Exhibit 10.23
CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT
ThisConfidentiality and Non-SolicitationAgreement(the "Agreement")is made betweenHallmarkFinancial Services, Inc. (“Hallmark”), and______ (the "Employee") (collectively, the "Parties"). This Agreement is ancillary to and in consideration of the grant of Restricted Stock Units evidenced by the Restricted Stock Unit Award Agreement dated May 29, 2015 (“RSU Agreement”).
In considerationof (i) Employee's employmentby Hallmark Financial Services, Inc.,or by oneofitsaffiliates (collectively"Hallmark") in a capacityofhightrust andconfidence inwhich Employeemay developorreceive highlysensitive,restricted andproprietary information involvingConfidentialInformation(asdefined below), and inwhich Employeemayseek outand develop customerGoodwill (asdefined below) using the resources provided by Hallmarkas wellas Hallmark'sreputation, and(ii) the restricted stock units awarded under the RSU Agreement as permitted underthe Hallmark Financial Services, Inc. 2015 Long Term Incentive Plan,the receiptand sufficiency of which arehereby acknowledged, theEmployeeherebyagrees as follows:
1. Employment At Will.The Employee agrees thathe/she is an "at will"employeeof Hallmark andthat he/shemay terminate his/her employment atanytime. TheEmployeefurtheragrees thatHallmark maysimilarlyterminate theEmployee's employment at anytime.Thisagreement does not createa contractforemploymentfor anyspecifiedduration,either expresslyorby implication.
2. Non-disclosureofConfidentialInformation.Employee acknowledgesthat, inorder forhim/her to perform his/her duties properly,EmployeewillhaveaccesstoandHallmark must necessarily entrusthim/herwithcertain proprietaryand confidentialbusiness information(the"Confidential Information").The Employee agreesthat,during the termofhis/heremployment withHallmarkand at alltimes thereafter, regardlessofthe reasonforterminationofemployment,he/she willnot discloseany Hallmark ConfidentialInformation or use it inanyway,except withthe priorwrittenauthorization byor onbehalfof Hallmark,whether ornotsuch ConfidentialInformationisproduced bythe Employee's own efforts.
(a)ForpurposesofthisAgreement,"ConfidentialInformation" meansall originaland copiesof allmaterial,data,documents,and information inanyformat(including withoutlimitationallhardcopy,softcopy, electronic,web, and computer-basedinformation, documents,data files, records,videos,pictures,andrecordings)which constitutes confidentialand/ortradesecretinformation as further defined in thisAgreement and/or Texaslaw.Examples of ConfidentialInformation include, butarenot limitedto Hallmark’s:
| • | proprietary information, includingwithoutlimitationallbusiness methods, databases,software,including thesource code,object code and operationaland functional features and limitationsofthesoftware,andother computer technology; |
| • | business development plans andactivities, |
| • | informationconcerningpending and prospective mergers,acquisitions, or other types oftransactions; |
| • | the prices,terms andconditions of contracts or agreements withits currentandprospectivecustomers,distributors,vendors,suppliers,or any other type ofbusinessrelationship; |
| • | cost andpricing of policiesanddata,includingwithoutlimitationthe costs of Hallmark'sbusinessand allresultsofits businessoperations; |
| • | businessandmarketing plans,manualsand strategies; |
| • | financialinformation,includingbut not limited to resultsfrom operations,results relatingtovariousprograms,profit/lossandrevenue figures,transactiondataand account information; |
| • | facility anddatasecurity-related information,includingwithoutlimitationdooraccesscodes, computer access codes,securitysystemPINs,computersystem useridentification information,passwordsandremoteaccess codes; |
| • | personnel information, including but not limited to, performance reviews,compensation information, personal information,ranking, skills and competencies; |
| • | informationacquiredbyor onbehalfof Hallmark about Hallmark's current customers,distributors,vendors,suppliers, andproducers; |
| • | intellectual property;provided, however, thatConfidential Informationdoes not include material, data,documents,and/or otherinformationthat Hallmarkhasvoluntarilyplaced in the public domain;that has been lawfullyandindependentlydeveloped andpubliclydisclosedtothird parties; thatconstitutes generalknowledgeand skills gainedbyEmployeeduring the periodofhisorheremployment with Hallmark;orthatotherwise enters thepublicdomainthrough lawful means. |
(b) Employee furtheracknowledgesthat the developmentor acquisition of such ConfidentialInformation is theresult of great effort and expensebyHallmark, thattheConfidentialInformation iscriticaltothesurvivalandsuccessof Hallmark, andthat theunauthorizeddisclosure oruseoftheConfidentialInformationwouldcause Hallmarkirreparable harm.
(c) Forthe avoidance of doubt,no provision in thisAgreementprohibitsorrestrictsEmployee, or Employee's attorneyactingon behalf of Employee,from initiatingcommunicationsdirectlywith,responding toanyinquiryfrom,orproviding testimony before,the United States Securities andExchangeCommission, any other federal or state authority, or self-regulatory organization,ifsuchcommunicationisrequiredby orprotected underapplicablelawor regulation,including the Dodd-FrankWall Street Reform and Consumer Protection Act or the Sarbanes-Oxley Act.
3. ProhibitedPost-employment Solicitation:
(a) Inorder toprotectHallmark's Goodwill (asdefined below),ConfidentialInformation,and Hallmark's otherlegitimate business interests,Employee agreesthat he/she shallnot, without the prior approval of the Company,directlyorindirectly,for aperiodoftwelve(12)monthsfromthe terminationof Employee's employment for any reason:
| · | initiate,receive,or otherwise engage in contact,directlyorindirectly,with any individual or entitythat isa currentinsuredof Hallmark (and where applicable,limited toa specificlayer)that the Employeedirectlyserviced or otherwise had contact with onbehalfofHallmark during the twelve (12) month period prior to the date of Employee’s termination. |
(b) Employee agreesthat he/she shallnot,directlyorindirectly,for aperiodoftwenty-four(24)monthsfromthe terminationof Employee's employment for any reason, in any manner or form entice,solicitorinduce,or attemptto entice,solicitor induce, any employee, consultant, or independent contractor of Hallmarkemployed or engaged by Hallmark during the twenty- four (24) month period prior to the date of Employee’s termination, to terminate his/her/its relationship with Hallmarkfor any reason whatsoever, without the prior approval of the company. Employee agrees not to directly or indirectly on behalf of or for the benefit of a third party solicit for employment, offer employment to, engage the services of or knowingly interfere with the employment of any officers, directors, or employees of Hallmark or its subsidiaries or affiliates. However, nothing contained in this paragraph shall prohibit a terminated employee from utilizing services performed by a vendor or consultant merely because such vendor or consultant also provides services to Hallmark or its subsidiaries or affiliates or prohibit the hiring of any Hallmark employee who responds to a general advertisement/employment solicitation made by the terminated employee or his/her then current employer addressed to the public at large and not expressly or impliedly directed to employees of Hallmark, its subsidiaries or affiliates.
(c) Prohibited solicitationunder thisAgreementincludes but is not limited to:
| • | solicitations via personal devices, such as cellphonesand computers; |
| • | solicitations via anysocial media,including,butnotlimitedto, Linkedln,Facebook,and Twitter. |
(d) Thetwelve (12) and twenty-four (24) monthrestrictiveperiodsshall betolled for the period oftime thatEmployee hadalreadybeenengagingin the prohibitedconductdescribedherein after termination of employment. ThePartiesintend that Hallmarkshallbeentitled to a full restrictive period of post-employment conductthat doesnot breachthis Agreement.
(e) "Goodwill"means the resultof Hallmark'sefforts, the efforts of Hallmark and asupplier,customer, producer,or any other type ofbusinessrelationship, and/ortheEmployee's efforts onbehalfof Hallmark and/or a current orprospectivecustomer, distributor,vendor,supplier,producer,oranyother type ofbusinessrelationship,to developand enhance Hallmark's reputationin theindustry,its business relationships,and other relatedbusinesscontacts.Becauseof the competitivenatureof Hallmark'sbusinessand Hallmark's repeattransactionswithmanycustomers,distributors,vendors, suppliers, etc.,the partiesagreethatHallmark'sGoodwilliscritical to ensuringHallmark's survival and success and such Goodwillconstitutesa valuableasset belonging toHallmark, regardless of whether such assetwas produced by the Employee'sowneffortsortheefforts of other employees ofHallmark.
4. Specific Performance.Employee acknowledgesthatabreachofthisAgreement will causeirreparable injury to Hallmark, thatHallmark'sremediesatlawwillbe inadequate incase of any suchbreachorthreatened breach,andthat Hallmarkwillbeentitledto preliminary injunctive relief andotherinjunctive reliefincaseof any suchbreachorthreatenedbreach.
5. Waivers.Thewaiver byHallmark ortheEmployee of any action,rightorcondition in thisAgreement,orofany breachofa provisionofthisAgreement,shall notconstitute a waiver of any other occurrences ofthesame event.
6. Survival,BindingEffect.The provisions of this Agreement shall survive the termination of the Employee’s employment relationship with Hallmark and/or the assignment of this Agreement by Hallmark to any successor in interest or other assignee, provided however, that in the event that Employee’s employment is terminated by Hallmark without cause, Section 3.Prohibited Post-employment Solicitation, shall not survive.
7. Without CauseTermination of Employment by Hallmark:In the event of Employee’s termination from employment by Hallmark without cause Employee will be offered a Severance Agreement and General Release containing terms and conditions under which Employee would be eligible to receive a severance package, with a minimum severance payment of six months of base salary.
8. Assignabilityby Hallmark. ThisAgreementisassignablebyHallmark andinures to the benefitof Hallmark,itssubsidiaries,affiliatedcorporations,successors and assignees.ThisAgreement, being personal, is notassignableby theEmployee.
9. Severability.The covenants ofthis Agreementare intendedto beseparable,andtheexpressionsused there inareintended to refer to divisible entities.Accordingly,the invalidityof alloranypartof any section ofthis Agreementshallnot render invalid the remainderof this Agreement or of such section.If, in any judicial proceeding,anyprovisionofthisAgreementisfoundto besobroadasto be unenforceable, itisherebyagreedthatsuch provision shallbe interpreted tobe only sobroadasto be enforceable.
10. Governing Law.This Agreement shallbegovernedbyandinterpreted inaccordance with thelawsof the State ofTexasgoverning a contractmadeand whollyperformedwithintheState of Texas.
11. ConsentTo Jurisdiction.The parties will consent to and will submit to the exclusive jurisdiction of the federal and state courts sitting in Fort Worth, Tarrant County, Texas for all purposes relating to the validity, interpretation or enforcement of this Agreement, including, without limitation, any application for injunctive relief.
12. CovenantNot ToSueOutside Of Texas.Employeeherebyagreesthat he/she willneithercommence orprosecute, norassistin any way another personorentity tocommence orprosecute,anylegal actionor otherproceeding (including but not limited toadeclaratory judgmentaction) againstHallmark concerningadisputearising from or relatingto thisAgreementinanyforumorjurisdictionotherthan thestateand federalcourtsin the Stateof Texas. Employeefurtheragreesthat,in theeventhe/shedisregards thisclause,Hallmark shallbeentitledto recover itsreasonableattorneys'feesand other costsincurred instaying,transferring, dismissingor otherwisedefendingsuch out-of-stateactionorproceeding, regardlessofwhethersuch fees and costs areincurred in theforum where Employee commenced theactionorinaTexasforum, and withoutregardto whether Hallmarkprevails in itseffortstoenforcethiscovenant.
13. EntireAgreement, Amendments.ThisAgreementconstitutestheentireunderstandingofthe partieswithrespecttoitssubjectmatter,supersedes anyprior communicationorunderstandingwithrespect thereto,andno modification orwaiver of any provisionhereofshallbevalidunless made inwriting and signedbyall ofthe parties hereto.
14. Return of Hallmark Propertyand ConfidentialInformation Upon Termination ofEmployment.TheEmployee agrees,upon terminationofhis/heremployment for any reason, todeliverthe followingtoHallmarkpromptly andwithout waiting for arequest fromHallmark: allfiles,books,documents,computerdisksortapes,computers,phones,PDAs,keys, securitypasses,credit cards,andany otherproperty prepared byoron behalfof Hallmark or otherwiseprovidedorpaidfor by Hallmark;allConfidentialInformation inEmployee'spossession,and any copiesthereof.TheEmployee further agrees to refrainfrommaking,retaining or distributing copies of any such property or ConfidentialInformation.TotheextentthatEmployeehasanydata belonging to Hallmarkon any storagemediaowned orotherwise used byEmployee (for example, apersonalcomputer'shard diskdrive,portabledatastoragedevice, etc.),Employeeagrees that immediately upontermination toprovideHallmark with a copy ofthe dataand thenpermanently purgesuch computer (or other storagemedia)ofthe data.Employee agreesto providewritten or otherpositiveconfirmation of theremovalor return of suchdata fromanypersonalstoragemedia upon Hallmark’s written request for such confirmation.
15. This Agreementmay beexecutedin multiplecounterparts,eachof whichshall be treatedas an original.
The parties have duly executed this Confidentiality and Non-Solicitation Agreement effective as of the __________day of ________2015.
| Employee: | | Hallmark Financial Services, Inc. |
| | | | | |
| By: | | | By: | |
