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EXHIBIT 10.11
EMPLOYMENT AND NONCOMPETITION AGREEMENT
THIS AGREEMENT is made and effective this 28th day of February, 2001
between SCI Executive Services, Inc., a Delaware corporation (the "Company"),
and Xxxxxxx X. Xxxxxxx (the "Employee"):
ARTICLE I
EMPLOYMENT
1.1 Employment Term. The Company agrees to employ the Employee and the
Employee agrees to accept such employment, in accordance with the terms and
conditions of this Agreement, for the period beginning on the date of this
Agreement and ending as of the close of business on December 31, 2001 (such
period together with all extensions thereof are referred to hereinafter as the
"Employment Term"); provided, however, that commencing on January 1, 2002, and
on each January 1 thereafter (each such date shall be hereinafter referred to as
a "Renewal Date"), the Employment Term shall be extended so as to terminate one
year from such Renewal Date if (i) the Company notifies the Employee in writing
of such extension at least thirty days prior to such Renewal Date and (ii) the
Employee has not previously given the Company written notice that the Employment
Term shall not be so extended. In the event that the Company gives the Employee
written notice at any time of its intention not to renew the Employment Term,
then the Employment Term shall terminate on December 31 of the year in which
such notice of non-renewal is given and shall not thereafter be further
extended. If the Company fails to notify the Employee at least thirty days prior
to a Renewal Date either of its intention to extend the Employment Term as
provided above or its intention not to so extend the Employment Term, then the
Employment Term shall not be extended and shall terminate as of the day prior to
such Renewal Date.
1.2 Duties. The Employee shall serve the Company in an executive or
managerial capacity and shall hold such title as may be authorized from time to
time by the Board of Directors of Service Corporation International ("SCI"). The
Employee shall have the duties, powers and authority consistent therewith and
such other powers as are delegated to him in writing from time to time by the
Board of Directors of SCI. If the Employee is elected to any office or other
position with the Company during the term of this Agreement, the Employee will
serve in such capacity or capacities without further compensation unless the
Compensation Committee (the "Compensation Committee") of the Board of Directors
of SCI authorizes additional compensation. The Employee's title and duties may
be changed from time to time at the discretion of the Company. The Employee also
agrees to perform, without additional compensation, such other services for the
Company and for any subsidiary or affiliated corporations of the Company or for
any partnerships in which the Company has an interest, as the Company shall from
time to time specify. The term "Company" as used hereinafter shall be deemed to
include and refer to subsidiaries and affiliated corporations and partnerships.
Employee agrees and acknowledges that he owes, and will comply with, a fiduciary
duty of loyalty, fidelity and allegiance to act at all times in the best
interests of the Company and to
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take no action or fail to take action if such action or failure to act would
injure the Company's business, its interests or its reputation.
1.3 Extent of Service. During the Employment Term, the Employee shall
devote his full time, attention and energy to the business of the Company, and,
except as may be specifically permitted by the Company, shall not be engaged in
any other business activity during the term of this Agreement. The foregoing
shall not be construed as preventing the Employee from making passive
investments in other businesses or enterprises, provided, however, that such
investments will not: (1) require services on the part of the Employee which
would in any way impair the performance of his duties under this Agreement, or
(2) in any manner significantly interfere with Employee's responsibilities as an
Employee of the Company in accordance with this Agreement.
1.4 Compensation
(a) Salary. The Company shall pay to the Employee a salary at the
rate in effect for Employee at the date of this Agreement. Such salary is to be
payable in installments in accordance with the payroll policies of the Company
in effect from time to time during the term of this Agreement. The Company may
(but is not required to) make such upward adjustments to the Employee's salary
as it deems appropriate from time to time.
(b) Incentive Compensation. In addition to the above salary, the
Employee shall be eligible annually for incentive compensation at the discretion
of the Compensation Committee.
(c) Other Benefits. The Employee shall be reimbursed in
accordance with the Company's normal expense reimbursement policy for all of the
actual and reasonable costs and expenses accrued by Employee in the performance
of his or her services and duties hereunder, including but not limited to,
travel and entertainment expenses. The Employee shall be entitled to participate
in all insurance, stock options, retirement plans and other benefit plans or
programs as may be from time to time specifically adopted and approved by the
Company for its employees, in accordance with the eligibility requirements and
any other terms and conditions of such plans. It is understood and agreed
between the parties hereto that the Company reserves the right, at its sole
discretion, to modify, amend or terminate such plans, programs or benefits at
any time.
1.5 Termination
(a) Death. If the Employee dies during the term of this Agreement
and while in the employ of the Company, this Agreement shall automatically
terminate and the Company shall have no further obligation to the Employee or
his estate except that (i) the Company shall continue to pay the Employee's
estate the Employee's salary in installments through the end of the Employment
Term which was in effect immediately prior to Employee's death, and (ii) the
Company shall pay the Employee's estate any applicable Pro Rated Bonus (defined
hereinbelow).
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(b) Disability. If during the term of this Agreement, the
Employee shall be prevented from performing his duties hereunder by reason of
disability, then the Company, on 30 days' prior notice to the Employee, may
terminate Employee's employment under this Agreement. For purposes of this
Agreement, the Employee shall be deemed to have become disabled when the
Company, upon the advice of a qualified physician, shall have determined that
the Employee has become physically or mentally incapable (excluding infrequent
and temporary absences due to ordinary illness) of performing his duties under
this Agreement. In the event of a termination pursuant to this paragraph 1.5(b),
the Company shall be relieved of all of its obligations under this Agreement,
except that the Company shall pay to the Employee (or his estate, in the event
of his subsequent death), (i) the Employee's salary in installments through the
end of the Employment Term which was in effect immediately prior to Employee's
disability, and (ii) any applicable Pro Rated Bonus. Before making any
termination decision pursuant to this Section 1.5(b), the Company shall
determine whether there is any reasonable accommodation (within the meaning of
the Americans With Disabilities Act) which would enable the Employee to perform
the essential functions of the Employee's position under this Agreement despite
the existence of any such disability. If such a reasonable accommodation is
possible, the Company shall make that accommodation and shall not terminate the
Employee's employment hereunder during the Employment Term based on such
disability.
(c) Certain Discharges. Prior to the end of the Employment Term,
the Company may discharge the Employee for Cause and terminate Employee's
employment hereunder without notice and without any further liability hereunder
to Employee or his estate. For purposes of this Agreement, "Cause" shall mean a
determination by the Company that Employee: (i) has been convicted of a crime
involving moral turpitude; (ii) has regularly failed or refused to follow
policies or directives established by the Company or the Board of Directors of
SCI; (iii) has willfully and persistently failed to attend to his duties; (iv)
has committed acts amounting to gross negligence or willful misconduct to the
detriment of the Company or its affiliates; (v) has violated any of his
obligations under Articles II or III of this Agreement; or (vi) has otherwise
breached any of the terms or provisions of this Agreement.
(d) Without Cause. Prior to the end of the Employment Term, the
employment of the Employee with the Company may be terminated by the Company
other than for Cause, death or disability. If such event occurs prior to a
Change of Control (defined hereinbelow), the Company shall have no further
obligation to Employee or his estate except that the Company shall pay to the
Employee (or his estate, in the event of his subsequent death), (i) the
Employee's salary in installments through the end of the Employment Term which
was in effect immediately prior to Employee's termination, and (ii) any
applicable Pro Rated Bonus.
(e) Voluntary Termination by Employee. If during the term of this
Agreement, the Employee voluntarily terminates his employment with the Company
prior to any Change of Control, the Company shall be relieved of all of its
obligations under this Agreement, except that the Company shall pay the Employee
(or his estate, in the event of his subsequent death) (i) the Employee's salary
through the date of Employee's termination, and (ii) any incentive compensation
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under Section 1.4(b) determined by the Compensation Committee for any fiscal
period ended prior to the date of Employee's termination which had not been paid
at the time of his termination. All such payments to the Employee or his estate
shall be made in the same manner and at the same times as the Employee's salary
or incentive compensation would have been paid to the Employee had he not
terminated his employment.
(f) Change of Control. If (i) a Change of Control occurs during
the Employment Term and (ii) within twelve months after such Change of Control
the Employee's employment is (x) terminated by the Company other than for Cause,
death or disability, or (y) terminated by Employee for any reason or for no
reason, then the Company shall be relieved of all of its obligations under this
Agreement, except that the Company shall pay the Employee (or his estate, in the
event of his subsequent death) in a lump sum in cash within 30 days after the
Employee's date of termination the aggregate of the following amounts:
(1) Two, multiplied by the Employee's annual salary in effect
immediately prior to the Change of Control, plus
(2) Any applicable Pro Rated Bonus.
The obligations of the Company under this Section 1.5(f) shall remain
in effect for twelve months after any Change of Control that occurs during the
Employment Term notwithstanding the fact that such twelve month period may
extend beyond the expiration of the Employment Term.
(g) Post Employment Term Matters. In the event the Employment Term
terminates because it is not extended or renewed pursuant to Section 1.1, then
the Company shall be relieved of all of its obligations under this Agreement and
Employee will thereafter be an employee "at will" of the Company.
ARTICLE II
INFORMATION
2.1 Nondisclosure of Information. The Employee acknowledges that
in the course of his employment by the Company he will receive certain trade
secrets, which may include, but are not limited to, programs, lists of
acquisition or disposition prospects and knowledge of acquisition strategy,
financial information and reports, lists of customers or potential customers and
other confidential information and knowledge concerning the business of the
Company (hereinafter collectively referred to as "Information") which the
Company desires to protect. The Employee understands that the Information is
confidential and agrees not to reveal the Information to anyone outside the
Company so long as the confidential or secret nature of the Information shall
continue, unless compelled to do so by any federal or state regulatory agency or
by a court order. If Employee becomes aware that disclosure of any Information
is being sought by such an agency or through a court order, Employee will
immediately notify the Company. The Employee further agrees that he will at no
time use the Information in competing with the Company. Upon
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termination of Employee's employment with the Company, the Employee shall
surrender to the Company all papers, documents, writings and other property
produced by him or coming into his possession by or through his employment or
relating to the Information, and the Employee agrees that all such materials are
and will at all times remain the property of the Company and to the extent the
Employee has any rights therein, he hereby irrevocably assigns such rights to
the Company.
2.2 Disclosure of Information, Ideas, Concepts, Improvements,
Discoveries and Inventions. As part of the Employee's fiduciary duties to the
Company, Employee agrees that during his employment by the Company, and for a
period of six months after the termination of the employment relationship for
any reason, Employee shall promptly disclose in writing to the Company all
information, ideas, concepts, improvements, discoveries and inventions, whether
patentable or not, and whether or not reduced to practice, which are conceived,
developed, made or acquired by Employee, either individually or jointly with
others, and which relate to the business, products or services of the Company or
any of its subsidiaries or affiliates, irrespective of whether Employee utilized
the Company's time or facilities and irrespective of whether such information,
idea, concept, improvement, discovery or invention was conceived, developed,
discovered or acquired by the Employee on the job, at home, or elsewhere. This
obligation extends to all types of information, ideas and concepts, including
information, ideas and concepts relating to new types of services, corporate
opportunities, acquisition prospects, the identity of key representatives within
acquisition prospect organizations, prospective names or service marks for the
Company's business activities, and the like.
2.3 Ownership of Information, Ideas, Concepts, Improvements,
Discoveries and Inventions and All Original Works of Authorship.
(a) All information, ideas, concepts, improvements, discoveries
and inventions, whether patentable or not, which are conceived, made, developed
or acquired by Employee or which are disclosed or made known to Employee,
individually or in conjunction with others, during Employee's employment by the
Company and which relate to the Company's business, products or services
(including but not limited to all such information relating to corporate
opportunities, research, financial and sales data, pricing and trading terms,
evaluations, opinions, interpretations, acquisition prospects, the identity of
customers or their requirements, the identity of key contacts within the
customer's organization or within the organization of acquisition prospects, or
marketing and merchandising techniques, prospective names and marks), are and
shall be the sole and exclusive property of the Company. Moreover, all drawings,
memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, maps and all other writings or materials of
any type embodying any of such information, ideas, concepts, improvements,
discoveries and inventions are and shall be the sole and exclusive property of
the Company.
(b) In particular, Employee hereby specifically sells, assigns
and transfers to the Company all of his worldwide right, title and interest in
and to all such information, ideas, concepts, improvements, discoveries or
inventions described in Section 2.3 (a) above, and any
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United States or foreign applications for patents, inventor's certificates or
other industrial rights that may be filed thereon, including divisions,
continuations, continuations-in-part, reissues and/or extensions thereof, and
applications for registration of such names and marks. Both during the period of
Employee's employment by the Company and thereafter, Employee shall assist the
Company and its nominees at all times in the protection of such information,
ideas, concepts, improvements, discoveries or inventions both in the United
States and all foreign countries, including but not limited to the execution of
all lawful oaths and all assignment documents requested by the Company or its
nominee in connection with the preparation, prosecution, issuance or enforcement
of any applications for United States or foreign letters patent, including
divisions, continuations, continuations-in-part, reissues, and/or extensions
thereof, and any application for the registration of such names and marks.
(c) Moreover, if during Employee's employment by the Company,
Employee creates any original work of authorship fixed in any tangible medium of
expression which is the subject matter of copyright (such as videotapes, written
presentations on acquisitions, computer programs, drawing, maps, architectural
renditions, models, manuals, brochures or the like) relating to the Company's
business, products, or services, whether such work is created solely by Employee
or jointly with others, the Company shall be deemed the author of such work if
the work is prepared by Employee in the scope of his or her employment; or, if
the work is not prepared by Employee within the scope of his or her employment
but is specially ordered by Company as a contribution to a collective work, as a
part of a motion picture or other audiovisual work, as a translation, as a
supplementary work, as a compilation or as an instructional text, then the work
shall be considered to be work made for hire and the Company shall be considered
the author of the work. In the event such work is neither prepared by the
Employee within the scope of his or her employment or is not a work specially
ordered and deemed to be a work made for hire, then Employee hereby agrees to
assign, and by these presents, does assign, to the Company all of Employee's
worldwide right, title and interest in and to the work and all rights of
copyright therein. Both during the period of Employee's employment by the
Company and thereafter, Employee agrees to assist the Company and its nominee,
at any time, in protection of the Company's worldwide right, title and interest
in and to the work and all rights of copyright therein, including but not
limited to, the execution of all formal assignment documents requested by the
Company or its nominees and the execution of all lawful oaths and applications
for registration of copyright in the United States and foreign countries.
ARTICLE III
NONCOMPETITION
3.1 Noncompetition. During the Employment Term (and for a period of one
or two years thereafter if the Company exercises its options under Section 3.2
hereof), Employee shall not, acting alone or in conjunction with others,
directly or indirectly, in any market in which the Company or any of its
affiliated companies conducts business, work for or engage in any business in
competition with the business conducted by the Company or any of its affiliated
companies,
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whether for his own account or by soliciting, canvassing or accepting any
business or transaction for or from any other company or business in competition
with such business of the Company or any of its affiliated companies. In the
event that a court should determine that any restriction herein is
unenforceable, the parties hereto agree that the obligations under this
paragraph shall be enforceable for the maximum term and maximum geographical
area allowable by law.
3.2 Extension. The Company shall have the option to extend Employee's
obligations under Section 3.1 for one additional year (the "First Extension
Term") beyond the end of the Employment Term. If the Company exercises such
option, it shall be required to pay Employee an amount equal to one year's
salary, based on Employee's salary rate as of the date his employment with the
Company ceased (the "Noncompetition Payment"). Such Noncompetition Payment shall
be made in 12 equal monthly installments (each installment being an amount equal
to 1/12th of such annual salary) commencing on the date which is thirty (30)
days after the last day of the Employment Term. Subsequent payments shall be
made on the same day of each succeeding month until 12 payments have been made.
If the Employee breaches his noncompetition obligations, the Company shall be
entitled to cease making such monthly payments. The purpose of this paragraph is
to make the noncompetition obligation of the Employee more reasonable from the
Employee's point of view. The amounts to be paid by the Company are not intended
to be liquidated damages or an estimate of the actual damages that would be
sustained by the Company if the Employee breaches his post-employment
noncompetition obligation. If the Employee breaches his post-employment
noncompetition obligation, the Company shall be entitled to all of its remedies
at law or in equity for damages and injunctive relief. The Company may exercise
the option conferred by this paragraph at any time within 30 days after the last
day of the Employment Term by mailing written notice of such exercise to
Employee.
If the Company exercises its option to extend Employee's obligations as
set forth in the preceding paragraph, then the Company shall have the option to
extend Employee's obligations under Section 3.1 for one additional year (the
"Second Extension Term") beyond the end of the First Extension Term. If the
Company exercises its option to extend Employee's obligations for the Second
Extension Term, the rights and obligations of the parties set forth in the
preceding paragraph shall be applicable during the Second Extension Term. The
Company may exercise the option conferred by this paragraph at any time within
30 days after the last day of the First Extension Term by mailing written notice
of such exercise to Employee.
3.3 Termination For Cause or Termination By Employee. Notwithstanding
anything to the contrary in this Agreement, in the event that Employee's
employment hereunder is terminated for Cause pursuant to Section 1.5 (c) hereof,
or in the event Employee voluntarily terminates the employment relationship for
any reason other than a material breach of this Agreement by the Company, the
noncompetition obligations of Employee described in Section 3.1 above shall
automatically continue for a period of two years from the date the employment
relationship ceases, and the Company shall not be required to (i) make any
payments to Employee in consideration for such obligations, or (ii) provide any
notice to Employee. Notwithstanding the foregoing, this Section 3.3 shall not be
applicable in the event Employee voluntarily terminates the employment
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relationship within twelve months after a Change of Control that occurs during
the Employment Term.
3.4 Obligations to Refrain From Competing Unfairly. In addition to the
other obligations agreed to by Employee in this Agreement, Employee agrees that
during the Employment Term and for five (5) year(s) thereafter, he shall not at
any time, directly or indirectly for the benefit or any other party than the
Company or any of its affiliated companies, (a) induce, entice, or solicit any
employee of the Company or any of its affiliated companies to leave his
employment, or (b) contact, communicate or solicit any customer of the Company
or any of its affiliated companies derived from any customer list, customer
lead, mail, printed matter or other information secured from the Company or any
of its affiliated companies or their present or past employees, or (c) in any
other manner use any customer lists or customer leads, mail, telephone numbers,
printed material or material of the Company or any of its affiliated companies
relating thereto.
3.5 Acknowledgement. Employee acknowledges that Employee's compliance
with the provisions of this Article III is necessary to protect the existing
goodwill and other proprietary rights of the Company, as well as all goodwill
and relationships that may be acquired or enhanced during the course of
Employee's employment with the Company, and all confidential information which
may come into existence or to which Employee may have access during his
employment with the Company. Employee further acknowledges that Employee will
become familiar with certain of the Company's affairs, operations, customers and
confidential information and data by means of his employment with the Company,
and that failure to comply with the provisions of this Article III will result
in irreparable and continuing damage to the Company for which there will be no
adequate remedy at law. The Company shall be entitled to all of its remedies at
law or in equity for damages and injunctive relief in the event of any violation
of this Article III by Employee.
ARTICLE IV
MISCELLANEOUS
4.1 Notices. All notices, requests, consents and other communications
under this Agreement shall be in writing and shall be deemed to have been
delivered on the date personally delivered or on the date mailed, postage
prepaid, by certified mail, return receipt requested, or telegraphed and
confirmed if addressed to the respective parties as follows:
If to the Employee:
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If to the Company:
General Counsel
c/o SCI Executive Services, Inc.
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Legal Department
Either party hereto may designate a different address by providing
written notice of such new address to the other party hereto.
4.2 Entire Agreement. This Agreement replaces and merges all previous
agreements and discussions relating to the same or similar subject matters
between Employee and the Company (or any of its affiliates) and constitutes the
entire agreement between the Employee and the Company (and any of its
affiliates) with respect to the subject matter of this Agreement. Any existing
employment agreement between the Employee and the Company (or any of its
affiliates) is hereby terminated, effective immediately. This Agreement may not
be modified in any respect by any verbal statement, representation or agreement
made by an employee, officer, or representative of the Company or by any written
agreement unless signed by an officer of the Company who is expressly authorized
by the Company to execute such document.
4.3 Specific Performance. The Employee acknowledges that a remedy at
law for any breach of Article II or III of this Agreement will be inadequate,
agrees that the Company shall be entitled to specific performance and injunctive
and other equitable relief in case of any such breach or attempted breach, and
further agrees to waive any requirement for the securing or posting of any bond
in connection with the obtaining of any such injunctive or any other equitable
relief.
4.4 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid or unenforceable under applicable law, such provision shall be
ineffective to the extent of such prohibition, invalidity or unenforceability
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
4.5 Assignment. This Agreement may not be assigned by the Employee.
Neither the Employee, his spouse, nor his estate shall have any right to
commute, encumber or dispose of any right to receive payments hereunder, it
being understood that such payments and the right thereto are nonassignable and
nontransferable. This Agreement may be assigned by the Company.
4.6 Binding Effect. Subject to the provisions of Section 4.5 of this
Agreement, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, the Employee's heirs and personal representatives, and the
successors and assigns of the Company.
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4.7 Captions. The section and paragraph headings in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
4.8 Governing Law. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of Texas.
4.9 Counterparts. This Agreement may be executed in multiple original
counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same instrument.
4.10 Survival of Certain Obligations. Employee's obligations under
Articles II and III hereof shall survive any termination of Employee's
employment hereunder.
4.11 Waiver. The waiver by either party of any right hereunder or of
any breach of this Agreement shall not operate as or be construed to be an
amendment of this Agreement or a waiver of any future right or breach.
4.12 Gender. All references to the masculine pronoun herein are used
for convenience and ease of reading only and are intended and apply to the
feminine gender as well.
4.13 Dispute Resolution.
(a) Employee and the Company agree that, except for the matters
identified in Section 4.13(b) below, all disputes relating to any aspects of
Employee's employment with the Company shall be resolved by binding arbitration.
This includes, but is not limited to, any claims against the Company, its
affiliates or their officers, directors, employees, or agents for breach of
contract, wrongful discharge, discrimination, harassment, defamation,
misrepresentation, and emotional distress, as well as any disputes pertaining to
the meaning or effect of this Agreement.
(b) It is expressly agreed that this Section 4.13 shall not govern
claims for workers' compensation or unemployment benefits, or any claim by the
Company against Employee which is based on fraud, theft or other dishonest
conduct of Employee.
(c) Any claim which either party has against the other must be
presented in writing by the claiming party to the other within one year of the
date the claiming party knew or should have known of the facts giving rise to
the claim. Otherwise, the claim shall be deemed waived and forever barred even
if there is a federal or state statute of limitations which would have given
more time to pursue the claim.
(d) Each party may retain legal counsel and shall pay its own costs and
attorneys' fees, regardless of the outcome of the arbitration. Each party shall
pay one-half of the
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compensation to be paid to the arbitrators, as well as one-half of any other
costs relating to the administration of the arbitration proceeding (for example,
room rental, court reporter, etc.).
(e) An arbitrator shall be selected by mutual agreement of the parties.
If the parties are unable to agree on a single arbitrator, each party shall
select one arbitrator, and the two arbitrators so selected shall select a third
arbitrator. The three arbitrators so selected will then hear and decide the
matter. All arbitrators must be attorneys, judges or retired judges who are
licensed to practice law in the state where the Employee is or most recently was
employed by the Company. The arbitration proceedings shall be conducted within
the county in which Employee is or most recently was employed by the Company or
at another mutually agreeable location.
(f) Except as otherwise provided herein, the arbitration proceedings
shall be conducted in accordance with the statutes, rules or regulations
governing arbitration in the state in which Employee is or most recently was
employed by the Company. In the absence of such statutes, rules or regulations,
the arbitration proceedings shall be conducted in accordance with the employment
arbitration rules of the American Arbitration Association ("AAA"); provided
however, that the foregoing reference to the AAA rules shall not be deemed to
require any filing with that organization, nor any direct involvement of that
organization. In the event of any inconsistency between this Agreement and the
statutes, rules or regulations to be applied pursuant to this paragraph, the
terms of this Agreement shall apply.
(g) The arbitrator shall issue a written award, which shall contain, at
a minimum, the names of the parties, a summary of the issues in controversy, and
a description of the award issued. Upon motion to a court of competent
jurisdiction, either party may obtain a judgment or decree in conformity with
the arbitration award, and said award shall be enforced as any other judgment or
decree.
(h) In resolving claims governed by this Section 4.13, the arbitrator
shall apply the laws of the state in which Employee is or most recently was
employed by the Company, and/or federal law, if applicable.
(i) Employee and the Company agree and acknowledge that any arbitration
proceedings between them, and the outcome of such proceedings, shall be kept
strictly confidential; provided however, that the Company may disclose such
information to the extent required by law and to its employees, agents and
professional advisors who have a legitimate need to know such information, and
the Employee may disclose such information (1) to the extent required by law,
(2) to the extent that the Employee is required to disclose same to professional
persons assisting Employee in preparing tax returns; and (3) to Employee's legal
counsel.
4.14 Change of Control. "Change of Control" means the happening of any
of the following events:
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(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person"), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding shares of Common Stock of SCI (the "Outstanding
SCI Common Stock") or (B) the combined voting power of the then outstanding
voting securities of SCI entitled to vote generally in the election of directors
(the "Outstanding SCI Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control under this subsection (a):
(i) any acquisition directly from SCI (excluding an acquisition by virtue of the
exercise of a conversion privilege), (ii) any acquisition by SCI, (iii) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by SCI or any corporation controlled by SCI, or (iv) any acquisition
by any corporation pursuant to a reorganization, merger or consolidation, if,
following such reorganization, merger or consolidation, the conditions described
in clauses (A), (B) and (C) of subsection (c) of this definition of "Change of
Control" are satisfied; or
(b) Individuals who, as of the effective date hereof, constitute the
Board of Directors of SCI (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors of SCI; provided,
however, that any individual becoming a director subsequent to the date hereof
whose election, or nomination for election by SCI's shareholders, was approved
by (A) a vote of at least a majority of the directors then comprising the
Incumbent Board, or (B) a vote of at least a majority of the directors then
comprising the Executive Committee of the Board of Directors of SCI at a time
when such committee was comprised of at least five members and all members of
such committee were either members of the Incumbent Board or considered as being
members of the Incumbent Board pursuant to clause (A) of this subsection (b),
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board of
Directors of SCI; or
(c) Approval by the shareholders of SCI of a reorganization, merger or
consolidation, in each case, unless, following such reorganization, merger or
consolidation, (A) more than 60% of, respectively, the then outstanding shares
of common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding SCI Common Stock and Outstanding SCI
Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding SCI Common Stock and Outstanding SCI Voting Securities, as the case
may be, (B) no Person (excluding SCI, any employee benefit plan (or related
trust) of SCI or such corporation resulting from such reorganization, merger or
consolidation, and any Person beneficially owning, immediately prior
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to such reorganization, merger or consolidation, directly or indirectly, 20% or
more of the Outstanding SCI Common Stock or Outstanding SCI Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of the Incumbent
Board at the time of the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(d) Approval by the shareholders of SCI of (A) a complete liquidation
or dissolution of SCI or (B) the sale or other disposition of all or
substantially all of the assets of SCI other than to a corporation, with respect
to which following such sale or other disposition, (i) more than 60% of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is the
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding SCI Common Stock and Outstanding SCI Voting Securities immediately
prior to such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of the
Outstanding SCI Common Stock and Outstanding SCI Voting Securities, as the case
may be, (ii) no Person (excluding SCI and any employee benefit plan (or related
trust) of SCI or such corporation, and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly, 20%
or more of the Outstanding SCI Common Stock or Outstanding SCI Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (iii) at least a majority of the members of the board of directors
of such corporation were members of the Incumbent Board at the time of the
execution of the initial agreement or action of the Board of Directors of SCI
providing for such sale or other disposition of assets of SCI.
4.15 Pro Rated Bonus. "Pro Rated Bonus" shall mean, a bonus equal to
the product of (i) the bonus Employee did not receive but would have received
under Section 1.4(b) if he had remained an employee through the end of the
Employment Term, it being understood that the amount of such bonus Employee
would have received shall be determined by reference to the average amount of
bonus actually awarded to other officers who were at the same or comparable
level of responsibility as Employee immediately prior to his termination, and
(ii) a fraction, the denominator of which is 365 and the numerator of which is
the number of days in the fiscal year being considered through the date of
death, determination of disability or notice of termination of employment,
whichever is applicable. In the event that a majority of SCI officers do not
receive a bonus for the fiscal year being considered, then the Pro Rated Bonus
shall not be applicable and Employee shall not be entitled to a Pro Rated Bonus.
Any Pro Rated Bonus payable to Employee
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shall be paid within 60 days of the date of the event which triggers payment of
the Pro Rated Bonus. Notwithstanding anything herein to the contrary, the
Company shall never be obligated to pay more than one Pro Rated Bonus.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
"COMPANY"
SCI Executive Services, Inc.
By: /s/ Xxx X. Xxxxxx
--------------------------------------
Xxx X. Xxxxxx
Vice President
"EMPLOYEE"
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
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