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EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
the 1st day of November, 1996, by and between Capital Senior Living
Corporation, a Delaware corporation ("CSL" or "the Company"), and Xxxxxxxx X.
Xxxxx, an individual residing in the State of New York ("Employee"). The term
of this Agreement shall be deemed to have commenced as of November 1, 1996
("Employment Commencement Date").
1. Appointment, Title and Duties. CSL hereby employs Employee to
serve in the positions as assigned to him by its Board of Directors, which
currently shall be as its Chief Financial Officer and as the Vice Chairman of
its Board of Directors and a member of the Executive Committee of the Board.
In such capacity, Employee shall report to the Chief Executive Officer and
Chief Operating Officer of CSL and shall have such powers, duties and
responsibilities as are customarily assigned to the Chief Financial Officer and
Vice Chairman. In addition Employee shall have such other duties and
responsibilities as may reasonably be assigned to him by the Board of
Directors, including serving with the consent or at the request of CSL on the
board of directors of affiliated corporations.
2. Term of Agreement. The initial term of this Agreement shall
be for a three (3) year period ending on October 31, 1999. The term of this
Agreement may be extended by the mutual written consent of the Employee and
Company. This Agreement shall terminate upon the earlier of: (i) the date of
the voluntary resignation of Employee, (ii) the date of Employee's death or
determination of Employee's disability (as defined in Xxxxxxxxx 0 xxxxx), (xxx)
the date of notice by CSL to Employee that this Agreement is being terminated
by CSL whether "for cause" (as defined in Paragraph 6 below) or without cause,
(iv) upon the date a notice of intent to resign for "good reason" (as defined
in Paragraph 6 below) is delivered to the Company by Employee, or (v)
expiration of the term.
3. Acceptance of Position. Employee hereby accepts the positions
assigned by the Board of Directors, and agrees that during the term of this
Agreement he will faithfully perform his duties and will devote substantially
all of his business time to the business and affairs of CSL and will not
engage, for his own account or for the account of any other person or entity,
in any other business or enterprise except with the express written approval of
the Board of Directors of CSL. Employee may, at his sole discretion, (i) serve
as a director on the boards of directors of other entities, businesses and
enterprises he currently serves on, President/CEO of Xxxxx Xxxxxx Independent
Living Mortgage Fund, Inc. and Xxxxx Xxxxxx Independent Living Mortgage Inc. II
(to serve without salary, stock ownership or other form of compensation and (i)
for the first six (6) months, not to interfere with Employee's ability to
devote substantially all of his business time to the business and affairs of
CSL, and (ii) after the first six (6) months, not to exceed a per annum of
hours of work per month as agreed to by the Chief Executive Officer or Chief
Operating Officer, in their sole discretion) and as President/CEO of Retail
Property Investors, Inc. for a period of one (1) year from the date of this
Agreement, and (ii) make personal, passive investments. Employee agrees to
perform his duties faithfully, diligently and to the best of his ability, to
use his best efforts to advance the best interests of the Company at all times,
and to
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abide by all moral, ethical and lawful policies, guidelines, procedures,
instructions and orders given to him by the Company from time to time;
provided, however, that in no event shall Employee be required to move from the
New York City, New York area. The Company will provide an office either in New
York City or the immediate area. Employee shall spend a reasonable amount of
time in Dallas to conduct the affairs of the Company.
4. Salary and Benefits. During the term of this Agreement:
A) CSL shall pay to Employee a base salary at an annual
rate of not less that Two Hundred Fifty Thousand
Dollars ($250,000.00) per annum, paid in
approximately equal installments no less frequently
than semi-monthly. A minimum annual bonus of
twenty-five percent (25%) of Employee's base salary
shall be paid in quarterly installments, subject to
increase by the Compensation Committee of the
Company, starting with the Employment Commencement
Date. The Company shall deduct from Employee's
compensation and bonus all applicable local, state,
Federal or foreign taxes, including, but not limited
to, income tax, withholding tax, social security tax
and pension contributions (if any).
B) Employee shall participate in all health, retirement,
Company-paid insurance, sick leave, disability,
expense reimbursement and other benefit programs, if
any, which CSL makes available, in its sole
discretion, to its senior executives; however,
nothing herein shall be construed to obligate the
Company to establish or maintain any employee benefit
program. The Company may purchase and maintain in
force a death and disability insurance policy in an
amount at all times equal to not less than an amount
equal to Employee's annual base salary multiplied by
three (3). The Company shall be the beneficiary of
said policy and shall use said policy for the
purposes described in Paragraph 7(A)(i), below.
Reimbursement of Employee's reasonable and necessary
business expenses incurred in the pursuit of the
business of the Company or any of its affiliates
shall be made to Employee upon his presentation to
the Company of itemized bills, vouchers or
accountings prepared in conformance with applicable
regulations of the Internal Revenue Service and the
policies and guidelines of the Company.
C) Employee shall be entitled to reasonable vacation
time in an amount of four (4) weeks per year pursuant
to the Company's Corporate Policies and Procedures
Manual, provided that not more than two (2) weeks of
such vacation time may be taken consecutively without
prior notice to, and the consent of, the Compensation
Committee of the Board of Directors of CSL or, if
there is no Compensation Committee, the Board of
Directors.
5. Stock Options. Pursuant to the terms of CSL's 1997 Stock
Option Plan, if adopted, Employee shall be entitled to receive a certain number
of options to purchase the common stock
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of the Company. The number of options to be offered to Employee shall be
determined by the Board of Directors of CSL.
6. Certain Terms Defined. For purposes of this Agreement:
A) Employee shall be deemed to be disabled if a physical
or mental condition shall occur and persist which, in
the written opinion of two (2) licensed physicians,
has rendered Employee unable to perform the duties of
Chief Financial Officer, Vice Chairman and member of
the Board of Directors of CSL for a period of ninety
(90) calendar days or more, and which condition, in
the opinion of such physicians, is likely to continue
for an indefinite period of time, rendering Employee
unable to return to his duties for CSL. One (1) of
the two (2) physicians shall be selected in good
faith by the Board of Directors of CSL, and the other
of the two (2) physicians shall be selected in good
faith by Employee. In the event that the two (2)
physicians selected do not agree as to whether
Employee is disabled, as described above, then said
two (2) physicians shall mutually agree upon a third
(3rd) physician whose written opinion as to
Employee's condition shall be conclusive upon CSL and
Employee for purposes of this Agreement.
B) A termination of Employee's employment by CSL shall
be deemed to be "for cause" if it is based upon (i)
Employee is charged with and then convicted of any
misdemeanor or any felony involving personal
dishonesty, (ii) material disloyalty by Employee to
the Company, including but not limited to
embezzlement, or (iii) Employee's material failure or
refusal to perform his duties in accordance with this
Agreement.
C) A resignation by Employee shall not be deemed to be
voluntary, and shall be deemed to be a resignation
for "good reason" if it is based upon (i) a material
diminution in Employee's duties, base salary or
annual minimum bonus which is not part of an overall
diminution for all executive officers of the Company,
or (ii) a material breach by CSL of the Company's
obligations to Employee under this Agreement or under
the Company's Stock Option Plan, if adopted.
7. Certain Benefits and Obligations Upon Termination.
A) In the event that Employee's employment terminates
(i) because of death or disability, (ii) because CSL
has terminated Employee other than "for cause," as
described above, or (iii) because Employee has
voluntarily resigned for "good reason," as described
above, then,
i) CSL shall pay Employee in accordance with its
Corporate Policies and Procedures Manual his
base salary plus his minimum annual
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bonus for the balance of the term of this
Agreement, but not less than one (1) year
(base salary plus minimum annual bonus for
two (2) years if termination due to a
Fundamental Change) from the date of the
notice of termination, and Employee shall
retain all his Company stock options that are
vested; provided, however, the benefits
described in this Paragraph 7(A)(i) shall
terminate at such time as Employee materially
breaches the provisions of Paragraphs 7(D),
8, or 9 hereof. A Fundamental Change shall
be defined as a merger, consolidation or any
sale of all or substantially all of the
assets of the Company that requires the
consent or vote of the holders of common
stock where the Company is not the survivor
or in control;
ii) All accrued but unpaid or unused vacation,
sick pay and expense reimbursement shall be
calculated in accordance with CSL's Corporate
Policies and Procedures Manual.
B) In the event that Employee's employment terminates
for any other cause other than those set forth in
Paragraph 7(A), which can include but not be limited
to voluntary resignation without good reason,
termination by CSL "for cause," expiration of the
term of the Agreement, etc., then,
i) CSL shall pay Employee his base salary and
prorated minimum base bonus, up to and
through the date of termination;
ii) All accrued but unpaid or unused vacation,
sick pay and expense reimbursement shall be,
calculated in accordance with CSL's Corporate
Policies and Procedures Manual.
C) In the event that Employee's employment terminates by reason
of his death, all benefits provided in this Paragraph 7 shall
be paid to Employee's estate or as his executor or personal
representative shall direct, but payment may be deferred until
Employee's executor or personal representative has been
appointed and qualified pursuant to the law in effect in
Employee's jurisdiction of residence at the time of his death;
D) Following the termination for any reason of Employee's
employment, Employee shall not for himself or any third party,
directly or indirectly (i) divert or attempt to divert from
the Company or its affiliated companies any business of any
kind in which it is or has been engaged, including, without
limitation, the solicitation of, interference with, or
entering into any contract with any of its past or then
existing customers, and (ii) employ, solicit for employment,
or recommend for employment any person employed by the Company
or its affiliated companies during the period of such person's
employment and for a period of two (2) years thereafter.
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8. Confidentiality. Employee hereby acknowledges his
understanding that as a result of his employment by CSL, he will have access
to, and possession of, valuable and important confidential or proprietary data,
documents and information concerning CSL, its operations and its future plans.
Employee hereby agrees that he will not, either during the term of his
employment with CSL, or at any time before or after the term of his employment
with CSL, divulge or communicate to any person or entity, or direct any
employee or agent of CSL or of his to divulge or communicate to any person or
entity, or use to the detriment of CSL or for the benefit of any other person
or entity, or make or remove any copies of, such confidential information or
proprietary data or information, whether or not marked or otherwise identified
as confidential or secret. Upon any termination of this Agreement for any
reason whatsoever, Employee shall surrender to CSL any and all materials,
including but not limited to drawings, manuals, reports, documents, lists,
photographs, maps, surveys, plans, specifications, accountings and any and all
other materials relating to the Company or any of its business, including all
copies thereof, that Employee has in his possession, whether or not such
material was created or compiled by Employee, but excluding, however, personal
memorabilia belonging to Employee and notes taken by him as a member of the
Board of Directors. With the exception of such excluded items, materials,
etc., Employee acknowledges that all such material is solely the property of
CSL, and that Employee has no right, title or interest in or to such materials.
Notwithstanding anything to the contrary set forth in this Paragraph 8, the
Provisions of this Paragraph 8 shall not apply to information which: (i) is or
becomes generally available to the public other than as a result of disclosure
by Employee, or (ii) is already known to Employee as of the date of this
Agreement from sources other than CSI, or (iii) is required to be disclosed by
law or by regulatory or judicial process.
9. Non-Competition. Employee hereby agrees that for a period of
two (2) years after any termination for any reason whatsoever of this Agreement
and after the last payment to Employee provided for hereunder (except that such
period shall be coterminous with the time period Employee receives any
termination compensation as set forth in Paragraph 7(A) if such termination is
without cause and there has not been a Fundamental Change), he will not,
directly or indirectly, commence doing business, in any manner whatsoever,
which is in competition with all or any portion of the business of CSL in any
state in which CSL then operates, owns, or is in the process of developing more
than three (3) facilities. CSL hereby acknowledges and agrees that Employee's
ownership of a class of securities listed on a stock exchange or traded on the
over-the-counter market that represents five percent (5%) or less of the number
of shares of such class of securities then issued and outstanding shall not
constitute a violation of this Paragraph 9.
10. Work Product. The Employee agrees that all innovations,
improvements, developments, methods, designs, analyses, reports and all similar
or related information which relates to the Company's or any of its
subsidiaries' or affiliates' actual or anticipated business, or existing or
future products or services and which are conceived, developed or made by the
Employee while employed by the Company ("Work Product") belong to the Company
or such subsidiary or affiliate. The Employee will promptly disclose such Work
Product to the Board and perform all actions reasonably requested by the Board
(whether during or after the employment period) to establish and to confirm
such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
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11. Legal Action. In the event that any action or proceeding is
brought to enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to recover reasonable attorneys' fees and costs. In
the event of a breach or threatened breach by Employee of the provisions of
Paragraph 7(D), 8, 9, or 10, Employee and the Company agree that the Company,
shall, in addition to any other available remedies, be entitled to an
injunction restraining Employee from violating the terms of the applicable
Paragraph and that said injunction is appropriate and proper relief for such
violation.
12. Notices. All notices and other communications provided to
either party hereto under this Agreement shall be in writing and delivered by
hand delivery, overnight courier service or certified mail, return receipt
requested, to the party being notified at said party's address set forth
adjacent to said party's signature on this Agreement, or at such other address
as may be designated by a party in a notice to the other party given in
accordance with this Agreement. Notices given by hand delivery or overnight
courier service shall be deemed received on the date of delivery shown on the
courier's delivery receipt or log. Notices given by certified mail shall be
deemed received three (3) days after deposit in the U.S. Mail.
13. Construction. In construing this Agreement, if any portion of
this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provision. In construing this Agreement, the singular shall include the
plural, the masculine shall include the feminine and neuter genders, as
appropriate, and no meaning or effect shall be given to the captions of the
paragraphs in this Agreement, which are inserted for convenience of reference
only.
14. Choice of Law; Survival. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Texas without
resort to choice of law principles. The provisions of Paragraphs 7, 8, 9, and
10 shall survive the termination of this Agreement for any reason whatsoever.
15. Integration; Amendments. This is an integrated Agreement.
This Agreement constitutes and is intended as a final expression and a complete
and exclusive statement of the understanding and agreement of the, parties
hereto with respect to the subject matter of this Agreement. All negotiations,
discussions and writings between the parties hereto relating to the subject
matter of this Agreement are merged into this Agreement, and there are no
rights conferred, nor promises, agreements, conditions, undertakings,
warranties or representations, oral or written, expressed or implied, between
the undersigned parties as to such matters other than as specifically set forth
herein. No amendment or modification of or addendum to, this Agreement shall
be valid unless the same shall be in writing and signed by the parties hereto.
No waiver of any of the provisions of this Agreement shall be valid unless in
writing and signed by the party against whom it is sought to be enforced.
16. Binding Effect. This Agreement is binding upon and shall
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; provided, however, that Employee shall
not be entitled to assign his interest in this Agreement
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(except for an assignment by operation of law to his estate), or any portion
hereof, or any rights hereunder, to any party. Any attempted assignment by
Employee in violation of this Paragraph 16 shall be null, void, ab initio and
of no effect of any kind or nature whatsoever.
17. Guaranty. The Company's obligations set forth in Sections 4
and 7 of this Agreement shall be guaranteed by Capital Senior Living, Inc. (the
"Guarantor"). The Guarantor guarantees the full and prompt payment of all
amounts payable by the Company set forth in Sections 4 and 7 which may become
due and arising as limited under and to Sections 4 and 7. Upon the Default by
the Company in payment of those obligations, and without further notice, or
without exhausting all remedies available to the, Employee against the Company,
the Guarantor shall perform the obligations described above. The Guarantor
shall have all rights of the Company hereunder regarding any event which would
result in a defense or claim hereunder, including but not limited to defenses,
notices, cure periods and any counterclaims.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth above to be effective as of the date specified in the preamble
of this Agreement.
CAPITAL SENIOR LIVING CORPORATION,
a Delaware corporation
Address:
00000 Xxxxxx Xxxxxxx, #000
Xxxxxx, XX 00000 By: /s/ XXXXX X. XXXXXX C.O.O.
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Xxxxx X. Xxxxxx, Chief Operating Officer
EMPLOYEE
Address:
00 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
/s/ XXXXXXXX X. XXXXX
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Xxxxxxxx X. Xxxxx
CAPITAL SENIOR LIVING, INC.,
a Texas corporation, signing for the
limited purpose set forth in Section 17.
Address:
00000 Xxxxxx Xxxxxxx, #000
Xxxxxx, XX 00000 By:/s/ XXXXXXX X. XXXX C.E.O.
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Xxxxxxx X. Xxxx, Chief Executive Officer
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