Exhibit 10.23
AGREEMENT
This Agreement, made as of the 1st day of July, 2002 between Valley
National Gases, Inc., a Corporation, ("VALLEY") and Xxxxxxx X. Xxxxxxxxxx
("XXXXXXXXXX").
WHEREAS, Xxxxxxxxxx, individually and by and through his consulting
corporation ADE Vantage, Inc. ("CORPORATION") have an arrangement with Valley
National Gases, Inc., which expires June 30, 2003, for the expansion of Valley's
industrial gas and welding supply business, through acquisition and expansion of
industrial gas and welding supply distributors ("ACQUISITION PROGRAM"); and,
WHEREAS, Valley and Xxxxxxxxxx desire to enter into this Agreement
setting forth Xxxxxxxxxx'x continuing relationship with Valley for general
management consulting services and in the execution of the Acquisition Program
including compensation therefore.
WITNESSETH in consideration the mutual promises hereinafter contained
Valley and Xxxxxxxxxx agree as follows:
1. Duties. Xxxxxxxxxx, through his position as Vice Chairman of the Board of
Directors, will provide Valley with general management consulting services and
more specifically, manage and direct the "to be hired" President and CEO at
least through the duration of this Agreement. Xxxxxxxxxx, together with Valley,
will qualify all potential distributors for acquisition and jointly target
distributors for acquisition solicitation ("TARGET DISTRIBUTORS"). Xxxxxxxxxx
will assist Valley in the solicitation, preparation of offering memoranda,
contract negotiation, due diligence and/or any other matters necessary to assist
Valley to consummate Target Distributor acquisitions in accordance with the
Board approved Acquisition Program. Compensation for such services will be
provided as part of the management service fee covered in Paragraph 10.
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2. Term. The term of this Agreement shall be one (1) year from the execution and
delivery of this Agreement.
3. Independent Contractor Status. It is understood that Xxxxxxxxxx is an
independent contractor, representing Valley pursuant to this Agreement, and he
shall not otherwise hold himself out to the public as employee, or partner of
Valley. As such Xxxxxxxxxx is responsible, where necessary, to secure at his
sole cost, worker's compensation, insurance, disability, benefits and any other
insurance as may be requires by law. Valley will not provide, nor will it be
responsible to pay for benefits for Xxxxxxxxxx. Any benefits, if provided by
Indelicato for himself and/or his staff, including by not limited to, health
insurance, paid vacation, paid holidays, sick leave or disability insurance
coverage of whatever nature, shall be secured and paid for by Xxxxxxxxxx.
4. Tax Duties and Responsibilities. Xxxxxxxxxx is responsible for the payment of
all required payroll taxes, whether federal, state or local in nature,
including, but not limited to, income taxes, social security taxes, federal
unemployment compensation taxes, and any other fees, charges, licenses or other
payments required by law.
5. Employee's of Independent Contractor. Xxxxxxxxxx may employ as many employees
as he requires, such matter resting entirely with his own discretion. Valley
need not be advised to the employment of such individuals. Such persons are
employed of Xxxxxxxxxx, and he shall be deemed employer of such persons. As
such, Xxxxxxxxxx shall be responsible for compensation as well as all necessary
insurance and payroll deductions for such persons, including but not limited to,
federal, state and local income taxes, social security taxes, unemployment
compensation taxes, workers compensation coverage, etc.
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6. ADE Vantage, Inc. Xxxxxxxxxx may at his sole cost and expense (except for
reimbursement support service costs as provided in Paragraph 11 hereinafter), in
his execution of the Acquisition Program engage Corporation, ADE Vantage, Inc.,
his consulting firm, as his agent and contractor to provide support services and
any other services executed pursuant to the Acquisition Program or otherwise
required by Valley, such as valuation support required by FASB 141/142. At all
times, Corporation shall solely be the contractual agent of Xxxxxxxxxx and not
Valley.
7. Indemnification. Xxxxxxxxxx shall not be liable for the acts, negligence or
defaults of any employee, agent or representative of Valley, nor shall he be
liable for anything done or not done in good faith, including errors of
judgment, acts done or committed on the advise of counsel, or mistakes of fact
or law. Xxxxxxxxxx shall, without prejudice to any other rights which he may
have, be indemnified by Valley against all liability and expense reasonably
incurred by him in connection with any claim, action, suit or proceeding of
whatever nature in which he may be involved as a party or otherwise by reason of
having entered into this Agreement and the execution of the duties assumed
hereunder relative to his execution of the Acquisition Program. Indemnification
hereunder, shall not, however, extend to any liability, loss, damage claim or
expense to the extent occasioned by or arising out of Xxxxxxxxxx'x default
hereunder or any willful misconduct or grossly negligent act by Xxxxxxxxxx, his
agents and employees in his capacity as an Independent Contractor in the
execution of his duties hereunder. Further, Valley agrees that ADE Vantage, Inc.
shall not be liable and shall be held harmless for any damage or injury caused
by its negligent mistakes, errors and omissions in and about providing financial
services under this Agreement.
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8. Business of Independent Contractor. During the term of this Agreement,
Xxxxxxxxxx may engage in any other business which does not conflict with his
duties hereunder, conflict with Valley's business, or otherwise impair the
successful execution and implementation of either his management consulting
services or the Acquisition Program.
9. Supervision. Xxxxxxxxxx shall not be subject to the provisions of any
personnel handbook or the rules and regulations of applicable employees to
Valley since Xxxxxxxxxx shall fulfill his responsibilities independent of any
without supervision or control by Valley.
10. Compensation. Xxxxxxxxxx'x compensation hereunder shall be set forth as
follows:
x. Xxxxxxxxxx will be paid a management service fee of $7,000 per month by
cash payment [to be paid, (1) for the first six months $4,000 per month
and a lump sum payment of $18,000 paid between January 1, 2003 and
January 7, 2003 and (2) for the last six months $7,000 per month.].
b. Valley shall reimburse Xxxxxxxxxx by cash payment for all out of pocket
expenses reasonably incurred by him, while rendering services in
support of the Acquisition Program, which includes office rent (not to
exceed $800 per month) cellular phone monthly charges, charges for
phone service, which is exclusively for Valley's benefit and part time
secretarial support.
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11. Reimbursable Support Service.
a. Financial. Xxxxxxxxxx shall be entitled for financial support
services for financial projections, evaluations as well as other
necessary and required analyses prepared for Xxxxxxxxxx by independent
professional agents obtained for this specific purpose, at the rate of
sixty six dollars and fifty cents ($66.50) per hour as such support
service costs are incurred during the term of is Agreement. Valley and
Xxxxxxxxxx agree that they intend to use ADE Vantage, Inc. for
financial services.
x. Xxxxxxxxxx will also be personally reimbursed for his time spent on
the Acquisition Program at a rate of eighty six dollars and fifty cents
($86.50) per hour up to a maximum of 420 hours per year. It is intended
that the Acquisition Program be selective, with the anticipated annual
expenditure for acquisitions by Valley being in the range of $4.2
million.
12. Assignment. Xxxxxxxxxx shall not sell, assign or transfer this Agreement,
however, he shall have the limited right to assign the Agreement to the
Corporation.
13. Governing Law. This Agreement shall be subject to and governed by the laws
of the State of West Virginia.
14. Renewal. This Agreement may be renewed for one year periods upon written
acknowledgment by both parties 30 days prior to expiration.
15. Waiver. The waiver by either party of a breach of any provision in the
Agreement shall not operate or be construed to operate as a waiver of any
subsequent breach.
16. Modification. No change, modification or waiver of any term of this
Agreement shall be valid unless it is in writing and signed by both parties.
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17. Entire Agreement. This Agreement constitutes the entire Agreement between
the parties and supersedes all prior Agreements or understandings between Valley
and Xxxxxxxxxx, with the exception of the letter agreements pertaining to
deferred compensation on future acquisitions.
18. Captions. The captions are inserted for convenience only and shall not be
considered when interpreting any provision or terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this day of
May, 2002.
VALLEY NATIONAL GASES, INC.
By /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx
Its /s/ Xxxx X. Xxxx
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Chairman
/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
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