
|
Officer of the Bank |
|
|
2007 |
|
|
|
143,312 |
|
|
|
44,370 |
|
|
|
40,560 |
|
|
|
0 |
|
|
|
40,127 |
|
|
|
0 |
|
|
|
9,322 |
|
|
|
277,692 |
|
Dale Schuman |
|
|
2009 |
|
|
|
137,477 |
|
|
|
40,000 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2,989 |
|
|
|
180,466 |
|
SVP, Trust and Wealth
Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes directors fees paid during the fiscal year 2009 to each of Messrs. Hecker and
Smith in the amount of $15,000 and a referral incentive earned by Mr. Schuman in the amount of
$5,189. |
|
(2) |
|
Includes bonus amounts that vested under the Stock Purchase Bonus Program for Ms. Rasmussen
and Mr. Schuman and the amount vested under a Retention Bonus Agreement for Ms. Rasmussen.
The terms of the Stock Purchase Bonus Programs and Ms. Rasmussens Retention Bonus Agreement
are discussed below. |
|
(3) |
|
Represents the grant date fair value of restricted stock awards granted in each of the
years 2008 and 2007 (no restricted stock awards were granted in 2009), based on the price of
Intermountains common stock at the close of business on the date of grant ($14.50 and $21.82,
respectively). The amounts for 2007 and 2008 have been restated to reflect a change in SEC
rules, which formerly required reporting the aggregate expense recognized during the year for
all equity awards, including awards granted in prior years. The amounts have been |
22
|
|
|
|
|
adjusted to reflect all stock splits and stock dividends. The assumptions used to calculate
these amounts are set forth in the footnotes to the Companys financial statements for the
fiscal year 2009, included in the Companys Annual Report. |
|
(4) |
|
No options were granted in fiscal years 2007, 2008 or 2009. The amounts for 2007 and 2008
have been restated to reflect the change in SEC rules, which formerly required reporting the
aggregate expense recognized during the year for all equity awards, including awards granted
in prior years, rather than reflecting the fair market value on the date of grant.
Accordingly, the amounts for 2007 and 2008 have been changed to $0. |
|
(5) |
|
Although the Companys performance permitted an 8% bonus payout to each Named Executive
Officer under the Executive Incentive Plan for the fiscal year 2008, each elected not to
accept a bonus. |
|
(6) |
|
Represents the increase during 2009 in actuarial present values of each Named Executive
Officers accumulated benefits under the individual Salary Continuation and Split Dollar
Agreements. |
|
(7) |
|
Amounts reflect contributions paid by Intermountain or the Bank under the 401(k) Savings Plan
and Trust (401(k) Plan) in the following amounts: Mr. Hecker $3,305, Mr. Smith $5,020
(including a true-up adjustment for 2008 of $933), Mr. Wright $5,144 (including a true-up
adjustment for 2008 of $1,530), Ms. Rasmussen $2,836, and Mr. Schuman $2,989. Amounts for
2008 include 401(k) true-up adjustments for 2007 for Mr. Wright of $1,390; and Ms. Rasmussen
$3,266. Amounts for 2007 include 401(k) true-up adjustments for 2006, and certain other
adjustments for 2007 for Mr. Hecker of $347; Mr. Smith $282; Mr. Wright $262; Ms. Rasmussen
$225 and Mr. Nagel $460. |
|
(8) |
|
Represents amounts paid by the Company to the executive in the form of 401(k) matching funds,
automobile allowance, club dues and miscellaneous awards. |
2009 Grants of Plan-Based Awards
There were no grants of equity or non-equity awards under compensatory plans during 2009.
Incentive and Stock Plans
General. Intermountain and the Bank have historically implemented two executive incentive and
stock programs: the Executive Incentive Plan and the Stock Purchase Bonus Program, the material
terms of which are summarized below. The objectives of the Executive Incentive Plan are to provide
the executive officers of Intermountain and the Bank with specific performance objectives and
goals, and to motivate such executive officers to reach such objectives and goals. The objectives
of the Stock Purchase Bonus Program are to encourage executive stock ownership and promote long
term retention of executive officers. For 2009, the Company did not offer these two key incentive
programs. The Company historically maintained an equity compensation plan; however, as described
below, the plan expired in 2009 and was not renewed.
The CPP Rules prohibit the payment of any bonus amounts to the top five most highly
compensated employees, until the Treasurys investment in the Company has been repaid. The
following description of the cash or stock incentive bonus amounts payable under the respective
plans is provided to give shareholders an understanding of amounts that could be payable under
these plans if they had been offered and if the employee met the prescribed performance goals and
if the CPP Rules no longer applied.
Executive Incentive Plan. The Executive Incentive Plan has historically been designed to
provide a cash incentive for management to achieve annual (as opposed to long-term) Company
performance goals. The key executives who are eligible to participate in the plan include all of
the Named Executive Officers. Under the plan, prior to the beginning of each year, Intermountains
management selects appropriate performance criteria and develops annual performance goals for
Intermountain for approval by the Compensation Committee. However, as discussed more fully in the
CD&A, in light of certain restrictions under TARP, the Company did not implement a cash incentive
program for 2009.
Stock Purchase Bonus Program. The Company has adopted a Stock Purchase Bonus Program for
executive officers and other officers of Intermountain and the Bank. The program is implemented
through the execution of individual stock purchase bonus agreements entered into by Intermountain
and the officer. The purpose of the program is to encourage and incent officers to own Company
stock, thereby further aligning the interests of management with those of Intermountains
shareholders. Under the agreement, these officers may purchase on the open market shares of
Intermountain common stock. If the officer makes such a purchase within the required time frame,
the officer will generally be paid a bonus
23
equal to the lesser of (i) the actual dollar amount paid by the officer for Intermountain
shares, including fees and/or commissions; or (ii) the maximum award amount. In certain
circumstances, however, the Company may elect to pay a bonus greater than the value of the stock
required to be purchased under the agreement in order to provide a supplemental bonus opportunity
for retention purposes. The bonus is paid to the officer in either three, five or ten annual
installments. In order to receive any payment installment, an officer must be a full-time employee
on the date such installment is due and payable; provided, however, that in some cases, in the
event of officers disability or death or in the event of a change in control of Intermountain (as
defined in the agreement), the balance of the bonus will become fully vested and the officer or
their beneficiaries will become eligible to receive a cash payment equal to such remaining bonus.
Employee Stock Plan. Intermountain previously maintained an Employee Stock Option and
Restricted Stock Plan (Employee Stock Plan) that provided for the grant of incentive and
non-qualified stock options and restricted stock awards to key officers and employees of
Intermountain and/or the Bank. Stock options under the Employee Stock Plan expire ten years from
the date of grant, and must have an exercise price of not less than the fair market value of
Intermountain stock at the time of grant, as determined by the Board or the Compensation Committee.
These awards typically vest over five years in order to motivate long-term performance and to
serve as a retention tool for award recipients. However, in the event of a change in control, the
agreements provide that all unvested options and restricted stock awards will become fully vested.
At December 31, 2009, the number of shares subject to granted but unexercised options and unvested
stock awards, as adjusted for subsequent stock splits and stock dividends, was 321,049 shares. The
Employee Stock Plan had a term of ten years. On January 14, 2009, the term of the Employee Stock
Plan expired and the Board determined that, due to the economic environment, a new plan would not
be implemented at that time. All granted but unvested awards are governed under the terms of the
Employee Stock Plan and related award agreements.
2009 Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
Stock Awards * |
|
|
Number of Shares Acquired |
|
Value Realized on Vesting |
|
|
on Vesting |
|
($) |
Name |
|
(#) |
|
(1) |
Curt Hecker |
|
|
2,462 |
|
|
$ |
9,861 |
|
Jerry Smith |
|
|
1,883 |
|
|
|
7,590 |
|
Douglas Wright |
|
|
1,814 |
|
|
|
7,304 |
|
John Nagel |
|
|
1,531 |
|
|
|
6,169 |
|
Pamela Rasmussen |
|
|
1,673 |
|
|
|
7,117 |
|
Dale Schuman |
|
|
856 |
|
|
|
3,424 |
|
|
|
|
* |
|
The numbers have been adjusted to reflect all applicable stock
splits and stock dividends. No options were exercised in fiscal year
2009. |
|
(1) |
|
Value realized represents the fair market value based on the
closing price of the shares at the time of vesting. |
24
2009 Outstanding Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards * |
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
|
|
|
Stock Awards * |
|
|
Number of |
|
Securities |
|
|
|
|
|
|
|
|
|
Number of |
|
Market Value |
|
|
Securities |
|
Underlying |
|
|
|
|
|
|
|
|
|
Shares or Units |
|
of Shares or |
|
|
Underlying |
|
Unexercised |
|
|
|
|
|
|
|
|
|
of Stock That |
|
Units of Stock |
|
|
Unexercised |
|
Options |
|
Option Exercise |
|
|
|
|
|
Have Not |
|
That Have Not |
|
|
Options |
|
(#) |
|
Price |
|
Option |
|
Vested |
|
Vested |
Name |
|
(#) Exercisable |
|
Unexercisable |
|
($) |
|
Expiration Date |
|
(#) |
|
($)(1) |
Curt Hecker |
|
|
5,760 |
|
|
|
0 |
|
|
$ |
3.72 |
|
|
|
01/01/11 |
|
|
|
6,612 |
|
|
$ |
15,869 |
|
|
|
|
3,845 |
|
|
|
0 |
|
|
|
3.72 |
|
|
|
01/01/11 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
1,437 |
|
|
|
0 |
|
|
|
5.51 |
|
|
|
01/01/13 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
5,750 |
|
|
|
0 |
|
|
|
5.51 |
|
|
|
01/01/13 |
|
|
|
0 |
|
|
|
0 |
|
Jerry Smith |
|
|
3,384 |
|
|
|
0 |
|
|
|
3.73 |
|
|
|
06/21/10 |
|
|
|
5,312 |
|
|
|
12,749 |
|
|
|
|
9,663 |
|
|
|
0 |
|
|
|
3.73 |
|
|
|
01/01/11 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
3,536 |
|
|
|
0 |
|
|
|
5.51 |
|
|
|
01/01/13 |
|
|
|
0 |
|
|
|
0 |
|
Douglas Wright |
|
|
15,263 |
|
|
|
0 |
|
|
|
4.82 |
|
|
|
05/31/12 |
|
|
|
5,091 |
|
|
|
12,218 |
|
|
|
|
17,970 |
|
|
|
0 |
|
|
|
5.51 |
|
|
|
01/01/13 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
3,952 |
|
|
|
0 |
|
|
|
6.12 |
|
|
|
06/04/13 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
17,097 |
|
|
|
0 |
|
|
|
4.79 |
|
|
|
02/03/14 |
|
|
|
0 |
|
|
|
0 |
|
John Nagel |
|
|
14,494 |
|
|
|
0 |
|
|
|
3.87 |
|
|
|
05/23/11 |
|
|
|
4,297 |
|
|
|
10,313 |
|
|
|
|
3,513 |
|
|
|
0 |
|
|
|
4.16 |
|
|
|
01/01/12 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
5,990 |
|
|
|
0 |
|
|
|
5.51 |
|
|
|
01/01/13 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
10,541 |
|
|
|
0 |
|
|
|
6.12 |
|
|
|
06/04/13 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
9,075 |
|
|
|
0 |
|
|
|
4.79 |
|
|
|
02/03/14 |
|
|
|
0 |
|
|
|
0 |
|
Pamela Rasmussen |
|
|
1,089 |
|
|
|
0 |
|
|
|
12.95 |
|
|
|
11/09/14 |
|
|
|
4,901 |
|
|
|
11,762 |
|
Dale Schuman |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
|
|
|
|
14,512 |
|
|
|
34,829 |
|
|
|
|
* |
|
The numbers have been adjusted to reflect all applicable stock splits and stock
dividends. |
|
(1) |
|
Based on the closing market price of Intermountain common stock on December 31, 2009
($2.40). |
Post Employment and Termination Benefits
The following is a discussion regarding the post employment and termination arrangements
currently in place for the Named Executive Officers. The amounts stated are based on the maximum
amounts that could be paid under these arrangements. As discussed in detail in the CD&A,
compensation paid in the event of termination or change in control is limited by the CPP Rules. We
have summarized the agreement provisions to provide shareholders with information about amounts to
which the Named Executive Officers would be entitled if the CPP Rules did not apply.
25
2009 Pension Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years |
|
Present Value of |
|
|
|
|
|
|
Credited Service |
|
Accumulated Benefit |
|
|
Plan Name |
|
(#) |
|
($) |
Name |
|
(1) |
|
(2) |
|
(3) |
Curt Hecker |
|
SCA/SDA |
|
8 years |
|
$ |
470,548 |
|
Jerry Smith |
|
SCA/SDA |
|
8 years |
|
|
495,960 |
|
Douglas Wright |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
John Nagel |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Pamela Rasmussen |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Dale Schuman |
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
|
(1) |
|
The terms of the Salary Continuation Agreement and Split Dollar Agreement
(SCA/SDA) are described below. |
|
(2) |
|
Under the terms of the SCA/SDA, executives must, in addition to
other conditions, be employed with Intermountain through 2012. |
|
(3) |
|
The estimated maximum annual retirement benefit payable under the
SCA/SDA for Messrs. Hecker and Smith, payable at age 60 is as follows: Mr.
Hecker $148,000 and Mr. Smith $111,000. |
Salary Continuation Agreement and Split Dollar Agreement. Effective January 1, 2002, the
Bank entered into Salary Continuation Agreements and Split Dollar Agreements with Curt Hecker and
Jerry Smith. Each of these agreements was amended and restated on January 1, 2008. The purpose of
these agreements is to provide Mr. Hecker and Mr. Smith with additional retirement benefits. The
agreements are unsecured and unfunded and there are no plan assets. the Bank has purchased a single
premium bank owned life insurance policy (BOLI policy) on the lives of Mr. Hecker and Mr. Smith
and intends to use income from the BOLI policy to offset benefit expenses. All amounts below have
been rounded up to the nearest thousand dollars.
The CPP Rules prohibit the payment of any amounts to Messrs. Hecker or Smith for any
accelerated vesting of payments or reimbursement of taxes on payments, until the Treasurys
investment in the Company has been repaid. The following description of the benefits provided in
the Salary Continuation Agreement and Split Dollar Agreement that include such payments is provided
to give shareholders an understanding of amounts that would be payable if the CPP Rules no longer
applied.
Upon reaching age 60 the salary continuation agreements provide for maximum annual payments to
Mr. Hecker and Mr. Smith of $148,000 and $111,000, respectively, for a period of ten years. So
long as Mr. Hecker and Mr. Smith remain employed by the Bank until January 1, 2012, in the event
that the employment of Mr. Hecker or Mr. Smith terminates for any reason and such individual is
less than 60 years of age as of such termination (other than for death, disability, for cause or in
connection with a change in control, as each term is defined in their respective salary
continuation agreements), then Mr. Hecker would receive annual payments ranging from $86,000 to
$148,000, and Mr. Smith would receive annual payments ranging from $82,000 to $111,000, depending
on the date of their respective termination, during each of the 10 years beginning at age 60. If
Mr. Heckers or Mr. Smiths employment is terminated because of disability before the age of 60,
each will receive an annual payment ranging from $63,000 to $148,000 (in the case of Mr. Hecker)
and $60,000 to $111,000 (in the case of Mr. Smith), depending on the date of disability, during
each of the 10 years beginning at age 60. Finally, if Mr.
26
Heckers or Mr. Smiths employment is terminated in connection with a change in control (so
long as they are not terminated for cause, as defined), Mr. Hecker and Mr. Smith will be entitled
to a lump sum payment of $528,000 to $1,110,000 (in the case of Mr. Hecker) and $520,000 to
$834,000 (in the case of Mr. Smith), depending upon the date of the change in control. Furthermore,
if Mr. Hecker or Mr. Smith is subject to any excise tax as a result of an acceleration of their
respective benefits under his agreement in the event of a change in control, Mr. Hecker and Mr.
Smith will receive a cash payment equal to the amount of their respective excise tax.
Under the salary continuation agreement and the split dollar agreement, Mr. Heckers estate
will receive a one-time payment of $1,110,000 if Mr. Hecker dies before the age of 60, provided
that the Bank employed him at the time of death; and, subject to the same conditions, Mr. Smiths
estate will receive a one time payment of $834,000. The Bank will be the beneficiary of any death
proceeds remaining after Mr. Heckers or Mr. Smiths interest has been paid to their respective
estates.
The CPP Rules prohibit the payment of any amounts to Messrs. Hecker or Smith for termination
of employment or a change in control, including any accelerated vesting of payments or equity
awards or the reimbursement of taxes on compensation, until the Treasurys investment in the
Company has been repaid. The following description of the termination and change in control
benefits provided in Messrs. Heckers and Smiths respective agreements is provided to give
shareholders an understanding of amounts that would be payable if the CPP Rules no longer applied.
Curt Hecker Employment Agreement
Mr. Hecker serves as President and Chief Executive Officer of Intermountain and Chief
Executive Officer of the Bank under the terms of an employment agreement that was amended and
restated effective January 1, 2008 to, among other things, incorporate and make such modifications
as necessary to comply with Section 409A of the Internal Revenue Code (the Code). The agreement
renews automatically for a new three-year term on January 1, 2011, unless earlier cancelled by the
Board. The Compensation Committee set Mr. Heckers annual salary for 2009 at $216,320. The
agreement grants Mr. Hecker four weeks of paid vacation annually and miscellaneous fringe benefits,
including use of an automobile, as well as his eligibility to participate in incentive and stock
plans made available to executive officers.
If Mr. Heckers employment terminates involuntarily without cause or if he voluntarily
terminates for any reason, he will be entitled to severance in an amount calculated at twice the
average of his annual base salary over the two most recent calendar years payable in one lump sum
on the first day of the seventh month after the month following termination. But if Mr. Heckers
employment terminates involuntarily (i) other than for cause, disability, retirement or death
within 24 months after a change in control, or (ii) within the period between the date of entering
into a definitive agreement and the effective date of the change in control, or (iii) if he
terminates for good reason (as defined in the agreement), his severance would instead be calculated
at twice the sum of his average annual base salary and short-term bonus over the two preceding
years. The difference between the change-in-control severance amount (twice the average annual base
salary and short-term bonus) versus severance payable for employment termination in other contexts
(twice the average annual base salary) would also be payable to Mr. Hecker if his employment
terminates involuntarily without cause or if he terminates for any reason within 12 months before
an agreement for a change in control is entered into. The change-in-control severance is payable on
the later of the date his employment terminated, the effective date of the change in control, or
the first day of the seventh month after the month in which his employment was terminated.
The employment agreement also provides for reimbursement of certain taxes (excise tax
reimbursement) if the aggregate benefits payable to Mr. Hecker after a change in control are
subject to
27
excise tax under section 4999 of the Code. In general terms, IRC section 280G disallows an
employers compensation deduction for so-called excess parachute payments made to an executive
after a change in control. Correspondingly, section IRC 4999 imposes a 20% excise tax on the
executive receiving excess parachute payments. Payments made to an executive as the result of a
change in control are excess parachute payments if they equal or exceed the executives base amount
multiplied by three. If the payments equal or exceed that threshold, the 20% excise tax is imposed
on payments exceeding the executives base amount, and the employers compensation deduction is
forfeited on those same dollars. The executives base amount is his five-year average taxable
compensation. The excise tax reimbursement benefit will reimburse Mr. Hecker for the 20% excise
tax, but not for any additional excise tax on the reimbursement itself. He will be responsible for
all other federal and state taxes (including income taxes) due on the excise tax reimbursement
benefit. The excise tax reimbursement benefit would not be a deductible payment to Intermountain
or the Bank. For purposes of the calculation under sections 280G and 4999 of benefits payable after
a change in control, the total benefits include severance payable under a severance or employment
agreement, accelerated payment or accelerated vesting of benefits under compensation arrangements
such as stock option plans and salary continuation agreements, and other benefits whose payment or
vesting accelerates because of the change in control. Taking into account Mr. Heckers potential
change-in-control severance benefit under the employment agreement and the benefit payable under
his Salary Continuation Agreement, Intermountain does not believe that benefits payable to Mr.
Hecker after a change in control would constitute excess parachute payments.
Mr. Heckers employment agreement provides that he is entitled to reimbursement of up to
$500,000 of legal fees if his employment agreement is challenged after a change in control,
regardless of whether Mr. Hecker prevails in such dispute.
Lastly, the employment agreement prohibits Mr. Hecker from competing with Intermountain or the
Bank as a director, officer, shareholder, or otherwise during the term of his employment and for
two years after termination of his employment. The prohibition against competition terminates
immediately after a change in control occurs.
The table below shows the maximum amounts that could be paid to Mr. Hecker under his
agreements, without giving effect to the restrictions under the CPP Rules and (i) is based on the
executives salary at December 31, 2009; and (ii) assumes that a triggering event occurred on
December 31, 2009, as well as the aggregate amount allowed to be paid under the CPP Rules.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination/Change in Control |
|
|
|
|
Payments Under |
|
|
|
|
Employment Agreement |
|
|
|
|
|
|
|
|
Involuntary |
|
Termination /Change in Control Payments |
|
|
|
|
|
|
Termination |
|
Under Salary Continuation Agreement |
|
|
|
|
|
|
(without cause) |
|
and Split Dollar Agreement |
|
|
|
|
|
|
or constructive |
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
Voluntary or |
|
termination |
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
Involuntary |
|
in connection |
|
Payment Due to |
|
Termination Due to |
|
Termination |
|
|
Termination |
|
with a CIC |
|
Death Prior to |
|
Disability Prior to |
|
(without cause) |
|
|
(without cause) (1) |
|
(2) |
|
Age 60 (3) |
|
Age 60 (4) |
|
Due to CIC (5)(6) |
Base salary |
|
$ |
432,640 |
|
|
$ |
432,640 |
|
|
$ |
1,110,000 |
|
|
$ |
62,171 |
|
|
$ |
527,198 |
|
Short-term bonus |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Fair market values of
accelerated equity
vesting(7) |
|
|
0 |
|
|
|
15,869 |
|
|
|
0 |
|
|
|
0 |
|
|
|
15,869 |
|
Total |
|
$ |
432,640 |
|
|
$ |
448,509 |
|
|
$ |
1,110,000 |
|
|
$ |
62,171 |
|
|
$ |
543,067 |
|
Total allowed under
CPP Rules |
|
$ |
0 |
(8) |
|
$ |
0 |
(8) |
|
$ |
1,110,000 |
(8) |
|
$ |
62,171 |
(8) |
|
$ |
0 |
(8) |
28
|
|
|
(1) |
|
Represents two times Mr. Heckers average base salary, payable in a lump sum payment. |
|
(2) |
|
Represents two times Mr. Heckers average base salary and short-term bonus over the two
most recent years, payable in a lump sum payment. |
|
(3) |
|
Represents amount payable to Mr. Heckers beneficiaries under the Split Dollar
Agreement in the event Mr. Hecker dies while still employed by the Company, payable in a
lump sum payment. |
|
(4) |
|
Represents the amount payable each year for a 10-year period based on the accrual
balance at December 31, 2009. |
|
(5) |
|
Represents the amount payable based on the accrual balance at December 31, 2009,
payable in a lump sum payment. |
|
(6) |
|
No payments will be made in the event of voluntary or involuntary termination outside
of a change in control prior to 2012. |
|
(7) |
|
For the purposes of this table, the fair market value of the accelerated vesting of
equity awards is based on $2.40, the closing price of Intermountain common stock at
December 31, 2009. It is possible that in the event of a change of control, the per share
settlement stock price would be substantially higher than that used in this table. |
|
(8) |
|
Represents the aggregate amount allowed to be paid under the CPP Rules and includes:
$1,110,000 payable due to death prior to age 60, and $62,171 payable each year for ten
years beginning at age 60, if terminated due to disability prior to age 60. |
Jerry Smith Employment Agreement
Mr. Smith serves as the Executive Vice President of Intermountain and President of the Bank
under an employment agreement that was amended and restated effective January 1, 2008 to, among
other things, incorporate and make such modifications as necessary to comply with Section 409A of
the Code. The terms of Mr. Smiths agreement are essentially identical to those of Mr. Heckers
employment agreement. The term of Mr. Smiths employment agreement will automatically renew for a
new three-year term on January 1, 2011, unless earlier canceled by the Board. The Compensation
Committee set Mr. Smiths annual salary for 2009 at $182,640. The agreement promises severance
benefits and change-in-control severance benefits on the same terms and calculated in the same
manner as Mr. Heckers, a potential excise tax reimbursement in connection with a change in
control, and reimbursement of up to $500,000 of legal fees if the employment agreement is
challenged after a change in control regardless of whether Mr. Smith prevails in such dispute. As
with Mr. Hecker, Intermountain does not believe that benefits payable to Mr. Smith after a change
in control would constitute excess parachute payments. Mr. Smiths employment agreement includes a
prohibition against competition identical to the prohibition in Mr. Heckers agreement, but like
Mr. Heckers agreement the prohibition against competition would not apply after a change in
control occurs.
The table below shows the maximum amounts that could be paid to Mr. Smith under his
agreements, without giving effect to the restrictions under the CPP Rules and (i) is based on the
executives salary at December 31, 2009; and (ii) assumes that a triggering event occurred on
December 31, 2009, as well as the aggregate amount allowed to be paid under the CPP Rules.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination /Change in Control Payments |
|
|
|
|
Under |
|
|
|
|
Employment Agreement |
|
Termination/Change in Control |
|
|
|
|
|
|
Involuntary |
|
Payments Under Salary
|
|
|
|
|
|
|
Termination |
|
Continuation Agreement and Split Dollar Agreement |
|
|
Voluntary or |
|
(without cause) |
|
|
|
|
|
|
|
|
|
Voluntary or |
|
|
Involuntary |
|
or constructive |
|
|
|
|
|
|
|
|
|
Involuntary |
|
|
Termination |
|
termination |
|
Payment Due to |
|
Termination Due to |
|
Termination |
|
|
(without cause) |
|
in connection with a |
|
Death Prior to |
|
Disability Prior to |
|
(without cause) |
|
|
(1) |
|
CIC (2) |
|
Age 60 (3) |
|
Age 60 (4) |
|
Due to CIC (5)(6) |
Base salary |
|
$ |
365,280 |
|
|
$ |
365,280 |
|
|
$ |
834,000 |
|
|
$ |
59,180 |
|
|
$ |
519,319 |
|
Short-term bonus |
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
Fair market values
of accelerated
equity vesting (7) |
|
|
0 |
|
|
|
12,749 |
|
|
|
0 |
|
|
|
0 |
|
|
|
12,749 |
|
Total |
|
$ |
365,280 |
|
|
$ |
378,029 |
|
|
$ |
834,000 |
|
|
$ |
59,180 |
|
|
$ |
532,068 |
|
Total allowed under
CPP Rules |
|
$ |
0 |
(8) |
|
$ |
0 |
(8) |
|
$ |
834,000 |
(8) |
|
$ |
59,180 |
(8) |
|
$ |
0 |
(8) |
29
|
|
|
(1) |
|
Represents two times Mr. Smiths average base salary, payable in a lump sum payment. |
|
(2) |
|
Represents two times Mr. Smiths average base salary and short-term bonus over
the two most recent calendar years, payable in a lump sum payment. |
|
(3) |
|
Represents amount payable to Mr. Smiths beneficiaries under the Split Dollar
Agreement in the event Mr. Smith dies while still employed by the Company, payable in a
lump sum payment. |
|
(4) |
|
Represents the amount payable each year for a 10-year period based on the accrual
balance at December 31, 2009. |
|
(5) |
|
Represents the amount payable based on the accrual balance at December 31, 2009,
payable in a lump sum. |
|
(6) |
|
No payments will be made in the event of voluntary or involuntary termination
outside of a change in control prior to 2012. |
|
(7) |
|
For the purposes of this table, the fair market value of the accelerated vesting
of equity awards is based on $2.40, the closing price of Intermountain common stock at
December 31, 2009. It is possible that in the event of a change of control, the per
share settlement stock price would be substantially higher than that used in this
table. |
|
(8) |
|
Represents the aggregate amount allowed to be paid under the CPP Rules and
includes: $834,000 payable due to death prior to age 60 and $59,180 payable each year
for ten years beginning at age 60, if terminated due to disability prior to age 60. |
Executive Severance Agreements for Douglas Wright and John Nagel
The CPP Rules prohibit the payment of any amounts to Messrs. Wright or Nagel for termination
of employment or a change in control, including any accelerated vesting of payments or equity
awards or, as applicable, the reimbursement of taxes on compensation, until the Treasurys
investment in the Company has been repaid. The following description of the termination and change
in control benefits provided in Messrs. Wrights and Nagels respective agreements is provided to
give shareholders an understanding of amounts that would be payable if the CPP Rules no longer
applied.
The Executive Severance Agreements with Messrs. Wright and Nagel, respectively, amended and
restated effective January 1, 2008 (as to Mr. Wrights agreement) and December 27, 2007 (as to Mr.
Nagels agreement) to, among other things, incorporate and make such modifications as necessary to
comply with Section 409A of the Code, provide that each of Messrs. Wright and Nagel is entitled to
severance if his employment terminates involuntarily (i) other than for cause, disability,
retirement or death within 24 months after a change in control, (ii) within the period between the
date of entering into a definitive agreement and the effective date of the change in control, or
(iii) within 12 months before an agreement for a change in control is entered into, or if he
terminates for good reason (as defined in the agreement). The severance payment would be an amount
equal to twice the sum of his average annual base salary and short-term bonus over the two most
recent calendar years, payable on the later of the date employment is terminated, the effective
date of the change in control, or the first day of the seventh month after the month employment is
terminated.
Mr. Wrights Executive Severance Agreement further provides for an excise tax reimbursement if
the aggregate benefits payable to Mr. Wright after a change in control are subject to excise taxes
under sections 280G and 4999 of the Code, payable under the same terms as described for Mr. Hecker
and Mr. Smith. Mr. Wrights agreement also provides that he is entitled to reimbursement of up to
$300,000 of legal fees if his employment agreement is challenged after a change in control,
regardless of whether Mr. Wright prevails in such dispute.
Under Mr. Nagels Executive Severance Agreement, his severance benefit will be reduced as
necessary to avoid application of sections 280G and 4999 of the Code. Mr. Nagels agreement also
provides that he is entitled to reimbursement of up to $250,000 of legal fees if his employment
agreement is challenged after a change in control, regardless of whether Mr. Nagel prevails in such
dispute.
The table below shows the maximum amounts that could be paid to Messrs. Wright and Nagel under
their respective agreements, without giving effect to the restrictions under the CPP Rules and (i)
is based on the executives salary at December 31, 2009; and (ii) assumes that a triggering event
occurred on December 31, 2009, as well as the aggregate amount allowed to be paid under the CPP
Rules.
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
Termination in Connection with Change in Control |
|
Total |
|
Allowed |
|
|
(other than for cause, death, disability or retirement) |
|
Payments to |
|
Under |
|
|
Salary |
|
Short-Term Bonus |
|
Equity Awards |
|
Executive |
|
CPP |
Name |
|
($) |
|
($)(1) |
|
($)(2) |
|
($) |
|
Rules |
Douglas Wright |
|
$ |
350,542 |
|
|
$ |
0 |
|
|
$ |
12,218 |
|
|
$ |
362,760 |
|
|
$ |
0 |
|
John Nagel |
|
$ |
292,464 |
|
|
$ |
0 |
|
|
$ |
10,313 |
|
|
$ |
302,777 |
|
|
$ |
0 |
|
|
|
|
(1) |
|
Represents two times the average base pay and short term bonus over the two most
recent calendar years, payable in a lump sum payment. |
|
(2) |
|
For the purposes of this table, the fair market value of the accelerated
vesting of equity awards is based on $2.40, the closing price of Intermountain
common stock at December 31, 2009. It is possible that in the event of a change of
control, the per share settlement stock price would be substantially higher than
that used in this table. |
Executive Severance and Retention Bonus Agreements for Pamela Rasmussen
On March 14, 2007, Intermountain entered into an Executive Severance Agreement with Ms.
Rasmussen, which was subsequently amended and restated effective December 28, 2007 to, among other
things, incorporate and make such modifications as necessary to comply with Section 409A of the
Code. The terms of this agreement are substantially identical in nature to the Executive Severance
Agreement with Mr. Nagel, including a provision for reimbursement of up to $250,000 of legal fees
in certain circumstances.
Under the CPP Rules, payments made following termination of employment of a change in control,
including any accelerated vesting of payments or equity awards under the Executive Severance
Agreement are prohibited until the Treasurys investment in the Company has been repaid.
On August 2005, as amended September 2006, the Company also entered into a Retention Bonus
Agreement with Ms. Rasmussen that provided for a bonus in the amount of $56,850, payable in five
equal annual installments, beginning on August 15, 2005. The last payment under this agreement was
made on August 2009.
On March 14, 2007, the Company entered into a Stock Purchase Bonus Agreement with Ms.
Rasmussen. Under the terms of this agreement, Ms. Rasmussen would be reimbursed up to $200,000
payable over a ten year period, provided Ms. Rasmussen acquired shares of Intermountain common
stock prior to November 30, 2007. This agreement was subsequently amended and restated to
decrease the required total investment in Intermountain common stock to $100,000. The bonus
payable under this agreement remains at $200,000, with the additional $100,000 not used to
reimburse stock purchases intended to be a supplemental bonus.
The table below shows the maximum amounts that could be paid to Ms. Rasmussen under her
agreements, without giving effect to the restrictions under the CPP Rules and (i) is based on the
executives salary at December 31, 2009; and (ii) assumes that a triggering event occurred on
December 31, 2009, as well as the aggregate amount allowed to be paid under the CPP Rules.
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination in Connection with Change in Control |
|
|
|
|
|
Total |
(other than for cause, death or disability) |
|
Total Payments to |
|
Allowed |
Salary |
|
Short-Term Bonus |
|
Equity Awards |
|
Executive |
|
Under |
($) |
|
($)(1) |
|
($)(2) |
|
($) |
|
CPP Rules |
$ |
298,088 |
|
|
$ |
0 |
|
|
$ |
11,762 |
|
|
$ |
309,850 |
|
|
$ |
0 |
|
|
|
|
(1) |
|
Represents the two times average base salary and short term bonus over the two
most recent calendar years. |
|
(2) |
|
For the purposes of this table, the fair market value of the
accelerated vesting of equity awards is based on $2.40, the closing price of
Intermountain common stock at December 31, 2009. It is possible that in the
event of a change of control, the per share settlement stock price would be
substantially higher than that used in this table. |
Stock Purchase Bonus Agreement for Dale Schuman
On January 1, 2006, as amended September 12, 2006, the Company entered into a Stock Purchase
Bonus Agreement with Dale Schuman. Under the terms of this agreement, Mr. Schuman would be
reimbursed $200,000 payable over a five year period beginning December 15, 2006, provided Mr.
Schuman acquired shares of Intermountain common stock of equal value by December 10, 2007.
Employee Benefit Plans
401(k) Savings Plan. Intermountain and the Bank have a 401(k) Savings Plan (401(k) Plan)
covering substantially all employees. An employee must be at least 19 years of age, work at least
1,000 hours per year and have six months of service with Intermountain or the Bank to be eligible
for the 401(k) Plan (Effective Date). Under the 401(k) Plan, participants may defer a percentage
of their compensation, the dollar amount of which may not exceed the limit as governed by law. At
the direction of the Board of Directors, Intermountain may also elect to pay a discretionary
matching contribution equal to a percentage of the amount of the salary deferral made by the
participant. The 401(k) Plan provides that contributions made by the employee are 100% vested
immediately upon the participants Effective Date. Contributions made by the employer vest 50% in
year one and 100% in year two.
A committee of the Bank acts as the Plan Administrator of the 401(k) Plan. The general
investment options are determined by the Plans Administrative Committee.
PROPOSAL NO. 2 ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
Under applicable law and regulations, as a participant in the U.S. Treasurys Capital Purchase
Program, we are providing you the opportunity, as a shareholder, to endorse or not endorse our
executive pay programs and policies through the following resolution:
RESOLVED, that the shareholders approve the compensation of executive officers as
described in the Compensation Discussion and Analysis and the tabular disclosures
regarding Named Executive Officer compensation (together with the accompanying
narrative disclosures) in this proxy statement.
The vote is not binding on the Board of Directors and may not be construed as overruling a
decision by the Board of Directors, nor creating or implying any additional fiduciary duty by the
Board of Directors, nor be construed to restrict or limit the ability of shareholders to make
proposals for inclusion in proxy materials related to executive compensation.
32
We believe that our compensation policies and procedures are strongly aligned with the
long-term interests of our shareholders. Because your vote is advisory, it will not be binding
upon the Board. However, the Compensation Committee will take into account the outcome of the vote
when considering future executive compensation arrangements.
Vote Required and Board Recommendation
The proposal to approve the advisory (non-binding) vote on executive compensation requires the
affirmative vote FOR of a majority of the shares present and entitled to vote.
The Board of Directors unanimously recommends a vote FOR approval of the compensation of
executive officers as described in the Compensation Discussion and Analysis and the tabular
disclosures regarding Named Executive Officer compensation (together with the accompanying
narrative disclosures) in this proxy statement.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth information as of February 15, 2010, regarding the shares of
Intermountain common stock beneficially owned by (i) each person (other than executive officers or
directors whose stock ownership is listed below), known by Intermountain to own beneficially more
than 5% of Intermountains common stock, (ii) each director of Intermountain, (iii) each executive
officer of Intermountain, which includes the Named Executive Officers, and (iv) all directors and
executive officers of Intermountain as a group.
We have determined beneficial ownership in accordance with the rules of the SEC. Except as
noted below, to our knowledge, each holder has sole voting and investment power with respect to
shares of Intermountain common stock listed as owned by such person or entity. The number of shares
beneficially owned is based on the shares of our common stock outstanding on February 15, 2010.
Share figures in the table below have been adjusted for all stock splits and stock dividends to
date. Shares of our common stock subject to stock options that are currently exercisable or
exercisable within 60 days of February 15, 2010 are deemed to be outstanding and to be beneficially
owned by the person holding the options for the purpose of computing the percentage ownership of
that person, but are not treated as outstanding for the purpose of computing the percentage
ownership of any other person.
Principal Shareholders (5% Owners Exclusive of Directors and Officers)
|
|
|
|
|
|
|
|
|
Number of Shares of |
|
Percentage of |
|
|
Common Stock |
|
Outstanding Common |
Name and Address of Beneficial Owner |
|
Owned |
|
Stock |
Wray D. Farmin
11815 Waikiki Rd
Spokane, WA 99218
|
|
454,321(1)
|
|
|
5.4 |
% |
|
|
|
|
|
|
|
James Fenton Company, Inc.
123 S. Third Avenue, Suite 27
Sandpoint, ID 83864
|
|
466,151(2)
|
|
|
5.5 |
% |
|
|
|
(1) |
|
The shares beneficially owned by Mr. Farmin are owned by the Farmin
Family LLP, of which Mr. Farmin is the general partner and has sole voting and
dispositive power. |
|
(2) |
|
The number of shares beneficially owned include 20,275 shares held in
trust for the minor children of Julie Meyer, President of James Fenton Company
Inc.; 1,089 shares held by Ms. Meyer and her spouse; and 17,391 shares held in
trust for the minor children of Susan Kubiak, Vice President of James Fenton
Company, Inc. |
33
Directors and Named Executive Officers
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
|
Shares of |
|
|
Percentage of |
|
|
|
Common Stock |
|
|
Outstanding |
|
Name and Position |
|
Owned(1)(2) |
|
|
Common Stock |
|
|
|
|
|
|
|
|
|
|
John B. Parker, Chairman |
|
|
115,057 |
(3) |
|
|
1.4 |
% |
James T. Diehl, Vice Chairman |
|
|
195,043 |
(4) |
|
|
2.3 |
% |
Curt Hecker, Director, President and CEO of the Company and CEO of the Bank |
|
|
202,416 |
(5) |
|
|
2.4 |
% |
Charles L. Bauer, Director |
|
|
196,751 |
(6) |
|
|
2.3 |
% |
Ford Elsaesser, Director |
|
|
104,611 |
(7) |
|
|
1.2 |
% |
Ronald Jones, Director |
|
|
30,611 |
(8) |
|
|
* |
|
Maggie Y. Lyons, Director |
|
|
32,413 |
(9) |
|
|
* |
|
Jim Patrick, Director |
|
|
44,992 |
(10) |
|
|
* |
|
Michael J. Romine, Director |
|
|
511,394 |
(11) |
|
|
6.1 |
% |
Jerry Smith, Director, Executive Vice President of the Company and
President of the Bank |
|
|
149,259 |
(12) |
|
|
1.8 |
% |
John Nagel, EVP and Chief Credit Officer of the Bank |
|
|
63,587 |
|
|
|
* |
|
Douglas Wright, EVP and Chief Financial Officer |
|
|
87,481 |
(13) |
|
|
1.0 |
% |
Pamela Rasmussen, EVP and Chief Operating Officer |
|
|
20,693 |
(14) |
|
|
* |
|
Dale Schuman, SVP, Trust and Wealth Management |
|
|
26,503 |
(15) |
|
|
* |
|
All directors and executive officers as a group (14 persons) |
|
|
1,780,811 |
|
|
|
21.1 |
% |
|
|
|
(1) |
|
Includes shares subject to options that could be exercised within 60 days of the Record
Date as follows: 545 shares each for Mr. Parker and Ms. Lyons; 908 shares for each of Messrs.
Diehl, Elsaesser, and Romine; 16,792 shares for Mr. Hecker; 16,583 shares for Mr. Smith; 6,353
shares for Messrs. Jones and Patrick; 364 shares for Mr. Bauer; 43,613 shares for Mr. Nagel;
54,282 shares for Mr. Wright; 1,089 shares for Ms. Rasmussen; and 149,243 shares for all
directors and executive officers as a group. |
|
(2) |
|
Includes shares of restricted stock subject to vesting requirements as follows: 369 shares
held by Messrs. Parker, Diehl, Bauer, Elsaesser, Romine, and Ms. Lyons; 329 shares held by
Messrs. Jones and Patrick; 6,612 shares held by Mr. Hecker; 5,312 shares held by Mr. Smith;
4,297 shares held by Mr. Nagel; 5,091 shares held by Mr. Wright; 4,901 shares held by Ms.
Rasmussen; 14,512 shares held by Mr. Schuman; and 43,597 shares for all directors and
executive officers as a group. |
|
(3) |
|
Includes 54,780 shares held in the Parker Family LLC of which Mr. Parker is co-manager with
his spouse; 3,000 shares held in an IRA for Mr. Parker; and 41,123 shares held jointly with
spouse. |
|
(4) |
|
Includes 9,695 shares held jointly with spouse; 78 shares held by spouse; 283 shares held in
an IRA for spouse; 314 shares held in an IRA for the benefit of Mr. Diehl; and 170,459 shares
held in the Diehl Family LLC of which Mr. Diehl is a managing member. |
|
(5) |
|
Includes 161,118 shares held in the Hecker Family Trust; 17,182 shares held in an IRA account
for the benefit of Mr. Hecker; 356 shares held in a custodial account for son; and 356 shares
held jointly with son. |
|
(6) |
|
Includes 96,428 shares held in the Bauer Family Trust; 53,169 shares held in IRA accounts for
the benefit of Mr. Bauer; and 46,421 shares held in IRA accounts for the benefit of Mr.
Bauers spouse. |
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(7) |
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Includes 2,195 shares held jointly with spouse; 2,944 shares held by Mr. Elsaessers minor
children and daughter; 75,975 shares held in a pension fund trust for the benefit of Mr.
Elsaesser; and shares held in pension fund trusts of which Mr. Elsaesser is trustee as
follows: 6,055 shares for Joseph Jarzabek; 1,291 shares for Donna La Rue; 356 shares for Lois
LaPointe; 77 shares for Sherylee Foster; 401 shares for Deborah Hillen; and 81 shares for the
benefit of Darla Kuhman. |
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(8) |
|
Includes 3,375 shares held jointly with spouse; 7,242 shares held in an IRA account for the
benefit of Mr. Jones spouse; and 8,860 shares held in an IRA account for the benefit of Mr.
Jones. |
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(9) |
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Includes 5,720 shares held jointly with spouse and 1,280 shares held in a profit sharing plan
for the benefit of Ms. Lyons spouse. |
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(10) |
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Includes 28,214 shares held jointly with spouse; 280 shares held by spouse; 220 shares held
in an IRA account for the benefit of Mr. Patricks spouse; and 9,363 shares held in IRA
accounts for the benefit of Mr. Patrick. |
34
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(11) |
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Includes 1,179 shares held in the Romine Educational Trust; 5,461 shares held by Mr. Romines
spouse; and 503,203 shares held in the Romine Family LLC. |
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(12) |
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Includes 109,966 shares held in the Smith Family Trust; and 17,398 shares held in IRA
accounts for the benefit of Mr. Smith. |
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(13) |
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Includes 1,298 shares that Mr. Wright holds jointly with his spouse. |
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(14) |
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Includes 14,703 shares held by Ms. Rasmussen in the Rasmussen Family Trust. |
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(15) |
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Includes 11,991 shares held jointly by Mr. Schuman and his spouse. |
Officers
The following table sets forth information with respect to the executive officers during 2009
who are not directors or nominees for director of Intermountain, including employment history for
the last five years. All executive officers are elected annually and serve at the discretion of
the Board.
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Has Served as an |
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Officer of the |
Name |
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Age |
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Position |
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Company Since |
John Nagel
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59 |
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EVP & Chief Credit
Officer of Bank
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2001 |
Douglas Wright
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45 |
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EVP & Chief
Financial Officer of
the Company and
Treasurer of the
Bank
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2002 |
Pamela Rasmussen
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49 |
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EVP and Chief
Operating Officer of
the Company and
Assistant Secretary
of the Company and
the Bank
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2004 |
Dale Schuman
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51 |
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SVP, Trust and
Wealth Management;
Corporate Secretary
of the Company and
the Bank
|
|
2006 |
Background of Executive Officers
John Nagel joined the Company in 2001. Prior to that time Mr. Nagel served as Credit Approval
Officer at Washington Trust Bank from December 1999 to May 2001.
Douglas Wright joined the Company in 2002. Prior to that time Mr. Wright served as Senior
Vice President and Production Manager at Sterling Savings Bank from June 1996 to May 2002.
Pamela Rasmussen joined the Company in 2004 as Senior Vice President and Chief Operating
Officer. In 2006, Ms. Rasmussen was promoted to Executive Vice President and Chief Operating
Officer. Prior to joining the Company, Ms. Rasmussen was the Vice President of Operations and
Cashier at Stockman Financial Corporation from March 2000 to April 2002, and the Operations Officer
and Chief Financial Officer of Snake River Bancorp, Inc. (the former holding company of Magic
Valley Bank) from April 2002 to November 2004.
Dale Schuman joined the Company in 2006 as Senior Vice President and General Manager of the
Trust and Wealth Management division. Mr. Schuman is an attorney and prior to joining the Company,
he practiced commercial, mergers and acquisitions, trust and probate law from 1986 to 1999, and
worked as an executive manager for an investment management institution from 1999 to 2005.
35
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions between Intermountain or its affiliates and related persons (including directors
and executive officers of Intermountain and the Bank, or their immediate families) must be approved
by the Audit Committee of the Board. A transaction between a related person shall be consummated
only if the Audit Committee approves or ratifies such transaction in accordance with the procedures
established by the Board in accordance with its lending and Corporate Governance Policy, and if the
transaction is on terms comparable to those that could be obtained in arms length dealings with an
unrelated third party.
Intermountain and the Bank have had, and expect to have in the future, banking transactions,
including loans, in the ordinary course of business with directors, executive officers, and their
associates, on substantially the same terms, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with other persons, which transactions do
not involve more than the normal risk of collectibility or present other unfavorable features.
PROPOSAL NO. 3 RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has appointed BDO Seidman, LLP (BDO) to serve as the independent
registered public accounting firm for Intermountain and its subsidiaries for the year ending
December 31, 2010, and any interim periods, subject to ratification by our shareholders at the
annual meeting. BDO has advised Intermountain that it will have in attendance at the annual meeting
one or more representatives who will be available to respond to appropriate questions presented at
the annual meeting. Such representatives will have an opportunity to make a statement at the annual
meeting if they desire to do so. If the required number of votes does not ratify the appointment of
BDO, the Audit Committee will take that into account for future selection of independent registered
public accountants.
Vote Required and Board Recommendation
The proposal for the shareholders to ratify the selection of BDO as our independent registered
public accounting firm requires the affirmative vote FOR of a majority of the shares present and
entitled to vote.
The Board of Directors unanimously recommends that Shareholders vote FOR the proposal to
ratify the appointment of BDO as the independent auditors for Intermountain for 2010.
COMPLIANCE WITH SECTION 16(A) FILING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires that all of our executive
officers and directors and all persons who beneficially own more than 10 percent of our common
stock file reports with the SEC regarding beneficial ownership of Company stock. We have adopted
procedures to assist our directors and executive officers in complying with the Section 16(a)
filings.
Based solely on our review of the copies of the filings which we received for the fiscal year
ended December 31, 2009, or written representations from certain reporting persons, we believe that
the reporting persons made all filings required by Section 16(a) on a timely basis.
36
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BDO Seidman, LLP, independent registered public accounting firm, performed the audit of our
consolidated financial statements, which include our subsidiary Panhandle State Bank, for the year
ended December 31, 2009. In addition, the effectiveness of Intermountains internal controls over
financial reporting as of December 31, 2009 has been audited by BDO Seidman, LLP.
Fees Paid to Independent Registered Public Accounting Firm
The following table sets forth the aggregate fees charged to Intermountain by BDO, for audit
services rendered in connection with the audited consolidated financial statements and reports for
the 2009 and 2008 fiscal years and for other services rendered during the 2009 and 2008 fiscal
years.
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Fee Category |
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Fiscal 2009 |
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|
%
of Total |
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Fiscal 2008 |
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|
%
of Total |
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Audit Fees |
|
$ |
439,500 |
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|
|
91 |
% |
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$ |
394,050 |
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90 |
% |
Audit-Related Fees |
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22,200 |
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5 |
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29,000 |
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7 |
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Tax Fees |
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18,800 |
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4 |
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14,675 |
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3 |
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All Other Fees |
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0 |
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0 |
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0 |
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0 |
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Total Fees |
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$ |
480,500 |
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100 |
% |
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$ |
437,725 |
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100 |
% |
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Audit Fees. Consists of fees billed to Intermountain for professional services
rendered by BDO in connection with the audit of our financial statements and review of financial
statements included in Intermountains Form 10-Qs and 10-Ks, fees for services performed in
relation to compliance with Sarbanes Oxley Rule 404, or services by BDO in connection with
statutory or regulatory filings or engagements.
Audit-Related Fees. Consists of fees relating to the audit of the employee benefit
plan.
Tax Fees. Consists of fees related to the preparation of Intermountains consolidated
federal and state tax returns and tax consulting services.
All Other Fees. We did not incur any other fees during 2009 or 2008.
In considering the nature of the services provided by BDO, the Audit Committee determined that
such services are compatible with the provision of independent audit services. The Audit Committee
discussed these services with BDO and Company management to determine that they are permitted under
the rules and regulations concerning auditor independence promulgated by the SEC to implement the
Sarbanes Act, as well as the American Institute of Certified Public Accountants.
Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
The Audit Committee pre-approves all audit and permissible non-audit services provided by the
independent auditors. These services may include audit services, audit-related services, tax
services, compliance services, consulting services and other services. For each proposed service,
the independent auditor is required to provide detailed back-up documentation at the time of
approval. The Audit Committee may delegate pre-approval to its chairman or one or more of its
members. Such a member must report any decisions to the Audit Committee at the next scheduled
meeting.
37
OTHER BUSINESS
The Board knows of no other matters to be brought before the shareholders at the annual
meeting. If other matters are properly presented for a vote at the annual meeting, the proxy
holders will vote shares represented by properly executed proxies in their discretion in accordance
with their judgment on such matters.
SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Shareholder Proposals
In order for a shareholder proposal to be considered for inclusion in our proxy statement for
next years annual meeting, the written proposal must be received by us no later than November 29,
2010 and should contain such information as required under our Bylaws. Such proposals should be
directed to our Corporate Secretary, at P. O. Box 967, Sandpoint, Idaho 83864, and must comply with
the SECs regulations regarding the inclusion of shareholder proposals in company-sponsored proxy
materials. No shareholder proposal from the floor will be considered at the annual meeting. In
addition, if we receive notice of a shareholder proposal after February 12, 2011, the persons named
as proxies in such proxy statement and form of proxy will have discretionary authority to vote on
such shareholder proposal.
Director Nominations
Our Bylaws provide for the nomination of director candidates by Company shareholders. In order
to recommend that the Nominating Committee consider a person for inclusion as a director nominee in
our proxy statement for next years annual meeting, we must receive a recommendation no later than
November 29, 2010. In addition, the notice of recommendation must meet all other requirements
contained in our Bylaws. Such recommendation should be sent to the attention of the Secretary of
the Company, and should contain the following information: (a) the name and address of each
proposed nominee and the number of shares of Intermountain stock held by such nominee; (b) the
principal occupation of each proposed nominee; (c) a description of any arrangements or
understandings between the nominee and the nominating shareholder pursuant to which the nomination
is being made; (d) your name and address; (e) the number of shares of stock of Intermountain you
own; and (f) a consent of the nominee agreeing to the nomination. The presiding officer of the
meeting may disregard your nomination if it does not contain the above information and otherwise
meet the requirements set forth in our Bylaws.
Copy of Bylaw Provisions
You may contact our Corporate Secretary for a copy of the relevant Bylaw provisions regarding
the requirements for making shareholder proposals and nominating director candidates.
ANNUAL REPORT TO SHAREHOLDERS
Any shareholder may obtain without charge a copy of our Annual Report on Form 10-K filed with
the SEC under the Securities Exchange Act of 1934 for the year ended December 31, 2009, including
financial statements. Written requests for the Form 10-K should be addressed to Susan Pleasant,
Asst. Vice President, Shareholder Relations, P. O. Box 967, Sandpoint, Idaho 83864.
38
ANNUAL MEETING OF SHAREHOLDERS OF
INTERMOUNTAIN COMMUNITY BANCORP
April 28, 2010
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, Proxy Statement, Proxy Card
are available at www.intermountainbank.com
Please sign, date and mail
your proxy card in the
envelope provided
as soon
as possible.
Please detach along
perforated line and mail in the envelope provided.
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20333000000000000000 6 |
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030609 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS 2 AND 3. |
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
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FOR |
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AGAINST |
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ABSTAIN |
1. ELECTION OF DIRECTORS:
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2. Advisory (non-binding)
Vote on Executive Compensation
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c |
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c
c |
FOR
ALL NOMINEES
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(See instructions below)
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NOMINEES: O James T. Diehl
O John
B. Parker
O Jim
Patrick
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3. Ratify the appointment of BDO Seidman, LLP as the independent
registered public accounting firm for Intermountain for 2010.
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INSTRUCTIONS: To withhold authority to vote for any individual
nominee(s), mark FOR ALL EXCEPT and fill in the circle next
to each nominee you wish to withhold, as shown
here: n |
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To change the address on your account, please check the box
at right and indicate your new address in the address
space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
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Signature
of Shareholder
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Date:
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Signature of Shareholder
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as
executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate
name by duly authorized officer, giving full title
as such. If signer is a partnership, please sign in partnership name by authorized person. |
ANNUAL MEETING OF SHAREHOLDERS OF
INTERMOUNTAIN COMMUNITY BANCORP
April 28, 2010
PROXY VOTING INSTRUCTIONS
INTERNET - Access www.voteproxy.com and follow the
on-screen instructions. Have your proxy card available when
you access the web page, and use the Company Number and
Account Number shown on your proxy card.
TELEPHONE - Call toll-free 1-800-PROXIES
(1-800-776-9437) in the United States or 1-718-921-8500 from
foreign countries from any touch-tone telephone and follow
the instructions. Have your proxy card available when you
call and use the Company Number and Account Number shown on
your proxy card.
Vote online/phone until 11:59 PM EDT the day before the meeting.
MAIL - Sign, date and mail your proxy card in the
envelope provided as soon as possible.
IN PERSON - You may vote your shares in person by
attending the Annual Meeting.
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COMPANY NUMBER
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ACCOUNT NUMBER |
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NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of
Meeting, Proxy Statement,
Proxy Card
are available at www.intermountainbank.com
Please detach along perforated line and mail in the envelope provided
IF you are not voting via
telephone or the Internet.
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20333000000000000000 6
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042810 |
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND FOR PROPOSALS 2 AND 3. |
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE
MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
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FOR |
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AGAINST |
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ABSTAIN |
1. ELECTION OF DIRECTORS:
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2. Advisory (non-binding)
Vote on Executive Compensation
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c |
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c |
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c |
c
c
c |
FOR
ALL NOMINEES
WITHHOLD AUTHORITY
FOR ALL NOMINEES
FOR ALL EXCEPT
(See instructions below)
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NOMINEES: O James T. Diehl
O John
B. Parker
O Jim
Patrick
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3. Ratify the appointment of BDO Seidman, LLP as the independent
registered public accounting firm for Intermountain for 2010.
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INSTRUCTIONS: To withhold authority to vote for any individual
nominee(s), mark FOR ALL EXCEPT and fill in the circle next
to each nominee you wish to withhold, as shown
here: n |
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To change the address on your account, please check the box
at right and indicate your new address in the address
space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
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Signature
of Shareholder
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Date:
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Signature of Shareholder
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Date: |
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Note: |
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Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign.
When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such.
If signer is a partnership, please sign in partnership name by authorized person.
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o |
INTERMOUNTAIN COMMUNITY BANCORP
Proxy for Annual Meeting of Shareholders on April 28, 2010
Solicited on Behalf of the Board of Directors
As
an alternative to completing this form, you may enter your vote
instruction by telephone at
1-800-PROXIES, or via the Internet at WWW.VOTEPROXY.COM and follow the simple
instructions. Use the Company Number and Account Number shown on your proxy card.
The undersigned hereby appoints
Charles L. Bauer, Maggie Y. Lyons and Ronald Jones, and each of them, with full power of substitution and power to act alone, as proxies to vote all
the shares of Common Stock which the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders of
Intermountain Community Bancorp, to be held April 28, 2010 at 10:00 am PDT at the Sandpoint Center, 414 Church Street,
Sandpoint, ID, and at any adjournments or postponements thereof, as follows:
(Continued and to be signed on the reverse side.)
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14475
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