EXHIBIT 10.3
RESTRICTIVE COVENANT AGREEMENT
AGREEMENT made as of the 1st day of January, 2001, by and between
NuCo2 Inc., a Florida corporation with its principal office at 0000 XX Xxxxxx
Xxxxx, Xxxxxx, Xxxxxxx 00000 (the "Corporation") and Xxxxxx X. Xxxxxxx, residing
at 0000 XX Xxxx Xxx, Xxxxxx, Xxxxxxx 00000 ("Sellian").
W I T N E S S E T H :
WHEREAS, since 1991 Sellian has been employed by the Corporation as
its Chairman of the Board ("Chairman") and until September 2000 was also its
Chief Executive Officer ("CEO"); and
WHEREAS, (i) Sellian possesses substantial technical and managerial
expertise and skill with respect to the Corporation's business, (ii) the
Corporation's business is substantially national in scope and its products and
services are marketed throughout the United States and (iii) the Corporation
competes with other businesses that are or could be located in any part of the
United States; and
WHEREAS, Sellian wishes his employment relationship with the
Corporation to be terminated and the parties have agreed upon the following
terms and conditions;
NOW, THEREFORE, in consideration of the premises and payments
hereunder and the mutual covenants contained herein, the parties agree as
follows:
1. Termination of Employment. Sellian's last day of employment as
Chairman with the Corporation was January 1, 2001 (the "Termination Date").
Effective with the close of business on the Termination Date and except as
provided in this Agreement, Sellian's participation in and entitlement to any
and all other compensation, fringe benefits and employee benefit plans of the
Corporation shall cease, and Sellian shall be entitled to benefits, if any, from
employee benefit plans in accordance with the terms of the applicable plan.
2. Confidential Information; Restrictive Covenants. (a) Sellian
reaffirms and acknowledges that:
(i) During the course of his employment as Chairman and CEO by
the Corporation, Sellian has obtained secret and confidential information
concerning the business of the Corporation and its affiliates, including,
without limitation, customer lists and sources of supply, their needs and
requirements, the nature and extent of contracts with them, and related costs,
price and sales information, and information about the Corporation's employees.
(ii) The Corporation and its affiliates will suffer substantial
damage that will be difficult to compute if Sellian should enter into a
competitive business or should divulge secret and confidential information
relating to the business of the Corporation and its affiliates acquired by him
in the course of his employment as Chairman and CEO with the Corporation.
(iii) The provisions of this Agreement are reasonable and
necessary for the protection of the business of the Corporation and its
affiliates.
(b) Sellian will not, directly or indirectly, use, disseminate,
divulge to any person, firm, corporation or other entity, disclose, lecture
upon, or publish articles concerning any proprietary and/or Confidential
Information, unless specifically authorized in writing by the Chief Executive
Officer of the Corporation. The term "Confidential Information" means trade
secrets, information, media, records, or documents containing confidential
information disclosed to Sellian or coming into Sellian's possession by virtue
of or through Sellian's employment with the Corporation about (1) the
Corporation's products, sources of supply, pricing policies, equipment,
processes, operational methods, systems, programs or services, including
information relating to research, development, inventions, manufacturing,
purchasing, accounting, marketing, merchandising or selling; (2) the
Corporation's financial affairs, its customers, its officers and directors, its
employees and the scope of their work; or (3) past, present or future customers
or customers' development or business activities. The only permitted exceptions
to the foregoing prohibition on disclosure shall be (i) information which is in
the public domain other than as a result of Sellian's breach of any of his
obligations hereunder and (ii) information which Sellian is required to disclose
by court order, subpoena or other government process. In the event that Sellian
is required to make disclosure pursuant to the provisions of clause (ii) of the
preceding sentence, Sellian shall promptly, but in no event more than two (2)
business days after learning of such subpoena, court order or other government
process, notify the Corporation, by personal delivery or by cablegram, confirmed
by mail, and at the Corporation's request, Sellian shall take all reasonably
necessary steps requested by the Corporation to defend against the enforcement
of such subpoena, court order or other government process, and shall permit the
Corporation to intervene and participate with counsel of its choice in any
proceeding relating to the enforcement thereof. Any and all costs incurred by,
or chargeable to Sellian: in providing notification to the Corporation;
complying with, or working with the Corporation's directions in relation to such
compelled, or attempted compelled disclosure; and any and all defense against
making such disclosures, including reasonable attorneys fees, and costs, shall
be reimbursed by the Corporation to Sellian within thirty (30) days of
submission to the Corporation by Sellian of a statement of such costs, and fees.
(c) Sellian's obligations to the Corporation shall continue during
the period commencing on the Termination Date and ending on December 31, 2005.
More specifically, Sellian shall not, directly or indirectly, without the
express prior written permission of the Chief Executive Officer of the
Corporation:
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(i) Enter into employment by or render any services to any
person, firm, corporation or other entity engaged in any Competitive Business
(as defined below); or
(ii) Engage in any Competitive Business for his own account; or
(iii) Be associated with or interested in, or act in concert
with, any person, firm, corporation, entity or venture engaged in any
Competitive Business, whether as an individual, partner, stockholder, creditor,
director, officer, principal, agent, employee, trustee, consultant, advisor,
joint venturer, independent contractor or in any other relationship or capacity;
or
(iv) Encourage or have contact with any of the Corporation's
employees (including any person who was employed or retained by the Corporation
or any of its affiliates during Sellian's employment with the Corporation),
either directly or indirectly, for the purpose of encouraging them to end their
employment with the Corporation and/or to join Sellian or any other person or
entity as a stockholder, creditor, director, officer, principal, agent,
employee, trustee, consultant, advisor, joint venturer or independent contractor
in any Competitive Business, or employ and/or allow any employee of the
Corporation (including any person who was employed or retained by the
Corporation or any of its affiliates during Sellian's employment with the
Corporation) to join Sellian as a stockholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor, joint venturer or
independent contractor in any Competitive Business, provided however, that after
January 1, 2003, the foregoing shall not prevent Sellian from encouraging or
contacting any of the Corporation's employees, either directly or indirectly,
for the purpose of encouraging them to end their employment with the Corporation
and join Sellian in a non-Competitive Business; or
(v) Solicit, service or attempt to service, interfere with, have
contact with, divert or attempt to divert, or endeavor to entice away from the
Corporation or any of its affiliates any of its or their sources of supply or
customers for the purposes of having such customer's needs for products and
services of the Corporation provided by a Competitive Business. The terms
"customers" and "sources of supply" includes any entity which, as of the
Termination Date or at any time during the immediately preceding twelve-month
period, is or was a customer or source of supply of the Corporation, or a
prospective customer or source of supply with which the Corporation had proposed
or was in the process of proposing to do business, either orally or in writing.
However, nothing in this Agreement shall preclude Sellian from investing his
personal assets in the securities of any Competitive Business if such securities
are traded on a national stock exchange or in the over-the-counter market and if
such investment does not result in his beneficially owning, at any time, more
than 5.0% of the publicly-traded equity securities of such Competitive Business.
(d) Sellian agrees that, prior to accepting employment with or
agreeing to perform services for any entity which is or might reasonably be a
Competitive Business, Sellian will notify the Corporation in writing of
Sellian's intentions, in order to provide the Corporation with the opportunity
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to assess whether Sellian's employment or retention may violate any provisions
of this Agreement.
(e) "Competitive Business" shall mean any business or enterprise, or
affiliate or subsidiary thereof, which:
(i) Is engaged in the business of renting, leasing or supplying
to other business entities high pressure or bulk CO2 cylinders and/or selling or
distributing CO2; or
(ii) Engages in any other business in which the Corporation or
any of its affiliates was involved at any time during the twelve-month period
immediately preceding the date hereof.
"Competitive Business" shall not include the operations of Soda
Systems, Inc. in New York, New Jersey and Connecticut, a company owned by a
Sellian family member which is based in Pelham, New York, as long as such
company is not engaged in the business of renting, leasing or supplying to other
business entities high pressure or bulk CO2 cylinders and/or selling or
distributing CO2.
(f) Any judicial or other tribunal making any determination that any
provisions of this Agreement are unenforceable shall have the power to modify
the scope, duration or area of any restrictive covenant hereunder, or all of
them, to the extent necessary to make such provision(s) enforceable, and such
provision(s) shall then be applicable in such modified form.
3. Payments. In consideration of the agreements of Sellian contained
in Paragraph 2 hereof, the Corporation shall pay Sellian the sum of Four Hundred
Eighty Thousand Dollars ($480,000), payable in thirty-six (36) equal monthly
installments on the last day of each month commencing on January 31, 2001.
4. Health and Dental Insurance. The Corporation will continue health
insurance coverage for Sellian and Sellian's spouse until December 31, 2003 on
the same terms and conditions as for other senior executives of the Corporation.
Until December 31, 2003, Sellian and Sellian's spouse shall be entitled to
participate in the dental plan offered by the Corporation, provided that the
cost shall be borne entirely by Sellian.
5. Stock Options. The parties hereby stipulate that for purposes of
the 1995 Stock Option Plan of the Corporation (the "Plan"), Sellian shall be
deemed to have voluntarily terminated his employment with the consent of the
Corporation and that Sellian may exercise any stock options granted to Sellian
under the Plan that are exercisable as of the Termination Date until the
expiration of the term stated in the option agreement grant letters between
Sellian and the Corporation dated March 16, 1998, which letters shall govern
such stock options.
6. Enforcement of Agreement. Sellian recognizes that a breach of any
of the provisions of Paragraph 2 of this Agreement would cause irreparable
damage to the Corporation's business and that such damage will be difficult or
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impossible to measure. Therefore, in the event of a violation or a threatened
violation by Sellian of the terms of this Agreement, Sellian hereby acknowledges
and agrees that the Corporation will have the right, in addition to all other
remedies available to it at law, in equity and under this Agreement, to
affirmative or negative injunctive relief from a court of competent
jurisdiction: (i) restraining Sellian from disclosing, in whole or in part, any
Confidential Information to any person, firm, corporation, partnership,
association or other entity to whom or to which such Confidential Information is
threatened to be disclosed and (ii) restraining Sellian from any continued or
threatened violation of the covenants contained in this Agreement. Sellian
agrees to entry of an appropriate protective order to ensure confidentiality of
all documents and any other relevant evidence.
Nothing in this Agreement shall be construed as prohibiting the
Corporation from pursuing any other remedies, and pursuit of one or more
remedies or forms of relief shall not preclude the Corporation from pursuing any
other remedies or forms of relief.
The waiver by the Corporation of a breach by Sellian of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by Sellian.
7. Applicable Law. This Agreement shall be interpreted and enforced
in accordance with the laws of the State of Florida.
8. Amendment. This Agreement may be amended only by a written
document signed by Sellian and the Chief Executive Officer of the Corporation.
9. Severability. In the event that any of the provisions of this
Agreement are determined by a judicial or other tribunal to be unenforceable,
the remaining provisions of this Agreement will remain enforceable.
10. Complete Agreement. This Agreement sets forth all of the terms
and conditions of the agreement between the parties, and no representations have
been made to Sellian which are not contained in this Agreement. With the
exception of the option agreements under the Plan (which remain applicable in
accordance with their terms only to the extent they are not inconsistent with
this Agreement), this Agreement supersedes any and all prior agreements,
contracts and understandings, and constitutes the entire
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agreement between the parties. Sellian acknowledges that no promise, inducement
or agreement has been made except as expressly provided in this Agreement.
IN WITNESS WHEREOF, each of the parties hereto, either individually
or by a duly authorized representative, has signed this Agreement on the date
set forth below.
Xxxxxx X. Xxxxxxx NuCo2 Inc.
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. XxXxxxxxxx
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Xxxxxxx X. XxXxxxxxxx
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