Exhibit 10.2


 


RETAINER
AGREEMENT


 


This Retainer Agreement (this “Agreement”) is
made effective as of June 2, 2009, by and between Richard J. Vander Woude
(hereinafter referred to as “Attorney”), FirstCity Servicing Corporation
(herein referred to as “FCSC”), and FirstCity Financial Corporation (herein
referred to as “Company”).  The parties,
intending to be legally bound, agree as follows:


 


BACKGROUND


 


 Attorney
was, prior to the Effective Date, employed as General Counsel of the Company  and FCSC. 
Prior to or as of the Effective Date, Attorney will resign his positions
as General Counsel of the Company and FCSC.


 


AGREEMENT


 


1.                                      DEFINITIONS


 


For the purposes of this Agreement, the
following terms have the meanings specified or referred to in this Section 1.


 


“Agreement” means this Retainer
Agreement, as amended from time to time.


 


“Company” means
FirstCity Financial Corporation.


 


“Effective
Date” means June 2, 2009.


 


“Fiscal
Year” means the Company’ fiscal year, as it exists on the Effective Date or
as changed from time to time.


 


“Person” means any
individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust,
association, organization, or governmental body.


 


“Retainer
Fee” has the meaning as defined in Section 3.1(b).


 


“Retainer Period” has the
meaning as defined in Section 2.2.


 


2.                                      TERMS AND DUTIES


 


2.1                               ENGAGEMENT.  Company
hereby engages the services of Attorney, on a non-exclusive basis, and Attorney
agrees to provide to Company and its affiliates and subsidiaries legal services
on the terms and conditions set forth in this Agreement, as and to the extent
requested by Company from time to time. 
In addition, Attorney shall provide such further legal services
hereunder as may be agreed upon by the parties from time to time. Attorney agrees
that he will be available during normal working hours to render the services
required of him hereunder, subject to vacation and normal conflicts arising
from representation of other clients.


 


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2.2                               TERM.  The term of
the Attorney’s engagement under this Agreement will be two  (2) years, beginning on the Effective
Date and ending on May 31, 2011 (the “Retainer Period”), unless earlier terminated
as provided in Section 6.2.


 


2.3                               RETAINER.  Company
agrees that Company and its Subsidiaries and Affiliates will furnish work for
legal services for a total of 1,500 hours during the Retainer Period (750 hours
for the period from June 1, 2009 through May 31, 2010 and 750 hours
for the period from June 1, 2010 through May 31, 2011).


 


3.                                      COMPENSATION


 


3.1                               Subject to the
terms of this Agreement, the Attorney will receive compensation as set forth in
subparts (a), (b) and (c) of this Section 3.1.


 


(a)                                  Hourly Fees.  Legal fees for services provided by Attorney
during the Retainer Period will be billed at $350 per hour.  Attorney will bill Company for legal services
provided by Attorney each month.  Attorney
will use his best efforts to submit any such invoices for services prior to the
10th day of the following month. 
Invoices for legal services will be paid no later than fifteen days
after receipt by Company.


 


(b)                                  Retainer Fee.  A Retainer
Fee will be calculated and paid (if any) within twenty-five days after each three
month period during the Retainer Period commencing on the Effective Date (a “Quarterly
Period”); the first Quarterly Period will end on August 31, 2009.  The Retainer Fee is an amount equal to (i) the
Hour Threshold applicable to that Quarterly Period multiplied by $350, (ii) reduced
by the amount of any fees invoiced to Company and/or any Company Subsidiaries
and Affiliates for that Quarterly Period, and further reduced by the amount of
any Retainer Fees paid for the immediate prior Quarterly Period which were not
applied as a credit to legal fees charged by Attorney.  In the event that the actual hours billed in
any Quarterly Period, exceeds the Hour Threshold applicable to that Quarterly
Period, the excess shall apply to the succeeding Quarterly Period.  The calculation of the Retainer Fee for each Quarterly
Period for the first year of the Retainer Period will be based upon an Hour
Threshold of 187.5 hours per quarter for services provided by Attorney under
this Agreement during the first year of the Retainer Period.  The calculation of the Retainer Fee for each
Quarterly Period for the second year of the Retainer Period will be based upon an
Hour Threshold of 120 hours per quarter for services provided by Attorney under
this Agreement during the second year of the Retainer Period.  Within twenty-five days of the end of the
Retainer Period a final calculation will be made for the entire Retainer Period
based upon the a total of 1,500 hours for the Retainer Period with credit given
to Company for all fees paid by Company and all Retainer Fees paid during the
Retainer Period and Company will pay, within thirty days of receipt of the
calculation and bill for any Retainer Fee, the final Retainer fee payable to Attorney.  The Retainer Fee will be paid, either
directly to Attorney or to any law firm by which Attorney is employed, but any
reduction of the Retainer Fee shall only apply to hourly fees for services
provided by Attorney and not for legal services provided by any other
attorneys.


 


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The
Retainer Fee shall be reduced to the extent that Attorney was offered work by Company
and declined to provide such legal services unless the work was declined due to
(1) other work being performed by Attorney for Company, (2) the work
arising during a vacation period designated by Attorney (not to exceed 28
workdays per year).  The reduction of the
Retainer Fee for declined work will not exceed the Hour Threshold in any Quarterly
Period reduced by hours of services provided by Attorney during that quarter.


 


Any
Retainer Fee payments paid to Attorney shall be made to Attorney as an
independent contractor and no such payments shall be included within any W-2
issued to Attorney under the Separation Agreement (as defined below) and
Attorney shall be solely responsible for the payment of all federal, state and
local income taxes, social security taxes, federal, state and local
unemployment insurance and similar taxes, and all other assessments, taxes,
contributions or sums payable with respect to Attorney as a result of or in
connection  with the services performed
by Attorney under the Retainer Agreement, and Attorney shall file all returns
and reports  with  respect to any of the  foregoing. 
In the event that Attorney provides the legal services through a law
firm, the law firm shall recognize and report all income for fees invoice
through such law firm and shall be responsible for payment of all such taxes.


 


(c)                                  No Other
Compensation.  Except as
set forth in a Separation Agreement, Release and Amendment to Award Agreements (the
“Separation Agreement”) of even date herewith executed by Attorney, Company and
FCSC, the Attorney shall not be entitled to any additional compensation, fees,
benefits or bonuses of any kind from the Company or its subsidiaries or
affiliates.


 


3.2                                            STATUS OF ATTORNEY AND COMPANY.  Attorney understands and agrees that he is acting as an independent contractor in the performance of his services hereunder and nothing herein contained shall be deemed to create an employment relationship or an agency relationship between Attorney and Company.  In light of Attorney’s independent contractor status, Attorney further understands and agrees that he shall in no event be entitled to participate as an employee  in, or to receive any benefits from, any of Company’s benefit or welfare plans in respect of his services hereunder.  Attorney or any law firm employing Attorney shall be solely responsible for the payment of all Federal, state and local income taxes, social security taxes, Federal, state and local unemployment insurance and similar taxes, and all other assessments, taxes, contributions or sums payable with respect to Attorney as a result of or in connection with the services performed by Attorney hereunder, and Attorney or such law firm shall file all returns and reports with respect to any of the foregoing.  Nothing contained herein shall prejudice, limit or otherwise modify any unconditionally accrued and/or vested rights of Attorney arising out of his prior employment by Company, which employment terminated on May 31, 2009.
 


4.                                      REIMBURSEMENT FOR EXPENSES


 


4.1                               Attorney shall
be entitled to reimbursement for reasonable and actual documented business
expenses incurred for the benefit of Company, FCSC and their affiliates and
subsidiaries in the course of providing legal services.  Expense invoices and, if requested,
supporting documentation 


 


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satisfactory
to Company shall be submitted on a monthly basis with respect to expenses
incurred during the preceding month.  To
the extent any reimbursement of expenses under this Section 1(e) are
subject to Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), then in accordance with Code Section 409A: (i) the
amount of expenses eligible for reimbursement provided during Employee’s
taxable year may not affect the expenses eligible for reimbursement provided in
any other taxable year, (ii) the reimbursement must be made on or before
the last day of Employee’s taxable year following the taxable year in which the
expense was incurred, and (iii) the right to reimbursement is not subject
to liquidation or exchange for another benefit.


 


CONFLICTS.


 


5.1                               Neither
Attorney nor any law firm employing attorney shall  provide legal services, directly or
indirectly, to any third party if the provision of such services would
violate  applicable rules of
professional  conduct  applicable to lawyers regarding  conflicts of interests or potential  conflicts of interest.


 


6.                                      TERMINATION


 


6.1                               EVENTS OF TERMINATION.  During the Retainer Period, the Attorney’s Retainer
Fee, and any and all other rights of the Attorney under this Agreement will
terminate (except as otherwise provided in this Section 6):


 


(a)                                  upon the death
of the Attorney, or the disability or incapacity of Attorney such that Attorney
cannot perform legal services for a period exceeding. 60 days;


 


(b)                                  in the event
that Attorney accepts full-time employment with a company engaged in the
acquisition of distressed assets in competition with Company;


 


(c)                                  Attorney’s
negligent performance of legal services or loss of his license  to practice law; provided that Attorney has
not cured any such breach within thirty (30) days after receiving notice of the
alleged breach from Company.


 


6.2                               TERMINATION PAY. 
Effective upon the termination of this Agreement, the Company will be
obligated to pay Attorney (or, in the event of his death, his heirs, estate or designated
beneficiary as defined below) only such compensation as is provided in this Section 6.2,
and in lieu of all other amounts and in settlement and complete release of all
claims the Attorney or his heirs may have against the Company.  Upon the termination of this Agreement,
Attorney or his designated beneficiary, heirs or estate will be entitled to
receive the fees due for services provided by Attorney prior to the termination
of this Agreement, any accrued and unpaid Retainer Fee due for the period
through the termination date and the amount of any unreimbursed expenses
payable under Section 4.1.  For
purposes of this Section 6.2, the Attorney’s designated beneficiary will
be his spouse, Jana Kay Vander Woude, or in the event that his spouse is not
surviving, his estate.  Notwithstanding
the preceding sentence, the Company will have no duty, in any circumstances, to
attempt to open an estate on behalf of Attorney, to determine whether any
beneficiary designated by Attorney is alive or to ascertain the address of any
such beneficiary, to determine the existence of any trust, to determine whether
any person or entity purporting to act as Attorney’s personal representative
(or the trustee of a trust established by the Attorney) is duly authorized to
act in that capacity, or to locate or attempt to locate any beneficiary, heir,
personal representative, or trustee.


 


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7.                                      GENERAL PROVISIONS


 


7.1                               WAIVER.  The rights
and remedies of the parties to this Agreement are cumulative and not
alternative.  Neither the failure nor any
delay by either party in exercising any right, power or privilege under this
Agreement will operate as a waiver of such right, power or privilege, and no
single or partial exercise of any such right, power, or privilege will preclude
any other or further exercise of such right, power, or privilege or the
exercise of any other right, power or privilege.  To the maximum extent permitted by applicable
law, (a) no claim or right
arising out of this Agreement can be discharged by one party, in whole or in
part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no
waiver that may be given by a party will be applicable except in the specific
instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement.


 


7.2                               BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED.  This Agreement shall inure to the benefit of,
and shall be binding upon, the parties hereto and their respective successors,
assigns, heirs, and legal representatives, including any entity with which the
Company may merge or consolidate or to which all or substantially all of its
assets may be transferred.  This
Agreement is for the personal services of Attorney and may not be assigned by
Attorney, nor shall it be assignable by operation of law, without the prior
written consent of Company, which consent may be withheld in Company’s sole
discretion.


 


7.3                               NOTICES.  All notices,
consents, waivers, and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent
by facsimile (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested, or (c) when received by the addressee, if
sent by a nationally recognized overnight delivery service (receipt requested),
in each case to the appropriate addresses and facsimile numbers set forth below
(or to such other addresses and facsimile numbers as a party may designate by
notice to the other parties):


 


	
  If to Company:

  	
  FirstCity Financial
  Corporation

  
	
   

  	
  P.O. Box 8216, Waco,
  Texas 76714-8216 (mail)

  
	
   

  	
  6400 Imperial Drive, Waco, Texas 76712 (deliveries only)

  
	
   

  	
  Attention: James T. Sartain

  
	
   

  	
  Facsimile No. 254-761-2953

  
	
   

  	
   

  
	
  If to FCSC:

  	
  FirstCity Servicing
  Corporation

  
	
   

  	
  P.O. Box 8216, Waco,
  Texas 76714-8216 (mail)

  
	
   

  	
  6400 Imperial Drive, Waco, Texas 76712 (deliveries only)

  
	
   

  	
  Attention: James T. Sartain

  
	
   

  	
  Facsimile No. 254-761-2953

  



 


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  If to Attorney:

  	
  Richard J. Vander Woude

  
	
   

  	
  10005 Lost Oak Ridge Drive

  
	
   

  	
  Woodway, Texas 76712

  



 


 


7.4                               ENTIRE AGREEMENT; AMENDMENTS.  This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements and understandings, oral or written, between the parties
hereto with respect to the subject matter hereof.  This Agreement may not be amended orally, but
only by an agreement in writing signed by the parties hereto.


 


7.5                               GOVERNING LAW.  This
Agreement will be governed by the laws of the State of Texas without regard to
conflicts of laws principles.


 


7.6                               SECTION HEADINGS, CONSTRUCTION.  The headings of Sections in this Agreement
are provided for convenience only and will not affect its construction or
interpretation.  All references to “Section”
or “Sections” refer to the corresponding Section or Sections of this
Agreement unless otherwise specified. 
All words used in this Agreement will be construed to be of such gender
or number as the circumstances require. Unless otherwise expressly provided,
the word “including” does not limit the preceding words or terms.


 


7.7                               SEVERABILITY.  If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect.  Any provision of
this Agreement held invalid or unenforceable only in part or degree will remain
in full force and effect to the extent not held invalid or unenforceable.


 


7.8                               COUNTERPARTS.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.


 


7.9                               NO THIRD-PARTY BENEFICIARIES.  This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective
successors, permitted assigns, heirs and legal representatives.


 


7.10                        NO CONSTRUCTION AGAINST PREPARER.  No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party by any court
or other governmental or judicial authority by reason of such party’s having or
being deemed to have prepared or imposed such provision.


 


7.11                        COUNSEL.  Each party
hereto warrants and represents that each party has been afforded the
opportunity to be represented by counsel of its choice in connection with the
execution of this Agreement, and has had ample opportunity to read, review, and
understand the provisions of this Agreement.


 


7.12                        ATTORNEYS’ FEES.  In
the event of any litigation between the Company and the Attorney arising under
or in connection with this Agreement, the prevailing party shall be entitled to
recover from the other party the expenses of litigation (including reasonable
attorneys’ fees, expenses and disbursements) incurred by the prevailing party.


 


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7.13                        NON-WAIVER.  Failure by
any party to complain of any action, non-action or breach of any other party
shall not constitute a waiver of any aggrieved party’s rights hereunder.  Waiver by any party of any right arising from
any breach of any other party shall not constitute a waiver of any other right
arising from a subsequent breach of the same obligation or for any other
default, past, present or future.


 


7.14                        TIME OF ESSENCE; DATES.  Time is of the essence of this
Agreement.  Anywhere a day certain is
stated for payment or for performance of any obligation, the day certain so
stated enters into and becomes a part of the consideration for this
Agreement.  If any date set forth in this
Agreement shall fall on, or any time period set forth in this Agreement shall
expire on, a day which is a Saturday, Sunday, federal or state holiday, or
other non-business day, such date shall automatically be extended to, and the
expiration of such time period shall automatically be extended to, the next day
which is not a Saturday, Sunday, federal or state holiday or other non-business
day.  The final day of any time period
under this Agreement or any deadline under this Agreement shall be the specified
day or date, and shall include the period of time through and including such
specified day or date.


 


7.15                        FACSIMILE AS WRITING.  The parties expressly acknowledge and agree
that, notwithstanding any statutory or decisional law to the contrary, the printed
product of a facsimile transmittal shall be deemed to be “written” and a “writing”
for all purposes of this Agreement.


 


7.16                        TERMINATION OF PRIOR AGREEMENTS. 
EXCEPT FOR THE SEPARATION AGREEMENT, RELEASE AND AMENDMENT OF AWARD
AGREEMENTS OF EVEN DATE HEREWITH, THE COMPANY,
FCSC AND ATTORNEY ACKOWLEDGE AND AGREE THAT THIS AGREEMENT IS THE ONLY
AGREEMENT RELATING TO THE TERMS OF ENGAGEMENT, COMPENSATION, OR ANY OTHER CLAIM
TO PAYMENTS OF ANY KIND OF ATTORNEY RELATING TO THE COMPANY, FCSC OR ANY OF
THEIR AFFILIATES OR SUBSIDIARIES COVERING THE RETAINER PERIOD.


 


7.17                        COMPLIANCE WITH CODE SECTION 409A. 
This Agreement is intended to comply with
Code Section 409A and shall be interpreted accordingly.  Any ambiguous provision will be construed in
a manner that is compliant with or exempt from the application of Code Section 409A.  If any provision of this Agreement (or any
award of compensation or benefits hereunder) would cause Employee to incur any
additional tax or interest under Code Section 409A and authoritative
guidance thereunder, FCFC and FCSC shall, after consulting with and obtaining
the agreement of Employee, reform such provision to comply with Code Section 409A,
provided that such reformation shall to the extent permitted under Code Section 409A,
maintain the original intent and economic benefit to Employee of the applicable
provision.


 


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IN WITNESS
WHEREOF, the parties have executed and delivered this
Agreement on June 4, 2009 to be effective as of the date above first
written above.


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  FirstCity Financial Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  FCSC:

  
	
   

  	
   

  
	
   

  	
  FirstCity Servicing Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATTORNEY:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Richard J. Vander Woude

  
							



 


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