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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated and effective
May 1, 1996, is made and entered into by and between FCLT LOANS ASSET
CORP., a corporation organized and operating under the laws of Texas and having
its principal place of business located at 0000 Xxxx Xxxxxx, Xxxxx 0000, X.X.
Xxx 000, Xxxxxxx, Xxxxx 00000-0000 (the "Employer") and XXXXXX X. XXXXX, an
individual currently residing at 0000 Xxxxxxxxxx, Xxxxxxx, Xxxxx 00000 (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Employer and Employee desire to commence the employment
relationship and enter into this Agreement in order to retain Employee's
services for and on behalf of Employer.
In consideration of the mutual promises and covenants set forth, the
Employer and Employee agree as follows:
ARTICLE 1.
TERM AND DUTIES OF EMPLOYMENT
1.01 Employment Term. The Employer agrees to employ the Employee
as President and the Employee accepts this employment and agrees to render
services to the Employer on the terms and conditions set forth in this
Agreement. The employment term of this Agreement shall begin on July 3, 1995
and terminate on September 30, 1998, unless further extended or terminated in
accordance with this Agreement.
1.02 Employee Duties. The Employee will perform executive services
for the Employer as may be consistent with Employee's title, President, along
with other duties that may be assigned from time to time by the Employer.
During this Agreement's term, the Employee's best efforts will
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be devoted to the affairs and business of the Employer, as is customarily
required for the position of President, including membership on the Portfolio
Committee of the First City Liquidating Trust.
(a) The Employee's duties will include the management and
payment of creditor claims, including payment to noteholders and
certificate holders pursuant to First City Financial Corporation's
bankruptcy reorganization plan (the "Reorganization Plan") in Case No.
392-3947Y-HCA-11, styled "In Re: First City Bancorporation of Texas,
Inc." as described more fully under paragraphs 2.02 through 2.07 of
this Agreement.
(b) The Employee's duties will include the liquidation of
the First City Liquidating Trust (hereinafter "the Trust") assets in
accordance with the terms, conditions, rules, etc. of the Trust
agreement.
1.03 Approval of Portfolio Committee or First City Financial
Corporation Required. Before entering into any agreement with respect to the
liquidation of any Trust assets, the Employee must, in accordance with the
terms of the Trust agreement, first get written approval from either the
Portfolio Committee of the Trust or First City Financial Corporation pursuant
to the Investment Management Agreement.
ARTICLE 2.
COMPENSATION
2.01 Basic Compensation. Employer agrees to pay Employee for his
services as President throughout the term of this Agreement an annual salary of
$250,000.00, to be paid in two monthly installments in accordance with the
Employer's normal payroll practice and on the Employer's regularly scheduled
paydays.
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2.02 Conditional Bonus #1. Employer will pay Employee an
additional bonus in the event that all of the following conditions are
fulfilled as determined by the Portfolio Committee of the Trust:
(a) All Class 1, 2, 3, 4, 5, and 8 creditor claims are
paid in full according to the terms of the Reorganization Plan
(approximately $80,000,000.00);
(b) New Senior Subordinated Noteholders are paid in full
(approximately $115,000,000.00, including interest); and
(c) New Special Preferred Stockholders and Class B
Certificate holders are paid in cash a total of $100,000,000.00.
If all of the above conditions are fulfilled as determined by the
Portfolio Committee of the Trust, the Employer will pay Employee an additional
bonus of $250,000.00 in one lump sum payment within thirty (30) days of the
fulfillment of all the above conditions.
2.03 Conditional Bonus #2. Employer shall pay Employee an
additional bonus if all of the conditions in Section 2.02 of this Agreement are
fulfilled and if the following condition is also fulfilled as determined by the
Portfolio Committee of the Trust:
(a) An additional aggregate $30,000,000.00 has been paid
to the Class B Certificate holders.
If the conditions in Section 2.02 of this Agreement and the above
condition is fulfilled as determined by the Portfolio Committee of the Trust,
Employer shall pay Employee an additional bonus of $250,000.00 in one lump sum
payment within thirty (30) days of the fulfillment of the above condition.
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2.04 Conditional Bonus #3. If Employee fulfills all the conditions
in Sections 2.02 and 2.03 of this Agreement as determined by the Portfolio
Committee of the Trust, then Employer shall pay Employee an additional bonus in
a sum equal to 1.67% of all additional aggregate payments made to Class B
Certificate Holders and Class C Certificate Holders. Such payments will be
made within thirty (30) days of each additional distribution.
2.05 Calculation of Bonuses - Payments Counted. In calculating any
bonus in this Agreement, the following payments will be counted:
(a) Payments to New Special Preferred Stockholders,
including principal payments, dividend payments, and the initial
$14,000,000.00 of book value attributed to New Common Shares awarded
to the Special Preferred Stockholders in the Reorganization Plan.
2.06 Calculation of Bonuses - Payments Not Counted. In calculating
any bonus in this Agreement, the following payments will not be counted:
(a) Payments to New Special Preferred Stockholders and
Class B Certificate Holders that are the result of interest earned on
Trust pool idle funds.
ARTICLE 3.
BENEFITS
Employee shall further be entitled to receive:
3.01 Benefit Plans. The Employer agrees to include and enroll the
Employee, if the Employee is eligible, in any benefit plans the Employer may
from time to time have in effect, including but not limited to hospital,
surgical, major medical, dental, vacation, sick leave, disability and life on
the same terms and conditions as these benefits are provided for or made
available to other employees.
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ARTICLE 4.
TERMINATION
4.01 Employee Termination of Agreement. During the term of this
Agreement, the Employee can terminate this Agreement by giving notice in
accordance with Section 5.01 at least thirty (30) days prior to the date of
termination. If the Employee terminates this Agreement prior to the end of the
term set forth in this Agreement under Section 1.01, the Employee will forfeit
any unpaid bonuses described in Sections 2.02 - 2.04 and his Basic Compensation
described in Section 2.01 of this Agreement will immediately cease. However,
the Employee's termination of this Agreement in compliance with the notice
provisions in this Agreement shall not affect any of the Employee's basic
compensation or bonuses described in Article 2 of this Agreement previously
paid to the Employee at the time of termination. Employer may only terminate
this Agreement prior to its expiration date for reasons set forth in paragraphs
4.02 and 4.03 hereof. Per the Trust Agreement, the life of the Trust can be
extended for up to four years in six month increments at the discretion of the
Portfolio Committee. If the Portfolio Committee elects to extend the life of
the Trust, then this contract automatically extends for a like period of time,
unless the Portfolio Committee advises Employee that it does not desire to
extend this Agreement. If the Portfolio Committee elects to extend the life of
the Trust but no longer desires the services of Employee, then Employee's
salary and benefits will terminate but conditional bonuses #1, #2 and #3 will
be paid in accordance with the terms of this Agreement.
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4.02 Employer's Right to Terminate the Agreement for "Cause". The
Employer may terminate the Employee's employment for "cause". For purposes of
this Agreement, "cause" means the occurrence of any of the following:
(a) The Employee's act or acts in connection, directly or
indirectly, with the Employee's employment duties of dishonesty,
fraud, willful misconduct, incompetence, gross negligence or breach of
a fiduciary duty, which in the reasonable determination of the
Employer would preclude the continued effective performance of the
Employee's duties; or
(b) The Employee's conviction of, or plea of guilty or
nolo contendere to, a felony, a crime of falsehood, or a crime
involving moral turpitude;
(c) The Employee's willful violation of any federal or
state law, rule, or regulation in the course and scope of employment.
4.03 Employer's Right to Terminate the Agreement for Reasons in
Addition to "Cause". The Employer may terminate the Employee's employment for
the following additional reasons:
(a) The Employee's refusal to perform duties assigned in
accordance with this Agreement or overt and willful disobedience of
orders or directives issued by the Employer to the Employee;
(b) The Employee's violation of the Employer's rules and
regulations concerning conflicts of interest.
(c) The Employee's failure to effectively perform the
duties described in this Agreement and duties which are customary and
ordinary for the Employee's title even if not described in this
Agreement.
(d) Any act of the Employee which is not in the best
interest of the Employer undertaken in the Employee's course and scope
of employment.
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(e) Any violation of this Agreement by the Employee.
4.04 Employer's Right to Terminate the Agreement Because of the
Employee's Death or Disability. In the event that Employee dies or becomes
disabled during the term of this Agreement then the Employer can terminate this
Agreement. In the case of Employee's death, Employee's salary and benefits
will terminate but Employee's estate will receive conditional bonuses #1, #2,
and #3 in accordance with this Agreement but less the value of any Trust
sponsored life insurance proceeds received by the Employee's estate. If the
Employee is disabled and this contract is terminated, then Employee's salary
and benefits will terminate but Employee will receive conditional bonuses #1,
#2 and #3 in accordance with this Agreement.
ARTICLE 5.
MISCELLANEOUS
5.01 Notices. Any notices, communications required under this
Agreement or consents, demands, requests, approvals or any other communications
regarding this Agreement shall be given to either party at the following
addresses:
(a) Notices to the Employer shall be delivered at 0000 Xxxx
Xxxxxx, Xxxxx 0000, X.X. Xxx 000, Xxxxxxx, Xxxxx 00000-0000 with copies to
Xxxxxxx Xxxx, 0000 Xxxxxxxx, Xxxxxxx, Xxxxx 00000; Xxxxx Xxxxxx, 0000 Xxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxx 00000; and Xxxx Xxxxxxxxxx, 0000 Xxxxxxxx Xxxxx,
X.X. Xxx 0000, Xxxx, Xxxxx 00000-0000.
(b) Notices to the Employee shall be delivered at 0000 Xxxxxxxxxx,
Xxxxxxx, Xxxxx 00000.
Any and all notices contemplated by this Agreement shall be effected
in writing and delivered either by personal delivery or by certified mail,
return receipt requested. Notices delivered
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personally shall be deemed communicated as of the actual receipt of the notice;
notices delivered pursuant to certified mail shall be deemed communicated as of
three (3) days after mailing.
5.02 Entire Agreement. This Agreement supersedes any and all other
agreements either oral or written, between the Employer and Employee with
respect to the subject matter of this Agreement and contains all of the
covenants and agreements between the parties regarding Employee's employment
with the Employer.
5.03 Severability. Each provision of this Agreement is intended to
be severable. If any term or provision hereof shall be determined by a court
of competent jurisdiction to be illegal or invalid for any reason whatsoever,
such term or provision shall be severed from this Agreement and shall not
affect the validity of the remainder of the Agreement.
5.04 Waiver. Waiver by any party of any breach of this Agreement
or failure to exercise any right under this Agreement shall not be deemed to be
a waiver of any other breach or right. The failure of any party to take action
by reason of such breach or to exercise any such right shall not deprive the
party of the right to take action at any time while or after such breach or
condition giving rise to such right.
5.05 Modification of Agreement. No change or modification of this
Agreement shall be valid or binding upon the parties, nor shall any waiver of
any term or condition be binding, unless such change, modification or waiver
shall be in writing and signed by the Employer and the Employee.
5.06 Governing Law. This Agreement and the rights and obligations
of the parties hereto shall be governed by and construed in accordance with the
laws of the State of Texas.
5.07 Arbitration. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be finally settled by
arbitration in the State of Texas in accordance with the rules of the American
Arbitration Association by an arbitrator appointed in accordance with
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the rules of the American Arbitration Association. The arbitrator shall follow
the law governing this Agreement. Any such arbitration decision will be final
and binding. Judgment upon the award may be entered in any court having
jurisdiction.
5.08 Costs. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any relief to which he or it may be entitled.
5.09 Assignability. The corporation shall have the right to assign
this Agreement only to an entity which it has merged or in which it owns a
controlling interest. The rights, duties and benefits of this Agreement to
Employee are personal to him and any such right, duty, or benefit may not be
assigned by Employee.
5.10 Binding Effect. This Agreement shall be binding upon the
parties hereto together with their personal executors, administrators,
successors, and personal representatives, heirs and permitted assigns.
5.11 Titles. The titles of the Articles in this Agreement do not
add or subtract from the obligations and rights contemplated in the text of
this Agreement.
5.12 Payment of Basic Compensation. The Employer will pay the
Employee's Compensation described in Article 2 of this Agreement. The Trust
will guarantee the payment of any of the Employee's Compensation as described
in Article 2 of this Agreement.
5.13 Withholdings, Deductions, Etc. The Employer may make
deductions, withholdings, or payments from sums payable to the Employee
pursuant to this Agreement as required by federal and/or state law or
regulation.
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EMPLOYER:
FCLT LOANS ASSET CORP.
By:
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Name: Xxxxxxx Xxxx
Title: Director
EMPLOYEE:
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XXXXXX X. XXXXX
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