EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") between Stewart Enterprises, Inc.,
a Louisiana corporation (the "Company"), and Randall L. Stricklin (the
"Employee") is effective as of November 1, 2004 (the "Agreement Date").
W I T N E S S E T H:
WHEREAS, Employee currently is employed by the Company;
WHEREAS, the Company desires to retain the services of Employee pursuant
to the terms of this Agreement, subject to Employee's acceptance of the
conditions stated herein;
WHEREAS, Employee wishes to be employed by the Company in consideration of
the compensation and benefits set forth herein and pursuant to the terms hereof;
WHEREAS, during the course of his employment with the Company, Employee
has or will have received extensive and unique knowledge, training and education
in, and access to resources involving, the Death Care Business (as defined
below) at a substantial cost to the Company, which Employee acknowledges has
enhanced or substantially will enhance Employee's skills and knowledge in such
business;
WHEREAS, during the course of his employment with the Company, Employee
has or will have received access to and information about the Company's
customers, suppliers, joint venture partners and others having important
commercial relationships with the Company, the preservation of which the
Employee acknowledges are vital to the continuing commercial success of the
Company;
WHEREAS, during the course of his employment with the Company, Employee
has had and will continue to have access to valuable oral and written
information, knowledge and data relating to the business and operations of the
Company and its subsidiaries that is non-public, confidential or proprietary in
nature and is particularly useful in the Death Care Business; and
WHEREAS, in view of the training provided by the Company to Employee, its
cost to the Company, the importance of maintaining continuing favorable
relationships with customers, suppliers, partners and others, and the need for
the Company to be protected against disclosures by Employee of the Company's and
its subsidiaries' trade secrets and other non-public, confidential or
proprietary information, the Company and Employee desire, among other things, to
prohibit Employee from disclosing or utilizing, outside the scope and term of
his employment with the Company, any non-public, confidential or proprietary
information, knowledge and data relating to the business and operations of the
Company or its subsidiaries received by Employee during the course of his
employment, and to restrict the ability of Employee to compete with the Company
or its subsidiaries for a limited period of time;
NOW, THEREFORE, for and in consideration of the continued employment of
Employee by the Company and the payment of salary, benefits and other
compensation to Employee by the Company, the parties hereto agree as follows:
ARTICLE I
EMPLOYMENT CAPACITY AND TERM
1. CAPACITY AND DUTIES OF EMPLOYEE. The Employee is employed by the
Company to render services on behalf of the Company in the capacity set forth in
Appendix A hereto, as such Appendix may be amended or supplemented from time to
time (as so amended or supplemented, "Appendix A"). The Employee shall perform
such duties, consistent with the Employee's job title, as are assigned to the
title or titles held by the Employee as set forth from time to time in the
Company's Bylaws and such other duties as may be prescribed from time to time by
the Company's Board of Directors (the "Board") or the executive of the Company
to whom the Employee directly reports.
2. EMPLOYMENT TERM. The term of this Agreement (the "Employment Term")
shall commence on the Agreement Date and shall continue through October 31,
2006, subject to any earlier termination of Employee's status as an employee
pursuant to this Agreement.
3. DEVOTION TO RESPONSIBILITIES. During the Employment Term, the
Employee shall devote all of his business time to the business of the Company,
shall use his best efforts to perform faithfully and efficiently his duties
under this Agreement, and shall not engage in or be employed by any other
business; provided, however, that nothing herein shall prohibit the Employee
from (a) serving as a member of the board of directors, board of trustees or the
like of any for-profit or non-profit entity that does not compete with the
Company, or performing services of any type for any civic or community entity,
whether or not the Employee receives compensation therefor, (b) investing his
assets in such form or manner as shall require no more than nominal services on
the part of the Employee in the operation of the business of the entity in which
such investment is made, or (c) serving in various capacities with, and
attending meetings of, industry or trade groups and associations, as long as the
Employee's activities permitted by clauses (a), (b) and (c) above do not
materially and unreasonably interfere with the ability of the Employee to
perform the services and discharge the responsibilities required of him under
this Agreement. Notwithstanding clause (b) above, during the Employment Term,
the Employee may not beneficially own more than 2% of the equity interests of a
business organization required to file periodic reports with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 (the "Exchange
Act") and may not beneficially own more than 2% of the equity interests of a
business organization that competes with the Company. For purposes of this
paragraph, "beneficially own" has the meaning ascribed to that term in Rule
13d-3 under the Securities Exchange Act of 1934, as amended from time to time
(the "Exchange Act").
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ARTICLE II
COMPENSATION AND BENEFITS
During the Employment Term, the Company shall provide the Employee with
the compensation and benefits described below:
1. SALARY AND BONUS. (a) The Company shall pay the Employee a salary
("Base Salary") at an annual rate per fiscal year of the Company ("Fiscal Year")
as set forth in Appendix A, which shall be payable to the Employee at such
intervals as other salaried employees of the Company are paid.
(b) The Employee shall be eligible to receive an annual incentive
bonus (the "Bonus"), up to the maximum amount set forth in Appendix A. The Bonus
will be awarded based upon factors to be established or approved annually by the
Compensation Committee in its discretion and set forth in Appendix A or a
supplement thereto. Any Bonus awarded shall be paid in cash not later than 30
days following the filing of the Company's annual report on Form 10-K for the
Fiscal Year in which the Bonus has been earned.
(c) Any change in the Employee's title, Base Salary or Bonus
eligibility during the Employment Term shall be set forth in one or more
supplements to Appendix A to this Agreement, each of which shall be signed by
the Employee and a member of the Compensation Committee of the Board of
Directors of the Company.
2. BENEFITS. The Employee shall be eligible to participate in all
benefit programs provided to other employees of the Company, including without
limitation a fully-paid insurance benefit package similar to that provided other
employees of the Company.
3. EXPENSES. The Employee shall be reimbursed for reasonable
out-of-pocket expenses incurred from time to time on behalf of the Company or
any subsidiary in the performance of his duties under this Agreement, upon the
presentation of such supporting invoices, documents and forms as the Company
reasonably requests.
ARTICLE III
TERMINATION OF EMPLOYMENT
1. DEATH. The Employee's status as an employee shall terminate
immediately and automatically upon the Employee's death during the Employment
Term.
2. DISABILITY. The Employee's status as an employee may be terminated
for "Disability" as follows:
(a) The Employee's status as an employee shall terminate if the
Employee has a disability that would entitle him to receive benefits under the
Company's long-term disability insurance policy in effect at the time either
because he is Totally Disabled or Partially Disabled, as such terms are defined
in such policy. Any such termination shall become effective on the
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first day on which the Employee is eligible to receive payments under such
policy (or on the first day that he would be so eligible, if he had applied
timely for such payments).
(b) If the Company has no long-term disability plan in effect, if
(i) the Employee is rendered incapable because of physical or mental illness of
satisfactorily discharging his duties and responsibilities under this Agreement
for a period of 90 consecutive days and (ii) a duly qualified physician chosen
by the Company and reasonably acceptable to the Employee or his legal
representatives so certifies in writing, the Board shall have the power to
determine that the Employee has become disabled. If the Board makes such a
determination, the Company shall have the continuing right and option, during
the period that such disability continues, and by notice given in the manner
provided in this Agreement, to terminate the status of Employee as an employee.
Any such termination shall become effective 30 days after such notice of
termination is given, unless within such 30-day period, the Employee becomes
capable of rendering services of the character contemplated hereby (and a
physician chosen by the Company and reasonably acceptable to the Employee or his
legal representatives so certifies in writing) and the Employee in fact resumes
such services.
(c) The "Disability Effective Date" shall mean the date on which
termination of employment becomes effective due to Disability.
3. CAUSE. The Company may terminate the Employee's status as an
employee for Cause. As used herein, "Cause" shall mean the Employee's: (a)
breach of this Agreement; (b) intentional failure to perform his prescribed
duties; (c) unauthorized acts or omissions that could reasonably be expected to
cause material financial harm to the Company or materially disrupt Company
operations; (d) commission of a felony; (e) commission of an act of dishonesty
(even if not a crime) resulting in the enrichment of the Employee at the expense
of the Company; (f) knowing falsification or knowing attempted falsification of
financial records of the Company in violation of SEC Rule 13b2-1; or (g) willful
failure to follow established Company policies or procedures; provided, however,
that no such termination may take place in the case of (a) through (c) or (g)
above unless the Company has provided written notice to the Employee of such
conduct and the Employee has failed to remedy such conduct within 10 days
following receipt of such notice.
4. GOOD REASON. The Employee may terminate his status as an employee
for Good Reason. As used herein, the term "Good Reason" shall mean:
(a) The occurrence of any of the following during the Employment
Term:
(i) the assignment to the Employee of any duties or
responsibilities that are inconsistent with the Employee's status, title and
position as set forth in Appendix A;
(ii) any removal of the Employee from, or any failure to
reappoint or reelect the Employee to, the position set forth in Appendix A,
except in connection with a termination of Employee's status as an employee as
permitted by this Agreement;
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(iii) the Company's requiring the Employee to be based
anywhere other than in the metropolitan area set forth in Appendix A, except for
required travel in the ordinary course of the Company's business;
(b) any breach of this Agreement by the Company that continues for
a period of 10 days after written notice thereof is given by the Employee to the
Company;
(c) the failure by the Company to obtain the assumption of its
obligations under this Agreement by any successor or assign as contemplated in
this Agreement; or
(d) any purported termination by the Company of the Employee's
status as an employee for Cause that is not effected pursuant to a Notice of
Termination satisfying the requirements of this Agreement.
5. VOLUNTARY TERMINATION BY THE COMPANY. The Company may terminate the
Employee's status as employee for other than death, Disability or Cause.
6. VOLUNTARY TERMINATION BY THE EMPLOYEE. The Employee may voluntarily
terminate the Employee's status as employee for other than Good Reason.
7. NOTICE OF TERMINATION. Any termination by the Company or by the
Employee, shall be communicated by Notice of Termination to the other party
hereto given in accordance with Article VII Section 2 of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written notice
that (a) indicates the specific termination provision in this Agreement relied
upon (b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provisions so indicated and (c) if the Date of Termination
(as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 30 days after the giving
of such notice). The failure by the Employee or the Company to set forth in the
Notice of Termination any fact or circumstance that contributes to a showing of
Good Reason, Disability or Cause shall not negate the effect of the notice nor
waive any right of the Employee or the Company, respectively, hereunder or
preclude the Employee or the Company, respectively, from asserting such fact or
circumstance in enforcing the Employee's or the Company's rights hereunder.
8. DATE OF TERMINATION. "Date of Termination" means (a) if Employee's
employment is terminated by reason of his death or Disability, the Date of
Termination shall be the date of death of Employee or the Disability Effective
Date, as the case may be, (b) if Employee's employment is terminated by the
Company for Cause, or by the Employee for Good Reason, the date of delivery of
the Notice of Termination or any later date specified therein (which date shall
not be more than 30 days after the giving of such notice) as the case may be,
(c) if the Employee's employment is terminated by the Company for reasons other
than death, Disability or Cause, the Date of Termination shall be the date on
which the Company notifies the Employee of such termination or any later date
specified therein, and (d) if the Employee's employment is terminated
voluntarily by the Employee for reasons other than Good Reason, the Date of
Termination shall be the date on which the Employee notifies the Company of such
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termination or any later date specified therein (which date shall not be later
than 30 days after the giving of such notice) as the case may be.
ARTICLE IV
OBLIGATIONS UPON TERMINATION
1. DEATH. If the Employee's status as an employee is terminated by
reason of the Employee's death, this Agreement shall terminate without further
obligation to the Employee's legal representatives under this Agreement, other
than the obligation to pay accrued salary through the Date of Termination and to
make any payments due pursuant to employee benefit plans maintained by the
Company or its subsidiaries.
2. DISABILITY. If Employee's status as an employee is terminated by
reason of Employee's Disability, this Agreement shall terminate without further
obligation to the Employee, other than the obligation to pay accrued salary
through the Date of Termination and to make any payments due pursuant to
employee benefit plans maintained by the Company or its subsidiaries.
3. TERMINATION BY THE COMPANY FOR REASONS OTHER THAN DEATH, DISABILITY
OR CAUSE; TERMINATION BY THE EMPLOYEE FOR GOOD REASON. If the Company terminates
the Employee's status as an employee for reasons other than death, Disability or
Cause, or the Employee terminates his employment for Good Reason, then the
Company shall pay to the Employee an amount equal to a single year's Base Salary
in effect at the Date of Termination, payable in equal installments over a
two-year period beginning on the first regular payroll date that is at least six
months after the Date of Termination and thereafter (1) at such intervals as
other salaried employees of the Company are paid.
4. CAUSE. If the Employee's status as an employee is terminated by the
Company for Cause, this Agreement shall terminate without further obligation to
the Employee other than for accrued salary through the Date of Termination,
obligations imposed by law and obligations imposed pursuant to any employee
benefit plan maintained by the Company or its subsidiaries.
5. RESIGNATION FROM BOARD OF DIRECTORS. If Employee is a director of
the Company and his employment is terminated for any reason other than death,
the Employee shall, if requested by the Company, immediately resign as a
director of the Company. If such resignation is not received when so requested,
the Employee shall forfeit any right to receive any payments pursuant to this
Agreement.
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(1) This deferral is now required under the American Jobs Creation Act of 2004.
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ARTICLE V
NONDISCLOSURE, NONCOMPETITION AND PROPRIETARY RIGHTS
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Confidential Information" means any information, knowledge or
data of any nature and in any form (including information that is electronically
transmitted or stored on any form of magnetic or electronic storage media)
relating to the past, current or prospective business or operations of the
Company and its subsidiaries, that at the time or times concerned is not
generally known to persons engaged in businesses similar to those conducted or
contemplated by the Company and its subsidiaries (other than information known
by such persons through a violation of an obligation of confidentiality to the
Company), whether produced by the Company and its subsidiaries or any of their
consultants, agents or independent contractors or by Employee, and whether or
not marked confidential, including without limitation information relating to
the Company's or its subsidiaries' products and services, business plans,
business acquisitions, joint ventures, processes, product or service research
and development ideas, methods or techniques, training methods and materials,
and other operational methods or techniques, quality assurance procedures or
standards, operating procedures, files, plans, specifications, proposals,
drawings, charts, graphs, support data, trade secrets, supplier lists, supplier
information, purchasing methods or practices, distribution and selling
activities, consultants' reports, marketing and engineering or other technical
studies, maintenance records, employment or personnel data, marketing data,
strategies or techniques, financial reports, budgets, projections, cost
analyses, price lists, formulae and analyses, employee lists, customer records,
customer lists, customer source lists, proprietary computer software, and
internal notes and memoranda relating to any of the foregoing.
(b) "Death Care Business" means (i) the owning and operating of
funeral homes and cemeteries, including combined funeral home and cemetery
facilities, (ii) the offering of services and products to meet families' funeral
needs, including prearrangement, family consultation, the sale of caskets and
related funeral and cemetery products and merchandise (whether at physical
locations or by means of the Internet), the removal, preparation and
transportation of remains, cremation, the use of funeral home facilities for
visitation and worship, and related transportation services, (iii) the marketing
and sale of funeral services and cemetery property or merchandise on an at-need
or prearranged basis, (iv) providing, managing and administering financing
arrangements (including trust funds, escrow accounts, insurance and installment
sales contracts) for prearranged funeral plans and cemetery property and
merchandise, (v) providing interment services, the sale (on an at-need or
prearranged basis) of cemetery property including lots, lawn crypts, family and
community mausoleums and related cemetery merchandise such as monuments,
memorials and burial vaults, (vi) the maintenance of cemetery grounds pursuant
to perpetual care contracts and laws or on a voluntary basis, and (vii) offering
mausoleum design, construction and sales services.
2. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During the Employment
Term, Employee shall hold in a fiduciary capacity for the benefit of the Company
all Confidential Information which shall have been obtained by Employee during
Employee's employment
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(whether prior to or after the Agreement Date) and shall use such Confidential
Information solely within the scope of his employment with and for the exclusive
benefit of the Company. For a period of five years after the Employment Term,
commencing with the Date of Termination, Employee agrees (a) not to communicate,
divulge or make available to any person or entity (other than the Company) any
such Confidential Information, except upon the prior written authorization of
the Company or as may be required by law or legal process, and (b) to deliver
promptly to the Company any Confidential Information in his possession,
including any duplicates thereof and any notes or other records Employee has
prepared with respect thereto. In the event that the provisions of any
applicable law or the order of any court would require Employee to disclose or
otherwise make available any Confidential Information, Employee shall give the
Company prompt prior written notice of such required disclosure and an
opportunity to contest the requirement of such disclosure or apply for a
protective order with respect to such Confidential Information by appropriate
proceedings.
3. LIMITED COVENANT NOT TO COMPETE. During the Employment Term and for
a period of two years thereafter, commencing with the Date of Termination,
Employee agrees that, with respect to each State of the United States or other
jurisdiction, or specified portions thereof, in which the Employee regularly (a)
makes contact with customers of the Company or any of its subsidiaries, (b)
conducts the business of the Company or any of its subsidiaries or (c)
supervises the activities of other employees of the Company or any of its
subsidiaries, as identified in Appendix B attached hereto and forming a part of
this Agreement, and in which the Company or any of its subsidiaries engages in
the Death Care Business on the Date of Termination (collectively, the "Subject
Areas"), Employee will restrict his activities within the Subject Areas as
follows:
(a) Employee will not, directly or indirectly, for himself or
others, own, manage, operate, control, be employed in an executive, managerial
or supervisory capacity by, consult with, or otherwise engage or participate in
or allow his skill, knowledge, experience or reputation to be used in connection
with, the ownership, management, operation or control of, any company or other
business enterprise engaged in the Death Care Business within any of the Subject
Areas; provided, however, that nothing contained herein shall prohibit Employee
from making passive investments as long as Employee does not beneficially own
more than 2% of the equity interests of a business enterprise engaged in the
Death Care Business within any of the Subject Areas. For purposes of this
paragraph, "beneficially own" shall have the same meaning ascribed to that term
in Rule 13d-3 under the Exchange Act.
(b) Employee will not call upon any customer of the Company or its
subsidiaries for the purpose of soliciting, diverting or enticing away the
business of such person or entity, or otherwise disrupting any previously
established relationship existing between such person or entity and the Company
or its subsidiaries;
(c) Employee will not solicit, induce, influence or attempt to
influence any supplier, lessor, lessee, licensor, partner, joint venturer,
potential acquiree or any other person who has a business relationship with
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the Company or its subsidiaries, or who on the Date of Termination is engaged in
discussions or negotiations to enter into a business relationship with the
Company or its subsidiaries, to discontinue or reduce or limit the extent of
such relationship with the Company or its subsidiaries; and
(d) Employee will not make contact with any of the employees of
the Company or its subsidiaries with whom he had contact during the course of
his employment with the Company for the purpose of soliciting such employee for
hire, whether as an employee or independent contractor, or otherwise disrupting
such employee's relationship with the Company or its subsidiaries.
(e) Employee further agrees that, for a period of one year from
and after the Date of Termination, Employee will not hire, on behalf of himself
or any person or entity engaged in the Death Care Business with which Employee
is associated, any employee of the Company or its subsidiaries as an employee or
independent contractor, whether or not such engagement is solicited by Employee;
provided, however, that the restriction contained in this subsection (e) shall
not apply to Company employees who reside in, or are hired by Employee to
perform work in, any of the Subject Areas located within the States of Virginia,
Arkansas or Georgia.
Employee agrees that he will from time to time upon the Company's request
promptly execute any supplement, amendment, restatement or other modification of
Appendix B as may be necessary or appropriate to correctly reflect the
jurisdictions which, at the time of such modification, should be covered by
Appendix B and this Article V Section 3. Furthermore, Employee agrees that all
references to Appendix B in this Agreement shall be deemed to refer to Appendix
B as so supplemented, amended, restated or otherwise modified from time to time.
4. INJUNCTIVE RELIEF; OTHER REMEDIES. Employee acknowledges that a
breach by Employee of Section 2 or 3 of this Article V would cause immediate and
irreparable harm to the Company for which an adequate monetary remedy does not
exist; hence, Employee agrees that, in the event of a breach or threatened
breach by Employee of the provisions of Section 2 or 3 of this Article V during
or after the Employment Term, the Company shall be entitled to injunctive relief
restraining Employee from such violation without the necessity of proof of
actual damage or the posting of any bond, except as required by non-waivable,
applicable law. Nothing herein, however, shall be construed as prohibiting the
Company from pursuing any other remedy at law or in equity to which the Company
may be entitled under applicable law in the event of a breach or threatened
breach of this Agreement by Employee, including without limitation the recovery
of damages and/or costs and expenses, such as reasonable attorneys' fees,
incurred by the Company as a result of any such breach or threatened breach. In
addition to the exercise of the foregoing remedies, the Company shall have the
right upon the occurrence of any such breach or threatened breach to cancel any
unpaid salary, bonus, commissions or reimbursements otherwise outstanding at the
Date of Termination. In particular, Employee acknowledges that the payments
provided under Article IV Section 3 are conditioned upon Employee fulfilling any
noncompetition and nondisclosure agreements contained in this Article V. In the
event Employee shall at any time materially breach or threaten to breach any
noncompetition or nondisclosure agreements contained in this Article V, the
Company may suspend or eliminate payments under Article IV during the period of
such breach or threatened breach. Employee acknowledges that any such suspension
or elimination of payments would be an exercise of the
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Company's right to suspend or terminate its performance hereunder upon
Employee's breach of this Agreement; such suspension or elimination of payments
would not constitute, and should not be characterized as, the imposition of
liquidated damages.
5. REQUESTS FOR WAIVER IN CASES OF UNDUE HARDSHIP. In the event that
Employee should find any of the limitations of Article V Section 3 (including
without limitation the geographic restrictions of Appendix B) to impose a severe
hardship on Employee's ability to secure other employment, Employee may make a
request to the Company for a waiver of the designated limitations before
accepting employment that otherwise would be a breach of Employee's promises and
obligations under this Agreement. Such request must be in writing and clearly
set forth the name and address of the organization with which employment is
sought and the location, position and duties that Employee will be performing.
The Company will consider the request and, in its sole discretion, decide
whether and on what conditions to grant such waiver.
6. GOVERNING LAW OF THIS ARTICLE V; CONSENT TO JURISDICTION. Any
dispute regarding the reasonableness of the covenants and agreements set forth
in this Article V (including Appendix B hereto), or the territorial scope or
duration thereof, or the remedies available to the Company upon any breach of
such covenants and agreements, shall be governed by and interpreted in
accordance with the laws of the State of the United States or other jurisdiction
in which the alleged prohibited competing activity or disclosure occurs, and,
with respect to each such dispute, the Company and Employee each hereby
irrevocably consent to the exclusive jurisdiction of the state and federal
courts sitting in the relevant State (or, in the case of any jurisdiction
outside the United States, the relevant courts of such jurisdiction) for
resolution of such dispute, and agree to be irrevocably bound by any judgment
rendered thereby in connection with such dispute, and further agree that service
of process may be made upon him or it in any legal proceeding relating to this
Article V and/or Appendix B by any means allowed under the laws of such
jurisdiction. Each party irrevocably waives any objection he or it may have as
to the venue of any such suit, action or proceeding brought in such a court or
that such a court is an inconvenient forum.
7. EMPLOYEE'S UNDERSTANDING OF THIS ARTICLE. Employee hereby represents
to the Company that he has read and understands, and agrees to be bound by, the
terms of this Article V (including Appendix B hereto). Employee acknowledges
that the geographic scope and duration of the covenants contained in Article V
Section 3 are the result of arm's-length bargaining and are fair and reasonable
in light of (i) the importance of the functions performed by Employee and the
length of time it would take the Company to find and train a suitable
replacement, (ii) the nature and wide geographic scope of the operations of the
Company and its subsidiaries, (iii) Employee's level of control over and contact
with the business and operations of the Company and its subsidiaries in a
significant number of jurisdictions where same are conducted and (iv) the fact
that all facets of the Death Care Business are conducted by the Company and its
subsidiaries throughout the geographic area where competition is restricted by
this Agreement. It is the desire and intent of the parties that the provisions
of this Agreement be enforced to the fullest extent permitted under applicable
law, whether now or hereafter in effect and, therefore, to the extent permitted
by applicable law, the parties hereto waive any provision
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of applicable law that would render any provision of this Article V (including
Appendix B hereto) invalid or unenforceable.
ARTICLE VI
ARBITRATION
1. BINDING AGREEMENT TO ARBITRATE. Any claim or controversy arising out
of any provision of this Agreement (other than Article V hereof), or the breach
or alleged breach of any such provision, shall be settled by arbitration
administered by the American Arbitration Association (the "AAA") under its
National Rules for the Resolution of Employment Disputes (the "Rules"), and
judgment on the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction thereof.
2. SELECTION AND QUALIFICATIONS OF ARBITRATORS. If no party to the
arbitration makes a claim in excess of $1.0 million, exclusive of interest and
attorneys' fees, the proceedings shall be conducted before a single neutral
arbitrator selected in accordance with the Rules. If any party makes a claim
that exceeds $1.0 million, the proceedings shall be conducted before a panel of
three neutral arbitrators, one of whom shall be selected by each party within 15
days after commencement of the proceeding and the third of whom shall be
selected by the first two arbitrators within 10 days after their appointment. If
the two arbitrators selected by the parties are unable or fail to agree on the
third arbitrator, the third arbitrator shall be selected by the AAA. Each
arbitrator shall be a member of the bar of the State of Louisiana and actively
engaged in the practice of employment law for at least 15 years.
3. LOCATION OF PROCEEDINGS. The place of arbitration shall be New
Orleans, Louisiana.
4. REMEDIES. Any award in an arbitration initiated under this Article
VI shall be limited to actual monetary damages, including if determined
appropriate by the arbitrator(s) an award of costs and fees to the prevailing
party. "Costs and fees" mean all reasonable pre-award expenses of the
arbitration, including arbitrator's fees, administrative fees, travel expenses,
out-of-pocket expenses such as copying, telephone, witness fees and attorneys'
fees. The arbitrator(s) will have no authority to award consequential, punitive
or other damages not measured by the prevailing party's actual damages, except
as may be required by statute.
5. OPINION. The award of the arbitrators shall be in writing, shall be
signed by a majority of the arbitrators, and shall include findings of fact and
a statement of the reasons for the disposition of any claim.
ARTICLE VII
MISCELLANEOUS
1. BINDING EFFECT.
(a) This Agreement shall be binding upon and inure to the benefit
of the Company and any of its successors or assigns.
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(b) This Agreement is personal to the Employee and shall not be
assignable by the Employee without the consent of the Company (there being no
obligation to give such consent) other than such rights or benefits as are
transferred by will or the laws of descent and distribution.
(c) The Company shall require any successor to or assignee of
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
all or substantially all of the assets or businesses of the Company (i) to
assume unconditionally and expressly this Agreement and (ii) to agree to perform
all of the obligations under this Agreement in the same manner and to the same
extent as would have been required of the Company had no assignment or
succession occurred, such assumption to be set forth in a writing reasonably
satisfactory to the Employee. In the event of any such assignment or succession,
the term "Company" as used in this Agreement shall refer also to such successor
or assign.
2. NOTICES. All notices hereunder must be in writing and shall be
deemed to have been given upon receipt of delivery by: (a) hand (against a
receipt therefor), (b) certified or registered mail, postage prepaid, return
receipt requested, (c) a nationally recognized overnight courier service
(against a receipt therefor) or (d) telecopy transmission with confirmation of
receipt. All such notices must be addressed as follows:
If to the Company, to:
Stewart Enterprises, Inc.
1333 South Clearview Parkway
Jefferson, Louisiana 70121
Attn: Chief Executive Officer
If to the Employee, to:
Randall L. Stricklin
5476 Proctor Avenue
Oakland, California 94618
or such other address as to which any party hereto may have notified the other
in writing.
3. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with and governed by the internal laws of the State of Louisiana
without regard to principles of conflict of laws, except as expressly provided
in Article V Section 6 above with respect to the resolution of disputes arising
under, or the Company's enforcement of, Article V of this Agreement.
4. WITHHOLDING. The Employee agrees that the Company has the right to
withhold, from the amounts payable pursuant to this Agreement, all amounts
required to be withheld under applicable income and/or employment tax laws, or
as otherwise stated in documents granting rights that are affected by this
Agreement.
-12-
5. SEVERABILITY. If any term or provision of this Agreement (including
without limitation those contained in Appendix B), or the application thereof to
any person or circumstance, shall at any time or to any extent be invalid,
illegal or unenforceable in any respect as written, Employee and the Company
intend for any court construing this Agreement to modify or limit such provision
temporally, spatially or otherwise so as to render it valid and enforceable to
the fullest extent allowed by law. Any such provision that is not susceptible of
such reformation shall be ignored so as to not affect any other term or
provision hereof, and the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid, illegal or unenforceable, shall not be affected thereby and
each term and provision of this Agreement shall be valid and enforced to the
fullest extent permitted by law.
6. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
7. REMEDIES NOT EXCLUSIVE. Except as provided in Article VI hereof, no
remedy specified herein shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies provided for in this
Agreement, the parties shall have all other rights and remedies provided to them
by applicable law, rule or regulation.
8. COMPANY'S RESERVATION OF RIGHTS. Employee acknowledges and
understands that the Employee serves at the pleasure of the Board and that the
Company has the right at any time to terminate Employee's status as an employee
of the Company, or to change or diminish his status during the Employment Term,
subject to the rights of the Employee to claim the benefits conferred by this
Agreement.
9. JURY TRIAL WAIVER. THE PARTIES HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS
AGREEMENT.
10. SURVIVAL. The rights and obligations of the Company and Employee
contained in Article V of this Agreement shall survive the termination of the
Agreement. Following the Date of Termination, each party shall have the right to
enforce all rights, and shall be bound by all obligations, of such party that
are continuing rights and obligations under this Agreement.
11. PRIOR EMPLOYMENT AGREEMENT. Effective as of the Agreement Date, this
Agreement supersedes any prior employment agreement between the Employee and the
Company.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
-13-
13. AMERICAN JOBS CREATION ACT OF 2004. In the event that any of the
compensation or benefits payable to the Employee hereunder are considered to be
non-qualified deferred compensation subject to the American Jobs Creation Act of
2004 (the "Jobs Act") and any regulations issued or to be issued by the
Department of the Treasury thereunder, the Company and the Employee shall
negotiate in good faith and agree to such amendments to this Agreement as they
and their respective tax counsel deem necessary to avoid the imposition of
additional taxes and penalties under the Jobs Act or such regulations, while
preserving the economic benefits intended to be conferred on the Employee by
this Agreement.
IN WITNESS WHEREOF, the Company and the Employee have caused this
Agreement to be executed on the dates set forth below and effective as of the
Agreement Date.
STEWART ENTERPRISES, INC.
Dated: January 7, 2005 By: /s/ James W. McFarland
----------------------------------------
James W. McFarland
Compensation Committee Chairman
EMPLOYEE:
Dated: December 30, 2004 /s/ Randall L. Strickland
----------------------------------------
Randall L. Stricklin
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APPENDIX A TO EMPLOYMENT AGREEMENT
BETWEEN STEWART ENTERPRISES, INC.
AND
RANDALL L. STRICKLIN
BASE SALARY, BONUS COMPENSATION AND BENEFITS
1. Effective April 28, 2003, Employee's title(s) shall be Senior Vice
President and President - Western Division, Employee's Base Salary shall
be $300,000, and Employee's principal work location shall be the Los
Angeles, California metropolitan area.
2. For Fiscal Year 2005 ("FY 2005"), the Employee shall be eligible to
receive a maximum Bonus of up to $300,000.
(a) The Bonus available for award will be determined as follows:
FY 2005 Reported EPS Bonus Available
- --------------------------- ---------------
Less than $ .46 $ 0
Equals or exceeds .46 300,000
(b) The portion of the Bonus available that will be awarded will depend
on the performance measures set forth below:
(1) 16.67% of the Bonus available for FY 2005 will be determined
based on the achievement of the following diluted reported EPS
levels (i.e., that EPS level, rounded to the nearest whole
cent, reported in the Company's year-end earnings release,
adjusted as appropriate pursuant to 2(c) hereof):
% of 16.67% of Bonus Bonus Award
FY 2005 Diluted Reported EPS Potential Based on EPS
- ----------------------------- -------------------- ------------
Equals or exceeds $.46 20.00% $ 10,000
Equals or exceeds .47 35.00% 17,500
Equals or exceeds .48 50.00% 25,000
Equals or exceeds .49 66.67% 33,335
Equals or exceeds .50 83.33% 41,670
Equals or exceeds .51 100.00% 50,000
(2) 75% of the Bonus available ($225,000 rounded) will be awarded
based on achievement of Divisional Business Objectives
specific to the Employee's area of responsibility based on
criteria provided in Attachment 1 to this Appendix A.
(3) 8.33% of the Bonus available ($25,000 rounded) will be based
on the
A-1
successful completion of initiatives deemed to be instrumental
in growing our existing businesses or by creating additional
revenue sources for the Company, either as head of a task
force or as a (division, regional, location, etc.) beta test
site for new projects.
(c) Non-recurring items approved for exclusion by the Compensation
Committee in its sole discretion shall be excluded from diluted
earnings per share for purposes of this calculation. Diluted
earnings per share shall be calculated by the Company's Chief
Financial Officer taking into account any such exclusions and shall
be binding on all Employees absent manifest error.
Agreed to and accepted:
STEWART ENTERPRISES, INC.
Effective date: November 1, 2004 By: /s/ James W. McFarland
----------------------------------------
James W. McFarland
Compensation Committee Chairman
EMPLOYEE
Effective date: November 1, 2004 /s/ Randall L. Stricklin
--------------------------------------------
Randall L. Stricklin
A-2
APPENDIX B TO EMPLOYMENT AGREEMENT
BETWEEN STEWART ENTERPRISES, INC.
AND
RANDALL L. STRICKLIN
Jurisdiction In Which Competition
Is Restricted As Provided
In Article V Section 3
A. States and Territories of the United States:
1. Nevada-- The following counties in the State of Nevada:
Clark, Lincoln, Nye
as well as any other counties in the State of Nevada in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
2. Oregon-- The following counties in the State of Oregon:
Josephine, Washington, Douglas, Curry, Jackson, Klamath, Clatsop,
Columbia, Multnomah, Clackamas, Yamhill, Tillamook
as well as any other counties in the State of Oregon in which the Employee
regularly (a) makes contact with customers of the Company or any of its
subsidiaries, (b) conducts the business of the Company or any of its
subsidiaries or (c) supervises the activities of other employees of the
Company or any of its subsidiaries as of the Date of Termination.
AGREED TO AND ACCEPTED:
STEWART ENTERPRISES, INC. EMPLOYEE
BY: /s/ James W. McFarland /s/ Randall L.Stricklin
---------------------------------- -----------------------------
JAMES W. MCFARLAND EFFECTIVE DATE: NOVEMBER 1,2004
COMPENSATION COMMITTEE CHAIRMAN
EFFECTIVE DATE: NOVEMBER 1, 2004
B-1
3. California-- The following counties in the State of California:
Glenn, Plumas, Sutter, Yuba, Colusa, Tehama, , Fresno, San Mateo, Contra
Costa, San Joaquin, Stanislaus, Santa Clara, Mariposa, Orange, San
Bernardino, Kern, Ventura, Inyo, Riverside, Los Angeles, Monterey, Kings,
Santa Barbara, Madera, Tulare, San Benito, Merced, San Luis Obispo,
Nevada, Alameda, Sacramento, El Dorado, Amador, Yolo, Solano, San Diego,
Imperial, Sonoma, Napa, Lake, Marin, Santa Cruz, Calaveras, Placer, Butte,
Mendocino, San Francisco
as well as any other counties in the State of California in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of
its subsidiaries or (c) supervises the activities of other employees of
the Company or any of its subsidiaries as of the Date of Termination.
Employee and the Company agree that, throughout the Employment Term,
Employee shall comply with all of the requirements and restrictions set
forth in Article V of the Agreement of which this Appendix A forms a part;
however, Employee and the Company agree that, notwithstanding anything to
the contrary contained in Article V, Section 2 or 3 of the Agreement,
Employee shall be required to restrict his post-employment activities in
the State of California only to: (I) complying with the restrictions set
forth in Article V, Section 2 of the Agreement to the extent that
Confidential Information constitutes a trade secret under California law
and (ii) complying with the restrictions set forth in Article V, Sections
3(C) and 3(d) of the Agreement. The parties hereby acknowledge and agree
that these modifications to the restrictions of Article V, Sections 2 and
3 as they relate to post-employment disclosure and competition in the
State of California are being entered into solely to comply with the
limitations provided in California law on the extent to which
nondisclosure and noncompetition agreements may be enforced. These
modifications do not reflect the parties' agreement as to the extent of
the limitations upon disclosure and competition necessary to protect the
legitimate interests of the Company; rather, the provisions of Article V
of the Agreement reflect such agreement.
4. Washington-- The following counties in the State of Washington:
King, Snohomish, Kittitas, Pierce, Kitsap, Skagit, Chelan, Island
as well as any other counties in the State of Washington in which the
Employee regularly (a) makes contact with customers of the Company or any
of its subsidiaries, (b) conducts the business of the Company or any of
its subsidiaries or (c) supervises the activities of other employees of
the Company or any of its subsidiaries as of the Date of Termination.
EMPLOYEE:
/s/ Randall L.Stricklin
-------------------------------
EFFECTIVE DATE: NOVEMBER 1,2004
B-2
B. Acknowledgment
The Company and Employee acknowledge that Employee's voluntary compliance
with Article V, Sections 2 and 3 constitutes a significant part of the
consideration for the Company's agreement to make the payments specified
in Article IV. Therefore, the Company and Employee acknowledge that it is
the intent of this Agreement that if Employee engages in conduct described
as prohibited conduct in Article V Section 2 or 3, the Company may suspend
or eliminate payments under Article IV, including Section 3 of Article IV,
during the period of such conduct, even if the parties' contractual
prohibitions on such conduct are determined to be invalid, illegal or
unenforceable under applicable law.
Furthermore, the parties acknowledge that any provision in this Appendix B
that permits Employee to engage, after the Date of Termination, in a
particular jurisdiction, in conduct otherwise prohibited by Article V
Section 2 or 3 (for example, as in California and Nebraska) has been
agreed to solely in order to comply with the limitations provided in the
law of that jurisdiction on the extent to which nondisclosure and
noncompetition agreements may be enforced. Therefore, the parties
acknowledge that, although Employee may be permitted pursuant to this
Appendix B to engage, after the Date of Termination, in certain
jurisdictions (such as California and Nebraska), in conduct otherwise
prohibited by Article V Section 2 or 3, if Employee does engage in conduct
prohibited by the provisions of Article V Section 2 or 3 (as such
provisions appear in the Agreement without giving effect to any
modifications to such provisions made by this Appendix B), Employee will
forfeit his or her right to payments under Article IV, including Section 3
of Article IV, during the period of such conduct.
EMPLOYEE:
/s/ Randall L.Stricklin
-------------------------------
EFFECTIVE DATE: NOVEMBER 1,2004
B-3