CARRIAGE SERVICES, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between CARRIAGE SERVICES, INC., a Delaware
corporation (hereinafter called the "Company"), and XXXXXX X. XXXXXXXXX
(hereinafter called the "Executive"), a resident of Spring, Texas,
W I T N E S S E T H:
That for and in consideration of TEN and NO/100 DOLLARS ($10.00) and
other good and valuable consideration the receipt and sufficiency of which are
hereby confessed and acknowledged by the Executive, the Company does hereby
agree to employ the Executive, and the Executive hereby agrees to be an employee
of the Company, under the following terms and conditions, to-wit:
1. DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
meanings specified in Paragraph 1:
A. "Company" means Carriage Services, Inc.
B. "Affiliate" means any corporation, general or limited
partnership, limited liability company or joint venture that (i) is
owned by or (ii) owns the Company. For the purposes of this definition,
ownership, directly or indirectly, of 50% or more of the capital stock
having the right to vote for directors of a corporation, or 50% or more
of the equity interest of a general or limited partnership, joint
venture or other business entity, shall constitute ownership thereof.
C. "Confidential Information" means trade secrets and business
information of the Company or any Affiliate which is not generally known
by others, including, by way of illustration and not limitation, 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 contracts within
the customer's organization or within the organization of acquisition
prospects, or marketing and merchandising techniques, prospective names
and marks, whether or not such information has been reduced to
documentary form.
D. "Conflicting Product or Service" means any product or service
which competes with or is designed to compete with a product or service
sold by the Company or any Affiliate, about which Executive has acquired
or acquires Confidential Information.
E. "Conflicting Organization" means any person, firm,
association or corporation which is engaged in or is about to become
engaged in development,
production, marketing or selling of, a Conflicting Product or Service in
a market or territory in which the Company or any Affiliate offers or
intends to offer products or services that would compete with the
Conflicting Product or Service.
F. "Cause" shall mean that the Executive has
(a) failed to cure, after reasonable notice of not less
than thirty (30) days, a material breach of any of the terms of
this Agreement;
(b) been convicted of a felony involving moral turpitude,
fraud, theft, embezzlement, assault, battery, rape or other
violent act or another crime;
(c) engaged in willful misconduct in the performance of
the duties and services required of the Executive pursuant to
this Agreement that has a material adverse effect on the Company;
provided, however, no act or failure to act shall be deemed
"willful" if due primarily to an error in judgment or negligence
or if made in good faith and with reasonable belief that such act
is in the best interest of the Company;
(d) committed any act that constitutes a material or
repeated failure to perform his duties in a manner consistent
with his position of employment; or
(e) been excessively absent from his employment not
related to illness.
G. "Board of Directors" means the board of directors of the
Company.
H. "Monthly Severance Payment" with respect to the Executive
shall be equal the quotient resulting from dividing (a) the aggregate
sum of all salary paid to, and incentive bonuses earned by, the
Executive pursuant to this Agreement and prior employment with the
Company during the three year period ended December 31 of the year prior
to the date of termination of the Executive's employment by (b) 36.
I. "Expiration Date" shall be December 31, 2001.
2. TERM AND TERMINATION
A. Subject to the termination provisions herein contained, the
employment of Executive by the Company pursuant to this Agreement shall commence
on the 13th day of December, 1996, and continue thereafter until terminated in
accordance with this paragraph 2 or, if not earlier so terminated, until the
Expiration Date (the "Employment Term").
B. If the Executive dies during the term of the Agreement and while in
the employ of the Company, this Agreement shall automatically terminate and the
Company shall have no further obligation to the Executive or his estate except
that the Company shall pay to the
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Executive's estate (i) on the next regular payroll payment date the unpaid
salary through the date of death, and (ii) on or before April 15 of the next
succeeding year a proportionate part of the incentive bonus as provided in
paragraph 3A hereof as is in the same ratio to the full bonus as the number of
days in the year until the date of death is to 365.
C. If, during the term of this Agreement, the Executive, by reason of a
disability, (I.E., a physical or mental impairment), cannot perform each of the
essential functions of his position, with reasonable accommodation, for a period
of one hundred eighty consecutive days, the Company, on thirty days prior
written notice to the Executive, may terminate this Agreement as of the date
specified in the notice. In the event of a termination pursuant to this
paragraph 2C, the Company shall be relieved of all of its obligations under this
Agreement, except that the Company shall pay to the Executive, or his estate in
the event of his subsequent death: (i) that portion of the Executive's salary
through the 30th day after notice of termination and (ii) on or before April 15
of the next succeeding year, the Company shall pay to the Executive a
proportionate part of the incentive bonus as provided in paragraph 3A hereof as
is in the same ratio to the full bonus as the number of days in the year until
the date of termination is to 365.
D. At any time prior to the Expiration Date of this Agreement the
Company may terminate this Agreement for Cause (as herein defined) without
further obligation or liability hereunder to the Executive, his spouse, estate,
heirs or assignees except for the obligation of the Company to pay to the
Executive his salary earned through the date of discharge.
E. The Executive may give written notice of voluntary termination of
employment at any time, and upon giving of the notice, the employment shall
terminate on the earlier of the date set forth in the notice or 30 days after
the notice is received by the Company ("Voluntary Termination Date"). Upon the
Voluntary Termination Date, the Company shall have no further obligation or
liability hereunder to the Executive, his spouse, heirs or estate, except to pay
to the Executive any unpaid salary earned through the Voluntary Termination Date
(subject to the terms of any other employee benefit plan of the Company in which
the Executive participates).
F. The Company may terminate the employment of the Executive at any time
WITHOUT CAUSE upon written notice to the Executive of such termination, which
notice shall set forth the date of termination ("Without Cause Termination
Date"). Upon the Without Cause Termination Date, the Company shall have no
further obligation or liability hereunder to the Executive or his spouse, heirs
or estate, except that (i) after the Without Cause Termination Date and
continuing monthly until the later of the Expiration Date or two years after the
termination date, or if earlier the last day of the month following the date of
death of the Executive, the Company shall pay to the Executive each month, in
accordance with the Company's payroll policies then in effect, an amount equal
to the Monthly Severance Payment, (ii) on or before April 15 of the next
succeeding year following the Without Cause Termination Date the Company shall
pay to the Executive a proportionate part of the incentive bonus as provided in
paragraph 3A hereof as is in the same ratio to the full bonus as the number of
days in the calendar year up to the Without Cause Termination Date is to 365 and
(iii) after the Without Cause Termination Date and continuing monthly during the
period the Executive is receiving the
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Monthly Severance Payments specified in subparagraph F(i) above, Executive and
his family shall be entitled to participate in any welfare benefit plans,
programs, or policies in which Executive and his family were participating at
the time of his termination of employment for group and/or executive life,
accident, health, dental, or medical/hospital insurance (whether funded by
actual insurance or self insured by the Company); provided, however, that the
rights of the Executive and his family thereunder shall be governed by the terms
thereof and shall not be enlarged hereunder.
G. Any termination of the employment relationship, whether termination
is effected by the Company or the Executive, shall be without prejudice to or
waiver of the obligations of the Executive to maintain in secrecy and confidence
all Confidential Information, pursuant to paragraph 5 hereof, and not to render
prohibited services to any Conflicting Organization, pursuant to paragraph 6
hereof.
3. EMPLOYMENT AND SALARY
A. During the Employment Term, the Company shall employ the Executive
and the Executive shall serve in the employ of the Company at a continuing
salary of One Hundred Seventy-Five Thousand Dollars ($175,000.00) per year,
subject to increases as provided below (the "Annual Base Salary"), payable in
accordance with the Company's payroll policies applicable to executives as
established by the Company from time to time. The Board of Directors shall
review and in its sole discretion may increase Executive's Annual Base Salary
annually commencing for 1998. Once established at a specified increased rate,
the Annual Base Salary shall not thereafter be reduced.
B. During the Employment Term, the Executive shall also be entitled to
be paid an incentive bonus in an amount, if any, as shall be determined by the
Board of Directors in its sole discretion. The incentive bonus, if any, shall be
paid prior to the close of business on April 15 of each year. Except for
termination by reason of death or disability or termination WITHOUT CAUSE, the
incentive bonus shall not be earned in whole or in part, until the close of
business on December 31 of each year ("Bonus Entitlement Date") and shall be
paid annually prior of the close of business on April 15 following the Bonus
Entitlement Date. Termination for Cause pursuant to paragraph 2D or voluntary
termination pursuant to paragraph 2E shall terminate the right of the Executive
to receive any incentive bonus under this Section 3A that has not yet been
earned; provided that any termination of employment after the incentive bonus
has been earned, but prior to its payment, shall not terminate the Executive's
right to receive such incentive bonus.
C. The Executive shall receive such further benefits as may be accorded
other executives under the established plans and programs of the Company to the
extent the executive is eligible for participation therein based on the
eligibility criteria applicable to other Executives, all as determined by the
Company from time to time in its sole discretion.
D. The Executive shall be entitled to receive reimbursement for, or seek
payment directly by the Company of, all reasonable expenses incurred by the
Executive in the performance
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of his duties under this Agreement. The Executive shall use his best efforts to
obtain approval prior to incurring any expenses. Unreasonable expenses or
expenses out of the ordinary course of business not approved in advance shall
not be reimbursed by the Company. Neither shall the Company be obligated to
reimburse expenses if reimbursement is not sought on a timely basis.
4. DUTIES
The Executive shall serve the Company in an executive capacity and shall
report to, and be subject to the general direction and control of the Chief
Executive Officer of the Company. The Executive shall perform such duties and
responsibilities and in such capacities as may be established by the Board of
Directors and the Chief Executive Officer from time to time. The Executive shall
perform his duties and discharge his obligations well and faithfully and to the
utmost of his ability, and shall use his best efforts to promote the success,
reputation and good will of the Company and its Affiliates. The Executive also
agrees to perform, without additional compensation, such services for any
Affiliate as the Board of Directors may designate; provided that the Executive's
performance of duties and services for any Affiliate shall not unreasonably be
added to the time required for performance of his assigned duties and services
for the Company. The Company agrees that it will assign to the Executive only
those duties and responsibilities of the type, nature and dignity normally
assigned to an executive employee of his position in an enterprise of the size,
stature and nature of the Company. The Executive agrees to devote his full
business time, attention, skill and effort exclusively to the performance of his
duties and responsibilities hereunder during the term of his employment and any
extension or renewal thereof. In addition, except for such personal and business
investment activities as are essentially passive in nature and do not involve
any breach of fiduciary duty or duty of loyalty to the Company or its
Affiliates, the Executive shall not, during the term of his employment
hereunder, engage in any other activity, whether or not such activity is
conducted or pursued for gain, profit or other pecuniary advantage, if it
conflicts or interferes with or adversely affects in any material respect the
performance or discharge of Executive's duties and responsibilities hereunder.
Without the prior written consent of the Company the Executive shall not, during
the term of his employment hereunder, serve as a principal, partner, employee,
officer, consultant, advisor or director of any other business concern
conducting business for profit except for such personal and business investment
activities as are essentially passive in nature.
The Executive acknowledges that the Executive is employed in an
executive and administrative position that is not subject to overtime pay under
the federal wage and hour law.
5. COVENANT OF SECRECY
The Executive agrees that, except as required by his duties to the
Company, he will not:
A. disclose or use for himself or others Confidential Information
during or after his employment with the Company, except as required by
law (provided that the Executive shall first advise the Company of any
proposed disclosure to afford the Company the opportunity to take any
protective measures); or
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B. except as is necessary in the performance of his duties, take
any documents or physical objects constituting or containing
Confidential Information from facilities of the Company or its
Affiliates, without first obtaining written authorization from the
Company. The Executive agrees to return to the Company all documents or
other physical objects constituting or containing Confidential
Information and all reproductions thereof upon request, and in any event
immediately upon termination by either party for any reason of his
employment with the Company.
6. RESTRICTIVE COVENANT
A. In consideration for the agreement to employ the Executive and to
provide Monthly Severance Payments under the conditions described in paragraph
2F, in consideration of the options granted to the Executive under the Incentive
Stock Option Agreement of even date herewith, and the other valuable
consideration provided to the Executive hereunder: (1) during the term hereof,
the Executive shall not: (i) either directly or indirectly, for himself or any
third party, divert or attempt to divert any existing business of the Company,
or (ii) either directly or indirectly, for himself or any third party, cause or
induce any present or future employee of the Company to accept employment with
another employer; or (2) during the two-year period commencing upon the
termination of the Executive's employment hereunder by either party for any
reason and during the period the Executive is to receive the Monthly Severance
Payments the Executive shall not, within 50 miles of any facility owned or
operated by the Company or any Affiliate, render advice or service to, or
otherwise assist a Conflicting Organization. The Company and Executive expressly
agree that in the event that Executive is entitled to receive Monthly Severance
Payments pursuant to xxxxxxxxx 0X, Xxxxxxxxx in his sole discretion may
irrevocably elect to forego such payments and thereafter shall not be prevented
from rendering advice or service to, or otherwise assist a Conflicting
Organization following Executive's termination of employment; provided, however,
Executive shall not be relieved his obligations contained in paragraph 5.
B. Both parties recognize that the services to be rendered under this
Agreement by the Executive are special, unique, and of extraordinary character,
and that in the event of the breach by the Executive of the terms and conditions
of the covenants contained in paragraphs 5 and/or 6, the Company shall be
entitled, if it so elects, to suspend (if applicable) salary payments, Monthly
Severance Payments and bonus payments and/or to institute and prosecute
proceedings in any court of competent jurisdiction to enforce through injunctive
relief such covenants. The Executive acknowledges and agrees that there is no
adequate remedy at law for his violation of such covenants and that in light of
the numerous years and the scope of his Executive-level responsibilities with
the Company, the restrictions as to time, geographic scope and scope of
activities restrained in paragraph 6A and 6C are both reasonable and necessary
to protect the goodwill and other legitimate business interests of the Company.
Indeed, the Executive acknowledges that the term of his employment hereunder,
the post employment Monthly Severance Payments and bonus payments and the amount
of salary and bonus provided by the Company hereunder are in significant part
provided by the Company to secure the Executive's agreement to such covenants.
The Executive agrees to waive and hereby waives any requirement
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for the Company to secure any bond in connection with the obtaining of such
injunction or other equitable relief.
C. Both parties recognize that the covenants set forth in paragraph 6
constitute a restraint on the future employment opportunities of the Executive
and as such are enforceable only to the extent necessary to protect and preserve
to the Company its valuable goodwill and other legitimate business interests
including but not limited to Confidential Information ("Protectable Interests"),
as they now exist and may be developed and expanded prior to the termination of
the Executive's employment hereunder. The Company and the Executive recognize
that the business of the Company and its Protectable Interests are not
restricted to a single market or geographic area but extend to many different
markets and geographic areas and that the duties and the Executive-level
activities of the Executive are applicable to all such markets and geographic
areas. The Company and the Executive have entered into this Agreement with the
expectation that as the business of the Company and the duties and activities of
the Executive expand, the Executive may acquire relationships and Confidential
Information that will constitute a part of the evolving Protectable Interests of
the Company. It is the parties' mutual intent that the covenants contained in
paragraph 6 be limited to only those time, geographic and activity restrictions
that are necessary to protect the Protectable Interests of the Company.
D. During the period that Executive may not render advice or service to,
or otherwise assist a Conflicting Organization, Executive shall refrain from
making any statement, except for an isolated idle comment made in a non-business
contact, which has the effect of demeaning the name or business reputation of
the Company or any Affiliate, or which materially adversely affects the best
interests (economic or otherwise) of the Company or any Affiliate.
7. NOTICE
Any notice or communication to the parties to this contract shall be
deemed to have been sufficiently given for all purposes hereof if mailed by
United States Mail, postage prepaid, Return Receipt Requested, addressed as
follows, to-wit:
To the Executive: Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
To the Company: Carriage Services, Inc.
0000 Xxxx Xxx Xxxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Chief Executive Officer
or such other address as may be set forth in a notice given in accordance with
the provisions hereof.
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8. MISCELLANEOUS
A. This Agreement supersedes all prior agreements and understandings
between the Company and the Executive with respect to the subject matter hereof
and may not be changed or terminated except by an instrument in writing duly
authorized by the Board of Directors and executed by the Executive and the
President of the Company.
B. This Agreement shall be interpreted and construed in accordance with
the laws of the State of Texas or any other jurisdiction in which the Company
seeks to enforce paragraph 5 or 6 hereof. Should any portion of this Agreement
be adjudged or held to be invalid, unenforceable or void, such holdings shall
not have the effect of invalidating or voiding the remainder of this Agreement,
and the parties hereto agree that the portion so held invalid, unenforceable or
void shall, if possible, be deemed amended or reduced in scope, or to otherwise
be stricken from this Agreement to the extent required for the purposes of
validity and enforcement thereof.
C. This Agreement may not be assigned by the Executive. The Executive
and his spouse, heirs and estate shall not have any right to commute, encumber
or dispose of any right to receive payments hereunder, it being understood that
such payments and the right thereto are nonassignable and nontransferable.
Subject to the limitation in the immediate preceding sentence, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, the
Executive's spouse, heirs and estate, and the successors and assigns of the
Company. It is specifically agreed that in the event that the Company's business
or any part thereof should be sold in any fashion and this Agreement is assigned
to the purchaser, the purchaser shall be entitled to specifically enforce the
terms and provisions of this Agreement.
D. The Executive represents and warrants to the Company that (i) he has
fulfilled all of the terms and conditions of all prior employment agreements to
which he was or has been a party and that he is not violating and will not
violate any term or provision of any employment agreement or confidentiality
agreement to which he is or has been a party by entering into or performing his
obligations under this Agreement and (ii) he is not violating and will not
violate his fiduciary duty to any prior employer by entering into or performing
his obligations under this Agreement.
E. The waiver by the Company of the breach of any provision of this
Agreement by the Executive shall not operate or be construed as a waiver of any
subsequent or continuing breach of this Agreement by the Executive.
F. Except for disputes regarding the Executive's failure to comply with
paragraph 5 or 6 hereof, if a dispute arises out of or relates to this Agreement
or its breach, and if the dispute cannot be settled through direct discussions,
then the Company and the Executive agree first to endeavor to settle the dispute
in an amicable manner by mediation, under the applicable provisions of Section
154.002, ET SEQ., Texas Civil Practices and Remedies Code, as
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supplemented by the rules of the American Arbitration Association, before having
recourse to any other proceeding or forum.
G. This Agreement has been entered into by the parties in Xxxxxx County,
Texas where the parties agree venue will lie for any action brought to enforce
or interpret the provisions hereof.
H. This Agreement may be executed in multiple original counterparts each
of which shall be deemed an original, but all of which together shall constitute
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in Houston, Texas, effective for all purposes as of the 13th day of
December, 1996.
CARRIAGE SERVICES, INC.
By:_________________________________
XXXXXX X. XXXXX, Chairman and
Chief Executive Officer
EXECUTIVE:
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XXXXXX X. XXXXXXXXX
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