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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 15th day of
May, 1997 (the "Effective Date"), by and between ITEQ, Inc. a Delaware
corporation (the "Corporation"), and Xxxx Xxxxxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Corporation desires to enter into the employment of the
Employee upon the terms and conditions herein set forth;
WHEREAS, the Employee desires to be so employed upon such terms and
conditions;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties agree as follows:
1. EMPLOYMENT AND RESPONSIBILITIES.
1.1 The Corporation shall employ the Employee, and the Employee shall
serve, as President and Chief Operating Officer of the Corporation on the terms
set forth herein. In such capacity, the Employee shall report to the Chief
Executive Officer (the "CEO") of the Corporation and shall perform such duties
as the CEO may direct and as are commensurate with his position, provided that
the Employee shall not be required to perform any duty which would constitute
Cause within the meaning of Section 2.4 hereof.
1.2 The Employee shall devote all of his business time to the business and
affairs of the Corporation and to the promotion of its interests.
Notwithstanding the foregoing, the Employee may engage in other activities, if
such activities do not materially interfere with the Employee's performance of
his duties and obligations hereunder, and may make and manage his personal
investments, provided that such activities and investments are not prohibited
hereby and do not violate the terms hereof.
2. TERM AND TERMINATION.
2.1 The term of the Employee's employment hereunder shall be for two years
from the Effective Date, unless earlier terminated in accordance with the terms
of this Agreement; provided, that such term of employment shall be extended
automatically for one additional one-year period after such two-year term or
any such renewal period, unless the Corporation or Employee gives the other
notice of intent to terminate this Agreement at least 90 days prior to the end
of the term hereof.
2.2 This Agreement shall terminate upon Employee's death.
2.3 The Corporation may terminate this Agreement by reason of Employee's
Disability (as hereinafter defined) after such condition of Disability has
existed for at least 60 consecutive days. As used in this Agreement,
"Disability" shall mean permanent and total disability within the meaning of
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, or any
successor provision.
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2.4 The Corporation may terminate this Agreement upon its determination
that Cause (as hereinafter defined) exists therefor. As used in this Agreement,
"Cause shall mean any of the following actions by the Employee: (i) failure to
comply with any of the material terms of this Agreement, which failure is
curable and is not cured by the Employee within thirty (30) days after the
Employee has written notice of such failure, (ii) deliberate and intentional
refusal to perform his duties, responsibilities or obligations under this
Agreement, which refusal continues for not less than thirty (30) days after
written notice thereof is given to the Employee, (iii) engagement in misconduct
injurious to the business of reputation of the Corporation, or (iv) Employee's
conviction of a felony involving moral turpitude or which is injurious to the
business or reputation of the Corporation. If the CEO determines that Cause
exists, the parties agree that such determination shall be subject to inquiry
or dispute only as to its reasonableness. If the CEO makes such determination,
the Corporation may (i) terminate this Agreement effective immediately or at a
subsequent date or (ii) condition Employee's continued employment upon such
considerations or requirements as may be reasonable under the circumstances and
place a reasonable limitation upon the time within which Employee shall comply
with such considerations or requirements.
2.5 (a) Upon termination of this Agreement by the Corporation for Cause,
by Employee, or due to the death or Disability of Employee, all compensation
and benefits shall cease upon the date of termination other than: (i) those
benefits that are provided by retirement and benefit plans and programs
specifically adopted and approved by the Corporation for Employee that are
earned and vested by the date of termination, (ii) the pro rata annual base
salary through the date of termination, and (iii) medical and similar benefits
the continuation of which is required by applicable law.
(b) Upon termination of Employee's employment by the
Corporation at any time other than for Cause during the term hereof, the
obligations of the Corporation and Employee under Sections 1 and 3 shall
terminate as of the date this Agreement is terminated, and the Corporation
shall pay or provide to Employee (i) the pro rata annual salary through the
date of termination, (ii) within 30 days of said termination, a severance
benefit equal to 12 months of Employee's annual base salary and (iii) medical
and similar benefits as required by applicable law.
3. COMPENSATION.
3.1 The Corporation shall pay to the Employee for the services to be
rendered by the Employee hereunder a base salary at the rate of $275,000 per
annum, payable in equal installments (subject to withholding tax) in accordance
with the Corporation's regular payroll schedule. Such base salary, as in effect
from time to time, may be increased annually on the anniversary date of the
Effective Date as determined by the Compensation Committee of the Board of
Directors of the Corporation in its sole discretion. The salary payable to the
Employee from time to time hereunder shall not be decreased.
3.2 The Employee shall be entitled to participate in, and receive benefits
from, any insurance, medical, dental, health and accident, hospitalization,
disability, or other employee benefit plan of the Corporation which may be in
effect at any time during the course of his employment by the Corporation and
which is generally available to executives of the Corporation.
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3.3 The Employee shall be entitled to participate in and receive payments
or other benefits from any stock purchase, pension, 401(k) (to the extent
permitted by applicable law), profit sharing, stock bonus, stock option, cash
bonus or other incentive compensation plan or plans which may be in effect from
time to time during the course of his employment by the Corporation and which
are generally available to the executives of the Corporation.
3.4 The Corporation shall reimburse the Employee for all reasonable and
necessary business expenses incurred by him on behalf of the Corporation in the
course of his duties hereunder upon the presentation by the Employee of
appropriate documentation substantiating the amount of and purpose for which
such expenses were incurred.
3.5 The Employee shall be entitled to four (4) weeks paid vacation in each
calendar year, which vacation shall be taken at times consistent with the
performance by the Employee of his obligations hereunder. Any vacation time not
fully used by the Employee in any one (1) calendar year may be carried over for
one (1) additional calendar year. If any such vacation time is carried over to
a subsequent calendar year, then any vacation time taken in the subsequent
calendar year shall be applied first against the carryover vacation time from
the prior calendar year.
3.6 The Employee may be entitled to receive an annual bonus of 0% to 100%
of base salary from the Corporation pursuant to a corporate incentive bonus
plan mutually agreed to by the Employee and the Corporation prior to the
beginning of the year with respect to which the annual bonus may be paid. The
Employee acknowledges that the Corporation is under no obligation to pay him an
annual bonus if the Employee is not entitled to receive a bonus under the terms
of the applicable corporate incentive bonus plan. The Corporation acknowledges
that the potential receipt of an annual bonus by the Employee is a material
factor to the Employee in entering into this Agreement. Notwithstanding
anything to the contrary herein, a non-refundable payment of $25,000 towards
the first year's bonus will be paid on June 11, 1997.
3.7 Employee will be reimbursed, on a tax-adjusted basis, for the
reasonable cost of moving from Employee's present home in Atlanta to Houston.
Protection from a loss on the sale of Employee's existing home in Atlanta,
below the original purchase price plus improvement, will be provided up to the
maximum amount of $50,000. Moving costs will include packing, unpacking, moving
household items, realty fees, closing costs (excluding prepaid items),
incidental expenses and house hunting trips. If within six months after the
Employee lists for sale his home in Atlanta, it remains unsold, Employee and
the Corporation shall consider the use of a third-party relocation service for
disposition of the home.
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4. DISABILITY OR DEATH.
4.1 In the event the Employee is disabled for a period of sixty (60)
consecutive days, then the Corporation may at any time following the end of
said 60-day period terminate the employment of the Employee without Cause, by
notice to the Employee setting forth the effective date of the termination.
Following termination, the Employee shall (i) be entitled to receive a pro rata
portion of any annual bonus attributable to the year in which this Agreement is
terminated, which shall be payable no later than March 15 of the following
year, and (ii) be reimbursed by the Corporation for the employee portion of the
cost of the Corporation-provided health insurance, which otherwise would be
payable by the Employee under COBRA, until the earlier of the expiration date,
the termination of the Employee's COBRA rights, or the Employee's election to
terminate participation in the Corporation's health insurance plan. However,
the Employee shall not be entitled to any other compensation or benefits
hereunder accruing after the date of termination. The Employee shall be
considered disabled if he suffers from any physical or mental illness, injury,
or condition which renders him unable to perform his duties under this
Agreement, as determined by the CEO.
4.2 In the event of the death of the Employee during the term hereof, his
employment hereunder shall terminate on the date of death.
5. OTHER ACTIVITIES DURING EMPLOYMENT
5.1 During the term of his employment by the Corporation, neither the
Employee nor any entity in which he may be interested as a partner, trustee,
director, officer, employee, shareholder, option holder, lender of money or
guarantor, shall engage directly or indirectly in any business competitive with
that of the Corporation; provided, however, that the foregoing shall not be
deemed to prevent the Employee from investing in securities of any company
having a class of securities which is publicly traded, so long as such
investment holdings do not, in the aggregate, constitute more than 5% of any
class of such company's securities. Without limiting the generality of the
foregoing, a business or a company may be deemed to be competitive with the
Corporation if 10% or more of its gross revenues are derived, directly or
indirectly, from the design, marketing, sale, fabrication, construction or
servicing of (a) equipment or systems, or component parts thereof, intended to
(i) control or limit the concentration of dust, fly ash or other particulates
in ambient air or combustion exhaust streams by filtration through fabric
filter systems, or (ii) remove, reduce, limit or control the concentration or
emission of chemicals, particulates, mists or gases in process gas streams or
combustion exhaust gas streams by combining or mixing such chemicals,
particulates, mists or gases with other liquids, gases or solids, or (b) heat
exchangers, air separation equipment, process vessels, reactors, blenders,
trayed columns or other types of custom process and containment equipment.
5.2 The Employee shall not at any time during the term of this Agreement
or after the termination hereof directly or indirectly divulge, furnish, use,
publish or make accessible to any person or entity any Confidential Information
(as hereinafter defined). Any records of confidential information prepared by
the Employee or which come into Employee's possession during this Agreement are
and remain the property of the Corporation and upon termination of Employee's
employment all such records and copies thereof shall be either left with or
returned to the Corporation.
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5.3 The term "Confidential Information" shall mean information disclosed
to the Employee or known, learned, created or observed by him as a consequence
of or through his employment by the Corporation, not generally known in the
relevant trade or industry, about the Corporation's business activities,
products, customers, suppliers, services and procedures, including, but not
limited to, information concerning costs, product performance, customer
requirements, advertising, sales promotion, publicity, sales data, research,
finances, accounting, methods, procedures, trade secrets, business plans,
client or supplier lists, and client or supplier billing.
6. POST-EMPLOYMENT ACTIVITIES.
6.1 For a period of one (1) year after voluntary termination of his
employment with the Corporation, regardless of the reason for such voluntary
termination, neither the Employee nor any entity in which he may be interested
as a partner, trustee, director, officer, employee, shareholder, option holder,
lender of money or guarantor, shall engage directly or indirectly in any
business competitive with that of the Corporation (as defined in Section 5.1);
provided, however, that the foregoing shall not be deemed to prevent the
Employee from investing in securities which are publicly traded, so long as
such investment holdings do not, in the aggregate, constitute more than 5% of
any class of such company's securities.
6.2 The Employee acknowledges that he has been employed for his special
talents and that his leaving the employ of the Corporation would seriously and
adversely affect the business of the Corporation. In addition to all remedies
permitted by law or in equity and without limiting any injunctive or other
relief to which the Corporation may be entitled in respect of any obligation of
the Employee, the Corporation shall be entitled to injunctive relief to enforce
the provisions of Sections 5 and 6 hereof.
6.3 The Employee will not, during the period of one (1) year after
termination of his employment by the Corporation, regardless of the reason of
such termination, either in the Employee's individual capacity or as agent for
another, hire or offer to hire or entice away any person who has been an
officer, employee, or agent of the Corporation at any time during the
immediately preceding year or in any other manner persuade or attempt to
persuade any of such persons to discontinue their relationship with the
Corporation or any of its affiliates nor divert or attempt to divert from the
Corporation or any of its subsidiaries any business whatsoever by influencing
or attempting to influence any customer or supplier of the Corporation or any
of its affiliates to diminish or discontinue its business with the Corporation
or such affiliate.
7. ASSIGNMENT. This Agreement shall not be assignable by the Corporation
except (i) to a corporation or other entity controlling, controlled by or under
common control with the Corporation, or (ii) to a successor to all or
substantially all of the business of the Corporation. This Agreement shall
inure to the benefit of and be binding upon the Corporation, its permitted
successors and permitted assigns, and upon the Employee and his heirs,
executors, administrators and legal representatives. This Agreement shall not
be assignable by the Employee.
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8. NOTICES. All notices under this Agreement shall be in writing and shall
be deemed to have been given at the time which mailed by registered or
certified mail, addressed to the address below stated of the party to which
notice is given, or to such changed address as such party may have fixed by
notice:
TO THE CORPORATION: ITEQ, Inc.
0000 Xxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
ATTN: Chief Executive Officer
TO THE EMPLOYEE: Xxxx Xxxxxxxxxx
0000 Xxxxxxxx Xx.
Xxxxxxxxxx, XX 00000
9. APPLICABLE LAW. This Agreement shall be construed, enforced and
governed in accordance with the laws of the State of Texas.
10. INVALIDITY. If any provision contained in this Agreement shall for any
reason be held to be invalid, illegal, void or unenforceable in any respect,
such provision shall be deemed modified so as to constitute a provision
conforming as nearly as possible to such invalid, illegal, void or
unenforceable provision while still remaining valid and enforceable, and the
remaining terms or provisions contained herein shall not be affected thereby.
11. BINDING EFFECT. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
executors, personal representatives, successors and assigns.
12. APPROVALS AND CONSENTS MUST BE IN WRITING. Whenever this Agreement
calls for the consent, vote, or approval of any person, such consent, vote, or
approval shall be effective only if it is in writing and signed by or on behalf
of the party who is granting such consent, vote, or approval unless the
circumstances clearly indicate that a writing is not required to evidence such
consent, vote, or approval.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the 10th day of June, 1997.
ITEQ, INC.
By: /s/ XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx
Chief Executive Officer
/s/ XXXX XXXXXXXXXX
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Xxxx Xxxxxxxxxx
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