EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on the
26th day of May, 1999, 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 June 1, 1999 ("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 Executive 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 Chairman of the Company of CSL and
shall have such powers, duties and responsibilities as are customarily
assigned to the Chief Executive 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 May 31, 2002, however, the term of this
Agreement shall automatically be extended for a one (1) year term on a
consecutive basis. 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, 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 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 than $300,000 per annum, paid in approximately equal installments no
less frequently than semi-monthly. An annual bonus of thirty-three and
one-third percent (33-1/3%) of Employee's base salary shall be paid in
quarterly installments, subject to meeting performance standards that the
Company's reported quarterly earnings per share is not less than the First
Call consensus earnings per share for that quarter, and subject to increase by
the Compensation Committee. The Compensation Committee will use its reasonable
discretion to determine the amount of the quarterly bonus to be paid if the
reported quarterly earnings per share are lower than the First Call consensus
earnings per share. 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.
5. STOCK OPTIONS. If the Company adopts a stock option plan or other
incentive compensation plan, Employee shall receive options to purchase
Company Common Stock. The number of shares of Common Stock of the Company
covered by options to be granted to Employee and the exercise price of the
options shall be determined by the Compensation Committee, if it exists, and
in the absence of a Compensation Committee, by the Board of Directors. The
number of shares and approximate vesting schedule of such options shall be at
least as favorable to Employee as those contained in options granted to any
other officer of the Company and its subsidiaries.
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 Executive 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) a final, nonappealable
conviction of Employee for commission of a felony involving moral turpitude,
(ii) Employee's willful gross misconduct that causes material economic harm to
the Company or that brings substantial discredit to the Company's reputation,
or (iii) Employee's material failure or refusal to perform his duties in
accordance with this Agreement, if Employee has failed to cure such failure or
refusal to perform within thirty (30) days after the Company notifies Employee
in writing of such failure or refusal to perform.
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 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.
D) A Fundamental Change shall be defined as any of the
following: (A) a merger, consolidation, statutory share exchange or sale,
lease, exchange or other transfer (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Company that
requires the consent or vote of the holders of the Company's Common Stock,
other than a consolidation, merger or share exchange of the Company in which
the holders of the Company's Common Stock immediately prior to such
transaction have the same proportionate ownership of Common Stock of the
surviving corporation immediately after such transaction; (B) the stockholders
of the Company approve any plan or proposal for the liquidation or dissolution
of the Company; (C) the cessation of control (by virtue of their not
constituting a majority of directors) of the Board of Directors of the Company
by the individuals (the "Continuing Directors") who (x) at the date of this
Agreement were directors or (y) become directors after the date of this
Agreement and whose election or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors
then in office who were directors at the date of this Agreement or whose
election or nomination for election was previously so approved; (D) the
acquisition of beneficial ownership (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934) of an aggregate of 20% or more of the
voting power of the Company's outstanding voting securities by any person or
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934) who beneficially owned less than 15% of the voting power of the
Company's outstanding voting securities on the date of this Agreement, or the
acquisition of beneficial ownership of an additional 5% of the voting power of
the Company's outstanding voting securities by any person or group who
beneficially owned at least 15% of the voting power of the Company's
outstanding voting securities on the date of this Agreement; provided,
however, that notwithstanding the foregoing, an acquisition shall not
constitute a Fundamental Change hereunder if the acquiror is (x) a trustee or
other fiduciary holding securities under an employee benefit plan of the
Company and acting in such capacity, (y) a wholly-owned subsidiary of the
Company or a corporation owned, directly or indirectly, by the stockholders of
the Company in the same proportions as their ownership of voting securities of
the Company or (z) any other person whose acquisition of shares of voting
securities is approved in
advance by a majority of the Continuing Directors; or (E) in a Title 11
bankruptcy proceeding, the appointment of a trustee or the conversion of a
case involving the Company to a case under Chapter 7.
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 annual
bonus paid during the term of this Agreement in the past twelve (12) months
for the balance of the term of this Agreement (not including any future
extensions), but not less than two (2) years (base salary plus annual bonus
paid during the term of this Agreement in the past twelve (12) months for
three (3) 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.
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 and shall be promptly paid
to Employee upon such termination.
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 promptly pay Employee his base
salary and pro-rated annual bonus up to and through the date of termi-
nation;
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 and shall be promptly paid
to Employee upon such termination.
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.
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 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 CSL, or (iii) is required to be disclosed by
law or by regulatory or judicial process.
9. NON-COMPETITION. Employee hereby agrees that during the term of his
employment with the Company and for a period of one (1) year after any
termination for any reason whatsoever of this Agreement, he will not and will
cause his Affiliates not to, directly or indirectly, acquire, develop or
operate senior living facilities anywhere in the United States, other than
through the Company and its subsidiaries except as otherwise requested by the
Company. 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).
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, 10
and 17 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 (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. REGISTRATION RIGHT.
A) If the Company at any time proposes to register any of its
securities under the Securities Act for sale to the public, whether for its
own account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4 or S-8 or another form not
available for registering the Registrable Securities for sale to the public),
each such time it will give written notice to Employee of its intention so to
do. Upon the written request of Employee, received by the Company within 30
days after the giving of any such notice by the Company, the Company will
cause the Registrable Securities as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by Employee (in accordance with its
written request) of such Registrable Securities so registered; provided,
however, that if the managing underwriter of the Company's offering delivers
in good faith a written opinion to Employee that either because of (A) the
kind of securities which the Employee or the Company intends to include in the
offering or (B) the size of the offering which Employee or the Company intend
to make, the success of the offering or the market for the Company's common
stock would be materially and adversely affected by the inclusion of the
Registrable Securities requested to be included (I) in the event that the size
of the offering is the basis for the managing underwriter's opinion, the
amount of the securities to be offered for the account of the Employee and
each other person registering securities of the Company pursuant to similar
incidental registration rights shall be reduced pro rata to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount reasonably recommended by such managing underwriter;
and (II) in the event that the combination of securities to be offered is the
basis of such managing underwriter's opinion, 1) the Registrable Securities
and other securities to be included in such offering shall be reduced as
described in clause (I) above or, 2) if the actions described in clause (I)
would, in the reasonable judgment of the managing underwriter, be insufficient
to substantially eliminate the material and adverse effect that inclusion of
the Registrable Securities requested to be included would have on such
offering, such Registrable Securities will be excluded from such offering.
Notwithstanding the foregoing provisions, the Company may withdraw any
registration statement referred to in this Paragraph 17(A) without thereby
incurring any liability to Employee. The Company shall not be required to
register shares of Registrable Securities of Employee after the Company has
filed two (2) registration statements which included Registrable Securities
and such registration statements have become effective, remained effective for
the period of distribution, and the transaction described therein were closed.
B) If and whenever the Company is required by Paragraph 17(A)
to effect a piggy back registration, the Company shall as expeditiously as
possible:
i) prepare and file with the Securities and Exchange
Commission ("Commission") a registration statement (which, in the case of an
underwritten public offering shall be on Form S-1, Form X-0, Xxxx X-0, any
successor forms thereto, or other form of general applicability satisfactory
to the managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain
effective for the period of the distribution contemplated thereby ( as
determined hereinafter ); provided, however that the Company may postpone
the filing, effectiveness, supplementing or amending of the registration
statement for up to 90 days if, in the good faith opinion of the Company's
Board of Directors, the registration or sale of Registrable Securities
would adversely affect a material financing, acquisition, disposition of
assets or stock, merger or other comparable transaction or would require
the Company to make public disclosure of information the public disclosure
of which would have a material adverse effect upon the Company. During any
time that the Company defers amending or supplementing the registration
statement, the holders of Registrable Securities shall discontinue
disposing of Registrable Securities;
ii) subject to the proviso in subparagraph (i),
prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith
as may be necessary to keep such registration statement effective for the
period of distribution and comply with the provisions of the Securities Act
with respect to the disposition of all Registrable Securities covered by
such registration statement in accordance with the intended method of
disposition set forth in such registration statement for such period;
iii) furnish to Employee and to each underwriter
such number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) as such persons
reasonably may request in order to facilitate the public sale or other
disposition of the Registrable Securities covered by such registration
statement;
iv) use its best efforts to register or qualify
the Registrable Securities covered by such registration statement under the
securities or "blue sky" laws of such jurisdictions as the Employee or, in
the case of an underwritten public offering, the managing underwriter
reasonably shall request, provided however, that the Company shall not for
any such purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;
v) use its best efforts to list or qualify for
quotation the Registrable Securities covered by such registration statement
with any securities exchange or inter-dealer quotation system on which the
common stock of the Company is then listed or quoted;
vi) notify Employee at any time when a prospectus
relating to Registrable Securities is required to be delivered under the
Securities Act or the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and, at the request of Employee, the
Company will prepare a supplement or amendment to such prospectus so that,
as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading, provided that the 180-day period described below will be tolled
from the time a prospectus contains such a statement or omission until a
prospectus correcting such statement or omission has been delivered to the
Employee and may be delivered to the purchasers of such Registrable
Securities in compliance with the Securities Act;
vii) notify the Employee immediately, and confirm
the notice in writing,
(1) when the registration statement becomes effective, (2) of the issuance
by the Commission of any stop order or of the initiation, or the
threatening, of any proceedings for that purpose, (3) of the receipt by the
Company of any notification with respect to the suspension of qualification
of the Registrable Securities for sale in any jurisdiction or of the
initiation, or the threatening, of any proceedings for that purpose, and
(4) of the receipt of any comments, or requests for additional information,
from the Commission or any state regulatory authority. If the Commission or
any state regulatory authority shall enter such a stop order or order
suspending qualification at any time, the Company will promptly use its
best reasonable efforts to obtain the lifting of such order; and
viii) otherwise use its best efforts to comply with
-all applicable rules and regulations of the Commission, and make available
to its security holders as soon as reasonably practicable, but not later
than 15 months after the effective date of the registration statement, a
statement covering a period of at least 12 months beginning after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act.
For purposes hereof, the period of distribution of Registrable
Securities in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of
all securities purchased by it, and the period of distribution of
Registrable Securities in any other registration shall be deemed to extend
until the earlier of the sale of all Registrable Securities covered thereby
or 180 days after the effective date thereof.
In connection with each registration hereunder, Employee will furnish
to the Company in writing such information with respect to it as a
stockholder as reasonably shall be necessary in order to assure compliance
with federal and applicable state securities laws.
In connection with each registration pursuant to Paragraph 17 hereof
covering an underwritten public offering, the Company and Employee agree to
use their best efforts to select a managing underwriter (and any
co-managers) and to enter into a written agreement with the managing
underwriter selected in the manner herein provided in such form and
containing such provisions as are customary in the securities business for
such an arrangement between such underwriter and companies of the Company's
size and investment stature.
C) All expenses incurred by the Company in complying with
Paragraph 17 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses
(including counsel fees) incurred in connection with complying with state
securities or "blue sky" laws, fees of the National Association of
Securities Dealers, Inc., transfer taxes, fees of transfer agents and
registrars, costs of insurance, and fees and disbursements of one counsel
for the Employee but excluding any Selling Expenses, are called
"Registration Expenses." All underwriting discounts and selling commissions
applicable to the sale of Registrable Securities are called "Selling
Expenses."
i) The Company shall pay all Registration Expenses
attributable to the shares of Registrable Securities included in the
registration in connection with each registration statement under Paragraph
17 hereof.
ii) All Selling Expenses in connection with each
such registration statement applicable to Registrable Securities sold by
Employee shall be borne by the Employee.
D) Subject to applicable law, the Company will indemnify each
underwriter, the Employee and each person controlling any of them, against all
claims, losses, damages and liabilities, including legal and other expenses
reasonably incurred, arising out of any untrue statement of a material fact
contained in the registration statement, or any omission to state a material
fact required to be stated in the registration statement or necessary to make
the statements not misleading, or arising out of any violation by the Company
of the Securities Act, any state securities or "blue-sky" laws or any
applicable rule or regulation. This indemnification will not apply to any
claims, losses, damages or liabilities to the extent that they may have been
caused by an untrue statement or omission based upon information furnished in
writing to the Company by such underwriter, the Employee or controlling
person, respectively, expressly for use in the registration statement. With
respect to such untrue statement or omission in the information furnished in
writing to the Company by the Employee, the Employee will indemnify the
underwriters, the Company, its directors and officers, and each person
controlling any of them against any losses, claims, damages, expenses or
liabilities to which any of them may become subject as a result of such untrue
statement or omission.
E) The registration rights of the Employee under this
Agreement may be transferred to any trust, family partnership or other family
entity formed by Employee to hold shares of common stock and to any member of
the family of the Employee.
F) In the event of any merger, consolidation or share exchange
pursuant to which the Company is not the surviving or resulting corporation,
the Company's obligations under this Paragraph 17 shall be assumed by such
surviving or resulting corporation.
18. CANCELLATION OF PRIOR EMPLOYMENT AGREEMENT. Employee and Company
hereby agree that the Employment Agreement, dated November 1, 1996, between
Employee and Company shall be, upon execution and delivery of this Agreement,
canceled and of no further force and effect.
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
-----------------------------
Xxxxx X. Xxxxxx, Chairman
EMPLOYEE
Address:
00 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000 /s/ Xxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxxx X. Xxxxx
