Exhibit 10.1
SEPARATION AGREEMENT,
RELEASE
AND AMENDMENT TO AWARD
AGREEMENTS
This Separation Agreement, Release
and Amendment to Award Agreements (“Agreement”) is made
and entered into on June 4, 2009 to be effective as of
June 2 , 2009 (the “Effective Date”), by
and between Richard J. Vander Woude (hereinafter referred to as
“Employee”), FirstCity Servicing Corporation .
(herein referred to as “FCSC”), and FirstCity Financial
Corporation (herein referred to as “FCFC”).
WHEREAS, Employee’s employment with FCSC and/or
FCFC will terminate effective June 2, 2009; and
WHEREAS, Employee, FCSC and FCFC desire to settle the
differences between them relating to all claims and causes of
action that could be asserted by Employee, FCSC and FCFC, including
but not limited to those for vacation pay, severance pay or other
payments that may be due or claims that might asserted by Employee
and to set forth their agreement concerning certain matters
relating to their relationship following termination of employment
and related agreements between them.
In consideration of the mutual
promises, covenants and agreements set forth herein, and in full
compromise, release and settlement, accord and satisfaction, and
discharge of all claims or causes of action, known or unknown,
possessed by or belonging to Employee, FCSC and FCFC, the parties
covenant and agree as follows:
1.
Each party shall take the following
actions, subject to the terms of this Agreement:
(a)
FCSC will, on the later to occur of
either (1) seven (7) days after the complete execution of
this Agreement or (2) June 15, 2009, begin payments to
Employee, the first payment being in the gross amount of $8,500
(less payroll deductions), a second payment to be paid on
June 30, 2009 in the gross amount of $8,500 (less payroll
deductions), and thereafter, commencing on July 15, 2009, pay
to Employee an amount equal to $8,500 per month to Employee by
making two payments per month of $4,250 each on the fifteenth
(15th) and last day of each month thereafter until and including
May 31, 2011, all of such payments totaling $212,500.
Each of the foregoing monthly payments will be made in accordance
with and subject to the normal payroll practices of FCFC and FCSC
and subject to withholding. FCFC will pay an additional cash
payment in the amount of $25,000 on May 31, 2010 whether or
not there has been a settlement payment or collection of the
judgment in the Prudential lawsuit. In the event that there
is no settlement payment or collection of the judgment in the
Prudential lawsuit, Employee shall pay back the $25,000.00 payment
to FCFC within 30 days of a final determination of the Prudential
lawsuit that results in a take nothing judgment for FCFC.
Employee will not be entitled to any other payments,
compensation or benefits from FCSC or FCFC (as defined herein)
after the Effective Date, except as provided in Sections 1(b),
1(c), 1(e) and 1(f). The obligation of FCFC and FCSC to
make the payments set forth herein are in
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the nature of severance payments and
are not conditioned upon any services to be performed by
Employee. The obligation to make these payments is absolute
and not subject to any right of setoff.
(b)
FCFC agrees that the Options (as
defined and set forth below) held by Employee under the FirstCity
Financial Corporation 1995 Stock Option and Award Plan, the
FirstCity Financial Corporation 1996 Stock Option and Award Plan,
the FirstCity Financial Corporation 2004 Stock Option and Award
Plan and the FirstCity Financial Corporation 2006 Stock Option and
Award Plan (collectively referred to as the “Plans”)
will continue in full force and effect after June 1, 2009 and
that the Award Agreements identified below related to the Options
are amended to provide that the Options do not terminate as of the
termination of employment of Employee, but that the options
described in subpart (ii) below shall terminate on
December 20, 2009 as to any of those Options which Employee
fails to exercise prior to December 20, 2009, and the options
described in subparts (i), (iii), (iv) and (v) below
shall terminate on June 1, 2010 as to any of those Options
which Employee fails to exercise prior to June 1, 2010, and
further that the Award Agreements dated November 2, 2006
identified in subpart (iv) are amended to provide that the
Options for 2,000 shares under those Award Agreements which have
not vested are vested as of June 1, 2009, and further that the
Award Agreement dated October 11, 2007 identified in subpart
(v) is amended to provide that the Options for 4,000 shares
under that Award Agreement which have not vested are vested as of
June 1, 2009.
The Award Agreements between FCFC
and Employee and the options granted by FCFC to Employee (the
“Options”) which are the subject of this
Section 1(b) are as follows:
(i) options for 25,000 shares
of FirstCity Financial Corporation common stock at an exercise
price of $2.00 per share and grant date of December 1, 2000
with a termination date prior to this Agreement of December 1,
2010, granted under the 1996 Stock Option and Award Plan as
evidenced by an award agreement dated December 1,
2000;
(ii) options for 25,000 shares
of FirstCity Financial Corporation common stock at an exercise
price of $3.06 per share and a grant date of December 20, 2001
with a termination date prior to this Agreement of
December 20, 2009, granted under the 1996 Stock Option and
Award Plan as evidenced by an award agreement dated
December 20, 2001;
(iii) options for 15,000 shares
of FirstCity Financial Corporation common stock at an exercise
price of $7.25 per share and grant date of May 13, 2004 with a
termination date prior to this Agreement of May 13, 2014,
granted under the 2004 Stock Option and Award Plan as evidenced by
an award agreement dated May 13, 2004;
(iv) options for 8,000 shares
of FirstCity Financial Corporation common stock at an exercise
price of $11.77 per share and grant date of October 25, 2005
with a termination date prior to this Agreement of October 25,
2015, 3,850 shares of which were granted under the 1995 Stock
Option and Award Plan as evidenced
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by an award agreement dated
November 2, 2006 and 4,150 shares of which were granted under
the 1996 Stock Option and Award Plan as evidenced by an award
agreement dated November 2, 2006; and
(v) options for 8,000 shares of
FirstCity Financial Corporation common stock at an exercise price
of $9.85 per share and grant date of October 11, 2007 with a
termination date prior to this Agreement of October 11, 2017,
granted under the 2006 Stock Option and Award Plan as evidenced by
an award agreement dated October 11, 2007.
Employee shall not be considered or
treated as an “employee” for the purpose of any benefit
plans after June 1, 2009; provided that Employee will retain
existing rights under the Award Agreements and Options with
extended exercise dates as to Options as provided in this subpart
(b) and will retain his rights as to shares purchased under
the Employee Stock Purchase Plan, to his vested interest in the
FCFC 401K Plan and other benefit obligations as in effect on
June 1, 2009.
(c)
FCSC shall convey ownership of the
Dell Latitude D620 computer and portable printer used by Employee
with value of computer and printer included in Employee’s W-2
to be $200.
(d)
FCFC will furnish Employee, at
FCFC’s expense, with cell phone service and use of the cell
phone in his possession with the cell phone number 254-715-2454
until December 31, 2009. FCFC will take all action to
attempt to transfer the cell phone number 254-715-2454 to Employee
prior to or at the end of that period.
(e)
FCFC will reimburse Employee for
expenses up to $1,500 for memberships, continuing legal education
expenses and related expenses which are primarily related to
services provided for FCFC as has historically been done when
Employee served as general counsel for FCFC. To the extent
any reimbursement of expenses under this Section 1(e) are
subject to Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), then in accordance with Code
Section 409A: (i) the amount of expenses eligible for
reimbursement provided during Employee’s taxable year may not
affect the expenses eligible for reimbursement provided in any
other taxable year, (ii) the reimbursement must be made on or
before the last day of Employee’s taxable year following the
taxable year in which the expense was incurred, and (iii) the
right to reimbursement is not subject to liquidation or exchange
for another benefit.
(f)
FCSC and Employee shall enter into a
Retainer Agreement in the form of the Retainer Agreement set forth
at Exhibit A attached hereto.
2.
Employee, on behalf of himself and
his agents, successors, assigns, heirs, executors, administrators,
and legal representatives, releases FCSC, FCFC and all of
FCFC’s affiliates and subsidiaries, their agents, servants,
legal representatives, officers, directors, shareholders, partners
and employees, and all persons, natural or corporate, in privity
with them or any of them (all shall be collectively referred to as
the “ FC Released Parties”), from any and all claims or
causes of action of any kind whatsoever, at common law, statutory,
contractual or otherwise, that Employee has or might have, or that
could be asserted by Employee, known or
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unknown, now existing, arising out
of or related to employment, termination of employment, operation
of FCSC or FCFC, or any other matters between or among Employee and
the FC Released Parties, save and except as to performance of
agreements set forth in this Agreement; this release shall include,
without limitation, all claims of Employee related to any
obligations, responsibilities, or liabilities of FCSC and/or FCFC:
(i) under any written or oral employment or
compensation agreement between Employee, FCSC and/or FCFC (other
than the Award Agreements); (ii) under any agreements
relating to compensation, reimbursement, or payment of any kind
from FCSC or FCFC, save and except any 401K or other benefit
obligations as in effect on June 1, 2009, any such obligations
being subject to the terms and provisions of such benefit plans and
the Award Agreements as to be amended under subpart (b) of
Section 1; (iii) under any written or oral
agreements relating to an ownership of stock or operation of FCSC
or FCFC, save and except the rights of Employee related to FCFC
common stock purchased under the FCFC Employee Stock Purchase Plan
or other benefit obligations as in effect on June 1, 2009; and
(v) any and all claims, demands, suits, damages,
losses, wrongs, actions, causes of action, or suits in equity or
otherwise of any kind or nature whatsoever regarding his
employment, and separation from employment, with FCSC or FCFC,
including, but not limited to, any claim arising under the Age
Discrimination in Employment Act, the Older Workers Benefit
Protection Act, the Civil Rights Act of 1964, the Equal Pay
Act,
