EXHIBIT 10.3
SECOND AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT OF XXXXX X. XXXXXX
This second amendment (the "Second Amendment") to the Amended and
Restated Employment Agreement of Xxxxx X. Xxxxxx is entered into effective
as of May 31, 1999, by and between Capital Senior Living Corporation (the
"Company") and Xxxxx X. Xxxxxx ("Employee").
WHEREAS, the Company and Employee entered into the Amended and Restated
Employment Agreement dated October 8, 1997, as amended on March 22, 1999
(the "Employment Agreement"), and
WHEREAS, the Company and Employee desire to amend the Employment
Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
of the parties hereto and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. The first and second sentence of Paragraph 4, shall be deleted and
the following shall be added:
CSL shall pay to Employee a base salary at an annual rate of not less
than Two Hundred and Fifty Thousand ($250,000.00) per annum, paid in
approximately equal installments no less frequently than semi-monthly.
An annual bonus of thirty-three and one-third percent (33-1/3%) of
Employee's base salary shall be paid in quarterly installments, subject
to increase by the Compensation Committee and subject to meeting
performance standards that the Company's reported quarterly earnings
per share is not less than the First Call consensus earnings per share
for that quarter. The Compensation Committee will use its reasonable
discretion to determine the amount of the quarterly bonus to be paid if
the reported quarterly earnings per share are lower than the First Call
consensus earnings per share.
2. The last sentence of Paragraph 5 shall be deleted and the following
added: "The number of shares and approximate vesting schedule of such
options shall be at least as favorable to Employee as those contained in
options granted to any other officer of the Company and its subsidiaries.
3. The phrase "annual minimum bonus" in Paragraph 6(C), "minimum annual
bonus" in Paragraph 7(A)(i), and "minimum base bonus" in Paragraph 7(B)(i)
shall be deleted and the following shall be added: "annual bonus paid
during the term of this Agreement in the past twelve (12) months."
4. In Paragraph 7(D)(i), the last word ", and" shall be deleted and be
replaced with a period. In addition, Paragraph 7(D)i(B) shall be amended
to form a new paragraph as follows:
a) The parenthetical "(i)(B)" shall be deleted and the new
parenthetical "(ii)" shall be added at the beginning of the paragraph.
b) The parenthetical "(D)(i)(B)" shall be deleted and the new
parenthetical "(D)(ii)" shall be added in the last sentence of the
paragraph.
c) The last sentence starting with "The Company shall..."
shall be deleted.
The remaining parentheticals "(ii) through (v)" shall be
deleted and the new parentheticals "(iii) through (vi)" shall be added. In
new paragraph 7(D)(iii), the parenthetical "7(D)i(B)" shall be deleted and
the new parenthetical "7(D)(ii)" shall be added.
In new Paragraph 7(D)(vi), the phrase ", family partnership or
other family entity" shall be added after the word "trust".
5. The phrase "Paragraphs 7, 8, 9, and 10" in the second sentence of
Paragraph 14 shall be deleted and the following shall be added,
"Paragraphs 7, 8, 9, 10, and 17".
6. A new paragraph 17 shall be added:
17. INDEMNIFICATION BY COMPANY. The Company shall and hereby
does indemnify Employee to the extent and in accordance with
the terms of Attachment I to this Agreement.
7. Except as expressly provided herein, all of the terms and provisions
of the Employment Agreement shall remain in full force and effect and
unchanged. All capitalized terms used herein which are not otherwise
defined herein shall have the meaning ascribed to such terms in the
Employment Agreement.
IN WITNESS WHEREOF, this Second Amendment has been duly executed on the
28th day of May, 1999.
COMPANY:
CAPITAL SENIOR LIVING CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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EMPLOYEE:
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
ATTACHMENT I
INDEMNITY
1. CAPITAL SENIOR LIVING CORPORATION (the "Corporation") will indemnify
XXXXX X. XXXXXX ("Indemnitee") in accordance with the following terms.
2. DEFINITIONS. As used in this Indemnity:
(a) The term "Proceeding" shall include any threatened,
pending or completed investigation, claim, action, suit or proceeding,
whether of a civil, criminal, administrative or investigative nature
(including without limitation any action, suit or proceeding by or in the
right of the Corporation or Other Entity to procure a judgment in its
favor), in which Indemnitee may be or may have been or may be threatened
to be made or to become involved in any manner (including without
limitation as a party or a witness) by reason of the fact that Indemnitee
has advised the Corporation (as an officer, director or consultant of the
Corporation) with respect to any matter, is alleged to have advised Other
Entities with respect to any matter in which the Corporation was involved
or related or by reason of anything actually or allegedly done or not done
by Indemnitee in any of such capacities, and whether such advice, action
or inaction occurred in the past or occurs after the date hereof. It is
expressly agreed that "Proceeding" shall include any claim, action, suit
or proceeding arising out of or related to the Corporation's business
relationships with and proposed mergers with ILM Senior Living, Inc. and
ILM II Senior Living, Inc., in connection with which the Corporation's
Board of Directors in considering this Agreement has determined
Indemnitee's actions and advice were in good faith and in the best
interests of the Corporation. It is also expressly agreed that
"Proceeding" shall include any claim, action, suit or proceeding arising
out of allegations that Indemnitee's affiliates have engaged in
transactions with the Corporation in which Indemnitee had a financial or
conflicting interest.
(b) The term "Expenses" includes, without limitation,
reasonable attorneys' fees and disbursements and all other reasonable
costs, expenses and obligations actually and reasonably incurred by
Indemnitee in connection with (i) investigating, defending, being a
witness in or otherwise participating in, or preparing to defend, be a
witness in or participate in, any Proceeding, or (ii) establishing a right
to indemnification under Paragraph 6 of this Indemnity, but shall not
include the amount of any judgments, fines or penalties entered or
assessed against Indemnitee or any amounts paid or payable in settlement
by Indemnitee.
(c) The term "Other Entity" includes, without limitation, any
subsidiary or affiliate of the Corporation and any entity with which
Indemnitee has served or is serving as an officer or director or otherwise
in the general interest of the Corporation's business. It is expressly
agreed that Indemnitee's (i) service with Capital Realty Group Senior
Housing, Inc., a Texas corporation, and with its subsidiaries and
partnerships in which it is a general partner, (ii) service with Capital
Senior Living Communities, LP, and its general partner, Retirement Living
Communities, L.P. and (iii) service with Tri-Point Communities, L.P. were
all undertaken by the Indemnitee for the benefit of the Corporation, and
all such entities and their affiliates are hereby agreed to be Other
Entities within the meaning of this definition.
3. SCOPE OF INDEMNIFICATION. Subject to Paragraph 7 of this Indemnity,
the Corporation shall indemnify Indemnitee in accordance with the
provisions of this Paragraph 3 if Indemnitee is or was or is threatened to
be made or to become involved in any manner, including without limitation
as a party or witness, in any Proceeding (including a Proceeding by or in
the right of the Corporation or Other Entity to procure a judgment in its
favor) against any and all Expenses and any and all judgments, fines and
penalties entered or assessed against Indemnitee, and any and all amounts
reasonably paid or payable in settlement by Indemnitee, in connection with
such Proceeding, but only if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the
Corporation's best interests and without gross negligence. THIS INDEMNITY
EXPRESSLY INDEMNIFIES INDEMNITEE AGAINST HIS OWN NEGLIGENCE. The
termination of any Proceeding by judgment, order of court, settlement or
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption for purposes of any provision of this
Indemnity that Indemnitee did not act in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the
Corporation's best interests, or with gross negligence.
4. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY; NO ADVERSE
PRESUMPTION. Notwithstanding any other provisions of this Indemnity, to
the extent that Indemnitee has been successful on the merits or otherwise,
in defense of any Proceeding or in defense of any claim, issue or matter
therein, including the dismissal of an action without prejudice,
Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.
5. ADVANCES OF EXPENSES. The Expenses incurred by Indemnitee pursuant
to Paragraph 3 in any Proceeding shall be paid by the Corporation in
advance, promptly upon the written request of the Indemnitee, if
Indemnitee shall undertake to repay such amount to the extent that it is
ultimately determined that Indemnitee is not entitled to indemnification.
No security for the performance of any such undertaking shall be required
and any such undertaking shall be accepted by the Corporation without
regard to the financial capacity of Indemnitee to perform his obligations
thereunder.
6. RIGHT OF INDEMNITEE TO INDEMNIFICATION UPON APPLICATION: PROCEDURE
UPON APPLICATION. Without limiting the obligation of the Corporation to
promptly make payments in respect of Expenses in accordance with Paragraph
5, any indemnification under Paragraph 3 shall be made no later than 45
days after receipt by the Corporation of the written request of
Indemnitee, unless a determination is made within said 45-day period by
(1) the Board of Directors of the Corporation by a majority vote of a
quorum consisting of Directors who are not and were not parties to the
relevant Proceeding, or (2) independent legal counsel in a written opinion
(which counsel shall be appointed if such a quorum is not obtainable) that
the Indemnitee has not met the relevant standards for indemnification set
forth in Paragraph 3.
The right to indemnification or advances as provided by this Indemnity
shall be enforceable by Indemnitee in any court of competent jurisdiction.
The burden of proving that indemnification is not appropriate shall be on
the Corporation. Indemnitee's Expenses reasonably incurred in connection
with successfully establishing his or her right to indemnification, in
whole or in part, in any such proceeding shall also be indemnified by the
Corporation.
7. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE; CONSTRUCTION. The
indemnification provided by this Indemnity shall not be deemed exclusive
of any other rights to which Indemnitee may be entitled under the General
Corporation Law of the State of Delaware, the Amended and Restated
Certificate of Incorporation and/or Bylaws of the Corporation, any other
indemnity, any vote of stockholders or disinterested Directors, or
otherwise, either as to action in his official capacity on, prior or after
the date hereof or as to action in any other capacity. The corporation
hereby agrees and acknowledges that it will continue to honor its
indemnification obligations to Indemnitee set forth in its Amended and
Restated Certificate of Incorporation and/or Bylaws with respect to any
existing or future lawsuit against the Corporation and any other actions
pursuant to which Indemnitee would be entitled to indemnification.
8. PARTIAL INDEMNIFICATION. In the event that Indemnitee is entitled
under any provision of this Indemnity to indemnification by the
Corporation for a portion but less than the entire amount of any Expenses,
judgments, fines, penalties and/or amounts paid or payable in settlement,
the Corporation shall fully indemnify Indemnitee in accordance with the
applicable provisions of this Indemnity for such portion of such Expenses,
judgments, fines, penalties and/or amounts paid in settlement.
9. SUBROGATION. In the event that the Corporation provides any
indemnification or makes any payment to Indemnitee in respect of any
matter in respect of which indemnification or the advancement of expenses
is provided for herein, the Corporation shall be subrogated to the extent
of such indemnification or other payment to all of the related rights of
recovery of Indemnitee against other persons or entities. Indemnitee shall
execute all papers reasonably required and shall do everything that may be
reasonably necessary to secure such rights and enable the Corporation
effectively to bring suit to enforce such rights (with all of Indemnitee's
reasonable costs and expenses, including attorneys' fees and
disbursements, to be reimbursed by or, at the option of Indemnitee,
advanced by the Corporation).
10. NO DUPLICATION OF PAYMENTS. The Corporation shall not be obligated
under this Indemnity to provide any indemnification or make any payment to
which Indemnitee is otherwise entitled hereunder to the extent, but only
to the extent, that such indemnification or payment hereunder would be
duplicative of any amount actually received by Indemnitee pursuant to any
insurance policy, the General Corporation Law of the State of Delaware,
the Amended and Restated Certificate of Incorporation and/or the Bylaws of
the Corporation or otherwise. With respect to the Corporation's indemnity
obligations concerning Other Entities, the Corporation shall have no
obligation hereunder until and unless Indemnitee has first sought all
available insurance coverage benefitting such Other Entities and indemnity
available from such Other Entities and such insurance coverage and
indemnity has been exhausted or has been denied.
11. SAVING CLAUSE. If any provision of this Indemnity or the
application of any provision hereof to any circumstance is held illegal,
invalid or otherwise unenforceable, the remainder of this Indemnity and
the application of such provision to any other circumstance shall not be
affected, and the provision so held to be illegal, invalid or otherwise
unenforceable shall be reformed to the extent (but only to the extent)
necessary to make it legal, valid and enforceable.
12. NOTICE. Indemnitee shall give to the Corporation notice in writing
as soon as practicable of any claim made against him or her for which
indemnification will or could be sought under this Indemnity, provided,
however, that any failure to give such notice to the Corporation will
relieve the Corporation from its obligations hereunder only if, and to the
extent that, such failure results in the forfeiture of substantial rights
and defenses. Notice to the Corporation shall be directed to the
Corporation (to the attention of the Chief Executive Officer, with a copy
to the General Counsel) at its principal executive office or such other
address as the Corporation shall designate in writing to Indemnitee.
Notice shall be deemed received when hand delivered or dispatched by
electronic facsimile transmission (with receipt thereof orally confirmed),
or three calendar days after having been mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
or one business day after having been sent for next-day delivery by a
nationally recognized overnight courier. In addition, Indemnitee shall
give the Corporation such information and cooperation as it may reasonably
require and shall be within Indemnitee's power. The Corporation shall give
prompt notice to Indemnitee of any potential claims against Indemnitee of
which the Corporation becomes aware.
13. APPLICABLE LAW. This Indemnity shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
14. SUCCESSORS. This Indemnity shall be binding upon the Corporation
and its successors, including without limitation any person acquiring
directly or indirectly all or substantially all of the business or assets
of the Corporation whether by purchase, merger, consolidation,
reorganization or otherwise (and such successor will thereafter be deemed
the "Corporation" for purposes of this Indemnity), but will not otherwise
be assignable, transferable or delegable by the Corporation. The
Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, reorganization or otherwise) to all or
substantially all of the business or assets of the Corporation, to assume
and agree in writing to perform this Indemnity, expressly for the benefit
of Indemnitee, in the same manner and to the same extent the Corporation
would be required to perform if no such succession had taken place.
Dated: May 28, 1999 CAPITAL SENIOR LIVING
CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
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Title: Vice President
