UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM 10-Q/A
AMENDMENT TO APPLICATION OR
REPORT FILED PURSUANT TO
SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
GAINSCO, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
AMENDMENT NO. 1
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The list of exhibits is amended to add the following:
Exhibit No. Exhibit
----------- -------
99.5 Employment Agreement with Glenn W.
Anderson
99.6 Stock Option Agreement with Glenn W.
Anderson
99.7 Change in Control Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, this registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized to sign on behalf
of the Registrant as well as in his capacity as Chief Financial
Officer.
GAINSCO, INC.
By: /s/ Daniel J. Coots
_____________________________
Daniel J. Coots
Senior Vice President,
Treasurer and Chief Financial
Officer
EXHIBIT 99.5
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), executed this 25th day of
April 1998 to be effective as of April 17, 1998, is between Gainsco,
Inc., a Texas corporation (the "Company"), and Glenn W. Anderson
("Employee").
R E C I T A L S:
A. Employer and Employee desire to enter into this written
agreement to specify the terms and conditions of Employee's employment
with the Company and its subsidiaries (collectively, "Employer").
B. Employer considers the maintenance of a sound management
team, including Employee, essential to protecting and enhancing its
best interests and those of its stockholders.
C. Employee will be President and Chief Executive Officer of
the Company. Employee will be an integral member of Employer's
management team.
NOW, THEREFORE, in consideration of Employee's future employment
with Employer and other good and valuable consideration, the parties
agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby employs Employee,
and Employee hereby accepts employment, upon the terms and subject to
the conditions hereinafter set forth.
SECTION 2. DUTIES. Employee shall be employed as President
and Chief Executive Officer of the Company, and such other positions
with Employer to which he may be appointed by the Board of Directors
of the Company (the "Board"). Employee agrees to devote his full time
and best efforts to the performance of the duties attendant to his
executive position with Employer.
SECTION 3. TERM. The initial term of employment of Employee
hereunder shall continue for forty-eight months from April 17, 1998
("Employment Date") or until April 16, 2002, unless earlier terminated
pursuant to Section 6 herein. Additionally, the initial term of
employment shall be automatically extended for additional one year
periods each on the anniversary of the Employment Date during the
initial term unless either party delivers written notice to the other
party at least thirty (30) days prior to the applicable anniversary
date.
SECTION 4. COMPENSATION AND BENEFITS. In consideration for
the services of Employee hereunder, Employer shall compensate Employee
as follows:
(a) BASE SALARY. Until the termination of Employee's
employment hereunder, Employer shall pay Employee, in arrears, a base
salary at an annual rate of $340,000 ("Base Salary"). The Base Salary
may not be decreased at any time during the term of Employee's
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employment hereunder and may be increased by Employer prior to the
annual anniversary of the Employee's Employment Date. Any increase in
Base Salary shall be in the sole discretion of the Compensation
Committee of the Board.
(b) EXECUTIVE BONUS PLAN. Employee shall be eligible to
receive from Employer such annual management incentive bonuses as may
be provided in management incentive bonus plans adopted from time to
time by Employer. Notwithstanding the foregoing, Employer shall pay
Employee a minimum bonus of $260,000 in cash at the end of Employee's
first year of employment with Employer. Subject to the preceding
sentence, the Board has the right to amend or terminate any bonus plan
at any time without the consent of Employee.
(c) STOCK OPTIONS. Employer hereby grants to Employee a
non-qualified stock option in the form attached hereto as Exhibit A
(the "Option") to purchase 579,710 shares of the Company's common
stock, par value $.10 per share ("Common Stock"), for $8-5/8 per share
(the "Exercise Price"). If on any trading day within five (5) business
days after the public announcement of the Company's results of
operations for the quarter ended June 30, 1998, the last reported sale
price for Common Stock on the New York Stock Exchange (the "Closing
Price") is below $8-5/8 per share, Employer will cancel the Option and
reissue an Option to purchase the same number of shares for an
Exercise Price equal to such lowest Closing Price during such five (5)
business day period. Each Option shall have a term of five (5) years
from the date of the grant and will be fully vested and able to be
exercised at the time of the grant.
(d) RELOCATION EXPENSES. In consideration for Employee's
relocation, Employer shall (i) pay Employee a lump-sum payment of
$50,000 and (ii) reimburse Employee for reasonable relocation costs
actually incurred, including the costs incurred by Employee in selling
Employee's current residence (but not including the loss of any equity
in such residence), reasonable costs of procuring temporary housing
and other out-of-pocket moving expenses, provided that the aggregate
expenses reimbursable pursuant to this clause (ii) shall not exceed
the sum of $110,000.
(e) VACATION. Employee shall be entitled to 15 days of
paid vacation per year at the reasonable and mutual convenience of
Employer and Employee. Accrued vacation not taken in any calendar
year may be carried forward or used in the following calendar year,
but not in any subsequent calendar year unless otherwise approved by
the Board.
(f) LIFE INSURANCE BENEFITS. Employer shall pay the
premiums allocable to a term life insurance policy in the face amount
of $1,000,000 covering Employee as the named insured, subject to
Employee's passing a standard physical examination in order to permit
issuance of the policy at standard (non-rated) premiums and
satisfaction of any other standard underwriting requirements.
Employee shall be the owner of such policy and shall have the right to
designate the beneficiary of the policy proceeds. Employee shall be
liable for income taxes with respect to premium amounts includable in
Employee's taxable income.
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(g) GROUP INSURANCE BENEFITS. Employee shall be entitled
to participate in the Employer's group health and disability programs
as are made available to the Employer's other executives and officers
and the Employee's participation in such programs shall be at the same
rates which are available to the Employer's other executives and
officers.
(h) CAR ALLOWANCE. As a condition of Employee's
employment, Employee shall from time to time be required to travel by
automobile on Employer's business. Accordingly, Employer shall pay
Employee a monthly car allowance of $700, payable in equal semi-monthly
installments, to cover Employee's costs of obtaining,
maintaining and insuring a suitable automobile.
(i) CLUB MEMBERSHIP. Employer will pay initiation
fees and monthly dues in accordance with the Employer's club policy
for executives which is in effect as of the Employment Date. All
monthly charges incurred at such clubs, however, shall be the sole
responsibility of Employee except as provided in Section 5 herein.
SECTION 5. EXPENSES. The parties anticipate that in
connection with the services to be performed by Employee pursuant to
the terms of this Agreement, Employee will be required to make
payments for travel, entertainment of business associates and similar
expenses. Employer shall reimburse Employee for all appropriate and
reasonable expenses authorized by Employer and incurred by Employee in
the performance of his duties hereunder. Employee shall comply with
such budget limitations and approval and reporting requirements with
respect to expenses as Employer may establish from time to time.
SECTION 6. TERMINATION.
(a) GENERAL. Employee's employment hereunder shall
commence on the Employment Date and continue until the end of the term
specified in Section 3, except that the employment of Employee
hereunder shall terminate prior to such time in accordance with the
following:
(i) DEATH OR DISABILITY. Upon the death of Employee
during the term of his employment hereunder or, at the option of
Employer, in the event of Employee's Disability, upon 30 days' notice
to Employee.
(ii) FOR CAUSE. For "Cause" immediately upon written
notice by Employer to Employee. A termination shall be for "Cause" if:
(1) Employee commits a criminal act involving
moral turpitude; or
(2) Employee commits a material breach of any
of the covenants, terms and provisions hereof or fails to obey written
directions delivered to Employee by the Company's Chairman of the
Board; or
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(3) Employee commits or omits to perform any
act, the performance of which or the omission of which constitutes
gross negligence or willful misconduct.
(iii) WITHOUT CAUSE. Without Cause immediately
upon notice by Employer to Employee.
(b) SEVERANCE PAY.
(i) TERMINATION UPON DEATH OR DISABILITY OR FOR
CAUSE. Employee shall not be entitled to any severance pay or other
compensation upon termination of his employment pursuant to Section
6(a)(i) or (ii) except for his Base Salary accrued but unpaid as of
the date of termination, unpaid expense reimbursements under Section 5
for expenses incurred in accordance with the terms hereof prior to
termination, and compensation for accrued, unused vacation as of the
date of termination ("Accrued Amounts").
(ii) TERMINATION WITHOUT CAUSE. In the event
Employee's employment hereunder is terminated pursuant to Section
6(a)(iii) prior to the expiration of the initial term of this
Agreement (as such initial term may have been extended), Employer
shall pay Employee, as consideration for the execution of a separation
and release agreement and in lieu of any further compensation payable
hereunder other than Accrued Amounts, a cash amount equal to 36 times
150% of Employee's then current monthly rate of Base Salary. Such
separation payments shall be Employee's sole remedy in connection with
such termination. Separation payments shall be made as specified
above without regard to the number of months remaining in the term of
this Agreement.
(c) CHANGE IN CONTROL. Employer and Employee shall enter
into a Change in Control Agreement in substantially the form entered
into between the Employer and other executive officers ("Change in
Control Agreement"). If Employee's employment is terminated pursuant
to Section 6(a)(iii) above prior to the end of a period of twenty-four
(24) months beyond the month in which a "change in control of the
Company" (as defined in the Change in Control Agreement) occurs,
Employee shall receive the greater of (i) the amount determined
pursuant to Section 6(b)(ii) above or (ii) the amounts payable
pursuant to the Change in Control Agreement.
SECTION 7. INVENTIONS; ASSIGNMENT.
(a) INVENTIONS DEFINED. All rights to discoveries,
inventions, improvements, designs and innovations (including all data
and records pertaining thereto) that relate to the business of
Employer, whether or not able to be patented, copyrighted or reduced
to writing, that Employee may discover, invent or originate during the
term of his employment hereunder, and for a period of six months
thereafter, either alone or with others and whether or not during
working hours or by the use of the facilities of Employer
("Inventions"), shall be the exclusive property of Employer. Employee
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shall promptly disclose all Inventions to Employer, shall execute at
the request of Employer any assignments or other documents Employer
may deem necessary to protect or perfect its rights therein, and shall
assist Employer, at Employer's expense, in obtaining, defending and
enforcing Employer's rights therein. Employee hereby appoints
Employer as his attorney-in-fact to execute on his behalf any
assignments or other documents deemed necessary by Employer to protect
or perfect its rights to any Inventions.
(b) COVENANT TO ASSIGN AND COOPERATE. Without limiting
the generality of the foregoing, Employee shall assign and transfer to
Employer the world-wide right, title and interest of Employee in the
Inventions. Employee agrees that Employer may apply for and receive
patent rights (including Letters Patent in the United States) for the
Inventions in Employer's name in such countries as may be determined
solely by Employer. Employee shall communicate to Employer all facts
known to Employee relating to the Inventions and shall cooperate with
Employer's reasonable requests in connection with vesting title to the
Inventions and related patents exclusively in Employer and in
connection with obtaining, maintaining and protecting Employer's
exclusive patent rights in the Inventions.
(c) SUCCESSORS AND ASSIGNS. Employee's obligations under
this Section 7 shall inure to the benefit of Employer and its
successors and assigns and shall survive the expiration of the term of
this Agreement for such time as may be necessary to protect the
proprietary rights of Employer in the Inventions.
SECTION 8. CONFIDENTIAL INFORMATION.
(a) ACKNOWLEDGMENT OF PROPRIETARY INTEREST. Employee
acknowledges the proprietary interest of Employer in all Confidential
Information (as defined below). Employee agrees that all Confidential
Information learned by Employee during his employment with Employer or
otherwise, whether developed by Employee alone or in conjunction with
others or otherwise, is and shall remain the exclusive property of
Employer. Employee further acknowledges and agrees that his
disclosure of any Confidential Information will result in irreparable
injury and damage to Employer.
(b) CONFIDENTIAL INFORMATION DEFINED. "Confidential
Information" means all confidential or proprietary information of
Employer, including without limitation, (i) information derived from
reports, investigations, experiments, research and work in progress,
(ii) methods of operation, (iii) market data, (iv) proprietary
computer programs and codes, (v) drawings, designs, plans and
proposals, (vi) marketing and sales programs, (vii) client lists,
(viii) historical financial information and financial projections,
(ix) pricing formulae and policies, (x) all other concepts, ideas,
materials and information prepared or performed for or by Employer and
(xi) all information related to the business, products, purchases or
sales of Employer or any of its suppliers and customers, other than
information that is publicly available.
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(c) COVENANT NOT TO DIVULGE CONFIDENTIAL INFORMATION.
Employer is entitled to prevent the disclosure of Confidential
Information. As a portion of the consideration for the employment of
Employee and for the compensation being paid to Employee by Employer,
Employee agrees at all times during the term of his employment
hereunder and thereafter to hold in strict confidence and not to
disclose or allow to be disclosed to any person, firm or corporation,
other than to persons engaged by Employer to further the business of
Employer, and not to use except in the pursuit of the business of
Employer, the Confidential Information, without the prior written
consent of Employer.
(d) RETURN OF MATERIALS AT TERMINATION. In the event of
any termination or cessation of his employment with employer for any
reason, Employee shall promptly deliver to Employer all documents,
data and other information derived from or otherwise pertaining to
Confidential Information. Employee shall not take or retain any
documents or other information, or any reproduction or excerpt
thereof, containing or pertaining to any Confidential Information.
SECTION 9. NON-SOLICITATION.
(a) SOLICITATION OF EMPLOYEES. During Employee's
employment with Employer and for a period of twelve (12) months after
termination of such employment at any time and for any reason, and
regardless of whether any payments are made to Employee under this
Agreement as a result of such termination, Employee shall not solicit,
participate in or promote the solicitation of any person who was
employed by Employer at the time of Employee's termination of
employment with Employer to leave the employ of Employer, or, on
behalf of himself or any other person, hire, employ or engage any such
person. Employee further agrees that, during such time, if an
employee of Employer contacts Employee about prospective employment,
Employee will inform such employee that he or she cannot discuss the
matter further without the consent of Employer.
(b) SOLICITATION OF CLIENTS, CUSTOMERS, ETC. During
Employee's employment with Employer and for a period of twelve (12)
months after termination of Employee's employment under circumstances
which result in payment of any amounts to Employee under this
Agreement, Employee shall not, directly or indirectly, solicit any
person who, at the time of termination of Employee's employment with
Employer, was a client, customer, policyholder, vendor, consultant or
agent of Employer to discontinue business, in whole or in part, with
Employer. Employee further agrees that, during such time, if such a
client, customer, policyholder, vendor, or consultant or agent
contacts Employee about discontinuing business with Employer or moving
that business elsewhere, Employee will inform such client, customer,
policyholder, vendor, consultant or agent that he or she cannot
discuss the matter further without the consent of Employer.
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SECTION 10. GENERAL.
(a) Notices. All notices and other communications
hereunder shall be in writing or by written telecommunication, and
shall be deemed to have been duly given if delivered personally or if
mailed by certified mail, return receipt requested or by written
telecommunication, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication shall
have specified to the other party in accordance with this Section
10(a):
If to Employer, to:
Gainsco, Inc.
500 Commerce Street
Fort Worth, Texas 75240
Attention: Chairman of the Board
Facsimile Number: (817) 338-1454
If to Employee, to:
Glenn W. Anderson
Gainsco, Inc.
500 Commerce Street
Fort Worth, Texas 75240
Facsimile Number: (817) 338-1454
(b) WITHHOLDING; NO OFFSET. All payments required to be
made to Employee by Employer under this Agreement shall be subject to
the withholding of such amounts, if any, relating to federal, state
and local taxes as may be required by law.
(c) EQUITABLE REMEDIES. Each of the parties hereto
acknowledges and agrees that upon any breach by Employee of his
obligations under any of Sections 7, 8, and 9, Employer shall have no
adequate remedy at law and accordingly shall be entitled to specific
performance and other appropriate injunctive and equitable relief.
(d) SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable, such provision shall be
fully severable, and this Agreement shall be construed and enforced as
if such illegal, invalid or unenforceable provision never comprised a
part hereof, and the remaining provisions hereof shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall
be added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
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(e) WAIVERS. No delay or omission by either party in
exercising any right, power or privilege hereunder shall impair such
right, power or privilege, nor shall any single or partial exercise of
any such right, power or privilege preclude any further exercise
thereof or the exercise of any other right, power or privilege.
(f) COUNTERPARTS. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, and
all of which together shall constitute one and the same instrument.
(g) CAPTIONS. The captions in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
any of the terms or provisions hereof.
(h) REFERENCE TO AGREEMENT. Use of the words "herein,"
"hereof," "hereto," "hereunder" and the like in this Agreement refer to
this Agreement only as a whole and not to any particular section or
subsection of this Agreement, unless otherwise noted.
(i) BINDING AGREEMENT. This Agreement shall be binding
upon and inure to the benefit of the parties and shall be enforceable
by the personal representatives and heirs of Employee and the
successors and assigns of Employer. This Agreement may be assigned by
the Company or any Employer to any Employer; provided that in the
event of any such assignment, the Company shall remain liable for all
of its obligations hereunder and shall be liable for all obligations
of all such assignees hereunder. If Employee dies while any amounts
would still be payable to him hereunder, such amounts shall be paid to
Employee's estate. This Agreement is not otherwise assignable by
Employee.
(j) ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and may not be
amended except by a written instrument hereafter signed by each of the
parties hereto.
(k) GOVERNING LAW. This Agreement and the performance
hereof shall be construed and governed in accordance with the laws of
the State of Texas, without regard to its choice of law principles.
(l) GENDER AND NUMBER. The masculine gender shall be
deemed to denote the feminine or neuter genders, the singular to
denote the plural, and the plural to denote the singular, where the
context so permits.
SECTION 11. DEFINITIONS. As used in this Agreement, the
following terms will have the following meanings:
(a) Agreement has the meaning ascribed to it in the first
paragraph of this document.
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(b) Accrued Amounts has the meaning ascribed to it in
Section 6(b)(i).
(c) Base Salary has the meaning ascribed to it in Section
4(a).
(d) Cause has the meaning ascribed to it in Section
6(a)(ii).
(e) Change in Control Agreement has the meaning ascribed
to it in Section 6(c).
(f) Code means the Internal Revenue Code of 1986, as
amended.
(g) Closing Price has the meaning ascribed to it in
Section 4(c).
(h) Company means Gainsco, Inc., a Texas Corporation.
(i) Confidential Information has the meaning ascribed to
it in Section 8(b).
(j) Determination has the meaning ascribed to such term in
Section 1313(a) of the Code.
(k) Disability with respect to an Employee shall be deemed
to exist in accordance with Section 6(a)(i) if the Employee meets the
definition of either "disabled" or "disability" under the terms of the
Employer's long-term disability benefit program. Any refusal by
Employee to submit to a reasonable medical examination to determine
whether Employee is so disabled shall be deemed to constitute
conclusive evidence of Employee's disability.
(l) Employee has the meaning ascribed to it in the first
paragraph of this document.
(m) Employer refers collectively to the Company and its
subsidiaries.
(n) Employment Date has the meaning ascribed to it in
Section 3.
(o) Exercise Price has the meaning ascribed to it in
Section 4(c).
(p) Inventions has the meaning ascribed to it in Section
7(a).
(q) Option has the meaning ascribed to it in Section 4(c).
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EXECUTED as of the date and year first above written.
GAINSCO, INC.
By /s/ Joel C. Puckett
______________________________
Chairman of Board of Directors
/s/ Glenn W. Anderson
______________________________
Glenn W. Anderson
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Exhibit A
GAINSCO INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (this "Agreement") is
entered into between Gainsco, Inc., a Texas corporation (the
"Company"), and Glenn W. Anderson (the "Optionee") this 25th day of
April, 1998 pursuant to the Employment Agreement entered into by and
between the Company and the Optionee dated effective as of April 17,
1998 (the "Employment Agreement"). Terms used herein with an initial
capital letter but not defined herein shall have the meanings ascribed
to such terms in the Employment Agreement. In consideration of the
mutual promises and covenants made herein, the parties hereby agree as
follows:
1. GRANT OF OPTION. The Company grants to the Optionee an
option (the "Option") to purchase from the Company all or any part of a
total of 579,710 shares of the Company's Common Stock, par value $.10
per share ("Common Stock"), at a purchase price of $8-5/8 per share.
2. CHARACTER OF OPTION. The Option is not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
3. TERM. The unexercised part of the Option will expire at
11:59 PM (CST) on April 16, 2003.
4. VESTING. The Option is fully vested and exercisable in full
on the date of this Agreement.
5. PROCEDURE FOR EXERCISE. Exercise of the Option or a portion
thereof shall be effected by the Optionee's giving written notice of
exercise to the Company at its principal place of business and the
Optionee's payment of the purchase price prescribed in Section 1 above
for the shares to be acquired pursuant to the exercise.
6. PAYMENT OF PURCHASE PRICE. Payment of the purchase price
for any shares purchased pursuant to the Option shall be in cash or in
such other form of consideration as the Compensation Committee of the
Board of Directors of the Company (the "Compensation Committee") may
permit.
7. TRANSFER OF OPTIONS. The Option may not be transferred
except (i) by will or the laws of descent and distribution or (ii)
pursuant to the terms of a qualified domestic relations order, as
defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, and, during the lifetime of the
Optionee, may be exercised only by the Optionee or by the Optionee's
legally authorized representative.
8. TERMINATION. The Option shall terminate on the expiration
date set forth in Section 3 above; provided, however, that in the
event of the termination of the Optionee's service as an employee of
the Company, the Option shall terminate on the following date, as
applicable:
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a. On the expiration date specified in Section 3 if
Optionee terminates his employment with the Company any time during
the period that begins on the business day before and ends at the end
of a period of twenty-four (24) months beyond the month in which such
change in control occurs;
b. On the expiration date specified in Section 3 if the
termination of Optionee's employment is effected by the Company
without Cause as specified in Section 6 of the Employment Agreement;
c. On the date that is one year after the date of
Optionee's termination of employment if such termination is on account
of the Optionee's death or Disability;
d. On the date of Optionee's termination of employment if
such termination is effected by the Company for Cause or is effected
by the Optionee (except as provided in Section 8a above with respect
to a "change in control" termination); or
e. On the expiration date specified in Section 3 in the
event of the expiration of the Employment Agreement after its initial
forty-eight month term without renewal by the parties for an
additional year pursuant to Section 3 of the Employment Agreement.
9. RESERVATION OF SHARES. The Company shall at all times
during the term of the Option reserve and keep available a sufficient
number of shares of its Common Stock to satisfy the Company's
obligation to transfer shares to the Optionee upon exercise of the
Option.
10. TAX WITHHOLDING. If the Company determines that the
issuance of shares of Common Stock to the Optionee upon his exercise
in whole or in part of the Option is subject to any federal, state, or
local tax withholding requirement, the Company shall notify the
Optionee of such requirement, and, as a condition to the issuance of
such shares, the Optionee shall pay to the Company, in cash or in any
other form of consideration the Company's Board of Directors may
permit, the amount required to be withheld.
11. COMPLIANCE WITH SECURITIES LAWS. Shares of Common Stock
shall be issued pursuant to the exercise of the Option only if the
Company determines that the issuance and delivery of the shares will
comply with all relevant provisions of state and federal law,
including without limitation the Securities Act of 1933 and the rules
and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Company's Common Stock then is listed.
The Optionee consents to the imposition of a legend upon the
certificate representing such shares restricting their transfer as
required by law or by this Agreement.
12. ANTIDILUTION. If the outstanding Common Stock is increased,
decreased, changed into, or exchanged for a different number or kind
of shares or securities through merger, consolidation, combination,
exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split, or reverse stock split,
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an appropriate and proportionate adjustment shall be made in the
number and type of shares subject to the Option. Any such adjustment
in the Option shall be made without change in the aggregate purchase
price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share covered by the
Option. The foregoing adjustments and the manner of application of
this section shall be determined solely by the Compensation Committee.
13. AMENDMENT. This Agreement may be amended only by an
instrument in writing signed by both the Company and the Optionee.
14. MISCELLANEOUS. This Agreement will be construed and
enforced in accordance with the laws of the State of Texas and will be
binding upon and inure to the benefit of any successor or assign of
the Company and any executor, administrator, trustee, guarantor, or
other legal representative of the Optionee.
Executed as of the first day written above.
GAINSCO, INC.
By: ___________________________
Chairman of the Board
_______________________________
GLENN W. ANDERSON
_______________________________
Social Security Number
of Optionee
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EXHIBIT 99.6
GAINSCO INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This Nonqualified Stock Option Agreement (this "Agreement") is
entered into between Gainsco, Inc., a Texas corporation (the
"Company"), and Glenn W. Anderson (the "Optionee") this 25th day of
April, 1998 pursuant to the Employment Agreement entered into by and
between the Company and the Optionee dated effective as of April 17,
1998 (the "Employment Agreement"). Terms used herein with an initial
capital letter but not defined herein shall have the meanings ascribed
to such terms in the Employment Agreement. In consideration of the
mutual promises and covenants made herein, the parties hereby agree as
follows:
1. GRANT OF OPTION. The Company grants to the Optionee an
option (the "Option") to purchase from the Company all or any part of a
total of 579,710 shares of the Company's Common Stock, par value $.10
per share ("Common Stock"), at a purchase price of $8-5/8 per share.
2. CHARACTER OF OPTION. The Option is not an "incentive stock
option" within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
3. TERM. The unexercised part of the Option will expire at
11:59 PM (CST) on April 16, 2003.
4. VESTING. The Option is fully vested and exercisable in full
on the date of this Agreement.
5. PROCEDURE FOR EXERCISE. Exercise of the Option or a portion
thereof shall be effected by the Optionee's giving written notice of
exercise to the Company at its principal place of business and the
Optionee's payment of the purchase price prescribed in Section 1 above
for the shares to be acquired pursuant to the exercise.
6. PAYMENT OF PURCHASE PRICE. Payment of the purchase price
for any shares purchased pursuant to the Option shall be in cash or in
such other form of consideration as the Compensation Committee of the
Board of Directors of the Company (the "Compensation Committee") may
permit.
7. TRANSFER OF OPTIONS. The Option may not be transferred
except (i) by will or the laws of descent and distribution or (ii)
pursuant to the terms of a qualified domestic relations order, as
defined by the Code or Title I of the Employee Retirement Income
Security Act of 1974, as amended, and, during the lifetime of the
Optionee, may be exercised only by the Optionee or by the Optionee's
legally authorized representative.
8. TERMINATION. The Option shall terminate on the expiration
date set forth in Section 3 above; provided, however, that in the
event of the termination of the Optionee's service as an employee of
the Company, the Option shall terminate on the following date, as
applicable:
-Page-
a. On the expiration date specified in Section 3 if
Optionee terminates his employment with the Company any time during
the period that begins on the business day before and ends at the end
of a period of twenty-four (24) months beyond the month in which such
change in control occurs;
b. On the expiration date specified in Section 3 if the
termination of Optionee's employment is effected by the Company
without Cause as specified in Section 6 of the Employment Agreement;
c. On the date that is one year after the date of
Optionee's termination of employment if such termination is on account
of the Optionee's death or Disability;
d. On the date of Optionee's termination of employment if
such termination is effected by the Company for Cause or is effected
by the Optionee (except as provided in Section 8a above with respect
to a "change in control" termination); or
e. On the expiration date specified in Section 3 in the
event of the expiration of the Employment Agreement after its initial
forty-eight month term without renewal by the parties for an
additional year pursuant to Section 3 of the Employment Agreement.
9. RESERVATION OF SHARES. The Company shall at all times
during the term of the Option reserve and keep available a sufficient
number of shares of its Common Stock to satisfy the Company's
obligation to transfer shares to the Optionee upon exercise of the
Option.
10. TAX WITHHOLDING. If the Company determines that the
issuance of shares of Common Stock to the Optionee upon his exercise
in whole or in part of the Option is subject to any federal, state, or
local tax withholding requirement, the Company shall notify the
Optionee of such requirement, and, as a condition to the issuance of
such shares, the Optionee shall pay to the Company, in cash or in any
other form of consideration the Company's Board of Directors may
permit, the amount required to be withheld.
11. COMPLIANCE WITH SECURITIES LAWS. Shares of Common Stock
shall be issued pursuant to the exercise of the Option only if the
Company determines that the issuance and delivery of the shares will
comply with all relevant provisions of state and federal law,
including without limitation the Securities Act of 1933 and the rules
and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Company's Common Stock then is listed.
The Optionee consents to the imposition of a legend upon the
certificate representing such shares restricting their transfer as
required by law or by this Agreement.
12. ANTIDILUTION. If the outstanding Common Stock is increased,
decreased, changed into, or exchanged for a different number or kind
of shares or securities through merger, consolidation, combination,
exchange of shares, other reorganization, recapitalization,
reclassification, stock dividend, stock split, or reverse stock split,
-2-
an appropriate and proportionate adjustment shall be made in the
number and type of shares subject to the Option. Any such adjustment
in the Option shall be made without change in the aggregate purchase
price applicable to the unexercised portion of the Option, but with a
corresponding adjustment in the price for each share covered by the
Option. The foregoing adjustments and the manner of application of
this section shall be determined solely by the Compensation Committee.
13. AMENDMENT. This Agreement may be amended only by an
instrument in writing signed by both the Company and the Optionee.
14. MISCELLANEOUS. This Agreement will be construed and
enforced in accordance with the laws of the State of Texas and will be
binding upon and inure to the benefit of any successor or assign of
the Company and any executor, administrator, trustee, guarantor, or
other legal representative of the Optionee.
Executed as of the first day written above.
GAINSCO, INC.
By: /s/ Joel C. Puckett
________________________________
Chairman of the Board
/s/ Glenn W. Anderson
________________________________
GLENN W. ANDERSON
________________________________
Social Security Number of Optionee
-3-
EXHIBIT 99.7
CHANGE IN CONTROL AGREEMENT
April 17, 1998
Mr. Glenn W. Anderson
500 Commerce Street
Fort Worth, Texas 76102-5439
Dear Mr. Anderson:
GAINSCO Service Corp. (the "Company") considers it essential to
the best interests of its stockholders to foster the continuous
employment of key management personnel. In this connection, the Board
of Directors of the Company (the "Board") recognizes that, as is the
case with many publicly held corporations, the possibility of a change
in control may exist and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the
departure or distraction of management personnel to the detriment of
the Company and its stockholders.
The Board has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of
members of the Company's management, including yourself, to their
assigned duties without distraction in the face of potentially
disturbing circumstances arising from the possibility of a change in
control of the Company, although no such change is now contemplated.
In order to induce you to remain in the employ of the Company and
in consideration of your agreement set forth in Subsection 2(ii)
hereof, the Company agrees that you shall receive the severance
benefits set forth in this letter agreement ("Agreement") in the event
your employment with the Company is terminated subsequent to a "change
in control of the Company" (as defined in Section 2 hereof) under the
circumstances described below.
1. TERM OF AGREEMENT. This Agreement shall commence on its
effective date and shall continue in effect through December 31, 1998;
provided, however, that commencing on January 1, 1999 and each January
thereafter, the term of this Agreement shall automatically be extended
for one additional year unless, not later than the September 30
preceding each such January 1, the Company shall have given notice
that it does not wish to extend this Agreement; provided, further, if
a change in control of the Company shall have occurred during the
original or extended term of this Agreement, this Agreement shall
continue in effect for the later of (i) the original or extended term
or (ii) a period of twenty-four (24) months beyond the month in which
such change in control occurred. Notwithstanding the foregoing, in no
event shall the term of this Agreement extend beyond the date that you
attain sixty-five years of age.
2. CHANGE IN CONTROL. (i) No benefits shall be payable
hereunder unless there shall have been a change in control of the
Company, as set forth below. For purposes of this Agreement, a "change
in control of the Company" shall be deemed to have occurred if (A) any
"person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
Page 2
other than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned, directly
or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's
then outstanding securities; or (B) during any period of two
consecutive years (not including any period prior to the execution of
this Agreement), individuals who at the beginning of such period
constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clauses (A), (C) or (D)
of this Subsection) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or (C) the shareholders of
the Company approve a merger or consolidation of the Company with any
other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity)
at least 75% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after
such merger or consolidation, or (D) the shareholders of the Company
approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or substantially all
the Company's assets.
(ii) For purposes of this Agreement, a "potential change in
control of the Company" shall be deemed to have occurred if (A) the
Company enters into an agreement, the consummation of which would
result in the occurrence of a change in control of the Company, (B)
any person (including the Company) publicly announces an intention to
take or to consider taking actions which if consummated would
constitute a change in control of the Company; (C) any person, other
than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, who is or
becomes the beneficial owner, directly or indirectly, of securities of
the Company representing 10% or more of the combined voting power of
the Company's then outstanding securities, increases his beneficial
ownership of such securities by 5% or more of the combined voting
power of the Company's then outstanding securities on the date hereof;
or (D) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a potential change in control of the Company has
occurred. You agree that, subject to the terms and conditions of this
Agreement, in the event of a potential change in control of the
Company, you will remain in the employ of the Company until the
earliest of (i) a date which is six (6) months from the occurrence of
such potential change in control of the Company, (ii) the termination
by you of your employment by reason of Disability or Retirement as
defined in Subsection 3(i), or (iii) the occurrence of a change in
control of the Company.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the
events described in Subsection 2(i) hereof constituting a change in
Page 3
control of the Company shall have occurred, you shall be entitled to
the benefits provided in Subsection 4(iii) hereof upon the subsequent
termination of your employment during the term of this Agreement
unless such termination is (A) because of your death, Disability or
Retirement, (B) by the Company for Cause, or (C) by you other than for
Good Reason.
(i) DISABILITY; RETIREMENT. If, as a result of your
incapacity due to physical or mental illness, you shall have been
absent from the full-time performance of your duties with the Company
for a period of six (6) consecutive months, and within thirty (30)
days after written notice of termination is given you shall not have
returned to the full-time performance of your duties, your employment
may be terminated for "Disability." Termination by the Company or you
of your employment based on "Retirement" shall mean termination with
your consent in accordance with the Company's Pension Plan (as
hereafter defined) including early retirement, generally applicable to
its salaried employees, provided, however, that termination based on
"Retirement" shall not include retirement in conjunction with
termination by you for Good Reason.
(ii) CAUSE. Termination by the Company of your employment
for "Cause" shall mean termination upon (A) the willful and continued
failure by you to substantially perform your duties with the Company
(other than any such failure resulting from your incapacity due to
physical or mental illness or any such actual or anticipated failure
after the issuance of a Notice of Termination, by you for Good Reason
as defined in Subsections 3(iv) and 3(iii), respectively) after a
written demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which the
Board believes that you have not substantially performed your duties,
or (B) the willful engaging by you in conduct which is demonstrably
and materially injurious to the Company, monetarily or otherwise. For
purposes of this Subsection, no act, or failure to act, on your part
shall be deemed "willful" unless done, or omitted to be done, by you
not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after
reasonable notice to you and an opportunity for you, together with
your counsel, to be heard before the Board), finding that in the good
faith opinion of the Board you were guilty of conduct set forth above
in clauses (A) or (B) of the first sentence of this Subsection and
specifying the particulars thereof in detail.
(iii) GOOD REASON. You shall be entitled to terminate
your employment for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean, without your express written consent, the
occurrence after a change in control of the Company of any of the
following circumstances unless, in the case of paragraphs (A), (E),
(F), (G) or (H), such circumstances are fully corrected prior to the
Date of Termination specified in the Notice of Termination, as defined
in Subsections 3(v) and 3(iv), respectively, given in respect thereof:
(A) the assignment to you of any duties inconsistent
with your present status as President and Chief Executive Officer of
the Company (or such other title or titles as you may be holding
immediately prior to the change in control of the Company) or a
Page 4
substantial adverse alteration in the nature or status of your
responsibilities from those in effect immediately prior to the change
in control of the Company;
(B) a reduction by the Company in your annual base
salary as in effect on the date of the change in control of the
Company;
(C) the relocation of the Company's principal
executive offices to a location outside of Fort Worth, Texas (or, if
different, the metropolitan area in which such offices are located
immediately prior to the change in control of the Company) or the
Company's requiring you to be based anywhere other than the Company's
principal executive offices except for required travel on the
Company's business to an extent substantially consistent with your
present business travel obligations;
(D) the failure by the Company, without your consent,
to pay to you any portion of your current compensation, or to pay to
you any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven (7) days of
the date such compensation is due;
(E) except as provided below, the failure by the
Company to continue in effect any compensation plan in which you
participate immediately prior to the change in control of the Company
which is material to your total compensation, including but not
limited to the Company's 1995 Stock Option Plan and the Executive
Incentive Compensation Plan or any substitute or additional plans
adopted prior to the change in control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan)
has been made with respect to such plan, or the failure by the Company
to continue your participation therein (or in such substitute or
additional plans) on a basis not materially less favorable, both in
terms of the amount of benefits provided and the level of your
participation relative to other participants, as existed at the time
of the change in control;
(F) except as provided below, the failure of GAINSCO,
Inc. to continue to provide you with benefits substantially similar to
those enjoyed by you under the Company's Profit Sharing Plan and Trust
of GAINSCO, Inc. (the "Pension Plan") or under any of the Company's
other deferred compensation plans, life insurance, medical, health and
accident, or disability plans in which you were participating at the
time of the change in control of the Company, the taking of any action
by the Company which would directly or indirectly materially reduce
any of such benefits or deprive you of any material fringe benefit
enjoyed by you at the time of the change in control of the Company, or
the failure by the Company to provide you with the number of paid
vacation days to which you are entitled on the basis of years of
service with the Company in accordance with the Company's normal
vacation policy for officers in effect at the time of the change in
control of the Company;
Page 5
(G) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and agree to
perform this Agreement, as contemplated in Section 5 hereof; or
(H) any purported termination of your employment
which is not effected pursuant to a Notice of Termination satisfying
the requirements of Subsection (iv) below (and, if applicable, the
requirements of Subsection (ii) above); for purposes of this
Agreement, no such purported termination shall be effective.
Your right to terminate your employment pursuant to this Subsection
shall not be affected by your incapacity due to physical or mental
illness. Your continued employment shall not constitute consent to,
or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder. You may not terminate your employment for Good
Reason pursuant to paragraphs (E) or (F) on account of the
discontinuance of any plan or benefit (without an equitable
substitution) which is part of a uniform, non-discriminatory, Company-wide
reduction in benefits.
(iv) NOTICE OF TERMINATION. Any purported termination of
your employment by the Company or by you shall be communicated by
written Notice of Termination to the other party hereto in accordance
with Section 6 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision
so indicated.
(v) DATE OF TERMINATION, ETC. "Date of Termination" shall
mean (A) if your employment is terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that you shall not
have returned to the full-time performance of your duties during such
thirty (30) day period), and (B) if your employment is terminated
pursuant to Subsection (ii) or (iii) above or for any other reason
(other than Disability), the date specified in the Notice of
Termination (which, in the case of a termination pursuant to
Subsection (ii) above shall not be less than thirty (30) days, and in
the case of a termination pursuant to Subsection (iii) above shall not
be less than fifteen (15) nor more than sixty (60) days, respectively,
from the date such Notice of Termination is given); provided that if
within fifteen (15) days after any Notice of Termination is given, or,
if later, prior to the Date of Termination (as determined without
regard to this proviso), the party receiving such Notice of
Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement
of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (which
is not appealable or with respect to which the time for appeal
therefrom has expired and no appeal has been perfected); provided
further that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full compensation
in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue you as a
participant in all compensation, benefit and insurance plans in which
you were participating whether or not specifically referenced in this
Agreement when the notice giving rise to the dispute was given, until
Page 6
the dispute is finally resolved in accordance with this Subsection.
Amounts paid under this Subsection are in addition to all other
amounts due under this Agreement and shall not be offset against or
reduce any other amounts due under this Agreement, except as provided
in Subsection 4(iii)(B) below.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
Following a change in control of the Company, as defined by Subsection
2(i), upon termination of your employment or during a period of
Disability you shall be entitled to the following benefits:
(i) During any period that you fail to perform your full-time
duties with the Company as a result of incapacity due to physical
or mental illness, you shall continue to receive your salary at the
rate in effect at the commencement of such period, together with all
other compensation and benefits payable to you during such period,
until this Agreement is terminated pursuant to Section 3(i) hereof.
Thereafter, or in the event your employment shall be terminated by the
Company or by you for Retirement, or by reason of your death, your
benefits shall be determined under the Company's retirement, insurance
and other compensation plans and programs then in effect in accordance
with the terms of such programs.
(ii) If your employment shall be terminated by the Company
for Cause or by you other than for Good Reason, Disability, death or
Retirement, the Company shall pay you your full base salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts to which you are entitled
under any compensation or benefit plan of the Company at the time such
payments are due, and the Company shall have no further obligations to
you under this Agreement.
(iii) If your employment by the Company shall be
terminated (a) by the Company other than for Cause, Retirement or
Disability or (b) by you for Good Reason, then you shall be entitled
to the benefits provided below:
(A) the Company shall pay you your full base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which you
are entitled under any compensation plan of the Company, at the time
such payments are due, except as otherwise provided below; and
(B) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the Company shall pay
as severance pay to you a lump sum cash severance payment in an amount
equal to two times your "base amount" (within the meaning of section
280G(b)(3) of the Internal Revenue Code of 1986, as amended (the
"Code")), provided, however, that such severance payment shall be no
less than 1.25 times the amount reported on your Form W-2 statement
issued by the Company with respect to the year preceding that in which
the Date of Termination occurs. Notwithstanding any other provision
of this Agreement, in the event that any payment or benefit received
Page 7
or to be received by you in connection with a change in control or the
termination of your employment (whether payable pursuant to the terms
of this Agreement or any other plan, arrangement or agreement with the
Company, its successors, any person whose actions result in a change
in control or any person affiliated with (or which, as a result of the
completion of the transactions causing a change in control, will
become affiliated) the Company or such person within the meaning of
section 1504 of the Code) (all such payments and benefits being
hereinafter called the "Severance Payments") would not be deductible
(in whole or in part), by the Company, an affiliate or any person
making such payment or providing such benefit as a result of section
280G of the Code, then, to the extent necessary to make such portion
of the Severance Payments deductible (and after taking into account
any reduction in the Severance Payments provided by reason of section
280G of the Code in such other plan, arrangement or agreement), (A)
the cash Severance Payments shall first be reduced (if necessary, to
zero), and (B) all other non-cash Severance Payments shall next be
reduced. For purposes of this limitation (i) no portion of the
Severance Payments the receipt or enjoyment of which you shall have
effectively waived in writing prior to the Date of Termination shall
be taken into account, (ii) no portion of the Severance Payments shall
be taken into account which in the opinion of tax counsel selected by
the Company's independent auditors and reasonably acceptable to you
does not constitute a "parachute payment" within the meaning of section
280G(b)(2) of the Code, including by reason of section 280G(b)(4)(A)
of the Code, (iii) the Severance Payments shall be reduced only to the
extent necessary so that the Severance Payments (other than those
referred to in clauses (i) or (ii)) in their entirety constitute
reasonable compensation for services actually rendered within the
meaning of section 280G(b)(4)(B) of the Code or are otherwise not
subject to disallowance as deductions, in the opinion of tax counsel
referred to in clause (ii); and (iv) the value of any non-cash benefit
or any deferred payment or benefit included in the Severance Payments
shall be determined by the Company's independent auditors in
accordance with the principles of sections 280G(d)(3) and (4) of the
Code.
(C) the payment provided for in paragraph (B) above,
shall be made not later than the fifth day following the Date of
Termination, provided, however, that if the amount of such payment
cannot be finally determined on or before such day, the Company shall
pay to you on such day an estimate, as determined in good faith by the
Company, of the minimum amount of such payment and shall pay the
remainder of such payment (together with interest at the rate provided
in section 1274(b)(2)(B) of the Code) as soon as the amount thereof
can be determined but in no event later the thirtieth day after the
Date of Termination. In the event that the amount of the estimated
payment exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to you, payable on
the fifth day after demand by the Company (together with interest at
the rate provided in section 1274(b)(2)(B) of the Code).
(D) the Company also shall pay to you all legal fees
and expenses incurred by you as a result of such termination
(including all such legal fees and legal expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain
or enforce any right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable
Page 8
to the application of section 4999 of the Code to any payment or
benefit provided hereunder). Such payments shall be made at the later
of the times specified in paragraph (C) above, or within five (5) days
after your request for payment accompanied with such evidence of fees
and expenses incurred as the Company reasonably may require.
(iv) You shall not be required to mitigate the amount of
any payment provided for in this Section 4 by seeking other employment
or otherwise, nor shall the amount of any payment or benefit provided
for in this Section 4 be reduced by any compensation earned by you as
the result of employment by another employer, by retirement benefits,
by offset against any amount claimed to be owed by you to the Company,
or otherwise.
(v) In addition to all other amounts payable to you under
this Section 4, you shall be entitled to receive all benefits payable
to you, at the respective time or times such payments are due, under
the Pension Plan[s], and any other plan or agreement relating to
retirement benefits.
5. SUCCESSORS; BINDING AGREEMENT. (i) The Company will require
any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had
taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation from
the Company in the same amount and on the same terms as you would be
entitled to hereunder if you terminate your employment for Good Reason
following a change in control of the Company, except that for purposes
of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable
to you hereunder if you had continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with
terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt requested, postage
pre-paid, addressed as follows:
Page 9
If to the Company:
GAINSCO Service Corp.
Attn: Chairman of the Board
500 Commerce Street
Fort Worth, Texas 76102-5439
If to you:
Glenn W. Anderson
500 Commerce Street
Fort Worth, Texas 76102-5439
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change
of address shall be effective only upon receipt.
7. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by you and such officer
as may be duly authorized to act on the Company's behalf. No waiver
by either party hereto at any time of any breach by the other party
hereto of, or non-compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver
of similar of dissimilar provisions or conditions at the same or at
any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the
State of Texas. All references to sections of the Exchange Act or the
Code shall be deemed also to refer to any successor provisions to such
sections. Any payments provided for hereunder shall be paid net of
any applicable withholding required under federal, state or local law.
The obligations of the Company under Subsections 4(i), 4(ii),
4(iii)(D) and 4(v) shall survive the expiration of the term of this
Agreement.
8. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which shall
remain in full force and effect.
9. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
10. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled, at the Company's
expense, exclusively by arbitration in Tarrant County, Texas in
accordance with the rules of the American Arbitration Association then
in effect. Judgment may be entered on the arbitrator's award in any
court having jurisdiction; provided, however, that you shall be
Page 10
entitled to seek specific performance of your right to be paid until
the Date of Termination during the pendency of any dispute or
controversy arising under or in connection with this Agreement.
If this letter sets forth our agreement on the subject matter
hereof, kindly signed and return to the Company the enclosed copy of
this letter which will then constitute our agreement on this subject.
Sincerely,
GAINSCO Service Corp.
By: /s/ Joel C. Puckett
___________________________
Agreed to effective the
17th day of April, 1998
/s/ Glenn W. Anderson
______________________________
Glenn W. Anderson
GUARANTEE
GAINSCO, INC., a Texas corporation, unconditionally guarantees
payment and performance in full of all obligations of GAINSCO Service
Corp. ("Service Corp.") under the above and foregoing change in
control agreement (the "Change in Control Agreement") between Service
Corp. and Glenn W. Anderson and any renewals or extensions thereof
whether or not the terms of the Change in Control Agreement are
modified.
This guarantee is a continuing guarantee and may not be revoked
by the guarantor without the written consent of Glenn W. Anderson and
shall expire only when the Change in Control Agreement and all
renewals or extensions of it have terminated.
GAINSCO, INC.
By: /s/ Joel C. Puckett
__________________________
Chairman of the Board
