EXHIBIT 10.34
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of April 1, 2002 (the "Agreement"),
is entered into by and between Petro Holdings, Inc., a Minnesota corporation
(the "Company") and Xxxxxx Xxxxxxx (the "Executive").
RECITALS
WHEREAS, the Executive has been employed by the Company for many
years, most recently as the Regional Vice President of the Company's
Mid-Atlantic Region; and
WHEREAS, the Company wishes to retain the services of the Executive as
its President and the Executive desires to continue to render services to the
Company in such capacity;
WHEREAS, the Company and the Executive deem it to be in their
respective best interests to enter into an agreement providing for the Company's
employment of the Executive on the terms and conditions set forth below; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, agreements, and promises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. Employment
1.1 Term. The Company agrees to employ the Executive as
President of the Company and the Executive agrees to accept such employment, for
an initial term commencing as of April 1, 2002 and ending on April 1, 2007 or
for such longer term as the Company and the Executive may agree. Not
withstanding the foregoing, between January 1, 2006 and June 30, 2006 the
Executive may give the Company notice of the pending expiration of the term and
if such notice is given, the term will automatically be extended for one year
unless the Company gives notice to the Executive on or before September 30, 2006
of its election not to extend the term , in which event the term shall end on
the last day of the initial
term. If this Agreement is extended, then between January 1 and June 30 of each
extension year the Executive may give the Company notice of the pending
expiration of the term and if such notice is given, the term will automatically
be extended one year unless the Company gives notice by September 30 that year
of its election not to extend the term. The initial term plus any extended
term(s), if applicable, is referred to herein as the "Term".
1.2 Duties. During the Term, the Executive shall perform such
duties and functions as are assigned to him by the Chief Executive of the
Company and the Executive shall adhere to all of the Company's policies and
procedures. The Executive shall report directly to the Chief Executive Officer.
1.3 Time Devoted to Employment. The Executive agrees to devote
his entire working time, attention and efforts to the Company and its
subsidiaries, use his best, good faith efforts to promote the success of the
Company's business, and cooperate fully with the Chief Executive Officer in the
advancement of the best interests of the Company. Among the duties of the
Executive will be the completion of the Organizational Re-Engineering/Call
Center Project ("Project") currently underway and it is anticipated that the
Executive will be required to devote up to 25% of his time to oversee the
completion of that project until it is completed or abandoned.
1.4 Location of Employment. The Executive's principal place of
employment shall initially be at the Company's principal executive offices
located in Stamford, CT. However, it is contemplated that the Company may move
its offices to another location within a 45 mile radius of New York City in (the
"Greater New York Metropolitan Area") and if such move is made, then Executive's
principal place of employment will be at the new location.
1.5 Moving Expenses. The Company will pay (i) all reasonable
packing and moving expenses associated with moving the Executive's possessions
from his home in Brielle, New Jersey to a new home selected by the Executive
nearer to the executive offices of the Company (ii) all closing costs and
expenses (including reasonable attorneys fees and normal brokerage commissions)
associated with the sale of his present home and the purchase of his new home
plus (iii) up to $5,000 as may be required to reduce the fixed mortgage rate on
the Executive's new home to 6%. Until such move is accomplished the
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Company will pay the reasonable cost of renting a furnished two bedroom
apartment for the Executive in or around Stamford, Connecticut or in proximity
to any new office established by the Company. The Company will pay for such
furnished apartment beginning on April 1, 2002 and continuing for a period which
ends 6 months after the date on which the Company has advised the Employee of
its intention not to move its executive officers from Stamford, CT or actually
moves its executive offices to a new location, whichever occurs first.
2. Compensation.
2.1 Base Salary; Bonus. As compensation for services rendered
hereunder, the Company shall pay the Executive an annual base salary of $325,000
or such higher amount as the Company, in its sole judgment and discretion, may
provide during the Term (the "Annual Base"). Executive shall be entitled to
receive a bonus targeted of up to $100,000 for each 12 month period ending
September 30 during the Term ("Targeted Bonus"). The Chief Executive Officer
will review Executive's performance on an annual basis (normally on or about
October 15) to determine what percentage of this Targeted Bonus he shall
actually receive, based upon objectives established prior to the beginning of
each fiscal year of the Company taking into account the Company's overall
performance, Executive's individual job performance and other factors deemed
appropriate by the Chief Executive Officer. The Targeted Bonus for the April 1,
2002 to September 30, 2002 period shall be a prorated portion of the $100,000
annual amount and shall be based upon performance objectives that are
established prior to April 5, 2002. For the period between January 1, 2002 and
March 31, 2002, the Executive shall be compensated at the annual rate of
$240,000 per annum and shall receive a pro rated bonus for the short period
October 1, 2001 to March 31, 2002 based upon the bonus program in effect for the
2001 fiscal year. The Annual Base shall be paid over the year in a manner
consistent with the Company's payment of executive salaries. The bonus shall be
paid to Executive each January following the end of each fiscal year. The
Executive shall be entitled to a success bonus of $300,000 upon the successful
completion of the Project, or, if the Project is abandoned prior to its
completion he shall receive a bonus of $150,000 in lieu of the success bonus.
The Project shall be deemed to be successfully completed if substantially all
customers of the Company on April 1, 2002 (other than Xxxxxx and Bayside
Customers) are properly
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serviced from one or two call centers on or before October 15, 2003; or such
later date as agreed to by the Chief Executive Officer.
2.2 Benefits. The Executive will be eligible to participate in
the Company's employee benefit plans as in effect from time to time made
generally available to senior executive employees of the Company including
medical, dental, life insurance, and 401(k) plan, all in accordance with Company
policies, as well as a company car.
2.3 Withholding. The Company shall make such deductions and
withhold such amounts from each payment made to the Executive under this
Agreement as may be required from time to time by law, governmental regulation
or order and in accordance with the Company's customary payroll practices.
2.4 Senior Subordinated Units. The Executive shall be granted
8,000 Senior Subordinated Units per year under the Company's Employee Unit
Incentive Plan for the fiscal years ending September 30, 2002, September 30,
2003 and September 30, 2004
3. Termination of Employment.
3.1 Termination. The Executive's employment hereunder may be
terminated prior to the end of the Term of this Agreement under the following
circumstances:
(a) Death. The Executive's employment hereunder shall terminate
upon his death.
(b) Disability. If, as a result of the incapacity of the
Executive due to physical or mental illness which constitutes "disability" under
any disability plan maintained by the Company of which the Executive is a
participant, the Executive shall have been absent from the full-time performance
of his duties with the Company for six (6) months during any eighteen (18)-month
period, his employment may be terminated by the Company for "Disability."
(c) Cause. Termination by the Company of the employment of the
Executive for "Cause" shall mean termination based upon the Executive's (i)
willful breach or willful neglect of his duties and responsibilities, (ii)
conviction (or plea of xxxx contendere) of a felony occurring on or after the
execution of this Agreement, (iii) material breach of this Agreement or any
other Agreement to which the Executive and the Company are parties (iv)
violation of any material Legal Requirement (as defined in Section 6.2 below),
(v) material
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breach of his duty of loyalty or fiduciary duties, or (vi) failure to comply
with the Company's reasonable orders or directives; provided, however, that in
the case of any act or failure to act described in sub-sections (i), (iii),
(iv), (v) or (vi) above, such act or failure to act shall not constitute Cause
if, within twenty (20) business days after Notice of Termination is given to the
Executive by the Company, the Executive has corrected such act or failure to
act, to the satisfaction of the Chief Executive Officer or the Chief Executive
Officer is otherwise satisfied that termination of the Executive's employment is
not in the best interests of the Company.
(d) Good Reason. The Executive may terminate his employment
during the Term of this Agreement for "Good Reason." Good Reason shall mean (i)
a requirement that Executive relocate to an area outside of the Greater New York
Metropolitan Area (ii) a substantial change in Executive's duties and
responsibilities or (iii) within the period of sixty (60) days following a
Change in Control, any termination of the Executive's employment for any reason,
either by the Executive or by the Company; however, in the case of any act
described in subsections (i) or (ii), such act or failure to act shall not
constitute Good Reason if after Notice of Termination is given by the Executive
to the Company, the Company has corrected such act or failure. "Change in
Control" shall mean (i) if the present members of Star LLC no longer have the
right to elect a majority of the Board of Directors of Star LLC or any successor
entity (iv) Star LLC or such successor entity is no longer the general partner
of Star Gas Propane LP or (iii) Star Gas LLC ceases for any reason to have the
indirect power to elect a majority of the Board of Directors of the Company.
3.2 Date of Termination. "Date of Termination" shall mean (a)
the expiration of the Term, (b) if the Executive's employment is terminated due
to his death, the date of his death, (c) if the Executive's employment is
terminated due to the Executive's Disability, ten (10) days after Notice of
Termination is given to the Executive, and (d) if the Executive's employment is
otherwise terminated by the Company or by the Executive, the date upon which the
for Cause or Good Reason event occurs or such other date set forth in the Notice
of Termination. Nothing in this Section shall be deemed to diminish the
Company's right to cause the Executive to cease performing his duties and
responsibilities as a President and employee of the Company at any time
("Termination Without Cause"), or to limit either party's right to give a Notice
of Termination at any time during the Term of this Agreement.
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3.3 Notice of Termination. Any purported termination of the
Executive's employment by the Company or by the Executive shall be communicated
by written Notice of Termination to the other party hereto in accordance with
Paragraph 7.4 of this Agreement. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which shall indicate the specific
termination provision in this Agreement relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.
4. Compensation Upon Termination.
4.1 Disability. During any period in which the Executive fails
to perform his full-time duties with the Company as a result of incapacity due
to physical or mental illness, the Executive shall be compensated as follows:
(a) the Executive shall continue to receive his Annual Base at the rate in
effect at the commencement of any such period less any compensation payable to
the Executive under the applicable disability insurance plan of the Company
during such period, until the Executive's employment is terminated pursuant to
Section 3 of this Agreement; and (b) the Company shall pay to the Executive
following such termination, in the same regular payments as theretofore as if
the Executive continued his employment with the Company, the lesser of (i) one
(1) year's Annual Base salary, and (ii) the unpaid amount of Annual Base for the
remaining balance of the Term of the Agreement; which payments shall be reduced
by any payments for disability under the Company's insurance and other benefit
programs. Thereafter, the Executive's benefits shall be only as provided under
the Company's insurance and other benefits programs then in effect in accordance
with the terms of such programs.
4.2 Death. In the event the Executive's employment is terminated
by reason of his death all earned, but unpaid amounts of Annual Base, if any, to
which the Executive was entitled as of the Date of Termination shall be paid in
accordance with the terms of this Agreement to the Executive's beneficiary, or,
if no beneficiary has been designated by the Executive in a written notice prior
to his death, to the Executive's estate. Thereafter, the Company shall have no
further obligations to the Executive's beneficiary or estate under this
Agreement.
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4.3 Termination for Cause or by The Executive Without Good
Reason. In the event the Executive's employment is terminated by the Company for
Cause or by the Executive without Good Reason, the Company shall pay the
Executive all earned, but unpaid amounts of his Annual Base, if any, to which
the Executive was entitled as of the Date of Termination and the Company shall
have no further obligations to the Executive under this Agreement.
4.4 Termination Without Cause or by Executive for Good Reason.
In the event the Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason, the Company shall pay the Executive
all earned, but unpaid amounts of his Annual Base, if any, to which the
Executive was entitled as of the Date of Termination. In addition, the Company
shall pay to the Executive promptly after the Date of Termination (i) if the
Date of Termination occurs during the initial term, a single payment of $480,000
or (ii) if the Date of Termination occurs after the initial term, an amount
equal to the Annual Base then in effect.
5. Restrictive Covenants.
5.1 Confidential Information. The Executive acknowledges that
during his employment with the Company, he shall be exposed to or given access
to Confidential Information (as defined below in Section 6.1). The Executive
agrees, without limitation in time or until such information shall become public
other than by the Executive's unauthorized disclosure (except as necessary or
appropriate in connection with the performance by the Executive of his duties or
as required by law), to maintain the confidentiality of the Confidential
Information and refrain from divulging, disclosing, or otherwise using for his
benefit or for the benefit of others in any respect the Confidential Information
to the detriment of the Company and any of its subsidiaries, affiliates,
successors or assigns, or for any other purpose or no purpose. Notwithstanding
the foregoing, there shall be no prohibition against the Executive using the
general skill and knowledge which he has acquired as an employee of the Company.
5.2 Ownership of Intellectual Property. The Executive
acknowledges and agrees that all work performed, and all ideas, concepts,
materials, products, software, documentation, designs, architectures,
specifications, flow charts, test data, programmer's notes, deliverables,
improvements, discoveries, methods, processes, or inventions, trade secrets or
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other subject matter related to the Company's business (collectively,
"Materials") conceived, developed or prepared by him, alone or with others,
during the period of his employment or other relationship with the Company in
written, oral, electronic, photographic, optical or any other form, are the
property of the Company and its successors or assigns, and all rights, title and
interest therein shall vest in the Company and its successors or assigns, and
all Materials shall be deemed to be works made for hire and made in the course
of his employment or other relationship with the Company. To the extent that
title to any Materials has not or may not, by operation of law, vest in the
Company and its successors or assigns, or such Materials may not be considered
works made for hire, the Executive hereby irrevocably assigns all rights, title
and interest therein to the Company and its successors or assigns. All Materials
belong exclusively to the Company and its successors or assigns, with the
Company and its successors or assigns having the right to obtain and to hold in
its or their own name, copyrights, patents, trademarks, applications,
registrations or such other protection as may be appropriate to the subject
matter, and any extensions and renewals thereof. The Executive hereby grants to
the Company and its successors or assigns an irrevocable power of attorney to
perform any and all acts and execute any and all documents and instruments on
his behalf as the Company and its successors or assigns may deem appropriate in
order to perfect or enforce the rights defined in this Section. Executive
further agrees to give the Company and its successors or assigns, or any person
designated by the Company and its successors or assigns, at the Company's or its
successors' or assigns' expense, any assistance required to perfect or enforce
the rights defined in this Section. Executive shall communicate and deliver to
the Company and its successors or assigns promptly and fully all Materials
conceived or developed by him (alone or jointly with others) during the period
of his employment or other relationship with the Company and its successors and
assigns.
5.3 Covenant Not to Compete.
(a) For a period commencing on April 1, 2002 and continuing
until 19 months after the termination of the Executive's employment with the
Company, The Executive shall not in any city, town or county in any state of the
United States, where the Company or any of its subsidiaries, affiliates,
successors or assigns engages in the sale or distribution at retail of #2 fuel
oil (the "Business"), directly or indirectly, do any of the following:
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(i) engage in the Business for the Executive's own account;
(ii) enter the employ of, or render any services to or for,
any entity that is engaged in the Business; or
(iii) become involved in any entity engaged in the Business
in any capacity, including as an individual, partner, member, shareholder,
officer, director, principal, employee, agent, investor, trustee or consultant.
Notwithstanding the foregoing, the Executive may own, directly or
indirectly, solely as a passive investment, securities of any entity traded on
any national securities exchange or automated quotation system if the Executive
is not a controlling person of, or a member of a group which controls, such
entity and does not, directly or indirectly, beneficially own 5.0% or more of
any class of securities of such
(b) Noninterference. For a period commencing on April 1, 2002
and continuing until 19 months after the termination of the Executive's
employment with the Company, the Executive shall not, directly or indirectly, do
any of the following: solicit, induce, or attempt to solicit or induce any
person known by the Executive to be an employee or consultant of the Company or
its subsidiaries, affiliates, successors or assigns, to terminate his or her
employment or other relationship with the Company or any of its subsidiaries,
affiliates, successors or assigns.
(c) Nonsolicitation. For a period commencing on April 1, 2002
and continuing until 19 months after the termination of the Executive's
employment with Company, the Executive shall not directly or indirectly,
solicit, induce, or attempt to solicit or induce any person or entity then known
to be a customer, vendor, supplier, distributor or consultant of the Company or
any of its subsidiaries, affiliates, successors or assigns (a "Customer or
Supplier") to terminate his, her or its relationship with the Company, or any of
its subsidiaries, affiliates, successors or assigns for any purpose.
The provisions of this Section shall be in addition to and not in
limitation of the provisions of any other agreement which the Executive has or
may sign for the benefit of the Company.
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5.4 Return of Documents and Other Property. At the end of the
Term or upon termination of the Executive's employment, the Executive shall
return to the Company all of its property, equipment, documents, records, lists,
files and any and all other Company materials including, without limitation,
computerized or electronic information that is in the Executive's possession as
of the Date of Termination (the "Company Property"). The Company Property shall
be delivered to the executive officers of the Company, at the Executive's
expense, within five (5) business days after the Date of Termination. Unless
otherwise agreed by the Company in writing, the Executive shall not retain any
Company Property.
5.5 Reasonableness of Restrictive Covenants. The Executive
agrees that, due to the uniqueness of his skills and abilities and the
uniqueness of the confidential information that he will possess in the course of
his employment with the Company, the covenants set forth herein are reasonable
and necessary for the protection of the Company. Nevertheless, if it shall be
determined that such covenants are unenforceable in that they are too broad as
to their scope or geographical coverage, then the parties hereby confer upon any
appropriate court the power to limit such scope or geographical coverage such
that they will be enforceable.
5.6 Irreparable Injury. The Executive acknowledges that the
covenants contained in this Section 5 and the Executive's services under this
Agreement are of a special and unique character, which gives them a peculiar
value to the Company, the loss of which may not be reasonably or adequately
compensated for by damages in an action at law, and that a material breach or
threatened breach by him of any of the covenants contained in this Agreement
will cause the Company irreparable injury. the Executive therefore agrees that
the Company shall be entitled, in addition to any other right or remedy, to a
temporary restraining order, preliminary and permanent injunctions and any other
appropriate equitable remedy that prevents the Executive from breaching this
Agreement, without the necessity of proving the inadequacy of monetary damages
or the posting of any bond or security, enjoining or restraining the Executive
from any such violation or threatened violation.
6. Definitions. For purposes of this Agreement, the following terms
have the meanings specified or referred to in this Section 6:
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6.1 "Confidential Information" shall mean (i) any and all Trade
Secrets, product specifications, compositions, designs, sketches, photographs,
graphs, drawings, samples, inventions and ideas, past, current and planned
research and development, current and planned manufacturing and distribution
methods and processes, current and anticipated customer requirements, marketing
and product procurement plans, price lists, market studies, business plans,
computer software and programs (including object code and source code), computer
software and database technologies, systems, structures and architectures (and
related processes, formulae, compositions, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information), of
the Company and any other information, however documented, of the Company that
is a Trade Secret; (ii) any and all information concerning the business and
affairs of the Company (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel,
personnel training and techniques and materials), however documented; and (iii)
any and all notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Company containing or based, in whole or in
part, on any information included in the foregoing.
6.2 "Legal Requirement" shall mean any federal, state, local,
municipal, foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
6.3 "Trade Secret" shall mean all technology, know-how,
proprietary processes and formulas, customer lists, software, technical
information, data, process technology, plans, drawings, and blue prints owned
used, or licensed by the Company as licensee or licensor.
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7. Miscellaneous.
7.1 Successors and Assigns; Binding Agreement. This Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns;
provided, that the duties of the Executive hereunder are personal to the
Executive and may not be delegated or assigned by him.
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut.
7.3 Waivers. The waiver by either party hereto of any right
hereunder or any failure to perform or breach by the other party hereto shall
not be deemed a waiver of any other right hereunder or of any other failure or
breach by the other party hereto, whether of the same or a similar nature or
otherwise. No waiver shall be deemed to have occurred unless set forth in a
writing executed by or on behalf of the waiving party. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and each
such waiver shall operate only as to the specific term or condition waived and
shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.
7.4 Notices. All notices and communications that are required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally or by overnight courier, as follows:
If to the Company, to:
Petro Holdings, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
And
Xxxxxxxx Xxxxx Xxxxxxxx Xxxx & Ballon LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxx Xxxxxxx, Esq.
If to the Executive, to:
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Xxxxxx Xxxxxxx
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
or to such other address as may be specified in a written notice personally
delivered, faxed or mailed by overnight courier or registered or certified mail,
postage prepaid, return receipt requested, given by one party to the other party
hereunder.
7.5 Severability. If for any reason any term or provision of
this Agreement is held to be invalid or unenforceable, all other valid terms and
provisions hereof shall remain in full force and effect, and all of the terms
and provisions of this Agreement shall be deemed to be severable in nature. If
for any reason any term or provision containing a restriction set forth herein
is held to cover an area or to be for a length of time which is unreasonable, or
in any other way is construed to be too broad or to any extent invalid, such
term or provision shall not be determined to be null, void and of no effect, but
to the extent the same is or would be valid or enforceable under applicable law,
any court of competent jurisdiction shall construe and interpret or reform this
Agreement to provide for a restriction having the maximum enforceable area, time
period and other provisions (not greater than those contained herein) as shall
be valid and enforceable under applicable law.
7.6 Amendment: Cancellation. This Agreement may not be amended
or cancelled except by mutual agreement of the parties in writing (without the
consent of any other person) and, so long as the Executive lives, no person,
other than the Company, its successors and assigns and the Executive shall have
any rights under or interests in this Agreement or the subject matter hereof.
7.7 Descriptive Headings. The parties hereto agree that the
headings of the several paragraphs of this Agreement are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
7.8 Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto, and supersedes all prior oral and/or
written understandings and/or agreements between the parties hereto relating to
the subject matter hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
PETRO HOLDINGS, INC.
By: _________________________________
Name: Xxxx Xxxxx
Title: Chief Executive Officer
_____________________________________
Xxxxxx Xxxxxxx
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