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EXHIBIT 10.8
CONSULTING AGREEMENT
This CONSULTING AGREEMENT ("Agreement") is made and entered into as of this
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13/th/ day of June, 2000, by and between Southwestern Life Holdings, Inc., a
Delaware corporation (the "Company"), and John Sharpe (the "Consultant").
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WHEREAS, the Company desires to engage Consultant and Consultant has agreed
to be engaged by the Company to consult with the Company as provided in this
Agreement.
NOW, THEREFORE, for and in consideration of the foregoing recital and the
mutual covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each of the parties hereto, the parties hereto hereby agree as follows:
1. Duties. Subject to the terms and conditions of this Agreement,
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Consultant shall assist the Company and its wholly-owned subsidiaries,
Southwestern Life Insurance Company and Security Life and Trust Co.
(collectively, the "Subsidiaries") in reviewing and analyzing business
opportunities (the "Services") but shall not be responsible for management of
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the Company or the Subsidiaries. Consultant shall provide the Services to the
Company and the Subsidiaries for a maximum of 80 hours per calendar month during
the term of this Agreement. Consultant may provide Services at any location
chosen by the Consultant, which location need not be the location of the
Company's offices.
2. Compensation.
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(a) Consulting Fee. During the term of this Agreement, the Company
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shall pay Consultant a monthly consulting fee equal to $9,000 per month,
payable in advance on the first business day of each calendar month.
(b) Office; Secretary; Parking. During the term of this Agreement,
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the Company shall furnish the Consultant with office space, secretarial
support and parking at the Company's headquarters, each at no cost to the
Consultant and shall reimburse the Consultant for the monthly (i) rent,
(ii) telephone expenses, (iii) insurance expenses and (iv) electrical
expenses incurred by the Consultant in connection with the operation of his
offices located at 2305 Cedar Springs, Suite 410, Dallas, Texas provided,
however, that such reimbursement shall not exceed $3,500 per month and
shall not continue beyond January 31, 2003.
(c) Administrative Assistant. During the term of this Agreement, the
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Company shall directly engage (either as an employee or consultant of the
Company) an assistant chosen by the Consultant to provide administrative
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assistance to the Consultant. The assistant initially will be Jannette
Stanley, who will work for 60-130 hours per month at an hourly rate of $30
per hour, payable by the Company directly to such assistant. The Company
shall also provide the assistant with parking and office facilities at the
Company's headquarters at no cost to the assistant. The Company
acknowledges that a portion of the assistant's work hours may be devoted to
assisting the Consultant in matters that are not related to the Services.
(d) Stock Options. Upon the execution and delivery of this Agreement,
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the Company shall grant to the Consultant options to purchase 170,000
shares of common stock, par value $0.01 per share, of the Company, at an
exercise price of $12.50 per share (subject to adjustment as provided in
the instrument(s) granting such options). Such options shall be in full
satisfaction of the Company's indication in its Plan of Reorganization that
the Company would issue options for up to 225,000 shares to the Consultant.
The options shall be assignable and transferrable by Consultant to any
person. The options shall be fully vested upon issuance and shall be
exercisable at any time during the period beginning on the date hereof and
ending on the tenth anniversary of the date hereof.
(e) Discretionary Stock Options. During the term of this Agreement,
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the Company may, in its sole discretion, grant to the Consultant (or to his
designees) additional options to purchase shares of common stock, par value
$0.01 per share, of the Company, at an exercise price and on such other
terms as may be determined in connection with any such grant.
(f) Reimbursement of Expenses. During the term of this Agreement, the
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Company shall reimburse Consultant for reasonable travel and other expenses
incurred by Consultant in performing his obligations under this Agreement.
3. Term and Termination. The term of this Agreement shall be the one-
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year period commencing on the date of this Agreement and ending on the one-year
anniversary of such date; provided, that this Agreement shall automatically
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renew for an additional one-year term on such one-year anniversary date and on
each such subsequent annual anniversary date unless either the Company or
Consultant delivers written notice to the other party not later than 30 days
prior to the date of the next applicable anniversary date to the effect that the
notifying party wishes to terminate the automatic annual renewal of this
Agreement.
The Company may terminate this Agreement by written notice thereof the
Consultant prior to the expiration of any one-year term, but shall immediately
thereupon pay to the Consultant the remaining portion of the consulting fees
that would have been payable to the Consultant during the remainder of such one-
year term if this Agreement had not been so terminated. Consultant may terminate
this
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Agreement at any time by written notice thereof to the Company and from and
after the effective date of such termination, the consulting fees and the
reimbursement obligations under Section 2(b) and (c) shall cease except for any
accrued and unpaid amounts existing at the termination date.
4. Independent Contractor Status. The parties hereby acknowledge and
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covenant that (i) Consultant is an independent contractor and will act
exclusively as an independent contractor and not as an employee of the Company
in performing the duties assigned hereunder, and (ii) the parties do not intend,
and will not hold out that there exists, any partnership, joint venture,
undertaking for a profit or other form of business venture or any employment
relationship among the parties other than that of an independent contractor
relationship.
During the term of this Agreement, Consultant may perform consulting
services for, be employed by, invest in or otherwise participate in connection
with other business entities and individuals (including competitors of the
Company) provided that Consultant shall not solicit any employees or insurance
agents of the Company for any other company during the term of this Agreement
and for one year after its termination.
Consultant shall file all tax returns and reports required to be filed by
him on the basis that Consultant is an independent contractor, rather than an
employee, as defined in Treasury Regulation (S)31.3121(d)-1(c)(2), and
Consultant shall indemnify the Company for the amount of any employment taxes
paid by the Company as the result of Consultant not withholding employment taxes
(excluding any penalties, interest or similar assessments) from the payments
under this Agreement.
5. Indemnity. The Company shall provide to the Consultant in his capacity
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as an officer, director and agent (as applicable) of the Company (pursuant to
this Agreement and/or the Company's Bylaws and Certificate of Incorporation) or
of any Subsidiaries, indemnification to the fullest extent permitted by
applicable law (including advancing defense costs and other expenses). The
Company shall also purchase and keep in force for the benefit of all officers
and directors of the Company (including the Consultant) directors and officers
insurance coverage of not less than $__________________ in face amount. The
Company shall also indemnify and defend Consultant and save Consultant harmless
against any and all losses, costs, damages, expenses, judgments and liabilities
(including without limitation reasonable attorney's and professional fees)
directly or indirectly resulting from, arising out of or relating to one or more
claims, lawsuits, causes of action or other legal actions and proceedings
against or involving (including without limitation as a witness) Consultant (or
an employee of Consultant), including but not limited to any state or federal
environmental claims even if groundless, false or fraudulent, so long as the
claim is alleged or determined, directly or indirectly, to arise out of, result
from, relate to or be based upon, in whole or in part, the performance by
Consultant of its duties under this Agreement, except and only to the extent
that a loss is determined
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to be from intentional misconduct or gross negligence of Consultant. The
indemnity set forth in this Agreement shall be in addition to, and not in
limitation of, any rights the Consultant may have under law, the Company's
Articles of Incorporation, the Company's Bylaws or any other agreement or
understanding that entitles the Consultant (in any capacity) to indemnification
and shall survive any termination of this Agreement or the Consultant's
consulting arrangement with the Company. THE COMPANY ACKNOWLEDGES THAT THE
FOREGOING INDEMNITY REQUIRES THE COMPANY TO INDEMNIFY THE CONSULTANT FOR HIS OWN
NEGLIGENCE.
6. Miscellaneous.
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(a) Validity. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
(b) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, REGARDLESS OF THE LAWS
THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICT OF LAWS
THEREOF.
(c) Descriptive Headings. The descriptive headings herein are
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inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(d) Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
(e) Amendments. This Agreement may not be modified, amended, altered
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or supplemented except upon the execution and delivery of a written
agreement executed by each of the parties hereto.
(f) Assignability. This Agreement shall not be assignable by any
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party hereto without the prior written consent of the other party hereto
and any purported assignment in contravention thereof shall be null and
void and of no force and effect; provided, that any successor (by operation
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of law) to the Company's rights hereunder shall be obligated hereunder to
the same extent as the Company (including without limitation under Section
5).
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
South western Life Holdings, Inc.
By: /s/ Steve R. Johnson
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Name: Steve R. Johnson
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Title: President and Chief Operating Officer
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CONSULTANT:
/s/ John Sharpe
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John Sharpe
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