Change-in-Control Executive Severance Agreement




Exhibit 10.56



CHANGE-IN-CONTROL EXECUTIVE SEVERANCE AGREEMENT



This Change-in-Control Executive Severance Agreement (this “Agreement”), dated
and effective May 15, 2001, is between Ace Cash Express, Inc., a Texas
corporation (the “Company”), and Barry M. Barron (the “Executive”).


Statement of Purpose


The Company desires, for its continued success, to have the benefit of services
of experienced management personnel like the Executive. The Board of Directors
of the Company therefore believes that it is in the best interest of the
Company that, in the event of any prospective change in control of the Company,
the Executive be reasonably secure in his employment and position with the
Company, so that the Executive can exercise independent judgment as to the best
interest of the Company and its shareholders, without distraction by any
personal uncertainties or risks regarding the Executive’s continued employment
with the Company created by the possibility of a change in control of the
Company. Therefore, the Company and the Executive are entering into this
Agreement to assure severance benefits to the Executive in connection with
certain terminations of employment upon or after a change in control of the
Company.


Agreement



In consideration of the statements made in the Statement of Purpose and the
mutual agreements set forth below, the Company and the Executive agree as
follows:


-1-







	1.	 	Definitions and Interpretation. Various terms used in this Agreement are
defined in Exhibit A; each of the defined terms used in this Agreement
begins with a capital letter. Various interpretative matters for this
Agreement are also set forth in Exhibit A. Exhibit A is an integral part
of this Agreement and is incorporated in this Agreement by reference.
	 
	2.	 	Term of Agreement. This Agreement will continue in effect until the
earliest of the following:




	 	(a)	 	Any termination of the Executive’s employment with the
Company before a Change in Control. (If the Executive is employed
by any Subsidiary, whether or not he is also employed by the
Company, any reference in this Agreement to the Executive’s
employment by the Company shall be deemed to include his employment
by a Subsidiary.)
	 
	 	(b)	 	11:59 p.m. on June 30 following at least six months’ Notice
of termination of this Agreement by either Party, if that June 30
occurs before a Change in Control.
	 
	 	(c)	 	The Company’s performance of all of its obligations, and the
Executive’s receipt of all of the payments and benefits to which he
is entitled, under this Agreement after a Severance Payment Event.




	3.	 	Severance Benefits. Upon a Severance Payment Event, in addition to any
other severance or employment-termination compensation or benefits to
which the Executive may be entitled from the Company or any Subsidiary
under the terms of any Plan of which the Executive was a participant or a
beneficiary immediately before the Severance Payment Event, the Company
shall:




	 	(a)	 	Pay the Executive in cash, within five Business Days after
the Severance Payment Event, all of his Base Salary and all other
earned but unpaid cash compensation or entitlements due to the
Executive through (and including) the date of the Severance Payment
Event, including unused earned and accrued vacation pay and
unreimbursed reimbursable business expenses.
	 
	 	(b)	 	Make the Severance Payment in cash within five Business Days
after the Severance Payment Event.
	 
	 	(c)	 	Provide or arrange to provide the Executive (whether or not
under any Welfare Benefit Plan then maintained), at the Company’s
sole expense and for the Benefit Continuation Period, Welfare
Benefits that are substantially the same the Welfare Benefits
provided to the Executive (and the Executive’s dependents and
beneficiaries) immediately before the Severance Payment Event,
except that the Welfare Benefits to which the Executive is entitled
under this subsection (c) will be subject to the Executive’s
compliance with Section 4 and will be reduced to the extent that
comparable welfare benefits are received by the Executive from an
employer other than the Company or any Subsidiary during the Benefit



-2-









	 	 	 	Continuation Period. (The fact that the cost of the participation
by the Executive, or the Executive’s dependents or beneficiaries,
in any Welfare Benefit Plan was paid indirectly by the Company, as
a reimbursement or a credit to the Executive, before the Severance
Payment Event does not mean that the corresponding Welfare Benefits
were not “provided to the Executive” by the Company for the purpose
of this subsection (c).)




	 	 	In addition, each Stock Award outstanding immediately before the
Severance Payment Event and not yet exercised or forfeited (as the case
may be) will accelerate and become fully vested, exercisable, or
nonforfeitable upon the Severance Payment Event, as though all requisite
time had passed to vest the Stock Award or cause it to become exercisable
or nonforfeitable.
	 
	4.	 	Nondisclosure and Noncompetition. As an inducement to the Company to
enter into this Agreement, the Executive represents to and covenants with
or in favor of the Company as follows:




	 	(a)	 	The Executive has acquired and will acquire during his
employment with the Company knowledge or awareness of various Trade
Secrets. All of the Trade Secrets are valuable, special, and unique
assets of the Company, and the disclosure of any of them, or their
use in any manner, other than on behalf of the Company would cause
substantial injury, loss of profits, and loss of goodwill to the
Company.
	 
	 	(b)	 	During his employment with the Company and at all times
thereafter, the Executive shall not, directly or indirectly,
disclose or disseminate any Trade Secret to any other Person or
lecture upon, publish articles concerning, or otherwise use or
employ any Trade Secret, except (in any case) to the extent required
in the course of his employment with the Company or by applicable
law, rule, or regulation (including legal process). In addition,
all Trade Secrets and materials containing Trade Secrets prepared or
compiled by the Executive or furnished or made available to him
during his employment with the Company are the sole and exclusive
property of the Company, and none of those Trade Secrets or
materials containing Trade Secrets may be retained by the Executive
upon or following any termination of his employment with the
Company.
	 
	 	(c)	 	If the Executive’s employment with the Company terminates
(other than because of the Executive’s death or Disability) upon or
before the termination of this Agreement, the Executive shall not,
at any time during the first year after that termination of
employment anywhere in the Restricted Territory, directly or
indirectly engage in any activity which, or any activity for any
enterprise or entity a material part of the business of which, is
competitive with the business conducted, or proposed during his
employment with the Company to be conducted, by the Company. The
activity prohibited by the preceding sentence includes any kind of
ownership (other than ownership of securities of a publicly held
entity of which the Executive owns less than 1% of a class of
outstanding



-3-









	 	 	 	securities) in or of, or acting as a director, officer, agent,
employee, or consultant of or for, any enterprise or entity
referred to in the preceding sentence.
	 
	 	(d)	 	The Executive acknowledges and agrees that the restrictions
in this Section 4 are reasonable and not unduly burdensome to him
under the circumstances.
	 
	 	(e)	 	The Executive’s compliance with this Section 4 is a condition
to the Company’s obligation to continue to provide Welfare Benefits
to the Executive under subsection (c) of Section 3; the Company may
refuse to continue providing those Welfare Benefits if there is any
such noncompliance. The Company shall have the burden of proof
regarding any question of the Executive’s compliance or
noncompliance with this Section 4.




	5.	 	Tax Limitation. If any payment or benefit received or to be received by
the Executive under this Agreement or any other of the Total Severance
Benefits would not be deductible, in whole or in part, by the Company as a
result of Section 280G of the Code, the payments and benefits under this
Agreement shall be reduced until no portion of the Total Severance
Benefits is nondeductible as a result of Section 280G of the Code. For
the purposes of this Section 5:




	 	(a)	 	Any portion of the Total Severance Benefits that the
Executive has effectively waived in writing before the date on which
that portion is received shall not be taken into account in
determining the limitation on the Total Severance Benefits;
	 
	 	(b)	 	any portion of the Total Severance Benefits that does not
constitute a “parachute payment” within the meaning of Section
280G(b)(2) of the Code shall not be taken into account in
determining the limitation on the Total Severance Benefits; and
	 
	 	(c)	 	the value of any non-cash benefit or deferred payment
included in the Total Severance Benefits shall be determined by the
Company’s independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.




	6.	 	Executive’s Legal Expenses. The Company shall pay the Executive an
amount equal to the reasonable legal fees and other expenses incurred in
good faith by him in obtaining or retaining payments and benefits under
this Agreement, including all such fees and expenses (if any) in
enforcing, in good faith, any right or benefit provided by this Agreement
or in connection with the contest or defense of any tax audit or
proceeding by the Internal Revenue Service to the extent that Section 4999
of the Code is alleged or claimed to apply to any payment or benefit
provided under this Agreement. The Company will be obligated under the
preceding sentence even if the Executive is not successful in any
enforcement claim or counterclaim by him, or in any such tax contest or
defense, so long as he acted in good faith. The Company shall make any
payment required by this Section 6 within five Business Days after Notice
from the Executive requesting payment and providing such evidence of the
incurrence of those fees and



-4-









	 	 	expenses as the Company may reasonably request.
	 
	7.	 	No Mitigation. If a Severance Payment Event occurs, the Executive need
not seek other employment or attempt in any way to reduce the amount of
any payments or benefits to the Executive by the Company under this
Agreement. The amount of the Severance Payment and, except as stated in
subsection (c) of Section 3 and in subsection (e) of Section 4, any other
severance benefit provided or to be provided to the Executive by the
Company under Section 3 shall not be reduced by any compensation earned by
the Executive as the result of any other employment, consulting
relationship, or other business activity.
	 
	8.	 	No Set-off. The Company’s obligations under this Agreement are absolute
and unconditional, and not subject to any set-off, counterclaim,
recoupment, defense, or other right that the Company or any Subsidiary may
have against the Executive, except as stated in subsection (c) of Section
3 and in subsection (e) of Section 4.
	 
	9.	 	Tax Withholding. The Company shall withhold from any payments or
benefits under this Agreement (whether or not otherwise acknowledged under
this Agreement) all federal, state, local, or other taxes as may be
legally required to be withheld.
	 
	10.	 	Employment Status. Nothing in this Agreement provides the Executive with
any continued employment with the Company or any Subsidiary or shall
interfere with the Company’s right to terminate the Executive’s employment
at any time and for any (or no) reason.
	 
	11.	 	No Exclusivity. Nothing in this Agreement prevents or limits the
Executive’s participation in any Plan for which the Executive may qualify
or shall impair any rights that the Executive may have under any other
contract or agreement with the Company or any Subsidiary, except for any
limitation resulting from Section 5.
	 
	12.	 	Governing Law; Jurisdiction. All matters or issues relating to the
interpretation, construction, validity, and enforcement of this Agreement
shall be governed by the laws of Texas, without giving effect to any
choice-of-law principle that would cause the application of the laws of
any jurisdiction other than Texas. Jurisdiction and venue of any action
or proceeding relating to this Agreement or any Dispute (to the extent
arbitration is not required under Section 13) shall be exclusively in
Dallas County, Texas.
	 
	13.	 	Arbitration. Except as provided in subsection (h) of this Section 13,
any Dispute must be resolved by binding arbitration in accordance with the
following:




	 	(a)	 	A Party may begin arbitration by filing a demand for
arbitration in accordance with the Arbitration Rules and
concurrently Notifying the other Party of that demand. If the
Parties are unable to agree upon a panel of three arbitrators within
ten days after the demand for arbitration was filed (and do not
agree to an extension of that ten-day period), either Party may
request the Dallas office of the American Arbitration Association to
appoint the arbitrator or arbitrators necessary



-5-









	 	 	 	to complete the panel in accordance with the Arbitration Rules.
Each arbitrator so appointed shall be deemed accepted by the
Parties as part of the panel.
	 
	 	(b)	 	The arbitration shall be conducted in the Dallas-Fort Worth,
Texas metropolitan area at a place and time agreed upon by the
Parties with the panel, or if the Parties cannot agree, as
designated by the panel. The panel may, however, call and conduct
hearings and meetings at such other places as the Parties may agree
or as the panel may, on the motion of one Party, determine to be
necessary to obtain significant testimony or evidence.
	 
	 	(c)	 	The panel may authorize any and all forms of discovery upon a
Party’s showing of need that the requested discovery is likely to
lead to material evidence needed to resolve the Dispute and is not
excessive in scope, timing, or cost.
	 
	 	(d)	 	The arbitration shall be subject to the Federal Arbitration
Act and conducted in accordance with the Arbitration Rules to the
extent that they do not conflict with this Section 13. The Parties
and the panel may, however, agree to vary to provisions of this
Section 13 or the matters otherwise governed by the Arbitration
Rules.
	 
	 	(e)	 	The arbitration hearing shall be held within 30 days after
the appointment of the panel. The panel’s final decision or award
shall be made within 30 days after the hearing. That final decision
or award shall be made by unanimous or majority vote or consent of
the arbitrators constituting the panel, and shall be deemed issued
at the place of arbitration. The panel’s final decision or award
shall be based on this Agreement and applicable law; the panel may
not act according to equity and conscience or apply the law
merchant.
	 
	 	(f)	 	The panel’s final decision or award may include injunctive
relief in response to any actual or impending breach of this
Agreement or any other actual or impending action or omission of a
Party under or in connection with this Agreement.
	 
	 	(g)	 	The panel’s final decision or award shall be final and
binding upon the Parties, and judgment upon that decision or award
may be entered in any court having jurisdiction. The Parties waive
any right to apply or appeal to any court for relief from the
preceding sentence or from any decision of the panel made before the
final decision or award.
	 
	 	(h)	 	Nothing in this Section 13 limits the right of either Party
to apply to a court having jurisdiction to (i) enforce the agreement
to arbitrate in accordance with this Section 13, (ii) seek
provisional or temporary injunctive relief, in response to an actual
or impending breach of the Agreement or otherwise so as to avoid a
irrevocable damage or maintain the status quo, until a final
arbitration decision or award is rendered or the Dispute is
otherwise resolved, or (iii) challenge or vacate any final
arbitration decision or award that does not comply with this Section
13.



-6-









		
	 	     In addition, nothing in this Section 13 prohibits the Parties from
resolving any Dispute (in whole or in part) by agreement.




	14.	 	Company’s Successor. In addition to any obligations imposed by law upon
any successor to the Company, the Company shall require any successor to
all or substantially all of the Company’s business or assets (whether
direct or indirect and whether by purchase, reorganization, merger, share
exchange, consolidation, or otherwise) to expressly assume and agree to
perform the Company’s obligations under this Agreement to the same extent,
and in the same manner, as the Company would be required to perform if no
such succession had occurred. This Agreement shall be binding upon, and
inure to the benefit of, any successor to the Company.
	 
	15.	 	Executive’s Successor. This Agreement shall inure to the benefit of, and
be enforceable by, the Executive’s personal or legal representatives,
administrators, successors, executors, heirs, distributees, devisees, and
legatees. If the Executive should die after a Severance Payment Event,
but before any payment or benefit to which the Executive is entitled under
this Agreement has been received by the Executive, all payments or
benefits to which the Executive would have been entitled had he continued
to live (other than any such Welfare Benefits that, by their terms,
terminate upon the Executive’s death) shall be made or provided in
accordance with this Agreement to the representatives, executors, or
administrators of the Executive’s estate.
	 
	16.	 	Restricted Assignment. Except as expressly provided in Sections 14 and
15, neither Party may assign, transfer, or delegate this Agreement or any
of its or his rights or obligations under this Agreement without the prior
written consent of the other Party. Any attempted assignment, transfer,
or delegation in violation of the preceding sentence shall be void and of
no effect.
	 
	17.	 	Waiver and Amendment. No term or condition of this Agreement shall be
deemed waived other than by a writing signed by the Party against whom or
which enforcement of the waiver is sought. Without limiting the
generality of the preceding sentence, a Party’s failure to insist upon the
other Party’s strict compliance with any provision of this Agreement or to
assert any right that a Party may have under this Agreement shall not be
deemed a waiver of that provision or that right. Any written waiver shall
operate only as to the specific term or condition waived under the
specific circumstances and shall not constitute a waiver of that term or
condition for the future or a waiver of any other term or condition. No
amendment or modification of this Agreement shall be deemed effective
unless stated in a writing signed by the Parties.
	 
	18.	 	Entire Agreement. This Agreement contains the Parties’ entire agreement
regarding the subject matter of this Agreement and supersedes all prior
agreements and understandings between them regarding that subject matter.
The Parties have made no agreements, representations, or warranties
regarding the subject matter of this Agreement that are not set forth in
this Agreement.
	 
	19.	 	Notice. Each notice or other communication required or permitted under
this Agreement



-7-









	 	 	shall be in writing and transmitted, delivered, or sent by personal
delivery, prepaid courier or messenger service (whether overnight or
same-day), prepaid telecopy or facsimile, or prepaid certified United
States mail (with return receipt requested), addressed (in any case) to
the other Party at the address or number for that Party set forth below
that Party’s signature on this Agreement, or at such other address or
number as the recipient has designated by Notice to the other Party.
Each notice or communication so transmitted, delivered, or sent:




	 	(a)	 	in person, by courier or messenger service, or by certified
United States mail shall be deemed given, received, and effective on
the date delivered to or refused by the intended recipient (with the
return receipt, or the equivalent record of the courier or
messenger, being deemed conclusive evidence of delivery or refusal),
or
	 
	 	(b)	 	by telecopy or facsimile shall be deemed given, received, and
effective on the date of actual receipt (with the confirmation of
transmission being deemed conclusive evidence of receipt, except
where the intended recipient has promptly Notified the other Party
that the transmission is illegible).




		
	 	Nevertheless, if the date of delivery or transmission is not a Business
Day, or if the delivery or transmission is after 5:00 p.m. on a Business
Day, the notice or other communication shall be deemed given, received,
and effective on the next Business Day.




	20.	 	Severability. If any provision of this Agreement is or becomes invalid
or unenforceable, that provision (to the extent invalid or unenforceable)
shall be deemed amended or reformed to the extent required to render it
valid and enforceable, and the remainder of this Agreement shall be
unaffected and shall continue in effect.
	 
	21.	 	Counterparts. This Agreement may be signed in counterparts, with the
same effect as if both Parties had signed the same document. All
counterparts shall be construed together to constitute one, and the same,
document.



The Parties have signed this Agreement to be effective as of the date set forth
in the first paragraph.



	 	 	 
	Company:	 	
Executive:
	
	
	
	

	
	
	
	

	
	
	
	

	ACE CASH EXPRESS, INC	 	 
	
	
	
	

	
	
	
	

	
	
	
	

	
	
	
	

	
	 	


	 	 	
BARRY M. BARRON
	
	
	
	

	
	
	
	

	
	
	
	

	Address for Notice:	 	
Address for Notice:
	1231 Greenway Drive

Suite 800

Irving, Texas 75038

Telecopy no. (972) 550-5150

Attention: Chairman of the Board	 	
                                             

                            , Texas                     

Telecopy no. (     )        -          



-8-







Exhibit A



to



Change-in-Control Executive Severance Agreement



Defined Terms. In the Agreement, the following terms have the corresponding
meanings:


“Acquiring Person” means any Person (other than an Excluded Person) who or
which, alone or together with all Affiliates and Associates of that Person, is
the Beneficial Owner of 25% or more of the Voting Securities of the Company
then outstanding.


“Affiliate” and “Associate” have the respective meanings ascribed to them in
Rule 12b-2 under the Exchange Act.


“Agreement” means the Change-in-Control Executive Severance Agreement between
the Parties of which this Exhibit A is a part.


“Arbitration Rules” means the Rules for Commercial Arbitration of the American
Arbitration Association in effect at the time of an arbitration of a Dispute.


“Base Salary” means the Executive’s annual salary, or base or fixed annual
compensation, of record from the Company or a Subsidiary that is his primary
employer, excluding any amount received or to be received under incentive
compensation Plans, whether or not deferred.


“Beneficial Owner” means beneficial owner as defined in Rule 13d-3 under the
Exchange Act. (“Beneficially Owns” has the correlative meaning.) Any
calculation of the number of Voting Securities outstanding at any particular
time, including for purposes of determining the particular percentage of such
outstanding Voting Securities of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under
the Exchange Act.


“Benefit Continuation Period” means 30 consecutive months after a Severance
Payment Event.


“Board” means the Board of Directors of the Company.


“Business Day” means any Monday through Friday, excluding any such day on which
banks are authorized to be closed in Texas.


“Cause” means:



	(i)	 	the Executive’s willful failure to substantially perform his employment
duties to the Company, as such duties may exist from time to time, or
comply with the written policies of the Company (other than any such
failure resulting from Disability or the Executive’s



A-9









	 	 	termination for Good Reason) which continues for a reasonable time after a
Notice to the Executive from the Board that (A) identifies the manner in
which the Board believes that the Executive has not substantially
performed the Executive’s duties or complied with written policies and (B)
demands substantial performance or compliance within a specified
reasonable time; or
	 
	(ii)	 	the Executive’s willful engaging in conduct (including any illegal
conduct) that is demonstrably and materially injurious to the Company or
any Subsidiary, monetarily or otherwise.



For purposes of this definition, no act, or failure to act, by the Executive
shall be deemed “willful” unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the Executive’s act, or
failure to act, was in the best interest of the Company and its Subsidiaries.
For the purpose of clause (i) of this definition, a “reasonable time” shall be
a time period determined by the Board, acting in good faith, to be sufficient
under normal circumstances to correct the deficient performance or compliance
described in the Notice to the Executive.


“Change in Control” means the occurrence of any one or more of the following:



	(i)	 	Any Person becomes an Acquiring Person, except as the result of (A) any
acquisition of Voting Securities of the Company by the Company or (B) any
acquisition of Voting Securities of the Company directly from the Company
(as authorized by the Board).
	 
	(ii)	 	Individuals who constitute the Incumbent Board cease for any reason to
constitute at least a majority of the Board; and for this purpose, any
individual who becomes a member of the Board after the date of this
Agreement whose election, or nomination for election by holders of the
Company’s Voting Securities, was approved by the vote of at least a
majority of the individuals then constituting the Incumbent Board shall be
considered a member of the Incumbent Board (except that any such
individual whose initial election as director occurs as the result of an
actual or threatened election contest, within the meaning of Rule 14a-11
under the Exchange Act, or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board shall
not be so considered).
	 
	(iii)	 	The consummation of a reorganization, merger, share exchange,
consolidation, or sale or disposition of all or substantially all of the
assets of the Company unless, in any case, the Persons who or which
Beneficially Own the Voting Securities of the Company immediately before
that transaction Beneficially Own, directly or indirectly, immediately
after the transaction, at least 75% of the Voting Securities of the
Company or any other corporation or other entity resulting from or
surviving the transaction (including a corporation or other entity which,
as the result of the transaction, owns all or substantially all of Voting
Securities of the Company or all or substantially all of the Company’s
assets, either directly or indirectly through one or more subsidiaries) in
substantially the same proportion as their respective ownership of the
Voting Securities of the Company immediately before that transaction.



A-10









	(iv)	 	The Company’s shareholders approve a complete liquidation or dissolution
of the Company.



“Code” means the Internal Revenue Code of 1986, as amended from time to time.


“Company” means Ace Cash Express, Inc., a Texas corporation.


“Disability” means the Executive’s inability, because of any physical or mental
illness or impairment, to substantially perform all of his employment duties to
the Company, on a full-time basis, for a period of at least 90 consecutive
days, as reasonably determined by the Board, based on advice from one or more
competent medical doctors selected by the Company or any of its insurers and
acceptable to the Executive or his legal representative.


“Dispute” means any dispute, disagreement, claim, or controversy arising in
connection with or relating to the Agreement or the validity, interpretation,
performance, breach, or termination of the Agreement.


“Exchange Act” means the Securities Exchange Act of 1934, as amended from time
to time.


“Excluded Person” means:



	(i)	 	the Executive or any group (within the meaning of Section 13(d)(3) of the
Exchange Act) of which the Executive is a member;
	 
	(ii)	 	any Person that controls (as defined in Rule 12b-2 under the Exchange
Act) the Company as of the date of the Agreement or any group of which any
such Person is a member;
	 
	(iii)	 	any employee-benefit plan, or related trust, sponsored or maintained by
the Company or any of its Subsidiaries, or any trustee or other fiduciary
thereof; or
	 
	(iv)	 	any corporation or other entity owned directly or indirectly by the
shareholders of the Company in substantially the same proportions as their
ownership of the Voting Securities of the Company.



“Executive” means Barry M. Barron.


“Good Reason” means:




	(i)	 	the assignment to the Executive of any duties inconsistent in any
material respect with the Executive’s position (which, in this definition,
includes status, office, title, and reporting requirements), duties, or
responsibilities as an officer of the Company or any Subsidiary, or any
other material diminution in the Executive’s position, authority, duties,
or responsibilities from those in effect as of three months before a
Change in Control, other than (in any case) an isolated and inadvertent
action not taken in bad faith that is remedied by the Company promptly
after Notice thereof to the Company by the Executive;



A-11









	(ii)	 	the Company’s requiring the Executive to be based at any office or
location farther than 50 miles from the Executive’s office or principal
job location immediately before a Change in Control, except for required
business travel to an extent substantially consistent with the Executive’s
travel obligations immediately before the Change in Control;
	 
	(iii)	 	any failure to comply with and satisfy Section 14, if the Company’s
successor has received at least ten days’ prior written notice from the
Company or the Executive of the requirements of Section 14;
	 
	(iv)	 	a material reduction in the Executive’s Base Salary from the highest
amount in effect at any time within three months before a Change in
Control;
	 
	(v)	 	the failure by the Company or any Subsidiary to continue in effect any
compensation Plan in which the Executive participates immediately before
the Change in Control that is material to the Executive’s total
compensation, unless an equitable arrangement (embodied in an ongoing
substitute or alternative Plan or arrangement) has been made with respect
to that Plan, or the failure by the Company or any Subsidiary to continue
the Executive’s participation in any such compensation Plan (or in such
substitute or alternative Plan or arrangement) on a basis not materially
less favorable to the Executive, both in terms of the amount of benefits
provided and the level of the Executive’s participation relative to other
participants, than existed at any time within three months before the
Change in Control; or
	 
	(vi)	 	the failure by the Company or any Subsidiary to continue to provide the
Executive with benefits similar in all material respects to those enjoyed
by the Executive under any Plan in which the Executive was participating
at any time within three months before the Change in Control, the taking
of action by the Company or any Subsidiary which would directly or
indirectly materially reduce any of such benefits or deprive the Executive
of any material fringe benefit enjoyed by the Executive at any time three
months before the Change in Control, or the failure by the Company or any
Subsidiary to provide the Executive with the number of paid vacation days
to which the Executive is entitled on the basis of years of service with
the Company and its Subsidiary in accordance with the Company’s or a
Subsidiary’s normal vacation policy in effect at any time within three
months before the Change in Control.



“Incumbent Board” means the members of the Board on the effective date of the
Agreement (subject, however, to clause (ii) of the definition of “Change in
Control”).


“Notice” means a written communication complying with Section 19. (“Notify”
has the correlative meaning.)


“Parties” means, collectively, the Company and the Executive. (“Party” means
either the Company or the Executive.)


“Person” means any individual, firm, corporation, partnership, limited
liability company, trust, or other entity, including any successor (by merger
or otherwise) of such entity.



A-12






“Plan” means any bonus, incentive compensation, savings, retirement, stock
option, stock appreciation, stock ownership or purchase, pension, deferred
compensation, or Welfare Benefits plan, policy, practice, program, or
arrangement of (including any separate contract or agreement with) the Company
or any Subsidiary for its employees.


“Restricted Territory” means, collectively, Dallas County, Texas; each county
(or equivalent subdivision) of any state, district, or territory of the United
States of America as to which the Executive had supervisory responsibility for
the Company during his employment with the Company; and each county (or
equivalent territory) adjacent to any of the preceding counties (or equivalent
territories).


“Severance Payment” means an amount equal to two and one-half times the sum of:



	(i)	 	the Executive’s highest Base Salary in effect at any time within three
months before the Change in Control;
	 
	(ii)	 	the highest amount of the annual automobile allowance payable to the
Executive within three months before the Change in Control; and
	 
	(iii)	 	an amount equal to the average of the annual bonuses or incentive cash
compensation paid or payable to the Executive by the Company and any
Subsidiary for the three fiscal years of the Company preceding the fiscal
year in which the Change in Control occurs, but in any event no less than
the Executive’s targeted bonus or amount of incentive cash compensation
for the fiscal year in which the Change in Control occurs (or if not yet
determined for that fiscal year before the Change in Control occurs, the
Executive’s targeted bonus or amount of incentive compensation for the
preceding fiscal year).



For clause (iii) of this definition: (a) if the Executive has not been employed
by the Company and a participant in a bonus or incentive cash compensation Plan
during the three completed fiscal years of the Company before the Change in
Control, the average of the annual bonuses or incentive cash compensation shall
be calculated over the completed fiscal years of the Company during which the
Executive was so employed and a participant in a bonus or incentive cash
compensation Plan; (b) the calculation of the average of the annual bonuses or
incentive cash compensation of the Executive shall include a fiscal year during
which the Executive was employed by the Company and a participant in a bonus or
incentive cash compensation Plan even if the Executive did not earn any bonus
or incentive cash compensation for that fiscal year; (c) the bonus or incentive
cash compensation paid or payable to the Executive for only part of a fiscal
year of the Company shall be annualized (on the same basis as the one on which
the bonus or compensation was prorated) for that fiscal year to calculate the
average; and (d) the “targeted” bonus or incentive cash compensation for the
fiscal year of the Company in which the Change in Control occurs shall be the
amount identified as a “target” by the Board (or its compensation committee
that administers the bonus or incentive cash compensation Plan) for the
Executive, or if no amount is identified as a “target,” the “targeted” amount
shall be the amount of the bonus or incentive cash compensation that the
Executive could earn for that fiscal year if the business plan for the Company
or the Executive, or both, is satisfied (but not exceeded).


A-13






“Severance Payment Event” means the occurrence of a Change in Control
coincident with or followed, at any time before the end of the 24th month
immediately following the month in which the Change in Control occurred, by the
termination of the Executive’s employment with the Company for any reason other
than (a) by the Executive without Good Reason, (b) by the Company because of
Disability or for Cause, or (c) by the death of the Executive. Any transfer of
the Executive’s employment from the Company to a Subsidiary, from a Subsidiary
to the Company, or from one Subsidiary to another Subsidiary is not a
termination of the Executive’s employment by the Company for purposes of the
Agreement (though any such transfer might, depending on the circumstances,
constitute or result in a termination of employment by the Executive for Good
Reason).


“Stock Award” means a stock option, stock appreciation right, restricted stock
grant, performance share plan, or any other agreement in which the Executive
has, or will (by the passage of time only, not based on the Executive’s
performance) have, (a) an interest in capital stock of the Company or a right
to obtain capital stock or an interest in capital stock of the Company, or (b)
an interest or right the economic value of which depends solely on the
performance of the capital stock of the Company.


“Subsidiary” means a corporation or other entity, whether incorporated or
unincorporated, of which at least a majority of the Voting Securities is owned,
directly or indirectly, by the Company.


“Total Severance Benefits” means the Severance Payment and all other payments
and benefits received or to be received by the Executive under the Agreement
and all payments and benefits (if any) to which the Executive may be entitled
under any Plan upon or as the result of a Change in Control or the termination
of his employment with the Company, or both.


“Trade Secrets” means any and all information and materials (in any medium)
that are proprietary to the Company or are treated as confidential by the
Company as part of or relating to all or any portion of the Company’s business,
including information and materials about the products and services offered, or
the needs of customers served, by the Company; compilations of information,
records and specifications, processes, programs, and systems of the Company;
research of or for the Company; and methods of doing business of the Company.


“Voting Securities” means securities or other interests having by their terms
ordinary voting power to elect members of the board of directors of a
corporation or individuals serving similar functions for a noncorporate entity.


“Welfare Benefits” means medical, prescription, dental, disability, employee
life, group life, accidental death, and travel accident insurance (whether
funded by insurance policy or self-insured by the Company or any Subsidiary)
provided or arranged by the Company or any Subsidiary to be provided to its
employees.


“Welfare Benefit Plan” means any Plan that provides any Welfare Benefits.


A-14







Interpretive Matters. In the interpretation of the Agreement, except where the
context otherwise requires:



	(a)	 	“including” or “include” does not denote or imply any limitation;
	 
	(b)	 	“or” has the inclusive meaning “and/or”;
	 
	(c)	 	the singular includes the plural, and visa a versa, and each gender
includes each of the others;
	 
	(d)	 	captions or headings are only for reference and are not to be considered
in interpreting the Agreement;
	 
	(e)	 	“Section” refers to a Section of the Agreement, unless otherwise stated
in the Agreement;
	 
	(f)	 	“month” refers to a calendar month; and
	 
	(g)	 	a reference to any statute, rule, or regulation includes any amendment
thereto or any statute, rule, or regulation enacted or promulgated in
replacement thereof.




A-15