EXHIBIT 10.12
AMENDED AND RESTATED
POST RETIREMENT SERVICES AGREEMENT BETWEEN
SURETY CAPITAL CORPORATION, SURETY BANK,
NATIONAL ASSOCIATION AND C. ▇▇▇▇ ▇▇▇▇
This Amended and Restated Post Retirement Services Agreement ("Agreement")
is entered into by and among Surety Capital Corporation, a Delaware corporation
(the "Corporation"), Surety Bank, National Association, a national banking
association (the "Bank"), and C. ▇▇▇▇ ▇▇▇▇, an individual of Fort Worth, Texas
("Bean"). The Corporation, the Bank and Bean are collectively referred to as
the "Parties." The Corporation's business operations that are conducted by the
Bank are referred to as its "Banking Business."
In consideration of the mutual covenants set forth below, it is agreed as
follows:
1. Purposes. The purposes of this Agreement are to provide:
(a) Bean with compensation and benefits for certain consulting
services to be rendered by Bean for the Corporation and the Bank on a part-time
basis after his retirement as a full-time employee of the Corporation; and
(b) the Corporation and the Bank with the part-time consulting
services of Bean after his retirement as a full-time employee of the Corporation
in the activities of (1) promoting the Corporation's and the Bank's ongoing
operations with businesses and business professionals in the service areas
covered by the Corpora tion's Banking Business, (2) representing the
Corporation and the Bank at functions and events relating to the Corporation's
business activities and its Banking Business, (3) providing the Corporation with
information that may come to Bean's attention as to potential business
acquisitions for the Corporation or the Bank, (4) providing the Corporation with
advisory services specifically related to acquisitions for the Banking Business,
and (5) providing the Corporation with services in connection with the
furtherance of stockholder relations (all of the foregoing being referred to in
this Agreement as the "Services").
2. Definitions. For purposes of this Agreement, certain terms are
defined as follows:
(a) "Accelerated Payment" means either the payment by the Corporation
and the Bank pursuant to Section 6 or pursuant to Section 7.
(b) "Cause" means any act that is materially adverse to the best
interests of the Corporation or the Bank and constitutes, on the part of Bean,
common law fraud, a felony or other gross malfeasance of duty.
(c) "Change in Control of the Corporation" shall be deemed to have
occurred if:
(A) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended, the "Exchange Act"), other
than a trustee or other fiduciary holding securities under an employee benefit
plan of the Corporation, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Corporation representing twenty percent (20%) or more of the combined voting
power of the Corporation's then outstanding voting securities;
(B) during any period of two (2) consecutive years during the term
of this Agreement, individuals who at the beginning of such period constitute
the Corporation's Board of Directors (the "Board") cease for any reason to
constitute at least a majority thereof, unless the election of each director who
was not a director at the beginning of such period has been approved in advance
by directors representing
at least two-thirds (2/3rds) of the directors then in office who were directors
at the beginning of the period;
(C) the Corporation sells or otherwise transfers more than fifty
percent (50%) voting control of the Bank; or
(D) there is a sale of substantially all of the assets of the
Bank.
(d) "Disability" means the inability of Bean to perform the Services
required by this Agreement by reason of illness, infirmity, insanity, mental
incompetency or otherwise. This determination will be made in good faith by
Board and concurred in by Bean. If there is a dispute between the Parties as to
the exis tence of a Disability, Bean, the Board, and Bean's physician (defined
as a person licensed to practice medicine in Texas who is regularly attending
Bean) will consult and reach a determination. If Bean does not have a regularly
engaged physician, the Board may engage at the Corporation's expense a physician
to examine Bean, and Bean consents to such examination and to waive, if
applicable, any privilege between the physician and Bean that may arise as a
result of said examination. If Bean has not engaged a physician, the opinion of
the physician engaged by the Board shall control.
3. Bean's Services. The Services to be provided by Bean under this
Agreement will be furnished by Bean as an independent contractor and not as an
employee and will commence at the time Bean retires from providing his active,
full-time services to the Corporation in its day-to-day operations and will
terminate on the fifteenth (15th) anniversary date of Bean's retirement date,
unless terminated earlier, in accordance with the provisions of this Section 3.
The nature and extent of the actual activities to be conducted by Bean will be
mutually agreed to by Bean and the Corporation and the Bank from time to time
during such period; however, the manner and means by which such activities are
performed by Bean shall be determined by Bean. Bean will devote such time to
the performance of his duties under this Agreement as is reasonably necessary
for a satisfactory performance of his duties under this Agreement.
(a) This Agreement may be terminated by the Corporation or the Bank
under the following circumstances: (1) for Cause or (2) in the event of Bean's
Disability or death.
(b) This Agreement may be terminated by Bean under the following
circumstances: (1) in the event of a default by the Corporation or the Bank of
its obligations under this Agreement, immediately after providing the
Corporation or the Bank, as the case may be, with written notice thereof, or (2)
at any time for any reason, in his sole discretion, after providing the
Corporation with thirty (30) days written notice of such intent.
(c) This Agreement shall terminate upon the occurrence of a Change in
Control of the Corporation.
(d) In the event of a termination of this Agreement by the Corporation
or the Bank pursuant to Section 3(a), neither the Corporation nor the Bank will
have any further obligations under this Agreement, except to the extent payments
and benefits are owed pursuant to Section 5 for periods prior to the termination
of this Agreement. In the event of a termination of this Agreement by Bean
pursuant to Section 3(b)(2), neither the Corporation nor the Bank will have any
further obligations under this Agreement, except to the extent payments and
benefits are owed pursuant to Section 5 for periods prior to the termination of
this Agreement. If the termination of this Agreement is pursuant to Section
3(b)(1) as a result of a default by the Corporation or the Bank in the
performance of their respective obligations hereunder or pursuant to Section
3(c) as a result of a Change in Control of the Corporation, the Corporation and
the Bank will be obligated to pay any amounts owed under Section 5 and to also
pay the Accelerated Payment due pursuant to either Section 6 or Section 7, as
the case may be, which obligation shall survive the termination of this
Agreement.
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The Corporation (to the extent of 25% thereof) and the Bank (to the extent of
75% thereof) shall also pay to Bean all legal fees and expenses incurred by Bean
in seeking to obtain or enforce any right or benefit provided by this Agreement.
4. Compensation for Services. During the period that Bean performs the
Services for the Corporation and the Bank after he retires from providing his
active, full-time services to the Corporation in its day-to-day operations, the
Corporation (to the extent of 25% thereof) and the Bank (to the extent of 75%
thereof) will reimburse Bean for meals and other out-of-pocket expenses that he
incurs in connection with his providing the Services. Bean agrees in this
regard to follow the Corporation's and the Bank's normal substantiation and
reimbursement policies in connection with such expenses.
5. Payments and Benefits for Services Rendered. At the time Bean retires
from providing his active, full-time services to the Corporation in its day-to-
day operations, the Corporation and the Bank agree to provide to Bean the
compensation and benefits listed below.
(a) Annual Payment. Upon Bean's retirement from full-time employment,
the Corporation and the Bank will begin payments to Bean in the amount of
$53,825 per year. This amount will be pro-rated for partial years and will be
paid to Bean, at his option, in annual, monthly or bi-monthly installments.
(b) Insurance Coverage. The Corporation and the Bank will provide
Bean, or reimburse Bean for the cost of, health, accident and medical insurance
coverage that is equivalent to the coverage provided to those persons serving
from time to time as the senior executive officers of the Corporation and the
Bank.
(c) Twenty-five percent of all payments pursuant to this Section 5
will be paid by the Corporation and seventy-five percent of all payments
pursuant to this Section 5 will be paid by the Bank.
6. Default. If the Corporation or the Bank defaults in the performance
of any provision under Section 5 of this Agreement, the payments, insurance
coverage and reimbursements under Section 5(a) and (b) shall be accelerated and
immediately due and payable to Bean. In such event, the Parties agree that it
may be diffi cult, if not impossible, to accurately determine the amount of
damages that Bean may incur by reason of such default; therefore, the Parties
agree that the sum of the amounts calculated under the following subsections
shall be used to determine the amount then owed to Bean for such default (the
"Accelerated Payment"). The Accelerated Payment shall be immediately due and
payable to Bean (payable by certified or cashier's check) upon the occurrence of
the default. All or any portion of such total that is not paid to Bean within
thirty (30) days of the default will bear interest at ten percent (10%) per
annum until paid. Twenty-five percent of all payments pursuant to this Section
6 will be paid by the Corporation and seventy-five percent of all payments
pursuant to this Section 6 will be paid by the Bank.
(a) Annual Payment. The amount owed under Section 5(a) shall be equal
to the discounted present value of $53,825 per year for the number of years
equal to eighty-five (85) minus Bean's age at the time of the default. The
discount interest rate for these purposes will be five percent (5%) per year.
(b) Insurance Coverage. The amount owed under Section 5(b) shall be
equal to the "insurance cost" (as defined below) times the number of years equal
to eighty-five (85) minus Bean's age at the time of the default. The insurance
cost for these purposes will be the cost of the coverage and reimbursement
provided under Section 5(b) for the immediately preceding twelve (12) calendar
month period.
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7. Change in Control of the Corporation. In the event of a Change in
Control of the Corporation, the Corporation (to the extent of twenty-five
percent (25%) thereof) and the Bank (to the extent of seventy-five (75%)
thereof) shall pay to Bean the Accelerated Payment, calculated in accordance
with Section 6 as of the effective date of the Change in Control. The
Accelerated Payment shall be due and payable to Bean (payable by certified or
cashier's check) immediately prior to the effectiveness of the Change in Control
of the Corporation. All or any portion of such total that is not paid to Bean
immediately prior to the effectiveness of the Change in Control of the
Corporation will bear interest at ten percent (10%) per annum until paid.
8. Nature of Accelerated Payment as a Result of a Change in Control
Payment. The benefits payable to Bean under this Agreement in the event of a
Change in Control of the Corporation shall be considered severance pay in
consideration of Bean's past service and Bean's continued service after the date
this Agreement. Bean shall not be required to mitigate the amount of any payment
provided for in Section 7 by seeking other employment or otherwise, nor shall
the amount of any payment or benefit provided for in Section 7 be reduced by any
compensation earned by Bean as the result of employment by another employer or
by retirement benefits after the date of termination, or otherwise.
9. Restrictions. Bean's rights or benefits under this Agreement shall
not be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge and any such actions shall be void. Bean's rights or
benefits under this Agreement shall not in any manner be liable for or subject
to the debts, contracts, liabilities or torts of the person entitled to such
benefits.
10. Taxes. As an independent contractor, Bean shall be responsible for
the payment of all federal income taxes and his own self-employment and social
security taxes, the liability for which arises from or relates to any and all
payments made by the Corporation and the Bank to Bean under this Agreement,
including payments pursuant to Sections 5, 6 and 7. Bean hereby agrees to
indemnify and hold harmless the Corporation and the Bank from and for any
liability or claim respecting the foregoing taxes which are the sole obligation
and liability of Bean. Bean's obligation to indemnify the Corporation and the
Bank as provided by this Section 10 shall survive the termination of this
Agreement.
11. Notices. Any notice required or permitted by either Party must be in
writing and must be delivered either personally to the other Party or by
certified mail, return receipt requested, at the Party's address indicated
below, and any notice will be effective upon delivery in the case of personal
delivery and, in the case of delivery by certified mail, three (3) business days
after the date of deposit in the United States mail, postage prepaid. The
addresses of the Parties are as follows:
If to Corporation: Surety Capital Corporation
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▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
If to Bank: Surety Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
If to Bean: Mr. C. ▇▇▇▇ ▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
The names and address of the Parties to receive notice as stated in this Section
11 may be changed at any time by notice given in accordance with this Section
11. As used in this Agreement, the term "business day" means any day of the
week, Monday through Friday, that is not recognized by the United States Postal
Service as a national holiday and on which national banks are open for business.
12. Independent Contractor Status. It is expressly agreed and stipulated
by the Parties hereto that Bean in an independent contractor and that Bean shall
not be deemed nor construed to be an employee of the Corporation or the Bank for
federal income tax purposes or within the meaning of the Workers' Compensation
Act of the state of Texas.
13. Invalid Provision. In the event any of the provisions, or portions
thereof, of this Agreement are held to be invalid, illegal or unenforceable by
any court of competent jurisdiction, the validity, legality and enforceability
of the remaining provisions, or portions thereof, shall not be affected.
Moreover, so far as is reasonable and possible, effect shall be given to the
intent manifested by the portion held invalid, illegal or unenforceable.
14. Captions. The captions or headings in this Agreement are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Agreement.
15. Governing Law. This Agreement has been executed in and shall be
governed by the laws of the state of Texas. The Parties agree that the terms of
this Agreement will be performed and all legal proceedings involving this
Agreement will be conducted in Tarrant County, Texas.
16. Inurement. This Agreement shall extend to and be binding upon Bean
and his heirs, legatees, legal representatives and successors, and on the
Corporation and the Bank and their respective successors or assigns. The rights
of the Corporation and the Bank under this Agreement may not be assigned without
Bean's consent.
17. Amendment. All amendments or changes to this Agreement shall be in
writing.
18. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original Agreement. All counterparts
together shall represent but one and the same instrument.
19. Further Assurances. Each Party to this Agreement agrees to perform
any further acts and to execute and deliver any documents or legal instruments
which may be reasonably necessary to carry out the provisions of this Agreement.
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20. Entire Agreement. This Agreement contains the entire understanding
between the undersigned concerning the subject matter of the Agreement. There
are no other representations, agreements, arrangements or understandings, oral
or written, between or among the Parties, relating to the subject matter of this
Agreement, which are not fully expressed herein. The Parties agree that the
Post Retirement Services Agreement dated January 20, 1998 between the
Corporation and Bean is hereby terminated and of no further force and effect,
such agreement being superseded in its entirety by this Agreement.
21. Authorization. The Corporation and the Bank are authorized to enter
into this Agreement by virtue of resolutions duly adopted by the respective
Board of Directors of the Corporation and the Bank.
22. Effective Date. The effective date of this Agreement is November 1,
1998.
SURETY: SURETY CAPITAL CORPORATION
By: /s/ ▇. ▇. ▇▇▇▇▇▇
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Title: Vice President
BANK: SURETY BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President
BEAN: /s/ C. ▇▇▇▇ ▇▇▇▇
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C. ▇▇▇▇ ▇▇▇▇
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