EXHIBIT 5
EMPLOYMENT AGREEMENT, dated as of February 24, 1997, between
REFRIGERATION TECHNOLOGY INC., a Delaware corporation (the "Company"), and
XXXXXXX X. XXXXXXX, residing at ---------------------------------------, New
Mexico ----- ("Employee").
The Company desires to engage Employee to perform services for
the Company and its affiliates and (subject to Section 8) any successor or
assign of the Company, and Employee desires to perform such services, on the
terms and conditions hereinafter set forth.
1. TERM
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The Company agrees to employ Employee, and Employee agrees to
serve, on the terms and conditions of this Agreement, including the provisions
of Section 7 providing for early termination, for a five year period commencing
with the date of the Closing, as defined in that Acquisition Agreement of even
date among the Company, Quality Air, Inc. ("QAI"), Employee and others (which
provides for the acquisition by the Company of the business and substantially
all of the assets of QAI). If the Closing does not take place, this Agreement
and all obligations of each party hereunder shall immediately terminate as if
never entered into. The period during which Employee is employed under this
Agreement is referred to as the "Employment Period".
2. DUTIES
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a. During the Employment Period, Employee shall
devote his attention and energies to the business of the Company and its parent
and subsidiary companies (its "affiliates") on a full-time basis, and shall not
be engaged in any other business activity, whether or not such business activity
is pursued for gain, profit or other pecuniary advantage; but this shall not be
construed as preventing Employee from investing his assets in such manner as
will not require him to expend any material time or effort in regard thereto or
to perform any services in connection therewith.
b. At all times during the Employment Period,
and thereafter if Employee continues in the employ of the Company or any of its
affiliates, Employee shall serve the Company and its affiliates faithfully,
diligently and in good faith.
c. During the Employment Period, Employee shall
perform such services as may be required of him by the Company and its
affiliates, under and subject to the instructions, directions and control of the
Board of Directors of the Company and its President (the "President"), to whom
he shall report. Employee shall serve as Vice President - Development of the
Company. Employee's primary responsibility shall be to perform those duties
reasonably required of, and related to, his position and such other duties as
may be assigned to Employee from time to time which are not inconsistent with
those customarily assigned to responsible executive employees.
d. At all times during the Employment Period,
and thereafter if Employee continues in the employ of the Company or any of its
affiliates, Employee shall adhere to all rules and regulations that have been or
that hereafter may be established by the Company and its affiliates for the
conduct of their employees.
e. Employee recognizes that he shall be
available to travel as the needs of the business require.
f. Employee represents that he is under no
contractual or other restriction or obligation which is inconsistent or in
conflict with his obligations under this Agreement or the rights of the Company
under this Agreement. Employee further represents that he is in good health,
with no chronic or recurring illness, and is insurable at normal rates. If
requested by the Company, Employee shall cooperate in applying for and
obtaining, at the Company's expense, key-man insurance for the benefit of the
Company.
3. COMPENSATION
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As and for full and complete compensation to Employee under
this Agreement, the Company agrees to pay to him, and he agrees to accept, the
following:
a. The Company shall pay Employee during the
Employment Period an annual salary of no less than $80,000 (the "Base Salary")
payable in equal bi-weekly installments, or as otherwise may be the practice of
the Company in making salary payments.
b. The Company, in its sole and absolute
discretion, may consider the granting of a bonus to Employee in such form and
amount, if any, as the Company may determine.
c. All compensation paid to Employee shall be
subject to withholding and deductions to the extent required by applicable law.
d. Employee shall be eligible to participate
in, and to be covered by, each life insurance, accident insurance, health
insurance and hospitalization, or other plan or benefit, if any, effective
generally (and not only with respect to a specific individual or individuals)
with respect to employees of the Company, if he shall be eligible under the
terms of such plan, without restriction or limitation by reason of this
Agreement. Nothing contained herein, however, shall be construed to require the
Company to establish any plans not in existence on the date hereof, to continue
any plans in existence on the date hereof, or to prevent the Company from
modifying and/or terminating any of the plans in existence on the date hereof,
and no such act or omission shall be deemed to affect this Agreement or any of
the provisions contained herein.
e. During the Employment Term, Employee shall
be entitled to a vacation of three weeks, and also shall be entitled to all paid
holidays given by the Company to its employees generally. Vacation days not
taken shall not accumulate and shall not be available to Employee in subsequent
years of this Agreement. Vacations shall be coordinated with other Company
executives and the President and shall be scheduled by Employee with due regard
to his activities with, and his responsibilities for, the Company and its
affiliates.
f. Employee shall be entitled to reimbursement
for all reasonable out-of-pocket expenses incurred in performing his services
hereunder, within the limits of authority which may be established by the
Company from time to time, provided that Employee properly accounts for such
expenses in accordance with Company policy.
4. NON-COMPETITION
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In view of the unique and valuable services it is expected
Employee will render to the Company, Employee's knowledge of the customers,
trade secrets and other proprietary information relating to the business of the
Company and its customers and suppliers and similar knowledge regarding the
Company and its affiliates that it is expected Employee will obtain, and in
consideration of the acquisition by the Company of the business and
substantially all of the assets of QAI and the compensation to be received
hereunder, Employee agrees that, for the greater of (a) five years commencing
with the Closing, or (b) the period during which Employee continues to be
employed by the Company or any of its affiliates plus six months (the
"Restriction Period"), Employee will not engage in, or otherwise directly or
indirectly be employed by, or act as a consultant to, or be an owner of, any
other business or organization which may then be competing with the Company or
its affiliates; provided, however, that if Employee's employment hereunder is
terminated by the Company without Cause, such period of non-competition shall be
limited to six months after such termination. For purposes of this Agreement,
mere ownership of not more than 1% of the outstanding common stock of a
corporation registered with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 shall not be deemed to be a violation of this
Section.
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5. PATENTS, ETC.
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Any interest in patents, patent applications, inventions,
technological innovations, copyrights, copyrightable works, developments,
discoveries, designs, and processes (collectively, the "Inventions") which
Employee now or hereafter during the Restriction Period may own, conceive of or
develop, and which either relate to the fields in which the Company or any of
its affiliates may then be engaged or contemplates being engaged, or are
conceived of or developed utilizing the time, assets, facilities or information
of the Company or any of its affiliates, shall belong to the Company. As soon as
Employee owns, conceives of, or develops any Invention, he agrees immediately to
communicate such fact in writing to the President and, without further
compensation, but at the Company's expense, forthwith shall execute all such
assignments and other documents (including applications for patents, copyrights,
trademarks, and assignments thereof) and take all such other action as the
Company may reasonably request in order (a) to vest in the Company, or as the
Company may direct, all of Employee's right, title and interest in and to the
Inventions, free and clear of liens, mortgages, security interests, pledges,
charges and encumbrances, and (b) if patentable or copyrightable, to obtain
patents or copyrights (including extensions and renewals) therefor in any and
all countries and in such name as the Company may direct.
6. CONFIDENTIAL INFORMATION
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All confidential information which Employee may possess or may
obtain during the Restriction Period relating to the business of the Company or
any of its affiliates or of any customer or supplier of any of them shall not be
published, disclosed, or made accessible by him to any other person or entity
either during or after the termination of his employment or used by him, except
during the Employment Period in the business and for the benefit of the Company,
without prior written permission of the Company. Employee shall return all
tangible evidence of such confidential information to the Company prior to or at
the termination of his employment. For purposes of this Agreement, confidential
information does not include (a) information which at the time of disclosure to
Employee is generally available to the public, (b) information which, subsequent
to disclosure to Employee, becomes generally available to the public without
fault on Employee's part, (c) information which is known in general to
Employee's profession or to the industry in which the Company is engaged, or (d)
knowledge of skills which are known in general to Employee's profession.
7. TERMINATION.
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a. DEATH. In the event that Employee shall die
during the Employment Period, then, notwithstanding any other provisions hereof,
Employee's employment hereunder shall terminate forthwith. In addition to any
unpaid compensation then accrued, Employee's estate shall be entitled to receive
the proceeds of any life insurance on Employee's life if and to the extent then
maintained by the Company for Employee's sole benefit.
b. DISABILITY. If Employee shall become
incapacitated during the Employment Period to such an extent that he shall be
unable to perform his duties hereunder, and such incapacity shall continue for
at least four consecutive weeks or for at least 45 days in any twelve-month
period, the Company may, at or at any time thereafter during the continuance of
such incapacity, give notice to Employee of the termination of his employment
hereunder on a date stated in such notice, and, in such event, Employee's
employment hereunder shall terminate on such date. Such termination shall not
affect any disability payments otherwise due hereunder to the Employee.
c. FOR CAUSE. If, during the Employment Period,
the employment of Employee by the Company should terminate by reason of
Employee's voluntary action, or by the Company for "Cause", then the Company's
obligations for payment or delivery of salary, bonus, if any,
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and other entitlements under this Agreement with respect to any future period
shall thereupon terminate. Written notice of termination for Cause shall be
given by the Company to Employee and shall be effective upon receipt. For
purposes of this Agreement, Cause consists of (1) Employee's (A) refusal to
carry out specific lawful directions of the Board of Directors or of the
President, which directions shall not be inconsistent with the provisions of
this Agreement, or (B) refusal or failure to properly, adequately and fully
perform part of his duties assigned to him which are not in violation of this
Agreement, which refusal or failure is not remedied promptly, but in no event
later than five days after notice thereof to Employee, (2) Employee's commission
of an act of fraud, misappropriation or dishonesty (including falsification of
information given to the Company in connection with Employee's hire) to the
Company or any of its affiliates or falsification of a written document
delivered to the Company or any of its affiliates or on the Company's or such
affiliate's behalf, and (3) Employee's commission of a crime with respect to
which, in the reasonable judgment of the Company, Employee is likely to be
incarcerated or as result of which the Company, in its reasonable judgement,
determines it would be inappropriate for Employee to continue as an employee of
the Company.
d. WITHOUT CAUSE. If, during the Employment
Period, the employment of Employee by the Company is terminated by the Company
without Cause, then the Company shall continue to pay Employee his salary for a
period of two months thereafter, and all other obligations of the Company for
payment or delivery of salary, bonus, if any, and other entitlements under this
Agreement with respect to any future period shall thereupon terminate.
8. MISCELLANEOUS PROVISIONS.
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a. ENTIRE AGREEMENT. This Agreement sets forth
the entire agreement and understanding between the parties with respect to the
employment of Employee by the Company and supersedes all prior agreements,
arrangements and understandings between the parties with respect thereto.
b. MODIFICATION AND WAIVER. This Agreement may
be amended, modified, superseded, canceled, renewed or extended, and the terms
or covenants hereof may be waived, only by an instrument executed by the party
to be charged or, in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision of this Agreement in no manner shall affect the right at a later time
to enforce the same. No waiver by either party of a breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be or construed as a further or
continuing waiver of any such breach, or a waiver of any other term or covenant
contained in this Agreement.
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c. NOTICES. All notices, demands, consents,
waivers and other communications ("Communications") given under this Agreement
may be in writing and shall be given (and shall be deemed to have been duly
given and received) upon the earlier of actual receipt, one business day after
being sent by overnight courier service or telecopier or three business days
after being sent by certified mail to the Company (to the attention of the
President and with second copies to the Chairman of the Company and of the
Company's parent, if any) and to Employee, each at their respective home
addresses or to such other address as either party may hereafter specify by
notice to the other party. Simultaneously with sending a Communication to the
Company, a copy of the Communication shall be sent to the Company's counsel
(currently Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx Xxxx, Esq.). Irrespective of the
foregoing, notice of change of address shall be effective only upon receipt.
d. GOVERNING LAW. This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware,
without regard to its principles of conflicts of laws.
e. SURVIVAL. The covenants, agreements,
representations, and warranties contained in or made pursuant to this Agreement
shall survive the execution of this Agreement and the conclusion of the
Employment Period, irrespective of any investigation made by or on behalf of any
party.
f. BINDING EFFECT. This Agreement shall be
binding upon and inure to the benefit of the parties and their respective legal
representatives, heirs, successors and permitted assigns.
g. INVALIDITY. The invalidity of any part of
this Agreement is not intended to render invalid the remainder of this
Agreement. If any provision of this Agreement is so broad as to be
unenforceable, such provision is intended to be interpreted to be only so broad
as is enforceable.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
REFRIGERATION TECHNOLOGY INC.
By: /s/ Xxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxx X. Xxxxxx, Sole Director Xxxxxxx X. Xxxxxxx
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