EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 26th day of September, 1997,
between HydroChem Industrial Services, Inc., a Delaware corporation (the
"Employer"), and Xxxxxxx Xxxx, an individual (the "Employee").
WHEREAS, Employer desires to employ Employee in connection with the
operation of Employer's business (the "Business") and pursuant to the terms of
this Employment Agreement; and
WHEREAS, Employee desires to accept such employment;
NOW THEREFORE, in consideration of the premises, the full and faithful
performance of the respective agreements herein contained, and the discharge of
the respective obligations herein imposed, the parties mutually covenant and
agree that in lieu of all prior agreements between the parties relating thereto,
Employee will become employed by Employer for the term herein specified and will
enter into a covenant not to compete and certain other covenants for the
protection of trade secrets and confidential information of Employer, all upon
the terms and conditions hereinafter set forth:
1. Term. Subject to the provisions for termination hereinafter set
forth, the term of this Agreement shall be for the fourteen month period from
November 1, 1997 to December 31, 1998 (the "Initial Term"), unless earlier
terminated by Employee's death or disability. Thereafter, this Agreement shall
be renewed automatically on a year to year basis (each such year being a
"Renewal Term") on the conditions herein set forth, unless either party gives
notice under paragraph 10 to the other party, within thirty (30) days prior to
expiration of the Initial Term or any Renewal Term, of such party's election not
to so renew this Agreement.
2. Duties. Employee's duties shall consist initially of serving as a
Vice President of the Employer with responsibility for the Employer's operations
in its Gulf Coast Area.
Employee agrees to perform faithfully the duties assigned to Employee
to the best of Employee's ability.
The Employee agrees to provide Employee's best advice, information,
judgment and knowledge with respect to the Business, and Employee warrants that
Employee is free to enter into the terms of this Agreement, that Employee has no
obligation inconsistent herewith, and that Employee will devote Employee's full
time and best efforts to the Business.
Employee shall serve Employer loyally, diligently and effectively, and
shall at all times exert Employee's best efforts to promote the success of the
Business' activities as hereinabove stated. Employee shall devote all Employee's
time, energy and ability to the interests of Employer and to the discharge of
Employee's duties and responsibilities in an efficient, trustworthy and
businesslike
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manner. Employee shall do nothing which will in any way impair or prejudice the
name or reputation of Employer.
3. Compensation. Subject to the performance by Employee of the forgoing
duties, Employer agrees to compensate Employee during the Initial Term and any
Renewal Term at the rate of Ten Thousand Dollars ($10,000) per month, payable in
accordance with the payroll policy of Employer, but not less than once a month
("Base Compensation"). Employer may from time to time change the amount of Base
Compensation; provided, however, that Employee's Base Compensation may not be
reduced without his written consent.
Employee shall be entitled to a "Performance Bonus" for the years 1998
and 1999 of up to Fifty percent (50%) of his Base Compensation for each such
year. The actual amount of the Performance Bonus shall be based upon Employer
performance, Gulf Coast Area performance, and a subjective evaluation of the
Employee's performance in each such year. For 1998, the Employer guarantees that
Employee's Performance Bonus shall be a minimum of Twenty Five Thousand Dollars
($25,000). The Employer shall pay Employee this guaranteed minimum no later than
August 31, 1998 as a non recoverable advance against the full year Performance
Bonus. The payment of any further Performance Bonus for 1998 and any Performance
Bonus for 1999 shall be subject to Employee remaining employed through the date
of payment. The payment of Performance Bonuses for any years after 1999 shall be
in accordance with the bonus plan or plans for other Employer executives at the
same level as Employee in each applicable year.
Employee shall be entitled to a "Deferred Supplemental Bonus" for the
years 1998 and 1999 in accordance with and subject to the Individual Deferred
Supplemental Bonus Plan which is attached hereto and incorporated herein as
Exhibit A.
As authorized from time to time by Employer, Employee may incur
reasonable expenses in furtherance of the business of Employer, including,
without limitation, expenses for entertainment, travel and similar items.
Employer will reimburse Employee for all such expenses upon presentation each
month by Employee of an itemized account together with supporting receipts for
such expenditures in accordance with the rules, practices, and policies
established from time to time by Employer.
Employee shall have the use of a company vehicle in accordance with the
Employer's motor vehicle policy.
4. Employee Covenants. At all times during the Initial
Term, any Renewal Term and thereafter, Employee agrees as provided below:
(a) Employee understands that Employer's business interests require a
confidential relationship between Employer and its employees and Employer and
its customers, the protection and confidential treatment of its employees and
customers, of its inventions, trade secrets, know-how, programs and other
knowledge of its business, including the Business (hereinafter collectively
termed "Information") whether or not conceived or learned by its employees in
the course of their employment. Accordingly, Employee shall keep confidential
and treat confidentially all
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Information, whether patented, or not, and shall not use or aid others in using
Information in competition with Employer, this obligation to exist both during
and after termination of Employee's employment by Employer pursuant to this
Agreement and for so long as any Information remains legally protectable as to
persons receiving it in a confidential relationship.
(b) Employee will disclose to Employer every significant item of Information
relating to Employer's interests and will disclose in writing every invention
while under the employ of Employer and which reasonably relates to the Business.
(c) Upon Employer's request, either during or after termination of this
employment, but without expense to him, Employee will (i) execute any and all
patent applications, assignments, and other legal instruments that Employer
shall deem necessary for the protection of the Information; (ii) render aid and
assistance in all proceedings pertaining to such Information, and (iii) in
general, cooperate with all lawful efforts by Employer to protect the
Information.
(d) Upon termination of employment, or from time to time during the Initial Term
or any Renewal Term as Employer may request, Employee will surrender to Employer
all papers, documents, writings, illustrations, models and other property
produced thereby or coming into Employee's possession by or through his
employment with Employer, and Employee agrees that all such materials are at all
times Employer's property.
(e) During the Initial Term, any Renewal Term, and for an additional period of
one year (two years if the Employee voluntarily terminates employment with
Employer) immediately following the term of employment (the "Restriction
Period"), and in consideration of the employment hereunder for a specified term,
the Information to be disclosed by Employer to Employee, and Employee's right to
severance compensation in certain circumstances under Section 5, Employee shall
not, directly or indirectly, (i) induce any employee of Employer to terminate
his employment with Employer, (ii) hire any such employee, (iii) call upon or
solicit, with the intent to divert or take away, any clients, customers, and
accounts, or (iv) in Employee's own behalf or as a partner, officer, director,
employee, agent, consultant or stockholder (other than as a holder of less than
1% of the outstanding capital stock of any corporation with a class of equity
securities registered under Section 12(b) or 12(g) of the Securities Exchange
Act of 1934, as amended) engage in, invest in, or render services to any person
or entity engaged in the businesses in which Employer or any of its subsidiaries
or affiliates are engaged. The parties intend that the covenants contained in
this Section 4(e) shall be deemed to be a series of separate covenants, one for
each foreign country and each county or parish in each state of the United
States and, expect for geographic coverage, each such separate covenant shall be
identical in terms to the covenant contained in this Section 4(e).
Notwithstanding the foregoing, the covenants contained in this Section 4(e)
shall only apply to the areas of Employer's Business for which Employee renders
services hereunder or receives Information and in the geographical areas where
Employee has responsibilities. If any judicial or administrative body shall
refuse to enforce all of the separate covenants contained in this Section 4(e)
because the time limit is too long, it is expressly understood and agreed
between the parties hereto that for the purposes of such proceeding such time
limitation shall be deemed reduced to the extent necessary to permit enforcement
of such covenants. If any judicial or administrative body shall refuse to
enforce all of the separate covenants contained in this Section 4(e) because
they are
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more extensive (whether as to geographic area, scope of business or otherwise)
than necessary to protect the business and goodwill of Employer or any of its
subsidiaries or affiliates, it is expressly understood and agreed between the
parties hereto that for purposes of such proceeding the geographic area , scope
of business or other aspect shall be deemed reduced to the extent necessary to
permit enforcement of such covenants.
(f) Employee acknowledges that, in view of the nature of the business in which
the Employer is engaged, the restrictions contained in this Section 4 (the
"Restrictions") are reasonable and necessary in order to protect the legitimate
interests of the Employer, and that any violation thereof would result in
irreparable injuries to the Employer, and Employee therefore further
acknowledges that , in the event Employee violates, or threatens to violate, any
of such Restrictions, the Employer shall be entitled to obtain from any court of
competent jurisdiction, without the posting of any bond or other security,
preliminary and permanent injunctive relief as well as damages and an equitable
accounting of all earnings, profits, and other benefits arising from such
violation, which rights shall be cumulative and in addition to any other rights
or remedies in law or equity to which the Employer may be entitled. The
legitimate interests of the Employer include, but are not limited to, the
identity of customers, the special needs and requirements of customers, pricing
strategies, cost factors and bidding strategies.
(g) If any of the Restrictions under this Section 4, or any part thereof, shall
be determined in any judicial or administrative proceeding to be invalid,
illegal or unenforceable, the remainder of the Restrictions shall not thereby be
affected and shall be given full effect, without regard to the invalid, illegal
or unenforceable provisions. If the period of time or the area specified in the
Restrictions shall be determined in any judicial or administrative proceeding to
be unreasonable, then the court or administrative body shall have the power to
reduce the period of time or the area covered and, in its reduced form, such
provisions shall then be enforceable and shall be enforced.
(h) If Employee violates any of the Restrictions, any applicable Restriction
Period shall be tolled from the time of the commencement of any such violation
until such time as such violation shall be cured by Employee to the reasonable
satisfaction of the Employer.
5. Termination.
(a) This Agreement may be terminated prior to the expiration of the Initial Term
or any Renewal Term: (i) by mutual agreement of the parties, or (ii) by the
Employer either with or without Cause (as such term is hereinafter defined). If
such termination is by the Employer for Cause, all of the Employee's right to
compensation under Section 3 above shall terminate upon such termination, except
any amount accrued Base Compensation in respect of periods prior to such
termination.
If such termination is by the Employer without Cause, the Employer shall pay to
the Employee, in addition to any amounts accrued as Base Compensation in respect
of periods prior to such termination:
(i) if such termination occurs during the Initial Term, an amount equal
to the Base Compensation that would otherwise be payable to the Employee under
this Agreement during (x)
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the remainder of the Initial Term or (y) the next six months following the date
of such termination, whichever is greater, or
(ii) if such termination occurs during any Renewal Term, an amount
equal to the Base Compensation that would otherwise be payable under this
Agreement during the next six months following the date of such termination.
In either case, such amount will be based on the Base Compensation then in
effect and payable in installments as if the employment of Employee had
continued through the applicable number of months. "Cause" shall mean (i)
failure by the Employee to perform assigned duties in a manner which is
satisfactory to the Employer which failure is not corrected within thirty (30)
days after receipt of written notice thereof, (ii) a material breach by Employee
of any of Employee's obligations hereunder, (iii) fraud or conviction of the
Employee for fraud, misappropriation, embezzlement, or any felony, or (iv) any
act or action involving moral turpitude or reflecting negatively on the
Employer.
(b) If the Employee shall die during the term of this Agreement, this Agreement
shall automatically terminate, and no further compensation shall be payable to
Employee hereunder.
(c) If the Employee is unable to discharge his duties hereunder for a period of
two consecutive months by reason of physical or mental illnesses, injury or
incapacity, the Employer may, by written notice to the Employee, terminate this
Agreement and no further compensation shall be payable to Employee hereunder.
6. Severability. In case any term, phrase, clause, paragraph,
restriction, covenant or agreement herein contained shall be held to be invalid,
illegal or unenforceable, the same shall be severed, and it is hereby agreed
that the same are meant to be severable, and shall not defeat or impair the
remaining provisions hereof. Further, there shall be substituted in lieu of such
invalid, illegal or unenforceable provision, a provision as close thereto which
is valid, legal and enforceable.
7. Waiver. A waiver by any party hereto of a breach of any provision of
this Agreement, or of any duties imposed upon any party hereto by law, or of any
other clauses hereof, shall not operate or be construed as a waiver of any
subsequent or continuing breach of this Agreement by any party.
8. Assignment. This Agreement shall bind and inure to the benefit of
Employer, and its successors and assigns, and Employee, and Employee's heirs and
personal representatives.
9. Relationship Between Parties. Employee shall be considered and
treated as having an employee status, and shall be entitled, to the extent
Employee is eligible, to participate in any plans, arrangements or distribution
of and by Employer pertaining to or in connection with any pension, bonus,
profit-sharing, or similar benefits and life, health, accident and disability
insurance or benefits, or similar employee fringe benefits for employees of
Employer. All fees, compensation and other things of value, charged by Employer
and received or realized as a result of the rendering
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of services by Employee on behalf of the Employer shall belong to and be paid
and delivered forthwith to Employer.
10. Notices. Any and all notices provided for herein shall be in
writing and shall be considered as properly given if delivered to the party, or
sent by certified mail, return receipt requested, at the addresses set out below
for such party.
If to Employer: HydroChem Industrial Services, Inc.
0000 Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Legal Department
If to Employee: Xxxxxxx Xxxx
0000 Xxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Either party may change its address for notice by giving proper notice to such
effect under this Section 10.
11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH INTERNAL SUBSTANTIVE LAWS OF STATE OF
TEXAS WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
12. Consent to Jurisdiction and Service of Process. EMPLOYEE HEREBY
CONSENTS TO JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN XXXXXX
COUNTY, TEXAS AND AGREES THAT SUBJECT TO EMPLOYER'S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN
SUCH COURTS. EMPLOYEE ACCEPTS AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM
NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT OR ORDER
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EMPLOYEE ALSO AGREES THAT
SERVICE OF PROCESS UPON EMPLOYEE IN ANY SUCH ACTION IN ANY SUCH COURT MAY BE
EFFECTED IN ACCORDANCE WITH THE NOTICE PROVISIONS SET FORTH IN SECTION 10 OF
THIS AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR LIMIT THE RIGHT OF EMPLOYER TO BRING
PROCEEDINGS AGAINST EMPLOYEE IN ANY OTHER JURISDICTION.
13. Captions. The captions to the sections and subsections of this
Agreement are for convenience of reference only and shall not be construed to be
a part hereof.
14. No Conflict. Employee represents and warrants to Employer that
being employed by Employer will not conflict with or violate any covenant not to
compete or any other restrictions to which Employee may be bound.
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15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and it supersedes
all prior or contemporaneous agreements, negotiations or understandings with
respect to said subject matter. This Agreement may be amended or waived only by
a written instrument duly signed by both parties.
EXECUTED in duplicate original as of the date and year first above
written.
EMPLOYER:
HydroChem Industrial Services, Inc.
By: /s/s Xxxx X. Xxxx
-----------------------
Xxxx X. Xxxx, Executive Vice President
EMPLOYEE:
/s/ Xxxxxxx Xxxx
-------------------------------
Xxxxxxx Xxxx
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EXHIBIT A
INDIVIDUAL SUPPLEMENTAL DEFERRED BONUS PLAN
FOR
XXXXXXX XXXX
September 26, 1997
This Individual Supplemental Bonus Plan (the "Plan") for Xxxxxxx Xxxx (the
"Employee") shall be a part of the Employment Agreement of even date (the
"Employment Agreement") between HydroChem Industrial Services, Inc. ("Employer")
and Employee. The following constitue the provisions of the Plan.
1. 1998 Award. As of April 1, 1999, and subject to Employee remaining
employed by Employer through such date, Employer shall award Employee a
supplemental deferred bonus for 1998 (the "1998 Award"). The amount of the 1998
Award shall be equal to the amount of Employee's Performance Bonus for 1998
under the third paragraph of section 3 of the Employment Agreement.
2. 1999 Award. As of April 1, 2000, and subject to Employee remaining
employed by Employer through such date, Employer shall award Employee a
supplemental deferred bonus for 1999 (the "1999 Award"). The amount of the 1999
Award shall be equal to the amount of the Employee's Performance Bonus for 1999
under the third paragraph of section 3 of the Employment Agreement.
3. Crediting of Awards. Each Award shall be credited to Employee on the
books and records of the Employer as of the respective date of each Award and
shall vest in and become payable to Employee as hereinafter set forth. All
amounts which may become payable under the Plan to the Employee shall be paid
exclusively from the general funds of the Employer. Employee's rights to payment
shall be those of a general unsecured creditor of Employer. Employee shall not
have any claim, right, security interest, or other interest in any fund, account
or other asset of the Company.
4. Vesting of Awards. Each Award shall vest in the Employee in equal
installments on the first, second and third anniversary dates (each such date
being an "Anniversary Date") of the date that such Award is credited to Employee
as set forth in section 3 of the Plan. Accordingly, the 1998 Award and the 1999
Award will become fully vested on April 1, 2002 and April 1, 2003, respectively.
5. Payment of Awards. Each Award shall be payable in xxxx.xx the Employer
to the Employee as of the date that such Award becomes fully vested.
Accordingly, the 1998 Award would be payable in full on April 1, 2002 subject to
the Employee remaining employed with Employer through such date. The 1999 Award
would be payable in full on April 1, 2003 subject to Employee remaining employed
through such date.
6. Termination of Employment. If Employee's employment with Employer
terminates for any reason whatsoever, other than for death or disability, prior
to the time that any Award is fully vested, then (i) withing thirty (30) days
thereafter, the Employer shall pay to Employee the portion of such Award that
was vested as of the last Anniversary Date of that Award prior to the
termination of employment, and (ii) any unvested portion of such Award shall be
forfeited and no longer be payable or credited to Employee.
7. Death of Disability. If Employee's employment with Employer terminates
because of death or disability prior to the time that any Award is fully vested,
then such Award shall immediately become fully vested and payable to Employee or
the personal representative of Employee as the case may be. For the purposes of
this section 7, disability shall be deemed to have occurred if Employer
terminates Employee's employment under section 5 (c) of the Employment
Agreement.
