FORM OF EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit
99.3
FORM
OF EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into
effective as of October 1, 2007, by and between MDI, Inc., a Delaware
corporation (together with its successors and assigns permitted under this
Agreement, the "Company"), and __________________ (the
"Executive").
WHEREAS,
Executive is currently the _______________________ of the Company.
WHEREAS,
the Company draws upon the knowledge, experience and objective advice of
Executive in order to manage its business for the benefit of the Company's
stockholders.
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and the Executive (individually a "Party" and
together the "Parties") agree as follows:
1. Definitions. The
following definitions shall apply to this Agreement in its
entirety.
(a) "Base
Salary" shall mean the salary granted to the Executive pursuant to Section
4.
(b) "Board"
shall mean the Board of Directors of the Company.
(c) "Cause"
shall mean (i) the Executive is convicted of a felony involving moral turpitude
or any other felony (other than motor vehicle related) and, in the case of such
other felony, the Executive is unable to show that he (A) acted in good faith
and in a manner he reasonably believed to be in the best interests of the
Company and its affiliates and (B) had no reasonable cause to believe his
conduct was unlawful; or (ii) the Executive engages in conduct that constitutes
willful gross neglect or willful misconduct in carrying out his duties under
this Agreement, resulting, in either case, in material harm to the Company or
its affiliates, unless the Executive believed in good faith that such act or
non-act was in, or was not opposed to, the best interests of the Company and its
affiliates.
(d) a "Change
in Control" shall be deemed to have occurred if:
(i) any
person/individual or entity, in one or more transactions or series of
transactions, directly or indirectly, acquires 25% or more of the record and
beneficial ownership in the voting stock of the Company; or
(ii) individuals
who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board, or
(iii) the
approval by the shareholders of the Company of any reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company, or
(iv) approval
by the shareholders of the Company of any plan or proposal for the
liquidation or dissolution of the Company.
(e) "Committee"
shall mean the Compensation Committee of the Board.
(f) "Constructive
Termination" by the Executive shall mean termination following the initial
existence of one or more of the following conditions arising without the consent
of the Executive:
(i) a
material diminution in the Base Salary,
(ii) a
material diminution in the Executive’s authority, duties, or
responsibilities;
(iii) a
material diminution in the authority, duties, or responsibilities of the
supervisor to whom the Executive is required to report, including a requirement
that the Executive report to the corporate officer or employee instead of
reporting directly to the Board of Directors of the Company;
(iv) a
material diminution in the budget over which the Executive retains
authority;
(v) a
material change in the geographic location at which the Executive must perform
the services; or
(vi) any other
action or inaction that constitutes a material breach by the Company of this
Agreement.
(g) "Disability"
shall mean the Executive's inability, with or without a reasonable
accommodation, to substantially perform his duties and responsibilities under
this Agreement by reason of any physical or mental incapacity for a period of
180 consecutive days.
(h) "Effective
Date" shall mean October 1, 2007.
2. Term of
Employment. The Executive has served as
____________________________ of the Company pursuant to the terms and conditions
of that certain Letter Agreement dated ______________, as amended. The parties
agree to terminate that Letter Agreement and substitute it with this Agreement
and to continue the employment of the Executive, who shall continue to serve in
the capacity of ______________________________. Subject to the terms and
conditions set forth herein, the Company shall employ the Executive, and the
Executive hereby accepts such employment, for the period commencing on the
Effective Date and ending on the third anniversary thereof (the "Term of
Employment"); provided, however, that the Term of Employment shall be
automatically extended for additional one-year periods on each subsequent annual
anniversary of the Effective Date, unless written notice of non-extension is
provided by either Party to the other Party at least 60 days prior to any such
anniversary.
3. Position, Duties and
Responsibilities.
(a) During
the Term of Employment, the Executive shall be employed by the Company and shall
serve as ____________________________ (or such other position or positions as
may be agreed upon in writing by the Executive and the Company. The Executive
shall have all authority commensurate with this position, subject to the
direction of the Board and/or the Chief Executive Officer ("CEO") of the
Company. The Executive shall report directly to the _________________. The
Executive shall devote substantially all of his business time, attention and
skill to the performance of such duties and responsibilities, and shall use his
best efforts to promote the interests of the Company and its affiliates. The
Executive shall not, without the prior written approval of the CEO, engage in
any other business activity which is in violation of policies established from
time to time by the Company or its affiliates.
(b) Anything
herein to the contrary notwithstanding, nothing shall preclude the Executive
from (i) serving on the boards of directors of a reasonable number of other
corporations or the boards of a reasonable number of trade associations and/or
charitable organizations, (ii) engaging in charitable activities and community
affairs, and (iii) managing his personal investments and affairs, provided that
such activities do not materially interfere with the proper performance of his
duties and responsibilities as an executive officer of the Company.
4. Base
Salary. During the Term of Employment, the Executive shall be
paid an annualized Base Salary, payable in accordance with the regular payroll
practices of the Company, in the amount of _______________. Executive will be
eligible for performance-based increases in the Executive’s base salary on the
same terms and conditions normally afforded executive employees employed at
Executive’s level with the Company. The Executive’s base salary will not be
reduced during the Employment Term. Executive shall receive all regular costs of
living and other standard raises or salary increases, if any, provided to other
executive employees employed at Executive’s level with the Company.
5. Annual Incentive
Awards.
(a) For each
fiscal year of the Company during which he is employed by the Company the
Executive shall be eligible to receive an annual bonus (“Annual Bonus”) under
the Company’s Management Incentive Plan or successor annual incentive award
plan. Such Annual Bonus shall be determined on the basis of an annual
target bonus opportunity of at least fifty percent (50%) of the Base Salary paid
the Executive with respect to such fiscal year, which annual target bonus
opportunity may be increased to two hundred percent (200%) of Base Salary for
truly exemplary performance, but not decreased below the annual target bonus.
Each Annual Bonus (or portion thereof) shall be paid in cash on the first
business day in February of the year next following the year for which the
Annual Bonus (or prorated portion) is earned or awarded, unless electively
deferred by the Executive pursuant to any deferral programs or arrangements that
the Company may make available to the Executive.
(b) Change of Control
Bonus. Notwithstanding the foregoing, the Annual Bonus awarded
to the Executive for each fiscal year of the Company ending during the period
commencing on the Change of Control Date and ending on the second anniversary
thereof shall be the greater of (A) the largest bonus earned by or awarded to
the Executive for any the of three fiscal years of the Company ending before
such Change of Control Date, or for the fiscal year in which such Change of
Control Date occurs, or (B) the Annual Target Bonus. For a fiscal
year of the Company that commences but does not end before the second
anniversary of a Change of Control Date, the Annual Bonus earned by or awarded
to the Executive for that portion of such fiscal year.
6. Incentive and Savings Plans;
Retirement and Death Benefit Programs.
(a) The
Executive shall be entitled to participate in all incentive and savings plans
and programs, including stock option plans and other equity-based compensation
plans, and in all employee retirement, executive retirement and executive death
benefit plans on a basis no less favorable than that basis generally available
to executives of the Company holding comparable positions or having comparable
responsibilities who become an elected or appointed officer of the Company on or
after the date on which the Executive first became an elected or appointed
officer of the Company.
(b) New Stock Option
Awards. Effective January 1, 2008 (“Grant Date”), the Company shall grant
the Executive a 5-year option to purchase an aggregate of _____________ shares
of Stock (the "New Option"), to be granted under the terms of the Company's
stock option plans or other plans as approved by the board of directors and or
the shareholders. The exercise price per share of the New Option shall be equal
to the closing price on the last trading day immediately preceding the Grant
Date. The New Option shall become vested and exercisable on the first
anniversary of the Grant Date, except as otherwise provided
hereinafter.
(c) Additional Equity
Awards. During the Term of Employment, the Executive will have
an annual opportunity to be granted an option or restricted stock (the "Annual
Option") for shares of Stock at a target level value equal to the greater of
400% of Base Salary or a percentage established by the CEO in a pool sharing 25%
of EBITDA profits based upon the achievement of performance goals established by
the Board or its Compensation Committee. The exercise price per share of the
Annual Option shall be equal to the closing price on the last trading day
immediately preceding the annual grant date (“Annual Grant Date”). The Annual
Option shall become vested and exercisable on the first anniversary of the
Annual Grant Date, except as otherwise provided herein.
(d) Minimum Option
Awards. If at any time during the Employment Term or as a
result of or at any time during the two-year period after a Change in Control,
the number of shares constituting the total shares of the Company’s
common stock beneficially owned by the Executive does not equal at least ______
percent (_%) of the shares of the Company, whether preferred or common, issued
and outstanding on said date (the “Minimum Ownership”), the Executive shall have
the right to receive an option (“Additional Share Option”) to purchase
additional shares of the Company's common stock (the "Additional Shares") in an
amount that is equal to the difference between (A) the number of shares
constituting Minimum Ownership and (B) the number of shares equal to the sum of
the number of shares constituting ______ percent (_%) of the shares of capital
stock of the Company actually issued and outstanding on said date plus the
number of Additional Shares. The exercise price per share of the Additional
Shares Option shall be equal to the closing price on the last trading day
immediately preceding the additional share grant date (the “Additional Share
Grant Date”). The Additional Shares Option shall become vested and exercisable
on the Additional Share Grant Date, except as otherwise provided
herein.
7. Other Benefit
Plans. The Executive, his spouse and their eligible dependents
(as defined in, and to the extent permitted by, the applicable plan), as the
case may be, shall be entitled to participate in or be covered under all
medical, dental, disability, group life, severance, accidental death and travel
accident insurance plans and programs of the Company and any affiliated
companies at the most favorable level of participation and providing the highest
levels of benefits available to him and his dependents.
8. Reimbursement of Business
and Other Expenses: Perquisites; Vacations.
(a) The
Executive is authorized to incur reasonable expenses in carrying out his duties
and responsibilities under this Agreement including, but not limited
to, travel, entertainment, subscriptions and dues associated with
Employee's membership in professional, business and civic
organizations and the Company shall promptly reimburse him for all reasonable
business expenses incurred in connection with carrying out the business of the
Company and its affiliates, subject to documentation in accordance with the
Company's policy.
(b) During
the Term of Employment, the Executive shall be entitled to three weeks' paid
vacation per year.
(c) The
Company shall not be obligated to institute, maintain, or
refrain from changing, amending or discontinuing, any
incentive compensation, employee benefit or stock or stock
option program or plan, so long as such actions
are similarly applicable to covered employees
generally.
(d) The
Company may withhold from any compensation, benefits, or amounts payable under
this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
(e) During
the pendency of a potential change of Control or during the period commencing on
a Change of Control Date and ending on the third anniversary thereof, the
benefits provided for in Sections 4, 5, 6, 7 & 8 may not be diminished from
the highest level previously provided or available to the Executive immediately
prior to the potential Change of Control or within the ninety-day period prior
to the Change of Control Date, as applicable.
9. Termination of
Employment.
(a) Termination Due to
Death. In the event the Executive's employment is terminated
due to his death, his estate or his beneficiaries as the case may be, shall be
entitled to the following:
(i) Base
Salary through the date of death;
(ii) an amount
equal to a prorated annual incentive award for the year in which death occurs,
based on the actual performance for such year, the amount of which prorated
bonus, if any, shall be determined and paid promptly following the end of the
year to which such bonus relates (if death occurs during fiscal year 2007, the
amount of said bonus shall be paid in full and shall not be
pro-rated);
(iii) the
balance of any annual or long-term cash incentive awards (if any) earned (but
not yet paid) pursuant to the terms of the applicable programs;
(iv) any
amounts earned, accrued or owing to the Executive but not yet paid under this
Agreement; and
(v) other or
additional benefits in accordance with applicable plans and programs of the
Company or its affiliates.
(b) Termination Due to
Disability. In the event the Executive's employment is
terminated due to his Disability, he shall be entitled in such case to the
following:
(i) Base
Salary through the date of termination;
(ii) an amount
equal to a prorated annual incentive award for the year in which termination due
to Disability occurs, based on the actual performance for such year, the amount
of which prorated bonus, if any, shall be determined and paid promptly following
the end of the year to which such bonus relates (if the termination occurs
during fiscal year 2007, the amount of said bonus shall be paid in full and
shall not be pro-rated);
(iii) the
balance of any annual or long-term cash incentive awards (if any) earned (but
not yet paid) pursuant to the terms of the applicable programs;
(iv) any
amounts earned, accrued or owing to the Executive but not yet paid under this
Agreement; and
(v) other or
additional benefits in accordance with applicable plans and programs of the
Company or its affiliates.
(c) Termination by the Company
for Cause. In the event the Company terminates the Executive's
employment for Cause, he shall be entitled to Base Salary through the date of
the termination of his employment. A termination for Cause shall not
take effect unless the provisions of this paragraph are complied with. The
Executive shall be given written notice by the Board of the intention to
terminate him for Cause, such notice (A) to state in detail the particular act
or acts or failure or failures to act that constitute the grounds on which the
proposed termination for Cause is based and (B) to be given within six months of
the Board learning of such act or acts or failure or failures to act. The
Executive shall have 10 days after the date that such written notice has been
given to the Executive in which to cure such conduct, to the extent such cure is
possible. If he fails to cure such conduct, the Executive shall then be entitled
to a hearing before the Board. Such hearing shall be held within 15 days of
notice to the Company by the Executive, provided he requests such hearing within
10 days of the written notice from the Board of the intention to terminate his
employment for Cause. If, within five days following such hearing, the Executive
is furnished written notice by the Board confirming that the Board has
determined, by majority vote at a meeting of the Board duly called and held as
to which termination of the Executive is an agenda item, that grounds for Cause
on the basis of the original notice exist, he shall thereupon be terminated for
Cause.
(d) Termination Without Cause;
Constructive Termination.
(i) A
Constructive Termination shall not take effect unless the provisions of this
paragraph are complied with. The Company shall be given written notice by the
Executive of the intention to terminate his employment on account of a
Constructive Termination, such notice (A) to state in detail the particular act
or acts or failure or failures to act that constitute the grounds on which the
proposed Constructive Termination is based and (B) to be given within six months
of the Executive learning of such act or acts or failure or failures to act. The
Company shall have 30 days after the date that such written notice has been
given to the Company in which to cure such conduct, to the extent such cure is
possible.
(ii) In the
event the Executive's employment is terminated (1) by the Company without Cause
(other than due to Disability or death), (2) by reason of a Constructive
Termination or (3) upon expiration of the Term of Employment following the
Company's having given a notice of non-extension of the Term of Employment, the
Executive shall be entitled to:
(A) Base
Salary through the date of termination of the Executive's
employment;
(B) Base
Salary, at the monthly rate in effect on the date of termination of the
Executive's employment (or in the event a reduction in Base Salary is the basis
for a Constructive Termination, then the Base Salary in effect immediately prior
to such reduction), payable for a period equal to the longer of (i) the 24-month
period following such termination and (ii) the number of months remaining in the
Term of Employment following such termination (the "Severance
Period);
(C) an amount
equal to a prorated annual incentive award for the year in which such
termination occurs, based on the actual performance for such year, the amount of
which prorated bonus, if any, shall be determined and paid promptly following
the end of the year to which such bonus relates;
(D) an amount
equal to two (2) times the highest bonus paid to the Executive during the
previous three (3) years shall be paid by the Company in equal installments for
a period of twenty-four (24) months in accordance with its customary payroll
practices;
(E) the
balance of any annual or long-term cash incentive awards earned (but not yet
paid) pursuant to the terms of the applicable programs;
(F) any
amounts earned, accrued or owing to the Executive but not yet paid under this
Agreement;
(G) all
equity granted to the Executive shall become fully vested and the restrictions
thereon shall lapse; and
(H) other or
additional benefits in accordance with applicable plans and programs of the
Company or its affiliates.
Notwithstanding
the preceding provisions of Section 9(d), because the Executive is a “specified
employee” as defined under Section 409A of the Internal Revenue Code, the above
severance payments payable during the Severance Period as a result of a
termination of employment under this Section 9(d) shall be limited to the
limitation on compensation set forth in Section 401(a)(17) of the Internal
Revenue Code (i.e.,
$225,000 for 2007). Any severance payments payable to the Executive
above in excess of said amount shall be deferred for six months as required
under Section 409A(a)(2)(B) of the Internal Revenue Code.
(e) Change in
Control. Should there occur a Change in Control, then the
following provisions shall become applicable:
(i) During
the period following a Change in Control that Executive shall continue to remain
employed, then the terms and provisions of this Agreement shall continue in full
force and effect, and all equity granted to the Executive shall become fully
vested and the restrictions thereon shall lapse ; or
(ii) In the
event of a termination of the Executive's employment by the Company or its
successor other than for Cause within twenty-four (24) months after a Change in
Control or the Executive voluntarily terminates his employment for Constructive
Termination within twenty-four (24) months after a Change in Control, the
Company shall pay to Executive in one lump sum an amount on or before the fifth
business day following the effective date of Executive's termination equal
to:
(A) Base
Salary through the date of termination of the Executive's
employment;
(B) an amount
equal to the greater of (i) two (2) times the Executive’s Base Salary and (ii)
the Base Salary that would have been payable during the Employment Term had a
there been no termination;
(C) an amount
equal to a prorated annual incentive award for the year in which such
termination occurs, based on the actual performance for such year;
(D) an amount
equal to two (2) times the highest bonus paid to the Executive during the
previous three (3) years;
(E) the
balance of any annual or long-term cash incentive awards earned (but not yet
paid) pursuant to the terms of the applicable programs;
(F) any
amounts earned, accrued or owing to the Executive but not yet paid under this
Agreement;
(G) all
equity granted to the Executive shall become fully vested and the restrictions
thereon shall lapse; and
(H) other or
additional benefits in accordance with applicable plans and programs of the
Company or its affiliates.
(f) Voluntary
Termination. In the event of a termination of employment by
the Executive on his own initiative, other than a termination due to death or
Disability or a Constructive Termination, the Executive shall have the same
entitlements as provided above for a termination for Cause. A voluntary
termination under this Section shall be effective upon 30 days' prior written
notice to the Company and shall not be deemed a breach of this
Agreement.
(g) No Mitigation; No
Offset. In the event of any termination of employment under
this Section, the Executive shall not be obligated to seek other employment.
There shall be no offset against amounts due the Executive under this Agreement
on account of any remuneration attributable to any subsequent employment that he
may obtain. Other than in the event of termination under Section 9(c), amounts
owed to the Executive under this Agreement shall not be offset by any claims the
Company may have against the Executive, and 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 other circumstances,
including, without limitation, any counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others.
(h) Nature of
Payments. Any amounts due under this Section are in the nature
of severance payments considered to be reasonable by the Company. Failure to
qualify for any such payment is not in the nature of a penalty.
10. Indemnification.
(a) The
Company agrees that if the Executive is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
is or was a director or employee of the Company or any of its affiliates or is
or was serving at the request of the Company as a director, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether or not the
basis of such Proceeding is the Executive's alleged action in an official
capacity while serving as a director, employee or agent, as long as the
Executive has acted in good faith, the Executive shall be indemnified and held
harmless by the Company to the fullest extent legally permitted or authorized by
the Company's certificate of incorporation or bylaws or resolutions of the Board
or, if greater, by the laws of the State of Texas against all cost, expense,
liability and loss (including, without limitation, attorney's fees, judgments,
fines, ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by the Executive in connection
therewith, and such indemnification shall continue as to the Executive even if
he has ceased to be a director, employee or agent of the Company or other entity
and shall inure to the benefit of the Executive's heirs, executors and
administrators. The Company shall advance to the Executive all reasonable costs
and expenses incurred by him in connection with a Proceeding within 20 days
after receipt by the Company of a written request for such advance. Such request
shall include an undertaking by the Executive to repay the amount of such
advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
(b) The
Company agrees to continue and/or maintain a directors and officers' liability
insurance policy covering the Executive to the same extent the Company provides
such coverage for its other executive officers and directors and for not less
than the amounts in effect for its other executive officers and
directors.
11. Enforcement
Costs. It is the intent of the parties that the Executive not
be required to incur the legal fees and expenses associated with the protection
or enforcement of his rights under this Agreement by litigation or other legal
action because such costs would substantially detract from the benefits intended
to be extended to the Executive hereunder, nor be bound to negotiate any
settlement of his rights hereunder under threat of incurring such
costs. Accordingly, if at any time after the Effective Date, it
should appear to the Executive that the Company or successors is or has acted
contrary to or is failing or has failed to comply with any of their obligations
under this Agreement for the reason that it regards this Agreement to be void or
unenforceable or for any other reason, or that the Company, or successors has
purported to terminate his employment for Cause or is in the course of doing so
in either case contrary to this Agreement, or in the event that the Company, or
successors or any other person takes any action to declare this Agreement void
or unenforceable, or institutes any litigation or other legal action designed to
deny, diminish or to recover from the Executive the benefits provided or
intended to be provided to him hereunder, and the Executive has acted in good
faith to perform his obligations under this Agreement, the Company, or
successors irrevocably authorizes the Executive from time to time to retain
counsel of his choice at the expense of the Company, or successors to represent
him in connection with the protection and enforcement of his rights hereunder,
including without limitation representation in connection with termination of
his employment contrary to this Agreement or with the initiation or defense of
any litigation or other legal action, whether by or against the Executive or the
Company, or successor or any director, officer, stockholder or other person
affiliated with the Company, or successor, in any jurisdiction. As long as the
Executive’s claim is not found by a court of competent jurisdiction to be
groundless and without merit, the reasonable fees and expenses of counsel
selected from time to time by the Executive as hereinabove provided shall be
paid or reimbursed to the Executive by the Company, or successor on a regular,
periodic basis upon presentation by the Executive of a statement or statements
prepared by such counsel in accordance with its customary
practices.
12. Assignability; Binding
Nature. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective successors, heirs (in the case of
the Executive) and assigns. No rights or obligations of the Company under this
Agreement may be assigned or transferred by the Company except that such rights
or obligations may be assigned or transferred pursuant to a merger or
consolidation in which the Company is not the continuing entity, or the sale or
liquidation of all or substantially all of the assets of the Company, provided
that the assignee or transferee is the successor to all or substantially all of
the assets of the Company and such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law. The Company further
agrees that, in the event of a sale or reorganization transaction as described
in the preceding sentence, it shall take whatever action it legally can in order
to cause such assignee or transferee to expressly assume the liabilities,
obligations and duties of the Company hereunder. No rights or obligations of the
Executive under this Agreement may be assigned or transferred by the Executive
other than his rights to compensation and benefits, which may be transferred
only by will or operation of law, except as otherwise provided
herein.
13. Miscellaneous
Provisions.
(a) This
Agreement contains the final and entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes all prior
representations, agreements, discussions, negotiations and undertakings, whether
written or oral, between the Parties with respect thereto; provided, however,
that this Agreement shall not supersede any separate written commitments by the
Company with respect to indemnification.
(b) No
provision in this Agreement may be amended unless such amendment is authorized
by the Board or the Committee and agreed to in writing and signed by the
Executive and an authorized officer of the Company. No waiver by either Party of
any breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be.
(c) In the
event that any provision or portion of this Agreement shall be determined to be
invalid or unenforceable for any reason, in whole or in part, the remaining
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by law.
(d) The
respective rights and obligations of the Parties hereunder shall survive any
termination of the Executive's employment to the extent necessary to the
intended preservation of such rights and obligations.
(e) The
Executive shall be entitled, to the extent permitted under any applicable law,
to select and change a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following the Executive's death by giving the
Company written notice thereof. In the event of the Executive's death or a
judicial determination of his incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.
(f) All
amounts required to be paid by the Company shall be subject to reduction in
order to comply with applicable Federal, state and local tax withholding
requirements, except as otherwise provided herein.
(g) The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of any
provision of this Agreement.
(h) This
Agreement may be executed in two or more counterparts.
14. Governing
Law/Jurisdiction. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of Texas without reference
to principles of conflict of laws. The Company and the Executive
hereby consent to the jurisdiction of any or all of the following courts for
purposes of resolving any dispute under this Agreement: (i) the United States
District Court of San Antonio, Texas or (ii) the State of Texas Courts of Bexar
County, Texas. The Company and the Executive further agree that any service of
process or notice requirements in any such proceeding shall be satisfied
if the rules of such court relating thereto have been substantially
satisfied. The Company and the Executive hereby waive, to the fullest extent
permitted by applicable law, any objection which it or the Executive may now or
hereafter have to such jurisdiction and any defense of inconvenient
forum.
15. Notices. Any
notice given to a Party shall be in writing and shall be deemed to have been
given when delivered personally or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Party concerned at the
address indicated below or to such changed address as such Party may
subsequently give such notice of:
If to the
Company:
Corporate
Secretary
00000 Xxx
Xxxxx Xxxxxx
Xxxxx
000
Xxx
Xxxxxxx, Xxxxx 00000
If to the
Executive:
_________________
_________________
16. Additional
Payments. If any payment or benefit received or to be received
by the Executive (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company or any affiliate) (all such
payments and benefits, excluding the Gross-Up Payment (as hereinafter defined),
being hereinafter called "Total Payments") will be subject (in whole or part) to
any excise tax (the "Excise Tax") imposed under section 4999 of the Internal
Revenue Code of 1986, as amended, then the Company shall pay to the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state and local income and employment taxes and Excise Tax upon the
Gross-Up Payment, shall be equal to the Total Payments.
17. Confidential
Information; Nonsolicitation.
(a) Confidential
Information. Except as may be required or appropriate in connection with
carrying out the duties under this Agreement, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law
or any legal process, or as is necessary in connection with any adversarial
proceeding against the Company (in which case the Executive shall cooperate with
the Company in obtaining a protective order at the Company's expense against
disclosure by a court of competent jurisdiction), communicate, to anyone other
than the Company and those designated by the Company or on behalf of the Company
in the furtherance of its business or to perform her duties hereunder, any trade
secrets, confidential information, knowledge or data relating to the Company and
its businesses and investments, obtained by the Executive during the Executive's
employment by the Company that is not generally available public knowledge
(other than by acts by the Executive in violation of this
Agreement).
(b) Non-solicitation.
During the Employment Period, and for 12 months after the Executive's Date of
Termination if the Executive's employment is terminated by the Company for Cause
or the Executive terminates employment based on Constructive Termination, the
Executive will not, directly or indirectly, solicit for employment by other than
the Company any person (other than any personal secretary or assistant hired to
work directly for the Executive) employed by the Company or its affiliated
companies, nor will the Executive, directly or indirectly, solicit for
employment by other than the Company any person known by the Executive (after
reasonable inquiry) to be employed at the time by the Company or its affiliated
companies.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first set forth above.
By:
Its:
EXECUTIVE
