EXHIBIT 10.5(A)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is dated as of August
21st, 1998, between INNOVATIVE VALVE TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), and XXXXXXX X. XXXXXXXXXX, XX. ("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, the Company desires to employ Executive, and Executive is
willing to accept such employment, on the terms hereinafter set forth;
NOW, THEREFORE, the Parties agree as follows:
26. EMPLOYMENT. The Company hereby employs Executive, and Executive hereby
accepts employment by the Company, on the terms and conditions hereinafter set
forth.
27. EXECUTIVE'S DUTIES. Executive is the Vice President, Corporate
Controller and Treasurer of the Company, and his duties shall include those
which are designated or assigned to him by the Chief Financial Officer of the
Company, provided those duties are of the type customarily discharged by a
person holding the same or similar office in a company similar in size and
operation to the Company. Executive shall devote Executive's entire time,
attention and energy to the business of the Company and diligently pursue its
best interests.
28. 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 7(d), (g) - (i), and 8 through
13 of this Agreement shall survive termination of this Agreement for any reason
whatsoever.
29. 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 Thousand Dollars
($100,000.00) per annum, payable in accordance with the standard payroll
policies of the Company;
(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;
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(c) 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;
(d) participation in the Company's long-term incentive plan
currently being developed by the Company, or other plan that may be
substituted for that plan, in accordance with the provisions of that plan;
and
(e) participation in all compensation plans from time to time in
effect while Executive is an active employee of the Company, taking into
account the Executive's positions with and duties and responsibilities to
the Company and its subsidiaries.
30. 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.
31. MEMBERSHIPS. The Company shall pay, or reimburse Executive for his
payment of, all membership fees, professional organization dues, professional
licenses and related expenses agreed to by the Executive and the Chief Financial
Officer, and which are necessary or appropriate for Executive to perform his
duties hereunder.
32. COVENANTS OF EXECUTIVE. For and in consideration of the employment
herein contemplated and the consideration paid or promised to be paid by the
Company, 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 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,
Executive has and will have access to, and that there has been and will be
disclosed to him, information of a proprietary nature owned by the
Company, including but not limited to records, customer and supplier lists
and information, pricing information, data, formulae, design information
and specifications, 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 may be obtained by or
disclosed to him in the course of his employment, including but not
limited to the information hereinabove 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 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 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
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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.
33. TERMINATION OF EMPLOYMENT FOR CAUSE. The Company may terminate the
employment of Executive if the Executive has engaged in any of the following or
any of the following occurs:
(a) the willful or continued failure by the Executive substantially to
perform his duties hereunder or regular failure to follow the
specific directives of the Chief Executive Officer, President or
Chief Financial Officer, after demand for substantial performance
that specifically identifies the manner in which the Company
believes the Executive has not substantially performed his duties is
delivered by the Company;
(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 or 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;
(c) the Executive's death; or
(d) an accident or illness which renders the Executive unable, for a
period of at least six (6) consecutive months, to perform the
essential functions of his job, notwithstanding the provision of
reasonable accommodation by Company.
For purposes of this section, no act, or failure to act, on the
Executive's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated For Cause under
subsection (a)without (i) reasonable notice to the Executive setting forth the
reasons for the Company's intention to terminate For Cause, (ii) an opportunity
for the Executive, together with his counsel, to be heard before the Chief
Executive Officer, President or Chief Financial Officer, and (iii) delivery to
the Executive of a notice of termination from the Chief Executive Officer,
President or Chief Financial Officer, finding that, in the good faith opinion of
the Chief Executive Officer, President or Chief Financial Officer, the Executive
was guilty of conduct set forth above in clause (a) of the preceding sentence
and specifying the particulars thereof in detail. 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, any annual incentive
award earned for fiscal years ending before his termination date but unpaid, and
reimbursement of expenses properly incurred but not yet reimbursed, and, only in
the case of termination under
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subsection (c) or (d) full vesting of all unvested options in his estate or with
his legal guardian.
34. TERMINATION WITHOUT CAUSE. The Company may terminate the employment of
Executive with thirty days' written notice for any reason other than those
enumerated in Section 8 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, (i) 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 twelve months, whichever is longer, (ii) immediately
accelerate the vesting date of any stock options granted to Executive (unless
the terms of any options or plan with respect thereto expressly provide
otherwise), (iii) pay any annual incentive earned for fiscal years ending before
his employment termination date but not yet paid, (iv) reimburse Executive for
all expenses incurred under Section 4(c) but not yet reimbursed and (v) continue
health insurance coverage for a period of twenty-four (24) months, at a level
commensurate with that which the Executive enjoyed with the Company immediately
prior to such termination. The aggregate of those payments shall constitute the
full and total amount of compensation that Executive shall be entitled to
receive. In 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 to
acceleration of such options, 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.
35. 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 10, the
Company shall be relieved of all of its obligations under this Agreement, except
that the Company shall pay to the Executive (i) his standard compensation
through the date upon which the thirty-day severance period ends, (ii) any
annual incentive earned for fiscal years ending before his termination date but
not yet paid and (iii) an amount representing the reimbursement of expenses
incurred under Section 4(e) but not yet reimbursed. The Executive agrees, in the
event of termination pursuant to this Section 10, and if so requested by the
Company, to assist the Company in training Executive's replacement during the
thirty-day severance period.
36. 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 employment and ending one year after the date Executive's employment
is terminated, Executive will not, without the prior written consent of the
Company, engage, directly or indirectly, in any business that competes with the
Company in any territory in which the Company conducts business (determined as
of such termination).
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It is mutually understood and agreed that if any of the provisions
relating to the scope, time or territory in this Section 11 are more extensive
than is enforceable under applicable laws or are broader than necessary to
protect the good will and legitimate business interests of the Company, then the
Parties agree that they will reduce the degree and extent of such provisions by
whatever minimal amount is necessary to bring such provisions within the ambit
of enforceability under applicable law.
The Parties acknowledge that the remedies at law for breach of Executive's
covenants contained in Sections 7 and 11 of the Agreement are inadequate, and
they agree that the Company shall be entitled, at its election, to injunctive
relief (without the necessity of posting bond against such breach or attempted
breach), and to specific performance of said covenants in addition to any other
remedies at law or equity that may be available to the Company.
37. 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.
38. RIGHT OF OFFSET. To the extent permitted by applicable law, all
amounts due and owing to Executive hereunder shall be subject to offset by the
Company to the extent of any damages incurred by Executive's breach of this
Agreement. 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.
39. 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.
40. 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 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;
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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.
41. 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.
42. 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.
43. 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 18, 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.
44. AUTHORITY TO CONTRACT. The Company warrants and represents that it has
full authority to enter into this Agreement and to consummate the 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.
45. 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
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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.
46. 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 elected 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.
47. 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
Texas.
48. 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.
49. PRIOR EMPLOYMENT AGREEMENTS. The Executive represents and warrants to
the Company that he has fulfilled all of the terms and conditions of all prior
employment agreements to which he may be or have been a party, 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:
_________________________________________
Xxxxxxx X. Xxxxxxxxxx, Xx.
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