Exhibit 10.23

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CONFIDENTIALITY AND NON-SOLICITATION AGREEMENT

 

This Confidentiality and Non-Solicitation Agreement (the "Agreement") is made
between Hallmark Financial 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 consideration of (i) Employee's employment by Hallmark Financial Services,
Inc., or by one of its affiliates (collectively "Hallmark") in a capacity of
high trust and confidence in which Employee may develop or receive highly
sensitive, restricted and proprietary information involving Confidential
Information (as defined below), and in which Employee may seek out and develop
customer Goodwill (as defined below) using the resources provided by Hallmark as
well as Hallmark 's reputation, and (ii) the restricted stock units awarded
under the RSU Agreement as permitted under the Hallmark Financial Services, Inc.
2015 Long Term Incentive Plan, the receipt and sufficiency of which are hereby
acknowledged, the Employee hereby agrees as follows:

 

1.          Employment At Will. The Employee agrees that he/she is an "at will"
employee of Hallmark and that he/she may terminate his/her employment at any
time. The Employee further agrees that Hallmark may similarly terminate the
Employee's employment at any time. This agreement does not create a contract for
employment for any specified duration, either expressly or by implication.

 

2.          Non-disclosure of Confidential Information. Employee acknowledges
that, in order for him/her to perform his/her duties properly, Employee will
have access to and Hallmark must necessarily entrust him/her with certain
proprietary and confidential business information (the "Confidential
Information"). The Employee agrees that, during the term of his/her employment
with Hallmark and at all times thereafter, regardless of the reason for
termination of employment, he/she will not disclose any Hallmark Confidential
Information or use it in any way, except with the prior written authorization by
or on behalf of Hallmark, whether or not such Confidential Information is
produced by the Employee's own efforts.

 

(a) For purposes of this Agreement, "Confidential Information" means all
original and copies of all material, data, documents, and information in any
format (including without limitation all hardcopy, softcopy, electronic, web,
and computer-based information, documents, data files, records, videos,
pictures, and recordings) which constitutes confidential and/or trade secret
information as further defined in this Agreement and/or Texas law. Examples of
Confidential Information include, but are not limited to Hallmark’s:

•proprietary information, including without limitation all business methods,
databases, software, including the source code, object code and operational and
functional features and limitations of the software, and other computer
technology;

•business development plans and activities,

•information concerning pending and prospective mergers, acquisitions, or other
types of transactions;

 

 

 

 

•the prices, terms and conditions of contracts or agreements with its current
and prospective customers, distributors, vendors, suppliers, or any other type
of business relationship;

•cost and pricing of policies and data, including without limitation the costs
of Hallmark 's business and all results of its business operations;

•business and marketing plans, manuals and strategies;

•financial information , including but not limited to results from operations,
results relating to various programs, profit/loss and revenue figures,
transaction data and account information;

•facility and data security-related information, including without limitation
door access codes, computer access codes, security system PINs, computer system
user identification information , passwords and remote access codes;

•personnel information, including but not limited to, performance reviews,
compensation information, personal information , ranking, skills and
competencies;

•information acquired by or on behalf of Hallmark about Hallmark's current
customers, distributor s, vendors, suppliers, and producers;

•intellectual property; provided, however, that Confidential Information does
not include material, data, documents, and/or other information that Hallmark
has voluntarily placed in the public domain; that has been lawfully and
independently developed and publicly disclosed to third parties; that
constitutes general knowledge and skills gained by Employee during the period of
his or her employment with Hallmark; or that otherwise enters the public domain
through lawful means.

 

(b)  Employee further acknowledges that the development or acquisition of such
Confidential Information is the result of great effort and expense by Hallmark,
that the Confidential Information is critical to the survival and success of
Hallmark, and that the unauthorized disclosure or use of the Confidential
Information would cause Hallmark irreparable harm.

 

(c)   For the avoidance of doubt, no provision in this Agreement prohibits or
restricts Employee, or Employee's attorney acting on behalf of Employee, from
initiating communications directly with, responding to any inquiry from, or
providing testimony before, the United States Securities and Exchange
Commission, any other federal or state authority, or self-regulatory
organization, if such communication is required by or protected under applicable
law or regulation, including the Dodd-Frank Wall Street Reform and Consumer
Protection Act or the Sarbanes-Oxley Act.

 

  3.          Prohibited Post-employment Solicitation:

(a)     In order to protect Hallmark's Goodwill (as defined below), Confidential
Information, and Hallmark's other legitimate business interests, Employee agrees
that he/she shall not, without the prior approval of the Company, directly or
indirectly, for a period of twelve (12) months from the termination of
Employee's employment for any reason:

 

·initiate, receive, or otherwise engage in contact, directly or indirectly, with
any individual or entity that is a current insured of Hallmark (and where
applicable, limited to a specific layer) that the Employee directly serviced or
otherwise had contact with on behalf of Hallmark during the twelve (12) month
period prior to the date of Employee’s termination.

 

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(b)     Employee agrees that he/she shall not, directly or indirectly, for a
period of twenty-four (24) months from the termination of Employee's employment
for any reason, in any manner or form entice, solicit or induce, or attempt to
entice, solicit or induce, any employee, consultant, or independent contractor
of Hallmark employed 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 Hallmark for 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 solicitation under this Agreement includes but is not limited
to:

 

•solicitations via personal devices, such as cell phones and computers;

•solicitations via any social media, including, but not limited to, Linkedln,
Facebook, and Twitter.

 

(d)     The twelve (12) and twenty-four (24) month restrictive periods shall be
tolled for the period of time that Employee had already been engaging in the
prohibited conduct described herein after termination of employment. The Parties
intend that Hallmark shall be entitled to a full restrictive period of
post-employment conduct that does not breach this Agreement.

 

(e)     "Goodwill" means the result of Hallmark's efforts, the efforts of
Hallmark and a supplier, customer, producer, or any other type of business
relationship, and/or the Employee's efforts on behalf of Hallmark and/or a
current or prospective customer, distributor, vendor, supplier, producer, or any
other type of business relationship, to develop and enhance Hallmark's
reputation in the industry, its business relationships, and other related
business contacts. Because of the competitive nature of Hallmark's business and
Hallmark's repeat transactions with many customers, distributors, vendors,
suppliers, etc., the parties agree that Hallmark's Goodwill is critical to
ensuring Hallmark's survival and success and such Goodwill constitutes a
valuable asset belonging to Hallmark, regardless of whether such asset was
produced by the Employee's own efforts or the efforts of other employees of
Hallmark.

 

4.          Specific Performance. Employee acknowledges that a breach of this
Agreement will cause irreparable injury to Hallmark, that Hallmark's remedies at
law will be inadequate in case of any such breach or threatened breach, and that
Hallmark will be entitled to preliminary injunctive relief and other injunctive
relief in case of any such breach or threatened breach.

 

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5.          Waivers. The waiver by Hallmark or the Employee of any action, right
or condition in this Agreement, or of any breach of a provision of this
Agreement, shall not constitute a waiver of any other occurrences of the same
event.

 

6.          Survival, Binding Effect. 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 Cause Termination 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.          Assignability by Hallmark. This Agreement is assignable by Hallmark
and inures to the benefit of Hallmark, its subsidiaries, affiliated
corporations, successors and assignees. This Agreement, being personal, is not
assignable by the Employee.

 

9.          Severability. The covenants of this Agreement are intended to be
separable, and the expressions used there in are intended to refer to divisible
entities. Accordingly, the invalidity of all or any part of any section of this
Agreement shall not render invalid the remainder of this Agreement or of such
section. If, in any judicial proceeding, any provision of this Agreement is
found to be so broad as to be unenforceable, it is hereby agreed that such
provision shall be interpreted to be only so broad as to be enforceable.

 

10.         Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Texas governing a contract made and
wholly performed within the State of Texas.

 

11.         Consent To 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.         Covenant Not To Sue Outside Of Texas. Employee hereby agrees that
he/she will neither commence or prosecute, nor assist in any way another person
or entity to commence or prosecute, any legal action or other proceeding
(including but not limited to a declaratory judgment action) against Hallmark
concerning a dispute arising from or relating to this Agreement in any forum or
jurisdiction other than the state and federal courts in the State of Texas.
Employee further agrees that, in the event he/she disregards this clause,
Hallmark shall be entitled to recover its reasonable attorneys' fees and other
costs incurred in staying, transferring, dismissing or otherwise defending such
out-of-state action or proceeding, regardless of whether such fees and costs are
incurred in the forum where Employee commenced the action or in a Texas forum,
and without regard to whether Hallmark prevails in its efforts to enforce this
covenant.

 

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13.         Entire Agreement, Amendments. This Agreement constitutes the entire
understanding of the parties with respect to its subject matter, supersedes any
prior communication or understanding with respect thereto, and no modification
or waiver of any provision hereof shall be valid unless made in writing and
signed by all of the parties hereto.

 

14.         Return of Hallmark Property and Confidential Information Upon
Termination of Employment. The Employee agrees, upon termination of his/her
employment for any reason, to deliver the following to Hallmark promptly and
without waiting for a request from Hallmark: all files, books, documents,
computer disks or tapes, computers, phones, PDAs, keys, security passes, credit
cards, and any other property prepared by or on behalf of Hallmark or otherwise
provided or paid for by Hallmark; all Confidential Information in Employee's
possession, and any copies thereof. The Employee further agrees to refrain from
making, retaining or distributing copies of any such property or Confidential
Information. To the extent that Employee has any data belonging to Hallmark on
any storage media owned or otherwise used by Employee (for example, a personal
computer's hard disk drive, portable data storage device, etc.), Employee agrees
that immediately upon termination to provide Hallmark with a copy of the data
and then permanently purge such computer (or other storage media) of the data.
Employee agrees to provide written or other positive confirmation of the removal
or return of such data from any personal storage media upon Hallmark’s written
request for such confirmation.

 

15.         This Agreement may be executed in multiple counterparts, each of
which shall be treated as 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:  

 

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