FORM OF CONSULTING AGREEMENT
EXHIBIT
10.11
This
Consulting Agreement (“Agreement”) is made and entered into as of the
______ day of ________________, 200___ by and between First Sentry Bank
(the “Bank”), a West Virginia chartered bank that is the wholly-owned subsidiary
of First Sentry Bancshares, Inc. (“First Sentry Bancshares”), a West
Virginia corporation and bank holding company, and Xxxx X. Xxxxxxx (the
“Consultant”), and is effective as of the effective time of the
Merger (as defined below) (the “Effective Time”).
WHEREAS, First Sentry
Bancshares and Guaranty Financial Services, Inc. (“Guaranty Financial”), a West
Virginia corporation, entered into an Agreement and Plan of Merger dated August
22, 2008 (“Merger Agreement”), wherein Guaranty Financial will merge
into First Sentry Bancshares (the “Merger”); and
WHEREAS, the Consultant is the
President and Chief Executive Officer of Guaranty Financial and
Guaranty Bank & Trust Company (“Guaranty Bank”), the wholly-owned subsidiary
of Guaranty Financial; and
WHEREAS, the Bank desires to
assure itself of the continued availability of the Consultant’s services as
provided in this Agreement; and
WHEREAS, the Consultant is
willing to serve the Bank on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in
consideration of the mutual agreements herein contained, and upon the other
terms and conditions hereinafter provided, the parties hereby agree as
follows:
Section 1. Consultant
Relationship.
The Bank
hereby engages the Consultant and the Consultant hereby agrees to serve the Bank
under the terms and conditions set forth in this Agreement.
Section 2. Duties.
Subject to the terms and conditions set
forth below, the Consultant shall, upon the request of the Bank, advise with
respect to: (i) assisting the Bank in connection with any personnel and business
integration issues which may arise in connection with the Merger; (ii) assisting
the Bank in the evaluation of business opportunities available to it in the
market area formerly served by Guaranty Financial and Guaranty Bank; (iii)
assisting the Bank in establishing and fostering a positive relationship with
the customers and communities previously served by Guaranty Financial and
Guaranty Bank prior to the Merger; (iv) strategies for developing and
implementing new banking products and services; and (v) such other
banking-related services or advice as the Bank may reasonably request
(collectively, the “Consulting Services”), as reasonably requested by the
President and Chief Executive Officer of the Bank. The Consultant
agrees to be available for up to forty (40) hours per week, at the request of
the President and Chief Executive Officer of the Bank. The Consultant
shall provide such Consulting Services at the Consultant’s residence, the Bank’s
main office in West Virginia, or at such other locations as the Bank and the
Consultant mutually agree. The Consultant is not hereby being granted
nor will the Consultant have any authority, apparent or otherwise, to bind or
commit the Bank in any manner.
Section 3. Term of
the Agreement.
This
Agreement shall commence on the Effective Time and shall terminate two years
from the Effective Time (the “Term”), unless earlier terminated in accordance
with the terms set forth below.
Section
4. Consulting Fee and
Expenses
(a) During the Term of this
Agreement, in consideration of the Consulting Services to be provided hereunder,
the Bank shall pay the Consultant a fixed quarterly fee of $37,500 (the
“Consulting Fee”), which shall be paid on the first business day of each quarter
commencing immediately following the Effective Time for a period of two
years.
(b) The Consultant shall pay and be responsible
for all of his home office expenses, postage, printing, insurance, cell phone,
secretarial, travel and similar administrative expenses, and the Consultant
acknowledges that the payment of such expenses by the Consultant was taken into
account in establishing the amount of the Consulting Fee. The
Consultant may request that the Bank reimburse him for any other fees or
expenses, which reimbursement shall require the prior approval of the President
and Chief Executive Officer of the Bank.
(c) The Consultant agrees that
the Bank shall make no deductions from any Consulting Fee paid to Consultant,
and the Consultant shall have full and exclusive liability for the payment of
any federal, state or local taxes and/or contributions for unemployment
insurance, workers' compensation or any other employment-related costs or
obligations, related to his Consulting Services. The Consultant
understands that he will be solely responsible for the payment of any such taxes
and/or contributions and hereby agrees to indemnify the Bank against nonpayment
thereof.
Section
5. Termination
In the
event Consultant voluntarily terminates his Consulting Services under this
Agreement or is terminated by the Bank for Cause (as defined herein) during the
Term, the Bank shall have no further obligations under this Agreement other than
to pay any earned but unpaid compensation. Termination of
Consultant’s Consulting Services or this Agreement by the Bank, other than for
breach of any provision of this Agreement by the Consultant, shall not relieve
the Bank of its obligations to make payments provided for in Section 4 of this
Agreement through the end of the Term. For purposes of this Section
5, “Cause” shall mean that the Consultant:
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(i)
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committed
a material act of dishonesty in performing his duties on behalf of the
Bank;
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(ii)
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committed willful
misconduct that, in the judgment of the Bank, caused
economic damage to the Bank, or injury to the business reputation of the
Bank;
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(iii)
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committed acts of
incompetence (in determining incompetence,
the acts or omissions shall be measured against standards generally
prevailing in the banking
industry);
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(iv)
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committed
a breach of fiduciary duty involving personal
profit;
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(v)
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intentionally
failed to perform stated duties under the Agreement;
and
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(vi)
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willfully violated
any law, rule, regulation (other than traffic violations or similar
offenses) that reflect adversely on the reputation of the Bank, or is
convicted of any felony or any violation
of law involving moral turpitude, or willfully violated a final
cease-and-desist
order.
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Section 6. Relationship
of the Parties
The
parties intend that an independent contractor relationship will be created by
this Agreement. The Consultant shall not be considered as having an
employee status vis-à-vis the Bank, or by virtue of this Agreement
shall not be entitled to participate in any plans, arrangements or distributions
of the Bank pertaining to or in connection with any pension, bonus, welfare
benefits, or similar benefits for regular employees of the Bank. The
Consultant hereby waives his right to participate in such employee benefits in
the event a federal or state court or government agency later reclassifies him
as an employee of the Bank.
Section 7. Confidentiality.
The Consultant recognizes and
acknowledges that the knowledge of the business activities, plans for business
activities, and all other proprietary information of the Bank, as it may exist
from time to time, are valuable, special and unique assets of the business of
the Bank. The Consultant will not, during or after the term of this
Agreement, disclose any knowledge of the past, present, planned or considered
business activities or any other similar proprietary information of the Bank to
any person, firm, corporation, or other entity for any reason or purpose
whatsoever unless expressly authorized by the Bank, or required by
law. Notwithstanding the foregoing, the Consultant may disclose
information that is known generally to the public (other than as a result of
unauthorized disclosure by Consultant or any person with the assistance, consent
or direction of the Consultant) or any information of a type not otherwise
considered confidential by persons engaged in the same business or a business
similar to that conducted by the Bank. Nothing herein shall be
construed as prohibiting the Bank from pursuing any other remedies available to
the Bank for such breach or threatened breach, including the recovery of damages
from the Consultant.
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Section 8. Covenant
Not to Compete.
Consultant shall be subject to the
terms and conditions regarding his covenant not to compete as set forth in his
Acknowledgment Agreement between Consultant, First Sentry Bancshares, the Bank,
Guaranty Financial, and Guaranty Bank, dated August 21, 2008, and as amended
dated June 4, 2009.
Section 9. Reliance.
All payments and benefits to the
Consultant under this Agreement shall be subject to the Consultant’s compliance
with Section 7 and Section 8 of the Agreement. In the event of any
breach of Section 7 and Section 8 of the Agreement by the Consultant, the Bank
will be entitled, in addition to any other remedies and damages available, to an
injunction to restrain the violation hereof by the Consultant and all persons
acting for or with the Consultant. Nothing herein will be construed as
prohibiting the Bank from pursuing any other remedies available to them for such
breach or threatened breach, including the recovery of damages from the
Consultant.
Section 10. Notices.
Except as otherwise provided in this Agreement, any notice required or permitted to be given under this Agreement shall be deemed properly given if in writing and if mailed by registered or certified mail, postage prepaid with return receipt requested, to Consultant’s residence, in the case of notices to Consultant, and to the principal executive offices of the Bank, in the case of notices to the Bank.
Section 11. Waiver.
No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by all parties to the Agreement. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
Section 12. Assignment.
This Agreement shall not be assignable
by any party, except by the Bank to any successor in interest to their
respective businesses.
Section 13. Entire
Agreement.
This
Agreement supersedes any and all agreements, either oral or in writing, between
the parties regarding Consultant’s consulting services and contains all the
covenants and agreements between the parties with respect to the consulting
arrangement.
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Section 14. Validity.
The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force and
effect.
Section 15. Governing
Law.
This Agreement shall be governed by and
construed and enforced in accordance with the domestic, internal laws of the
State of West Virginia, except to the extent that federal law
controls.
Section 16. Headings.
The section headings of this Agreement
are for convenience only and shall not control or affect the meaning or
construction or limit the scope or intent of any of the provisions of this
Agreement.
Section 17. Counterparts.
This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, and all of
which shall constitute one and the same Agreement.
[Signature
Page to Follow]
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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date provided below.
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By:
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Date
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Print
Name:
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Title:
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CONSULTANT
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Date
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Xxxx
X.
Xxxxxxx
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