Exhibit 10.1
COMPENSATION AGREEMENT
by and between
LONE STAR LIQUIDATING TRUST
and
XXXXX X. XXXXX, as Managing Trustee
effective as of February 19, 1997
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TABLE OF CONTENTS
Page
1. Defined Terms 3
2. Managing Trustee's Compensation and Reimbursement 3
(a) Base Salary 3
(b) Bonus Payments 3
(c) Benefits. 4
(d) Proration. 4
3. Compensation Upon Termination. 5
(a) Compensation Upon Termination. 5
(b) Survival. 5
4. Other Provisions Relating to Termination. 5
(a) Continuing Cooperation. 5
(b) Confidentiality. 5
5 . Successors and Assignments. 5
6. Notice. 5
7. Severability. 5
8. Miscellaneous. 6
9. GOVERNING LAW. 6
10. Counterparts. 6
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COMPENSATION AGREEMENT
This Compensation Agreement (this "Agreement") is effective as of the 19th
day of February, 1997 ("Effective Date"), by and between Lone Star Liquidating
Trust (the "Trust"), and Xxxxx X. Xxxxx (the "Managing Trustee").
WHEREAS, the Lone Star Liquidating Trust has been established pursuant to
the Lone Star Liquidating Trust Agreement", dated as of February 19, 1997, (the
"Trust Agreement by I.C.H. Corporation (including Care Financial Corporation and
SWL Holding Corporation) and accepted by Xxxxx X. Xxxxx, as Managing Trustee;
WHEREAS, Section 4.1.2 of the Trust Agreement provides that the initial
Managing Trustee shall be compensated on terms substantially in conformity with
the compensation provided for in the employment agreement between Xxxxx X. Xxxxx
and I.C.H. Corporation dated as of January 1, 1996 (the "Employment Agreement");
WHEREAS, the Supervisory Trustees have consented to the execution of a
Compensation Agreement with Managing Trustee substantially on the terms set
forth in Section 4.1.2 of the Trust Agreement and in the Employment Agreement;
WHEREAS, the Employment Agreement has been terminated pursuant to the
Acknowledgment of Termination of Employment Agreement dated as of the date
hereof, Managing Trustee has accepted the appointment to act as Managing Trustee
of the Trust, and Managing Trustee and the Trust desire to enter into this
Agreement to set forth the terms of Managing Trustee's compensation;
NOW, THEREFOR, in consideration of the foregoing premises and the mutual
covenants herein contained, and other good and valuable consideration, the
parties do hereby covenant and agree as follows:
1. Defined Terms. All capitalized terms used herein and not otherwise
defined shall have the meaning assigned thereto in the Trust Agreement.
2. Managing Trustee's Compensation and Reimbursement.
(a) Base Salary. Managing Trustee shall receive a base salary paid by
the Trust at the annual rate of $250,000 ("Base Salary") during each
calendar year of the Term, payable in equal monthly installments.
(b) Bonus Payments. Managing Trustee shall be entitled to receive, in
addition to the Base Salary, Bonus payments when and if Available Cash is
distributed to the Trust Beneficiaries from the Trust determined as
follows:
(i) if the value of Available Cash distributed to Trust
Beneficiaries under the Trust Agreement (adjusted as set forth below)
(the "Total Value Distributed") is less than or
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equal to $260 million, then Managing Trustee shall not be entitled to
any Bonus;
(ii) if the Total Value Distributed is greater than $260 million
but less than or equal to $280 million, then Managing Trustee shall be
entitled to a Bonus in an amount equal to 1% of the excess of the
Total Value Distributed over $260 million;
(iii) if the Total Value Distributed is greater than $280 million
but less than or equal to $310 million, then Managing Trustee shall be
entitled to an additional Bonus in an amount equal to 2% of the excess
of the Total Value Distributed over $280 million; or
(iv) if the Total Value Distributed is greater than $310 million,
then Managing Trustee shall be entitled to an additional Bonus in an
amount equal to 2.5% of the excess of the Total Value Distributed over
$310 million.
For purposes of determining the Total Value Distributed, the value of cash
distributed shall be discounted at the rate of 4% per annum for the period from
the date of distribution back to January 1, 1997; provided, that the date of any
distribution to a Distribution Agent shall be deemed the date of distribution
for purposes hereof.
(c) Benefits. Managing Trustee shall be entitled to be reimbursed by
the Trust in a reasonable amount for the cost incurred by Managing Trustee
to purchase:
(i) health insurance coverage substantially similar to that
provided by I.C.H. Corporation to Managing Trustee immediately prior
to the termination of the Employment Agreement, and
(ii) a term life insurance policy covering the life of Managing
Trustee and providing a lump sum death benefit of $500,000 payable to
such beneficiaries as Managing Trustee designates.
(d) Proration; Withholding. Any payments payable to Managing Trustee
under this Agreement (other than the payment of Bonus payments pursuant to
Section 2(b) hereof) in respect of any calendar year during which Managing
Trustee is employed by the Trust for less than the entire year, unless
otherwise expressly provided herein, shall be prorated in accordance with
the number of days in such calendar year during which she is so employed.
Any payments payable to Managing Trustee under this Agreement shall be
subject to all applicable deductions and withholdings for federal, state,
city or other taxes or other amounts as shall be required pursuant to any
law or regulation.
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3. Compensation Upon Termination.
(a) Compensation Upon Termination. Managing Trustee shall be entitled
to the following compensation from the Trust upon the termination of her
service as Managing Trustee by reason of death, resignation or removal:
(i) Managing Trustee's Base Salary to the date of Managing
Trustee's death, resignation or removal; plus
(ii) the Bonus, if any, as and when determined pursuant to
Section 2(b) hereof.
(b) Survival. The provisions of this Section 3 shall survive any
termination of this Agreement.
4. Other Provisions Relating to Termination.
(a) Continuing Cooperation. In the event of the removal or resignation
of Managing Trustee, Managing Trustee agrees to reasonably cooperate with
and to make herself available to the Trust to assist it in the orderly
administration of its affairs. For such assistance and cooperation,
Managing Trustee shall be paid $150 per hour.
(b) Confidentiality. Managing Trustee agrees, in the event of her
removal or resignation prior to substantial completion of the purpose of
the Trust, to maintain in confidence all proprietary and confidential
information of the Trust.
5. Successors and Assignments. This Agreement shall be binding upon, and
inure to the benefit of, the Trust, Managing Trustee, and their respective
successors. assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees. and legatees, as applicable. This
Agreement may not be assigned (either voluntarily or involuntarily) by any party
hereto without the express written consent of the other party and approval of
the Bankruptcy Court, if necessary. Any attempted assignment in violation of
this Section 5 shall be void and ineffective for all purposes. In the event of
an assignment permitted by this Section 5, this Agreement shall be binding upon
the heirs, successors, and assigns of the parties hereto.
6. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be given in the manner set
forth in the Section 7.7 of the Trust Agreement.
7. Severability. In the event that any provision of this Agreement, or the
application thereof to any person or circumstance, is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable in any respect
under present or future laws effective during the effective term of any such
provision, such invalid, illegal, or unenforceable provision shall be fully
severable: and this Agreement shall then be construed and enforced as if such
invalid, illegal, or unenforceable provision had not been contained in this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
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lieu of each such illegal, invalid, or unenforceable provision, there shall be
added automatically as part of this Agreement, a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid and enforceable.
8. Miscellaneous. This Agreement and the Trust Agreement sets forth the
entire understandings of the parties with respect to the subject matter hereof,
it incorporates and merges any and all previous communications and
understandings with respect to the subject matter hereof, oral or written, and
no provision of this Agreement may be modified, waived, or discharged unless
such waiver, modification, or discharge is agreed to in the manner set forth in
Section 7.10 of the Trust Agreement.
9. GOVERNING LAW. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES SUBMIT TO THE EXCLUSIVE JURISDICTION
OF THE BANKRUPTCY COURT WITH RESPECT TO ALL DISPUTES ARISING UNDER THIS
AGREEMENT.
10. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which together will
constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth below, to be effective as of the date first above written.
THE TRUST:
LONE STAR LIQUIDATING TRUST
Date: February 19, 1997 By:/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Managing Trustee
MANAGING TRUSTEE:
Date: February 19, 1997 /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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