AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement dated as of April 1,
1997 (this "AGREEMENT") is entered into by and between American Residential
Services, Inc., a Delaware corporation (the "CORPORATION"), and Xxxxx X.
Xxxxxxxxx XX (the "EMPLOYEE") and amends and restates in its entirety the
Employment Agreement dated as of January 20, 1997 between the Corporation and
the Employee.
1. EMPLOYMENT. The Corporation hereby employs the Employee and the
Employee hereby accepts employment with the Corporation upon the terms and
subject to the conditions set forth herein.
2. DUTIES AND RESPONSIBILITIES. Subject to the power of the board of
directors of the Corporation to manage the business and affairs of the
Corporation and to elect and remove officers and employees of the Corporation
and its subsidiaries, the Employee shall serve the Corporation as Vice
President, Chief Financial Officer and Chief Accounting Officer and shall
perform the services and functions relating to such offices or otherwise
reasonably incident to such offices. The Employee shall report directly to the
Chief Executive Officer of the Corporation, or such other officer of the
Corporation as the board of directors of the Corporation may determine.
3. COMPENSATION AND OTHER EMPLOYEE BENEFITS.
As compensation for his services under the terms of this
Agreement:
(a) Subject to section 4 hereof, the Employee shall be paid
an annual salary of $125,000, payable in accordance with
the then-current payroll policies of the Corporation (such
annual salary is herein referred to as the "BASE SALARY");
the Base Salary shall be subject to increase (but not
decrease) at the discretion of the Corporation;
(b) subject to the right of the Corporation to amend or
terminate any employee and/or group or senior executive
benefit, bonus and/or stock option plan, the Employee shall
be entitled to receive the following employee benefits:
(1) the Employee shall have the right to participate in
such medical and dental plans as are adopted by the
Corporation, as well as any or future employee and/or group
benefit plans of the Corporation that are available to its
exempt salaried employees generally (including, without
limitation, disability, accident, medical, life insurance
and hospitalization plans);
1
(2) the Employee shall have the right to participate, at
levels determined by the board of directors (or the
compensation committee thereof), in such bonus and/or stock
option plans of the Corporation as shall be determined by
the board of directors (or the compensation committee
thereof);
(3) the Employee shall be entitled to reimbursement from
the Corporation for reasonable out-of-pocket expenses
incurred by him in the course of the performance of his
duties hereunder.
4. TERM.
The term of the Employee's employment under this Agreement
shall commence on the date of this Agreement and shall end on April
1, 2000, provided, however, after April 1, 1999, the term shall
continuously extend without the necessity of action of either party
for a continually renewing period of one year's duration, until, in
either case, an event has occurred as described in, or one of the
parties shall have made an appropriate election pursuant to, the
provisions of Section 6 of this Agreement. Such term is referred to
herein as the "EMPLOYMENT TERM".
5. COMPETITION AND CONFIDENTIALITY.
(a) If, during the Employment Term (or any extension
thereof), the employment of the Employee is terminated pursuant to
Section 6(a) or Section 6(e), or if the Employee voluntarily
terminates his employment pursuant to Section 6(d), or if this
Agreement expires pursuant to its terms, then for the period of time
remaining in the Employment Term, the Employee shall not (i) accept
employment with or render service to any person, firm or corporation
and that is engaged in a business directly competitive with the
business of the Corporation, (ii) directly or indirectly own manage,
operate, finance or control or participate in the ownership,
management, operation or control of, or be connected as a principal,
agent, representative, consultant, advisor, investor, owner, partner,
financier, manager or joint venturer with, or permit his name to be
used by or in connection with, any business or enterprise directly
competitive with the business of the Corporation (provided, however,
that the Employee may invest as an investor in the voting securities
of any person that is a reporting company under the Securities
Exchange Act of 1934, as amended, so long as (A) the aggregate amount
of such securities that the Employee owns directly or indirectly is
less than five percent of the total outstanding voting securities of
such person and (B) the Employee has no other affiliation with such
person), or (iii) solicit the employment of any person who, within
six months before or after the date of the Employee's termination, is
employed by the Corporation on a full or part-time basis. For the
purposes of this Section 5, the Corporation shall be deemed to
include all of the
2
subsidiaries of the Corporation.
(b) It is the desire and intent of each of the parties that
the provisions of Section 5(a) shall be enforced to the fullest
extent permissible under the laws and public policies applied in the
State of Texas. Accordingly, if any particular portion of Section
5(a) shall be adjudicated to be invalid or unenforceable, Section
5(a) shall be deemed amended to (i) reform the particular portion to
provide for such maximum restrictions as will be valid and
enforceable, or if that is not possible, then (ii) delete therefrom
the portion thus adjudicated to be invalid or unenforceable. Section
5(a) shall inure to the benefit of any successor to the Corporation.
(c) During the Employment Term and for a period of two
years after termination of the Employment Term, the Employee will not
divulge or appropriate to his own use or to the use of others any
secret or confidential information pertaining to the business of the
Corporation obtained by the Employee in his capacity as an employee
of the Corporation. For purposes of this Agreement, the term secret
and confidential information does not include any information that is
or becomes generally available to and known by the public (other than
as a result of an unpermitted disclosure directly or indirectly by
the Employee).
(d) The Employee acknowledges that Sections 5(a) and (c)
are expressly for the benefit of the Corporation, that the
Corporation would be irreparably injured by a violation of Section
5(a) or (c), and that the Corporation would have no adequate remedy
at law in the event of such violation. Therefore, the Employee
acknowledges and agrees that injunctive relief, specific performance
or any other appropriate equitable remedy (without any bond or other
security being required) are appropriate remedies to enforce
compliance by the Corporation with Sections 5(a) and (c).
6. TERMINATION OF EMPLOYMENT.
(a) FOR DUE CAUSE. Nothing herein shall prevent the
Corporation from terminating, without prior notice, the Employee for
"Due Cause" (as hereinafter defined), in which event the Employee
shall be entitled to receive his Base Salary on a pro rata basis to
the date of termination. In the event of such termination for Due
Cause, all other rights and benefits the Employee may have under the
employee and/or group or senior executive benefit, bonus and/or stock
option plans and programs of the Corporation, generally, shall be
determined in accordance with the terms and conditions of such plans
and programs. The term "DUE CAUSE" shall mean (i) the Employee has
committed a willful serious act, such as fraud, embezzlement or
theft, against the Corporation intending to enrich himself at the
expense of the Corporation, (ii) the Employee has been convicted of a
felony, (iii) the Employee has engaged in grossly improper conduct
which has caused demonstrable and serious injury, monetary or
otherwise, to the Corporation, (iv) the Employee, in carrying out his
duties hereunder, has been guilty of willful gross neglect or willful
gross misconduct, (v) the
3
Employee has refused to carry out his duties in gross dereliction of
duty and, after receiving written notice to such effect from the
Corporation, the Employee fails to cure the existing problem within
five days, or (vi) the Employee has materially breached this
Agreement and has not remedied such breach within five days after
receipt of written notice from the Corporation that a breach of this
Agreement has occurred.
(b) DUE TO DEATH. In the event of the death of the
Employee, this Agreement shall terminate on the date of death and the
estate of the Employee shall be entitled to the Employee's Base
Salary through the end of the month in which he died. In the event of
such termination due to death, all other rights and benefits the
Employee (or his estate) may have under the employee and/or group or
senior executive benefit, bonus and/or stock option plans and
programs of the Corporation, generally, shall be determined in
accordance with the terms and conditions of such plans and programs.
(c) DISABILITY. In the event the Employee suffers a
"Disability" (as hereinafter defined), this Agreement shall terminate
on the date on which the Disability occurs and the Employee shall be
entitled to his Base Salary through the end of the month in which his
employment is terminated due to the Disability. In the event of such
termination due to Disability, all other rights and benefits the
Employee may have under the employee and/or group or senior executive
benefit, bonus and/or stock option plans and programs of the
Corporation, generally, shall be determined in accordance with the
terms and conditions of such plans and programs. For purposes of this
Agreement, "DISABILITY" shall mean the inability or incapacity (by
reason of a medically determinable physical or mental impairment) of
the Employee to perform the duties and responsibilities related to
the job or position with the Corporation described in Section 2 for a
period that can be reasonably expected to last more than 180 days.
Such inability or incapacity shall be documented to the reasonable
satisfaction of the Corporation by appropriate correspondence from
registered physicians reasonably satisfactory to the Corporation.
(d) VOLUNTARY TERMINATION. The Employee may voluntarily
terminate his employment under this Agreement at any time by
providing at least 21 days' prior written notice to the Corporation.
In such event, the Employee shall be entitled to receive his Base
Salary until the date his employment terminates and all other
benefits the Employee may have under the employee and/or group or
senior executive benefit, bonus and/or stock option plans and
programs of the Corporation, generally, shall be determined in
accordance with the terms and conditions of such plans and programs.
(e) CONSTRUCTIVE TERMINATION.
(i) If the Corporation (i) terminates the employment of the
Employee other than for Due Cause or because of a
Disability, (ii) demotes the Employee to a lesser position
than as provided in Section 2, (iii) decreases the
Employee's Base Salary below the level provided for by the
terms of Section 3(a), or (iv) requires
4
the Employee to move his principal residence from the
Houston, Texas area, then such action by the Corporation,
unless consented to in writing by the Employee, shall be
deemed to be a constructive termination by the Corporation
of the Employee's employment ("CONSTRUCTIVE TERMINATION").
(ii) In the event of a Constructive Termination, the
Employee shall be entitled to receive, from the date of
Constructive Termination, his Base Salary (as provided in
Section 3(a)) for a period equal to the remaining period in
the Employment Term, payable in accordance with the
then-current payroll policies of the Corporation. In the
event of such Constructive Termination, all other rights
and benefits the Employee may have under the employee
and/or group or senior executive benefit, bonus and/or
stock option plans and programs of the Corporation,
generally, shall be determined in accordance with the terms
and conditions of such plans and programs.
(iii) In the event of the death or Disability of the
Employee following Constructive Termination, the amounts
set forth in Section 6(e)(ii) shall continue to be owing
and shall be paid to the estate of the Employee or the
Employee, as applicable.
7. NOTICES. All notices, requests, demands and other communications
given under or by reason of this Agreement shall be in writing and shall be
deemed given when delivered in person or when mailed, by certified mail (return
receipt requested), postage prepaid, addressed as follows (or to such other
address as a party may specify by notice pursuant to this provision):
(a) If to the Corporation:
American Residential Services, Inc.
Post Oak Tower, Suite 725
0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
(b) If to the Employee:
Xxxxx X. Xxxxxxxxx XX
0000 Xxxxxxxxxxx
Xxxx, Xxxxx 00000
5
8. CONTROLLING LAW. The execution, validity, interpretation and
performance of this Agreement shall be governed by and construed in accordance
with the law of the State of Texas.
9. ADDITIONAL INSTRUMENTS. The Employee and the Corporation shall
execute and deliver any and all additional instruments and agreements that may
be necessary or proper to carry out the purposes of this Agreement.
10. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement contains the
entire agreement of the Employee and the Corporation relating to the matters
contained herein and supersedes all prior agreements and understandings, oral or
written, between the Employee and the Corporation with respect to the subject
matter hereof. This Agreement may be changed only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
11. SEPARABILITY. If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by the decision of any arbitrator or by decree of a court
of last resort, the Employee and the Corporation shall promptly meet and
negotiate substitute provisions for those rendered or declared illegal or
unenforceable to preserve the original intent of this Agreement to the extent
legally possible, but all other provisions of this Agreement shall remain in
full force and effect.
12. ASSIGNMENTS. The Corporation may assign this Agreement to any
person or entity succeeding to all or substantially all of the business
interests of the Corporation by merger or otherwise. The rights and obligations
of the Employee under this Agreement are personal to him, and no such rights,
benefits or obligations shall be subject to voluntary or involuntary alienation,
assignment or transfer, except as otherwise contemplated hereby.
13. EFFECT OF AGREEMENT. Subject to the provisions of Section 12 with
respect to assignments, this Agreement shall be binding upon the Employee and
his heirs, executors, administrators, legal representatives and assigns and upon
the Corporation and its respective successors and assigns, except as otherwise
contemplated hereby.
14. EXECUTION. This Agreement may be executed in multiple
counterparts each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
15. WAIVER OF BREACH. The waiver by either party to this Agreement of
a breach of any provision of the Agreement by the other party shall not operate
or be construed as a waiver by such party of any subsequent breach by such other
party.
6
IN WITNESS WHEREOF, the Employee and the Corporation have executed
this Agreement effective as of the date first above written.
AMERICAN RESIDENTIAL SERVICES, INC.
-----------------------------
Xxxx X. Held
Senior Vice President and General Counsel
--------------------------
Xxxxx X. Xxxxxxxxx XX
