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EXHIBIT 10.6
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") is entered into as
of the 18th day of January, 2000, among Service Corporation International, a
Texas corporation ("SCI"), SCI Executive Services, Inc., a Delaware corporation
("Executive Services"), and W. Blair Waltrip ("Employee").
SCI, Executive Services and Employee agree as follows:
1. Effective as of the date hereof, Executive Services hereby
terminates Employee's employment other than for cause and Employee hereby
resigns as Executive Vice President of SCI, as a member of the Directors Stock
Committee of the Board of Directors of SCI and as a member of the 1996
Nonqualified Incentive Plan Stock Option Committee of the Board of Directors of
SCI, as well as all other positions he holds with SCI, its subsidiaries and
affiliates (collectively, the "SCI Group"), including without limitation all
positions as officer, director or committee member; provided however,
notwithstanding the foregoing, Employee does not resign as a director of SCI or
as a member of the following committees of the SCI Board of Directors: the
Strategic Alliance Committee, the Executive Committee or the Investment
Committee.
2. The Employment Agreement dated January 1, 1999 between SCI,
Executive Services and Employee shall remain in effect except as modified
herein. Although Employee's employment is hereby terminated, the Employment
Period as defined in the Employment Agreement shall continue until December 31,
2002 subject to the provisions of the Employment Agreement. During the
Employment Period, Employee will continue to receive salary of $475,000 per
year pursuant to Section 3(a) of the Employment Agreement. In lieu of bonuses
under Section 3(b) of the Employment Agreement, Executive Services shall pay to
Employee within 10 days of the date hereof the sum of $2,102,471. Payments made
pursuant to this numbered paragraph 2 shall be made net of applicable
withholding taxes. Except as set forth in this Agreement, Employee shall not be
entitled to any compensation or benefits set forth in Section 3 of the
Employment Agreement.
3. Employee shall be eligible to participate in the employee benefit
plans of the Group and the other benefits that are listed on Schedule A to this
Agreement during the Employment Period. Employee shall not be eligible to
participate in any of the other employee benefit plans of the Group or receive
any of the other benefits to which he was entitled while employed as an
executive of the Group pursuant to the Employment Agreement, including without
limitation those listed on Schedule B to this Agreement.
4. Employee will be eligible to receive his Supplemental Executive
Retirement Plan for Senior Officers ("SERP") benefit payments commencing upon
his attaining the age of 55. Through the remainder of the Employment Period,
Executive Services will pay Employee in cash (i) the equivalent of the cash
contributions to the Cash Balance Plan which Employee would have received if he
had remained as an employee during such period and (ii) the present value of
the benefit Employee would have accrued under the SERP if he had remained as an
employee during such period.
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5. Provided Employee continues to provide reasonably satisfactory
collateral to SCI, Executive Services shall continue to reimburse Employee for
the interest payments on his Promissory Note dated August 19, 1993 payable to
SCI in the original principal amount of Six Hundred Thousand and No/100 Dollars
($600,000.00), bearing interest at 6-1/2% per annum and maturing on August 10,
2003. Such reimbursements shall be made in accordance with prior practice,
shall include a gross-up for federal income taxes payable in respect thereof
and are expected to approximate a total of $70,000 per year.
6. All SCI stock options held by Employee will be governed by the
terms thereof based upon termination of employment without cause.
7. Executive Services hereby notifies Employee that Executive Services
exercises its option to extend Employee's post-employment non-competition
obligations under Section 12(a) of the Employment Agreement and Executive
Service's corresponding obligation to make the Non-Competition Payments (as
defined in the Employment Agreement). Accordingly, Employee's post-employment
non-competition obligations and Executive Service's obligation to make such
Non-Competition Payments will commence January 1, 2003 and terminate December
31, 2005. Such Non-Competition Payments will total $475,000 per year and will
be payable on a monthly or bi-weekly basis.
8. In consideration of the payments to Employee referred to in
numbered paragraph 2 above, the receipt and sufficiency of which Employee
hereby acknowledges, Employee discharges and releases SCI, Executive Services,
all other members of SCI Group, their successors, assigns, divisions,
representatives, agents, officers, directors, stockholders, and employees, from
any claims, demands, and/or causes of action whatsoever, presently known or
unknown, that are based upon facts occurring on or prior to the date of
execution of this Agreement, including but not limited to, the following: (a)
any statutory claims under the Age Discrimination in Employment Act of 1967,
the Americans with Disabilities Act of 1990, the Family and Medical Leave Act
of 1993, the Civil Rights Acts of 1964 and 1991, the Employee Retirement Income
Security Act, Chapter 451 of the Texas Labor Code and/or the Texas Commission
on Human Rights Act, (b) any tort or contract claims, and/or (c) any claims,
matters or actions related to Employee's employment and/or affiliation with, or
separation from SCI Group; provided, however, that the release set forth in
this numbered paragraph 8 shall not affect any claims, demands and/or causes of
action that Employee may have for indemnity, contribution or otherwise against
any member of the SCI Group arising from or relating to the pending shareholder
litigation and any additional lawsuits that are filed after the date hereof
arising from or relating to essentially the same factual matters ("Excepted
Litigation").
9. Pursuant to Section 7 of Article IV of SCI's Bylaws, the right of
indemnification provided for therein shall "continue as to a person who has
ceased to be a director, officer, or representative and shall inure to the
benefit of the heirs, executors and administrators of such a person." SCI
confirms that, Employee's rights to indemnification under Article IV of SCI's
Bylaws in respect of the Excepted Litigation and any other event occurring
prior to the time of his resignation as an officer or director of SCI and its
subsidiaries and affiliated companies will not be affected.
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10. Additionally, SCI and Executive Services discharge and release
Employee and his heirs, executors and administrators from any claims, demands,
and/or causes of action whatsoever, presently known or unknown, that are based
upon facts occurring on or prior to the date of execution of this Agreement,
including, but not limited to, any claim, matter or action related to
Employee's employment and/or affiliation with, or separation from SCI Group;
provided, however, that the release set forth in this numbered paragraph 10
shall not affect any claims, demands and/or causes of action that any member of
the SCI Group may have against Employee arising from or relating to the
Excepted Litigation or his position or actions as a director of SCI.
11. Employee agrees that he shall engage in no act which is intended,
or may be reasonably expected, to harm the reputation, business, prospects, or
operations of any members of SCI Group, their officers, directors, stockholders
or employees. Employee will not reveal to any third party any difference of
opinion that may exist at any time between Employee and any member of
management of SCI, Executive Services, or any other members of SCI Group.
12. The parties agree that they shall not disclose, or cause to be
disclosed, the terms of this Agreement, or the fact that this Agreement exists,
except to their respective attorneys, accountants and/or advisors, or to the
extent otherwise required by law. The parties further agree that this numbered
paragraph 12 is not applicable to discussions of this Agreement in the ordinary
course of business among representatives, agents, officers, directors,
stockholders and employees of any members of SCI Group.
13. The execution, validity, interpretation and performance of this
Agreement shall be determined and governed exclusively by the laws of the State
of Texas, without reference to the principles of conflict of laws.
14. This Agreement and the Employment Agreement as modified hereby
represent the complete agreement among Employee, SCI and Executive Services
concerning the subject matter hereof and supersede all prior agreements or
understandings, written or oral, between Employee and any member of the SCI
Group. No attempted modification or waiver of any of the provisions of this
Agreement shall be binding on any party hereto unless in writing and signed by
Employee, SCI and Executive Services.
15. Each of the numbered paragraphs contained in this Agreement shall
be enforceable independently of every other numbered paragraph in this
Agreement, and the invalidity or nonenforceability of any numbered paragraph
shall not invalidate or render nonenforceable any other numbered paragraph
contained in this Agreement.
16. It is further understood that for a period of seven (7) days
following the execution of this Agreement in duplicate originals, Employee may
revoke this Agreement, and this Agreement shall not become effective or
enforceable until the revocation period has expired.
17. This Agreement has been entered into voluntarily and not as a
result of coercion, duress, or undue influence. Employee acknowledges that he
has read and fully understands the terms
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of this Agreement and has consulted with an attorney before executing this
Agreement. Additionally, Employee acknowledges that he has been afforded the
opportunity to take twenty-one (21) days to consider this Agreement.
18. Except for the matters specifically excluded below, any and all
disputes between the parties to this Agreement arising out of or in connection
with the negotiation, execution, interpretation, performance or non-performance
of this Agreement and the covenants and obligations contemplated herein,
including but not limited to any claims against Executive Services, SCI, its
affiliates or their respective officers, directors, employees or agents, shall
be solely and finally settled by arbitration conducted pursuant to the Rules of
the American Arbitration Association, as now in effect or hereafter amended.
Judgment on the award of the arbitrator may be entered in any court having
jurisdiction over the party against whom enforcement of the award is being
sought, and the parties hereby irrevocably consent to the jurisdiction of any
such court for the purpose of enforcing any such award. The parties agree and
acknowledge that any arbitration proceedings between them, and the outcome of
such proceedings, shall be kept strictly confidential. It is expressly agreed
and understood that this paragraph shall not govern claims for workers'
compensation or unemployment benefits or claims for injunctive relief relating
to alleged violations of Sections 9, 11, 12 or 13 of the Employment Agreement.
19. It is agreed that Executive Services shall pay reasonable legal
fees of Employee incurred in the negotiation and execution of this Agreement.
The parties to this Agreement have executed this Agreement as of the
day and year first written above.
/s/ W. BLAIR WALTRIP
- -------------------- Service Corporation International
Employee
By: /s/ JAMES M. SHELGER
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Authorized Officer
SCI Executive Services, Inc.
By: /s/ CURTIS G. BRIGGS
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Authorized Officer
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