Document:

exv10w7

 

Exhibit 10.7

GUARANTY FINANCIAL GROUP INC.

DIRECTORS’ FEE DEFERRAL PLAN

ARTICLE 1

Definitions

     When used herein the following terms shall have the following meanings:

     1.1. “Account” means the Account maintained for each Participant in accordance with
the terms of Article 3 hereof.

     1.2. “Affiliate” means each trade or business, whether or not incorporated, that
together with the Company, is treated as a “single employer” under Section 414(b) or 414(c) of the
Code.

     1.3. “Administrator” means the Board or such person(s) as may be designated by the
Board to administer this Plan.

     1.4. “Board” means the Board of Directors of the Company.

     1.5. “Board Fees” means annual retainer fees (including Non-Executive Chair Retainer
Fees) and meeting fees payable to an Eligible Director with respect to the Eligible Director’s
service on the Board and/or one or more Board committees.

     1.6. “Change in Control” means the occurrence of a “change in control event” (within
the meaning of Section 409A of the Code) with respect to the Company.

     1.7. “Code” means the Internal Revenue Code of 1986, as amended.

     1.8. “Common Stock” means the common stock, $1.00 par value, of the Company and, in
the event such common stock is converted to another security or property, such other security or
property.

     1.9. “Company” means Guaranty Financial Group Inc., a Delaware corporation, and its
successors by merger, sale of assets or otherwise.

     1.10. “Crediting Date” means the date on which Board Fees would have been paid to an
Eligible Director absent the Deferral Election covering such Board Fees.

     1.11. “Deferral Election” means an irrevocable election by an Eligible Director, made
on a form prescribed by the Administrator and delivered to the Administrator, to defer under this
Plan the receipt of all or a specified portion of Board Fees otherwise payable to the Eligible
Director. A Deferral Election shall be effective when the form is countersigned on behalf of the
Company.

 

 

     1.12. “Eligible Director” means a member of the Board who is not also an employee of
the Company or any of its Affiliates.

     1.13. “Fair Market Value” means, unless otherwise determined by the Administrator, the
closing price of a share of Common Stock on the New York Stock Exchange (“NYSE”) as of the relevant
date (or if the NYSE is not open on such date or the Common Stock is not traded on that day, the
most recent prior date that the NYSE was open for trading and the Common Stock was traded).

     1.14. “401(k) Plan” means the Temple-Inland Salaried Savings Plan or any successor thereto.

     1.15. “Matching Restricted Stock Units” means Matching Restricted Stock Units as
defined in Section 3.3 hereof.

     1.16. “Non-Executive Chair Retainer Fees” means Board Fees that are payable to an
Eligible Director with respect to the Eligible Director’s service on the Board as a non-executive
chairperson.

     1.17. “Participant” means an Eligible Director who files a Deferral Election or is
credited with Retainer Shares pursuant to the terms of the Plan.

     1.18. “Restricted Stock Units” means hypothetical shares of Common Stock credited to a
Participant’s Account having a value equal to the Fair Market Value of an equal number of shares of
Common Stock.

     1.19. “Plan” means the Guaranty Financial Group Inc. Directors’ Fee Deferral Plan, as
set forth herein and amended from time to time.

     1.20. “Retainer Shares” means Restricted Stock Units credited to a Participant’s
Account pursuant to Section 2.2 hereof.

     1.21. “Separation from Service” means a “separation from service” (within the meaning
of Section 409A of the Code) from the Company and its Affiliates.

     1.22. “Stock Plan” means the Guaranty Financial Group Inc. 2007 Stock Incentive Plan
and any other plan adopted by the Company that provides for the grant of stock options, phantom
stock, or restricted stock to members of the Board.

     1.23. “Unforeseeable Emergency” means an “unforeseeable emergency” (within the meaning
of Section 409A of the Code).

ARTICLE 2

Participation; Deferred Board Fees

     2.1. Participation. Each Eligible Director shall be a Participant in this Plan.

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     2.2. Retainer Shares. On the date of the first regularly scheduled Board meeting each
year, each Eligible Director’s Account shall be credited with a number of Restricted Stock Units
equal to the quotient obtained by dividing (a) $75,000 (effective January 1, 2008) by (b) the Fair
Market Value of a share of Common Stock as of such date.

     2.3. Board Fee Deferrals. An Eligible Director may elect to defer hereunder the
receipt of all or a portion of Board Fees payable to the Eligible Director by filing with the
Administrator a Deferral Election prior to the start of the calendar year during which the Board
Fees covered by the Deferral Election will be paid. An Eligible Director who is a non-executive
chairperson, may, in a Deferral Election, make separate elections with respect to (a) Non-Executive
Chair Retainer Fees and (b) Board Fees other than Non-Executive Chair Retainer Fees. An Eligible
Director who defers Board Fees hereunder shall be credited with the number of Restricted Stock
Units provided for by Section 3.2 hereof.

     2.4. Matching Restricted Stock Units. The Account of an Eligible Director who makes a
valid Deferral Election shall be credited with Matching Restricted Stock Units in accordance with
Section 3.3 hereof.

     2.5. Payment Elections. At the time an Eligible Director makes a Deferral Election,
or receives an annual credit of Retainer Shares pursuant to Section 2.2 hereof, or at such other
time(s) as may be authorized by the Administrator and permitted under Section 409A of the Code, a
Participant shall elect, in accordance with rules specified by the Administrator, to receive
payment of amounts credited to the Participant’s Account in a method of payment permitted under
Article 4 hereof.

ARTICLE 3

Accounts

     3.1. Establishment of Accounts. The Company shall establish and maintain in
accordance with this Article 3 a bookkeeping account for each Participant, which account shall
record and reflect the Retainer Shares credited to the Participant pursuant to Section 2.2 hereof,
Board Fees (other than Non-Executive Chair Retainer Fees) deferred hereunder by the Participant,
Non-Executive Chair Retainer Fees deferred hereunder by the Participant, and the Matching
Restricted Stock Units credited to the Participant (each such account being referred to herein as
an “Account”).

     3.2. Crediting of Board Fee Deferrals. The Account of each Participant who defers
Board Fees hereunder shall be credited with a number of Restricted Stock Units equal to the
quotient obtained by dividing (a) the amount of Board Fees covered by the Deferral Election by
(b) the Fair Market Value of a share of Common Stock as of such date.

     3.3. Matching Restricted Stock Units. A Participant’s Account shall be credited, as
of the Crediting Date of the Board Fees covered by a Deferral Election made

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by the Participant with a number of Restricted Stock Units (“Matching Restricted Stock Units”)
equal to the quotient obtained by dividing (a) 50% of the amount of Board Fees covered by the
Deferral Election (excluding Non-Executive Chair Retainer Fees), by (b) the Fair Market Value of a
share of Common Stock as of the Crediting Date of the Board Fees covered by the Deferral Election.

     3.4. Payments. A Participant’s Account shall be reduced by any payments made to the
Participant, his or her beneficiary, estate, or representative.

     3.5. Adjustments. If any of the following events occur, the Administrator shall make
appropriate adjustments with respect to Restricted Stock Units credited to a Participant’s Account:
(a) any extraordinary dividend or other extraordinary distribution in respect of Common Stock
(whether in the form of cash, Common Stock, other securities or other property); (b) any
recapitalization, stock split (including a stock split in the form of a stock dividend), reverse
stock split, reorganization, merger, combination, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Stock or other securities of the Company; or (c) any other like
corporate transaction or event in respect of the Common Stock.

     3.6. Vesting of Accounts. Each Participant’s Account shall be fully vested and
nonforfeitable at all times.

     3.7. Board Fees Covered by Elections. For purposes of this Article 3, the amount of
Board Fees “covered” by a Deferral Election shall be the amount by which an Eligible Director’s
Board Fees are to be reduced by reason of a Deferral Election. If a Deferral Election covers less
than all of the Board Fees payable to an Eligible Director during a calendar year, the percentage
of each payment of each type of Board Fee during the calendar year that shall be treated as being
covered by the Deferral Election shall be equal to the percentage of total Board Fees of the same
type for the calendar year that is covered by the Deferral Election.

     3.8. No Funding of Benefits. All adjustments to a Participant’s Account shall be
bookkeeping entries only and shall not represent a special reserve or otherwise constitute a
funding of the Company’s unsecured promise to pay any amounts hereunder. To the extent a
Participant or any other person acquires a right to receive payments from the Company under this
Plan, such right shall be no greater than the right of any unsecured general creditor of the
Company, and such person shall have only the unsecured promise of the Company that such payments
shall be made.

ARTICLE 4

Payment of Deferred Compensation.

     4.1. Payment in Accordance with Elections. Subject to the terms of this Article 4, a
Participant’s Account shall be paid (or commence to be paid) to the Participant in the form of a
lump sum on or as soon as practicable following the Participant’s Separation from Service (but in
no event more than 60 days after such Separation From Service).

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     4.2. Form of Payment. Payment with respect to Restricted Stock Units credited to a
Participant’s Account shall be paid in the form of shares of Common Stock, provided that if any
such Restricted Stock Units represent a fractional share of Common Stock, then in lieu thereof, the
Fair Market Value of such fractional share on the date the payment is calculated shall be paid in
cash.

     4.3. Unforeseeable Emergency. The Administrator may accelerate payment of all or a
portion of a Participant’s Account upon the occurrence of an Unforeseeable Emergency. The amount
of such payment shall be limited to the amount reasonably necessary to satisfy the emergency need
(which may include amounts necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from such payment). The determination of whether a Participant
has experienced an Unforeseeable Emergency and the amount reasonably necessary to satisfy the
emergency need shall be based on all the facts and circumstances taking into consideration the
financial resources available to the Participant and shall be made in accordance with Section 409A
of the Code. If payment of less than all of a Participant’s Account is accelerated pursuant to
this Section 4.3, the accelerated payment shall be deducted proportionately from all amounts
credited to the Participant’s Account.

     4.4. Section 409A Mandatory Delay in Benefit Payments for Specified Employees.
Notwithstanding the preceding provisions of this Article 4, to the extent required by Section 409A
of the Code, the Administrator shall delay payment of the Account of a Participant who is a
“specified employee” (within the meaning of Section 409A of the Code) until the earlier of (a) the
date that is six months after the date of the Participant’s Separation From Service, or (b) the
date of the specified employee’s death. The aggregate amount of payment(s) otherwise payable
during the delay period (plus interest thereon at a rate equal to the simple average of the rate
for the last four reported quarters preceding the Participant’s Separation from Service under the
Vanguard U.S. Treasury Fund under the 401(k) Plan, or, if such fund is no longer offered under the
401(k) Plan, a comparable fund offered under the 401(k) Plan as determined by the Administrator)
shall be payable to the specified employee upon the expiration of the delay period.

     4.5. Payment of Dividends. Not later than 30 days after the payment date of any cash
dividend or cash distribution declared on the Common Stock on or after January 1, 2008, the Company
shall pay to each Participant the amount of the dividend that would have been paid to the
Participant with respect to the Restricted Stock Units credited to the Participant’s Account if
such Restricted Stock Units were actual issued and outstanding shares of Common Stock held by the
Participant. Except as provided in this Section 4.5, no credits, distributions, or payments shall
be made with respect to Restricted Stock Units credited to Participants’ Accounts to reflect cash
dividends or cash distributions on Common Stock.

     4.6. Payment Upon Death. Notwithstanding Section 4.1, in the event of a Participant’s
death, the entire balance of the Participant’s Account shall be paid to the Participant (or the
Participant’s beneficiary, as determined in accordance with Section 6.2

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hereof) in the form of a single payment as soon as practicable after death (and in no event
more than 90 days after death).

     4.7. Withholding. The Company shall have the right to deduct from any payment to be
made pursuant to this Plan any federal, state or local taxes required by law to be withheld.

ARTICLE 5

Administration

     5.1. Administration. This Plan shall be administered by the Administrator. The
Administrator shall have all powers necessary to carry out the provisions of this Plan, including,
without reservation, the power to delegate administrative matters to other persons and to interpret
this Plan in its discretion.

ARTICLE 6

Miscellaneous

     6.1. Amendment and Termination of Plan. The Company may at any time by action of the
Board modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend
or terminate the Plan entirely. Upon termination of this Plan, no further Deferral Elections shall
be permitted and no further credits shall be made pursuant to Sections 2.2 or 3.3 hereof; provided,
however, that each Participant’s Account will be maintained and paid pursuant to the provisions of
this Plan and the Participant’s elections hereunder.

     6.2. Beneficiary Designation. Each Participant shall designate a beneficiary to whom
the Participant’s Account shall be payable on the Participant’s death. A Participant may also
designate an alternate beneficiary to receive such payment in the event that the designated
beneficiary cannot receive payment for any reason. In the event no designated or alternate
beneficiary can receive such payment for any reason, payment will be made to the Participant’s
surviving spouse, if any, or if the Participant has no surviving spouse, then to the following
beneficiaries if then living in the following order of priority: (a) to the Participant’s children
(including adopted children and stepchildren) in equal shares, (b) to the Participant’s parents in
equal shares, (c) to the Participant’s brothers and sisters in equal shares and (d) to the
Participant’s estate. A Participant may at any time change his or her beneficiary designation. A
change of beneficiary designation must be made in writing and delivered to the Administrator or its
designee for such purposes. The interest of any beneficiary who predeceases the Participant will
terminate unless otherwise specified by the Participant.

     6.3. Alienation of Benefits. A Participant’s rights under this Plan shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment pledge, encumbrance,
attachment, or garnishment by creditors of a Participant or any beneficiary.

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     6.4. Restricted Stock Units Issued Under Stock Plans. Restricted Stock Units credited
to Participants’ Accounts under Article 3 shall constitute the grant of “Restricted Stock Units”
under the Stock Plan then in effect and under which stock-based awards are then being made, unless
otherwise specified by the Administrator. Common Stock issued in payment of Restricted Stock Units
credited to Participants’ Accounts hereunder shall be issued under the Stock Plan pursuant to which
the applicable Restricted Stock Units were issued.

     6.5. Expenses. All expenses and costs in connection with the operation of the Plan
shall be borne by the Company.

     6.6. Rules of Construction. The singular shall include the plural unless the context
clearly indicates the distinction.

     6.7. Applicable Law. This Plan shall be construed and enforced in accordance with the
laws of the State of Texas except to the extent superseded by federal law.

     6.8. Headings. The headings of sections of this Plan are for convenience of reference
only and shall have no substantive effect on the provisions of this Plan.

     6.9. Compliance with Section 409A of the Code. The Plan is intended to comply with
the requirements of Section 409A of the Code, and the Administrator shall administer and interpret
the Plan in accordance with such requirements. If any provision of the Plan conflicts with the
requirements of Section 409A of the Code, the requirements of Section 409A of the Code shall
supersede any such Plan provision.

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Exhibit 10.10

INDEMNIFICATION AGREEMENT

     AGREEMENT, effective as of [                    ], between Guaranty Financial Group Inc., a
Delaware corporation (the “Company”), and [                    ] (the “Indemnitee”).

     WHEREAS, it is essential to the Company to retain and attract as directors the most capable
persons available; and

     WHEREAS, Indemnitee is a Director of the Company; and

     WHEREAS, both the Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against directors of public companies in today’s environment; and

     WHEREAS, the Company’s By-laws require the Company to indemnify and advance expenses to its
directors to the full extent permitted by law and the Indemnitee has been serving and continues to
serve as a Director of the Company in part in reliance on such By-laws; and

     WHEREAS, the current difficulty in obtaining adequate director and officer liability insurance
coverage at a reasonable cost and uncertainties as to the availability of indemnification created
by recent court decisions have increased the risk that the Company will be unable to retain and
attract as directors and officers the most capable persons available; and

     WHEREAS, the Company’s Board of Directors has determined that the inability of the Company to
retain and attract as directors and officers the most capable persons would be detrimental to the
interests of the Company and that the Company therefore should seek to assure such persons that
indemnification and insurance coverage will be available in the future; and

     WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the Company in an effective manner,
the increasing difficulty in obtaining satisfactory director and officer liability insurance
coverage, and Indemnitee’s reliance on the aforesaid By-laws, and in part to provide Indemnitee
with specific contractual assurance that the protection promised by such By-laws will be available
to Indemnitee (regardless of, among other things, any amendment to or revocation of such By-laws or
any change in the composition of the Company’s Board of Directors or acquisition transaction
relating to the Company), the Company wishes to provide in this Agreement for the indemnification
of and the advancing of expenses to Indemnitee to the full extent (whether partial or complete)
permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under the Company’s directors’
and officers’ liability insurance policies; and

 

 

     WHEREAS, the stockholder of the Company approved and authorized the Company to enter into this
Agreement at a meeting of stockholders of the Company held on                     , 2007;

     NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to serve the
Company directly or, at its request, with another enterprise, and intending to be legally bound
hereby, the parties hereto agree as follows:

1. CERTAIN DEFINITIONS: In addition to terms defined elsewhere herein, the following terms
have the following meanings when used in this Agreement:

	 	(a)	 	Change in Control: shall be deemed to have occurred if (i) any
“person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended), 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 said Act), directly or indirectly, of securities of the
Company representing 20% or more of the total voting power represented by the Company’s
then outstanding Voting Securities, or (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of Directors of
the Company and any new director whose election by the Board of Directors or nomination
for election by the Company’s stockholders 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 of the Board of Directors, or
(iii) the stockholders 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 80% of the total voting power represented
by the Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of transactions) all or
substantially all of the Company’s assets.
	 
	 	(b)	 	Claim: means any threatened, asserted, pending or completed action,
suit or proceeding, or appeal thereof, or any inquiry or investigation,
whether instituted by the Company or any governmental agency or any other party,
that Indemnitee in good faith believes might lead to the institution of any such
action, suit or proceeding, whether civil, criminal,

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	 	 	 	administrative, investigative
or other, including any arbitration or other alternative dispute resolution
mechanism.
	 
	 	(c)	 	Expenses: include attorneys’ fees and all other costs, expenses and
obligations (including, without limitation, experts’ fees, court costs, retainers,
transcript fees, duplicating, printing and binding costs, as well as
telecommunications, postage and courier charges) paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on appeal),
or preparing to investigate, defend, be a witness in or participate in, any Claim
relating to any Indemnifiable Event.
	 
	 	(d)	 	Indemnifiable Event: means any event or occurrence, whether occurring
before, on or after the date of this Agreement, related to the fact that Indemnitee is
or was a director, officer, employee, trustee, agent or fiduciary of the Company, or is
or was serving at the request of the Company as a director, officer, employee, trustee,
agent or fiduciary of another corporation, limited liability company, partnership,
joint venture, employee benefit plan, trust or other entity or enterprise, or by reason
of anything done or not done by Indemnitee in any such capacity.
	 
	 	(e)	 	Potential Change in Control: shall be deemed to have occurred if (i)
the Company enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control; (ii) 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; (iii) 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 9.5% or more of the combined voting power of the Company’s then
outstanding Voting Securities, increases his beneficial ownership of such securities by
5% or more over the percentage so owned by such person on the date hereof; or (iv) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control has occurred.
	 
	 	(f)	 	Independent Legal Counsel: means an attorney or firm of attorneys,
selected in accordance with the provisions of Section 3 hereof, who is experienced in
matters of corporate law and who shall not have otherwise performed services for the
Company or Indemnitee within the last five years (other than with respect to matters
concerning the rights of
Indemnitee under this Agreement, or of other indemnitees under similar indemnity
agreements).

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	 	(g)	 	Reviewing Party: means any appropriate person or body consisting of a
member or members of the Company’s Board of Directors or any other person or body
appointed by the Board (including the special, independent counsel referred to in
Section 3) who is not a party to the particular Claim for which Indemnitee is seeking
indemnification, or Independent Legal Counsel.
	 
	 	(h)	 	Voting Securities: means any securities of the Company which vote
generally in the election of directors.

2. Basic Indemnification Arrangement; Advancement of Expenses.

	 	(a)	 	In the event Indemnitee was, is or becomes a party to or witness or other
participant in, or is threatened to be made a party to or witness or other participant
in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than thirty days after written demand is
presented to the Company, against any and all Expenses, damages, judgments, fines,
penalties, ERISA excise taxes and amounts paid in settlement (including all interest,
assessments and other charges paid or payable in connection with or in respect of such
Expenses, judgments, fines, penalties, excise taxes or amounts paid in settlement)
arising out of or resulting from any Claim relating to an Indemnifiable event.
Notwithstanding anything in this Agreement to the contrary, prior to a Change in
Control Indemnitee shall not be entitled to indemnification pursuant to this Agreement
in connection with any claim initiated by Indemnitee against the Company or any
director or officer of the Company unless (a) the Company has joined in or consented to
the initiation of such Claim or (b) the Claim is one to enforce Indemnitee’s rights
under this Agreement. Indemnitee shall also not be entitled to indemnification
hereunder for liability arising under Section 16(b) of the Securities Exchange Act of
1934 or under federal or state Securities laws for insider trading, conduct finally
adjudged as constituting active or deliberate dishonesty or willful fraud or
illegality, or conduct finally adjudged as producing an unlawful personal benefit.
	 
	 	(b)	 	If so requested by Indemnitee, the Company shall advance (within two business
days of such request) any and all Expenses incurred by Indemnitee (an “Expense
Advance”). The Company shall, in accordance with such request (but without
duplication), either (i) pay such Expenses on behalf of Indemnitee, or (ii) reimburse
Indemnitee for such Expenses. Indemnitee’s right to an Expense Advance is absolute and
shall not be
subject to any prior determination by the Reviewing Party that the Indemnitee has
satisfied any applicable standard of conduct for indemnification.

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	 	(c)	 	Notwithstanding the foregoing, (i) the indemnification obligations of the
Company under Section 2(a) shall be subject to the condition that the Reviewing Party
shall not have determined (in a written opinion, in any case in which Independent Legal
Counsel referred to in Section 3 hereof is involved) that Indemnitee would not be
permitted to be indemnified under applicable law, and (ii) the obligation of the
Company to make an Expense Advance pursuant to Section 2(b) shall be subject to the
condition that, if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under applicable law, the
Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid (it being understood and
agreed that the foregoing agreement by Indemnitee shall be deemed to satisfy any
requirement that Indemnitee provide the Company with an undertaking to repay any
Expense Advance if it is ultimately determined that the Indemnitee is not entitled to
indemnification under applicable law); provided, however, that if Indemnitee has
commenced or thereafter commences legal proceedings in a court of competent
jurisdiction to secure a determination that Indemnitee should be indemnified under
applicable law, any determination made by the Reviewing Party that Indemnitee would not
be permitted to be indemnified under applicable law shall not be binding and Indemnitee
shall not be required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). Indemnitee’s undertaking to repay such
Expense Advances shall be unsecured and interest-free. If there has not been a Change
in Control, the Reviewing Party shall be selected by the Company’s Board of Directors,
and if there has been such a Change in Control (other than a Change in Control which
has been approved by a majority of the Company’s Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be Independent
Legal Counsel referred to in Section 3 hereof. If there has been no determination by
the Reviewing Party within thirty days after written demand is presented to the Company
or if the Reviewing Party determines that Indemnitee substantively would not be
permitted to be indemnified in whole or in part under applicable law, Indemnitee shall
have the right to commence litigation in any court in the States of Delaware or Texas
having subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, including the legal or factual basis therefor,
and the Company hereby consents to service of process and to appear in any such
proceeding.
Any determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and the Indemnitee.

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3. Change in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority of the Company’s
Board of Directors who were directors immediately prior to such Change in Control) then with
respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or Company By-law now or hereafter
in effect, the Company shall seek legal advice only from Independent Legal Counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably delayed,
conditioned or withheld). Such counsel, among other things, shall render its written opinion to
the Company and Indemnitee as to whether and to what extent the Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent
Legal Counsel and to indemnify fully such counsel against any and all expenses (including
attorneys’ fees), claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.

4. Establishment of Trust. In the event of a Potential Change in Control, the Company
shall, upon written request by Indemnitee, create a Trust for the benefit of the Indemnitee and
from time to time upon written request of the Indemnitee shall fund such Trust in an amount
sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such request
to be incurred in connection with investigating, preparing for and defending any Claim relating to
an Indemnifiable Event, and any and all judgments, fines, penalties and settlement amounts of any
and all Claims relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated or proposed to be paid. The amount or amounts to be deposited in the Trust
pursuant to the foregoing funding obligation shall be determined by the Reviewing Party, in any
case in which the special, independent counsel referred to above is involved. The terms of the
Trust shall provide that upon a Change in Control (i) the Trust shall not be revoked or the
principal thereof invaded, without the written consent of the Indemnitee, (ii) the Trustee shall
advance, within two business days of a request by the Indemnitee, any and all Expenses to the
Indemnitee (and the Indemnitee hereby agrees to reimburse the Trust under the circumstances under
which the Indemnitee would be required to reimburse the Company under Section 2(b) of this
Agreement), (iii) the Trust shall continue to be funded by the Company in accordance with the
funding obligation set forth above, (iv) the Trustee shall promptly pay the Indemnitee all amounts
for which the Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise, and (v) all unexpended funds in such Trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as the case may be, that
the Indemnitee has been fully indemnified under the terms of this Agreement. The Trustee shall be
chosen by the Indemnitee, provided, that the Trustee shall be a national banking association with
at least $100,000,000 in assets. Nothing in this Section 4 shall relieve the Company of any of its
obligations under this Agreement.

5. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against
any and all Expenses and, if requested by Indemnitee, shall advance such Expenses to Indemnitee
subject to and in accordance with Section 2(b),

6

 

which are incurred by Indemnitee in connection with
any claim assessed against or action brought by Indemnitee for (i) indemnification or an Expense
Advance by the Company under this Agreement or any Company By-law or provision of the Company’s
Certificate of Incorporation now or hereafter in effect and/or (ii) recovery under any directors’
and officers’ liability insurance policies maintained by the Company, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification, Expense Advance or
insurance recovery, as the case may be.

6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this Agreement
to indemnification by the Company for some or a portion of the Expenses, or other Indemnifiable
Amounts in respect of a Claim but not, however, for all of the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.
Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any or all Claims relating in whole or in
part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal
without prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection
therewith.

7. Burden of Proof. In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder the Reviewing Party or
court shall presume that the Indemnitee has satisfied the applicable standard of conduct and is
entitled to indemnification, and the burden of proof shall be on the Company to establish, by clear
and convincing evidence, that Indemnitee is not so entitled.

8. Reliance as Safe Harbor. For purposes of this Agreement, Indemnitee shall be deemed to
have acted in good faith and in a manner he or she reasonably believed to be in or not opposed to
the best interests of the Company if Indemnitee’s actions or omissions to act are taken in good
faith reliance upon the records of the Company, including its financial statements, or upon
information, opinions, reports or statements furnished to Indemnitee by the officers or employees
of the Company in the course of their duties, or by committees of the Company’s Board of Directors,
or by any other person (including legal counsel, accountants and financial advisors) as to matters
Indemnitee reasonably believes are within such other person’s professional or expert competence and
who has been selected with reasonable care by or on behalf of the Company. In addition, the
knowledge and/or actions, or failures to act, of any director, officer, agent or employee of the
Company shall not be imputed to Indemnitee for purposes of determining the right to indemnity
hereunder.

9. No Other Presumption. For purposes of this Agreement, the termination of any claim,
action, suit or proceeding, by judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption
that Indemnitee did not meet any particular
standard of
conduct or have any particular belief or that a court has determined that indemnification is not
permitted by applicable law. In addition, neither the failure of the Reviewing Party to have made
a determination as to whether Indemnitee has met any particular

7

 

standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met
such standard of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified
under applicable law shall be a defense to Indemnitee’s claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did not have any particular belief.

10. Non-exclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition to
any other rights Indemnitee may have under the By-laws or Certificate of Incorporation of the
Company or the Delaware General Corporation Law or otherwise. To the extent that a change in the
applicable law (whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company’s By-laws or Certificate of
Incorporation or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such change.

11. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.

12. Period of Limitations. No legal action shall be brought and no cause of action shall
be asserted by, on behalf, or in the right of, the Company or any affiliate of the Company against
Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the
expiration of two years from the date of accrual of such cause of action, and any claim or cause of
action of the Company or its affiliate shall be extinguished and deemed released unless asserted by
the timely filing of a legal action within such two-year period; provided, however, that if any
shorter period of limitations is otherwise applicable to any such cause of action such shorter
period shall govern.

13. Amendments, Etc. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

14. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers reasonably required and shall do everything that may be reasonably necessary to
secure such rights, including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.

15. No Duplication of Payments. The Company shall not be liable under this Agreement to
make any payment in connection with any claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance

8

 

 policy, By-law, provision of the Company’s
Certificate of Incorporation or otherwise) of the amounts otherwise indemnifiable hereunder.

16. Defense of Claims. The Company shall be entitled to participate in the defense of any
Claim relating to an Indemnifiable Event or to assume the defense thereof, with counsel reasonably
satisfactory to the Indemnitee; provided that if Indemnitee believes, after consultation
with counsel selected by Indemnitee, that (i) the use of counsel chosen by the Company to represent
Indemnitee would present such counsel with an actual or potential conflict of interest, (ii) the
named parties in any such Claim (including any impleaded parties) include both the Company and
Indemnitee and Indemnitee concludes that there may be one or more legal defenses available to him
or her that are different from or in addition to those available to the Company, or (iii) any such
representation by such counsel would be precluded under the applicable standards of professional
conduct then prevailing, then Indemnitee shall be entitled to retain separate counsel (but not more
than one law firm plus, if applicable, local counsel in respect of any particular Claim) at the
Company’s expense. The Company shall not be liable to Indemnitee under this Agreement for any
amounts paid in settlement of any Claim relating to an Indemnifiable Event effected without the
Company’s prior written consent. The Company shall not, without the prior written consent of the
Indemnitee, effect any settlement of any Claim relating to an Indemnifiable Event which the
Indemnitee is or could have been a party unless such settlement solely involves the payment of
money and includes a complete and unconditional release of Indemnitee from all liability on all
claims that are the subject matter of such Claim. Neither the Company nor Indemnitee shall
unreasonably withhold its or his or her consent to any proposed settlement; provided that
Indemnitee may withhold consent to any settlement that does not provide a complete and
unconditional release of Indemnitee.

17. Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors, assigns, including any
direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs, executors and
personal and legal representatives. The Company shall require and cause 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, by written agreement in form and substance satisfactory
to Indemnitee and his or her counsel, expressly to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to perform if no such
succession had taken place. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or of any other entity or
enterprise at the Company’s request.

18. Severability. The provisions of this Agreement shall be severable in the event that
any of the provisions hereof (including any provision within a single section,
paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable in any respect, and the validity and enforceability of any such

9

 

 provision
in every other respect and of the remaining provisions hereof shall not be in any way impaired and
shall remain enforceable to the fullest extent permitted by law.

19. Security. To the extent requested by Indemnitee and approved by the Company’s Board of
Directors, the Company may at any time and from time to time provide security to Indemnitee for the
obligations of the Company hereunder through an irrevocable bank line of credit, funded trust or
other collateral or by other means. Any such security, once provided to Indemnitee, may not be
revoked or released without the prior written consent of such Indemnitee.

20. Specific Performance, Etc. The parties recognize that if any provision of this
Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law.
Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so
elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce
specific performance, to enjoin such violation, or to obtain any relief or any combination of the
foregoing as Indemnitee may elect to pursue.

21. Counterparts. This Agreement may be executed in counterparts, each of which shall for
all purposes be deemed to be an original but all of which together shall constitute one and the
same agreement. Only one such counterpart signed by the party against whom enforceability is
sought needs to be produced to evidence the existence of this Agreement.

22. Headings. The headings of the sections and paragraphs of this Agreement are inserted
for convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction or interpretation thereof.

23. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.

10

 

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this agreement as of
the ___ day of                     , 20___.

	 	 	 	 	 	 	 
	 	 	Guaranty Financial Group Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	BY:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	INDEMNITEE	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 

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