FORM OF CONSULTING AGREEMENT
EXHIBIT
10.12
FORM
OF CONSULTING AGREEMENT
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 Xxxxxxxx X. Xxxxxxxxxx (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 Senior Vice President 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; and (ii) 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 twenty
(20) 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
$13,500 (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:
| (i) | committed a material act of dishonesty in performing his duties on behalf of the Bank; | |
| (ii) |
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) |
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) | committed a breach of fiduciary duty involving personal profit; | |
| (v) | intentionally failed to perform stated duties under the Agreement; and | |
| (vi) |
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.
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
22, 2008.
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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.
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.
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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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FIRST
SENTRY BANK
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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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Xxxxxxxx
X. Xxxxxxxxxx
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