EMPLOYMENT AGREEMENT
This agreement ("Agreement") is made as of April 1, 2000 by and among Blue Rhino
Corporation, a Delaware corporation ("Blue Rhino"), and Xxx XxXxxxxxx (the
"Employee").
RECITALS
WHEREAS, Blue Rhino is engaged in the business of manufacturing,
distributing, imparting and otherwise dealing in fireplace furnishings and
related products;
WHEREAS, Blue Rhino desires to employ Employee and Employee is willing
to be employed by Blue Rhino, on the terms and subject to the conditions set
forth in this Agreement;
WHEREAS, Employee recognizes that such employment constitutes a
confidential relationship wherein Employee will become familiar with and aware
of information as to the specific manner of doing business, all of which
information is secret and proprietary and constitutes valuable goodwill Blue
Rhino;
WHEREAS, Employee recognizes that the success of Blue Rhino's Business
(as defined in Section 9) is dependent upon the maintenance of a number of
proprietary trade secrets, including the identity of customers and vendors, the
confidential information regarding and analysis of such candidates and the
financial data of Blue Rhino, and that the protection of these proprietary
trade secrets is of critical importance to Blue Rhino; and
WHEREAS, Employee recognizes that Blue Rhino will sustain great loss
and damage if he should violate the provisions of this Agreement. Further,
monetary damages for such losses would be extremely difficult to measure and
would therefore be likely to be inadequate for any violation of this Agreement
by Employee; and
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein and other good and valuable consideration, the parties hereby
agree as follows:
TERMS
1. Employment: Blue Rhino hereby employs Employee in the capacity
described on Exhibit A attached hereto, and Employee hereby accepts such
employment with Blue Rhino. Employee will perform the duties associated with
such position and will perform such others duties consistent with his position
as may be assigned to him from time to time by the board of directors, president
or chief executive officer of Blue Rhino. Employee's primary duties shall be
described an Exhibit A attached hereto. During his employment, Employee shall
devote his full time and best efforts to promote and further the business and
services of Blue Rhino. Employee shall faithfully adhere to, execute, and
fulfill all policies established by Blue Rhino's board of directors. Employee
shall not, during his employment hereunder, be engaged in any business or
perform any services in any capacity other than for Blue Rhino, whether or not
they interfere with his duties to Blue Rhino, without the prior approval of the
board of directors of Blue Rhino, except that no such approval shall be required
with respect to volunteer activities for organizations with charitable purposes;
provided that such activities do not interfere with his duties for Blue Rhino
and are not conducted during business hours. Without limiting the generality of
any other provisions hereunder, under no circumstances shall Employee accept any
form of remuneration from any business owner or broker with respect to any
matter related to the Business of Blue Rhino without prior written approval.
Notwithstanding the foregoing, Blue Rhino consents to Employee's working, in a
self-employed capacity, in a retail ceramic/art studio, so long as such work
does not interfere with the performance of Employee's duties at Blue Rhino.
2. Term. The term of this Agreement shall begin April 1, 2000,
and shall expire March 31, 2003, unless terminated as herein provided (the
"Term").
3. Compensation. During the Term, Blue Rhino shall compensate
Employee as follows;
a. Salary. For his services during the Term, Blue Rhino
shall pay to Employee a base salary of $30,000 per year ("Base
Salary"), payable in accordance with Blue Rhino's standard payroll
practices, but no less frequently than in monthly installments. The
payment of salary and any bonuses paid hereunder shall be subject to
all Federal, State, and local withholding taxes, social security tax
deduction, and other general obligations. Employee may be entitled to
receive additional compensation from Blue Rhino in such form and
only to the extent explicitly set forth herein, subject to limitations
set forth herein. The Base Salary shall increase each year during the
Term at January 1st in the same proportion as the annual increase in
the "Consumer Price Index" when measured at the aforesaid January 1st
of each year as compared to the immediately preceding January 1st. The
"Consumer Price Index" means the consumer price index published by the
U.S. Bureau of Labor Statistics, all Retail Products, Chicago/
Northwestern Indiana metropolitan region.
b. Incentive Bonus. Employee may receive a bonus for
each fiscal year, as determined in the sole discretion of the board of
directors on recommendation of the President, based on Employee's
performance, Blue Rhino's performance, Blue Rhino's profitability,
industry performance or any other factors the board of directors
chooses. The factors for achieving Employee's bonus shall be,
determined at the beginning of the fiscal year of the Term, and shall
be attached as Exhibit B to this Agreement and communicated to Employee
at the beginning of the fiscal year of the Term. There is no guarantee
that Employee shall receive an Incentive Bonus each year. Except as
otherwise specifically provided herein. Employee must be employed by
Blue Rhino at the time that the bonus is to be paid to be eligible to
receive such bonus. Such bonus will be paid after the end of the year
to which it is attributable, after the determination of bonus factors
is made.
c. Other Compensation. Employee shall be entitled to
participate, on the same terms as other nonunion, executive employees
of Blue Rhino, in any medical, dental or other health plan, 401k plan,
stock option plan, employee stock purchase plan and life insurance plan
that Blue Rhino may adopt or maintain for such employees, any of which
plans may be changed, terminated or eliminated by Blue Rhino at any
time in its sole discretion.
d. Reimbursement of Expenses. Blue Rhino shall reimburse
Employee for properly documented expenses that are incurred by Employee
on behalf of Blue Rhino in accordance with corporate policies in effect
from time to time.
4. Vacation, Holidays and Sick Leave. Employee shall be entitled
to fifteen (15) paid vacation days annually during the Term, to be taken at such
time or times and in such number of consecutive days as Employee and Blue Rhino
shall mutually agree and in accordance with the regular policy relating to
vacation days for executive employees of Blue Rhino. Employee shall be entitled
to such paid holidays and sick leave policy regularly recognized by Blue Rhino
for executive personnel.
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5. Termination by Blue Rhino.
a. Termination for Cause. Blue Rhino may terminate this
Agreement at any time for Cause, in which case Employee shall be
entitled to receive his Base Salary accrued and unpaid through the date
of such termination in full satisfaction of Blue Rhino's obligations to
Employee under this Agreement. Any of the following shall constitute
"Cause"
i. Any material breach by Employee of any of
the terms of this Agreement where such
breach is not cured within five (5) days
after written notice of such breach is
delivered to Employee;
ii. Intoxication with alcohol or drugs while on
the premises of Blue Rhino or of any
customer or potential customer to the extent
that in the reasonable judgment of
management, Employee is abusive or his
ability to perform his duties and
responsibilities under this Agreement is
impaired;
iii. Conviction of a felony or any misdemeanor
involving dishonesty, theft, the failure to
tell the truth, other unethical behavior,
racial prejudice, drugs, alcohol, sexual
misconduct or any other crime;
iv. Intentional misappropriation of property
belonging to Blue Rhino;
v. Illegal business practices in connection
with Blue Rhino that could have an adverse
effect on Blue Rhino or its business or
reputation;
vi. Excessive absence of Employee from his
employment during usual business hours for
reasons other than vacation, disability or
sickness after written notice thereof is
delivered to Employee describing the nature
of such excess absences and affording
Employee one opportunity to avoid excess
absences; or
vii. Willful failure of Employee to obey
directions of the board of directors of Blue
Rhino, the president or chief executive
officer of blue Rhino, consistent with his
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duties as described in paragraph 1 hereof,
provided Blue Rhino first gives written
notice to Employee of such failure, and
Employee, does not cure such failure within
five (5) days of the delivery of such
notice.
b. Termination Without Cause. Blue Rhino may terminate
the employment of Employee, and this Agreement without Cause at any
time, in which event Blue Rhino shall pay to Employee, in full
satisfaction of Blue Rhino's obligations to Employee under this
Agreement, the Base Salary accrued but unpaid through the date of the
termination of his employment and shall continue to pay the Base
Salary for one (1) year following the date of Employee's termination.
Such amounts shall be earned and paid over the applicable period in
accordance with Blue Rhino's regular payroll practices.
6. Termination of Account of Death or Disability. If Employee
dies during the Term, this Agreement shall terminate and Blue Rhino shall pay to
the estate of Employee, the Base Salary accrued but unpaid through the date of
his death. Blue Rhino may elect to terminate the employment of Employee for
"disability" if Employee is no longer able to perform the duties of his position
due to illness, accident or other physical or mental condition and such
disability is expected to continue, with or without interruption, for a period
equal to the later of ninety (90) days and Employee's accumulated sick leave
("Disability Period"). Blue Rhino may engage a licensed physician of its
choosing to examine Employee to determine if Employee is suffering from a
disability and to determine the date of onset of such disability. Blue Rhino's
physician's determination shall be final.
7. a. Confidentiality. Except in the furtherance of the
business of Blue Rhino, during and at all times after Employee's employment:
i. Employee shall not disclose to any person or
entity, without Blue Rhino's prior written
consent, any Confidential or Proprietary
information (as defined below), whether
prepared by him or others.
ii. Employee shall not directly or indirectly
use any such Confidential or Proprietary
Information other than as directed by Blue
Rhino in writing.
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iii. Employee shall not remove Confidential or
Proprietary information from the premises of
Blue Rhino without the prior written consent
of Blue Rhino.
Upon termination of his employment for whatever reasons with or without
Cause, Employee will promptly deliver to Blue Rhino all originals and
copies (whether in note, memo or other document form or on video, audio
or computer tapes or discs or otherwise) of Confidential or Proprietary
Information in his possession, custody or control, whether prepared by
him or others.
b. "Confidential or Proprietary Information" includes,
but is not limited to:
i. Business, pricing and management methods;
ii. Finances, strategies, systems, research,
surveys, plans, reports, recommendations and
conclusions, financial statements, tax
returns, budgets, and compilations of any
kind of Blue Rhino's finances and
operations;
iii. Names of, arrangements with, or other
information relating to, Blue Rhino's
customers, equipment suppliers,
manufacturers, financiers, owners or
operators, representatives and other persons
who have business relationships with Blue
Rhino or who are prospects for business
relationships with Blue Rhino;
iv. Technical information, work products and
know-hour;
v. Cost, operating, and other management
information systems, and other software and
programming; and
(vii) Plans for new products and new product
development.
c. "Confidential or Proprietary Information" does not
include:
i. Information in the public domain; and
ii. Information known to Employee prior to his
engagement as an Employee of Blue Rhino,
learned
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from sources which had no obligation to keep
such information confidential.
8. Confidentiality After Termination of Employment. The
confidentiality provisions of this Agreement shall remain in full force and
effect after the termination of Employee's employment for a period of one (1)
year.
9. Non-Compete and Non-Solicitation Agreement.
a. Employee recognizes the Confidential or Proprietary
Information of Blue Rhino is a special and unique asset of Blue Rhino and needs
to be protected from improper disclosure. In consideration of the disclosure of
the Confidential or Proprietary Information to Employee to allow Employee to
perform his duties under this Agreement, Employee agrees and covenants that
during the Term of this Agreement and for a period of one (1) year following
the termination of this Agreement, whether such termination is voluntary or
involuntary, Employee will not directly or indirectly engage in any business
competitive with Employer, within the United States of America. For purposes of
this Agreement, "Business" means;
i. Engaging in the business of manufacturing,
distributing, imparting or otherwise dealing
in fireplace accessories and garden and
patio furnishings, barbeque grills and
related products, reflective of the business
acquired by Blue Rhino from Uniflame, Inc.
at the date of execution of this Agreement;
or
ii. Engaging in the business of manufacturing,
distributing, imparting or otherwise dealing
in propane-related products.
b. The term "directly or indirectly engaging in" means:
i. Acting as an owner, partner, or agent;
ii. Becoming an employee or independent
contractor of any third party that is
engaged in the Business;
iii. Becoming interested directly or indirectly
in the Business; or
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iv. Soliciting any customer, employee or
business partner of Blue Rhino for the
benefit of a third party that is engaged in
the Business.
c. Employee agrees and covenants that during such
Employee's employment by Blue Rhino and for a period of one (1) year following
the termination of this Agreement, whether such termination is voluntary or
involuntary, Employee will not directly or indirectly, or by action in concert
with others, induce or influence, any person who is engaged as an employee or
consultant of Blue Rhino, or any affiliate of Blue Rhino, to terminate his or
her employment or consultant relationship with Blue Rhino, or such affiliate of
Blue Rhino; or either directly or indirectly, or by action in concert with
others, call on, solicit or take away any of the customers of Blue Rhino, or any
affiliate of Blue Rhino, either for the benefit of Employee or any other
person.
d. Employee agrees that this non-compete and
non-solicitation provision is a restriction necessary to protect Blue Rhino's
confidential customer lists and other trade secrets and that such restriction
will not unreasonably adversely affect the Employee's livelihood.
10. Inventions and Improvements. Employee agrees that Blue Rhino
will own all right title and interest in and to any and all intellectual and
industrial property developed or created by Employee, and related in any way to
Blue Rhino's business or products, during Employee's employment by Blue Rhino
including, without limitation, improvements to Blue Rhino's products, derivative
works of Blue Rhino's products, and trade secrets or know-how derived from
Blue Rhino's products or business.
11. Damages. The parties acknowledge that monetary damages will be
inadequate and Blue Rhino will be irreparably damaged if the provisions of
Sections 7, 8, 9, 10 and 13 of this Agreement are not specifically enforced.
Blue Rhino shall be entitled among other remedies, (a) without any bond or other
security being required, to an injunction restraining any violation of this
Agreement by Employee and by any person or entity to whom Employee provides or
proposes to provide any services in violation of this Agreement, and (b) to
require Employee to hold in a constructive trust, account for and pay over to
Blue Rhino all compensation and other benefits which Employee shall derive as a
result of any action or omission which is a violation of any provision of this
Agreement. Employee shall indemnify and hold Blue Rhino harmless with respect to
any costs, fees and expenses incurred by Blue Rhino in order to enforce the
terms of Sections 7, 8, 9, 10 and 13 of this Agreement.
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12. Enforceability. If any provision contained in this Agreement
is determined to be void, illegal or unenforceable, in whole or in part, then
the other provisions contained herein shall remain in full force and effect as
if the provision which was determined to be void, illegal, or unenforceable, had
not been contained herein. The courts or other parties enforcing this Agreement
shall be entitled to modify the duration and scope of any restriction contained
herein to the extent necessary to render such restriction enforceable, and such
restriction as so modified shall be enforced.
13. Return of Property. All products, records, designs, plans,
manuals, memoranda, lists and other property delivered to Employee by or on
behalf of any of Blue Rhino or by its customers, including, but not limited to,
customers obtained for it by Employee, and all records compiled by Employee
which pertain to the business of Blue Rhino, or any of its customers, whether or
not confidential, shall be and remain the property of Blue Rhino and be subject
at all times to the discretion and control of Blue Rhino. Likewise, all
correspondence with customers or representatives, reports, records, charts,
advertising materials, and any data collected by Employee, or by or on behalf of
Blue Rhino or its representatives, whether or not confidential, shall be
delivered promptly to Blue Rhino without request by it upon termination of
Employee's employment.
14. Cooperation in Proceedings. During and after the termination
of Employee's employment, Employee shall cooperate fully and at reasonable
times with Blue Rhino in all litigation and regulatory proceedings with respect
to which Blue Rhino seeks Employee's assistance and as to which Employee has any
knowledge or involvement. Without limiting the generality of the foregoing,
Employee shall be available to testify at such litigation and other proceedings,
and will cooperate with counsel to Blue Rhino in preparing materials and
offering advice in such litigation and other proceedings. To the extent Employee
is no longer employed by Blue Rhino, should Employee avail himself in accordance
with this Section 14, Blue Rhino shall compensate Employee for any wages lost by
Employee in connection with his current employment plus any travel and
incidental expenses incurred by Employee.
15. Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and will be deemed duly given: (a)
when personally delivered, (b) the next business day when deposited with Federal
Express or other nationally recognized overnight courier service delivery
prepaid, or (c) five (5) business days after being sent by registered mail,
return receipt requested, postage prepaid, and (d) addressed to the intended
recipient as set forth below:
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If to Employee: Xxx XxXxxxxxx
-----------------------
-----------------------
If to Blue Rhino: Blue Rhino Corporation
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
Attn: Xxxx Xxxxxxxxx
Either party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other party
written notice in the manner herein set forth.
16. Other Agreements. Employee represents that he has furnished to
Blue Rhino copies of all agreements that restrict or limit or could restrict or
limit his services for Blue Rhino at any time during the term. However, nothing
in this Agreement shall be construed to render an opinion as to the
interpretation or validity of any agreements with prior employers purporting to
restrict or limit Employee's services for Blue Rhino.
17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without giving
effect to any choice or conflict of law provision or rule, whether of the State
of Illinois or any other jurisdiction, that would cause the application of the
laws of any jurisdiction other than the State of Illinois. In the event of any
dispute or claim relating to arising out of Employee's employment relationship
with Blue Rhino, or the termination of Employee's employment relationship with
Blue Rhino, Employee and Blue Rhino agree that (i) all such disputes shall be
fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in Xxxx County, Illinois, and (ii) each waives his or
its rights to have such dispute tried by a court or jury. RIGHT TO TRIAL BY JURY
IS WAIVED. However, Employee and Blue Rhino agree that this arbitration
provision shall not apply to any disputes or claims relating to or arising out
of Sections 7, 8, 9, 10 and 13 of this Agreement. With respect to each such
dispute, each of the parties submits to the jurisdiction of any state court
sitting in Chicago, Illinois or the United States District Court for the
Northern District of Illinois.
18. Advice of Counsel. Employee been advised by his own
independent counsel concerning this Agreement prior to executing this Agreement.
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19. Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
heirs, legal representatives, successors and permitted assigns. Employee may not
assign either this Agreement or any of Employee's rights, interests or
obligations hereunder. Blue Rhino may assign any or all of its rights and
interests hereunder to any person or entity that acquires the business of Blue
Rhino or to any entity with which Blue Rhino merges or consolidates.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same agreement.
21. Headings. The section headings contained in this Agreement are
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
22. Waiver. The waiver of a breach of any provision of this
Agreement shall not operate or be construed to be a waiver of any other
provision or of a subsequent or prior breach of this Agreement.
23. Entire Agreement. This Agreement contains the entire agreement
of the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous negotiations, correspondence, understandings, and
agreements between the parties regarding the subject matter of this Agreement.
This Agreement may not be amended or modified or any provision waived except in
a writing signed by both parties and supported by new consideration.
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Executed as of the date first set forth above.
BLUE RHINO CORPORATION EMPLOYEE
By: /s/ Xxxx Xxxxxxxxx /s/ Xxx XxXxxxxxx
-------------------------- --------------------------
Its: CFO Xxx XxXxxxxxx
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EXHIBIT A
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Employee's Duties
Employee: Xxx XxXxxxxxx
Position:
B-1
EXHIBIT B
Incentive Bonus
Annual Executive Incentive Plan
Quarterly Uniflame Division EBITDA will be compared to target to determine
award in accordance with the following matrix:
Target
4/30/00 7/31/00 10/31/00 1/31/01 Annual
-------- -------- ---------- -------- ----------
EBITDA $274,000 $210,000 $1,100,000 $228,000 $1,812,000
Payout Matrix
% of Target 95% 100% 110%
Incentive 50% 100% 120%
Quarterly target options: 3,000
Award to be in Blue Rhino Corporation employee stock options with a one year and
one day 100% vesting schedule. Awards will be granted 30 days after each
quarter.
B-2
