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EXHIBIT 10.35
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") between COMFORT SYSTEMS
USA, INC., a Delaware corporation (referred to herein individually as "Comfort"
and collectively with its subsidiaries and affiliates as the "Company"), and
Xxxxxxx X. Xxxxxxxxx ("Executive") is entered into and effective as of the 1st
day of January, 1998. This Agreement supersedes any other employment agreements
or understandings, written or oral, between the Company and Executive.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged in
the business of mechanical contracting services, including heating,
ventilation and air conditioning, plumbing, piping, electrical and
related services ("Services").
Executive is employed hereunder by the Company in a
confidential relationship wherein Executive, in the course of
Executive's employment with the Company, has and will continue to
become familiar with and aware of information as to the Company's and
its customers' specific manner of doing business, including the
processes, techniques and trade secrets utilized by the Company, and
future plans with respect thereto, all of which has been and will be
established and maintained at great expense to the Company. This
information is a trade secret and constitutes the valuable goodwill of
the Company.
NOW, THEREFORE, in consideration of the mutual promises, terms,
covenants and conditions set forth herein and the performance of each, the
Company and Executive hereby agree as follows:
A G R E E M E N T S
1. Employment and Duties.
(a) The Company hereby employs Executive in an executive
position and Executive hereby accepts this employment upon the terms
and conditions herein contained. Executive agrees to devote
substantially all of Executive's business time, attention and efforts
to promote and further the business of the Company.
(b) Executive shall faithfully adhere to, execute and fulfill
all lawful policies established by the Company, including the Company's
Corporate Compliance Policy.
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(c) Executive shall not, during the term of Executive's
employment hereunder, be engaged in any other business activity pursued
for gain, profit or other pecuniary advantage if such activity
interferes in any material respect with Executive's duties and
responsibilities hereunder. The foregoing limitations shall not be
construed as prohibiting Executive from making personal investments in
such form or manner as will neither require Executive's services in the
operation or affairs of the companies or enterprises in which such
investments are made nor violate the terms of Section 4 hereof.
2. Compensation. For all services rendered by Executive, the
Company shall compensate Executive as follows:
(a) Base Salary. Effective the date hereof, the base salary
payable to Executive shall be $110,00 per year, payable on a regular
basis in accordance with the Company's standard payroll procedures, but
not less often than monthly. On at least an annual basis, the Company
will review Executive's performance and may make increases to such base
salary if, in its discretion, any such increase is warranted.
(b) Executive Perquisites, Benefits and Other Compensation.
Executive shall be entitled to receive additional benefits and
compensation from the Company in such form and to the extent specified
below:
(i) Coverage, subject to contributions required of
employees generally, for Executive and Executive's dependent
family members under health, hospitalization, disability,
dental, life and other insurance plans that the Company may
have in effect from time to time for the benefit of its
employees.
(ii) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Executive in the
performance of Executive's services pursuant to this
Agreement. Reimbursable expenses shall be appropriately
documented in reasonable detail by Executive, and shall be in
a format consistent with the Company's expense reporting
policy.
3. Confidentiality.
(a) Confidential Information. As used herein, the term
"Confidential Information" means any information, technical data or
know-how of the Company, including, but not limited to, that which
relates to customers, business affairs, business plans, financial
matters, financial plans and projections, pending and proposed
acquisitions, operational and hiring matters, contracts and agreements,
marketing, sales and pricing, prospects of the Company, and any
information, technical data or know-how that contain or reflect any of
the foregoing, whether prepared by the Company, Executive or any other
person or entity; provided, however, that the term "Confidential
Information" shall not include information, technical data or know-how
that Executive can demonstrate is generally available to the public not
as a result of any breach of this Agreement by Executive.
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(b) No Disclosure. Except in the performance of Executive's
duties as an employee of the Company, Executive will not, during or
after the term of Executive's engagement with the Company, disclose to
any person or entity or use, for any reason whatsoever, any
Confidential Information.
4. Non-Competition Agreement.
(a) Competition. Executive will not, during the period of
Executive's employment by or with the Company, and for a period of
twelve months immediately following the termination of Executive's
employment, for any reason whatsoever, directly or indirectly, on
behalf of Executive or on behalf of or in conjunction with any other
person, company, partnership, corporation or business of whatever
nature:
(i) engage, as an officer, director, shareholder,
owner, partner, joint venturer, or in a managerial capacity,
whether as an employee, independent contractor, consultant or
advisor, or as a sales representative, or make or guarantee
loans or invest in or for any business engaged in Services in
competition with the Company within 100 miles of where the
Company conducts or has conducted business during the Term
(the "Territory");
(ii) call upon any person who is, at that time,
within the Territory, an employee of the Company in a
technical, managerial or sales capacity for the purpose or
with the intent of enticing such employee away from or out of
the employ of the Company;
(iii) call upon any person or entity which is, at
that time, or which has been, within two (2) years prior to
that time, a customer of the Company for the purpose of
soliciting or selling Services;
(iv) call upon any prospective acquisition candidate,
on Executive's own behalf or on behalf of any competitor,
which candidate was either called upon by the Executive on
behalf of the Company or for which the Executive made an
acquisition analysis on behalf of the Company for the purpose
of acquiring such entity.
Notwithstanding the above, the foregoing covenants shall not be deemed
to prohibit Executive from acquiring as an investment not more than one
percent (1%) of the capital stock of a competing business whose stock
is traded on a national securities exchange or on an over-the-counter
or similar market.
(b) No Violation. It is specifically agreed that the period
during which the agreements and covenants of Executive made in this
Section 4 shall be effective shall be
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computed by excluding from such computation any time during which
Executive is in violation of any provision of this Section 4.
5. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue for two (2) (the "Term"), unless
terminated sooner as herein provided. Beginning on the second anniversary and
thereafter on each anniversary this Agreement shall renew for consecutive
one-year terms unless either party shall give the other notice at least 30 days
prior to such anniversary. This Agreement and Executive's employment may be
terminated in any one of the following ways:
(a) Death. The death of Executive shall immediately terminate
this Agreement with no severance compensation due to Executive's
estate.
(b) Disability. If, as a result of incapacity due to physical
or mental illness or injury, Executive shall have been absent from
Executive's full-time duties hereunder for four (4) consecutive months,
then thirty (30) days after receiving written notice (which notice may
occur before or after the end of such four (4) month period, but which
shall not be effective earlier than the last day of such four (4) month
period), the Company may terminate Executive's employment hereunder,
provided Executive is unable to resume Executive's full-time duties at
the conclusion of such notice period. In the event this Agreement is
terminated as a result of Executive's disability, Executive shall
receive from the Company Executive's base salary at the rate then in
effect for the lesser of the time period remaining under the Term of
this Agreement or for one (1) year, and such amount shall be payable
during such period in a manner consistent with Company's standard pay
practices. The amount payable hereunder shall be decreased by the
amount of benefits otherwise actually paid by the Company to Executive
or on Executive's behalf or under any insurance procured by the
Company.
(c) Good Cause. The Company may terminate this Agreement ten
(10) days after written notice to Executive for good cause, which shall
be any of the following: (1) Executive's willful or material breach of
this Agreement; (2) Executive's gross negligence in the performance or
intentional nonperformance of any of Executive's material duties and
responsibilities hereunder; (3) Executive's willful dishonesty, fraud
or misconduct with respect to the business or affairs of the Company;
(4) Executive's conviction of a felony crime; (5) Executive's confirmed
positive illegal drug test result; (6) sexual harassment by Executive;
or (7) willful or material failure by Executive to comply with the
Company's Corporate Compliance Policy or other Company policies. In the
event of a termination for good cause, as enumerated above, Executive
shall have no right to any severance compensation.
(d) Without Cause. At any time after the commencement of
Executive's employment, Executive or the Company may, without cause,
terminate this Agreement and Executive's employment, effective thirty
(30) days after receipt of written notice. Should Executive be
terminated by the Company without cause, Executive shall receive from
the Company Executive's base salary at the rate then in effect for the
greater of the
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time period remaining under the Term or for one (1) year, and such
amount shall be payable during such period in a manner consistent with
the Company's standard pay practices. If Executive resigns or otherwise
terminates Executive's employment, Executive shall receive no severance
compensation, provided, however, at any time after a change of control
of the Company (i.e. a sale of a majority of the Comfort's capital
stock, substantially all of Comfort's assets, or other transaction of
similar effect), Executive may resign during the nine-month period
immediately following consummation of such transaction if Executive's
duties or compensation are materially diminished in any way, and in
such event Executive shall be entitled to severance as if Executive had
been terminated without cause.
6. Return of Company Property. All records, plans, manuals, "field
guides", memoranda, lists, documents, statements and other property delivered to
Executive by or on behalf of the Company, by any customer of the Company
(including but not limited to, any such customers obtained by Executive), by any
acquisition candidate of the Company, and all records compiled by Executive
which pertain to the business or activities of the Company shall be and remain
the property of the Company and shall be subject at all times to its discretion
and control. Likewise, all correspondence with customers, representatives or
acquisition candidates, reports, records, charts, advertising materials, and any
data collected by Executive, or by or on behalf of the Company or any
representative of the Company shall be delivered promptly to the Company without
request by it upon termination of Executive's engagement with the Company.
7. Inventions. Executive shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the period of Executive's
employment or within one (1) year thereafter, and which are directly related to
the business or activities of the Company or which Executive conceives as a
result of Executive's employment by the Company. Executive hereby assigns and
agrees to assign all Executive's interests therein to the Company or its
nominee. Whenever requested to do so by the Company, Executive shall execute any
and all applications, assignments or other instruments that the Company shall
deem necessary to apply for and obtain Letters Patent of the United States or
any foreign country or to otherwise protect the Company's interest therein.
8. Trade Secrets. Executive agrees that Executive will not, during or
after the Term, disclose the specific terms of the Company's relationships or
agreements with significant vendors or customers or any other significant and
material trade secret of the Company, whether in existence or proposed, to any
person, firm, partnership, corporation or business for any reason or purpose
whatsoever.
9. No Prior Agreements. Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and Executive's
employment by the Company and the performance of Executive's duties hereunder
will not violate or be a breach of any agreement with a former employer, client
or any other person or entity. Further, Executive agrees to indemnify the
Company for any claim, including, but not limited to, attorneys' fees and
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expenses of investigation, by any such third party that such third party may now
have or may hereafter come to have against the Company based upon or arising out
of any non-competition agreement, invention or secrecy agreement between
Executive and such third party which was in existence as of the date of this
Agreement.
10. Assignment; Binding Effect. Executive understands that Executive
has been selected for employment by the Company on the basis of Executive's
personal qualifications, experience and skills. Executive agrees, therefore,
that Executive cannot assign all or any portion of Executive's performance under
this Agreement. Executive, Executive's spouse and the estates of each shall not
have any right to encumber or dispose of any right to receive payments
hereunder, it being understood that such payments and the right thereto are
nonassignable and nontransferable; provided, however in the event of the death
of Executive, any payments that Executive is entitled to receive may be assigned
to the beneficiaries of Executive's estate. Subject to the preceding three (3)
sentences and the express provisions of Section 11 below, this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.
11. Complete Agreement. Executive has no oral representations,
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This
Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements.
12. Amendment; Waiver. This Agreement may not be modified except in
writing signed by the parties, and no term of this Agreement may be waived
except by a writing signed by the party waiving the benefit of such terms. No
waiver by the parties hereto of any default or breach of any term, condition or
covenant of this Agreement shall be deemed to be a waiver of any subsequent
default or breach of the same or any other term, condition or covenant contained
herein.
13. Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company: Comfort Systems USA, Inc.
Xxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
To Executive: Xxxxxxx X. Xxxxxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxx 00000
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Notice shall be deemed given and effective on the earlier of five (5) days after
the deposit in the U.S. mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either party may change the address for notice by notifying the other party of
such change in accordance with this Section 13.
14. Severability; Enforceability. If any portion of this Agreement is
held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth in any
covenant contained herein are unreasonable, then it is the intention of the
parties that such restrictions be enforced to the fullest extent which the court
deems reasonable, and this Agreement shall thereby be reformed. Each of the
covenants contained in this Agreement shall be construed as an agreement
independent of any other provision in this Agreement, and the existence of any
claim or cause of action of Executive against the Company, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of such covenants.
15. Survival. The provisions and covenants of Sections 3, 4, 6, 7 and 8
shall survive termination of this Agreement.
16. Specific Performance. Because of the difficulty of measuring
economic losses to the Company as a result of a breach of the covenants
contained in Sections 3, 4, 6, 7 and 8 and because of the immediate and
irreparable damage that could be caused to the Company for which it would have
no other adequate remedy, Executive agrees that the Company shall be entitled to
specific performance and that such covenants may be enforced by the Company in
the event of any breach or threatened breach by Executive, by injunctions,
restraining orders and other appropriate equitable relief. Executive further
agrees to waive any requirement for the securing or posting of any bond in
excess of $50,000 in connection with the obtaining of any such injunctive or any
other equitable relief.
17. Arbitration. With the exception of Sections 4 and 8, any unresolved
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted by a single arbitrator in
Houston, Texas, in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") then in
effect, provided that the parties may agree to use arbitrators other than those
provided by the AAA. 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. The arbitrators shall have the authority to order back pay,
severance compensation, reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon. A decision by the arbitrator shall
be final and binding. Judgment may be entered on the arbitrator's award in any
court having jurisdiction. Responsibility for bearing the cost of the
arbitration shall be determined by the arbitrator and shall be proportional to
the arbitrator's decision on the merits.
18. Attorney's Fees. If any litigation is instituted to enforce or
interpret the provisions of this Agreement or the transactions described herein,
the prevailing party in such action shall be
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entitled to recover such party's reasonable attorneys' fees and other costs from
the other party hereto.
19. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Texas.
20. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EXECUTIVE: COMPANY:
COMFORT SYSTEMS USA, INC.
/s/ Xxxxxxx Xxxxxxxxx /s/ X. Xxxxxx Beittemiller
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Xxxxxxx X. Xxxxxxxxx J. Xxxxxx Xxxxxxxxxxxxx
Senior Vice President
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