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Exhibit 10.9
FORM OF CONSULTING AGREEMENT
THIS
CONSULTING AGREEMENT (this “Agreement”), dated as
of the ____ day of __________, 2008, is made by and among
FIRST CLOVER LEAF FINANCIAL CORP., a Maryland corporation
(“Holding Company”), FIRST CLOVER LEAF BANK, FSB,
a federal savings bank (the “Bank”), and BART J.
SOLON, an individual with a principal residence in the State
of Illinois (“Consultant”).
Recitals
A. Holding
Company has entered into that certain Agreement and Plan of
Merger (the “Merger Agreement”), dated April 30,
2008, by and among Holding Company and Partners Financial
Holdings, Inc. (“Partners”) pursuant to which it
is contemplated that Partners will be acquired by Holding
Company. Concurrently, Partners Bank
(“Partners Bank”) will be merged into
Bank.
B. It
is a condition to Partners’ obligations under the Merger
Agreement that Holding Company cause the delivery of this
Agreement to Partners.
C.
Consultant served as President and Chief Executive Officer of
Partners and Partners Bank prior to the Merger.
D. Holding
Company desires to have Consultant’s experience,
expertise, services and advice available to it and the Bank
further desires to retain Consultant’s services to
assist in the transition of ownership and management following
the merger of Partners Bank into Bank by retaining Consultant
as a consultant for the term described in Section 1, subject
to the terms and conditions of this Agreement, and Consultant
desires to serve Holding Company and Bank in such
capacity.
E. As
described in Sections 7 and 8 below, Holding Company desires
that Consultant avoid other business activities that may
create a conflict, or the appearance of a conflict between his
role as a consultant to Holding Company and Bank and such
other activities, and Consultant desires to avoid creating a
conflict or the appearance of such a conflict.
F. Holding
Company and Consultant desire to set forth the terms of their
agreement concerning Consultant consulting services for
Holding Company and Bank and the restrictions of
Consultant.
Agreement
NOW,
THEREFORE, in consideration of the foregoing and of the mutual
promises herein contained the receipt and sufficiency of which
are hereby acknowledged, and as an inducement material for
Holding Company and Partners to engage in the Merger the
parties hereto agree as follows:
1.
Engagement as
Consultant . Subject to the terms and
conditions set forth herein, effective as of the effective
time (“Effective Time”) of the merger of Partners
Bank into Bank, the Bank hereby engages Consultant as a
consultant and advisor of the Bank to assist in the transition
of ownership and management of the Bank following the Merger
and Consultant hereby accepts such engagement as a consultant
and advisor of the Bank. The term of this Agreement
shall commence on the Effective Time and shall continue for a
term of 18 months (the “Consulting
Period”).
2.
Duties of
Consultant .
(a) Consultant’s
duties as a consultant hereunder shall be to furnish to the
Bank, on a regular basis not to exceed 30 hours per week
during regular business hours, subject to the terms hereof,
such advisory and consulting services in connection with the
business of the Bank as may from time to time be requested by
the Chief Executive Officer of the Bank after the Effective
Time. The intent hereof is to make the benefit of
Consultant’s experience, abilities and knowledge
available to the Bank during the Consulting Period in order to
assist the transition of borrowing and depository
relationships of Partners Bank to the Bank.
(b) Consultant
shall make himself available, as an independent contractor, to
render such services on a reasonable basis. The
Parties anticipate that Consultant shall perform
Consultant’s services on site at the Bank’s
facilities. The Bank shall provide reasonable
office space, general office supplies and such reasonable
administrative staff support as requested by
Consultant. During the term of consultancy,
Consultant shall be reimbursed for all reasonable and
necessary expenses incurred by him in discharging his
obligations hereunder, including but not limited to travel and
entertainment expenses and access to any athletic tickets
possessed by the Bank; provided such expenses are timely
submitted and documented, in accordance with the expense
reimbursement policy of the Bank. Any additional or
unusual expenses or materials needed by Consultant in
connection with the performance of services hereunder shall be
provided by the Bank but only if approved in writing in
advance by the Bank.
3.
Independent
Contractor Status . It is hereby
acknowledged and understood that Consultant shall be an
independent contractor. Nothing contained in this Agreement
shall be construed so as to create an employment relationship
between Consultant and Bank. Consultant will not be
eligible for any pension, bonus, vacation pay, sick pay, or
other fringe benefits that Bank may provide to its
employees. All responsibility for the withholding
of funds for social security taxes, federal and state income
taxes, or any other tax with respect to Consultant’s
services hereunder shall be the sole and absolute obligation
of Consultant .
4.
Consulting
Fee . In consideration of the consulting
services to be rendered by Consultant throughout the
Consulting Period, the Bank shall pay to Consultant an annual
rate of $175,000, paid monthly at such times as the Bank shall
determine. By virtue of Consultant’s status
as an independent contractor, all payments hereunder shall be
made without any withholding for federal income tax purposes
and on an annual basis the Bank shall deliver an IRS Form 1099
to Consultant.
5.
Bonus
. In consideration of retention of borrowing and
depository relationships of Partners Bank as well as the
generation of new and additional business for the Bank during
the
Consulting
Period, the Bank shall pay bonuses upon such terms and subject
to meeting such goals as set forth in Appendix A, attached
hereto and made a part hereof by this reference.
6.
Termination for
disability or death .
(a) The
Bank or Consultant may terminate this Agreement after having
established Consultant's Disability. For purposes
of this Agreement, "Disability" means a physical or mental
infirmity that impairs Consultant's ability to substantially
perform his duties under this Agreement and that impairs
Consultant's ability to substantially perform his duties under
this Agreement for a period of ninety (90) consecutive
days). The Board of the Bank shall determine in
good faith, based upon competent medical advice and other
factors that they reasonably believe to be relevant, whether
or not Consultant is and continues to be disabled for purposes
of this Agreement. As a condition to any benefits,
the Board may require Consultant to submit to such physical or
mental evaluations and tests as it deems reasonably
appropriate, at the Bank's expense.
(b) In
the event of such Disability, Consultant's obligation to
perform services under this Agreement will
terminate. In the event of such termination,
Consultant shall receive his Consulting Fee, as defined in
Section 4, at the rate in effect on the Date of Termination
for a period of three (3) months following the Date of
Termination by reason of Disability.
(c) In
the event of Consultant's death during the term of this
Agreement, this Agreement shall terminate.
7.
Covenant of
Confidentiality .
(a) Consultant
acknowledges that, in and as a result of Consultant’s
engagement hereunder, Consultant will be making use of,
acquire knowledge of and/or add to confidential or proprietary
information relating to the Bank and its affiliates,
including, without limitation, the Bank’s lists of
customers and accounts, systems, procedures, policies,
manuals, advertising, marketing plans, marketing strategies,
trade secrets, business plans, financial data, strategies,
methods of conducting business, price lists, formulas,
processes, procedures, standards, know-how, manuals,
techniques, technology, confidential reports, and all other
information, knowledge, or data of any kind or nature relating
to the products, services, or business of the Bank or any
subsidiary, parent or other affiliate of the Bank
(collectively, “Confidential Information”),
provided further that the term Confidential Information in
this Agreement shall be interpreted coextensively with, and
not broader than, the term “trade secret” as
defined in Section 2(d) of the Illinois Trade Secrets Act and
coextensively with the confidential obligations of bank
employees and directors under federal banking
regulations. Consultant covenants and agrees that
Consultant shall not, at any time during or following the term
of Consultant’s engagement by the Bank, directly or
indirectly, except in furtherance of the Bank’s business
and in accordance with the Bank’s policies, use,
disseminate, divulge or disclose, for any purpose whatsoever,
any Confidential Information.
(b) Upon
termination of Consultant’s engagement by the Bank,
whether such termination was by Consultant or the Bank, all
documents, records, notebooks, and similar repositories of or
documents containing any Confidential Information with
respect
to
Holding Company, Bank, Partners or Partners Bank, including
all existing copies or extractions thereof, then in
Consultant’s possession or in Consultant’s
control, whether prepared by Consultant or others, shall be
the sole property of the Bank. Upon termination,
all documents, records, notebooks, and similar repositories of
or documents containing any Confidential Information,
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