Acknowledgement Agreement
Exhibit
10.7
I, Xxxxx
X. Xxxxxx (“Executive”), am a party to an employment agreement with Guaranty
Bank & Trust Co. (“Guaranty Bank”) dated as of December 31, 2003 (the
“Employment Agreement”). Guaranty Financial Services, Inc. (“Guaranty
Financial”), the holding company of Guaranty Bank, has entered into a merger
agreement with First Sentry Bancshares, Inc. (“First Sentry Bancshares”) dated
as of August 22, 2008 (the “Merger Agreement”), pursuant to which Guaranty
Financial will be merged into First Sentry Bancshares, and thereafter the
separate corporate existence of Guaranty Financial will cease. Under
Section 4(e) of the Employment Agreement, following a change in control of
Guaranty Financial or Guaranty Bank, I am entitled to receive a continuation of
salary and benefits for the longer of the remaining term of the Employment
Agreement, or 3 years, provided, however, that pursuant to Section 7.8.2 of the
Merger Agreement, such amount is subject to reduction in order to avoid an
excess parachute payment under Section 280G of the Internal Revenue
Code. Notwithstanding the previous sentence, no reduction shall be
made pursuant to Section 7.8.2 of the Merger Agreement to the extent that the
shareholder approval requirements of Treasury Regulation Section 1.280G-1,
Q&A: 7, are satisfied with respect to such payments. The
consummation of the transactions contemplated by the Merger Agreement shall be a
change in control for purposes of Section 4(e) of the Employment
Agreement. Set forth below is the understanding among Executive,
Guaranty Financial, Guaranty Bank, First Sentry Bancshares, and First Sentry
Bank with respect to the settlement of the Employment Agreement pursuant to
Section 7.8.2 of the Merger Agreement and the remaining obligations of the
parties thereto. Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Merger Agreement
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1.
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Pursuant
to Section 4(e) of the Employment Agreement and Section 7.8.2 of the
Merger Agreement, I understand that the Employment Agreement shall be
terminated, effective as of the Effective Time, and a lump sum cash
severance payment (the “Payment”) of approximately $312,564 (subject to
applicable withholding) shall be distributed to me in a single lump sum
payment at the Effective Time. Notwithstanding the foregoing, I
hereby acknowledge and agree that, if the shareholder approval
requirements of Treasury Regulation Section 1.280G-1, Q&A:
7, are not satisfied with respect to the Payment, it shall be reduced by
the minimum amount necessary in order to avoid an excess parachute payment
under Section 280G of the Internal Revenue Code, and that no other amounts
or benefits shall be payable to me under the Employment
Agreement.
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2.
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This
Acknowledgement Agreement shall not affect the obligations of Executive
under Section 6 of the Employment Agreement relating to his covenant not
to compete with Guaranty Financial, Guaranty Bank or First Sentry
Bancshares and First Sentry Bank as their successors, which provisions
shall survive the termination of the Employment Agreement for a period of
three (3) years following the Effective Time of the
Merger.
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3.
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Upon
payment in full of the amounts set forth in Section 1 hereof, Executive,
for himself and for his heirs, successors and assigns, does hereby release
completely and forever discharge Guaranty Financial, Guaranty Bank, First
Sentry Bancshares and First Sentry Bank, and their affiliates, directors,
officers, successors and assigns, from any further obligation under the
Employment Agreement.
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[signature
page follows]
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EXECUTIVE
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DATE
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/s/
Xxxxx
X. Xxxxxx
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August 22,
2008
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Xxxxx
X. Xxxxxx
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GUARANTY
FINANCIAL SERVICES, INC.
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DATE
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/s/
Xxxx X. Xxxxxxx
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August 22,
2008
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By:
Xxxx
X. Xxxxxxx
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Its:
President and CEO
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GUARANTY
BANK
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DATE
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/s/
Xxxx X. Xxxxxxx
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August 22,
2008
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By:
Xxxx
X. Xxxxxxx
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Its:
President and CEO
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DATE
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/s/
Xxxxxxxx X. Xxxxxx
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August 19,
2008
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By:
Xxxxxxxx X. Xxxxxx
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Its:
President and CEO
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FIRST
SENTRY BANK
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DATE
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/s/
Xxxxxxxx X. Xxxxxx
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August 19,
2008
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By:
Xxxxxxxx X. Xxxxxx
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Its:
President and CEO
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