EXHIBIT 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement") is
dated as of January 1, 1998, between INNOVATIVE VALVE TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and PLINY X. XXXXXXX ("Executive"). The
Company and the Executive are hereinafter sometimes referred to collectively as
the "Parties" and individually as a "Party."
W I T N E S S E T H:
WHEREAS, pursuant to that certain Stock Purchase Agreement dated effective
February 26, 1997 (the "PURCHASE AGREEMENT"), entered into by and among the
Company, Executive, The Xxxxx X. Xxxxxx--GSV Voting Trust, Xxxxx X. Xxxxxx and
Xxxxxx Xxxxxx, the Company acquired more than ninety-nine percent (99%) of the
issued and outstanding shares of capital stock of GSV, Inc. ("GSV") from the
Executive and the other shareholders of GSV;
WHEREAS, the Executive was a shareholder, executive officer and director
of GSV, and was a primary beneficiary of the consideration paid by the Company
under the Purchase Agreement; and
WHEREAS, as a result of the Executive's intimate knowledge of the business
of GSV, and the trade secrets and confidential information relating thereto, as
well as his reputation and relationships with, among others, the clients,
customers, subcontractors, vendors, suppliers, employees and other agents of
GSV, Executive and the Company recognize and acknowledge (i) the detrimental
effect on the business and the substantially decreased value of GSV and its
business and assets which would result if Executive were to disclose or use any
of GSV's trade secrets or confidential information other than in connection with
Executive's employment with the Company, (ii) the detrimental effect on the
business and the substantially decreased value of GSV and its business and
assets which would result if Executive were to enter into competition with GSV
within an unreasonably brief period of time after the Company's acquisition of
GSV, or the termination of the employment of Executive with GSV, (iii) that the
agreements and covenants in this Agreement are essential to protect the business
and goodwill to be acquired by the Company, and other legitimate business
interests of the Company, and (iv) that the Company would not have entered into
the Purchase Agreement but for the covenants and agreements contained in this
Agreement, and the protection afforded to the Company hereby; and
WHEREAS, upon consummation of the acquisition of GSV, the Company
disclosed to the Executive confidential and proprietary information regarding
the business of the Company, and certain trade secrets relating thereto, and the
Executive has been encouraged to expand his relationships with, among others,
the clients, customers, subcontractors, vendors, suppliers, employees and other
agents of the Company, and the Executive and the Company recognize and
acknowledge (i) the detrimental effect on the business of the Company and its
legitimate business interests if the Executive were to disclose or use any of
the Company's trade secrets or
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confidential information other than in connection with the Executive's
employment with the Company, (ii) the detrimental effect on the business of the
Company and its legitimate business interests which would result if the
Executive were to enter into competition with the Company within an unreasonably
brief period of time after the termination of the employment of Executive with
the Company, and (iii) that the agreements and covenants in this Agreement are
essential to protect the business and goodwill and other legitimate business
interests of the Company;
WHEREAS, it was a material condition to the Company's obligation to
consummate the transactions contemplated by the Purchase Agreement that the
Executive enter into an Employment Agreement of even date therewith; and
WHEREAS, the Company and Executive now desire to amend and restate that
Employment Agreement;
NOW, THEREFORE, for and in consideration of the mutual promises,
covenants, and obligations contained herein and in the Purchase Agreement, the
Company and Executive agree as follows:
iii. EMPLOYMENT. The Company hereby employs Executive, and
Executive hereby accepts employment by the Company, on the
terms and conditions hereinafter set forth.
iv. EXECUTIVE'S DUTIES. Executive is a Senior Vice President -
Operations of the Company. The Executive's duties shall
include those which are designated or assigned to him by the
President and Chief Executive Officer of the Company, provided
those duties are of the type customarily discharged by the
senior vice president - operations of a company similar in
size and operation to the Company. Executive shall devote his
entire time, attention and energy to the business of the
Company, and diligently pursue its best interests.
v. TERM OF EMPLOYMENT. Subject to the provisions for termination
hereof, the original term of this Agreement shall commence as
of the date hereof and shall continue for a term of two years.
Sections 6(d), (g), (h) and (i), and 7 through 12 of this
Agreement shall survive termination of this Agreement for any
reason whatsoever.
vi. COMPENSATION. For all services rendered by Executive hereunder
on behalf of the Company, and the covenants and agreements of
the Executive set forth herein, the Company agrees to pay to
Executive, and Executive agrees to accept, the following
compensation:
(a) salary in the aggregate amount of One Hundred Seventy-Five
Thousand Dollars ($175,000) per year, payable in accordance with the
standard payroll policies of the Company;
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(b) an annual incentive award payable in accordance with the Annual
Incentive Plan of the Company to be established by the Compensation
Committee of the Board of Directors, or other plan that may be substituted
for that plan, and subject to the approval by the Compensation Committee
of the Board of Directors; and
(c) an incentive award for 1998 of options to purchase 60,000 shares
at an exercise price of $15.75 per share vesting in equal amounts over a
three year period in accordance with the 1997 Incentive Plan of the
Company, subject to the approval by the Compensation Committee of the
Board of Directors; and
(d) prompt reimbursement of all reasonable expenses incurred by him
in the performance of his duties during the term of this Agreement,
subject to the presenting of appropriate vouchers and receipts in
accordance with the Company's policies.
vii. ADDITIONAL BENEFITS In addition to the compensation provided
for in Section 4 herein, Executive shall be entitled to
participate in or receive benefits under all benefit plans or
programs generally available to employees of the Company to
the extent that his position, tenure, salary, age, health and
other qualifications make him eligible to participate, subject
to the rules and regulations applicable thereto.
viii. COVENANTS OF EXECUTIVE. For and in consideration of the
employment herein contemplated, and the consideration paid or
promised to be paid by the Company hereunder, Executive does
hereby covenant, agree and promise that during the term
hereof, and thereafter to the extent specifically provided in
this Agreement:
(a) Executive will not actively engage, directly or indirectly, in
any other business except at the direction or approval of the Company;
(b) Executive will not engage, directly or indirectly, in the
ownership, management, operation or control of, or employment by, any
business of the type and character engaged in by the Company.
Notwithstanding the foregoing, Executive may make or maintain an
investment not to exceed one percent (1.0%) of the capital stock of any
publicly traded company;
(c) Executive will truthfully and accurately make, maintain and
preserve all records and reports that the Company may from time to time
request or require;
(d) Executive will fully account for all money, records, goods,
wares and merchandise or other property belonging to the Company of which
Executive has custody, and will pay over and deliver same promptly
whenever and however he may be reasonably directed to do so;
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(e) Executive will obey all rules, regulations and special
instructions applicable to him, and will be loyal and faithful to the
Company at all times, constantly endeavoring to improve his ability and
knowledge of the business in an effort to increase the value of his
services to the mutual benefit of the Parties;
(f) Executive will make available to the Company any and all of the
information of which he has knowledge relating to the business of the
Company, and will make all suggestions and recommendations which he feels
will be of benefit to the Company;
(g) Executive recognizes that during the course of his employment,
and during his prior employment by GSV, Executive has had, has and will
have access to, and that there has been and will be disclosed to him,
information of a proprietary nature owned, directly or indirectly, by the
Company or its subsidiaries, including but not limited to plans,
strategies, computer software, product information and manufacturing and
repair techniques, financial information, records, customer and supplier
lists and information, cost and pricing information, data, formulae,
design information and specifications, technical data, inventions,
processes and methods, which is of a confidential or trade secret nature,
and which has great value to the Company and is a substantial basis and
foundation upon which the Company's business is predicated. Executive
acknowledges that except for his employment and the fulfillment of the
duties assigned to him, he would not have access to such information, and
Executive agrees that any and all confidential knowledge or information
which has been or may be obtained by or disclosed to him in the course of
his employment, including but not limited to the information herein above
set forth (collectively, the "Information"), will be held inviolate by
him, that he will conceal the same from any and all other persons,
including but not limited to competitors of the Company, and that he will
not impart the Information or any such knowledge acquired by him as an
officer, director or employee of the Company to anyone, either during his
employment by the Company or thereafter. Executive further agrees that
during the term of this Agreement and for a period of five (5) years
thereafter, he will not use the Information in competing with the Company,
or in any other manner to his benefit or to the detriment of the Company;
(h) Executive agrees that upon termination of his employment
hereunder he will immediately surrender and turn over to the Company all
books, records, forms, specifications, formulae, data, processes, papers
and writings related to the business of the Company and all other property
belonging to the Company, together with all copies of the foregoing, it
being understood and agreed that the same are the sole property of the
Company; and
(i) Executive agrees that all ideas, concepts, processes,
discoveries, devices, machines, tools, materials, designs, improvements,
inventions and other things of value (hereinafter collectively referred to
as "intangible rights"), whether patentable or not, which are conceived,
made, invented or suggested either by him alone or in collaboration with
others during the term of his employment, and whether or not during
regular working hours, shall be promptly disclosed in writing to the
Company and shall be the sole and
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exclusive property of the Company. Executive hereby assigns all of his
right, title and interest in and to all such intangible rights to the
Company, and its successors or assigns. In the event that any of said
intangible rights shall be deemed by the Company to be patentable or
otherwise registerable under any federal, state or foreign law, Executive
further agrees that at the expense of the Company, he will execute all
documents and do all things necessary, advisable or proper to obtain
patents therefor or registration thereof, and to vest in the Company full
title thereto.
ix. TERMINATION OF EMPLOYMENT FOR CAUSE. The Company may terminate
the employment of Executive if the President and Chief
Executive Officer determines, in his sole discretion, that the
Executive has:
(a) breached or habitually neglected the duties which he was
required to perform under any provision of this Agreement;
(b) misappropriated funds or property of the Company or otherwise
engaged in acts of dishonesty, fraud, misrepresentation or other acts of
moral turpitude, even if not in connection with the performance of his
duties hereunder, which would result in serious prejudice to the interests
of the Company if he were retained as an employee;
(c) secured any personal profit not thoroughly disclosed to and
approved by the Company in connection with any transaction entered into on
behalf of or with the Company or any affiliate of the Company;
(d) died, or become and remained incapacitated (either physically,
mentally or otherwise) for a period of ninety consecutive days; or
(e) failed to carry out and perform duties assigned to Executive in
accordance with the terms hereof in a manner acceptable to the President
and Chief Executive Officer of the Company.
In the event of termination of his employment for cause, Executive shall be
entitled to receive his salary due or accrued on a pro rata basis to the date of
termination, and reimbursement of expenses properly incurred but not yet
reimbursed.
x. TERMINATION WITHOUT CAUSE. The Company may terminate the
employment of Executive with fourteen days' written notice for
any reason other than those enumerated in Section 7 hereof, in
which event such termination shall be deemed a termination
without cause. In the event of a termination without cause,
the Company shall, in exchange for a general release by the
Executive of claims in form and content acceptable to the
Company, make a lump sum cash payment to Executive in an
amount equal to the salary of Executive for the remaining term
of this Agreement or six months, which ever is longer, which
payment shall constitute the full and total amount of
compensation that Executive shall be entitled to receive. In
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the event that Executive contests his termination by filing or
threatening to file a lawsuit or pursuing any other remedy or
proceeding against the Company or any of its officers,
directors, shareholders, employees, agents or affiliates,
Executive shall forfeit his right to such payment, and shall
immediately return to the Company all or any portion of such
payment made to him; provided, however, that such forfeiture
shall have no effect on the general release by the Executive,
which release shall remain in full force and effect.
xi. TERMINATION OF EMPLOYMENT BY EXECUTIVE. The Executive may
terminate this Agreement at Executive's election upon thirty
days' prior written notice to the Company. In the event of a
termination pursuant to this Section 9, the Company shall be
relieved of all of its obligations under this Agreement,
except that the Company shall pay to the Executive his
standard compensation through the date upon which the thirty
day severance period ends. The Executive agrees, in the event
of termination pursuant to this Section 9, and if so requested
by the Company, to assist the Company in training Executive's
replacement during the thirty day severance period.
xii. COVENANT NOT TO COMPETE. The Executive recognizes that the
Company has business good will and other legitimate business
interests which must be protected in connection with and in
addition to the Information, and therefore, in exchange for
access to the Information, the specialized training and
instruction which the Company will provide, the Company's
agreement to employ the Executive on the terms and conditions
set forth herein, and the promotion and advertisement by the
Company of Executive's skill, ability and value in the
Company's business, the Executive agrees that during the term
commencing with the date of the acquisition by the Company of
the outstanding common stock of GSV from the Executive and the
Xxxxx X. Xxxxxx--GSV Voting Trust, and ending four years
thereafter (or, if earlier, the date which is two years from
the expiration or earlier termination hereof), Executive will
not, without the prior written consent of the Company, engage,
directly or indirectly, in any Competitive Activities. The
term "Competitive Activities" as used herein shall mean:
(a) directly or indirectly engaging in, continuing in or carrying on
the business of manufacturing, remanufacturing, distributing, selling,
repairing, restoring and servicing valves (the "BUSINESS"), including
owning, controlling, participating in, joining, operating, or managing or
being a partner, stockholder or other equity interest owner of any
business which competes with or is engaged in or carries on in any
material respect any aspect of the Business;
(b) consulting with, advising or assisting in any way, whether or
not for consideration, any corporation, partnership, firm or other
business organization which at
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the time of such consultation, advice or assistance is or proposes to
become a competitor of the Business, including, but not limited to,
advertising or otherwise endorsing the products or services of any such
competitor; soliciting clients or customers of the Company (or persons or
entities from which the Company has solicited orders for the sale of any
Business products or services within the twenty-four (24) months
immediately preceding the date of this Agreement) or otherwise serving as
an intermediary for any such competitor; or loaning money or rendering any
other form of financial assistance to any such competitor;
(c) inducing or attempting to induce any director, officer,
employee, agent, customer, client, vendor, supplier or lessor of the
Company to terminate such position or relationship with the Company; or
(d) operating any business or offering any goods or services under
the name of "GSV," "Southern Valve," "Xxxxx Machine," "Ash Tools," or any
variation of any of them;
PROVIDED, HOWEVER, that the term "Competitive Activities" shall not include (i)
the ownership of securities of corporations which are listed on a national
securities exchange or traded in the national over-the-counter market in an
amount which shall not exceed 1.0% of the outstanding shares of any such
corporation, or (ii) any activities performed by Executive on behalf of the
Company or its subsidiaries. The parties agree that the geographic scope of this
covenant not to compete shall (i) with respect to actual or alleged Competitive
Activities occurring (x) while the Executive is employed under this Agreement,
extend throughout the territory in which the Company conducts business as of, or
within one year prior to the date of, any actual or alleged Competitive
Activities, or (y) after the Executive's employment has been terminated, extend
throughout the territory in which the Company conducted business as of, or
within one year prior to the date of, such termination.
Executive understands that the foregoing restrictions limit his ability to
engage in a business similar to the Business, but acknowledges receiving
sufficiently high benefits from the Company hereunder to justify such
restrictions. It is expressly understood and agreed that the Company and the
Executive consider the restrictions contained in Section 6 and this Section 10
to be reasonable and necessary for the purposes of preserving and protecting the
Business and goodwill of the Company and to protect and preserve other
legitimate business interests of the Company. Nevertheless, if any of the
aforesaid restrictions are found by a court having jurisdiction to be
unreasonable, or overly broad as to the scope of activity to be restrained,
geographic area or time, or otherwise unenforceable, the parties intend for the
restrictions therein set forth to be modified by such court in the minimal
amount necessary so as to be reasonable and enforceable and, as so modified by
the court, to be fully enforced. If any provision of this Agreement or
application thereof to anyone or under any circumstances shall be determined to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application.
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The Parties acknowledge that the remedies at law for breach, or threatened
breach, of Executive's covenants contained in Section 6 or this Section 10 are
inadequate, and that such breach or threatened breach will cause irreparable
injury and continuing damage to the Company and its subsidiaries, the exact
amount of which would be impossible to ascertain. The Parties therefore agree
that money damages would not provide an adequate remedy to the Company, and that
the Company shall be entitled, at its election, to injunctive relief, and to
specific performance of said covenants in addition to any other remedies at law
or equity that may be available to the Company.
xiii. BUSINESS OPPORTUNITIES. For as long as the Executive shall be
employed by the Company and thereafter with respect to any
business opportunities learned about during the time of
Executive's employment by the Company, the Executive agrees
that with respect to any future business opportunity or other
new and future business proposal which is offered to, or comes
to the attention of, the Executive and which is in any way
related to or connected with, the business of the Company or
its affiliates, the Company shall have the right to take
advantage of such business opportunity or other business
proposal for its own benefit. The Executive agrees to promptly
deliver notice to the Chief Executive Officer or Chairman of
the Board of Directors in writing of the existence of such
opportunity or proposal, and the Executive may take advantage
of such opportunity only if the Company does not elect to
exercise its right to take advantage of such opportunity and
if the pursuit thereof would not otherwise violate any
provision of this Agreement.
xiv. RIGHT OF OFFSET. To the extent permitted by applicable law,
all amounts due and owing to the Executive hereunder shall be
subject to offset by the Company to the extent of any damages
incurred by the Executive's breach of this Agreement. The
Executive acknowledges and agrees that but for the right of
offset contained in this Agreement, the Company would not have
hired Executive nor entered into this Employment Agreement.
xv. ASSIGNABILITY. The obligations of Executive hereunder are
personal and may not be assigned or delegated by Executive or
transferred in any manner whatsoever, nor are such obligations
subject to involuntary alienation, assignment or transfer. The
Company shall have the right to assign this Agreement and to
delegate all rights, duties and obligations hereunder, either
in whole or in part, to any parent, affiliate, successor or
subsidiary of the Company. This Agreement shall be binding
upon all successors and assigns.
xvi. AMENDMENT AND WAIVER. This instrument contains the entire
agreement of the Parties and supersedes and replaces any prior
employment agreements between the Company or any affiliate and
Executive, which prior employment agreements (if any) are
hereby terminated, effective as
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of the commencement date of this Agreement, by mutual
agreement of the Parties. This Agreement may not be changed
orally but only by written documents signed by the Party
against whom enforcement of any waiver, change, modification,
extension or discharge is sought; however, the amount of
compensation to be paid to Executive for services to be
performed for the Company hereunder may be changed from time
to time by the Parties by written agreement without in any
other way modifying, changing or affecting this Agreement or
the performance by Executive of any of the duties of his
employment with the Company. Any such written agreement shall
be, and shall be conclusively deemed to be, a ratification and
confirmation of this Agreement, except as expressly set forth
in such written amendment. The waiver by any Party of a breach
of any provision of this Agreement shall not operate as or be
construed to be a waiver of any subsequent breach thereof, nor
of any breach of any other term or provision of this
Agreement.
xvii. NOTICE. Any notice required or permitted to be given hereunder
shall be sent by certified or registered mail; in the case of
the Company, to its principal office address, and in the case
of Executive, to Executive's residence address as shown on the
records of the Company, or may be given by personal delivery
thereof.
xviii. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid
and enforceable under applicable law, but if any provision of
this Agreement shall be invalid, unenforceable or prohibited
by applicable law, then in lieu of declaring such provision
invalid or unenforceable, to the extent permitted by law (a)
the Parties agree that they will amend such provision to the
minimal extent necessary to bring such provision within the
ambit of enforceability, and (b) any court of competent
jurisdiction may, at the request of either party, revise,
reconstruct or reform such provision in a manner sufficient to
cause it to be valid and enforceable.
xix. FORCE MAJEURE. Neither of the Parties shall be liable to the
other for any delay or failure to perform hereunder, which
delay or failure is due to causes beyond the control of said
Party, including, but not limited to: acts of God; acts of the
public enemy; acts of the United States of America or any
state, territory or political subdivision thereof or of the
District of Columbia; fires; floods; epidemics, quarantine
restrictions; strike or freight embargoes. Notwithstanding the
foregoing provisions of this Section 17, in every case the
delay or failure to perform must be beyond the control and
without the fault or negligence of the Party claiming
excusable delay.
xx. AUTHORITY TO CONTRACT. The Company warrants and represents
that it has full authority to enter into this Agreement and to
consummate the
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transactions contemplated hereby and that this Agreement is
not in conflict with any other agreement to which the Company
is a party or by which it may be bound. The Company hereto
further warrants and represents that the individuals executing
this Agreement on behalf of the Company have the full power
and authority to bind the Company to the terms hereof and have
been authorized to do so in accordance with the Company's
corporate organization.
xxi. RECOVERY OF LITIGATION COSTS. If any legal action or other
proceeding is brought for the enforcement of this Agreement or
any agreement or instrument delivered under or in connection
with this Agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing
Party or Parties shall be entitled to recover reasonable
attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it or
they may be entitled.
xxii. ARBITRATION. Any and all disputes or controversies whether of
law or fact and of any nature whatsoever arising from or
respecting this Agreement shall be decided by arbitration by
the American Arbitration Association in accordance with its
Commercial Rules except as modified herein.
(a) The arbitrator shall be selected as follows: in the event the
Company and the Executive agree on one arbitrator, the arbitration shall
be conducted by such arbitrator. In the event the Company and the
Executive do not so agree, the Company and the Executive shall each select
one independent, qualified arbitrator and the two arbitrators so selected
shall select the third arbitrator (the arbitrator(s) are herein referred
to as the "Panel"). The Company reserves the right to object to any
individual arbitrator who shall be employed by or affiliated with a
competing organization.
(b) Arbitration shall take place at Houston, Texas, or any other
location mutually agreeable to the Parties. At the request of either
Party, arbitration proceedings will be conducted in the utmost secrecy; in
such case all documents, testimony and records shall be received, heard
and maintained by the arbitrators in secrecy, available for inspection
only by the Company or the Executive and their respective attorneys and
their respective experts who shall agree in advance and in writing to
receive all such information in secrecy until such information shall
become generally known. The Panel shall be able to award any and all
relief, including relief of an equitable nature, provided that punitive
damages shall not be awarded. The award rendered by the Panel may be
enforceable in any court having jurisdiction thereof.
(c) Reasonable notice of the time and place of arbitration shall be
given to all Parties and any interested persons as shall be required by
law.
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xxiii. GOVERNING LAW. This Agreement and the rights and obligations
of the Parties shall be governed by and construed and enforced
in accordance with the substantive laws (but not the rules
governing conflicts of laws) of the State of Florida. The
parties hereto intend to and hereby confer jurisdiction to
enforce the covenants contained in this Agreement upon the
courts of any state within the geographical scope of such
covenants. If the courts of any one or more of such states or
jurisdictions shall fail to hold such covenants wholly
enforceable by reason of the breadth of such scope or
otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the Company's right
to the relief provided above in the courts of any other states
or jurisdictions within the geographical scope of such
covenants, breaches of such covenants as they relate to each
state being, for this purpose, severable at the Company's sole
option into diverse and independent covenants.
xxiv. MULTIPLE COUNTERPARTS. This Agreement may be executed in
multiple counterparts each of which shall be deemed to be an
original but all of which together shall constitute but one
instrument.
xxv. PRIOR EMPLOYMENT AGREEMENTS. The Executive represents and
warrants to the Company that he has fulfilled all of the terms
and conditions of his prior Employment Agreement with the
Company, and at the time of execution of this Agreement is not
a party to any other employment agreement.
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EXECUTED as of the day and year first above set forth.
THE COMPANY:
INNOVATIVE VALVE TECHNOLOGIES, INC.
By:______________________________________
Xxxxxxx X. Xxxxxx, President
EXECUTIVE:
_________________________________________
PLINY X. XXXXXXX
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