Exhibit 10.2
RETAINER AGREEMENT
This Retainer Agreement (this
“Agreement”) is made effective as of June 2, 2009,
by and between Richard J. Vander Woude (hereinafter referred to as
“Attorney”), FirstCity Servicing Corporation (herein
referred to as “FCSC”), and FirstCity Financial
Corporation (herein referred to as “Company”).
The parties, intending to be legally bound, agree as
follows:
BACKGROUND
Attorney was, prior to the
Effective Date, employed as General Counsel of the Company
and FCSC. Prior to or as of the Effective Date,
Attorney will resign his positions as General Counsel of the
Company and FCSC.
AGREEMENT
1.
DEFINITIONS
For the purposes of this Agreement,
the following terms have the meanings specified or referred to in
this Section 1.
“Agreement” means this Retainer Agreement, as amended from
time to time.
“Company”
means FirstCity Financial
Corporation.
“Effective
Date” means
June 2, 2009.
“Fiscal
Year” means the
Company’ fiscal year, as it exists on the Effective Date or
as changed from time to time.
“Person”
means any individual, corporation
(including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate,
trust, association, organization, or governmental body.
“Retainer
Fee” has the
meaning as defined in Section 3.1(b).
“Retainer
Period” has the
meaning as defined in Section 2.2.
2.
TERMS AND DUTIES
2.1
ENGAGEMENT.
Company hereby engages the
services of Attorney, on a non-exclusive basis, and Attorney agrees
to provide to Company and its affiliates and subsidiaries legal
services on the terms and conditions set forth in this Agreement,
as and to the extent requested by Company from time to time.
In addition, Attorney shall provide such further legal services
hereunder as may be agreed upon by the parties from time to time.
Attorney agrees that he will be available during normal working
hours to render the services required of him hereunder, subject to
vacation and normal conflicts arising from representation of other
clients.
1
2.2
TERM. The term of the Attorney’s
engagement under this Agreement will be two (2) years,
beginning on the Effective Date and ending on May 31, 2011
(the “Retainer Period”), unless earlier terminated as
provided in Section 6.2.
2.3
RETAINER. Company agrees that Company and its
Subsidiaries and Affiliates will furnish work for legal services
for a total of 1,500 hours during the Retainer Period (750 hours
for the period from June 1, 2009 through May 31, 2010 and
750 hours for the period from June 1, 2010 through
May 31, 2011).
3.
COMPENSATION
3.1
Subject to the terms of this
Agreement, the Attorney will receive compensation as set forth in
subparts (a), (b) and (c) of this
Section 3.1.
(a)
Hourly Fees.
Legal fees for services
provided by Attorney during the Retainer Period will be billed at
$350 per hour. Attorney will bill Company for legal services
provided by Attorney each month. Attorney will use his best
efforts to submit any such invoices for services prior to the 10th
day of the following month. Invoices for legal services will
be paid no later than fifteen days after receipt by
Company.
(b)
Retainer Fee.
A Retainer Fee will be
calculated and paid (if any) within twenty-five days after each
three month period during the Retainer Period commencing on the
Effective Date (a “Quarterly Period”); the first
Quarterly Period will end on August 31, 2009. The
Retainer Fee is an amount equal to (i) the Hour Threshold
applicable to that Quarterly Period multiplied by $350,
(ii) reduced by the amount of any fees invoiced to Company
and/or any Company Subsidiaries and Affiliates for that Quarterly
Period, and further reduced by the amount of any Retainer Fees paid
for the immediate prior Quarterly Period which were not applied as
a credit to legal fees charged by Attorney. In the event that
the actual hours billed in any Quarterly Period, exceeds the Hour
Threshold applicable to that Quarterly Period, the excess shall
apply to the succeeding Quarterly Period. The calculation of
the Retainer Fee for each Quarterly Period for the first year of
the Retainer Period will be based upon an Hour Threshold of 187.5
hours per quarter for services provided by Attorney under this
Agreement during the first year of the Retainer Period. The
calculation of the Retainer Fee for each Quarterly Period for the
second year of the Retainer Period will be based upon an Hour
Threshold of 120 hours per quarter for services provided by
Attorney under this Agreement during the second year of the
Retainer Period. Within twenty-five days of the end of the
Retainer Period a final calculation will be made for the entire
Retainer Period based upon the a total of 1,500 hours for the
Retainer Period with credit given to Company for all fees paid by
Company and all Retainer Fees paid during the Retainer Period and
Company will pay, within thirty days of receipt of the calculation
and bill for any Retainer Fee, the final Retainer fee payable to
Attorney. The Retainer Fee will be paid, either directly to
Attorney or to any law firm by which Attorney is employed, but any
reduction of the Retainer Fee shall only apply to hourly fees for
services provided by Attorney and not for legal services provided
by any other attorneys.
2
The Retainer Fee shall be reduced to
the extent that Attorney was offered work by Company and declined
to provide such legal services unless the work was declined due to
(1) other work being performed by Attorney for Company,
(2) the work arising during a vacation period designated by
Attorney (not to exceed 28 workdays per year). The reduction
of the Retainer Fee for declined work will not exceed the Hour
Threshold in any Quarterly Period reduced by hours of services
provided by Attorney during that quarter.
Any Retainer Fee payments paid to
Attorney shall be made to Attorney as an independent contractor and
no such payments shall be included within any W-2 issued to
Attorney under the Separation Agreement (as defined below) and
Attorney shall be solely responsible for the payment of all
federal, state and local income taxes, social security taxes,
federal, state and local unemployment insurance and similar taxes,
and all other assessments, taxes, contributions or sums payable
with respect to Attorney as a result of or in connection with
the services performed by Attorney under the Retainer Agreement,
and Attorney shall file all returns and reports with
respect to any of the foregoing. In the event that
Attorney provides the legal services through a law firm, the law
firm shall recognize and report all income for fees invoice through
such law firm and shall be responsible for payment of all such
taxes.
(c)
No Other Compensation.
Except as set forth in a
Separation Agreement, Release and Amendment to Award Agreements
(the “Separation Agreement”) of even date herewith
executed by Attorney, Company and FCSC, the Attorney shall not be
entitled to any additional compensation, fees, benefits or bonuses
of any kind from the Company or its subsidiaries or
affiliates.
3.2
STATUS OF ATTORNEY AND
COMPANY . Attorney
understands and agrees that he is acting as an independent
contractor in the performance of his services hereunder and nothing
herein contained shall be deemed to create an employment
relationship or an agency relationship between Attorney and
Company. In light of Attorney’s independent contractor
status, Attorney further understands and agrees that he shall in no
event be entitled to participate as an employee in, or to
receive any benefits from, any of Company’s benefit or
welfare plans in respect of his services hereunder. Attorney
or any law firm employing Attorney shall be solely responsible for
the payment of all Federal, state and local income taxes, social
security taxes, Federal, state and local unemployment insurance and
similar taxes, and all other assessments, taxes, contributions or
sums payable with respect to Attorney as a result of or in
connection with the services performed by Attorney hereunder, and
Attorney or such law firm shall file all returns and reports with
respect to any of the foregoing. Nothing contained herein
shall prejudice, limit or otherwise modify any unconditionally
accrued and/or vested rights of Attorney arising out of his prior
employment by Company, which employment terminated on May 31,
2009.
4.
REIMBURSEMENT FOR
EXPENSES
4.1
Attorney shall be entitled to
reimbursement for reasonable and actual documented business
expenses incurred for the benefit of Company, FCSC and their
affiliates and
