Exhibit 10.24
AMENDMENT NO. 3 TO EMPLOYMENT AGREEMENT
Amendment No. 3 ("Amendment") dated September 13, 2007 to Employment
Agreement dated as of October 21, 2002 (the "Employment Agreement") by and
between NuCO2 Inc. (the "Corporation") and Xxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Corporation and the Executive are parties to the Employment
Agreement; and
WHEREAS, the Corporation and the Executive wish to amend the Employment
Agreement to make certain modifications thereto;
NOW, THEREFORE, for Ten Dollars ($10) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each of
the parties, the Corporation and the Executive hereby agree as follows:
1. The first sentence of Paragraph 2.1(a) of the Employment Agreement
is hereby amended in its entirety to read as follows:
"Effective as of July 9, 2007, a base salary ("Base Salary") at the
rate of $309,310 per annum, payable in accordance with the
Corporation's regular payment schedule for its employees."
2. Paragraph 2.1(c) of the Employment Agreement is amended by adding a
new sentence at the end thereof as follows:
"Any Target Cash Bonus earned shall be paid no later than August
31st following the end of the applicable fiscal year."
3. Paragraph 3.1(a) of the Employment Agreement is hereby amended in
its entirety to read as follows:
"(a) automatically upon the death of the Executive or voluntary
termination of employment by the Executive other than for Good
Reason (as such term is defined in Paragraph 5.3 below)."
4. The third sentence of Paragraph 3.2(a) of the Employment Agreement
is hereby amended in its entirety to read as follows:
"To the extent that the Corporation receives the proceeds on any
life insurance on the life of the Executive (as provided in
Paragraph 3.2(d)) such proceeds shall be paid, promptly after
receipt (but no later than thirty (30) days after the Corporation
has received such proceeds), to the beneficiaries theretofore
designated in writing by the Executive (or the Executive's estate if
no such beneficiaries shall have been designated) to fund the
obligations under this Paragraph 3.2(a) and shall reduce such
obligations on a dollar for dollar basis."
5. The first sentence of Paragraph 3.2(c) of the Employment Agreement
is hereby amended in its entirety to read as follows:
"In the event of a termination of the Executive's employment "for
cause" as defined in Paragraph 3.1(c) above or voluntarily by the
Executive other than for Good Reason, the Executive shall not be
entitled to (i) any payments other than such compensation as shall
have been earned by him prior to the date of such termination and
not paid as of the date of such termination, or (ii) any bonus
pursuant to Paragraph 2.1(c)."
6. Paragraph 4.2 of the Employment Agreement is hereby amended in its
entirety to read as follows:
"4.2 NON-COMPETE. The Executive acknowledges that (i) the services
to be performed by him under this Agreement are of a special,
unique, extraordinary and intellectual character; (ii) the Executive
possess substantial technical and managerial expertise and skill
with respect to the Corporation's business; (iii) the Corporation's
business is national in scope and its products and services are
marketed throughout the nation; (iv) the Corporation competes with
other businesses that are or could be located in any part of the
nation; (v) the covenants and obligations of Executive under this
Paragraph 4.2 are material inducement and condition to the
Corporation's entering into this Agreement and performing its
obligations hereunder; and (vi) the provisions of this Paragraph 4.2
are reasonable and necessary to protect the Corporation's business.
In consideration of the acknowledgments by the Executive above, and
in consideration of the compensation and benefits (including the
payments described in Paragraphs 3.2(e) and 5.1(c)) to be paid or
provided to Executive by the Corporation, the Executive covenants
that he will not, for a period of two (2) years following the
expiration or earlier termination of this Agreement, without the
prior written consent of the Corporation, directly or indirectly:
(a) knowingly solicit any business, in the same product or
business line or one that is closely related to that in which the
Executive was engaged during his employment, for or from, or become
associated with, as principal, agent, employee, consultant, or in
any other capacity, any person who, or entity which, at the time of,
or during the twelve (12) months immediately preceding such
expiration or termination was in direct competition with the
Corporation; or
(b) become a principal, agent, employee, consultant, or
otherwise become associated with any person or entity which is
engaged in direct or indirect competition (i.e., doing indirectly
through others what the Executive could not do directly) with the
Corporation during a period of two (2) years following the
expiration or earlier termination of this Agreement."
7. The first sentence of Paragraph 4.3 of the Employment Agreement is
hereby amended in its entirety to read as follows:
"The Executive acknowledges that the services provided by him
pursuant to this Agreement are of a unique nature and of
extraordinary value and of such a character that a material breach
of the provisions of either Paragraph 4.1 or 4.2 of this Agreement
by the Executive will result in irreparable damage and injury to the
Corporation for which the Corporation will not have any adequate
remedy at law."
8. Section 5.1 of the Employment Agreement is hereby amended in its
entirety to read as follows:
"5.1 COMPENSATION. If prior to the expiration of the Term of
this Agreement, there is a Change of Control (defined in Paragraph
5.2 below) and thereafter, within two (2) years of the Change in
Control, the Executive should resign his employment for Good Reason
(as defined in Paragraph 5.3 below), the Executive shall be entitled
to the following compensation:
(a) Continuation of all benefits, including without limitation
medical, dental and life insurance for one and one-half (1-1/2)
years following the date of termination, or until the date on which
the Executive first becomes eligible for insurance coverage of a
similar nature provided by a firm that employs him following
termination of employment by the Corporation, whichever occurs
first. (b) Immediate vesting of any granted but unvested options to
purchase Common Stock held by the Executive.
(c) An amount equal to the greater of (i) one and one-half (1 1/2)
times (y) the Executive's then current annual Base Salary and (z)
the Executive's Target Cash Bonus for the then current year (such
Target Cash Bonus calculated as if the targets had been met in the
event the Target Cash Bonus cannot be calculated as of the date of
the termination of the Executive's employment) and (ii) six hundred
ninety-five thousand nine hundred forty-eight dollars ($695,948), to
be paid within sixty (60) days of termination of employment (except
as provided in Paragraph 6.8). The parties agree that the amount of
$618,620 payable pursuant to this Paragraph 5.1(c) shall be treated
as paid in consideration for the non-compete provisions set forth in
Paragraph 4.2 and shall be subject to the enforcement provisions set
forth in Paragraph 4.3, and the balance shall be treated as
severance."
9. Paragraph 5.2 of the Employment Agreement is hereby amended in its
entirety to read as follows:
"5.2 CHANGE OF CONTROL.
(a) For the purposes of this Agreement, a Change of Control
means during any twelve (12) month period (i) the direct or indirect
sale, lease, exchange or other transfer of all or substantially all
(50% or more) of the assets of the Corporation to any person or
entity or group of persons or entities acting in concert as a
partnership or other group (a "Group of Persons"), (ii) the merger,
consolidation or other business combination of the Corporation with
or into another corporation with the effect that the shareholders of
the Corporation, as the case may be, immediately following the
merger, consolidation or other business combination, hold 50% or
less of the combined voting power of the then outstanding securities
of the surviving corporation of such merger, consolidation or other
business combination ordinarily (and apart from rights accruing
under special circumstances) having the right to vote in the
election of directors, (iii) the replacement of a majority of the
Board in any given year as compared to the directors who constituted
the Board at the beginning of such year, and such replacement shall
not have been approved by the Board, as the case may be, as
constituted at the beginning of such year, or (iv) a person or Group
of Persons shall, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise, have
become the beneficial owner (within the meaning of Rule 13d-3 under
the Securities Exchange Act of 1934, as amended) of securities of
the Corporation representing 50% or more of the combined voting
power of the then outstanding securities of such corporation
ordinarily (and apart from rights accruing under special
circumstances) having the right to vote in the election of
directors.
Notwithstanding anything to the contrary contained in this
Agreement, to the extent that any of the payments and benefits provided
for under this Agreement or any other agreement or arrangement between the
Corporation and Executive (collectively, the "Payments") (i) constitute a
"parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Paragraph 5.2 would be subject to the excise tax imposed by Section 4999
of the Code, then the Payments shall be payable either (x) in full or (y)
as to such lesser amount which would result in no portion of such Payments
being subject to excise tax under Section 4999 of the Code; whichever of
the foregoing amounts, taking into account the applicable federal, state
and local income taxes and the excise tax imposed by Section 4999, results
in Executive's receipt on an after-tax basis, of the greatest amount of
benefits under this Agreement, notwithstanding that all or some portion of
such benefits may be taxable under Section 4999 of the Code. Unless
Executive and the Corporation otherwise agree in writing, any
determination required under this Section shall be made in writing by the
Corporation's independent public accountants (the "Accountants"), whose
determination shall be conclusive and binding upon Executive and the
Corporation for all purposes. For purposes of making the calculations
required by this Section, the Accountants may make reasonable assumptions
and approximations concerning applicable taxes and may rely in reasonable,
good faith interpretations concerning the application of Section 280G and
4999 of the Code. The Corporation and Executive shall furnish to the
Accountants such information and documents as the Accountants may
reasonably request in order to make a determination under this Section.
The Corporation shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Paragraph. If any
Payments would be reduced pursuant to the immediately preceding sentence
but would not be so reduced if the shareholder approval requirements of
section 280G(b)(5) of the Code are satisfied, the Corporation shall use
its reasonable best efforts to cause such payments to be submitted for
such approval prior to the event giving rise to such payments. If the
limitation set forth in this Paragraph 5.2 is applied to reduce an amount
payable to Executive, and the Internal Revenue Service successfully
asserts that, despite the reduction, Executive has nonetheless received
payments which are in excess of the maximum amount that could have been
paid to Executive without being subjected to any excise tax, then, unless
it would be unlawful for the Corporation to make such a loan or similar
extension of credit to Executive, Executive may repay such excess amount
to the Corporation as though such amount constitutes a loan to Executive
made at the date of payment of such excess amount, bearing interest at
120% of the applicable federal rate (as determined under Section 1274(d)
of the Code in respect of such loan)."
10. Paragraph 5.3 of the Employment Agreement is hereby amended in its
entirety to read as follows:
"5.3 GOOD REASON. The Executive shall have Good Reason for
terminating his employment with the Corporation under this Agreement if
one or more of the following events (each, an "Event") occurs:
(a) an involuntary change in the Executive's status or
position with the Corporation which constitutes a demotion from the
Executive's then current status or position and a material change in the
nature or scope of powers, authority or duties inherent in such position;
(b) layoff or involuntary termination of the Executive's
employment, except in connection with the termination of the Executive's
employment for Cause or as a result of the non-renewal of this Agreement
or of the Executive's disability or death;
(c) a reduction by the Corporation in the Executive's
compensation;
(d) any action or inaction by the Corporation that would
adversely affect the Executive's continued participation in any Benefit
Plan on at least as favorable basis as was the case at the time of such
action or inaction, or that would materially reduce the Executive's
benefits in the future under the Benefit Plan or deprive him of any
material benefits that he then enjoyed, except to the extent that such
action or inaction by the Corporation (i) is also taken or not taken, as
the case may be, in respect of all employees generally, (ii) is required
by the terms of any Benefit Plan as in effect immediately before such
action or inaction; or (iii) is necessary to comply with applicable law or
to preserve the qualification of any Benefit Plan under Section 401(a) of
the Code;
(e) a material change in the principal work location;
(f) the failure of the Corporation, its successor or any Group
of Persons acquiring substantially all of the assets of the Corporation to
assume any and all terms of this Agreement; or
(g) a material breach of this Agreement by the Corporation,
its successor or any Group of Persons acquiring substantially all of the
assets of the Corporation.
Notwithstanding the foregoing, the Executive shall not have Good Reason
unless he has, within ninety (90) days of the Event, notified the
Corporation of the Event in the manner set forth in Paragraph 6.5 and the
Event remains uncured for a period of thirty (30) days after the Executive
provides notice of the Event."
11. Paragraph 5.4 of the Employment Agreement is hereby amended in its
entirety to read as follows:
"5.4 ARBITRATION. In the event that the Executive reasonably believes that
he has Good Reason to terminate his employment in reliance upon Section
5.3 hereof, and if the Corporation disagrees with the Executive's belief
that he has Good Reason to terminate his employment in reliance upon
Section 5.3 hereof, such unresolved dispute or controversy arising
thereunder or in connection therewith shall be settled exclusively by
arbitration conducted in accordance with the rules of the American
Arbitration Association then in effect. The arbitration shall take place
in Xxxxxx County, Florida before a panel of three arbitrators who shall be
mutually agreed upon by the Corporation and the Executive. The exclusive
question for the arbitrators shall be whether or not Good Reason for the
termination exists. The arbitrators shall not have the authority to add
to, detract from, or modify any provision hereof nor to award punitive
damages to any injured party. A decision by a majority of the arbitration
panel shall be final and binding on whether "Good Reason" exists. Judgment
may be entered on the arbitrators' award in any court having jurisdiction.
The direct expense of any arbitration proceeding shall be borne by the
Corporation. Each party shall bear its own counsel's fees and expenses."
12. Immediately following Paragraph 6.7 of the Employment Agreement, a
new Paragraph 6.8 is hereby added as follows:
"6.8 SECTION 409A. It is the intention of the parties hereto that
this Agreement comply strictly with the provisions of Section 409A
of the Code, and Treasury Regulations and other Internal Revenue
Service guidance (the "Section 409A Rules"). Accordingly, this
Agreement, including, but not limited to, any provision relating to
severance payments, Change in Control payments or the terms of any
grants of stock options hereunder, including, but not limited to,
the timing of payments, may be amended from time to time with the
consent of the Executive as may be necessary or appropriate to
comply with, and to avoid adverse tax consequences under the Section
409A Rules. The Executive agrees that no payment will be made to him
until such time as the payment may be made without the imposition of
the 20% excise tax imposed by Section 409A of the Code by virtue of
Section 409A(a)(2)(B)(i) of the Code (which, if applicable,
generally provides that no payment, other than certain severance
payments, may be made to a key employee of a public company prior to
the date that is six months following separation from service within
the meaning of Section 409A of the Code)."
13. Except as herein provided, the Employment Agreement shall remain
unchanged and in full force and effect.
IN WITNESS WHEREOF, the Corporation and the Executive have executed this
Amendment as of the day and year first above written.
NUCO2 INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. XxXxxxxxxx
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
