CONSULTING AGREEMENT
Exhibit 10.1
This Consulting Agreement (the “Agreement”) is made and entered into this 18th day of March,
2011, by and among Green Bankshares, Inc., a Tennessee corporation (the “Company”), GreenBank, a
Tennessee state-chartered bank and wholly owned subsidiary of the Company (the “Bank”) and Xxxxx X.
Xxxxx (“Consultant”). Except as set forth in Section 1, this Agreement shall be effective as of
May 17, 2011 (the “Effective Date”).
WITNESSETH:
WHEREAS, Consultant serves as the Company’s and the Bank’s Executive Vice President, Chief
Financial Officer and Secretary;
WHEREAS, Consultant has notified the Company that he intends to retire from his positions as
the Company’s and the Bank’s Executive Vice President, Chief Financial Officer and Secretary
effective May 16, 2011;
WHEREAS, the Company intends to hire a new Chief Financial Officer to replace Consultant;
WHEREAS, in order to facilitate the transition related to the hiring of a new Chief Financial
Officer, the Company wishes to obtain the future consulting services of Consultant; and
WHEREAS, Consultant is willing, upon the terms and conditions herein set forth, to provide
such services to the Company.
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the Company and Consultant hereby agree as follows:
Section 1. Agreement to Serve as Consultant. So long as Consultant is no longer an
employee of the Company or the Bank as of the Effective Date, the Company engages Consultant and
Consultant agrees to serve as a consultant to the Company and the Bank beginning on the Effective
Date and provide consultation and advice in accordance with the terms and conditions of this
Agreement.
Section 2. Term. The term of this Agreement shall commence on the Effective Date and
shall continue for a term of six (6) months thereafter unless earlier terminated pursuant to the
provisions of Section 4 hereof (the “Term”).
Section 3. Services; Extent of Services.
(a) Consultant is hereby engaged to provide consultation and advice to the Company’s and the
Bank’s Chief Financial Officer, Chief Executive Officer and other members of senior management, as
well as each of the Company’s and the Bank’s Board of Directors. Consultant agrees to perform such
services as the Company or the Bank may reasonably request for a total of up to eighty (80) hours
per month. At all times, Consultant shall perform the services consistent with policies and
practices established from time to time by the Boards of Directors of the Company and the Bank.
1
(b) During the Term, Consultant shall perform the services faithfully and to the best of his
ability. Consultant shall be reasonably available using such time, energy and skill as may be
reasonably necessary for the performance of his duties, responsibilities and obligations hereunder,
consistent with past practices and norms in similar positions.
Section 4. Termination of Engagement. Consultant’s engagement by the Company and the
Bank shall immediately terminate if the Company or the Bank elects to terminate this Agreement for
Cause. For purposes hereof, “Cause” shall mean (i) an act of fraud, misappropriation, embezzlement
or dishonesty with respect to the Company or the Bank by Consultant; (ii) the conviction of, or
plea of guilt or no contest to, any felony by Consultant; (iii) gross negligence or intentional
misconduct by Consultant in the performance of his duties that is not promptly remedied upon
receipt of notice thereof from the Company or the Bank; (iv) the disregard by Consultant of any
lawful policy established by the Boards of Directors of the Company or the Bank or any other person
to whom Consultant reports that is not promptly remedied upon receipt of notice thereof from the
Company or the Bank; or (v) any breach by Consultant of any other provision of this Agreement that
is not promptly remedied upon receipt of notice thereof from the Company or the Bank. Upon a
termination of this Agreement for Cause pursuant to this Section 4, Consultant shall be entitled to
all accrued compensation through the date of termination with no further payment obligation
hereunder on the part of the Company or the Bank.
Section 5. Compensation and Expenses. In consideration of the Services, the Company
shall pay Consultant during the Term a fee equal to $10,000.00 per month payable on the first day
of each month during the Term (provided that the fee payable on May 17, 2011 for the consulting
services performed from the Effective Date through May 31, 2011 shall be $5,000.00). Upon receipt
of itemized vouchers, expense account reports and supporting documents submitted to the Bank in
accordance with the Bank’s policies and procedures then in effect, the Bank shall reimburse
Consultant for all reasonable and necessary business expenses incurred ordinarily and necessarily
by Consultant in connection with the performance of Consultant’s duties hereunder.
Section 6. Taxes. Consultant shall have the entire responsibility to
discharge any and all of his (and not the Company’s or the Bank’s) obligations under federal, state
or local laws, regulations or orders now or hereafter in effect, relating to taxes, unemployment
compensation or insurance, social security, workers’ compensation, disability pensions and tax
withholdings (the “Tax Obligations”). Consultant hereby agrees to indemnify and hold each of the
Company and the Bank harmless for any and all claims, losses, costs, fees, liabilities, damages or
injuries suffered by the Company arising out of Consultant’s failure to properly discharge the Tax
Obligations.
Section 7. Relationship of Parties. It is the express intention of the parties that
the relationship of Consultant to the Company and the Bank, for so long as Consultant is providing
services under this Agreement, shall be, from and after the Effective Date, that of independent
contractor, and nothing in this Agreement is intended or shall be construed to create, from and
after the Effective Date, a relationship of employer and employee, principal and agent or master
and servant between the Company and the Bank and Consultant. Consultant has no authority to act
for or on behalf of the Company or the Bank or to enter into any obligations, contracts or
commitments on behalf of the Company or the Bank.
Section 8. Indemnity. Consultant hereby agrees to defend, indemnify, protect, and
hold harmless the Company and the Bank and their shareholders, directors, employees, and agents
from
2
any and all claims, losses, demands, suits, or actions arising out of or incidental to the services
provided pursuant to this Agreement, including any liability or claim for taxes payable by or on
behalf of Consultant.
Section 9. Remedies. Consultant acknowledges and agrees that a breach by him of any
provision of this Agreement cannot be reasonably or adequately compensated in damages in an action
at law, and that the Company and the Bank shall each be entitled to seek injunctive relief and any
other remedies that may be available at law or in equity, all of which remedies shall be cumulative
and in addition to any rights and remedies available by contract, law, rule, regulation, or order.
Section 10. Intellectual Property. All right, title and interest of every kind and
nature whatsoever in and to any intellectual property, including any inventions, patents,
trademarks, copyrights, ideas, creations, and properties furnished to the Bank or the Company
during the Term, and/or used in connection with any of the Bank’s or the Company’s activities, or
written or created by the Consultant, or with which the Consultant is connected in the performance
of his services hereunder, shall as between the parties hereto be, become, and remain the sole and
exclusive property of the Bank or the Company, as the case may be, for any and all purposes and
uses whatsoever, regardless of whether the same were invented, created, written, developed,
furnished, produced, or disclosed by the Consultant or any other party, and the Consultant shall
have no right, title or interest of any kind or nature therein or thereto, or in and to any results
and proceeds therefrom. The Consultant agrees, during the Term hereof, to execute any and all
documents and agreements which the Bank or the Company may deem necessary and appropriate to
effectuate the provisions of this Section 10.
Section 11. Privacy Compliance.
(a) Definitions. As used in this Agreement:
(i) “Customer Information” means nonpublic personal information about any
individual (or that individual’s legal representative) who obtains or seeks to
obtain a financial product or service from you when (1) the financial product or
service is to be used primarily for personal, family or household purposes and (2)
the information about the information is protected by Privacy Laws.
(ii) “Privacy Laws” refers collectively to the various federal and state laws
and regulations governing the privacy of Customer Information, as the same may be
amended from time to time. The Privacy Laws include, but are not limited to, Title V
of the Xxxxx-Xxxxx-Xxxxxx Act of 1999 (Public Law 106-102, 113 Stat. 1338) and its
implementing regulations, and any applicable implementing guidelines.
(b) Confidentiality Obligations. Except as provided in (c) below, Consultant
will:
(i) Limit access to Customer Information to the Bank’s or the Company’s
partners, officers, directors, employees, and agents who have a need to know such
information to carry out the purposes for which the information was disclosed or
3
made available and who have an obligation to maintain the confidentiality of
the information;
(ii) Safeguard and maintain the confidentiality of Customer Information and not
directly or indirectly disclose the same to any other person or entity in violation
of or in any manner inconsistent with applicable Privacy Laws or any other standards
that govern the Bank or the Company and also immediately notify the Bank or the
Company of any such direct or indirect disclosure; and
(iii) Not use Customer Information in violation of or in any manner
inconsistent with applicable Privacy Laws or any other standards that govern the
Bank or the Company.
(c) Exceptions. Provided the disclosure of Customer Information is permitted
under any other standards that govern the Bank or the Company, the Consultant will
not be in violation of this Agreement for disclosing Customer Information when:
(i) The Consultant discloses the information with the Bank’s consent or
pursuant to (1) a subpoena or court order, (2) a federal or state law or regulation,
or (3) the rules or regulations of a governmental agency; or
(ii) The disclosure is (1) reasonably necessary and appropriate to carry out
the purposes for which the Customer Information was provided or made available to
the Consultant, (2) made in the ordinary course of business and, (3) required or
permitted under applicable Privacy Laws.
(d) Security Measures. The Consultant has implemented or will implement
appropriate measures designed to ensure the security and confidentiality of Customer
Information, protect against any anticipated threats or hazards to the security or
integrity of Customer Information, and protect against unauthorized access to or use
of Customer Information that could result in substantial harm or inconvenience to
any of the Bank’s customers. Where indicated by the Bank’s risk assessment, the Bank
may monitor the Consultant to confirm that the Consultant has satisfied the
Consultant’s obligations under this Agreement.
(e) Remedies. The Consultant acknowledges that the Bank has the right to
take all reasonable steps to protect the Customer Information of the Bank or the
Company, including, but not limited to, seeking injunctive relief and any other
remedies that may be available at law or in equity, all of which remedies shall be
cumulative and in addition to any rights and remedies available by contract, law,
rule, regulation, or order.
Section 12. Confidentiality; Non-Competition; Non-Solicitation.
(a) Consultant recognizes and acknowledges that he has had, and may continue to
have, access to certain information of Company and the Bank that is confidential
4
and constitutes valuable, special and unique property of Company. Consultant shall
not at any time, either during or subsequent to the term of this Agreement, disclose
to others, use, copy or permit to be copied, except as directed by law or in
pursuance of Consultants’ duties for or on behalf of Company, its successors,
assigns or nominees, any Confidential Information of Company (regardless of whether
developed by Consultant), without the prior written consent of the Company. The
term “Confidential Information” means any Company secret or confidential information
or know-how and shall include, but shall not be limited to, the plans; customers;
customer specific information; customer specific loan pricing, loan needs, and
maturity dates; costs, prices, rates, uses, and applications of products and
services; customer specific deposit information; results of investigations; studies
owned or used by such person; and all products, processes, compositions, computer
programs, and servicing, marketing or operational methods and techniques at any time
used, developed, investigated, made or sold by such person, before or during the
term of this Agreement, that are not readily available in the banking industry.
(b) For and in consideration of the payments that the Company and the Bank have each
agreed to make to Consultant under the terms of this Agreement, Consultant agrees
that he will not, during the Term, directly or indirectly engage in the business of
banking, or any other business in which Company directly or indirectly engages
during the Term, in any county of any state in which the Company has an office or
branch at the Effective Date. For purposes of this Section 12(b), Consultant shall
be deemed to engage in a business if he directly or indirectly, engages or invests
in, owns, manages, operates, controls or participates in the ownership, management,
operation or control of, is employed by, associated or in any manner connected with,
or renders services or advice to, any business engaged in banking or financial
services; provided, however, that Consultant may invest in the securities of any
enterprise (but without otherwise participating in the activities of such
enterprise) if the following two conditions are met: (A) such securities are listed
on any national or regional securities exchange or have been registered under
Section 12(g) of the Securities Exchange Act of 1934; and (B) Consultant does not
beneficially own as defined in Rule 13d-3 promulgated under the Securities Exchange
Act of 1934 in excess of 1% of the outstanding capital stock of such enterprise.
| (c) | Consultant hereby agrees that, during the Term, he will not, without the Company’s prior written consent, directly or indirectly, (i) induce, attempt to induce or encourage any person employed with the Company or any of its subsidiaries to leave the employ of the Company or such subsidiary or in any way interfere with the relationship between the Company or such subsidiary and such persons, or (ii) solicit for employment or hire any person who is or has been employed with the Company or any of its subsidiaries, unless such person has ceased to be an employee of the Company or any of its subsidiaries for at least six months (other than as a result of a breach of this Section 12(c)); provided, however, that this prohibition shall not apply to solicitations made to the public or the industry generally through advertising or electronic listing which are not targeted at employees of the Company or any subsidiary, or the subsequent employment of any person (other than any of the Company’s executive officers) as a result of such permitted solicitations. |
5
Section 13. No Conflicting Obligations. Consultant certifies that Consultant has no
outstanding agreement or obligation that is in conflict with any of the provisions of this
Agreement, or that would preclude Consultant from complying with the provisions hereof, and further
certifies that Consultant will not enter into any such conflicting agreement during the term of
this Agreement.
Section 14. Assignment. This Agreement may not be assigned by any party hereto without
the prior written consent of the non-assigning party; provided that the Company and the Bank may
each assign this Agreement without the consent of Consultant to any affiliate thereof.
Section 15. Waiver. Any party’s failure to enforce any provision(s) of this Agreement
shall not in any way be construed as a waiver of any such provision(s), or to prevent that party
thereafter from enforcing each and every other provision of this Agreement.
Section 16. Severability. The invalidity or unenforceability of any provision of this
Agreement shall in no way effect the validity or enforceability of any other provision.
Furthermore, to the extent this Agreement is inconsistent with federal or state law, this Agreement
shall be deemed amended to the extent necessary to make it consistent and in compliance with such
laws.
Section 17. Entire Agreement. The terms and conditions of this Agreement supersede
any previous oral or written agreement with respect to Consultant’s engagement by the Company and
the Bank and may be altered only by another written agreement, signed by the parties hereto. This
Agreement sets forth the entire understanding of the parties with respect to the subject matter
hereof, and no representation, warranty, promise or agreement whatsoever not expressly contained
herein has been made to Consultant by the Company or the Bank or any representative, consultant or
agent of the Company or the Bank.
Section 18. Attorneys’ Fees. The parties agree that in the event it becomes necessary
to seek judicial remedies for the breach or threatened breach of this Agreement, any prevailing
party shall be entitled, in addition to all other remedies, to recover from any non-prevailing
party all costs of such judicial action, including but not limited to, reasonable attorneys’ fees
and costs and paralegals’ fees, together with all sales taxes thereon, and also including all such
expenses related to any appeal.
Section 19. Notices. All notices, offers, requests, demands, and other communications
pursuant to this Agreement shall be given in writing by personal delivery, by prepaid first class
registered or certified mail properly addressed with appropriate postage paid thereon, or by
overnight delivery service, and shall be deemed to be duly given and received on the date of
delivery if delivered personally, on the second day after the deposit in the United States Mail if
mailed, or on the first day after delivery to an overnight delivery service if delivered by
overnight delivery service to the following addresses:
If to the Company or the Bank:
|
Green Bankshares, Inc. | |
| 000 Xxxxx Xxxx Xxxxxx | ||
| Xxxxxxxxxxx, XX 00000 | ||
| Attn: Xxxxxxx Xxxxx |
6
with a copy to:
|
Bass, Xxxxx & Xxxx PLC | |
| 000 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000 | ||
| Xxxxxxxxx, XX 00000 | ||
| Attention: D. Xxxxx Xxxxxx, Esq. | ||
If to Consultant:
|
Xxxxx X. Xxxxx | |
| 000 Xxxxxxxxxx Xxxxx | ||
| Xxxxxxxxxxx, XX 00000 |
or to such other addresses as the parties shall from time to time designate by like notice.
Section 20. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Tennessee, without applying the conflict of laws rules of
such state. In addition, the parties consent to the jurisdiction of the State of Tennessee for any
lawsuit arising under this Agreement. The parties also agree that the venue for any lawsuit arising
under this Agreement shall be in Xxxxxx County, Tennessee.
Section 21. Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their permitted successors and assigns.
Section 22. Further Assurances. Each party hereto shall perform such further acts and
execute and deliver such further documents as may be reasonably necessary to carry out the
provisions of this Agreement.
Section 23. Survival. The provisions of Sections 6, 8, 10, 11, 12, 17, 19 and 22
hereof shall survive termination for any reason or expiration of this Agreement for the period
described or referenced in each such Section or, if no period is described or referenced in such
Section, indefinitely.
[Signatures on next page]
7
IN WITNESS WHEREOF, the undersigned parties have caused this Consulting Agreement to be
executed by themselves or by their duly authorized representatives as of the day and date first
written above.
|
Dated: March 18, 2011 |
GREEN BANKSHARES, INC. |
|||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
| GREENBANK |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Chairman and Chief Executive Officer | |||
| /s/ Xxxxx X. Xxxxx | ||||
| Xxxxx X. Xxxxx | ||||
8
