EXHIBIT 10.15
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is made effective as of the
13th day of February, 1998 (the "Commencement Date"), by and between U S
LIQUIDS INC., a Delaware corporation (the "Corporation"), and W. XXXXXXX XXX
(the "Employee").
WITNESSETH:
WHEREAS, the Corporation desires to employ the Employee upon the terms
and conditions herein set forth; and
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. 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.
2. DUTIES AND RESPONSIBILITIES.
2.1 AS PRESIDENT AND CHIEF OPERATING OFFICER. As President and Chief
Operating Officer, the Employee shall act in a general executive capacity and
assist the Chief Executive Officer in the administration and operation of the
Corporation's business and in the general supervision of its policies and
affairs. The Employee shall report directly to the Chief Executive Officer of
the Corporation and shall perform such duties as are commensurate with his
positions as President and Chief Operating Officer. The Employee's place of
employment shall be in the Houston, Texas metropolitan area, subject to travel
necessary for the performance of his duties hereunder. The Corporation shall
provide to the Employee adequate office facilities and staff commensurate with
his positions to enable him to perform his duties hereunder.
2.2 EXTENT OF SERVICES. The Employee shall devote such of his time
as is necessary to fully and properly carry out his duties and responsibilities.
However, this Agreement shall not prohibit the Employee from engaging in other
activities, whether for family, recreation, investment, civic, charity, or other
purposes, so long as those activities do not unduly interfere with the ability
of the Employee to carry out his duties and responsibilities hereunder and so
long as they are not inconsistent or competitive with the interests of the
Corporation.
2.3 DUTY OF LOYALTY. The Employee recognizes that he owes a duty of
loyalty and good faith to the Corporation (including any subsidiary thereof) and
agrees that during the term of this
Agreement he will not take advantage of any corporate opportunity of the
Corporation, engage in self-dealing with the Corporation, sell or disclose any
confidential or proprietary information of the Corporation, or have or obtain
any material economic interest in any entity or arrangement which is competitive
with the business of the Corporation or engage in any activities which are
competitive with the business of the Corporation, without first disclosing all
facts and details relating thereto to the Board of Directors and obtaining the
approval of the Board of Directors.
3. BASE SALARY AND INCENTIVE COMPENSATION.
3.1 The Corporation shall pay to the Employee for the services to be
rendered by the Employee hereunder a base salary (the "Base Salary") at the rate
of $150,000 per year, payable in equal installments (subject to withholding tax)
in accordance with the Corporation's regular payroll schedule, which as of the
date of this Agreement is on the 15th day and the last day of each calendar
month. Such Base Salary as in effect from time to time may be increased annually
or more often as determined by the Board of Directors in its sole discretion.
However, the Base Salary payable to the Employee from time to time hereunder
shall not be decreased.
3.2 Each calendar year during the term of this Agreement, the
Corporation will adopt an incentive compensation plan for certain of its
executive employees, including the Employee. This incentive compensation plan
will provide for incentive bonus compensation ("Incentive Compensation") to be
paid to the Employee and the other participants in that plan based upon the
performance of the Employee and the other participants in the plan and further
based upon the results of the Corporation's business and operations.
4. BENEFITS.
4.1 EXECUTIVE BENEFITS GENERALLY. The Employee shall be entitled to
participate in and receive benefits from any insurance, medical, dental, health
and accident, hospitalization, disability, stock purchase, defined benefit,
defined contribution, or other employee benefit plan of the Corporation which
may be in effect at any time during the course of his employment with the
Corporation and which is generally available to executives of the Corporation
(these being referred to as the Employee's "Executive Benefits").
4.2 AUTOMOBILE. If and at such time that it becomes the policy of
the Corporation to provide automobiles or an automobile allowance to the
Corporation's senior executives for their use in connection with the
Corporation's business, the Corporation shall provide such an automobile or an
automobile allowance to the Employee in accordance with such policy.
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4.3 REIMBURSEMENT OF EXPENSES. The Corporation shall reimburse the
Employee for all reasonable and ordinary 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.
4.4 VACATIONS. The Employee shall be entitled to four (4) weeks of
paid vacation in each calendar year (to be prorated for any calendar year during
which the Employee is employed by the Corporation for less than the full
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.
5. DISABILITY OR DEATH. In the event the Employee incurs a disability,
which for purposes of this Agreement shall mean any mental or physical illness,
injury, or condition which results in the Employee being unable to fulfill his
duties under this Agreement on a regular basis, then the Corporation shall
nevertheless continue to provide to the Employee during such period or periods
of disability all compensation and benefits under this Agreement, except that,
during any one (1) calendar year the Corporation shall not be required to pay
the Base Salary or Incentive Compensation of the Employee for periods of
disability in excess of 180 days in total.
6. NONCOMPETITION DURING EMPLOYMENT. During the term of his employment by
the Corporation, the Employee shall not, directly or indirectly, engage 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.
7. TERM OF EMPLOYMENT AND RIGHTS UPON TERMINATION OF EMPLOYMENT.
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7.1 TERM AND SCHEDULED TERMINATION DATE. The term of Employee's
employment hereunder shall begin on the Commencement Date and shall continue for
a term of five (5) years from the Commencement Date (this date of termination of
his employment being referred to as the "Scheduled Termination Date"). However,
as of each anniversary date of the Commencement Date, the Scheduled Termination
Date shall automatically be extended for a successive one-year period of time,
unless more than ninety (90) days prior to the occurrence of such anniversary
date, either party gives notice to the other that such Scheduled Termination
Date shall not thereafter be so extended. If any such notice is given, then the
Scheduled Termination Date hereof shall not be automatically extended upon the
future occurrence of any such anniversary date. Following the Scheduled
Termination Date, the Employee shall not be entitled to earn any further
compensation or benefits under this Agreement.
7.2 TERMINATION BY THE CORPORATION WITHOUT CAUSE.
(a) The Corporation may terminate this Agreement at any time,
without cause and for any reason, upon notice to the Employee setting
forth the date of termination (this date of termination and any other date
of termination prior to the Scheduled Termination Date is referred to as
the "Early Termination Date"). In this event, the Employee shall be
entitled to continue to receive, during the period of time between the
Early Termination Date and the Scheduled Termination Date, the same Base
Salary which the Employee was receiving at the time of such Early
Termination Date (in the manner and as described in Section 3.1) and all
Executive Benefits which the Employee was receiving or entitled to receive
as of such Early Termination Date (in the manner and as described in
Section 4.1). Further, all outstanding stock options which shall have been
granted to the Employee shall immediately become exercisable (if not
already exercisable in full) and shall continue in full force and effect.
(b) In the event the Employee suffers from a disability (as defined
in Section 5) for a period of 180 business days out of any 360 consecutive
business day period, then the Corporation may at any time no later than
thirty (30) days following the end of said 360-day period terminate the
employment of the Employee without cause, by notice to the Employee
setting forth the effective Early Termination Date. However, the
Corporation shall not have the right to terminate the employment of the
Employee hereunder if, at the time the Corporation gives notice of
termination to the Employee, the Employee has then again begun to render
services for the Corporation as required hereunder. Following an Early
Termination Date because of disability, the Employee shall be entitled to
receive his Base Salary then in effect for a period of one (1) year
following his Early Termination Date
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and shall be entitled to retain all of his Executive Benefits for a period
of one (1) year following his Early Termination Date. Further, the
Employee's stock options, to the extent not fully vested, would continue
to vest during the one-year period following his Early Termination Date.
(c) This Agreement shall terminate immediately upon the Employee's
death. In addition to any other compensation or benefits payable or
accrued to the benefit of the Employee as of the date of his death, the
Corporation shall pay to the Employee's executor or legal representative
an amount in cash equal to one (1) times the Employee's Base Salary then
in effect at the time of his death.
7.3 BY THE CORPORATION WITH CAUSE. The Corporation may terminate
this Agreement at any time for cause, by notice to the Employee setting forth
the Early Termination Date. The term "cause" shall mean (a) a willful and
recurring refusal of the Employee to perform his duties, responsibilities or
obligations under this Agreement, which refusal continues for at least thirty
(30) days after notice thereof is given to the Employee by the Corporation
setting forth the facts upon which the notice is based, (b) the Employee's
conviction of a felony involving moral turpitude, or (c) the Employee's fraud
regarding any material matter with respect to the business or operations of the
Corporation. Following the occurrence of the Early Termination Date of the
Employee for cause, then the Employee shall not be entitled to earn any further
compensation or benefits under this Agreement.
7.4 BY EMPLOYEE WITHOUT CAUSE. The Employee may terminate this
Agreement at any time, without cause and for any reason, upon notice to the
Corporation setting forth the Employee's Early Termination Date. In such event,
the Employee shall not be entitled to earn any further compensation or benefits
under this Agreement.
7.5 BY EMPLOYEE WITH CAUSE. The Employee may terminate this
Agreement at any time with cause upon notice to the Corporation setting forth
the Early Termination Date. The term "cause" shall mean a breach of this
Agreement in any material way by the Corporation, which breach is not cured
within thirty (30) days after notice of such breach to the Corporation by the
Employee setting forth the facts upon which the notice is based. In the event of
such Early Termination Date, then from the Early Termination Date until the
Scheduled Termination Date, the Employee shall be entitled to continue to
receive, the same Base Salary which the Employee was receiving at the time of
such Early Termination Date (in the manner and as described in Section 3.1) and
all Executive Benefits which the Employee was receiving or entitled to receive
as of such Early Termination Date (in the manner and as described in Section
4.1). Further, all outstanding
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stock options which shall have been granted to the Employee shall become
immediately exercisable (if not already exercisable in full) and shall continue
in full force and effect.
7.6 COMPENSATION, REIMBURSEMENTS, INDEMNIFICATION, AND BENEFITS
PAYABLE OR ACCRUED AS OF TERMINATION DATE. Upon the occurrence of any
Termination Date, whether a Scheduled Termination Date or an Early Termination
Date, and regardless of the reason for termination, the Employee shall be
entitled to receive all compensation, reimbursements, and benefits hereunder
which were either payable to the Employee, or which had accrued to the benefit
of the Employee or which had been earned by the Employee as of such Termination
Date. Any such compensation, reimbursements, or benefits shall be payable or
provided to the Employee no less quickly than they would have been payable or
provided to the Employee had the Termination Date not occurred. For these
purposes, the Employee's compensation shall include a pro rata portion of the
Incentive Compensation payable to the Employee under Section 3.2. Further, the
Employee shall be entitled to receive any indemnification payments that may have
accrued but have not been paid or that may thereafter become payable to the
Employee pursuant to the provisions of the Corporation's Certificate of
Incorporation, Bylaws or similar policy, plan or agreement relating to the
indemnification of directors or officers of the Corporation.
8. CHANGE OF CONTROL.
8.1 This Section 8 shall become effective, but not operative,
immediately upon the Commencement Date and shall remain in effect so long as the
Employee remains employed hereunder by the Corporation, but shall not be
operative unless and until there has been a Change in Control, as defined in
Section 8.4 hereof. Upon such a Change in Control, this Section 8 shall become
operative immediately.
8.2 If a Change in Control occurs (i) while the Employee is employed
by the Corporation hereunder, or (ii) subsequent to the Termination Date of the
Employee's employment hereunder other than by the Corporation for cause, or
death or disability, and prior to the later of the first anniversary of such
Termination Date or the third anniversary of the Commencement Date, or (iii)
within 180 days of the Scheduled Termination Date, the Employee may, in his sole
discretion, within twelve (12) months after the date of the Change in Control,
give notice to the Corporation that he intends to elect to exercise his rights
under this Section 8 (the "Notice of Intention"). Within thirty (30) days after
the Corporation's receipt of the Notice of Intention, the Corporation shall
provide written notice to the Employee setting forth the Corporation's
computation of the amount that would be payable pursuant to Section 8.3,
accompanied by the written opinion of the Corporation's independent certified
public accountants confirming
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the Corporation's computation. If the Employee takes exception to the
Corporation's computation of such amount, the Employee may (but shall not be
prejudiced in this right to later contest the amount actually paid by failure to
do so) give a further written notice to the Corporation setting forth in
reasonable detail the Employee's exceptions to the Corporation's computation,
accompanied by the written opinion of the Employee's tax advisor confirming the
basis for such exceptions. Exercise by the Employee of his rights pursuant to
this Section 8 shall only be made by giving further notice to the Corporation
(the "Notice of Exercise") within six (6) months from the date of the Notice of
Intention.
8.3 If the Employee gives the Notice of Exercise described in
Section 8.2 to the Corporation, the Termination Date of his employment hereunder
shall then occur; all outstanding stock options which are not then exercisable
shall immediately become exercisable in full; and the Corporation shall pay to
the Employee a lump sum amount equal to $1.00 less than three (3) times the
Employee's "base amount" (as defined by Section 280(G), Part IX, Subchapter B,
Chapter 1 of the Internal Revenue Code of 1986, as amended). The Corporation
shall, within ten (10) business days after the date of the Notice of Exercise,
deliver to the Employee its cashier's check in the amount payable pursuant to
this Section 8.3, and payment of such amount shall terminate the Employee's
rights to receive any and all other compensation, reimbursements,
indemnification, or benefits under this Agreement, other than those which are
payable to or have accrued to the Employee as described in Section 7.6.
8.4 For the purposes of this Agreement, a Change in Control shall
mean (i) a reportable change in control under the proxy rules of the Securities
and Exchange Commission, including the acquisition of a 30% beneficial voting
interest in the Corporation (other than such acquisition by Employee or an
affiliate of Employee), or (ii) a change in any calendar year of such number of
directors as constitutes a majority of the board of directors of the
Corporation, unless the election, or the nomination for election by the
Corporation's shareholders, of each new director was approved by a vote of at
least two-thirds (2/3) of the directors then in office who were directors at the
beginning of the calendar year.
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90 POST-EMPLOYMENT ACTIVITIES.
9.1 For a period of two (2) years after the Employee's Termination
Date, except for a termination subsequent to a Change in Control of the
Corporation and further except for a termination by the Employee with cause,
then the Employee shall not, directly or indirectly, engage 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 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.
9.2 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 Section 9.1 hereof; provided, that the
Corporation shall not be entitled to injunctive relief or any other relief with
respect to Section 9.1 hereof if at the time such relief is sought the
Corporation has been in default of any of its obligations to the Employee
pursuant to any of the terms of Sections 7.2, 7.5, or 7.6 hereof.
9.3 The Employee will not, during the period of two (2) years after
his Termination Date, except for a termination subsequent to a Change in Control
of the Corporation and further except for a termination by the Employee with
cause, 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 subsidiaries 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 subsidiaries
to diminish or discontinue its business with the Corporation or such subsidiary.
100 CONFIDENTIAL INFORMATION. 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
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records and copies thereof shall be either left with or returned to the
Corporation. 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 records, potential client or supplier lists, and client or
supplier billing. Notwithstanding the foregoing, "Confidential Information"
shall not include information publicly disclosed by the Corporation or known by
the Employee other than because of his employment with the Corporation.
110 GENERAL.
11.1 ASSIGNMENT. This Agreement shall not be assignable.
11.2 NOTICES. All notices under this Agreement shall be in writing
and shall be deemed to have been given at the time when mailed by registered or
certified mail, addressed to the address below state of the party to which
notice is given, or to such changed address as such party may have fixed by
notice:
TO THE CORPORATION: U S Liquids Inc.
000 X. Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
ATTN: Xxxxxxx X. Xxxxxx
TO THE EMPLOYEE: W. Xxxxxxx Xxx
000 Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
11.3 ENTIRE AGREEMENT. This instrument contains and constitutes the
entire agreement between and among the parties herein and supersedes all prior
agreements and understandings between the parties hereto relating to the subject
matter hereof.
11.4 APPLICABLE LAW. This Agreement shall be construed, enforced and
governed in accordance with the laws of the State of Delaware.
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11.5 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.
11.6 DISPUTE RESOLUTION. Any dispute arising in any way out of this
Agreement and which cannot be resolved by good faith negotiations between the
parties within thirty (30) days after either party shall have notified the other
party in writing of its desire to arbitrate the dispute shall be submitted to
and settled through binding arbitration in accordance with the rules of the
American Arbitration Association as from time to time in effect. The arbitration
proceedings shall be conducted by a sole arbitrator who shall be an attorney
with not less than ten (10) years experience in commercial law. All disputes or
claims of the parties subject to arbitration shall be consolidated into a single
arbitration proceeding. The arbitration proceedings shall be conducted in
Houston, Texas. The award or determination of the arbitrator shall be final and
binding upon all parties and shall be subject to enforcement in any court of
competent jurisdiction. The arbitrator shall have the authority to award costs
and expenses of arbitration to either party as the arbitrator sees fit.
11.7 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 and successors.
11.8 APPROVALS AND CONSENTS MUST BE IN WRITING. Whenever this
Agreement calls for the consent, vote, or approval of any party, such consent 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 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
effective as of the date first above written.
U S LIQUIDS INC.
By: /S/ XXXXXXX X. XXXXXX
Xxxxxxx X. Xxxxxx, Chief
Executive Officer
By: /S/ W. XXXXXXX XXX
W. Xxxxxxx Xxx
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