EXHIBIT 10.4
EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "Agreement"), effective on the
date hereof, is entered into in Dallas, Texas, by and between Texas Capital
Bancshares, Inc., a Texas corporation, with its principal place of business
located at 0000 XxXxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx, 00000 ("Employer"),
and Xxxxx X. Xxxxxxxxx ("Executive").
In consideration of the mutual covenants set forth herein, Employer and
Executive, intending to be legally bound, hereby agree as follows:
1. Employment Relationship. Employer hereby employs Executive, and Executive
hereby accepts such employment, upon the terms and conditions set forth in
this Agreement. Such employment relationship shall continue for the stated
term of this Agreement, as described in Section 8 hereof, unless earlier
terminated pursuant to Section 5 hereof.
2. Position and Responsibilities of Executive. Executive shall be employed as
Executive Vice President and Chief Financial Officer with job
responsibilities related thereto, and such job responsibilities may be
expanded at the sole discretion of the Chief Executive Officer or the
Board of Directors of Employer ("Board"). Executive shall devote such
time, skill and attention to the business of Employer as shall be required
for the efficient management thereof, and shall manage and supervise such
business, and shall devote his full time best efforts to the faithful
performance of his duties on behalf of Employer, provided, however,
Executive may engage in appropriate civic, charitable or religious
activities and devote a reasonable amount of time to private investments
or boards or other activities provided that such activities do not
interfere or conflict with the Executive's responsibilities to Employer
and are not likely to be contrary to Employer's interests. Executive shall
also perform such other duties, and may have job responsibilities and
titles modified from time to time as may be requested by the Chief
Executive Officer and/or the Board, provided such duties are generally
consistent with the level of the Executive's current duties. Executive's
duties shall be performed at Employer's offices in Dallas, Texas. The
location at which Executive performs his duties shall not be relocated
more than fifty (50) miles from Employer's offices in Dallas, Texas on the
date hereof, without Executive's written consent. Executive shall not
engage in any employment of any kind or undertake any role or position,
whether or not for compensation, with any person or entity during the term
of this Agreement without advance written approval of the Chief Executive
Officer, who shall give notice of Executive's any such request to the
Executive Committee of the Board, except as otherwise noted above.
3. Compensation. For all services rendered by Executive pursuant to this
Agreement, Employer shall pay to Executive, and Executive shall accept as
full compensation hereunder the following:
a. Salary. Executive shall receive a salary of $250,000 per year
payable by Employer in semi-monthly amounts. Executive's salary
shall be subject to all appropriate federal and state withholding
taxes and shall be payable in accordance
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with the normal payroll procedures of Employer. Employer shall not
reduce Executive's salary without Executive's written consent.
Employer agrees to consider increasing such base salary at least
annually during the Initial Employment Term and any Renewal Term (as
those terms are defined herein), but shall not be obligated to
effectuate such an increase.
b. Benefits and Perquisites. Executive shall be entitled to participate
in the benefit plans provided by Employer for all employees
generally, and for executive employees of Employer. Employer shall
be entitled to change or terminate such plans in its sole
discretion. The parties acknowledge that at the initial date of this
Agreement the fringe benefits provided to Executive include a
corporate 401(k) plan, health, dental, life, short and long-term
disability insurance, and reimbursement of certain expenses in
accordance with the policies and procedures of Employer.
c. Discretionary Bonuses. The Board shall establish an incentive bonus
plan for its key executives based on various targets and performance
criteria to be established by the Board. Executive shall be
permitted to participate in such plan. The evaluation of the
performance of Executive as measured by the applicable targets and
the awarding of applicable bonuses, if any, shall be at the sole
discretion of the Board. The annual discretionary bonus may be
awarded in whole or in part, based on the level of incentive bonus
plan performance criteria achieved by Executive, in the sole
judgement of the Board. If Executive terminates this Agreement
without Good Reason, as defined in Section 5(d), or if Employer
terminates this Agreement at any time for Cause, as defined in
Section 5(b), Executive will not be paid any Discretionary Bonus, in
whole or in part.
d. Equity Compensation. Employer establishes equity-based incentives
for its executives from time to time pursuant to its 1999 Omnibus
Stock Plan and, potentially, such other equity compensation programs
as may be adopted by Employer in the future (collectively, the
"Plan"). Employer may, but is not obligated to, make grants of
equity-based incentive compensation to Executive pursuant to the
terms of such Plan.
4. Protective Covenants. Executive recognizes that his employment by Employer
is one of the highest trust and confidence because (i) Executive has
become and/or in the future will become familiar with critical aspects of
Employer's business during the period of his employment with Employer,
(ii) certain information of which Executive will gain knowledge during his
employment by Employer is proprietary, confidential and/or trade secret
information and is of special and peculiar value to Employer, and (iii) if
any such proprietary, confidential and/or trade secret information were
imparted to or became known by any person, including Executive, engaging
in a business in competition with that of Employer, hardship, loss and
irreparable injury and damage could result to Employer, the measurement of
which would be difficult if not impossible to ascertain. Executive further
acknowledges that Employer has developed unique concepts, lending
practices, sales presentations, marketing programs, marketing strategies,
business
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practices, methods of operation, pricing information, cost information,
trademarks, licenses, technical information, proprietary information,
computer software programs, tapes and disks concerning its operations
systems, customer lists, customer leads, documents identifying past,
present and future customers, customer profile and preference data, hiring
and training methods, investment policies, financial and other
confidential, proprietary and/or trade secret information concerning its
operations and expansion plans ("Confidential Information"). Therefore,
Executive agrees that it is necessary for Employer to protect its business
and that of its affiliates from such damage, and Executive further agrees
that the following covenants constitute a reasonable and appropriate
means, consistent with the best interest of both Executive and Employer,
to protect Employer or its affiliates against damage due to loss or
disclosure of Confidential Information and shall apply to and be binding
upon Executive as provided herein:
a. Confidential Information. Employer agrees to provide Executive with
some or all of its Confidential Information (as defined above)
during the term of this Agreement (as set forth in Section 8 below).
Executive recognizes that his position with Employer is one of the
highest trust and confidence by reason of Executive's access to and
contact with certain Confidential Information of Employer. Executive
agrees and covenants that, except as may be required by Employer in
connection with this Agreement, or with the prior written consent of
Employer, Executive shall not, either during the term of this
Agreement or at any time thereafter, directly or indirectly, use for
Executive's own benefit or for the benefit of another, or disclose,
disseminate, or distribute to another, except as directed by
Employer or as required for the performance of Executive's duties on
behalf of Employer, any Confidential Information (whether or not
acquired, learned, obtained, or developed by Executive alone or in
conjunction with others) of Employer or of others with whom Employer
has a business relationship, provided, however that this restriction
shall not apply to truthful testimony given under oath in a legal
proceeding by Executive pursuant to a properly issued subpoena if
Executive provides timely notice of such subpoena to Employer. All
Confidential Information, and all memoranda, notes, records,
drawings, documents, or other writings whatsoever made, compiled,
acquired, or received by Executive at any time during his employment
with Employer, including during the term of this Agreement, arising
out of, in connection with, or related to any activity or business
of Employer, including, but not limited to, the customers,
suppliers, or others with whom Employer has a business relationship,
the arrangements of Employer with such parties, and the pricing and
expansion policies and strategy of Employer, are, and shall continue
to be, the sole and exclusive property of Employer and shall,
together with all copies thereof, and any and all documents
constituting or relating to Employer's Confidential Information, be
delivered to Employer by Executive immediately, without demand, upon
the termination of this Agreement, or at any time upon Employer's
demand.
Executive acknowledges that Employer would not employ
Executive or provide Executive access to Employer's Confidential
Information and proprietary
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information but for Executive's covenants and promises contained in
this Section 4.
Executive represents and warrants that he is not bound by any
agreement with any prior employer or other party that will be
breached by execution and performance of this Agreement, or which
would otherwise prevent him from performing his duties with Employer
as set forth in this Agreement. Executive represents and warrants
that he has not retained any copies of proprietary or confidential
information of any prior employer, and he will not use or rely on
any confidential and proprietary information of any prior employer
in carrying out his duties for Employer.
b. Covenant Not to Compete. In consideration of the numerous mutual
promises and agreements contained in this Agreement between Employer
and Executive, including, without limitation, those involving
Confidential Information, and in order to protect Employer's
Confidential Information and to reduce the likelihood of irreparable
damage which would occur in the event such information is provided
to or used by a competitor of Employer, Executive agrees that during
his employment and for an additional period of twelve (12) months
immediately following the termination of his employment, whether
voluntary or involuntary (the "Noncompetition Term"), not to,
directly or indirectly, either through any form of ownership or as
an individual, director, officer, principal, agent, employee,
employer, adviser, consultant, shareholder, partner, member, or in
any individual or representative capacity whatsoever, without the
prior written consent of Employer (which consent may be withheld in
its sole discretion), (i) compete for or solicit business for or on
behalf of any person or business entity operating a state or
national bank or company providing similar services with a place of
business in Texas, New Mexico, Oklahoma, Arkansas, and Louisiana;
(ii) own, operate, participate in, undertake any employment with or
have any interest in any entity with a place of business in Texas,
New Mexico, Oklahoma, Arkansas, and Louisiana related to the
operation of a state or national bank or company providing similar
services, except owning publicly traded stock for investment
purposes only in which Executive owns less than 5%, (iii) compete
for or solicit business related to the operation of a state or
national bank or company providing similar services from any
customer of Employer (or its successors by merger); or (iv) use in
any competition, solicitation, or marketing effort any Confidential
Information, any proprietary list, or any information concerning
customers of Employer.
Executive hereby acknowledges that the geographic boundaries,
scope of prohibited activities and the time duration of the
provisions of this Section 4 are reasonable and are no broader than
are necessary to protect the legitimate business interests of
Employer. This noncompetition provision shall survive the
termination of Executive's employment and can only be revoked or
modified by a writing signed by the parties that specifically states
an intent to revoke or modify this provision. Executive acknowledges
that Employer would not employ him or
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provide him with access to its Confidential Information but for his
covenants or promises contained in this Section.
Employer and Executive agree and stipulate that the agreements
and covenants not to compete contained in this Section 4 hereof are
fair and reasonable in light of all of the facts and circumstances
of the relationship between Executive and Employer; however,
Executive and Employer are aware that in certain circumstances
courts have refused to enforce certain terms of agreements not to
compete. Therefore, in furtherance of, and not in derogation of the
provisions of this Section 4, Employer and Executive agree that in
the event a court should decline to enforce any terms of any of the
provisions of this Section 4, that Section 4 shall be deemed to be
modified or reformed to restrict Executive's competition with
Employer or its affiliates to the maximum extent, as to time,
geography and business scope, which the court shall find
enforceable; provided, however, in no event shall the provisions of
this Section 4 be deemed to be more restrictive to Executive than
those contained herein.
Executive agrees that during the Noncompetition Term, he shall
immediately notify Employer in writing of any employment, work or
business he undertakes with or on behalf of any person (including
himself) or entity.
c. Non-Solicitation. Executive agrees that during his employment, and
for a period of twelve (12) months following the termination of his
employment, for whatever reason, that neither he nor any individual,
partner(s), limited partnership, corporation or other entity or
business with which he is in any way affiliated, including, without
limitation, any partner, limited partner, member, director, officer,
shareholder, employee, or agent of any such entity or business, will
(i) request, induce or attempt to influence, directly or indirectly,
any employee of Employer to terminate their employment with Employer
or (ii) employ any person who as of the date of this Agreement was,
or after such date, is an employee of Employer. Executive further
agrees that during the period beginning with the commencement of
Executive's employment with Employer and ending twelve (12) months
after the termination of Executive's employment with Employer, for
whatever reason, he shall not, directly or indirectly, as an
individual, employee, agent, consultant, stockholder, director,
partner or in any other individual or representative capacity of
Employer or of any other person, entity or business, solicit or
encourage any present or future customer, supplier, contractor,
partner or investor of Employer to terminate, limit or otherwise
alter his, her or its relationship with Employer.
d. Work Product. For purposes of this Section 4, "Work Product" shall
mean all intellectual property rights, including all trade secrets,
U.S. and international copyrights, patentable inventions,
discoveries and other intellectual property rights in any
programming, design, documentation, technology, or other work
product that is created in connection with Executive's work. In
addition, all rights in any preexisting programming, design,
documentation, technology, or other
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Work Product provided to Employer during Executive's employment
shall automatically become part of the Work Product hereunder,
whether or not it arises specifically out of Executive's "Work." For
purposes of this Agreement, "Work" shall mean (i) any direct
assignments and required performance by or for Employer, and (ii)
any other productive output that relates to the business of Employer
and is produced during the course of Executive's employment or
engagement by Employer. For this purpose, Work may be considered
present even after normal working hours, away from Employer's
premises, on an unsupervised basis, alone or with others. Unless
otherwise approved in writing by the Board, this Agreement shall
apply to all Work Product created in connection with all Work
conducted before or after the date of this Agreement.
Employer shall own all rights in the Work Product. To this
end, all Work Product shall be considered work made for hire for
Employer. If any of the Work Product may not, by operation of law or
agreement, be considered Work made by Executive for hire for
Employer (or if ownership of all rights therein do not otherwise
vest exclusively in Employer immediately), Executive agrees to
assign, and upon creation thereof does hereby automatically assign,
without further consideration, the ownership thereof to Employer.
Executive hereby irrevocably relinquishes for the benefit of
Employer and its assigns any moral rights in the Work Product
recognized by applicable law. Employer shall have the right to
obtain and hold, in whatever name or capacity it selects,
copyrights, registrations, and any other protection available in the
Work Product.
Executive agrees to perform upon the request of Employer,
during or after Executive's Work or employment, such further acts as
may be necessary or desirable to transfer, perfect, and defend
Employer's ownership of the Work Product, including by (i)
executing, acknowledging, and delivering any requested affidavits
and documents of assignment and conveyance, (ii) obtaining and/or
aiding in the enforcement of copyrights, trade secrets, and (if
applicable) patents with respect to the Work Product in any
countries, and (iii) providing testimony in connection with any
proceeding affecting the rights of Employer in any Work Product. In
the event that Executive is required to perform the services
described in this paragraph after his employment with the Employer
has terminated, Executive will be reasonably compensated for actual
time spent providing such services.
Executive warrants that his Work for Employer does not and
will not in any way conflict with any obligations Executive may have
with any prior employer or contractor. Executive also agrees to
develop all Work Product in a manner that avoids even the appearance
of infringement of any third party's intellectual property rights.
e. Survival of Covenants. Each covenant of Executive set forth in this
Section 4 shall survive the termination of this Agreement and
Executive's employment for any reason and shall be construed as an
agreement independent of any other
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provision of this Agreement, and the existence of any claim or cause
of action of Executive against Employer whether predicated on this
Agreement or otherwise shall not constitute a defense to the
enforcement by Employer of said covenant. No modification or waiver
of any covenant contained in this Section 4 shall be valid unless
such waiver or modification is approved in writing by the Board.
f. Remedies. In the event of a breach, violation or threatened breach
or violation by Executive of any provision of this Section 4,
Executive agrees that Employer shall be entitled to relief by
temporary restraining order, temporary injunction, or permanent
injunction or otherwise, in addition to other legal and equitable
relief to which it may be entitled, including any and all monetary
damages which Employer may incur as a result of said breach,
violation or threatened breach or violation. Employer may pursue any
remedy available to it concurrently or consecutively in any order as
to any breach, violation, or threatened breach or violation, and the
pursuit of one of such remedies at any time will not be deemed an
election of remedies or waiver of the right to pursue any other of
such remedies as to such breach, violation, or threatened breach or
violation, or as to any other breach, violation, or threatened
breach or violation.
Executive hereby acknowledges that Executive's agreement to be
bound by the protective covenants set forth in this Section 4 was a
material inducement for Employer entering into this Agreement,
agreeing to pay Executive the compensation and benefits set forth
herein, and providing Executive with Employer's Confidential
Information and other proprietary information.
5. Termination. The employment relationship between Executive and Employer
created hereunder shall terminate before the expiration of the stated term
of this Agreement upon the occurrence of any one of the following events:
a. Death or Permanent Disability. The employment relationship shall be
terminated effective on the death or permanent disability of
Executive. However, Executive shall be entitled to leaves of absence
from Employer in accordance with the policy of Employer generally
applicable to executives for illness or temporary disabilities for a
period or periods not exceeding three (3) months in any calendar
year, and his status as an Executive shall continue during such
periods. However, if Executive qualifies for short-term disability
payments under Employer's standard short-term disability plan during
such leave, Executive shall apply to receive such short-term
disability payments. Employer shall supplement such short term
disability payments so that Executive receives such monthly amounts
when combined with the short term disability payments to equal
Executive's monthly compensation as set forth in Section 3(a) of
this Agreement. If Executive is incapacitated due to physical or
mental illness and such incapacity prevents Executive from
satisfactorily performing his duties for Employer on a full time
basis for six (6) months or more, Executive shall be deemed to have
experienced a permanent disability and Employer may terminate this
Agreement upon thirty (30) days written notice. Upon the death or
permanent disability of
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Executive, Executive or his estate (as the case may be) shall be
entitled to compensation as provided in Sections 6(a), (b) and (c)
below.
b. Termination for Cause. The following events, which for purposes of
this Agreement shall constitute "Cause" for termination:
i. Any act of fraud, misappropriation or embezzlement by
Executive with respect to any aspect of Employer's business;
ii. The breach by Executive of any provision of Sections 1, 2 or 4
of this Agreement (including but not limited to a refusal to
follow lawful directives of the Board, the Chief Executive
Officer or their designees which are not inconsistent with the
duties of Executive's position and the provisions of this
Agreement);
iii. The conviction of Executive by a court of competent
jurisdiction of a felony or of a crime involving moral
turpitude;
iv. The intentional and material breach by Executive of any
non-disclosure or non-competition/non-solicitation provision
of any agreement to which Executive and Employer or any of its
subsidiaries are parties;
v. The intentional failure by Executive to perform in all
material respects his duties and responsibilities (other than
as a result of death or disability) and the failure of
Executive to cure the same in all material respects within
fifteen (15) days after written notice thereof from the Chief
Executive Officer or his designee;
vi. The illegal use of drugs by Executive during the term of this
Agreement that, in the determination of the Board,
substantially interferes with Executive's performance of his
duties hereunder;
vii. Acceptance of employment with any other employer except upon
written permission of the Board; or
viii. The breach by Executive of his fiduciary duty to Employer.
Employer shall provide Executive with a written notice of
termination, which can be provided on the date of termination. In
the event Executive's employment is terminated for Cause hereunder,
Executive shall be entitled to the compensation provided in Sections
6(a), (b) and (c) below.
c. Termination by Employer with Notice. Employer may terminate this
Agreement without Cause at any time upon thirty (30) days written
notice to Executive, during which period Executive shall not be
required to perform any services for Employer other than to assist
Employer in training his successor and generally
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preparing for an orderly transition; PROVIDED, HOWEVER, that
Executive shall be entitled to compensation upon such termination as
provided in Section 6(a), (b), (c) and (d) below.
d. Termination by Executive For Good Reason. Executive shall be
entitled to terminate this Agreement at any time for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean the
occurrence of any of the following events:
i. Without his express written consent, the assignment of
Executive to a position functionally inferior to his position
with Employer on the date of this Agreement;
ii. The change of the location where Executive is based to a
location which is more than fifty (50) miles from his present
location without Executive's written consent; or
iii. A reduction by Employer in Executive's base salary as in
effect on the date hereof, unless such reduction is a
proportionate reduction of the compensation of Executive and
all other senior officers of Employer as a part of a
company-wide effort to enhance the financial condition of
Employer.
Executive shall give Employer thirty (30) business days notice of an
intent to terminate this Agreement for "Good Reason" as defined in
this Section 5(d), and provide Employer with ten (10) business days
after receipt of such notice from Executive to remedy the alleged
violation of Subsections 5(d)(i), (ii) or (iii). In the event
Executive terminates his employment for Good Reason hereunder,
Executive shall be entitled to the compensation provided in Sections
6(a), (b), (c) and (d) below.
6. Compensation Upon Termination. Upon the termination of Executive's
employment under this Agreement before the expiration of the stated term
hereof for any reason, Executive shall be entitled to:
a. the salary earned by him before the effective date of termination as
provided in Section 3(a) hereof (including salary payable during any
applicable notice period), prorated on the basis of the number of
full days of service rendered by Executive during the salary payment
period to the effective date of termination;
b. any accrued, but unpaid, vacation benefits; and
c. any previously authorized but unreimbursed business expenses.
If Executive's employment hereunder terminates because of the death or
permanent disability of Executive, Executive shall be entitled to the
lesser of (i) the balance of
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Executive's base salary (as set forth in Section 3(a) above), if any,
remaining in the term of this Agreement or (ii) twelve (12) months' base
salary. In addition, in the event of Executive's permanent disability,
Executive shall receive continued medical insurance benefits, at
Employer's expense, for a period of twelve (12) months from the date of
the termination of this Agreement. All amounts that may be due to
Executive under this Section 6 or Section 5(a) shall be paid to him or his
administrators, personal representatives, heirs and legatees, as may be
appropriate.
Notwithstanding the foregoing, with respect to any stock options or other
plans or programs in which Executive is participating at the time of
termination of his employment, Executive's rights and benefits under each
such plan shall be determined in accordance with the terms, conditions,
and limitations of the plan and any separate agreement executed by
Executive which may then be in effect.
d. Additional Compensation and Benefits Upon Termination Without Cause,
With Notice or for Good Reason. If Executive's employment hereunder
terminates without "Cause" (as defined in Section 5(b) above), with
notice pursuant to Section 5(c) above, or for "Good Reason" (as
defined in Section 5(d) above) Employer shall, upon Executive's
execution of a general release of claims in favor of Employer,
provide to Executive in addition to the amounts set forth in
Subsections 6(a), 6(b) and 6(c) above:
i. a cash payment equal to the greater of (y) Executive's base
salary (as set forth in Section 3(a) above), if any, remaining
in the term of Executive's Agreement or (z) twelve (12)
months' base salary;
ii. a cash payment equal to the average annual cash bonus paid to
Executive for the two (2) full bonus plan years immediately
preceding the date Executive's employment terminates; and
iii. continued medical insurance benefits, at Employer's expense,
for a period of twelve (12) months.
Employer shall pay the severance amounts referenced in Section
6(d)(i) in equal semi-monthly installments for a period of twelve
(12) months ("Severance Period") in accordance with Employer's
regular payroll practices. Executive shall have no obligation to
mitigate any severance obligation of Employer under this Agreement
by seeking new employment. Employer shall not be entitled to set off
or reduce any severance payments owed to Executive under this
Agreement by the amount of earnings or benefits received by
Executive in future employment. The provisions of Sections 4, 5 and
6 hereof shall survive the termination of the employment
relationship hereunder and this Agreement.
Notwithstanding the foregoing, with respect to any stock options or
other plans or programs in which Executive is participating at the
time of termination of his employment, Executive's rights and
benefits under each such plan shall be
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determined in accordance with the terms, conditions, and limitations
of the plan and any separate agreement executed by Executive which
may then be in effect.
e. If, during the Severance Period, Executive is in breach of his
post-employment covenants contained in Section 4 of this Agreement,
Employer shall not be obligated to pay any severance payments
referenced herein, Employer's severance obligations shall terminate
and expire, and Employer shall have no further obligations to
Executive hereunder from and after the date of such breach and shall
have all other rights and remedies available under this Agreement or
any other agreement and at law or in equity.
7. Compensation Upon Change in Control.
a. For purposes of this Agreement, a "Change in Control" of Employer
shall be deemed to have occurred at such time as:
i. any "person" (as the term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of voting securities of Employer representing more
than 50% of Employer's outstanding voting securities or rights
to acquire such securities except for any voting securities
issued or purchased under any employee benefit plan of
Employer or its subsidiaries; or
ii. individuals who constitute the Board on the date hereof (the
"Incumbent Board") cease for any reason to constitute at least
a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election was
approved by a vote of at least three-quarters of the directors
comprising the Incumbent Board, or whose nomination for
election by Employer's stockholders was approved by a
Nominating Committee solely composed of members which are
Incumbent Board members, shall be, for purposes of this clause
(ii), considered as though he were a member of the Incumbent
Board; or
iii. a plan of reorganization, merger, consolidation, sale of all
or substantially all of the assets of Employer or similar
transaction occurs or is effectuated in which Employer is not
the resulting entity; provided, however, that such an event
listed above will be deemed to have occurred or to have been
effectuated upon receipt of all required regulatory approvals
not including the lapse of any required waiting periods; or
iv. the Board determines in its sole discretion that a Change in
Control has occurred.
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b. Benefits Upon Change in Control.
x. Xxxxxxxxx Benefits. If Executive's employment with Employer is
terminated (A) by Employer (or by the acquiring or successor
business entity following a Change of Control) other than for
"Cause" (as defined in Section 5(b) above), death or permanent
disability, or (B) by Executive for "Good Reason" (as defined
in Section 5(d) above) in either event within a period
beginning ninety (90) days before, and ending one (1) year
after, the date of a Change of Control (the "Change Period"),
Executive shall receive a cash severance benefit in an amount
equal to (a) for a termination occurring between the effective
date hereof and October 6, 2005, 267% of Executive's cash base
salary and bonus in effect for the most recent fiscal year
immediately preceding the Change of Control, and (b) for a
termination occurring after October 6, 2005, 250% of
Executive's average annual cash base salary and bonus in
effect for the two (2) years immediately preceding the Change
of Control.
In addition, for sixty (60) months (which shall, effective
October 6, 2005, be reduced to twenty four (24) months)
following the date of termination of Executive's employment in
circumstances in which a severance payment is due under this
Section 7(b), Employer shall provide Executive, at Employer's
expense, health and other welfare benefits that are not less
favorable to Executive than those to which he was entitled
immediately prior to the Change in Control. Provided however,
Employer shall have no obligation to provide Executive with
any severance compensation under this Section 7 if Executive
is in breach or violation of any of the covenants contained in
Section 4, which are applicable to Executive at the time of
the severance payment.
ii. Form of Payment. The amount of the severance benefit provided
in Section 7(c)(i) hereof shall be paid to Executive in a lump
sum within thirty (30) days of Executive's termination, unless
such payment must be delayed so as to avoid classification as
"deferred compensation" under Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code").
iii. Notwithstanding the other provisions of this Section 7, in the
event that:
(aa) the aggregate payments or benefits to be made or
afforded to Executive, which are deemed to be parachute
payments as defined in Code Section 280G or any
successor thereof, (the "Termination Benefits") would be
deemed to include an "excess parachute payment" under
Code Section 280G; and
(bb) if such Termination Benefits were reduced to an amount
(the "Non-Triggering Amount"), the value of which is one
dollar
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($1.00) less than an amount equal to three (3) times
Executive's "base amount," as determined in accordance
with Code Section 280G and the Non-Triggering Amount
less the product of the marginal rate of any applicable
state and federal income tax and the Non-Triggering
Amount would be greater than the aggregate value of the
Termination Benefits (without such reduction) minus (a)
the amount of tax required to be paid by Executive
thereon by Code Section 4999 and further minus (b) the
product of the Termination Benefits and the marginal
rate of any applicable state and federal income tax,
then the Termination Benefits shall be reduced to the
Non-Triggering Amount. The allocation of the reduction
required hereby among the Termination Benefits shall be
determined by Executive.
iv. Notwithstanding the foregoing, with respect to any stock
options or other plans or programs in which Executive is
participating at the time of termination of his employment,
Executive's rights and benefits under each such plan shall be
determined in accordance with the terms, conditions, and
limitations of the plan and any separate agreement executed by
Executive which may then be in effect.
c. No Mitigation or Offset. Executive shall not be required to mitigate
the amount of any payment provided for in this Section 7 of this
Agreement by seeking other employment or otherwise. Employer shall
not be entitled to set off or reduce any severance payments owed to
Executive under this Section 7 by the amount of earnings or benefits
received by Executive in future employment.
8. Term. This Agreement shall be binding and enforceable against Employer and
Executive immediately upon its execution by both such parties. The stated
term of this Agreement and the employment relationship created hereunder
shall begin on December 20, 2004, and shall remain in effect for two (2)
years thereafter, unless sooner terminated in accordance with Section 5
hereof (the "Initial Employment Term"). This Agreement shall be
automatically renewed for successive one (1) year terms after the Initial
Employment Term ("Renewal Term"), unless terminated by either party at
least thirty (30) days prior to the end of the Initial Employment Period
or any Renewal Term.
Notwithstanding any provision of this Agreement to the contrary, the
parties' respective rights and obligations under Sections 3, 4, 6 and 7
shall survive any termination or expiration of this Agreement or the
termination of Executive's employment for any reason whatsoever.
9. Remedies. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise
all other rights existing in its favor. Notwithstanding Section 10 below,
the parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this
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Agreement and that any party may in its sole discretion apply to any court
of law or equity of competent jurisdiction for specific performance and/or
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
10. Arbitration. Any controversy or claim arising out of or relating to this
Agreement or relating to Executive's rights, compensation and
responsibilities as an Executive, excluding any claims based on violations
of Section 4, shall be determined by arbitration in Dallas County, Texas
in accordance with the rules of the American Arbitration Association then
in effect. The arbitration shall be submitted to a single arbitrator
selected in accordance with the American Arbitration Association's
procedures then in effect for the selection of employment arbitrators. The
parties shall split the cost of the arbitrator. The arbitrator shall have
the authority to award any remedy that could be awarded by a court of
competent jurisdiction. Each party shall bear its own expenses and fees
associated with such arbitration. This Section 10 shall survive
termination of this Agreement for any reason.
11. Non-Disparagement. Executive and Employer agree not to make any statements
that disparage the reputation of (i) Employer, its products, services or
employees, or (ii) Executive. Executive and Employer further acknowledge
and agree that any breach or violation of this non-disparagement provision
shall entitle Executive or Employer to seek injunctive relief to prevent
any future breaches of this provision and/or to xxx the other party on
this Agreement for the immediate recovery of any damages caused by such
breach. For purposes of this provision, Employer's obligation shall be
limited to the Executive Committee of the Board and executives who are
members of the Employer's Senior Policy Committee.
12. Assignment. This Agreement is personal to Executive and may not be
assigned in any way by Executive without the prior written consent of
Employer. This Agreement shall not be assignable or delegable by Employer,
other than to an affiliate of Employer; provided, however, that in the
event of the acquisition, merger or consolidation of Employer, the
obligations of Employer hereunder shall be binding upon the surviving or
resulting entity of such acquisition, merger or consolidation. The rights
and obligations under this Agreement shall inure to the benefit of and
shall be binding upon the heirs, legatees, administrators and personal
representatives of Executive and upon the successors, representatives and
assigns of Employer.
13. Severability and Reformation. The parties hereto intend all provisions of
this Agreement to be enforced to the fullest extent permitted by law. If,
however, any provision of this Agreement is held to be illegal, invalid,
or unenforceable under present or future law, such provision shall be
fully severable, and this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision were never a part
hereof, and the remaining provisions shall remain in full force and effect
and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance. In lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of
this Agreement a legal, valid and enforceable provision as similar in
terms to such illegal, invalid or unenforceable provision as may be
possible, and Employer and
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Executive hereby request the court to whom disputes relating to this
Agreement are submitted to reform the otherwise unenforceable covenant in
accordance with this Section 13.
14. Notices. All notices and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by certified mail (return receipt
requested) or sent by overnight delivery service, cable, telegram,
facsimile transmission or telex to the parties at the following addresses
or at such other addresses as shall be specified by the parties by like
notice:
If to Employer: Texas Capital Bancshares, Inc.
0000 XxXxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attn: Chairman
If to Executive: Xxxxx X. Xxxxxxxxx
_________________________
_________________________
_________________________
Notice so given shall, in the case of notice so given by mail, be deemed
to be given and received on the fourth calendar day after posting, in the
case of notice so given by overnight delivery service, on the date of
actual delivery and, in the case of notice so given by cable, telegram,
facsimile transmission, telex or personal delivery, on the date of actual
transmission or, as the case may be, personal delivery.
15. Further Acts. Whether or not specifically required under the terms of this
Agreement, each party hereto shall execute and deliver such documents and
take such further actions as shall be necessary in order for such party to
perform all of his or its obligations specified herein or reasonably
implied from the terms hereof.
16. Publicity and Advertising. Executive agrees that Employer may use his
name, picture, or likeness for any advertising, publicity or other
business purpose at any time, during the term of this Agreement and may
continue to use materials generated during the term of this Agreement for
a period of six months thereafter. Such use of Executive's name, picture,
or likeness shall not be deemed to result in any invasion of Executive's
privacy or in violation of any property right Executive may have; and
Executive shall receive no additional consideration if his name, picture
or likeness is so used. The Executive further agrees that any negatives,
prints or other material for printing or reproduction purposes prepared in
connection with the use of his name, picture or likeness by Employer shall
be and are the sole property of Employer.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
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WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS (RULES) OR CHOICE OF LAWS
(RULES) THEREOF.
18. Venue. The exclusive venue for all suits or proceedings arising from or
related to this Agreement shall be in a court of competent jurisdiction in
Dallas County, Texas.
19. Entire Agreement and Amendment. This Agreement contains the entire
understanding and agreement between the parties, and supersedes any other
agreement between Executive and Employer, whether oral or in writing, with
respect to the subject matter hereof, except that nothing herein shall
affect the rights of Executive and Employer under that certain
Indemnification Agreement dated December 20, 2004 or any existing
confidentiality or non-disclosure agreement. This Agreement may not be
altered, amended, or rescinded, nor may any of its provisions be waived,
except by an instrument in writing signed by both parties hereto or, in
the case of an asserted waiver, by the party against whom the waiver is
sought to be enforced. Any modification of this Agreement may only be
signed on behalf of Employer by the President of Employer and approved by
the Board.
20. Counterparts. This Agreement may be executed in counterparts, with the
same effect as if both parties had signed the same document. All such
counterparts shall be deemed an original, shall be construed together and
shall constitute one and the same instrument.
[signature page to follow]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date indicated in Section 8.
EMPLOYER:
TEXAS CAPITAL BANCSHARES, INC.
By: /s/ XXXXXX X. XXXXX
------------------------------
Its: Chairman and Chief Executive Officer
------------------------------------
EXECUTIVE:
/s/ XXXXX X. XXXXXXXXX
------------------------------
Xxxxx X. Xxxxxxxxx
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