1
EXHIBIT 10.10
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made
and entered into on the 7th day of May, 1997, by and between Capital Senior
Living Corporation, a Delaware corporation ("CSL" or "the Company"), and Xxxxx
X. Xxxxxx, an individual residing in the State of Texas ("Employee").
1. EMPLOYMENT COMMENCEMENT; APPOINTMENT, TITLE AND DUTIES.
A) This Agreement shall commence upon the date on which
the Company, or a Designated Affiliate of the Company
(hereinafter defined) which controls the Company or
into which the Company merges, consolidates or
otherwise combines, has consummated a public offering
of its common stock ("Employment Commencement Date").
This Agreement shall terminate in the event the
Employment Commencement Date does not occur on or
before June 30, 1998.
B) CSL hereby employs Employee to serve in the positions
of Chief Operating Officer and as Co- Chairman of its
Board of Directors and a member of the Executive
Committee of the Board. In such capacity, Employee
shall report to the Board of Directors of CSL and
shall have such powers, duties and responsibilities
as are customarily assigned to the Chief Operating
Officer and Co-Chairman. In addition Employee shall
have such other duties and responsibilities as may
reasonably be assigned to him by the Company's Board
of Directors, including serving with the consent or
at the request of CSL on the board of directors of
affiliated corporations.
2. TERM OF AGREEMENT. The initial term of this Agreement shall be
for a four (4) year period commencing on the Employment Commencement Date;
however, the term of this Agreement shall automatically be extended on each
anniversary of the Employment Commencement Date so that there are three (3)
years remaining on the term of the Agreement. Except as set forth in Paragraph
14, this Agreement shall terminate upon the earlier of: (i) the date of the
voluntary resignation of Employee, (ii) the date of Employee's death or
determination of Employee's disability (as defined in Xxxxxxxxx 0 xxxxx), (xxx)
the date of notice by CSL to Employee that this Agreement is being terminated
by CSL whether "for cause" (as defined in Paragraph 6 below) or without cause,
or (iv) upon the date a notice of intent to resign for "good reason" (as
defined in Paragraph 6 below) is delivered to the Company by Employee.
3. ACCEPTANCE OF POSITION. Employee hereby accepts the positions
assigned by the Board of Directors, and agrees that during the term of this
Agreement he will perform his duties in a reasonable amount of time. Employee
agrees to perform his duties faithfully, diligently and to the best of his
ability, to use his best efforts to advance the best interests of the Company
at all times.
-1-
2
4. SALARY AND BENEFITS. During the term of this Agreement:
A) CSL shall pay to Employee a base salary at an annual
rate of not less than $175,000.00 per annum, paid
in approximately equal installments no less
frequently than semi-monthly. Employee shall be
eligible for an annual bonus, if available, as
determined by the Compensation Committee of the
Company (or the Company's Board of Directors if no
Compensation Committee has been established),
starting with the Employment Commencement Date.
Employee shall receive a performance and compensation
review on or about each anniversary of the Employment
Commencement Date. The Company shall deduct from
Employee's compensation and bonus all applicable
local, state, Federal or foreign taxes, including,
but not limited to, income tax, withholding tax,
social security tax and pension contributions (if
any).
B) Employee shall participate in all health, retirement,
Company-paid insurance, sick leave, disability,
expense reimbursement and other benefit programs, if
any, which CSL makes available, in its sole
discretion, to its senior executives; however,
nothing herein shall be construed to obligate the
Company to establish or maintain any employee benefit
program. The Company may purchase and maintain in
force a death and disability insurance policy in an
amount at all times equal to not less than an amount
equal to Employee's annual base salary multiplied by
three (3). The Company shall be the beneficiary of
said policy and shall use said policy for the
purposes described in Paragraph 7(A)(i), below.
Reimbursement of Employee's reasonable and necessary
business expenses incurred in the pursuit of the
business of the Company or any of its affiliates
shall be made to Employee upon his presentation to
the Company of itemized bills, vouchers or
accountings prepared in conformance with applicable
regulations of the Internal Revenue Service and the
policies and guidelines of the Company.
C) Employee shall be entitled to a minimum vacation time
in an amount of eight (8) weeks per year.
D) The Company agrees to provide Employee with a car
allowance of $300.00 per month, which shall be paid
when Employee's base salary is paid, gasoline credit
cards, and a long distance telephone credit card.
The Company also agrees to promptly reimburse
Employee for the cost of obtaining a mobile phone and
the monthly charges from the use of such mobile phone
upon Employee's submission of reasonably satisfactory
documentation of those costs and expenses to the
Company.
-2-
3
5. STOCK OPTIONS. If the Company adopts a stock option plan or other
incentive compensation plan, Employee shall receive options to purchase Company
Common Stock. The number of shares of Common Stock of the Company covered by
options to be granted to Employee and the exercise price of the options shall
be determined by the Compensation Committee, if it exists, and in the absence
of a Compensation Committee, by the Board of Directors. The number of shares,
exercise price and other terms of such options shall be at least as favorable
to Employee as those contained in options granted to the Company's chief
executive officer or any other officer of the Company and its subsidiaries.
6. CERTAIN TERMS DEFINED. For purposes of this Agreement:
A) Employee shall be deemed to be disabled if a physical
or mental condition shall occur and persist which, in
the written opinion of two (2) licensed physicians,
has rendered Employee unable to perform the duties of
Chief Operating Officer, Co-Chairman and member of
the Board of Directors of CSL for a period of ninety
(90) consecutive calendar days or more, and which
condition, in the opinion of such physicians, is
likely to continue for an indefinite period of time,
rendering Employee unable to return to his duties for
CSL. One (1) of the two (2) physicians shall be
selected in good faith by the Board of Directors of
CSL, and the other of the two (2) physicians shall be
selected in good faith by Employee. In the event
that the two (2) physicians selected do not agree as
to whether Employee is disabled, as described above,
then said two (2) physicians shall mutually agree
upon a third (3rd) physician whose written opinion as
to Employee's condition shall be conclusive upon CSL
and Employee for purposes of this Agreement.
B) A termination of Employee's employment by CSL shall
be deemed to be "for cause" if it is based upon (i) a
final, nonappealable conviction of Employee for
commission of a felony involving moral turpitude,
(ii) Employee's willful gross misconduct that causes
material economic harm to the Company or that brings
substantial discredit to the Company's reputation, or
(iii) Employee's material failure or refusal to
perform his duties in accordance with this Agreement,
if Employee has failed to cure such failure or
refusal to perform within thirty (30) days after the
Company notifies Employee in writing of such failure
or refusal to perform.
C) A resignation by Employee shall not be deemed to be
voluntary, and shall be deemed to be a resignation
for "good reason" if it is based upon (i) a material
diminution or change in Employee's duties, base
salary or annual minimum bonus which is not part of
an overall diminution or change for all executive
officers of the Company, or (ii) a material breach by
CSL of the Company's obligations to Employee under
this Agreement or under
-3-
4
the Company's stock option or incentive compensation
plan, if adopted, or (iii) a relocation of the
company's principal executive offices to any county
other than Dallas County or any county contiguous
thereto.
D) "Designated Affiliate of the Company" shall mean
Capital Senior Living Corporation, Capital Senior
Development, Inc., Capital Senior Management 1, Inc.,
Capital Senior Management 2, Inc. or other
affiliated entities formed to provide similar
services, such as Capital Senior Management 3, Inc.,
and Quality Home Health Care, Inc.
E) "Registration Event" shall mean the Company or any
Designated Affiliate of the Company has terminated
Employee other than "for cause," as described above,
or Employee's resignation for good reason. The date
on which a Registration Event occurs shall be the
date of termination.
F) "Affiliate" with regard to Employee means a person
that is controlled by him. For purposes of this
definition, "Control" when used with respect to any
person means the power to direct the management and
policies of such person, whether through the
ownership of voting securities, by contract or
otherwise.
7. CERTAIN BENEFITS AND OBLIGATIONS UPON TERMINATION.
A) In the event that Employee's employment terminates
(i) because of death or disability, (ii) because CSL
has terminated Employee other than "for cause," as
described above, or (iii) because Employee has
voluntarily resigned for "good reason," as described
above, then,
i) CSL shall pay Employee in accordance with its
Corporate Policies and Procedures Manual his
base salary plus his minimum annual bonus for
the balance of the term of this Agreement,
but not less than two (2) years (base salary
plus minimum annual bonus for three (3) years
if termination due to a Fundamental Change)
from the date of the notice of termination,
and Employee shall retain all his Company
stock options that are vested; provided,
however, the benefits described in this
Paragraph 7(A)(i) shall terminate at such
time as Employee materially breaches the
provisions of Paragraphs 8 or 9 hereof;
ii) A Fundamental Change shall be defined as any
of the following: (A) a merger,
consolidation, statutory share exchange or
sale, lease, exchange or other transfer (in
one transaction or a series of related
transactions) of all or substantially all of
the assets of the Company that requires the
consent or vote of the holders of the
-4-
5
Company's Common Stock, other than a
consolidation, merger or share exchange of
the Company in which the holders of the
Company's Common Stock immediately prior to
such transaction have the same proportionate
ownership of Common Stock of the surviving
corporation immediately after such
transaction; (B) the stockholders of the
Company approve any plan or proposal for the
liquidation or dissolution of the Company;
(C) the cessation of control (by virtue of
their not constituting a majority of
directors) of the Board of Directors of the
Company by the individuals (the "Continuing
Directors") who (x) at the date of this
Agreement were directors or (y) become
directors after the date of this Agreement
and whose election or nomination for election
by the Company's stockholders was approved by
a vote of at least two-thirds of the
directors then in office who were directors
at the date of this Agreement or whose
election or nomination for election was
previously so approved; (D) the acquisition
of beneficial ownership (within the meaning
of Rule 13d- 3 under the Securities Exchange
Act of 1934) of an aggregate of 20% or more
of the voting power of the Company's
outstanding voting securities by any person
or group (as such term is used in Rule 13d-5
under the Securities Exchange Act of 1934)
who beneficially owned less than 15% of the
voting power of the Company's outstanding
voting securities on the date of this
Agreement, or the acquisition of beneficial
ownership of an additional 5% of the voting
power of the Company's outstanding voting
securities by any person or group who
beneficially owned at least 15% of the voting
power of the Company's outstanding voting
securities on the date of this Agreement;
provided, however, that notwithstanding the
foregoing, an acquisition shall not
constitute a Fundamental Change hereunder if
the acquiror is (x) a trustee or other
fiduciary holding securities under an
employee benefit plan of the Company and
acting in such capacity, (y) a wholly-owned
subsidiary of the Company or a corporation
owned, directly or indirectly, by the
stockholders of the Company in the same
proportions as their ownership of voting
securities of the Company or (z) any other
person whose acquisition of shares of voting
securities is approved in advance by a
majority of the Continuing Directors; or (E)
in a Title 11 bankruptcy proceeding, the
appointment of a trustee or the conversion of
a case involving the Company to a case under
Chapter 7.
iii) All accrued but unpaid or unused vacation,
sick pay and expense reimbursement shall be
calculated in accordance with CSL's Corporate
Policies and Procedures Manual and shall be
promptly paid to Employee upon such
termination.
-5-
6
B) In the event that Employee's employment terminates
for any other cause other than those set forth in
Paragraph 7(A), then,
i) CSL shall promptly pay Employee his base
salary and prorated minimum base bonus, up to
and through the date of termination; and
ii) All accrued but unpaid or unused vacation,
sick pay and expense reimbursement shall be
calculated in accordance with CSL's Corporate
Policies and Procedures Manual and promptly
paid to Employee.
C) In the event that Employee's employment terminates by
reason of his death, all benefits provided in this
Paragraph 7 shall be paid to Employee's estate or as
his executor or personal representative shall direct,
but payment may be deferred until Employee's executor
or personal representative has been appointed and
qualified pursuant to the law in effect in Employee's
jurisdiction of residence at the time of his death;
D) Registration Right.
i) Upon and following the occurrence of a
Registration Event, Employee shall have the
right, but not the obligation, to:
(A) Upon the written request of the
Employee delivered to the Company,
the Company will cause up to 100% of
the shares of Common Stock
beneficially owned by Employee
(directly or indirectly) as of the
date of such termination, plus all
shares of Common Stock that Employee
may acquire after his termination
pursuant to the exercise of stock
options held by Employee
(collectively, the "Registrable
Securities") to be included in a
registration statement under the
Securities Act of 1933, as amended
("Securities Act"). The Company
will not be required to file more
than two (2) registration statements
under this Paragraph D(i)(A) and
shall not be required to file more
than one registration statement
under this paragraph D(i)(A) during
each 12 month period after the date
of the Registration Event; and
(B) If the Company at any time proposes
to register any of its securities
under the Securities Act for sale to
the public, whether for its own
account or for the account of other
security holders or both (except
with respect to registration
statements on Forms S-4 or S-8 or
another form not
-6-
7
available for registering the
Registrable Securities for sale to
the public), each such time it will
give written notice to Employee of
its intention so to do. Upon the
written request of Employee,
received by the Company within 30
days after the giving of any such
notice by the Company, the Company
will cause the Registrable
Securities as to which registration
shall have been so requested to be
included in the securities to be
covered by the registration
statement proposed to be filed by
the Company, all to the extent
requisite to permit the sale or
other disposition by Employee (in
accordance with its written request)
of such Registrable Securities so
registered; provided, however, that
if the managing underwriter of the
Company's offering delivers in good
faith a written opinion to Employee
that either because of (A) the kind
of securities which the Employee or
the Company intends to include in
the offering or (B) the size of the
offering which Employee or the
Company intend to make, the success
of the offering or the market for
the Company's common stock would be
materially and adversely affected by
the inclusion of the Registrable
Securities requested to be included
(I) in the event that the size of
the offering is the basis for the
managing underwriter's opinion, the
amount of the securities to be
offered for the account of the
Employee and each other person
registering securities of the
Company pursuant to similar
incidental registration rights shall
be reduced pro rata to the extent
necessary to reduce the total amount
of securities to be included in such
offering to the amount reasonably
recommended by such managing
underwriter; and (II) in the event
that the combination of securities
to be offered is the basis of such
managing underwriter's opinion, 1)
the Registrable Securities and other
securities to be included in such
offering shall be reduced as
described in clause (I) above or, 2)
if the actions described in clause
(I) would, in the reasonable
judgment of the managing
underwriter, be insufficient to
substantially eliminate the material
and adverse effect that inclusion of
the Registrable Securities requested
to be included would have on such
offering, such Registrable
Securities will be excluded from
such offering. Notwithstanding the
foregoing provisions, the Company
may withdraw any registration
statement referred to in this
Paragraph D(i)(B) without thereby
incurring any liability to
-7-
8
Employee. The Company shall not be
required to register shares of
Registrable Securities of Employee
after the Company has filed two (2)
registration statements which
included Registrable Securities and
such registration statements have
become effective, remained effective
for the period of distribution, and
the transaction described therein
were closed.
(ii) If and whenever the Company is required by
Paragraph 7D(i)(A) to effect a demand
registration or Paragraph 7D(i)(B) to effect
a piggy back registration, the Company shall
as expeditiously as possible:
(a) prepare and file with the Securities
and Exchange Commission
("Commission") a registration
statement (which, in the case of an
underwritten public offering shall
be on Form S-1, Form X-0, Xxxx X-0,
any successor forms thereto, or
other form of general applicability
satisfactory to the managing
underwriter selected as therein
provided) with respect to such
securities and use its best efforts
to cause such registration statement
to become and remain effective for
the period of the distribution
contemplated thereby ( as determined
hereinafter ); provided, however
that the Company may postpone the
filing, effectiveness, supplementing
or amending of the registration
statement for up to 90 days if, in
the good faith opinion of the
Company's Board of Directors, the
registration or sale of Registrable
Securities would adversely affect a
material financing, acquisition,
disposition of assets or stock,
merger or other comparable
transaction or would require the
Company to make public disclosure of
information the public disclosure of
which would have a material adverse
effect upon the Company. During any
time that the Company defers
amending or supplementing the
registration statement, the holders
of Registrable Securities shall
discontinue disposing of Registrable
Securities;
(b) subject to the proviso in
subparagraph (a), prepare and file
with the Commission such amendments
and supplements to such registration
statement and the prospectus used in
connection therewith as may be
necessary to keep such registration
statement effective for the period
of distribution and comply with the
provisions of the Securities Act
with respect to the disposition of
all Registrable Securities
-8-
9
covered by such registration
statement in accordance with the
intended method of disposition set
forth in such registration statement
for such period;
(c) furnish to Employee and to each
underwriter such number of copies of
the registration statement and the
prospectus included therein
(including each preliminary
prospectus) as such persons
reasonably may request in order to
facilitate the public sale or other
disposition of the Registrable
Securities covered by such
registration statement;
(d) use its best efforts to register or
qualify the Registrable Securities
covered by such registration
statement under the securities or
"blue sky" laws of such
jurisdictions as the Employee or, in
the case of an underwritten public
offering, the managing underwriter
reasonably shall request, provided
however, that the Company shall not
for any such purpose be required to
qualify generally to transact
business as a foreign corporation in
any jurisdiction where it is not so
qualified or to consent to general
service of process in any such
jurisdiction;
(e) use its best efforts to list or
qualify for quotation the
Registrable Securities covered by
such registration statement with any
securities exchange or inter-dealer
quotation system on which the common
stock of the Company is then listed
or quoted;
(f) notify Employee at any time when a
prospectus relating to Registrable
Securities is required to be
delivered under the Securities Act
or the happening of any event as a
result of which the prospectus
included in such registration
statement contains an untrue
statement of a material fact or
omits any fact necessary to make the
statements therein not misleading,
and, at the request of Employee, the
Company will prepare a supplement or
amendment to such prospectus so
that, as thereafter delivered to the
purchasers of such Registrable
Securities, such prospectus will not
contain an untrue statement of a
material fact or omit to state any
fact necessary to make the
statements therein not misleading,
provided that the 180-day period
described below will be tolled from
the time a prospectus contains such
a statement or omission until a
prospectus correcting such statement
or
-9-
10
omission has been delivered to the
Employee and may be delivered to the
purchasers of such Registrable
Securities in compliance with the
Securities Act.
(g) notify the Employee immediately, and
confirm the notice in writing, (1)
when the registration statement
becomes effective, (2) of the
issuance by the Commission of any
stop order or of the initiation, or
the threatening, of any proceedings
for that purpose, (3) of the receipt
by the Company of any notification
with respect to the suspension of
qualification of the Registrable
Securities for sale in any
jurisdiction or of the initiation,
or the threatening, of any
proceedings for that purpose, and
(4) of the receipt of any comments,
or requests for additional
information, from the Commission or
any state regulatory authority. If
the Commission or any state
regulatory authority shall enter
such a stop order or order
suspending qualification at any
time, the Company will promptly use
its best reasonable efforts to
obtain the lifting of such order;
and
(h) otherwise use its best efforts to
comply with-all applicable rules and
regulations of the Commission, and
make available to its security
holders as soon as reasonably
practicable, but not later than 15
months after the effective date of
the registration statement, a
statement covering a period of at
least 12 months beginning after the
effective date of the registration
statement, which earnings statement
shall satisfy the provisions of
Section 11(a) of the Securities Act.
For purposes hereof, the period of distribution of Registrable
Securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable Securities in
any other registration shall be deemed to extend until the earlier of the sale
of all Registrable Securities covered thereby or 180 days after the effective
date thereof.
In connection with each registration hereunder, Employee will furnish
to the Company in writing such information with respect to it as a stockholder
as reasonably shall be necessary in order to assure compliance with federal and
applicable state securities laws.
In connection with each registration pursuant to Paragraph 7(D) hereof
covering an underwritten public offering, the Company and Employee agree to use
their best efforts to select a managing underwriter (and any co- managers) and
to enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an arrangement between such
underwriter and companies of the Company's size and investment stature.
-10-
11
(iii) All expenses incurred by the Company in
complying with Paragraph 7(D) hereof,
including, without limitation, all
registration and filing fees, printing
expenses, fees and disbursements of counsel
and independent public accountants for the
Company, fees and expenses (including counsel
fees) incurred in connection with complying
with state securities or "blue sky" laws,
fees of the National Association of
Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs
of insurance, and fees and disbursements of
one counsel for the Employee but excluding
any Selling Expenses, are called
"Registration Expenses." All underwriting
discounts and selling commissions applicable
to the sale of Registrable Securities are
called "Selling Expenses."
(a) The Company shall pay all
Registration Expenses attributable
to the shares of Registrable
Securities included in the
registration in connection with each
registration statement under
Paragraph 7(D) hereof.
(b) All Selling Expenses in connection
with each registration statement
under Paragraph 7(D) hereof shall be
borne by the Employee and any other
selling stockholder in proportion to
the number of shares sold by each
stockholder, or by such other
selling stockholders.
(iv) Subject to applicable law, the Company will
indemnify each underwriter, the Employee and
each person controlling any of them, against
all claims, losses, damages and liabilities,
including legal and other expenses reasonably
incurred, arising out of any untrue statement
of a material fact contained in the
registration statement, or any omission to
state a material fact required to be stated
in the registration statement or necessary to
make the statements not misleading, or
arising out of any violation by the Company
of the Securities Act, any state securities
or "blue-sky" laws or any applicable rule or
regulation. This indemnification will not
apply to any claims, losses, damages or
liabilities to the extent that they may have
been caused by an untrue statement or
omission based upon information furnished in
writing to the Company by such underwriter,
the Employee or controlling person,
respectively, expressly for use in the
registration statement. With respect to such
untrue statement or omission in the
information furnished in writing to the
Company by the Employee, the Employee will
indemnify the underwriters, the Company, its
directors and officers, and each person
controlling
-11-
12
any of them against any losses, claims,
damages, expenses or liabilities to which any
of them may become subject as a result of
such untrue statement or omission.
(v) The registration rights of the Employee under
this Agreement may be transferred to any
trust formed by Employee to hold shares of
common stock and to any member of the family
of the Employee.
E) In the event of any merger, consolidation or share
exchange pursuant to which the Company is not the
surviving or resulting corporation, the Company's
obligations under this Paragraph 7 shall be assumed
by such surviving or resulting corporation.
F) The Employee shall not be required to mitigate the
amount of any payment provided for in this Paragraph
7 by seeking other employment or otherwise.
8. CONFIDENTIALITY. Employee hereby acknowledges his understanding
that as a result of his employment by CSL, he will have access to, and
possession of, valuable and important confidential or proprietary data,
documents and information concerning CSL, its operations and its future plans.
Employee hereby agrees that he will not, either during the term of his
employment with CSL, or at any time after the term of his employment with CSL,
divulge or communicate to any person or entity, or direct any employee or agent
of CSL or of his to divulge or communicate to any person or entity, or use to
the detriment of CSL or for the benefit of any other person or entity, or make
or remove any copies of, such confidential information or proprietary data or
information, whether or not marked or otherwise identified as confidential or
secret. Upon any termination of this Agreement for any reason whatsoever,
Employee shall surrender to CSL any and all materials, including but not
limited to drawings, manuals, reports, documents, lists, photographs, maps,
surveys, plans, specifications, accountings and any and all other materials
relating to the Company or any of its business, including all copies thereof,
that Employee has in his possession, whether or not such material was created
or compiled by Employee, but excluding, however, personal memorabilia belonging
to Employee and notes taken by him as a member of the Board of Directors. With
the exception of such excluded items, materials, etc., Employee acknowledges
that all such material is solely the property of CSL, and that Employee has no
right, title or interest in or to such materials. Notwithstanding anything to
the contrary set forth in this Paragraph 8, the provisions of this Paragraph 8
shall not apply to information which: (i) is or becomes generally available to
the public other than as a result of disclosure by Employee, or (ii) is already
known to Employee as of the date of this Agreement from sources other than CSL,
or (iii) is required to be disclosed by law or by regulatory or judicial
process.
9. NON-COMPETITION; NON-SOLICITATION. Employee hereby agrees that
during the term of his employment with the Company and for a period of one (1)
year after any termination for any reason whatsoever of this Agreement, he will
not and will cause his Affiliates not to, directly or indirectly, acquire,
develop or operate senior living facilities anywhere in the United
-12-
13
States, other than through the Company and its subsidiaries except as otherwise
requested by the Company. CSL hereby acknowledges and agrees that (i)
Employee's ownership of a class of securities listed on a stock exchange or
traded on the over-the-counter market that represents five percent (5%) or less
of the number of shares of such class of securities then issued and
outstanding, and (ii) Employee's services to Tri Point Communities, L.P. and
Tri Point Development, Inc. to own and develop senior living facilities for the
benefit of the Company shall not constitute a violation of this Paragraph 9.
Following the termination for any reason of Employee's employment, Employee
shall not for himself or any third party, directly or indirectly employ,
solicit for employment, or recommend for employment any person employed by the
Company or its affiliated companies during the period of such person's
employment and for a period of two (2) years thereafter.
The parties hereto have carefully considered the necessity for
protection of the goodwill and business of the Company and the scope of such
protection. Employee acknowledges that the restrictions, prohibitions and
other provisions of this Section 9 are reasonable, fair and equitable in scope,
terms and duration, are necessary and essential to protect the legitimate
business interests and goodwill of the Company, are a material inducement to
the Company to enter into the transactions contemplated by this Agreement and
that adequate consideration has been and will be received by Employee for such
restrictions, prohibitions and other provisions.
10. WORK PRODUCT. The Employee agrees that all innovations,
improvements, developments, methods, designs, analyses, reports and all similar
or related information which relates to the Company's or any of its
subsidiaries' or affiliates' actual or anticipated business, or existing or
future products or services and which are conceived, developed or made by the
Employee while employed by the Company ("Work Product") belong to the Company
or such subsidiary or affiliate. The Employee will promptly disclose such Work
Product to the Board and perform all actions reasonably requested by the Board
(whether during or after the employment period) to establish and to confirm
such ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments).
11. LEGAL ACTION. In the event of a breach by Employee of the
provisions of Paragraphs 8, 9, or 10, Employee and the Company agree that the
Company, shall, in addition to any other available remedies, be entitled to an
injunction restraining Employee from violating the terms of the applicable
Paragraph and that said injunction is appropriate and proper relief for such
violation.
12. NOTICES. All notices and other communications provided to either
party hereto under this Agreement shall be in writing and delivered by hand
delivery, overnight courier service or certified mail, return receipt
requested, to the party being notified at said party's address set forth
adjacent to said party's signature on this Agreement, or at such other address
as may be designated by a party in a notice to the other party given in
accordance with this Agreement. Notices given by hand delivery or overnight
courier service shall be deemed received on the date of delivery shown on the
courier's delivery receipt or log. Notices given by certified mail shall be
deemed received three (3) days after deposit in the U.S. Mail.
-13-
14
13. CONSTRUCTION. In construing this Agreement, if any portion of
this Agreement shall be found to be invalid or unenforceable, the remaining
terms and provisions of this Agreement shall be given effect to the maximum
extent permitted without considering the void, invalid or unenforceable
provision. In construing this Agreement, the singular shall include the
plural, the masculine shall include the feminine and neuter genders, as
appropriate, and no meaning or effect shall be given to the captions of the
paragraphs in this Agreement, which are inserted for convenience of reference
only.
14. CHOICE OF LAW; SURVIVAL. This Agreement shall be governed and
construed in accordance with the internal laws of the State of Texas without
resort to choice of law principles. The provisions of Paragraphs 7, 8, 9, and
10 shall survive the termination of this Agreement for any reason whatsoever.
15. INTEGRATION; AMENDMENTS. This is an integrated Agreement. This
Agreement constitutes and is intended as a final expression and a complete and
exclusive statement of the understanding and agreement of the parties hereto
with respect to the subject matter of this Agreement. All negotiations,
discussions and writings between the parties hereto relating to the subject
matter of this Agreement are merged into this Agreement, and there are no
rights conferred, nor promises, agreements, conditions, undertakings,
warranties or representations, oral or written, expressed or implied, between
the undersigned parties as to such matters other than as specifically set forth
herein. No amendment or modification of or addendum to, this Agreement shall
be valid unless the same shall be in writing and signed by the parties hereto.
No waiver of any of the provisions of this Agreement shall be valid unless in
writing and signed by the party against whom it is sought to be enforced.
16. BINDING EFFECT. This Agreement is binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; PROVIDED, HOWEVER, that Employee shall
not be entitled to assign his interest in this Agreement (except for an
assignment by operation of law to his estate), or any portion hereof, or any
rights hereunder, to any party. Any attempted assignment by Employee in
violation of this Paragraph 16 shall be null, void, ab initio and of no effect
of any kind or nature whatsoever.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth above to be effective as of the date specified in the preamble
of this Agreement.
CAPITAL SENIOR LIVING
CORPORATION
a Delaware corporation
Address:
00000 Xxxxxx Xxxxxxx, #000
Xxxxxx, XX 00000 By:/s/ XXXXXXX X. XXXX
-------------------------
Its: CEO
------------------------
-14-
15
EMPLOYEE: XXXXX X. XXXXXX
Address:
7229 Xxxxx Dells /s/ XXXXX X. XXXXXX
Xxxxxx, XX 00000 ----------------------------
Xxxxx X. Xxxxxx
-15-
