EXHIBIT 4.12
SEVERANCE AGREEMENT
This Agreement is entered into on December 30, 1993, by and between
Southwest Bank of Texas National Association (the "Bank") and W. Xxxxxx Xxxxxxx
("Xx. Xxxxxxx").
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises in this Agreement, the Bank and Xx. Xxxxxxx hereby agree as follows:
1. RESIGNATION. Effective as of the close of business on January 31,
1994, Xx. Xxxxxxx resigns from the offices of Director, Executive Vice President
and Chief Financial Officer of the Bank and from all employment with the Bank.
Xx. Xxxxxxx acknowledges and agrees that he has no authority to and will not act
for the Bank in any capacity on or after the effective date of the resignation.
2. SEVERANCE PAY. The Bank agrees to provide to Xx. Xxxxxxx xxxxxxxxx
payments subsequent to March 31, 1994 in the total amount of $123,000 payable in
monthly installments of $10,250 each on the last day of each calendar month,
beginning April 30, 1994 and ending on March 31, 1995; provided, however, that
at any time after March 31, 1994, Xx. Xxxxxxx may elect to receive the unpaid
balance of such severance payments in a lump sum at such time as he may choose.
Such severance payment shall be subject to customary withholding for taxes and
Social Security.
3. MEDICAL INSURANCE. Xx. Xxxxxxx and the Bank agree that, for the
period of April 1, 1994 to March 31, 1995 the Bank, at its expense, will provide
Xx. Xxxxxxx and his eligible dependents with medical and dental insurance under
the Bank's employee group medical and dental benefit plans on the same basis as
such benefits are provided to all full-time employees of the Bank during that
period; provided, however, that such medical and dental insurance will not be
provided during any period when Xx. Xxxxxxx is eligible to participate in any
medical benefit coverage under another employer's plan. In the event Xx. Xxxxxxx
dies prior to March 31, 1995, and while medical and dental insurance provided
for herein is still in effect, his eligible dependents will continue to receive
such medical and dental insurance until March 31, 1995.
In the event changes in the Bank's medical or dental benefit plans
occur, then the benefits provided by the Bank to Xx. Xxxxxxx, his eligible
dependents and survivors will be adjusted in accordance with such changes on the
same terms and conditions applicable to other persons eligible for benefits
under such plans, including such changes that may effectuate the termination of
benefits.
4. STOCK OPTIONS.
(a) AMENDMENT OF NON-QUALIFIED OPTIONS. Xx. Xxxxxxx and the Bank agree
that each of the options held by Xx. Xxxxxxx for the purchase of 12,381 shares
and 5,000 shares of Common Stock of the Bank granted pursuant to option
agreements dated July 1, 1989, and July 20, 1993, respectively (the "Option
Agreements") are hereby amended by amending Section 3 of each Option Agreement
to read in its entirety as follows:
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"3. EXERCISE OF OPTION. This Option shall be fully exercisable on
the date hereof and may be exercised in whole or in part at any time
prior to December 31, 1999, on which date this Option shall expire,
terminate and be of no further force or effect. This Option may be
exercised by written notice to the Company at its principal executive
office addressed to the attention of its Chief Executive Officer. This
Option is not transferable by Employee otherwise than by will or the
laws of descent and distribution. If Employee dies prior to December 31,
1999, his estate or the person who acquires this Option by will or the
laws of descent or distribution or otherwise by reason of the death of
Employee, may exercise this Option only during the period of one year
following the date of Employee's death, but no later than December 31,
1999. The purchase price of shares as to which this Option is exercised
shall be paid in full at the time of exercise in cash (including check,
bank draft or money order payable to the order of the Company). No
fraction of a share of Stock shall be issued by the Company upon
exercise of an Option; rather, Employee shall provide a cash payment for
such amount as is necessary to effect the issuance and acceptance of
only whole shares of Stock. Unless and until a certificate or
certificates representing such shares shall have been issued by the
Company to Employee, Employee (or the person permitted to exercise this
Option in the event of Employee's death) shall not be or have any of the
rights or privileges of a shareholder of the Company with respect to
shares acquirable upon an exercise of this Option."
(b) TERMINATION OF INCENTIVE OPTION. Xx. Xxxxxxx and the Bank agree that
the incentive option held by Xx. Xxxxxxx for the purchase of the 20,000 shares
of common stock of the Bank for a price of $7.00 per share, issued pursuant to
the option agreement between Xx. Xxxxxxx and the Bank dated August 15, 1989, is
hereby canceled and terminated and such option agreement shall be void and of no
further force or effect.
(c) GRANT OF REPLACEMENT OPTION. (1) GRANT OF OPTION; PURCHASE PRICE. In
consideration of the cancellation and termination of the above incentive option,
the Bank hereby grants to Xx. Xxxxxxx an option (the "Replacement Option") to
purchase 20,000 shares of the Bank's common stock ("Stock"), at an exercise
price of $7.00 per share. The Replacement Option is not granted under any of the
Bank's Stock Option Plans and shall not be treated as an incentive stock option
within the meaning of section 422(b) of the Internal Revenue Code of 1986, as
amended.
(2) EXERCISE OF OPTION. The Replacement Option shall be fully
exercisable on the date hereof and may be exercised in whole or in part
at any time prior to December 31, 1999, on which date the Replacement
Option shall expire, terminate and be of no further force or effect. The
Replacement Option may be exercised by written notice to the Bank at its
principal executive office addressed to the attention of its Chief
Executive Officer. The Replacement Option is not transferable by Xx.
Xxxxxxx otherwise than by will or the laws of descent and distribution.
If Xx. Xxxxxxx dies prior to December 31, 1999, his estate, or the
person who acquires the Replacement Option by will or the laws of
descent and distribution or otherwise by reason of Xx. Xxxxxxx'x death,
may exercise the Replacement Option only during the period of one year
following the date of Xx. Xxxxxxx'x death, but no later than December
31, 1999.
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The purchase price of shares as to which the Replacement Option
is exercised shall be paid in full at the time of exercise in cash
(including check, bank draft or money order payable to the order of the
Bank). No fraction of a share of Stock shall be issued by the Bank upon
exercise of the Replacement Option; rather, Xx. Xxxxxxx shall provide a
cash payment for such amount as is necessary to effect the issuance and
acceptance of only whole shares of Stock. Unless and until a certificate
or certificates representing such shares shall have been issued by the
Bank to Xx. Xxxxxxx, Xx. Xxxxxxx (or the person permitted to exercise
the Replacement Option in the event of his death) shall not be or have
any of the rights or privileges of a shareholder of the Bank with
respect to shares acquirable upon an exercise of the Replacement Option.
3. WITHHOLDING OF TAX. To the extent that the exercise of the
Replacement Option or the disposition of shares of Stock acquired by
exercise of the Replacement Option results in compensation income to Xx.
Xxxxxxx for federal or state income tax purposes, Xx. Xxxxxxx shall
deliver to the Bank at the time of such exercise of disposition such
amount of money or shares of Stock as the Bank may require to meet its
obligation under applicable tax laws or regulations, and, if Xx. Xxxxxxx
fails to do so, the Bank is authorized to withhold from any cash or
Stock remuneration then or thereafter payable to Xx. Xxxxxxx any tax
required to be withheld by reason of such resulting compensation income.
Upon an exercise of the Replacement Option, the Bank is further
authorized in its discretion to satisfy any such withholding requirement
out of any cash or shares of Stock distributable to Xx. Xxxxxxx upon
such exercise.
4. STATUS OF STOCK. Xx. Xxxxxxx understands that at the time of
the execution of this Agreement the shares of Stock to be issued upon
exercise of the Replacement Option have not been registered under the
Securities Act of 1933, as amended (the "Act") or any State securities
law, and that the Bank does not currently intend to effect any such
registration. Until the shares of Stock acquirable upon exercise of the
Replacement Option have been registered for issue under the Act, the
Company will not issue such shares unless Xx. Xxxxxxx provides the Bank
with a written opinion of legal counsel, who shall be satisfactory to
the Bank, addressed to the Bank and satisfactory in form and substance
to the Bank's counsel, to the effect that the proposed issuance of such
shares may be made without registration under the Act. In the event
exemption from registration under the Act is available upon an exercise
of the Replacement Option, Xx. Xxxxxxx (or the person permitted to
exercise the Replacement Option in the event of his death), if requested
by the Bank to do so, will execute and deliver to the Bank in writing an
agreement containing such provisions as the Bank may require to assure
compliance with applicable securities laws.
Xx. Xxxxxxx agrees that the shares of Stock which he may acquire
by exercising the Replacement Option shall be acquired for investment
without a view to distribution, within the meaning of the Act, and shall
not be sold transferred, assigned, pledged or hypothecated in the
absence of an effective registration statement for the shares under the
Act and applicable State securities laws or an applicable exemption from
the registration requirements of the Act and any applicable State
securities laws. Xx. Xxxxxxx also agrees that the shares of Stock which
he may acquire by exercising the Replacement Option will not
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be sold or otherwise disposed of in any manner which would constitute a
violation of any applicable securities laws, whether federal or state.
In addition, Xx. Xxxxxxx agrees (i) that the certificates
representing the shares of Stock purchased under the Replacement Option
may bear such legend or legends as the Bank deems appropriate in order
to assure compliance with applicable securities laws, (ii) that the Bank
may refuse to register the transfer of the shares of Stock purchased
under the Replacement Option on the stock transfer records of the Bank
if such proposed transfer would in the opinion of counsel satisfactory
to the Bank constitute a violation of any applicable securities law and
(iii) that the Bank may give related instructions to its transfer agent,
if any, to stop registration of the transfer of the shares of Stock
purchased under the Replacement Option.
5. RECAPITALIZATION OR REORGANIZATION. Article VIII of the Bank's
1993 Stock Option Plan, relating to the treatment of options granted
under such Plan in the event of any recapitalization, reorganization or
other change in the Bank's capital structure, is hereby incorporated by
reference and the provisions of such Article VIII are hereby deemed to
be provisions of the Replacement Option (even though the Replacement
Option is not issued pursuant to such Plan).
5. CONFIDENTIAL AND PROPRIETARY INFORMATION. Xx. Xxxxxxx recognizes and
acknowledges that he has had access to certain information of the Bank that is
confidential and proprietary and constitutes valuable, special, and unique
property of the Bank. Xx. Xxxxxxx agrees that he will not at any time disclose
to others, use, copy or permit to be copied any secret or confidential
information (whether or not developed by Xx. Xxxxxxx) without the Bank's prior
written consent. The term "secret or confidential information" shall include,
without limitation, the Bank's plans, strategies, applications of services,
results of investigations, and all processes, computer programs and software,
financial information, methods of doing business, policy and/or procedure
manuals, training and recruiting procedures, accounting procedures, the status
and content of the Bank's contracts with its customers, the Bank's business
philosophy, and servicing methods and tech niques at any time used, developed or
investigated by the Bank, before or during Xx. Xxxxxxx'x tenure of employment,
which are not generally available to the public or which are maintained as
confidential by the Bank. Xx. Xxxxxxx further agrees to maintain in confidence
any confidential information of third parties received as a result of his
employment with the Bank.
6. DOCUMENTS AND BANK ASSETS. Xx. Xxxxxxx agrees to leave in his office
or deliver to the Bank on or before March 31, 1994 all correspondence,
memoranda, notes, records, data or information, analysis, or other documents and
all copies thereof, made, composed or received by Xx. Xxxxxxx, solely or jointly
with others, and which are in Xx. Xxxxxxx'x possession, custody or control and
which are related in any manner to the past, present or anticipated business of
the Bank. On or before March 31, 1994, Xx. Xxxxxxx shall deliver to the Bank any
property belonging to the Bank in his possession or control, including, without
limitation, any security, telephone or credit cards furnished by the Bank for
his use.
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7. COOPERATION. Xx. Xxxxxxx agrees to cooperate fully and in good faith
with the Bank and its authorized representatives with respect to reasonable
requests for information or assistance in connection with business matters,
including litigation arising from such business matters, of which he had
knowledge while an employee or director of the Bank.
8. XX. XXXXXXX'X REPRESENTATION. Xx. Xxxxxxx represents, warrants, and
agrees that he has not filed any claims, complaints, charges or lawsuits against
the Bank, its parent, subsidiaries, affiliates, owners, employees, officers,
directors, shareholders, agents, attorneys, insurers, successors, and
representatives with any governmental agency or court, and that he will not
file, or permit to be filed, or accept benefit from, any claim, complaint or
petition filed with any governmental agency or court by him or on his behalf at
any time hereafter; provided, however, this shall not limit Xx. Xxxxxxx from
filing an action for the sole purpose of enforcing his rights under this
Agreement.
9. RELEASE. In return for the promises made in paragraphs 2, 3 and 4
above, Xx. Xxxxxxx, on behalf of himself and his successors, heirs, assigns,
agents, and representatives, hereby releases, acquits, and discharges the Bank,
its parent, subsidiaries, and affiliates, and their respective former and
current officers, directors, shareholders, owners, employees, agents, attorneys,
insurers, successors, and representatives (collectively the "Bank and
Affiliates") from any and all claims, charges, rights, damages, demands, and
causes of action, whether based in tort, contract, statute or any other legal or
equitable theory of recovery, including but not limited to, any and all claims
or causes of action arising under the Texas Commission on Human Rights Act,
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act, and any other federal, state
or local statute, regulation or the common law, which Xx. Xxxxxxx now has or may
have, of any kind or character, whether now known or unknown. This release
includes, but is not limited to, any claim for salary, bonus, compensation,
benefits, expenses, damages, remuneration or wages arising from Xx. Xxxxxxx'x
employment, resignation or termination of employment, and all other acts or
omissions related to any matter up to and including the date of execution of
this Agreement. Xx. Xxxxxxx expressly understands and agrees that the terms of
this Agreement are contractual and not merely recitals and that no statement or
consideration given shall be construed as an admission of liability by the Bank
and Affiliates, all such liability being expressly denied.
10. REMEDIES. Xx. Xxxxxxx and the Bank agree that, because damages at
law for any breach or nonperformance of this Agreement by Xx. Xxxxxxx, while
recoverable, will be inadequate, this Agreement may be enforced in equity by
specific performance, injunction, accounting or otherwise. However, if Xx.
Xxxxxxx violates this Agreement by suing the Bank, he agrees that he will pay
all costs and expense of defending the suit incurred by the Bank, will no longer
be entitled to receive any of the monies identified in paragraphs 2 and 3 of
this Agreement, will be required to repay to the Bank any monies already paid by
the Bank pursuant to this Agreement and will be deemed to have forfeited all of
his rights under all options held by him for the purchase of common stock of the
Bank under paragraph 4 of this Agreement.
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11. ENFORCEMENT OF AGREEMENT. No waiver or nonaction with respect to any
breach by the other party of any provision of this Agreement, nor the waiver or
nonaction with respect to any breach of the provisions of similar agreements
with other employees shall be construed to be a waiver of any succeeding breach
of such provision, or as a waiver of the provision itself. Should any provisions
hereof be held to be invalid or wholly or partially unenforceable, such holdings
shall not invalidate or void the remainder of this Agreement; provided, however,
that if paragraph 9 of this Agreement is subsequently found by a court to be
unenforceable or null and void, this entire Agreement shall be deemed null and
void and Xx. Xxxxxxx agrees to immediately reimburse the Bank for any payments
made pursuant to paragraphs 2 and 3 of this Agreement.
12. CHOICE OF LAW. This Agreement shall be interpreted and construed in
accordance with and shall be governed by the laws of the State of Texas.
13. MERGER. This Agreement supersedes, replaces, and merges all previous
agreements and discussions relating to the same or similar subject matters
between Xx. Xxxxxxx and the Bank and constitutes the entire agreement between
Xx. Xxxxxxx and the Bank with respect to the subject matter of this Agreement.
This Agreement may not be changed or terminated orally, and no change,
termination or waiver of this Agreement or any of the provisions herein
contained shall be binding unless made in writing and signed by all parties, and
in the case of the Bank, by an authorized officer.
14. NO DEROGATORY COMMENTS. Xx. Xxxxxxx shall refrain from making public
or private comments relating to the Bank and its directors, officers, employees
and agents which are derogatory or which may tend to injure any such party in
its business, public or private affairs.
15. CONFIDENTIALITY. Xx. Xxxxxxx agrees that he will not disclose the
terms of this Agreement or the consideration received from the Bank to any other
person, except his attorney or financial advisors and only on the condition that
they keep such information strictly confidential.
16. VOLUNTARY AGREEMENT. Xx. Xxxxxxx acknowledges and agrees that he has
carefully read this Agreement and understands it to be a release of all claims,
known and unknown, past or present, including any claims under the Age
Discrimination in Employment Act of 1967. He warrants that he is fully competent
to execute this Agreement which he understands to be contractual. He further
acknowledges that he executes this Agreement of his own free will, after having
been given at least 21 days in which to review, study, consider, and deliberate
regarding its meaning and effect; to consult with counsel for review if so
desired prior to executing same; and without reliance on any representation of
any kind or character not expressly set forth herein. Finally, he executes this
Agreement fully knowing its effect and voluntarily for the consideration stated
above.
17. TIMING OF AGREEMENT. Xx. Xxxxxxx acknowledges and agrees that if he
accepts the Severance Agreement, he has seven days following its execution to
revoke this Agreement; and that this Agreement shall not become effective or
enforceable until the expiration of this seven-day period. Xx. Xxxxxxx further
agrees that if he should revoke this Agreement, or if paragraph 9 of this
Agreement is subsequently found by a court to be unenforceable or null and void,
he shall
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immediately reimburse the Bank for any payments made pursuant to paragraphs 2
and 3 of this Agreement.
Executed this 30th day of December, 1993.
SOUTHWEST BANK OF TEXAS
NATIONAL ASSOCIATION
By /s/ XXXX X. XXXXXXX
Xxxx X. Xxxxxxx
Chairman of the Board
/s/ W. XXXXXX XXXXXXX
W. Xxxxxx Xxxxxxx
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