Exhibit 10.1

 

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ADVISORY SERVICES AGREEMENT

This Advisory Services Agreement (“Agreement”) is made and entered into as of
the 1st day of January, 2013 (“Effective Date”), by and between Stone Pillar
Advisors, Ltd. (“Stone Pillar”), and Community Bank Wheaton/Glen Ellyn with its
parent company Community Financial Shares, Inc. (“Client”).

WITNESSETH:

WHEREAS, Client desires to retain Stone Pillar as an independent contractor to
perform certain advisory services as more fully described in this Agreement, and
Stone Pillar desires to be engaged by Client to perform such advisory services
in accordance with the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

1.    Advisory Services. Client hereby engages Stone Pillar for the purpose of
providing, and Stone Pillar hereby agrees to provide to Client (a) the services
described on Exhibit A, and (b) such additional services as may be agreed from
time to time by Stone Pillar and Client (the “Services”). Upon a request for
additional services, Stone Pillar shall submit to Client a change order form
describing the changes, including, as applicable, the impact of such changes on
schedules, fees and expenses.

In connection with the foregoing, Stone Pillar shall devote such of its time to
the performance of the Services hereunder as shall be mutually agreed upon
between Stone Pillar and Client; provided, however, that the parties
specifically acknowledge and agree that the time and effort that Stone Pillar
devotes to the performance of Services hereunder may vary from time to time and
Client shall give Stone Pillar reasonable advance notice of the Services which
it may request hereunder and shall work with Stone Pillar to establish a
mutually acceptable time frame and schedule which allows Stone Pillar to meet
other obligations to third parties. Nothing contained herein shall be deemed to
prohibit Stone Pillar or its officers and consultants from providing similar
Services for, accepting employment with or rendering Services, to any other
party.

Stone Pillar represents and warrants to Client that (i) Stone Pillar is
qualified to provide the Services required by this Agreement as and when
required hereunder, and (ii) Stone Pillar has all right, power and due authority
to perform the Services required by the this Agreement. EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT, STONE PILLAR MAKES NO OTHER REPRESENTATIONS, WARRANTIES
OR GUARANTEES TO Client OR ANY THIRD PARTY; AND ALL OTHER REPRESENTATIONS,
WARRANTIES, AND/OR GUARANTEES, EXPRESS OR IMPLIED, AND WHETHER ARISING BY
OPERATION OF LAW OR OTHERWISE, ARE SPECIFICALLY AND EXPRESSLY DISCLAIMED,
INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY.

Client acknowledges that the Services are advisory in nature, and Client is
solely responsible for the management and operation of its business. Under no
circumstances shall Stone Pillar be responsible or have any liability for any
losses incurred by Client with respect to Client’s activities. Client
acknowledges that it is a sophisticated financial institution and is solely
responsible for such investment, capital, lending and other transactions. Client
agrees to consult with its tax and accounting advisors as may be necessary in
connection with any such transactions and Stone Pillar shall have no liability
hereunder for any adverse tax, regulatory or accounting consequences incurred by
Client as a result of Client’s following any advice or strategy suggested by
Stone Pillar.

2.    Term. The term of this Agreement shall commence as of the Effective Date
and shall continue thereafter for twelve months. This Agreement shall be
automatically renewed for successive three-month terms unless either party
provides written notice of termination to the other party at least sixty
(60) days before the date of the expiration of the then-current term.

 

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3.    Fees and Expenses. In consideration of the Services to be performed by
Stone Pillar hereunder, Client shall from time to time pay to Stone Pillar the
fees and charges set forth on Exhibit B (“Fees”), which is hereby incorporated
by reference. Except as expressly set forth in this exhibit, the Fees are deemed
to include all expenses incurred by Stone Pillar in providing the Services.
Client shall remit to Stone Pillar each Monthly Fee within five (5) business
days of the end of each calendar month. Stone Pillar shall invoice Client for
any additional expenses agreed to by Client relating to such Services, which
shall be payable ten (10) days after receipt of such invoice.

4.    Independent Consultant. Client and Stone Pillar acknowledge and agree that
in performing the Services hereunder Stone Pillar is acting as an independent
contractor and advisor or consultant of Client. Nothing contained herein or
otherwise shall be construed in such a manner as to create the relationship of
principal and agent between Client and Stone Pillar or the relationship of
employer/employee between Client and Stone Pillar.

5.    Indemnification.

(a)    Client shall indemnify and hold harmless Stone Pillar from any and all
losses, suits, actions, judgments, penalties, fines, costs, damages, liabilities
or claims of any kind or nature, whether joint or several (including, without
limitation, reasonable legal or any other expenses) as they are incurred by
Stone Pillar in connection with the preparation for or defense of any action,
claim or proceeding or threatened action, claim or proceeding, whether or not
resulting in any liability (all of the foregoing being collectively defined as
the “Indemnified Claims”) to which Stone Pillar may become subject or liable or
which may be incurred by or assessed against Stone Pillar under any statute,
common law, contract or otherwise, relating to or arising out of this Agreement
or the Services performed pursuant to this Agreement (including, without
limitation, any claims by creditors of, or parties adverse to, Client);
provided, however, that Client shall not be liable to Stone Pillar in any such
case solely to the extent that any such Indemnified Claim is found by a court of
competent jurisdiction to have resulted solely and exclusively and as a direct
and proximate cause from Stone Pillar’s willful misconduct or gross negligence
in the performance of the Services hereunder. Promptly after receipt by Stone
Pillar of notice of the occurrence of an Indemnified Claim, or any claim or the
commencement of any action or proceeding with respect to which indemnity may be
sought against Client, Stone Pillar will notify Client in writing of the
commencement thereof. The indemnity and expense reimbursement agreements and
obligations set forth herein (including the employment of counsel satisfactory
to Stone Pillar and the payment of the reasonable fees and expenses of such
counsel) shall be in addition to any other rights, remedies or indemnification
which Stone Pillar may have or be entitled to at common law or otherwise, and
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of Stone Pillar.

(b)    Reasonable expenses (including court costs and attorneys’ fees) incurred
by Stone Pillar who is or is threatened to be made a party to a proceeding or
action shall be paid by Client at reasonable intervals in advance of the final
disposition of any such proceeding after receipt by Client of a written
undertaking by or on behalf of Stone Pillar to repay the amount paid or
reimbursed by Client if it shall ultimately be determined that Stone Pillar is
not entitled to be indemnified by Client as set forth in this Section 5.

(c)    The indemnification provided by this Section 5 shall continue as to Stone
Pillar upon termination of this Agreement and shall survive such termination and
shall inure to the benefit of the heirs, executors and administrators of Stone
Pillar.

6.    No Claims for Consequential Damages. Client shall not in any action or
proceeding, or otherwise, assert any claim for special, indirect or
consequential damages against Stone Pillar on account of any loss, cause, damage
or expense which Client may suffer or incur because of any act or omission of
Stone Pillar in the performance of the Services hereunder and Client hereby
expressly waives all such claims.

 

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7.    Confidentiality.

(a)    Stone Pillar agrees that it shall not, at any time during the term of
this Agreement and any time thereafter, except in the interest and for the
benefit of Client, directly or indirectly use or disclose any Confidential
Information (as defined herein) of Client. Nothing in this Agreement shall
prevent Stone Pillar, after the termination of this Agreement, from using
general skills and knowledge gained while serving as an advisor or consultant to
Client. Nothing in this Paragraph 7 shall be construed to supersede or limit the
common law of torts or statutory or other protection of trade secrets where such
law provides Client with greater protections than those provided in this
Paragraph 7.

(b)    The term “Confidential Information” shall mean all proprietary
information of Client which has value to Client and which is not known to the
public or Client’s competitors, generally. Confidential Information includes,
but is not limited to: (1) information which is marked or otherwise designated
as confidential or proprietary by Client; and (2) information received by Client
from others which Client has an obligation to treat as confidential. The term
“Confidential Information” does not include, and the obligations set forth in
this Paragraph 7 do not apply to, any information which: (i) can be demonstrated
by Stone Pillar to have been known by it prior to this Agreement with Client;
(ii) is or becomes generally available to the public through no act or omission
of Stone Pillar; (iii) is obtained by Stone Pillar in good faith from a third
party who discloses such information to Stone Pillar on a non-confidential basis
without violating any obligation of confidentiality or secrecy relating to the
information disclosed; or (iv) is independently developed by Stone Pillar
outside the scope of its duties under this Agreement without use of Confidential
Information.

(c)    Stone Pillar acknowledges and agrees that an award of monetary damages
would be an inadequate remedy for any breach by Stone Pillar of the provisions
of this Section 7. Accordingly, Client shall be entitled, in addition to any
other rights or remedies that may be available to it, to seek injunctive relief
for any breach by Stone Pillar or threatened breach of the provisions of this
Section 7.

(d)    As a further protection for Client’s confidentiality of information,
Stone Pillar further agrees that it will not, without prior written consent of
the Client:

  i). for the term of the Agreement and one year following the termination of
the Agreement, have an executive officer of Stone Pillar serve on the Board of
Directors of any commercial bank or bank holding company with assets below $1
billion with headquarters in DuPage County, IL or any other county in which
Client maintains a banking office, or

  ii). for the term of the Agreement and one year following the termination of
the Agreement, directly or indirectly (other than by general advertising or
similar non-targeted methods) solicit any officer of Client for employment at
another banking organization, or

  iii). for the term of the Agreement and one year following the termination of
the Agreement, directly or indirectly (other than by general advertising or
similar non-targeted methods) solicit commercial customers of client to move any
part of their banking relationship to another banking organization.

  iv). for the term of the Agreement, provide services described in Exhibit A,
items 1.(c), (e) or (g) to any commercial bank or bank holding company with
assets below $1 billion with headquarters in DuPage County, IL or any other
county in which Client maintains a banking office

 

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8.    Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

9.    Notices. All communications or notices required or permitted by this
Agreement will be in writing and will be deemed to have been given at the
earlier of the date when actually delivered to an officer of a party or when
deposited in the United States mail, certified or registered mail, postage
prepaid, return receipt requested, and addressed as set forth on the signature
page, unless and until any of such parties notifies the others.

10.    Assignment. This Agreement may not be assigned by any party without the
prior written consent of the other parties; provided, however, that Stone Pillar
may, without consent of Client, assign this Agreement and the related rights and
obligations to any company owned in whole or in part by Donald H. Wilson and
which is intended to succeed to the advisory and consulting business described
herein.

11.    Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.

12.    Waiver of Breach. The waiver by either party of a breach of any provision
of this Agreement shall not be deemed a waiver by such party of any subsequent
breach.

13.    Entire Agreement. All terms, covenants and conditions of this Agreement
are contained herein and there are no other warranties, obligations, covenants
or understandings (whether oral or written) between the parties hereto with
respect to the subject matter hereof. No amendment or modification hereto or
hereunder shall be effective unless in writing signed by an authorized signatory
of both parties to this Agreement.

14.    Governing Law. This Agreement and all questions of its interpretation,
performance, enforceability and the rights and remedies of the parties hereto
shall be determined in accordance with the laws of Illinois and all suits with
respect hereto shall be instituted in courts having their forum within the State
of Illinois.

15    Execution in Counterparts. This Agreement may be executed simultaneously
in any number of counterparts, each of which will be deemed an original but all
of which will together constitute one and the same Agreement.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
their names as of the date first above written.

 

Community Bank Wheaton/Glen Ellyn

Community Financial Shares, Inc.

    STONE PILLAR ADVISORS. Ltd. By:         By:     Name:   Scott Hamer    
Name:   Donald H. Wilson Title:   President and CEO     Title:   Chairman and
CEO Address:  

357 Roosevelt Rd.

Glen Ellyn, IL 60137

    Address:  

300 Concord Dr.

Brookfield, WI 53005

E-mail:   shamer@cbwge.com     E-mail:   don.wilson@stonepillaradvisors.com

 

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EXHIBIT A

DESCRIPTION OF SERVICES

Subject to the terms hereof, on and after the Effective Date, Stone Pillar is
prepared to provide or deliver those services for Client as described below:

 

  1. Services – provide support to executive management to:

 

  a. Cleanse balance sheet of OREO and NPL portfolio as efficiently as possible

  i. Clarify operative constraints (e.g. capital ratios, Texas ratio, etc.)

  ii. Optimize price discovery opportunities

  iii. Determine trade-offs between one-off trades and pooled trades

  iv. Develop mechanism for on-going transactions to maintain acceptable credit
profile

 

  b. Determine run-rate earnings base and create post-recap budget objectives

  i. Detailed expense review and rationalization

  ii. Review of product pricing and structure

 

  c. Evaluate risk and opportunities of existing and potential lines of business

  i. Mortgages

  ii. HELOCs

  iii. Investment Center

  iv. Church lending

  v. Leasing

  vi. Asset-based lending

  vii. Indirect lending

  viii. Deposit products

 

  d. Analyze and recommend objectives and controls on interest rate and
liquidity risk

  i. Exposure measures

  ii. Process and assumption review

  iii. Develop target ranges for position

  iv. Integrate risk targets into budget process

  v. Quantification of effects of product rate floors or similar embedded
options

 

  e. Analyze and recommend portfolio structure, in context of rate risk
objectives

  i. Clarification of convexity exposure

  ii. Potential expansion of product set, with appropriate controls and measures

 

  f. Evaluate, update and integrate primary risk policies

 

  g. Enhance credit sales and control process

  i.

Identify vendors and process for an annual 3rd party loan review

  ii. Develop and implement robust prospecting, sales tracking and closing
process

  iii. Determine appropriate level of segregation between sales and credit
process

 

  h. Review and enhance marketing program

  i. Review current objectives, expenditures and measures of effectiveness

  ii. Develop new strategies and support implementation in cost effective manner

 

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  i. Solidify performance measurement systems and objectives

  i. Primary focus on core deposit generation

  ii. Condense and focus executive management and Board reporting packages

 

  j. Participate in core system conversion and implementation

  i. Identify opportunities for product additions or enhancements

  ii. Maximize effectiveness of client Treasury management product offering

  iii. Optimize management reporting flexibility in system implementation

  iv. Design system to incorporate growth objectives of organization

 

  k. Prepare organization for acquisition/expansion opportunities

  i. Develop relationship network with bank executives in target markets and
relevant investment bankers

  ii. Identify and quantify strategic objectives for expansion (branch purchase,
bank purchase, asset portfolio purchase, etc.)

  iii. Develop framework for due diligence process

  iv. Provide regular updates to Board

 

  l. Other objectives as mutually agreed

 

2. Consultants assigned

  a. Stone Pillar expects to have consultants working on-site at client offices,
with some work being done off-site as well. Client agrees to provide reasonable
office facilities with on-line access for on-site work. Consultants assigned to
this engagement are Don Wilson and Doug Howe, with the potential for additional
support as needed.

 

 

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EXHIBIT B

FEES AND EXPENSES

 

Retainer:

None

 

Services Fee:

The Monthly Fee for services is $31,250.

 

Expenses:

During the term of this Agreement, Client shall promptly pay or reimburse Stone
Pillar for all reasonable and necessary business expenses incurred by Stone
Pillar for travel beyond a 100 mile radius from Wheaton IL in connection with
the Services, including, without limitation, reasonable travel costs, living
expenses, out-of-pocket expenses, and related costs. Stone Pillar shall submit
an itemized account of such expenditures and such proof as may be reasonably
necessary to establish to the satisfaction of Client that the expenses incurred
by Stone Pillar were ordinary and necessary business expenses incurred by Stone
Pillar on behalf of Client.

 

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