EXHIBIT 10.76
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into on
the 25th day of May, 1999, by and between Capital Senior Living Corporation,
a Delaware corporation ("CSL" or "the Company"), and Xxxxx X. Xxxxxxx, an
individual residing in the State of Texas ("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 position as assigned to him by the Board of Directors. In
such capacity, Employee shall report to the Chief Executive 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 May 24, 2002, 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.
4. SALARY AND BENEFITS. During the term of this Agreement:
A) CSL shall pay to Employee a base salary at an annual
rate of One Hundred Eighty Thousand Dollars
($180,000) 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 increase by the
Compensation Committee and 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. 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, 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
2
common stock 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 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
3
and Procedures Manual his base salary and
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, 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 and
annual bonus paid during the term of this
Agreement in the past twelve (12) months 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
4
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.
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.
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
5
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 or representations, oral or written,
6
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.
7
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 CORPORATION
a Delaware corporation
Address:
00000 Xxxxxx Xxxxxxx, #000
Xxxxxx, XX 00000 By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx, Chairman of the Company
EMPLOYEE
Address:
0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000 /s/ Xxxxx X. Xxxxxxx
----------------------------------------
8
