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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
the 26th day of November, 1996, by and between Capital Senior Living, Inc. a
Texas corporation ("CSL" or "the Company"), and Xxxxx X. Xxxxxxxxxxx , an
individual residing in the State of Texas ("Employee"). The term of this
Agreement shall be deemed to have commenced as of December 1 , 1996
("Employment Commencement Date").
1. APPOINTMENT, TITLE AND DUTIES. CSL hereby employs Employee to
serve in the position as assigned to him by the Board of Directors. 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 said position and as may be
otherwise assigned to him. 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 or as an officer of entities affiliated with CSL
(collectively, the "Affiliates") of affiliated corporations.
2. TERM OF AGREEMENT. The initial term of this Agreement shall be
for a three (3) year period ending on November 30 , 1999, however, the term of
this Agreement shall automatically be extended for a two (2) year term on a
consecutive basis. 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, or (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.
3. ACCEPTANCE OF POSITION. Employee hereby accepts the position
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.
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4. SALARY AND BENEFITS. During the term of this Agreement:
A) CSL shall pay to Employee a base salary at an annual
rate of $140,000.00 per annum, paid in approximately
equal installments no less frequently than
semi-monthly. Employee shall receive a performance
and compensation review on Employee's anniversary
hire date. Employee shall be eligible for an annual
bonus, if available, as determined by the
Compensation Committee of the Board of Directors of
CSL or, if there is no Compensation Committee, the
Board of Directors. The Company shall deduct from
Employee's compensation and bonus, if any, 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
two (2). The Company would be the beneficiary of
said policy and would 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, if available, to purchase the common stock of the Company. The number
of options to be offered to Employee shall be determined by the Board of
Directors of CSL.
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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 his assigned
duties for CSL for a period of ninety (90)
consecutive 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) disloyalty by Employee to the
Company, including but not limited to embezzlement,
or (iii) Employee's failure or refusal to perform his
duties in accordance with this Agreement based on a
standard of reasonableness.
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 base salary 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), including a Fundamental Change and
if Employee has been continuously employed by CSL for
at least one year prior to the Fundamental Change as
described below, 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 for the balance
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of the term of this Agreement, but not to
exceed two (2) years and not less than one
(1) year 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, 9, or 10
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 voluntary resignation without good reason
or termination by CSL "for cause"), then,
i) CSL shall pay Employee his base salary 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 Affiliates 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 Affiliates 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 or its Affiliates, 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 its Affiliates or of his to divulge or
communicate to any person or entity, or use to the detriment of CSL or its
Affiliates 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 or its Affiliates 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 or its Affiliates, 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 its Affiliates, 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 one
(1) year after any termination for any reason whatsoever of this Agreement and
after the last payment to Employee provided for hereunder, 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 or its
Affiliates in any state in which CSL or its Affiliates then operate, own, asset
manage, or is in the process of developing more than two (2) 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. Notwithstanding anything to the contrary set forth in this
Paragraph 9, if Employee is terminated from employment by CSL "for cause" as
defined in Paragraph 6(B) or Employee voluntarily resigns, Employee shall not
be in violation of this Paragraph 9 if Employee accepts and works within the
one (1) year period at a position as an on-site administrator or on-site
executive director at a nursing or retirement facility for a salary equal to or
less than a comparable position at a comparable facility in the area.
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
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business, or existing or future products or services and which are conceived,
developed or made by the Employee while employed by the Company or its
Affiliates ("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(A), (B),
(C), (D), 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
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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.
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, INC.
a Texas corporation
Address:
00000 Xxxxxx Xxxxxxx, #000
Xxxxxx, XX 00000 By: /s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx,
Chief Operating Officer
EMPLOYEE
Address:
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxxxx, XX 00000 /s/ XXXXX XXXXXXXXXXX
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