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Exhibit 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made and entered into as of this 1st day of
December, 1991, amended and restated as of August 12, 1992, further amended as
of May 12, 1993 and further amended and restated as of January 1, 1995 by and
between SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Company")
and XXXXXX X. XXXXXXX (the "Employee");
WHEREAS, Employee is employed by the Company in an executive
capacity, has extraordinary access to the Company's confidential business
information, and has significant duties and responsibilities in connection with
the conduct of the Company's business which places Employee in a special and
uncommon classification of employees;
WHEREAS, attendant to Employee's employment by the Company, the
Company and Employee wish for there to be a complete understanding and
agreement between the Company and Employee with respect to the fiduciary duties
owed by Employee to the Company; Employee's obligation to avoid conflicts of
interest, disclose pertinent information to the Company, and refrain from using
or disclosing the Company's information; the term of employment and conditions
for or upon termination thereof; the compensation and benefits owed to
Employee; and the post-employment obligations Employee owes to the Company; and
WHEREAS, but for Employee's agreement to the covenants and
conditions of this Agreement, particularly the conflict of interest provisions,
the provisions with respect to confidentiality of information and the ownership
of intellectual property, and the post-employment obligations of Employee, the
Company would not have entered into this Agreement;
NOW, THEREFORE, in consideration of Employee's continued
employment by the Company and the mutual promises and covenants contained
herein, the receipt and sufficiency of such consideration being hereby
acknowledged, the Company and Employee agree as follows:
1. Employment and Term. The Company agrees to employ the
Employee and the Employee agrees to remain in the employ of the Company, in
accordance with the terms and provisions of this Agreement, for the period
beginning on the date of this Agreement and ending as of the close of business
on the third (3rd) anniversary of the date hereof (such period together with
all extensions thereof, including any Change of Control Period (as defined in
Section 16(b) below), are referred to hereinafter as the "Employment Period");
provided, however, that commencing on the date one year after the date hereof,
and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as a "Renewal Date") the
Employment Period shall be automatically extended so as to terminate three (3)
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years from such Renewal Date, unless at least 60 days prior to the Renewal Date
either the Company or the Employee gives the other written notice that the
Employment Period shall not be so extended.
2. Duties and Powers of Employee. (a) Position; Location.
During the Employment Period, the Employee shall be employed as Executive Vice
President European Operations of the Company. In such employment, the
Employee's duties and powers shall include, but not be limited to, all of the
duties and powers of holding the offices described above pursuant to the Bylaws
of the Company, as in effect on the date hereof, or as designated by the Board
of Directors of the Company (the "Board") or any duly authorized committee
thereof in connection with the execution of this Agreement. The Employee's
services shall be performed at the location where the Employee is currently
employed or any office which is the headquarters of the Company and is less
than 50 miles from such location. During the Change of Control Period, the
Employee's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period immediately
preceding the Change of Control Date.
(b) Duties. During the Employment Period, and excluding any
periods of vacation and sick leave to which the Employee is entitled, the
Employee agrees to devote his attention and time during normal business hours
to the business and affairs of the Company and to use the Employee's best
efforts to perform faithfully and efficiently such responsibilities. During
the Employment Period it shall not be a violation of this Agreement for the
Employee to (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach at educational
institutions and (iii) manage personal investments, so long as such activities
do not significantly interfere with the performance of the Employee's
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that any
such activities have been conducted by the Employee prior to the date of this
Agreement or subsequent thereto consistent with this Section 2(b), the
continued conduct of such activities (or the conduct of activities similar in
nature and scope thereto) shall not thereafter be deemed to interfere with the
performance of the Employee's responsibilities to the Company.
(c) Employee agrees and acknowledges that he owes, and will
comply with, a fiduciary duty of loyalty, fidelity or allegiance to act at all
times in the best interests of the Company and to 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.
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3. Compensation. The Employee shall receive the following
compensation for his services:
(a) Salary. During the Employment Period, he shall be paid an
annual base salary ("Annual Base Salary") at the rate of not less than
$280,000 per year, in substantially equal bi-weekly installments, and
subject to any and all required withholdings and deductions for Social
Security, income taxes and the like. The Board may from time to time
direct such upward adjustments to Annual Base Salary as the Board deems
to be appropriate or desirable; provided, however, that during the
Change of Control Period, the Annual Base Salary shall be reviewed at
least annually and shall be increased at any time and from time to time
as shall be substantially consistent with increases in base salary
generally awarded in the ordinary course of business to other peer
executives of the Company and its affiliated companies (as defined in
Section 16(d) below). Annual Base Salary shall not be reduced after any
increase thereof pursuant to this Section 3(a). Any increase in Annual
Base Salary shall not serve to limit or reduce any other obligation of
the Company under this Agreement.
(b) Incentive Cash Compensation. During the Employment Period,
he shall be eligible annually for a cash bonus at the discretion of the
Compensation Committee of the Board (such aggregate awards for each year
are hereinafter referred to as the "Annual Bonus") and at the discretion
of the Board to receive awards from any plan of the Company or any of
its affiliated companies providing for the payment of bonuses in cash to
employees of the Company or its affiliated companies having rank
comparable to that of the Employee (such plans being referred to herein
collectively as the "Cash Bonus Plans") in accordance with the terms
thereof; provided, however, that, during the Change of Control Period,
the Employee shall be awarded, for each fiscal year ending during the
Change of Control Period, an Annual Bonus at least equal to the Highest
Recent Bonus (as defined in Section 16(e) below). Each Annual Bonus
shall be paid no later than the end of the third month of the fiscal
year next following the fiscal year for which the Annual Bonus is
awarded, unless the Employee shall elect to defer the receipt of such
Annual Bonus.
(c) Incentive and Savings and Retirement Plans. During the
Employment Period, the Employee shall be entitled to participate in all
incentive and savings (in addition to the Cash Bonus Plans) and
retirement plans, practices, policies and programs applicable generally
to other peer executives of the Company and its affiliated companies.
(d) Welfare Benefit Plans. During the Employment Period, the
Employee and/or the Employee's family, as the case may be, shall be
eligible for participation in all welfare benefit
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plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) to the extent applicable generally to other peer executives of
the Company and its affiliated companies.
(e) Expenses. During the Employment Period and for so long as
the Employee is employed by the Company, he shall be entitled to receive
prompt reimbursement for all reasonable expenses incurred by the
Employee in accordance with the policies, practices and procedures of
the Company and its affiliated companies from time to time in effect.
(f) Fringe Benefits. During the Employment Period, the
Employee shall be entitled to fringe benefits in accordance with the
plans, practices, programs and policies of the Company and its
affiliated companies from time to time in effect, commensurate with his
position and on a basis at least comparable to those received by other
peer executives of the Company and its affiliated companies.
(g) Office and Support Staff. During the Employment Period,
the Employee shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, commensurate with his position and on
a basis at least comparable to those received by other peer executives
of the Company and its affiliated companies.
(h) Vacation and Other Absences. During the Employment Period,
the Employee shall be entitled to paid vacation and such other paid
absences whether for holidays, illness, personal time or any similar
purposes, in accordance with the plans, policies, programs and practices
of the Company and its affiliated companies in effect from time to time,
commensurate with his position and on a basis at least comparable to
those received by other peer executives of the Company and its
affiliated companies.
(i) During the Change of Control Period, the Employee's
benefits listed under Sections 3(c), 3(d), 3(e), 3(f), 3(g) and 3(h)
above shall be at least commensurate in all material respects with the
most valuable and favorable of those received by the Employee at any
time during the 90-day period immediately preceding the Change of
Control Date.
4. Termination of Employment. (a) Death or Disability. The
Employment Period shall terminate automatically upon the Employee's death
during the Employment Period. If the Company determines in good faith that the
Disability of the Employee has
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occurred during the Employment Period (pursuant to the definition of Disability
set forth below), it may give to the Employee written notice in accordance with
Section 18(b) of its intention to terminate the Employment Period. In such
event, the Employment Period shall terminate effective on the 30th day after
receipt of such notice by the Employee (the "Disability Effective Date"),
provided that, within the 30 days after such receipt, the Employee shall not
have returned to full-time performance of the Employee's duties. For purposes
of this Agreement, "Disability" shall mean the inability of the Employee to
perform the Employee's duties with the Company on a full-time basis as a result
of incapacity due to mental or physical illness which continues for more than
one year after the commencement of such incapacity, such incapacity to be
determined by a physician selected by the Company or its insurers and
acceptable to the Employee or the Employee's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Employment Period for
Cause. For purposes of this Agreement, "Cause" shall mean (i) a material
breach by the Employee of Section 9 which is willful on the Employee's part or
which is committed in bad faith or without reasonable belief that such breach
is in the best interests of the Company and its affiliated companies, or (ii) a
material breach by the Employee of the Employee's obligations under Section 2
(other than a breach of the Employee's obligations under Section 2 arising from
the failure of the Employee to work as a result of incapacity due to physical
or mental illness) or any material breach by the Employee of Section 10, 11 or
12 of this Agreement which in either case is willful on the Employee's part,
which is committed in bad faith or without reasonable belief that such breach
is in the best interests of the Company and its affiliated companies and which
is not remedied in a reasonable period of time after receipt of written notice
from the Company specifying such breach, or (iii) the conviction of the
Employee of a felony involving malice which conviction has been affirmed on
appeal or as to which the period in which an appeal can be taken has lapsed.
(c) Good Reason; Window Period. The Employee's employment may
be terminated (i) by the Employee for Good Reason (as defined below) or (ii)
during the Window Period (as defined below) by the Employee without any reason.
For purposes of this Agreement, the "Window Period" shall mean the 30-day
period immediately following the first anniversary of the Change of Control
Date. For purposes of this Agreement, "Good Reason" shall mean
(i) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position (including
status, offices, titles and reporting requirements), authority, duties
or responsibilities as contemplated by Section 2 or any other action by
the Company which results in
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a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated and insubstantial action not
taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(ii) any failure by the Company to comply with any of the
provisions of Section 3, other than an isolated and insubstantial
failure not occurring in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Employee;
(iii) the Company's requiring the Employee to be based at any
office or location other than that described in Section 2(a);
(iv) any purported termination by the Company of the
Employee's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 16(c), provided that the successor referred to in Section 16(c)
has received at least ten days prior written notice from the Company or
the Employee of the requirements of Section 16(c).
For purposes of this Section 4(c), during the Change of Control Period, any
good faith determination of "Good Reason" made by the Employee shall be
conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause or by the Employee without any reason during the Window Period or for
Good Reason shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 18(b). For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employment Period under the
provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination
date (which date shall be not more than 15 days after the giving of such
notice). The failure by the Employee or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of the Employee or the Company
hereunder or preclude the Employee or the Company from asserting such fact or
circumstance in enforcing the Employee's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Employee's employment is terminated by the Company for Cause, or by the
Employee during the Window Period or for Good
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Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if the Employee's employment is
terminated by the Company other than for Cause or Disability, or by the
Employee other than for Good Reason or during the Window Period, the Date of
Termination shall be the date on which the Company or the Employee, as the case
may be, notifies the other of such termination and (iii) if the Employee's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Employee or the Disability
Effective Date, as the case may be.
5. Obligations of the Company Upon Termination. (a) Certain
Terminations Prior to Change of Control Date. If, during the Employment Period
prior to any Change of Control Date, the employment of the Employee with the
Company shall be terminated (i) by the Company other than for Cause, death or
Disability or (ii) by the Employee for Good Reason, then, in lieu of the
obligations of the Company under Section 3, (i) the Company shall pay to the
Employee in a lump sum in cash within 30 days after the Date of Termination all
Unpaid Agreement Amounts (as defined in Section 5(b)(i)(A) below) and (ii)
notwithstanding any other provision hereunder, for the longer of (A) the
remainder of the Employment Period or (B) to the extent compensation and/or
benefits are provided under any plan, program, practice or policy, such longer
period, if any, as such plan, program, practice or policy may provide, the
Company shall continue to provide to the Employee the compensation and benefits
provided in Sections 3(a), 3(c) and 3(d).
(b) Certain Terminations After Change of Control Date. If,
during the Change of Control Period, the employment of the Employee with the
Company shall be terminated (i) by the Company other than for Cause, death or
Disability or (ii) by the Employee either for Good Reason or without any reason
during the Window Period, then, in lieu of the obligations of the Company under
Section 3 and notwithstanding any other provision hereunder:
(i) the Company shall pay to the Employee in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the
following amounts:
(A) the sum of (1) all unpaid amounts due to the
Employee under Section 3 through the Date of Termination,
including without limitation, the Employee's Annual Base Salary
and any accrued vacation pay, (2) the product of (x) the Highest
Recent Bonus and (y) a fraction, the numerator of which is the
number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (3) any
compensation previously deferred by the Employee (together with
any accrued interest or earnings thereon) to the extent not
theretofore paid (the sum of the amounts described in clauses
(1), (2) and (3) shall be hereinafter referred to
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as the "Accrued Obligations" and the sum of the amounts
described in clauses (1) and (3) shall be hereinafter referred
to as the "Unpaid Agreement Amounts"); and
(B) the amount (such amount shall be hereinafter
referred to as the "Severance Amount") equal to the sum of
(1) Three (3) multiplied by the Employee's
Annual Base Salary, plus
(2) Three (3) multiplied by the Employee's
Highest Recent Bonus; and
(ii) for the longer of (A) the remainder of the Employment
Period or (B) to the extent benefits are provided under any plan,
program, practice or policy, such longer period as such plan, program,
practice or policy may provide, the Company shall continue benefits to
the Employee and/or the Employee's family at least equal to those which
would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 3(d) if the Employee's
employment had not been terminated, in accordance with the most
favorable plans, practices, programs or policies of the Company and its
affiliated companies as in effect and applicable generally to other peer
executives and their families during the 90-day period immediately
preceding the Change of Control Date or, if more favorable to the
Employee, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies and
their families; provided, however, that if the Employee becomes
reemployed with another employer and is eligible to receive medical or
other welfare benefits under another employer provided plan, the medical
and other welfare benefits described herein shall be required only to
the extent not provided under such other plan during such applicable
period of eligibility. For purposes of determining eligibility of the
Employee for retiree benefits pursuant to such plans, practices,
programs and policies, the Employee shall be considered to have remained
employed until the end of the Employment Period and to have retired on
the last day of such period; and
(iii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Employee and/or the
Employee's family for the remainder of the Employment Period any other
amounts or benefits required to be paid or provided or which the
Employee and/or the Employee's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies as in
effect and applicable generally to other peer executives of the Company
and its affiliated companies and their families during the 90-day period
immediately preceding the Change of Control Date or, if more favorable
to the Employee, as in effect generally
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thereafter with respect to other peer executives of the Company and its
affiliated companies and their families.
Such amounts received under this Section 5(b) shall be in lieu of any other
amount of severance relating to salary or bonus continuation to be received by
the Employee upon termination of employment of the Employee under any severance
plan, policy or arrangement of the Company.
(c) Termination as a Result of Death. If the Employee's
employment is terminated by reason of the Employee's death during the
Employment Period, in lieu of the obligations of the Company under Section 3,
the Company shall pay or provide to the Employee's estate (i) all Accrued
Obligations (which shall be paid in a lump sum in cash within 30 days after the
Date of Termination) and the timely payment or provision of the Welfare Benefit
Continuation (as defined below) and the Other Benefits (as defined below) and
(ii) any cash amount to be received by the Employee or the Employee's family as
a death benefit pursuant to the terms of any plan, policy or arrangement of the
Company and its affiliated companies. Welfare Continuation Benefits shall mean
the continuation of benefits to the Employee and/or the Employee's family for
the longer of (i) three (3) years from the Date of Termination or (ii) the
period provided by the plans, programs, policies or practices described in
Section 3(d) in which the Employee participates as of the Date of Termination,
such benefits to be at least equal to those which would have been provided to
them in accordance with the plans, programs, practices and policies described
in Section 3(d) if the Employee's employment had not been terminated, in
accordance with the most favorable plans, practices, programs or policies of
the Company and its affiliated companies as in effect and applicable generally
to other peer executives and their families on the Date of Termination or, if
the Date of Termination occurs after the Change of Control Date, during the
90-day period immediately preceding the Change of Control Date or, if more
favorable to the Employee, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its affiliated companies
and their families. Other Benefits shall mean the timely payment or provision
to the Employee and/or the Employee's family of any other amounts or benefits
required to be paid or provided or which the Employee and/or the Employee's
family is eligible to receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the Company and its
affiliated companies as in effect and applicable generally to other peer
executives and their families on the Date of Termination or, if the Date of
Termination occurs after the Change of Control Date, during the 90-day period
immediately preceding the Change of Control Date or, if more favorable to the
Employee, as in effect generally thereafter with respect to other peer
executives of the Company and its affiliated companies and their families.
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(d) Termination as a Result of Disability. If the Employee's
employment is terminated by reason of the Employee's Disability during the
Employment Period, in lieu of the obligations of the Company under Section 3,
the Company shall pay or provide to the Employee (i) all Accrued Obligations
which shall be paid in a lump sum in cash within 30 days after the Date of
Termination and the timely payment or provision of the Welfare Benefit
Continuation and the Other Benefits, provided, however, that if the Employee
becomes reemployed with another employer and is eligible to receive medical or
other welfare benefits under another employer provided plan, the Welfare
Benefit Continuation shall be required only to the extent not provided under
such other plan during such applicable period of eligibility, and (ii) any cash
amount to be received by the Employee as a disability benefit pursuant to the
terms of any plan, policy or arrangement of the Company and its affiliated
companies.
(e) Cause; Other than for Good Reason. If the Employee's
employment shall be terminated during the Employment Period by the Company for
Cause or by the Employee other than during the Window Period and other than for
Good Reason, in lieu of the obligations of the Company under Section 3, the
Company shall pay to the Employee in a lump sum in cash within 30 days after
the Date of Termination all Unpaid Agreement Amounts.
6. Non-exclusivity of Rights. Except as provided in Sections
5(a), 5(b)(i)(B), 5(b)(ii), 5(c) and 5(d), nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its affiliated
companies and for which the Employee may qualify, nor shall anything herein
limit or otherwise affect such rights as the Employee may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Employee is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.
7. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Employee or others. In no event shall the
Employee be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Employee under any of the
provisions of this Agreement and, except as provided in Sections 5(b)(ii) and
5(d), such amounts shall not be reduced whether or not the Employee obtains
other employment. The Company agrees
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to pay promptly as incurred, to the full extent permitted by law, all legal
fees and expenses which the Employee may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Company, the Employee or
others of the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a
result of any contest by the Employee about the amount of any payment pursuant
to this Agreement), plus in each case interest on any payment required to be
made under this Agreement but not timely paid at the rate provided for in
Section 280G(d)(4) of the Internal Revenue Code of 1986, as amended (the
"Code").
(b) If there shall be any dispute between the Company and the
Employee (i) in the event of any termination of the Employee's employment by
the Company, whether such termination was for Cause, or (ii) in the event of
any termination of employment by the Employee, whether Good Reason existed,
then, unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that
the determination by the Employee of the existence of Good Reason was not made
in good faith, the Company shall pay all amounts, and provide all benefits, to
the Employee and/or the Employee's family or other beneficiaries, as the case
may be, that the Company would be required to pay or provide pursuant to
Section 5(a) or 5(b) as though such termination were by the Company without
Cause or by the Employee with Good Reason. The Employee hereby undertakes to
repay to the Company all such amounts to which the Employee is ultimately
adjudged by such court not to be entitled.
8. Certain Additional Payments by the Company. (a) Anything in
this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the
benefit of the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 8) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Employee with
respect to such excise tax (such excise tax, together with any such interest
and penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Employee shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 8(c), all
determinations required to be made under this Section 8, including whether and
when a Gross-Up Payment is required and the amount of
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such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by Ernst & Young (the "Accounting Firm"), which
shall provide detailed supporting calculations both to the Company and the
Employee within 15 business days of the receipt of notice from the Employee
that there has been a Payment, or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving (or has served
within the three years preceding the Change of Control Date) as accountant or
auditor for the individual, entity or group effecting the Change of Control, or
is unwilling or unable to perform its obligations pursuant to this Section 8,
the Employee shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as
determined pursuant to this Section 8, shall be paid by the Company to the
Employee within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by the Employee, it shall furnish the Employee with a written opinion that
failure to report the Excise Tax on the Employee's applicable federal income
tax return would not result in the imposition of a negligence or similar
penalty. Any determination by the Accounting Firm shall be binding upon the
Company and the Employee. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts its remedies pursuant to Section 8(c) and the
Employee thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten business days after the
Employee is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid. The Employee shall not pay such claim prior to the expiration of the
30-day period following the date on which the Employee gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Employee in
writing prior to the expiration of such period that it desires to contest such
claim, the Company, subject to the provisions of this Section 8(c), shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with
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the taxing authority in respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner. In this connection, the Employee
agrees, subject to the provisions of this Section 8(c), to (i) prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine, (ii) give the Company any information reasonably requested by the
Company relating to such claim, (iii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,
(iv) cooperate with the Company in good faith in order effectively to contest
such claim and (v) permit the Company to participate in any proceedings
relating to such claim. The foregoing is subject, however, to the following:
(A) the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Employee harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed in connection therewith and the payment of costs and expenses
in such connection, (B) if the Company directs the Employee to pay such claim
and xxx for a refund, the Company shall advance the amount of such payment to
the Employee, on an interest-free basis, and shall indemnify and hold the
Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such
advance, (C) any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Employee with respect to which such contested
amount is claimed to be due shall be limited solely to such contested amount
and (D) the Company's control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable hereunder and the Employee
shall be entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Employee of an amount advanced
by the Company pursuant to Section 8(c), the Employee becomes entitled to
receive any refund with respect to such claim, the Employee shall (subject to
the Company's complying with the requirements of Section 8(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Employee of an amount advanced by the Company pursuant to Section 8(c), a
determination is made that the Employee shall not be entitled to any refund
with respect to such claim and the Company does not notify the Employee in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance
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14
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
9. Confidential Information. The Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Employee during the Employee's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Employee or representatives of the Employee in violation of
this Agreement). After termination of the Employee's employment with the
Company or any of its affiliated companies, the Employee shall not, without the
prior written consent of the Company or as may otherwise be required by law or
legal process, communicate or divulge any such information, knowledge or data
to anyone other than the Company and those designated by it. In no event shall
an asserted violation of the provisions of this Section 9 constitute a basis
for deferring or withholding any amounts otherwise payable to the Employee
under this Agreement. Subject to the previous sentence, nothing herein shall
be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery of
damages from the Employee.
10. Employee's Obligation to Avoid Conflicts of Interest. (a)
In keeping with Employee's fiduciary duties to the Company, Employee agrees
that he shall not knowingly become involved in circumstances constituting a
conflict of interest with such duties, or upon discovery thereof, allow such a
conflict to continue. Moreover, Employee agrees that he shall disclose to the
Secretary of the Company any facts which might involve a conflict of interest
that has not been approved by the Company's Compensation Committee. The Board
hereby acknowledges and agrees that the activities of Employee listed on
Schedule A hereto do not, and the continuation of such activities will not,
constitute a conflict of interest for purposes of this Section 10.
(b) In this connection, it is agreed that any direct interest
in, connection with, or benefit from any outside activities, particularly
commercial activities, which might in any way adversely affect the Company or
any of its affiliated companies, involves a possible conflict of interest.
Circumstances in which a conflict of interest on the part of Employee would or
might arise, and which should be reported immediately to the Company, include,
but are not limited to, the following:
(i) Ownership of a material interest in any lender,
supplier, contractor, customer or other entity with
which the Company or any of its affiliated companies
does business;
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15
(ii) Acting in any capacity, including director, officer,
partner, consultant, employee, distributor, agent or
the like, for lenders, suppliers, contractors,
subcontractors, customers or other entities with which
the Company or any of its affiliated companies does
business;
(iii) Acceptance, directly or indirectly, of payments,
services or loans from a lender, supplier, contractor,
subcontractor, customer or other entity with which the
Company or any of its affiliated companies does
business, including but not limited to, gifts, trips,
entertainment, or other favors of more than a nominal
value, but excluding loans from publicly held insurance
companies and commercial or savings banks at normal
rates of interest;
(iv) Misuse of information or facilities to which Employee
has access in a manner which will be detrimental to the
Company's or any of its affiliated companies' interest,
such as utilization for Employee's own benefit of
know-how or information developed through the Company's
or any of its affiliated companies' business
activities;
(v) Disclosure or other misuse of information of any kind
obtained through Employee's connection with the Company
or any of its affiliated companies; or
(vi) Acquiring or trading in, directly or indirectly, other
properties or interests connected with the design or
marketing of products or services designed or marketed
by the Company or any of its affiliated companies.
(c) In the event that the Company determines, in the exercise of its
reasonable judgment, that a conflict of interest exists between the Employee
and the Company or any of its affiliated companies, the Company shall notify
the Employee in writing in accordance with Section 17(b) hereof, providing
reasonably detailed information identifying the source of the conflict of
interest. Within the 60-day period following receipt of such notice, the
Employee shall take action satisfactory to the Company to eliminate the
conflict of interest. Failure of the Employee to take such action within such
60-day period shall constitute "Cause" under Section 4(b) hereof.
11. Disclosure of Information, Ideas, Concepts, Improvements,
Discoveries and Inventions. As part of Employee's
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16
fiduciary duties to the Company, Employee agrees that during the Employment
Period, and for a period of six (6) months after the Date of Termination,
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
affiliated companies, irrespective of whether Employee utilized the Company's
or any of its affiliated companies' time or facilities and irrespective of
whether such information, idea, concept, improvement, discovery or invention
was conceived, developed, discovered or acquired by 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 or any of its affiliated companies'
business activities, and the like.
12. 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 or any of
its affiliated companies and which relate to the Company's or any of its
affiliated companies' business, products or services (including 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 organizations 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, and any 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
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17
thereof, and applications for registration of such names and marks. Both
during the period of Employee's employment by the Company or any of its
affiliated companies and thereafter, Employee shall assist the Company and its
nominee 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 or
any of its affiliated companies, 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, drawings, maps, architectural renditions, models, manuals,
brochures or the like) relating to the Company's or any of its affiliated
companies' 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 the 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 instrumental
text, then the work shall be considered to be work made for hire and the
Company shall be 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 such work and all
rights of copyright therein. Both during the period of Employee's employment
by the Company or any of its affiliated companies and thereafter, Employee
agrees to assist the Company and its nominee, at any time, in the 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 nominee and the
execution of all lawful oaths and applications for registration of copyright in
the United States and foreign countries.
13. Employee's Post-Employment Non-Competition Obligations:
In Certain Situations such Obligations Apply only if the Company opts to
Continue Employee's Salary Payment. (a) During the Employment Period and,
subject to the conditions of Sections 13(b) and 13(c), for a period of three
(3) years
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18
thereafter (the "Non-Competition Period") provided, however, that the
Non-Competition Period shall not exceed three (3) years from the Date of
Termination, Employee shall not, acting alone or in conjunction with others,
directly or indirectly, in any of the business territories in which the Company
or any of its affiliated companies is presently or at the time of termination
of employment conducting business, engage in any business in competition with
the business conducted by the Company or any of its affiliated companies at the
time of the termination of the employment relationship, 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.
(b) If Employee has been terminated for Cause (Section 4(b)) or
if Employee terminates his employment for any reason other than for Good Reason
or other than during the Window Period (Section 4(c)), Employee shall be bound
by the obligations of Section 13(a) and the Company shall have no obligation to
make the Non-Competition Payments (as defined in Section 13(c) below).
However, if the employment relationship is terminated by any other circumstance
or for any other reason, Employee's post-employment non-competition obligations
required by Section 13(a) shall be subject to the Company's obligation to make
the Non-Competition Payments specified in Section 13(c).
(c) Notwithstanding the provisions of Section 4 of this
Agreement, whenever the employment relationship is terminated due to the
expiration of its term because the Company or Employee timely gave written
notice of termination (Section 1), or due to Employee's Disability (Section
4(a)), or by the Company without Cause (Section 4(b)), unless the Company
exercises its option as hereinafter provided, Employee shall be entitled to
continue to receive payments (the "Non-Competition Payments") equal to his then
current Annual Base Salary (as of the Date of Termination) during the
Non-Competition Period. During the Non-Competition Period, the Employee shall
not, however, be deemed to be an employee of the Company or be entitled to
continue to receive any other employee benefits other than as set forth in
Section 5 or Section 8. Moreover, the Non-Competition Payments shall be
reduced to the extent Employee has already received lump-sum payments in lieu
of salary and bonus pursuant to Section 5. The Company shall have the option,
exercisable at any time within one (1) month after Employee's Date of
Termination, to cancel Employee's post-employment non-competition obligations
under Section 13(a) and the Company's corresponding obligation to make the
Non-Competition Payments. Such option shall be exercised by the Company
mailing a written notice thereof to Employee in accordance with Section 18(b);
if the Company does not send such notice within the prescribed one-month time,
the Company shall remain obligated to make the Non-Competition Payments and
Employee shall remain obligated to comply with the provisions of Section 13(a).
The purpose of this paragraph is to make the non-competition
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19
obligations of 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
Employee breaches his post-employment non-competition obligations. If Employee
breaches his post-employment non-competition obligations, the Company shall be
entitled to cease making the Non-Competition Payments and shall be entitled to
all of its remedies at law or in equity for damages and injunctive relief.
14. 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 Period and for three (3) years
following the Date of Termination, he shall not at any time, directly or
indirectly for the benefit of 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.
15. Successors. This Agreement is personal to the Employee and
without the prior written consent of the Company shall not be assignable by the
Employee otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company or the Company
to assume expressly and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
16. Certain Definitions. The following defined terms used in
this Agreement shall have the meanings indicated:
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(a) The "Change of Control Date" shall mean the first date on
which a Change of Control occurs. Anything in this Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Employee's employment
with the Company is terminated or the Employee ceases to have the position with
the Company, as set forth in Section 2(a), which the Employee had prior to the
date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Employee that such termination or cessation (i) was at the
request of a third party who has taken steps reasonably calculated to effect
the Change of Control or (ii) otherwise arose in connection with or
anticipation of the Change of Control, then, for all purposes of this
Agreement, the "Change of Control Date" shall mean the date immediately prior
to the date of such termination or cessation.
(b) The "Change of Control Period" shall mean the period
commencing on the Change of Control Date and ending on the last day of the
Employment Period.
(c) "Change of Control" shall mean:
(i) 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 the Company (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that the following acquisitions shall not constitute a Change
of Control: (A) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (B)
any acquisition by the Company, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any corporation controlled by the Company or (D) 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 (iii) of
this definition of "Change of Control" are satisfied; or
(ii) Individuals who, as of the effective date hereof,
constitute the Board of the Company (the "Incumbent Board") cease for
any reason to constitute at least a majority of the Board of the
Company; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election
by the Company's shareholders, was approved by (A) a vote of at least a
majority of the directors then comprising the Incumbent Board of the
Company, or (B) a vote of at least a majority of the directors
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then comprising the Executive Committee of the Board 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 (ii), 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 the Company; or
(iii) Approval by the shareholders of the Company 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 Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
organization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding the Company, any employee benefit plan or
related trust of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially
owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the Outstanding
Company Common Stock or Outstanding Company 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
(iv) Approval by the shareholders of the Company of (A) a
complete liquidation or dissolution of the Company or (B) the sale or
other disposition of all or substantially all of
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22
the assets of the Company, other than to a corporation, with respect to
which following such sale or other disposition, (A) 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 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 Company
Common Stock and Outstanding Company 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 Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding the Company and
any employee benefit plan or related trust of the Company 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 Company Common Stock or Outstanding Company 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 (C) 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 the Company providing for such sale
or other disposition of assets of the Company.
(d) The term "affiliated company" shall mean any company
controlled by, controlling or under common control with the Company.
(e) The term "Highest Recent Bonus" shall mean the highest
Annual Bonus (annualized for any fiscal year consisting of less than twelve
full months) paid or payable, including by reason of any deferral, to the
Employee by the Company and its affiliated companies in respect of the three
most recent full fiscal years ending on or prior to, (i) if prior to a Change
of Control, the Date of Termination, or (ii) if after a Change of Control, the
Change of Control Date.
17. Miscellaneous. (a) This Agreement replaces and merges all
previous agreements and discussions relating to the same or similar subject
matters between Employee and the Company and shall be governed by and construed
in accordance with the laws of the State of Texas, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may
not be amended, modified, repealed, waived, extended
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23
or discharged except by an agreement in writing signed by the party against
whom enforcement of such amendment, modification, repeal, waiver, extension or
discharge is sought. No person, other than pursuant to a resolution of the
Board or a duly authorized committee thereof, shall have authority on behalf of
the Company to agree to amend, modify, repeal, waive, extend or discharge any
provision of this Agreement or anything in reference thereto.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Employee:
Xxxxxx X. Xxxxxxx
00 Xxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
If to the Company:
Service Corporation International
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon
strict compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Employee or the Company may
have hereunder, including, without limitation, the right of the Employee to
terminate employment for Good Reason pursuant to Section 4(c) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
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24
(f) No breach, whether actual or alleged, of this Agreement
by the Employee shall constitute grounds for the Company to withhold or offset
any payment or benefit due to the Employee under any other agreement, contract,
plan, program, policy or practice of the Company.
18. Other Provisions. The Company acknowledges that
Employee was an employee of the Company or one of its affiliates from December
1, 1969 until April 4, 1979 ("Prior Employment Period"), and Employee was a
participant in a company pension plan which required five (5) years of Vesting
Service to fully vest. The Company acknowledges that under applicable law and
under Section 7.03 of the current SCI Pension Plan that the Prior Employment
Period must be credited together with all subsequent years of employment of the
same employer or an affiliate thereof for computation of Benefit Service under
the SCI Pension Plan and SCI Supplemental Executive Retirement Plan. By
confirmation of dates of employment hereof the Company does not change, add or
incur additional expenses or liabilities for the payment of benefits that may
be due or become due to Employee pursuant to applicable statutes and the SCI
Pension Plan.
IN WITNESS WHEREOF, the Employee and, pursuant to due
authorization from the Board of Directors of the Company, the Company have
caused this Agreement to be executed as of the day and year first above
written.
XXXXXX X. XXXXXXX
Xxxxxx X. Xxxxxxx
-----------------------------------
SERVICE CORPORATION
INTERNATIONAL
By: Xxxxx X. Shelger
-------------------------------
Xxxxx X. Shelger
Senior Vice President
and General Counsel
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