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EXHIBIT 10.2
TEXAS CAPITAL BANCSHARES, INC.
DEFERRED COMPENSATION AGREEMENT
THIS AGREEMENT made this 1st day of January, 1999 by and between Texas Capital
Bancshares, Inc., a Delaware corporation ("Bancshares"), and Joseph M. Grant
(the "Employee").
WITNESSETH THAT in consideration of the agreements hereinafter contained the
parties hereto agree as follows:
1. Bancshares shall pay the Employee beginning January 1, 1999 and
continuing during the term of his employment hereunder, deferred compensation
payable as provided in paragraphs 2 and 3 below.
2. (a) Bancshares shall credit on the Employee's behalf, to a book
reserve (the "Deferred Compensation Account") established for this purpose,
compensation validly deferred by the Employee on an annual basis on a form
provided by Bancshares.
(b) All such funds so credited to the Deferred Compensation
Account shall be invested in Bancshares Common Stock in accordance with the
Texas Capital Bancshares Deferred Compensation Agreement Trust (the "Trust").
Investments in Bancshares Common Stock shall be made at a price per share
determined by Bancshares. Prior to such time as Bancshares completes an initial
equity offering representing at least 20% of Bancshares' then outstanding Common
Stock, such price per share shall be set, for purposes of this subsection 2(b)
as the prevailing "market price" as measured by the most recent sale of
Bancshares Common Stock, adjusted upward effective as of the first business day
of each calendar year quarter (January 1, April 1, July 1 and October 1), by the
Prime Rate as listed for that day in the Wall Street Journal. Upon Bancshares
completion of an initial equity offering representing at least 20% of its then
outstanding Common Stock, such price shall be the bid price per share as of the
close of the immediately preceding stock market trading day.
(c) The Employee agrees on behalf of himself and his designated
beneficiary to assume all risk in connection with any decrease in value of the
funds which are invested in Bancshares Common Stock in accordance with the
provisions of this Agreement.
(d) Title to and beneficial ownership of Bancshares Common Stock
deferred pursuant to this paragraph shall at all times remain in Bancshares and
the Employee and his designated beneficiary shall not have any property interest
whatsoever in any specific assets of Bancshares.
3. Deferred compensation shall be distributed in the following manner:
(a) If the Employee's employment with Bancshares is terminated on
or after his 66th birthday, Bancshares shall distribute to him in sixteen (16)
equal quarterly installments the number of shares of Bancshares Common Stock
acquired pursuant to this Agreement and held for such purpose in the Trust and
commencing on the first day of the month next following the Employee's
termination of employment. If the Employee should die on or after his 66th
birthday and before all of the sixteen (16) equal quarterly payments are made,
the unpaid balance will continue to be paid to his designated beneficiary in
equal quarterly installments for the unexpired portion of such distribution
period.
(b) If the Employee's employment hereunder is terminated for any
reason other than death and disability but before the Employee's 66th birthday,
then the amount credited to the Deferred Compensation Account shall continue to
be held in such Account and no payments shall be made until the Employee attains
age 66 at which time payments shall be made in the same manner and to the same
extent as set for in paragraph 3(a), above. Notwithstanding the foregoing, if
before reaching age 66 the Employee dies or becomes disabled, then payments
shall be made in the same manner and to the same extent as set forth in
paragraph 3(c), below.
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(c) If the Employee's employment is terminated because of
disability or death before he has reached the age of 66, but while he is
employed by Bancshares, then Bancshares shall make sixteen (16) equal quarterly
installments to the Employee (in the event of his disability) or to his
designated beneficiary (in the event of his death) in the same manner and to the
same extent as provided in paragraph 3(a), above.
(d) If both the Employee and his designated beneficiary should
die before all sixteen (16) equal quarterly payments are made by Bancshares,
then the balance in the Deferred Compensation Account as of the date of the
designated beneficiary's death shall be paid as soon as practicable in a single
distribution to the estate of such designated beneficiary.
(e) The Employee may designate any individual or entity as his
designated beneficiary and may change the designated beneficiary without the
consent of any prior beneficiary by completing a form provided by Bancshares for
such purpose and delivering such form to Bancshares before his death. If the
Employee fails to designate a beneficiary, or if no designated beneficiary shall
survive the Employee, the installment payments payable under paragraph 3(c),
above shall be payable to the Employee's estate.
(f) The term "disabled" or "disability" as used in this Agreement
shall have the same meaning(s) as those terms are defined in Bancshares' Long
Term Disability Insurance Plan.
(g) The installment payments to be made to the Employee under
paragraphs 3(a) and 3(c), above shall commence on the first day of the month
next following the date of the termination of his employment, and the
installment payments to be made to the Employee under paragraph 3(b), above
shall commence on the first day of the month next following the Employee's 66th
birthday.
4. Nothing contained in this Agreement and no action taken pursuant to
the provisions of this Agreement shall create or be construed to create a
fiduciary relationship between Bancshares and the Employee, his designated
beneficiary or any other person. Any funds which may be invested under the
provisions of this Agreement shall continue for all purposes to be a part of the
general assets of Bancshares, whether or not held in trust, and no person or
entity other than Bancshares shall by virtue of the provisions of this Agreement
have any interest in such funds. To the extent that any person acquires a right
to receive payments from Bancshares under this agreement, such right shall be no
greater than the right of any unsecured general creditor of Bancshares.
5. The right of the Employee or any other person to the payment of
deferred compensation or other benefits under this Agreement shall not be
assigned, transferred, pledged or encumbered except by will or by the laws of
descent and distribution.
6. If the Board shall find that any person to whom any payment is
payable under this Agreement is unable to care for his affairs because of
illness or accident, or is a minor, any payment due (unless a prior claim
therefor shall have been made by a duly appointed guardian, committee or other
legal representative) may be paid to the spouse, a child, a parent, or a brother
or sister, or to any person deemed by the Board to have incurred expense for
such person otherwise entitled to payment, in such manner and proportions as the
Board may determine. Any such payment shall be a complete discharge of the
liabilities of Bancshares under this agreement.
7. Nothing contained herein shall be construed as conferring upon the
Employee the right to continue in the employ of Bancshares as an executive or in
any other capacity.
8. Any deferred compensation payable under this Agreement shall not be
deemed salary or other compensation to the Employee for the purpose of computing
benefits to which he may be entitled under any pension plan or other arrangement
sponsored by Bancshares for the benefit of its employees.
9. The Board shall have full power and authority to interpret,
construe, and administer this Agreement and the Board's interpretations and
construction thereof, and actions thereunder, shall be binding and conclusive on
all persons for all purposes. No member of the Board shall be liable to any
person for any action taken or omitted in connection with the interpretation and
administration of this Agreement unless attributable to his own willful
misconduct or lack of good faith.
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10. This agreement shall be binding upon and inure to the benefit of
Bancshares, its successors and assigns, and the Employee and his heirs,
executors, administrators, and legal representatives.
11. Except to the extent superseded by laws of the United States, the
laws of the State of Texas shall be controlling in all matters relating to this
Agreement.
IN WITNESS WHEREOF, Bancshares has caused this Agreement to be executed
by a duly authorized officer and Employee has hereunto set his hand and seal as
of the date first above written.
Texas Capital Bancshares, Inc.
By: /s/ GREGORY B. HULTGREN
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/s/ JOSEPH M. GRANT
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Joseph M. Grant