EXHIBIT 10 (bz)
THIRD AMENDMENT TO
EXECUTIVE COMPENSATION AGREEMENT
This Third Amendment to Executive Compensation Agreement (the "Third
Amendment") is made and entered into effective as of November 15, 2000, by
and between ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Executive") and HALLMARK FINANCIAL
SERVICES, INC. (the "Company").
Recitals:
WHEREAS, the Executive has previously been employed by the Company as
its President and Chief Executive Officer;
WHEREAS, the Executive is now Chairman of the Board of Directors and
has relinquished his other offices;
WHEREAS, the Company and Executive have entered into 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, and letter agreements dated
December 29, 1998, and December 14, 1999 (as amended, the "Agreement"); and
WHEREAS, the Company and Executive desire to further amend the
Agreement as set forth herein;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and
Executive hereby agree as follows:
Amendment:
1. Amendment of Article I. Article I of the Agreement is hereby
deleted in its entirety and a new Article I substituted therefor which shall
read as follows:
ARTICLE I
DUTIES AND COMPENSATION
Chairman of the Board
1.01 The Executive shall serve as Chairman of the Board of
Directors of the Company, and shall perform all duties and
functions reasonably appurtenant to such position and as
reasonably directed by the Board of Directors of the Company. The
Executive will devote his full working time to the performance of
his duties as Chairman of the Company, but need not maintain any
specified working hours or days while performing such duties. The
Company acknowledges that the Executive may perform a significant
portion of his duties as Chairman from his home.
Base Salary
1.02 During the period of employment of Executive by the
Company, the Board of Directors of the Company, or the
Compensation Committee thereof, shall determine the base salary of
Executive. Commencing November 15, 2000, and continuing until
immediately following the 2001 Annual Meeting of Shareholders of
the Company, the annualized base salary of Executive shall be not
less than $252,495. Commencing immediately following the 2001
Annual Meeting of Shareholders of the Company, and continuing
until immediately following the 2002 Annual Meeting of
Shareholders of the Company, the annualized base salary of
Executive shall be not less than $150,000.
Bonuses
1.03 In addition to his base salary, Executive shall be
entitled to such cash bonuses as the Board or Compensation
Committee shall from time to time determine.
Expense Allowances
1.04 In addition to his base salary and bonuses, Executive
shall be provided an automobile allowance of $1,250 per month.
The Company shall also reimburse Executive for all ordinary and
necessary business expenses incurred on behalf of the Company in
the course of Executive's duties. Such ordinary and necessary
business expenses shall include, without limitation, all
reasonable expenses incurred in connection with equipping an
office in Executive's home.
Stock Options and Other Benefits
1.05 Executive shall be entitled to participate in all stock
option and other incentive compensation plans of the Company.
Awards to Executive pursuant to such stock option and incentive
compensation plans shall be in such amounts as the Board, or the
Stock Option Committee or Compensation Committee thereof, shall
determine in its sole discretion. Executive shall also be
entitled to participate in all other programs and benefits
provided by the Company to the same extent as other executive
officers of the Company.
2. Amendment of Article II. Article II of the Agreement is hereby
amended by deleting the parenthetical phrase immediately following clause
(c) in Section 2.03 and substituting therefor a new parenthetical phrase
reading "(other than (i) the Company, or (ii) an employee benefit plan
sponsored by the Company)".
3. Amendment of Article III. Article III of the Agreement is hereby
amended by deleting Section 3.01 in its entirety and substituting therefor a
new Section 3.01 which shall read as follows:
Window Period; Other than for Cause
3.01 If the Company terminates Executive's employment other
than for Cause or Executive terminates employment during the
Window Period, the Company shall pay to Executive in a lump sum in
cash within thirty (30) days after the Date of Termination an
amount equal to the sum of (i) the then current annual base salary
of Executive plus (ii) the highest amount of bonus and other cash
compensation received by Executive during any one of the
immediately preceding three (3) fiscal years.
4. Amendment of Article IV. Article IV of the Agreement is hereby
deleted in its entirety and a new Article IV substituted therefor which
shall read as follows:
ARTICLE IV
TERM; POST-TERMINATION CONSULTING
Term
4.01 The term of this Agreement shall commence on the date
hereof and shall continue until immediately following the 2002
Annual Meeting of Shareholders of the Company.
Post-Termination Consulting
4.02 Upon termination of this Agreement immediately following
the 2002 Annual Meeting of Shareholders of the Company, the
Company shall retain Executive as an independent contractor to
perform consulting services for the Company for a period of one
(1) year. During such period, Executive shall be reasonably
available to consult with the Board of Directors and executive
officers of the Company for a maximum of 20 hours per month. In
consideration of such consulting services, Executive shall receive
an annualized base retainer of $89,000, plus $200.00 per hour
devoted to such consultation in excess of 20 hours per month.
During the term of such consulting services, Executive shall
continue to be entitled to receive the reimbursement and benefits
provided in Sections 1.04 and 1.05 hereof.
5. Affirmation of Agreement. Except as expressly provide herein, all
terms and conditions of the Agreement shall continue in full force and
effect.
EXECUTED to be effective as of the date first set forth above.
COMPANY: EXECUTIVE:
Hallmark Financial Services, Inc.
_________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: ______________________
Name: _____________________
Title: ____________________
