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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of this 1st day of December,
1991, amended and restated as of August 12, 1992, further amended as of May 12,
1993 and further amended and restated as of January 1, 1995 by and between
SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Company") and
XXXXXX X. XXXXXXX (the "Employee");
WHEREAS, Employee is employed by the Company in an executive capacity, has
extraordinary access to the Company's confidential business information, and has
significant duties and responsibilities in connection with the conduct of the
Company's business which places Employee in a special and uncommon
classification of employees;
WHEREAS, attendant to Employee's employment by the Company, the Company and
Employee wish for there to be a complete understanding and agreement between the
Company and Employee with respect to the fiduciary duties owed by Employee to
the Company; Employee's obligation to avoid conflicts of interest, disclose
pertinent information to the Company, and refrain from using or disclosing the
Company's information; the term of employment and conditions for or upon
termination thereof; the compensation and benefits owed to Employee; and the
post-employment obligations Employee owes to the Company; and
WHEREAS, but for Employee's agreement to the covenants and conditions of
this Agreement, particularly the conflict of interest provisions, the provisions
with respect to confidentiality of information and the ownership of intellectual
property, and the post-employment obligations of Employee, the Company would not
have entered into this Agreement;
NOW, THEREFORE, in consideration of Employee's continued employment by the
Company, and the mutual promises and covenants contained herein, the receipt and
sufficiency of such consideration being hereby acknowledged, the Company and
Employee agree as follows:
1. Employment and Term. The Company agrees to employ the Employee and the
Employee agrees to remain in the employ of the Company, in accordance with the
terms and provisions of this Agreement, for the period beginning on the date of
this Agreement and ending as of the close of business on the third (3rd)
anniversary of the date hereof (such period together with all extensions
thereof, including any Change of Control Period (as defined in Section 16(b)
below), are referred to hereinafter as the "Employment Period"); provided,
however, that commencing on the date one year after the date hereof, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as a "Renewal Date") the Employment Period
shall be automatically extended so as to terminate three (3) years from such
Renewal Date, unless at least 60 days prior to the
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Renewal Date either the Company or the Employee gives the other written notice
that the Employment Period shall not be so extended.
2. Duties and Powers of Employee. (a) Position; Location. During the
Employment Period, the Employee shall be employed as Executive Vice President
European Operations of the Company. In such employment, the Employee's duties
and powers shall include, but not be limited to, all of the duties and powers of
holding the offices described above pursuant to the Bylaws of the Company, as in
effect on the date hereof, or as designated by the Board of Directors of the
Company (the "Board") or any duly authorized committee thereof in connection
with the execution of this Agreement. The Employee's services shall be performed
at the location where the Employee is currently employed or any office which is
the headquarters of the Company and is less than 50 miles from such location.
During the Change of Control Period, the Employee's position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the 90-day period immediately preceding the Change of Control Date.
(b) Duties. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Employee is entitled, the Employee agrees
to devote his attention and time during normal business hours to the business
and affairs of the Company and to use the Employee's best efforts to perform
faithfully and efficiently such responsibilities. During the Employment Period
it shall not be a violation of this Agreement for the Employee to (i) serve on
corporate, civic or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (iii)
manage personal investments, so long as such activities do not significantly
interfere with the performance of the Employee's responsibilities as an employee
of the Company in accordance with this Agreement. It is expressly understood and
agreed that to the extent that any such activities have been conducted by the
Employee prior to the date of this Agreement or subsequent thereto consistent
with this Section 2(b), the continued conduct of such activities (or the conduct
of activities similar in nature and scope thereto) shall not thereafter be
deemed to interfere with the performance of the Employee's responsibilities to
the Company.
(c) Employee agrees and acknowledges that he owes, and will comply with, a
fiduciary duty of loyalty, fidelity or allegiance to act at all times in the
best interests of the Company and to take no action or fail to take action if
such action or failure to act would injure the Company's business, its interests
or its reputation.
3. Compensation. The Employee shall receive the following compensation for
his services:
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(a) Salary. During the Employment Period, he shall be paid an annual base
salary ("Annual Base Salary") at the rate of not less than $280,000 per year,
in substantially equal bi-weekly installments, and subject to any and all
required withholdings and deductions for Social Security, income taxes and the
like. The Board may from time to time direct such upward adjustments to Annual
Base Salary as the Board deems to be appropriate or desirable; provided,
however, that during the Change of Control Period, the Annual Base Salary
shall be reviewed at least annually and shall be increased at any time and
from time to time as shall be substantially consistent with increases in base
salary generally awarded in the ordinary course of business to other peer
executives of the Company and its affiliated companies (as defined in Section
16(d) below). Annual Base Salary shall not be reduced after any increase
thereof pursuant to this Section 3(a). Any increase in Annual Base Salary
shall not serve to limit or reduce any other obligation of the Company under
this Agreement.
(b) Incentive Cash Compensation. During the Employment Period, he shall be
eligible annually for a cash bonus at the discretion of the Compensation
Committee of the Board (such aggregate awards for each year are hereinafter
referred to as the "Annual Bonus") and at the discretion of the Board to receive
awards from any plan of the Company or any of its affiliated companies providing
for the payment of bonuses in cash to employees of the Company or its affiliated
companies having rank comparable to that of the Employee (such plans being
referred to herein collectively as the "Cash Bonus Plans") in accordance with
the terms thereof; provided, however, that, during the Change of Control Period,
the Employee shall be awarded, for each fiscal year ending during the Change of
Control Period, an Annual Bonus at least equal to the Highest Recent Bonus (as
defined in Section 16(e) below). Each Annual Bonus shall be paid no later than
the end of the third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, unless the Employee shall elect to defer the
receipt of such Annual Bonus.
(c) Incentive and Savings and Retirement Plans. During the Employment
Period, the Employee shall be entitled to participate in all incentive and
savings (in addition to the Cash Bonus Plans) and retirement plans, practices,
policies and programs applicable generally to other peer executives of the
Company and its affiliated companies.
(d) Welfare Benefit Plans. During the Employment Period, the Employee
and/or the Employee's family, as the case may be, shall be eligible for
participation in all welfare benefit plans, practices, policies and programs
provided by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary continuance,
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employee life, group life, accidental death and travel accident insurance plans
and programs) to the extent applicable generally to other peer executives of the
Company and its affiliated companies.
(e) Expenses. During the Employment Period and for so long as the Employee
is employed by the Company, he shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Employee in accordance with the
policies, practices and procedures of the Company and its affiliated companies
from time to time in effect.
(f) Fringe Benefits. During the Employment Period, the Employee shall be
entitled to fringe benefits in accordance with the plans, practices, programs
and policies of the Company and its affiliated companies from time to time in
effect, commensurate with his position and on a basis at least comparable to
those received by other peer executives of the Company and its affiliated
companies.
(g) Office and Support Staff. During the Employment Period, the Employee
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to exclusive personal secretarial and other assistance,
commensurate with his position and on a basis at least comparable to those
received by other peer executives of the Company and its affiliated companies.
(h) Vacation and Other Absences. During the Employment Period, the Employee
shall be entitled to paid vacation and such other paid absences whether for
holidays, illness, personal time or any similar purposes, in accordance with the
plans, policies, programs and practices of the Company and its affiliated
companies in effect from time to time, commensurate with his position and on a
basis at least comparable to those received by other peer executives of the
Company and its affiliated companies.
(i) During the Change of Control Period, the Employee's benefits listed
under Sections 3(c), 3(d), 3(e), 3(f), 3(g) and 3(h) above shall be at least
commensurate in all material respects with the most valuable and favorable of
those received by the Employee at any time during the 90-day period immediately
preceding the Change of Control Date.
4. Termination of Employment. (a) Death or Disability. The Employment
Period shall terminate automatically upon the Employee's death during the
Employment Period. If the Company determines in good faith that the Disability
of the Employee has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Employee written
notice in accordance with Section 18(b) of its intention to
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terminate the Employment Period. In such event, the Employment Period shall
terminate effective on the 30th day after receipt of such notice by the Employee
(the "Disability Effective Date"), provided that, within the 30 days after such
receipt, the Employee shall not have returned to full-time performance of the
Employee's duties. For purposes of this Agreement, "Disability" shall mean the
inability of the Employee to perform the Employee's duties with the Company on a
full-time basis as a result of incapacity due to mental or physical illness
which continues for more than one year after the commencement of such
incapacity, such incapacity to be determined by a physician selected by the
Company or its insurers and acceptable to the Employee or the Employee's legal
representative (such agreement as to acceptability not to be withheld
unreasonably).
(b) Cause. The Company may terminate the Employment Period for Cause. For
purposes of this Agreement, "Cause" shall mean (i) a material breach by the
Employee of Section 9 which is willful on the Employee's part or which is
committed in bad faith or without reasonable belief that such breach is in the
best interests of the Company and its affiliated companies, or (ii) a material
breach by the Employee of the Employee's obligations under Section 2 (other than
a breach of the Employee's obligations under Section 2 arising from the failure
of the Employee to work as a result of incapacity due to physical or mental
illness) or any material breach by the Employee of Section 10, 11 or 12 of this
Agreement which in either case is willful on the Employee's part, which is
committed in bad faith or without reasonable belief that such breach is in the
best interests of the Company and its affiliated companies and which is not
remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach, or (iii) the conviction of the Employee of a
felony involving malice which conviction has been affirmed on appeal or as to
which the period in which an appeal can be taken has lapsed.
(c) Good Reason; Window Period. The Employee's employment may be terminated
(i) by the Employee for Good Reason (as defined below) or (ii) during the Window
Period (as defined below) by the Employee without any reason. For purposes of
this Agreement, the "Window Period" shall mean the 30-day period immediately
following the first anniversary of the Change of Control Date. For purposes of
this Agreement, "Good Reason" shall mean
(i) the assignment to the Employee of any duties inconsistent in any
respect with the Employee's position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplated by Section 2 or any other action by the Company which results
in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated and insubstantial action not taken
in bad faith and which is
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remedied by the Company promptly after receipt of notice thereof given
by the Employee;
(ii) any failure by the Company to comply with any of the provisions
of Section 3, other than an isolated and insubstantial failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(iii) the Company's requiring the Employee to be based at any office
or location other than that described in Section 2(a);
(iv) any purported termination by the Company of the Employee's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
16(c), provided that the successor referred to in Section 16(c) has
received at least ten days prior written notice from the Company or the
Employee of the requirements of Section 16(c).
For purposes of this Section 4(c), during the Change of Control Period, any
good faith determination of "Good Reason" made by the Employee shall be
conclusive.
(d) Notice of Termination. Any termination by the Company for Cause or by
the Employee without any reason during the Window Period or for Good Reason
shall be communicated by Notice of Termination to the other party hereto given
in accordance with Section 18(b). For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employment Period under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 15 days after the giving of such
notice). The failure by the Employee or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Employee or the Company
hereunder or preclude the Employee or the Company from asserting such fact or
circumstance in enforcing the Employee's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the Employee's
employment is terminated by the Company for Cause, or by the Employee during the
Window Period or for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if the
Employee's employment is terminated by the Company other than for
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Cause or Disability, or by the Employee other than for Good Reason or during the
Window Period, the Date of Termination shall be the date on which the Company or
the Employee, as the case may be, notifies the other of such termination and
(iii) if the Employee's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the Employee
or the Disability Effective Date, as the case may be.
5. Obligations of the Company Upon Termination. (a) Certain Terminations
Prior to Change of Control Date. If, during the Employment Period prior to any
Change of Control Date, the employment of the Employee with the Company shall be
terminated (i) by the Company other than for Cause, death or Disability or (ii)
by the Employee for Good Reason, then, in lieu of the obligations of the Company
under Section 3, (i) the Company shall pay to the Employee in a lump sum in cash
within 30 days after the Date of Termination all Unpaid Agreement Amounts (as
defined in Section 5(b)(i)(A) below) and (ii) notwithstanding any other
provision hereunder, for the longer of (A) the remainder of the Employment
Period or (B) to the extent compensation and/or benefits are provided under any
plan, program, practice or policy, such longer period, if any, as such plan,
program, practice or policy may provide, the Company shall continue to provide
to the Employee the compensation and benefits provided in Sections 3(a), 3(c)
and 3(d).
(b) Certain Terminations After Change of Control Date. If, during the
Change of Control Period, the employment of the Employee with the Company shall
be terminated (i) by the Company other than for Cause, death or Disability or
(ii) by the Employee either for Good Reason or without any reason during the
Window Period, then, in lieu of the obligations of the Company under Section 3
and notwithstanding any other provision hereunder:
(i) the Company shall pay to the Employee in a lump sum in cash within
30 days after the Date of Termination the aggregate of the following
amounts:
(A) the sum of (1) all unpaid amounts due to the Employee under
Section 3 through the Date of Termination, including without
limitation, the Employee's Annual Base Salary and any accrued vacation
pay, (2) the product of (x) the Highest Recent Bonus and (y) a
fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of
which is 365 and (3) any compensation previously deferred by the
Employee (together with any accrued interest or earnings thereon) to
the extent not theretofore paid (the sum of the amounts described in
clauses (1), (2) and (3) shall be hereinafter referred to as the
"Accrued Obligations" and the sum of the amounts described in clauses
(1) and (3) shall be hereinafter referred to as the "Unpaid Agreement
Amounts"); and
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(B) the amount (such amount shall be hereinafter referred to as
the "Severance Amount") equal to the sum of
(1) Three (3) multiplied by the Employee's Annual Base
Salary, plus
(2) Three (3) multiplied by the Employee's Highest Recent
Bonus; and
(ii) for the longer of (A) the remainder of the Employment Period or (B) to
the extent benefits are provided under any plan, program, practice or policy,
such longer period as such plan, program, practice or policy may provide, the
Company shall continue benefits to the Employee and/or the Employee's family at
least equal to those which would have been provided to them in accordance with
the plans, programs, practices and policies described in Section 3(d) if the
Employee's employment had not been terminated, in accordance with the most
favorable plans, practices, programs or policies of the Company and its
affiliated companies as in effect and applicable generally to other peer
executives and their families during the 90-day period immediately preceding the
Change of Control Date or, if more favorable to the Employee, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families; provided, however, that
if the Employee becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer provided plan,
the medical and other welfare benefits described herein shall be required only
to the extent not provided under such other plan during such applicable period
of eligibility. For purposes of determining eligibility of the Employee for
retiree benefits pursuant to such plans, practices, programs and policies, the
Employee shall be considered to have remained employed until the end of the
Employment Period and to have retired on the last day of such period; and
(iii) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Employee and/or the Employee's family for the
remainder of the Employment Period any other amounts or benefits required to be
paid or provided or which the Employee and/or the Employee's family is eligible
to receive pursuant to this Agreement and under any plan, program, policy or
practice or contract or agreement of the Company and its affiliated companies as
in effect and applicable generally to other peer executives of the Company and
its affiliated companies and their families during the 90-day period immediately
preceding the Change of Control Date or, if more favorable to the Employee, as
in effect generally thereafter with respect to other peer executives of the
Company and its affiliated companies and their families.
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Such amounts received under this Section 5(b) shall be in lieu of any other
amount of severance relating to salary or bonus continuation to be received by
the Employee upon termination of employment of the Employee under any severance
plan, policy or arrangement of the Company.
(c) Termination as a Result of Death. If the Employee's employment is
terminated by reason of the Employee's death during the Employment Period, in
lieu of the obligations of the Company under Section 3, the Company shall pay or
provide to the Employee's estate (i) all Accrued Obligations (which shall be
paid in a lump sum in cash within 30 days after the Date of Termination) and the
timely payment or provision of the Welfare Benefit Continuation (as defined
below) and the Other Benefits (as defined below) and (ii) any cash amount to be
received by the Employee or the Employee's family as a death benefit pursuant to
the terms of any plan, policy or arrangement of the Company and its affiliated
companies. Welfare Continuation Benefits shall mean the continuation of benefits
to the Employee and/or the Employee's family for the longer of (i) three (3)
years from the Date of Termination or (ii) the period provided by the plans,
programs, policies or practices described in Section 3(d) in which the Employee
participates as of the Date of Termination, such benefits to be at least equal
to those which would have been provided to them in accordance with the plans,
programs, practices and policies described in Section 3(d) if the Employee's
employment had not been terminated, in accordance with the most favorable plans,
practices, programs or policies of the Company and its affiliated companies as
in effect and applicable generally to other peer executives and their families
on the Date of Termination or, if the Date of Termination occurs after the
Change of Control Date, during the 90-day period immediately preceding the
Change of Control Date or, if more favorable to the Employee, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families. Other Benefits shall
mean the timely payment or provision to the Employee and/or the Employee's
family of any other amounts or benefits required to be paid or provided or which
the Employee and/or the Employee's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies as in effect and
applicable generally to other peer executives and their families on the Date of
Termination or, if the Date of Termination occurs after the Change of Control
Date, during the 90-day period immediately preceding the Change of Control Date
or, if more favorable to the Employee, as in effect generally thereafter with
respect to other peer executives of the Company and its affiliated companies and
their families.
(d) Termination as a Result of Disability. If the Employee's employment is
terminated by reason of the Employee's Disability during the Employment Period,
in lieu of the obligations of the Company under Section 3, the Company shall pay
or provide to the Employee (i) all Accrued Obligations which shall be paid in a
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lump sum in cash within 30 days after the Date of Termination and the
timely payment or provision of the Welfare Benefit Continuation and the Other
Benefits, provided, however, that if the Employee becomes reemployed with
another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the Welfare Benefit Continuation shall be
required only to the extent not provided under such other plan during such
applicable period of eligibility, and (ii) any cash amount to be received by the
Employee as a disability benefit pursuant to the terms of any plan, policy or
arrangement of the Company and its affiliated companies.
(e) Cause; Other than for Good Reason. If the Employee's employment shall
be terminated during the Employment Period by the Company for Cause or by the
Employee other than during the Window Period and other than for Good Reason, in
lieu of the obligations of the Company under Section 3, the Company shall pay to
the Employee in a lump sum in cash within 30 days after the Date of Termination
all Unpaid Agreement Amounts.
6. Non-exclusivity of Rights. Except as provided in Sections 5(a), 5(b) (i)
(B), 5(b)(ii), 5(c) and 5(d), nothing in this Agreement shall prevent or limit
the Employee's continuing or future participation in any plan, program, policy
or practice provided by the Company or any of its affiliated companies and for
which the Employee may qualify, nor shall anything herein limit or otherwise
affect such rights as the Employee may have under any contract or agreement with
the Company or any of its affiliated companies. Amounts which are vested
benefits or which the Employee is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Company or
any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
7. Full Settlement; Resolution of Disputes. (a) The Company's obligation to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have
against the Employee or others. In no event shall the Employee be obligated to
seek other employment or take any other action by way of mitigation of the
amounts payable to the Employee under any of the provisions of this Agreement
and, except as provided in Sections 5(b)(ii) and 5(d), such amounts shall not
be reduced whether or not the Employee obtains other employment. The Company
agrees to pay promptly as incurred, to the full extent permitted by law, all
legal fees and expenses which the Employee may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Employee or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or
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any guarantee of performance thereof (including as a result of any contest by
the Employee about the amount of any payment pursuant to this Agreement), plus
in each case interest on any payment required to be made under this Agreement
but not timely paid at the rate provided for in Section 280G(d)(4) of the
Internal Revenue Code of 1986, as amended (the "Code").
(b) If there shall be any dispute between the Company and the Employee (i)
in the event of any termination of the Employee's employment by the Company,
whether such termination was for Cause, or (ii) in the event of any termination
of employment by the Employee whether Good Reason existed, then, unless and
until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that the
determination by the Employee of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Employee and/or the Employee's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section
5(a) or 5(b) as though such termination were by the Company without Cause or by
the Employee with Good Reason. The Employee hereby undertakes to repay to the
Company all such amounts to which the Employee is ultimately adjudged by such
court not to be entitled.
8. Certain Additional Payments by the Company. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company to or for the benefit of the
Employee (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Section 8) (a "Payment") would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Employee with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Employee shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Employee of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all determinations required
to be made under this Section 8, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by Ernst & Young (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Employee within 15 business days of the receipt of notice
from the Employee that there
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has been a Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving (or has served within the three years
preceding the Change of Control Date) as accountant or auditor for the
individual, entity or group effecting the Change of Control, or is unwilling or
unable to perform its obligations pursuant to this Section 8, the Employee shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 8, shall be paid by the Company to the Employee within five days of
the receipt of the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Employee, it shall furnish the
Employee with a written opinion that failure to report the Excise Tax on the
Employee's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the
Accounting Firm shall be binding upon the Company and the Employee. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 8(C) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.
(C) The Employee shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Employee is informed
in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Employee
shall not pay such claim prior to the expiration of the 30-day period following
the date on which the Employee gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Employee in writing prior to the expiration
of such period that it desires to contest such claim, the Company, subject to
the provisions of this Section 8(c), shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner. In this connection, the Employee agrees,
subject to the provisions of this Section 8(c), to (i) prosecute such contest to
a determination
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before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine, (ii) give the
Company any information reasonably requested by the Company relating to such
claim, (iii) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company, (iv) cooperate with the Company
in good faith in order effectively to contest such claim and (v) permit the
Company to participate in any proceedings relating to such claim. The foregoing
is subject, however, to the following: (A) the Company shall bear and pay
directly all costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Employee harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed in connection
therewith and the payment of costs and expenses in such connection, (B) if the
Company directs the Employee to pay such claim and xxx for a refund, the company
shall advance the amount of such payment to the Employee, on an interest-free
basis, and shall indemnify and hold the Employee harmless, on an after-tax
basis, from any Excise Tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with respect to any
imputed income with respect to such advance, (C) any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Employee
with respect to which such contested amount is claimed to be due shall be
limited solely to such contested amount and (D) the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount advanced by the
Company pursuant to Section 8(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall (subject to the Company's
complying with the requirements of Section 8(c)) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by the Employee of an amount
advanced by the Company pursuant to Section 8(c), a determination is made that
the Employee shall not be entitled to any refund with respect to such claim and
the Company does not notify the Employee in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
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9. Confidential Information. The Employee shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the Employee
during the Employee's employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts
by the Employee or representatives of the Employee in violation of this
Agreement). After termination of the Employee's employment with the Company or
any of its affiliated companies, the Employee shall not, without the prior
written consent of the Company or as may otherwise be required by law or legal
process, communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 9 constitute a basis for
deferring or withholding any amounts otherwise payable to the Employee under
this Agreement. Subject to the previous sentence, nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages
from the Employee.
10. Employee's Obligation to Avoid Conflicts of Interest. (a) In keeping
with Employee's fiduciary duties to the Company, Employee agrees that he shall
not knowingly become involved in circumstances constituting a conflict of
interest with such duties, or upon discovery thereof, allow such a conflict to
continue. Moreover, Employee agrees that he shall disclose to the Secretary of
the Company any facts which might involve a conflict of interest that has not
been approved by the Company's Compensation Committee. The Board hereby
acknowledges and agrees that the activities of Employee listed on Schedule A
hereto do not, and the continuation of such activities will not, constitute a
conflict of interest for purposes of this Section 10.
(b) In this connection, it is agreed that any direct interest in,
connection with, or benefit from any outside activities, particularly commercial
activities, which might in any way adversely affect the Company or any of its
affiliated companies, involves a possible conflict of interest. Circumstances in
which a conflict of interest on the part of Employee would or might arise, and
which should be reported immediately to the Company, include, but are not
limited to, the following:
(i) Ownership of a material interest in any lender, supplier,
contractor, customer or other entity with which the Company or any of its
affiliated companies does business;
(ii) Acting in any capacity, including director, officer, partner,
consultant, employee, distributor, agent or the like, for lenders,
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suppliers, contractors, subcontractors, customers or other entities with
which the Company or any of its affiliated companies does business;
(iii) Acceptance, directly or indirectly, of payments, services or
loans from a lender, supplier, contractor, subcontractor, customer or other
entity with which the Company or any of its affiliated companies does
business, including but not limited to, gifts, trips, entertainment, or
other favors of more than a nominal value, but excluding loans from
publicly held insurance companies and commercial or savings banks at normal
rates of interest;
(iv) Misuse of information or facilities to which Employee has access
in a manner which will be detrimental to the Company's or any of its
affiliated companies' interest, such as utilization for Employee's own
benefit of know-how or information developed through the Company's or any
of its affiliated companies' business activities;
(v) Disclosure or other misuse of information of any kind obtained
through Employee's connection with the Company or any of its affiliated
companies; or
(vi) Acquiring or trading in, directly or indirectly, other properties
or interests connected with the design or marketing of products or services
designed or marketed by the Company or any of its affiliated companies.
(c) In the event that the Company determines, in the exercise of its
reasonable judgment, that a conflict of interest exists between the Employee and
the Company or any of its affiliated companies, the Company shall notify the
Employee in writing in accordance with Section 17(b) hereof, providing
reasonably detailed information identifying the source of the conflict of
interest. Within the 60-day period following receipt of such notice, the
Employee shall take action satisfactory to the Company to eliminate the conflict
of interest. Failure of the Employee to take such action within such 60-day
period shall constitute "Cause" under Section 4(b) hereof.
11. Disclosure of Information, Ideas, Concepts, Improvements, Discoveries
and Inventions. As part of Employee's fiduciary duties to the Company, Employee
agrees that during the Employment Period, and for a period of six (6) months
after the Date of Termination, Employee shall promptly disclose in writing to
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the Company all information, ideas, concepts, improvements, discoveries and
inventions, whether patentable or not, and whether or not reduced to practice,
which are conceived, developed, made or acquired by Employee, either
individually or jointly with others, and which relate to the business, products
or services of the Company or any of its affiliated companies, irrespective of
whether Employee utilized the Company's or any of its affiliated companies' time
or facilities and irrespective of whether such information, idea, concept,
improvement, discovery or invention was conceived, developed, discovered or
acquired by Employee on the job, at home, or elsewhere. This obligation extends
to all types of information, ideas and concepts, including information, ideas
and concepts relating to new types of services, corporate opportunities,
acquisition prospects, the identity of key representatives within acquisition
prospect organizations, prospective names or service marks for the Company's or
any of its affiliated companies' business activities, and the like.
12. Ownership of Information, Ideas, Concepts, Improvements, Discoveries
and Inventions and all Original Works of Authorship. (a) All information,
ideas, concepts, improvements, discoveries and inventions, whether patentable
or not, which are conceived, made, developed or acquired by Employee or which
are disclosed or made known to Employee, individually or in conjunction with
others, during Employee's employment by the Company or any of its affiliated
companies and which relate to the Company's or any of its affiliated
companies' business, products or services (including all such information
relating to corporate opportunities, research, financial and sales data,
pricing and trading terms, evaluations, opinions, interpretations, acquisition
prospects, the identity of customers or their requirements, the identity of
key contacts within the customer's organizations or within the organization of
acquisition prospects, or marketing and merchandising techniques, prospective
names and marks) are and shall be the sole and exclusive property of the
Company. Moreover, all drawings, memoranda, notes, records, files,
correspondence, manuals, models, specifications, computer programs, maps and
all other writings or materials of any type embodying any of such information,
ideas, concepts, improvements, discoveries and inventions are and shall be the
sole and exclusive property of the Company.
(b) In particular, Employee hereby specifically sells, assigns and
transfers to the Company all of his worldwide right, title and interest in and
to all such information, ideas, concepts, improvements, discoveries or
inventions, and any United States or foreign applications for patents,
inventor's certificates or other industrial rights that may be filed thereon,
including divisions, continuations, continuations-in-part, reissues and/or
extensions thereof, and applications for registration of such names and marks.
Both during the period of Employee's employment by the Company or any of its
affiliated companies and thereafter, Employee shall
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assist the Company and its nominee at all times in the protection of such
information, ideas, concepts, improvements, discoveries or inventions, both in
the United States and all foreign countries, including but not limited to, the
execution of all lawful oaths and all assignment documents requested by the
Company or its nominee in connection with the preparation, prosecution, issuance
or enforcement of any applications for United States or foreign letters patent,
including divisions, continuations, continuations-in-part, reissues, and/or
extensions thereof, and any application for the registration of such names and
marks.
(c) Moreover, if during Employee's employment by the Company or any of its
affiliated companies, Employee creates any original work of authorship fixed in
any tangible medium of expression which is the subject matter of copyright (such
as videotapes, written presentations on acquisitions, computer programs,
drawings, maps, architectural renditions, models, manuals, brochures or the
like) relating to the Company's or any of its affiliated companies' business,
products, or services, whether such work is created solely by Employee or
jointly with others, the Company shall be deemed the author of such work if the
work is prepared by Employee in the scope of his or her employment; or, if the
work is not prepared by Employee within the scope of his or her employment but
is specially ordered by the Company as a contribution to a collective work, as a
part of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as a compilation or as an instrumental text, then the work
shall be considered to be work made for hire and the Company shall be the author
of the work. In the event such work is neither prepared by the Employee within
the scope of his or her employment or is not a work specially ordered and deemed
to be a work made for hire, then Employee hereby agrees to assign, and by these
presents does assign, to the Company all of Employee's worldwide right, title
and interest in and to such work and all rights of copyright therein. Both
during the period of Employee's employment by the Company or any of its
affiliated companies and thereafter, Employee agrees to assist the Company and
its nominee, at any time, in the protection of the Company's worldwide right,
title and interest in and to the work and all rights of copyright therein,
including but not limited to, the execution of all formal assignment documents
requested by the Company or its nominee and the execution of all lawful oaths
and applications for registration of copyright in the United States and foreign
countries.
13. Employee's Post Employment Non-Competition Obligations: In
Certain Situations such Obligation apply only if the Company opts to Continue
Employee's Salary Payment. (a) During the Employment Period and, subject to
the conditions of Sections 13(b) and 13(c), for a period of three (3) years
thereafter (the "Non-Competition Period") provided, however, that the
Non-Competition Period shall not exceed three (3) years from the Date of
Termination, Employee shall not, acting alone or in
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conjunction with others, directly or indirectly, in any of the business
territories in which the Company or any of its affiliated companies is presently
or at the time of termination of employment conducting business, engage in any
business in competition with the business conducted by the Company or any of its
affiliated companies at the time of the termination of the employment
relationship, whether for his own account or by soliciting, canvassing or
accepting any business or transaction for or from any other company or business
in competition with such business of the Company or any of its affiliated
companies.
(b) If Employee has been terminated for Cause (Section 4(b)) or if Employee
terminates his employment for any reason other than for Good Reason or other
than during the Window Period (Section 4(c)), Employee shall be bound by the
obligations of Section 13(a) and the Company shall have no obligation to make
the Non-Competition Payments (as defined in Section 13(C) below). However, if
the employment relationship is terminated by any other circumstance or for any
other reason, Employee's post-employment non-competition obligations required by
Section 13(a) shall be subject to the Company's obligation to make the
Non-Competition Payments specified in Section 13(c).
(c) Notwithstanding the provisions of Section 4 of this Agreement, whenever
the employment relationship is terminated due to the expiration of its term
because the Company or Employee timely gave written notice of termination
(Section 1), or due to Employee's Disability (Section 4(a)), or by the Company
without Cause (Section 4(b)), unless the Company exercises its option as
hereinafter provided, Employee shall be entitled to continue to receive payments
(the "Non-Competition Payments") equal to his then current Annual Base Salary
(as of the Date of Termination) during the Non-Competition Period. During the
Non-Competition Period, the Employee shall not, however, be deemed to be an
employee of the Company or be entitled to continue to receive any other employee
benefits other than as set forth in Section 5 or Section 8. Moreover, the
Non-Competition Payments shall be reduced to the extent Employee has already
received lump-sum payments in lieu of salary and bonus pursuant to section 5.
The Company shall have the option, exercisable at any time within one (1) month
after Employee's Date of Termination, to cancel Employee's post-employment
non-competition obligations under Section 13(a) and the Company's corresponding
obligation to make the Non-Competition Payments. Such option shall be exercised
by the Company mailing a written notice thereof to Employee in accordance with
Section 18(b); if the company does not send such notice within the prescribed
one-month time, the Company shall remain obligated to make the Non-Competition
Payments and Employee shall remain obligated to comply with the provisions of
Section 13(a). The purpose of this paragraph is to make the non-competition
obligations of Employee more reasonable from the Employee's point of view. The
amounts to be paid by the Company are not intended to be liquidated damages or
an estimate of the actual damages that
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would be sustained by the Company if Employee breaches his post-employment
non-competition obligations. If Employee breaches his post-employment
non-competition obligations, the Company shall be entitled to cease making the
Non-Competition Payments and shall be entitled to all of its remedies at law or
in equity for damages and injunctive relief.
14. Obligations to Refrain From Competing Unfairly. In addition to the
other obligations agreed to by Employee in this Agreement, Employee agrees that
during the Employment Period and for three (3) years following the Date of
Termination, he shall not at any time, directly or indirectly for the benefit of
any other party than the Company or any of its affiliated companies, (a) induce,
entice, or solicit any employee of the Company or any of its affiliated
companies to leave his employment, or (b) contact, communicate or solicit any
customer of the Company or any of its affiliated companies derived from any
customer list, customer lead, mail, printed matter or other information secured
from the Company or any of its affiliated companies or their present or past
employees, or (C) in any other manner use any customer lists or customer leads,
mail, telephone numbers, printed material or material of the Company or any of
its affiliated companies relating thereto.
15. Successors. This Agreement is personal to the Employee and without the
prior written consent of the Company shall not be assignable by the Employee
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Employee's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) 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 or the Company to assume expressly 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. 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.
16. Certain Definitions. The following defined terms used in this Agreement
shall have the meanings indicated:
(a) The "Change of Control Date" shall mean the first date on which a
Change of Control occurs. Anything in this
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Agreement to the contrary notwithstanding, if a Change of Control occurs and if
the Employee's employment with the Company is terminated or the Employee ceases
to have the position with the Company, as set forth in Section 2(a), which the
Employee had prior to the date on which the Change of Control occurs, and if it
is reasonably demonstrated by the Employee that such termination or cessation
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control or (ii) otherwise arose in connection
with or anticipation of the Change of Control, then, for all purposes of this
Agreement, the "Change of Control Date" shall mean the date immediately prior to
the date of such termination or cessation.
(b) The "Change of Control Period" shall mean the period commencing on the
Change of Control Date and ending on the last day of the Employment Period.
(c) "Change of Control" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended the "Exchange Act") (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (A) the then outstanding shares of Common Stock of
the Company (the "Outstanding Company Common Stock") or (B) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege), (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (D) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in clauses (A), (B) and
(C) of subsection (iii) of this definition of "Change of Control" are
satisfied; or
(ii) Individuals who, as of the effective date hereof, constitute the
Board of the Company (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of the Company; provided,
however, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
shareholders, was approved by (A) a vote of at least a majority of the
directors then comprising the Incumbent Board of the Company, or (B) a vote
of at least a majority of the directors then comprising the Executive
Committee of the Board at a time when such committee was comprised of at
least five members and
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all members of such committee were either members of the Incumbent
Board or considered as being members of the Incumbent Board pursuant to
clause (A) of this subsection (ii), shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of the Company; or
(iii) Approval by the shareholders of the Company of a reorganization,
merger or consolidation, in each case, unless, following such
reorganization, merger or consolidation, (A) more than 60% of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and
the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such organization, merger or consolidation
in substantially the same proportions as their ownership, immediately prior
to such reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding the Company, any employee benefit plan or related
trust of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly
or indirectly, 20% or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities, as the case may be) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the Incumbent Board
at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(iv) Approval by the shareholders of the Company of (A) a complete
liquidation or dissolution of the Company or (B) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a corporation, with respect to which following such sale or other
disposition, (A)
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more than 60% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors i.e. then beneficially owned,
directly or indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and outstanding Company Voting Securities immediately
prior to such sale or other disposition in substantially the same
proportion as their ownership, immediately prior to such sale or other
disposition, of the outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (B) no Person (excluding the
Company and any employee benefit plan or related trust of the Company or
such corporation and any Person beneficially owning, immediately prior to
such sale or other disposition, directly or indirectly, 20% or more of the
outstanding Company Common Stock or Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors and (C) at least a majority of the members of the Board of
Directors of such corporation were members of the Incumbent Board at the
time of the execution of the initial agreement or action of the Board of
the Company providing for such sale or other disposition of assets of the
Company.
(d) The term "affiliated company" shall mean any company controlled by,
controlling or under common control with the Company.
(e) The term "Highest Recent Bonus" shall mean the highest Annual Bonus
(annualized for any fiscal year consisting of less than twelve full months) paid
or payable, including by reason of any deferral, to the Employee by the Company
and its affiliated companies in respect of the three most recent full fiscal
years ending on or prior to, (i) if prior to a Change of Control, the Date of
Termination, or (ii) if after a Change of Control, the Change of Control Date.
17. Miscellaneous. (a) This Agreement replaces and merges all previous
agreements and discussions relating to the same or similar subject matters
between Employee and the Company and shall be governed by and construed in
accordance with the laws of the State of Texas, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not be
amended, modified, repealed, waived, extended or discharged except by an
agreement in writing signed by the party against whom enforcement of such
amendment, modification, repeal,
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waiver, extension or discharge is sought. No person, other than pursuant to a
resolution of the Board or a duly authorized committee thereof, shall have
authority on behalf of the Company to agree to amend, modify, repeal, waive,
extend or discharge any provision of this Agreement or anything in reference
thereto.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
If to the Employee:
Xxxxxx X. Xxxxxxx
00 Xxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
If to the Company:
Service Corporation International
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such federal, state or local taxes as shall be required to be withheld pursuant
to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right the Employee or the company may have hereunder,
including, without limitation, the right of the Employee to terminate employment
for Good Reason pursuant to Section 4(c) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
(f) No breach, whether actual or alleged, of this Agreement by the Employee
shall constitute grounds for the Company
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to withhold or offset any payment or benefit due to the Employee under any other
agreement, contract, plan, program, policy or practice of the Company.
18. Other Provisions. The Company acknowledges that Employee was an
employee of the Company or one of its affiliates from December 1, 1969 until
April 4, 1979 ("Prior Employment Period"), and Employee was a participant in a
company pension plan which required five (5) years of Vesting Service to fully
vest. The Company acknowledges that under applicable law and under Section 7.03
of the current SCI Pension Plan that the Prior Employment Period must be
credited together with all subsequent years of employment of the same employer
or an affiliate thereof for computation of Benefit Service under the SCI Pension
Plan and SCI Supplemental Executive Retirement Plan. By confirmation of dates of
employment hereof the Company does not change, add or incur additional expenses
or liabilities for the payment of benefits that may be due or become due to
Employee pursuant to applicable statutes and the SCI Pension Plan.
IN WITNESS WHEREOF, the Employee and, pursuant to due authorization from
the Board of Directors of the Company, the Company have caused this Agreement to
be executed as of the day and year first above written.
XXXXXX X. XXXXXXX
/s/ XXXXX X. XXXXXXX
--------------------
SERVICE CORPORATION
INTERNATIONAL
By: /s/ XXXXX X. SHELGER
------------------------
Xxxxx X. Shelger
Senior Vice President
and General Counsel
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