CONSULTING AGREEMENT
EXHIBIT
10.11
This
Agreement (this “Agreement”) is entered into as of the ____day of _______, 2006,
by and between Solera National Bancorp, Inc. f/k/a Patria
Corporation,
Solera
National Bank,
corporations organized under the laws of the State of Delaware (the “Company”),
and Xxxx X. Xxxxxxxx, an adult individual residing in the State of Colorado
(the
“Consultant”).
The
parties hereto agree as follows:
1. Engagement.
The
Company hereby engages the Consultant and the Consultant hereby agrees to
render, at the request of the Company, independent advisory and consulting
services for the Company in connection with the organization of a proposed
bank
(the “Bank”), upon the terms and conditions hereinafter set forth.
2. Term.
The
term
of this Agreement shall begin the earlier of (i) the date that the Consultant
is
terminated by U.S. Bank, the consultant’s current employer, as a result of the
Consultant’s proposed employment as the Chief Executive Officer of the Bank, or
(ii) the date that the Office of the Comptroller of the Currency grants
preliminary conditional approval for the Bank (currently anticipated on or
about
November 1st,
2006)
and shall terminate on the earlier of (i) April 1, 2007; (ii) the date on which
the Bank receives (and satisfies all conditions to opening for business under)
its authorization to commence its banking business (the “Certificate of
Authority”) from the Office of the Comptroller of the Currency and approval of
Insurance of Accounts from the Federal Deposit Insurance Corporation; (iii)
the
date on which the Company advises the Consultant that it has abandoned its
effort to obtain the Certificate of Authority; (iv) the date on which the
Consultant receives written notice from the Company that it is terminating
this
Agreement “for cause” as hereafter defined; or (v) the death or disability of
the Consultant (as used herein, the disability of the Consultant shall be deemed
to have occurred when he has been unable to perform his services under this
Agreement for a period of forty-five (45) consecutive days or the Consultant
has
made any claim under any disability insurance policy.) As used herein, “for
cause” shall be defined as follows: (i) the Consultant’s failure to use diligent
and good faith efforts to perform the services requested by the Company under
this Agreement (which failure is not cured within five (5) days following
written notice to the Consultant); (ii) the Consultant’s willful misconduct or
gross negligence in the performance of his services hereunder; (iii) the
Consultant’s conviction of a crime or involvement in any conduct which could, in
the judgment of the Company, adversely impact on the reputation of the Company
or the Bank or the prospects of the Bank receiving its Certificate of Authority;
(iv) receipt by the Company of any notification from the Office of the
Comptroller of the Currency or the Federal Deposit Insurance Corporation
indicating that the Consultant would not be an acceptable candidate to be Chief
Executive Officer (CEO) of the Bank.
3. Compensation.
During
the term of this Agreement, as compensation for all services rendered by the
Consultant under this Agreement, the Company shall pay the Consultant the
following amounts:
(a) Consulting
Fee.
The
Company shall pay the consultant the sum of twenty thousand two hundred fifty
dollars ($20,250.00) per month (prorated for any partial month), which shall
be
paid in arrears in two installments of ten thousand one hundred twenty-five
dollars ($10,125.00) each on the 15th
and
30th
day of
each calendar month.
(b) Deductions.
All such
compensation shall be payable without deduction for federal income, social
security, or state income taxes or any other amounts.
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(c) Termination
Payment. If,
for
any reason, other than a termination by the Company for Cause, the Company
terminates this Agreement during its term and without the Employment Agreement
referenced in Paragraph 10 of this Agreement becoming effective, Consultant
will
be entitled to receive a lump sum payment, payable on the date of termination,
of not less than the greater of (i) one-half of the fees which would have been
payable for the remaining term of this Agreement from the date of termination
or
(ii) $70,000.
4. Duties.
The
Consultant shall render services conscientiously and shall devote his full
time,
attention, efforts and abilities to the establishment of the Bank, including
without limitation obtaining regulatory approvals, site development activities,
personnel matters and capital raising activities, at such times during the
term
hereof and in such manner as reasonably requested by the Company, and performed
at such places and at such times as are reasonably convenient to the Company
and
the Consultant. The Consultant shall observe all policies and directives
promulgated from time to time by the Company’s Board of Directors.
5. Expenses.
The
Company shall reimburse the Consultant up to $2,000 per month during the term
of
this agreement, for temporary housing expenses incurred during the Consultant’s
relocation period, subject to presentation of supporting documentation and
not
to exceed $10,000. Additionally, the Consultant shall be reimbursed by the
Company for all reasonable business expenses which were incurred by the
Consultant during the performance of his services hereunder; provided, any
such
reimbursement in excess of $250 in any month shall require the prior written
approval of the Company’s Board of Directors or a committee thereof; provided
however that any expenses set forth in the organizational budget shall be deemed
to be approved unless the Company’s Board of Directors makes an express
determination to the contrary prior to the time at which the expense is
incurred. The Company’s obligation to reimburse the Consultant pursuant to this
paragraph shall be subject to the presentation to the Company’s Board of
Directors or a committee thereof by the Consultant of an itemized account of
such expenditures, together with supporting vouchers, in accordance with any
policies of the Company in effect from time to time.
6. Independent
Contractor.
It is
expressly agreed that Consultant is acting as an independent contractor in
performing services hereunder. The Company shall carry no worker’s compensation
insurance or any health or accident insurance to cover Consultant. The Company
shall not pay any contributions to Social Security, unemployment insurance,
federal or state withholding taxes, nor provide any other contributions or
benefits which might be expected in an employer-employer
relationship.
7. Covenant
Not to Compete.
The
Consultant hereby acknowledges and recognizes the highly competitive nature
of
the Company’s business and accordingly agrees that, during the term of this
Agreement, the Consultant will not, except as provided in Paragraph 4 hereof,
directly or indirectly:
(a) engage
in
any business activity related to the business of banking or financial services,
or the formation of any entity for the purpose of engaging in such a business
(other than on behalf of the Company to the extent that the Consultant is then
in the employ of or consulting for the Company), whether such engagement is
as
an officer, director, proprietor, employee, partner, member, investor (other
than as a passive investor in less than one percent (1%) of the outstanding
capital stock of a publicly traded corporation), consultant, advisor, agent
or
other participant in another business,
(b) assist
others in engaging in any of the business activities prohibited to the
Consultant under clause (a) above, or
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(c) induce
employees of the Company to engage in any activities hereby prohibited to the
Consultant or to terminate their employment.
(d)
In
the event that this Agreement is terminated under the provisions of Section
2,
above, this Covenant Not to Complete shall become null and void.
8. No
Disclosure of Confidential Information.
The
Consultant acknowledges that the Company’s trade secrets and private processes,
as they may exist from time to time, and confidential information concerning
the
formation and development of the Bank, the Bank’s planned products, technical
information regarding the Bank, and data concerning potential customers of
and
investors in the Bank are valuable, special, and unique assets of the Company,
access to and knowledge of which are essential to the performance of the
Consultant’s duties under this Agreement. In light of the highly competitive
nature of the industry in which the business of the Company is conducted, the
Consultant further agrees that all knowledge and information described in the
preceding sentence not in the public domain and heretofore or in the future
obtained by the Consultant as a result of his engagement by the Company shall
be
considered confidential information. In recognition of this fact, the Consultant
agrees that the Consultant will not, during or after the term of this Agreement,
disclose any of such secrets, processes, or information to any person or other
entity for any reason or purpose whatsoever, except as necessary in the
performance of the Consultant’s duties as a consultant to the Company and then
only upon a written confidentiality agreement in such form and content as
requested by the Company from time to time, nor shall Consultant make use of
any
of such secrets, processes or information for Consultant’s own purposes or for
the benefit of any person or other entity (except the Company and its
subsidiaries, if any) under any circumstances during or after the term of this
Agreement.
9. Remedies.
The
Consultant acknowledges and agrees that the Company’s remedy at law for a breach
or threatened breach of any of the provisions of Paragraphs 7 and 8 of this
Agreement would be inadequate. In recognition thereof, if the Consultant
breaches or threatens to breach any provision of Paragraphs 7 and 8 of this
Agreement, the Company shall be entitled to equitable relief in the form of
specific performance, a temporary restraining order, a temporary or permanent
injunction or any other equitable remedy which may then be available in addition
to any of its remedies at law. Nothing herein shall prohibit the Company from
pursuing any other right or remedy available to it for such breach or threatened
breach.
10. Employment
Agreement.
It
is
anticipated that the Consultant and the Bank will enter into an Employment
Agreement having a term of not less than three years in form satisfactory to
each of the Consultant and the Bank in their reasonable discretion, subject
to
the approval of such form by the Bank’s primary regulators and modifications to
such form as may be required by the regulators, which Employment Agreement
shall
be effective as of the date on which the Office of the Comptroller of the
Currency issues the Certificate of Authority to the Bank and the Federal Deposit
Insurance Corporation issues approval for Insurance of Accounts.
11. Assignment.
This
Agreement is a personal one, being entered into in reliance upon and in
consideration of the personal skill and qualifications of Consultant. Consultant
shall therefore not voluntarily or by operation of law assign or otherwise
transfer the obligations incurred on its part pursuant to the terms of this
Agreement without the prior written consent of Company. Any attempted assignment
or transfer by Consultant of its obligations without such consent shall be
wholly void.
12. Modification
of Agreement.
This
Agreement may be modified by the parties hereto only by a written supplemental
agreement executed by both parties.
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13. Notice.
Any
notice required or permitted to be given hereunder shall be sufficient if in
writing, and if sent by any nationally recognized courier service providing
for
receipt of delivery, registered or certified mail, postage prepaid, or by fax
followed by such mail, addressed as follows:
If
to
Company:
Xxxxx
Xxxxxx
Chairman,
Solera National Bancorp, Inc.
0000
X.
Xxxxxxx Xxx., Xxxxx X
Xxxxxxxx,
XX 00000
If
to
Consultant:
Xxxx
X.
Xxxxxxxx
P.O.
Box
8357
Xxxx,
XX
00000
or
to
such other address as the parties hereto may specify, in writing, from time
to
time.
14. Mediation
and Arbitration.
The
parties agree to mediate, in good faith, any claim arising hereunder and to
refrain from pursuing arbitration hereunder until the parties have met with
a
mediator. The parties agree to select and mediate any claim or controversy
within sixty (60) days of the date the claim or controversy accrues or
first arises. The mediator shall be selected by the Company with the
Consultant’s consent, which may not be unreasonably withheld. The mediator shall
be licensed to practice law in the State of Colorado and be experienced in
the
arbitration of labor and employment disputes.
The
parties acknowledge and agree that any claim or controversy arising out of
or
relating to this Agreement, or the breach of this Agreement, or any other
dispute arising out of or relating to the consulting relationship, shall be
settled by final and binding arbitration in the City of Denver, State of
Colorado, before a private arbitrator selected by the parties. The parties
further acknowledge and agree that either party must request arbitration of
any
claim or controversy within one hundred twenty (120) days of the date the
claim or controversy accrues or first arises by giving written notice of the
party’s request for arbitration by certified U.S. mail or personal delivery.
Notice shall be effective upon delivery or mailing. Failure to give notice
of
any claim or controversy within one hundred twenty (120) days shall
constitute a waiver of the claim or controversy.
All
claims or controversies subject to arbitration shall be submitted to arbitration
within one hundred eighty (180) days from the date the written notice of a
request for arbitration is effective. All claims or controversies shall be
resolved by a single private arbitrator who is licensed to practice law in
the
State of Colorado and experienced in the arbitration of labor and employment
disputes. Either party may request that the arbitration proceeding be
stenographically or otherwise recorded by a Certified Shorthand Reporter. The
arbitrators shall issue a written decision with respect to all claims or
controversies within thirty (30) days from the date the claims or
controversies are submitted to arbitration. The parties shall be entitled to
be
represented by legal counsel at any arbitration proceeding. The parties
acknowledge and agree that each party will bear fifty percent (50%) of the
cost of the arbitration proceeding. The parties shall be responsible for paying
their own attorneys’ fees and other costs, if any.
The
parties acknowledge and agree that the arbitration provisions set forth herein
may be specifically enforced by either party, and submission to arbitration
proceedings compelled, by any court
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of
competent jurisdiction. The parties further acknowledge and agree that the
decision of the arbitrators may be specifically enforced by either party in
any
court of competent jurisdiction.
15. Waiver
of Breach.
The
waiver by either party of any breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach.
16. Entire
Agreement.
This
Agreement contains the entire agreement of the parties relating to the subject
matter of this Agreement, and supersedes any prior written or oral arrangements
with respect to the Consultant’s engagement by the Company.
17. Successors,
Binding Agreement.
Subject
to the restrictions on assignment contained herein, this Agreement shall inure
to the benefit (including all rights to receive compensation earned hereunder
prior to death or disability) of and be enforceable by the Consultant’s personal
or legal representatives, executors, administrators, heirs, distributees,
devisees, and legatees.
18. 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.
19. Applicable
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Colorado.
20. Headings.
The
headings of the paragraphs 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.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first set forth above.
Xxxx
X.
Xxxxxxxx
By:______________________________________
Xxxxx
X.
Xxxxxx, Chairman
SOLERA
NATIONAL BANK
By:_______________________________________
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