EXHIBIT 10(bt)
TERMINATION AGREEMENT
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This Termination Agreement (the "Agreement") is made and entered into
as of December 30, 2002, by and between HALLMARK FINANCIAL SERVICES, INC., a
Texas corporation (the "Company"), and XXXXX X. XXXXXXX, an individual
("Sleeper").
Recitals:
A. Sleeper has been employed by the Company pursuant to an Executive
Compensation Agreement dated August 24, 1994, which Executive Compensation
Agreement has been amended by a First Executive Compensation Agreement
Amendment dated August 24, 1995, a Second Amendment to Executive
Compensation Agreement dated November 30, 1995, letter agreements dated
December 29, 1998, and December 14, 1999, and a Third Amendment to Executive
Compensation Agreement dated November 15, 2000 (as amended, the "Employment
Agreement").
B. The Employment Agreement expires by its terms on December 31,
2002, and the Board of Directors of the Company has determined not to renew
or extend the Employment Agreement.
C. In order to provide a smooth transition of responsibilities, the
Company and Sleeper desire to enter into certain agreements regarding
Sleeper's post-employment services to the Company, defining certain
employment benefits and confirming certain covenants.
Agreement:
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and promises herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Sleeper hereby agree as follows:
1. Termination of Employment. The Company and Sleeper acknowledge
and agree that Sleeper's employment with the Company will terminate without
further action by either party as of December 31, 2002. The Company will
pay to Sleeper her accrued compensation through December 31, 2002, and
reimburse Sleeper for ordinary and necessary business expenses incurred on
behalf of the Company in the course of her duties through December 31, 2002,
in accordance with Company's customary practice. Sleeper may retain the
laptop computer presently provided to her by the Company, provided that a
representative of the Company designated by the Chief Executive Officer is
permitted to confirm that no proprietary or confidential information of the
Company is stored on such computer.
2. Consulting Services. Sleeper shall serve as an independent
contractor to provide consulting services to the Company as reasonably
requested by the Chief Executive Officer or his designee for a period
commencing January 1, 2003, and continuing through the earlier of (a)
Sleeper's commencement of other employment, or (b) June 30, 2003 (the
"Consulting Period"). During the Consulting Period, Sleeper shall not be
required to maintain any designated working hours or working days, but shall
be reasonably available to respond to telephone inquiries from the Chief
Executive Officer of the Company.
3. Remuneration and Benefits. During the Consulting Period, Sleeper
shall receive as her sole remuneration the sum of $8,750.00 per month
payable in equal bi-monthly installments due on the 1st and 15th day of each
calendar month. During the Consulting Period, the Company shall pay the
premiums to permit Sleeper to continue her health insurance under The
Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). Sleeper
shall not participate in any other benefit programs of the Company during
the Consulting Period, other than as expressly provided in the Company's
stock option and 401(k) plans.
4. Complete Satisfaction. The compensation, reimbursement,
remuneration and benefits provided to Sleeper by the Company pursuant to
Sections 1 and 3 above shall be in full and complete satisfaction of any and
all amounts otherwise payable to Sleeper in connection with or as a
consequence of her employment with the Company or the termination thereof,
her post-employment consulting services to the Company and her other
covenants and agreements contained herein. Sleeper acknowledges and agrees
that, subsequent to the Consulting Period, she will not be entitled to any
further remuneration or benefits from the Company. Sleeper further
acknowledges and agrees that the benefits provided to her pursuant to this
Agreement exceed the benefits to which she would otherwise be entitled under
normal Company policy.
5. Board Membership. Sleeper may remain a member of the Board of
Directors of the Company until the next annual meeting of shareholders of
the Company. Sleeper acknowledges and agrees that she will not stand for
re-election at the next annual meeting of shareholders of the Company.
6. Press Release. The Company and Sleeper will in good faith attempt
to compose a mutually agreeable press release announcing the Company's
management changes and providing a positive characterization of Sleeper's
contributions to the Company. In the event the parties cannot timely agree
on the form of the press release, the Company may issue such press release
as it deems prudent to comply with applicable securities laws.
7. Confidentiality. In addition to any other agreements with or
duties to the Company, Sleeper agrees that she will not, at any time,
without the express written consent of the Chief Executive Officer of the
Company, publish, disclose or divulge to any person, firm or corporation, or
use, directly or indirectly, for her own benefit or the benefit of any such
person, firm or corporation other than the Company, any confidential
information of the Company, its subsidiaries and/or its affiliates. Sleeper
acknowledges and agrees that, in the event of her violation of this covenant
of confidentiality, the Company will suffer irreparable injury and,
therefore, shall be authorized and entitled to obtain from any court of
competent jurisdiction preliminary and permanent injunctive relief as well
as an equitable accounting of all profits or benefits arising out of such
violation. Such rights and remedies of the Company shall be cumulative and
in addition to any other rights or remedies to which the Company may be
entitled including, but not limited to, damages suffered by the Company.
8. Early Termination of Non-Compete. The Company agrees that the
covenant against competition contained in Paragraph 6 of that certain Key
Employee Stock Option Agreement between the Company and Sleeper dated
November 23, 1993, shall cease to be of any further force and effect at such
time as Sleeper is no longer a member of the Board of Directors of the
Company.
9. Release. Sleeper hereby releases, acquits and forever discharges
the Company, its affiliates, subsidiaries and parents, and their respective
shareholders, directors, officers, employees, attorneys, agents, successors,
and assigns from any and all claims, obligations, liabilities, demands,
actions, and causes of action of any kind or character whatsoever, known or
unknown, foreseen or unforeseen, arising as a result of or in connection
with her employment by the Company or the termination thereof, including,
but not limited to, any such claims, obligations, liabilities, demands,
actions, or causes of action arising under Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act (as amended by the Older
Workers' Benefit Protection Act), the Americans With Disabilities Act, or
any other federal or state employment statutes or relating to any benefit
plans of the Company.
10. Entire Agreement. This Agreement contains the entire agreement
between the Company and Sleeper and supersedes any and all prior agreements
with respect to the subject matter hereof. This Agreement may not be
amended, changed or modified except by written instrument executed by the
parties hereto. Nothing contained in this Agreement shall abrogate the
rights of the parties under that certain Indemnification Agreement between
the Company and Sleeper dated July 23, 2002, which Indemnification Agreement
shall remain in full force and effect.
9. Non-Waiver. The failure by the Company or Sleeper to complain of
any act or omission on the part of the other, no matter how long the same
may continue, shall not be deemed to be a waiver by the Company or Sleeper
of any of their respective rights under this Agreement. The waiver by the
Company or Sleeper of any breach of this Agreement shall not be deemed a
waiver of any subsequent breach of the same or any other provision of this
Agreement.
10. Severability. In the event that any provision of this Agreement
shall prove to be illegal, invalid, void or unenforceable, such provision
shall be deemed to be severable from the other provisions of this Agreement,
which shall remain binding on the parties hereto. In the event that any of
the terms or provisions of this Agreement shall be held to be illegal,
invalid, void or unenforceable solely by virtue of the fact that such term
or provision exceeds the permissible bounds of applicable law with respect
to its scope or duration, the parties request that any court examining such
issue employ great latitude in reforming this Agreement so as to make this
Agreement, as reformed, valid, binding and enforceable.
11. Binding Effect. This Agreement shall be binding upon the parties
hereto and their respective heirs, successors and assigns.
12. Company Defined. Any reference to Company herein includes the
Company and its affiliates, subsidiaries, and parents.
13. Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. This Agreement
has been executed and is performable in Dallas, Texas, and any action, suit
or proceeding to enforce or construe any of the terms hereof shall be
brought in a court of competent jurisdiction in Dallas County, Texas.
14. Headings. The headings of all paragraphs in this Agreement are
inserted for convenience of reference only and shall not affect the
construction hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date set forth opposite the respective signatures below, but in all
events to be effective as of the date first hereinabove set forth.
HALLMARK FINANCIAL SERVICES, INC.
By:
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Xxxx X. Xxxxxxx, Chairman of the Board of
Directors
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Xxxxx X. Xxxxxxx
