1
EXHIBIT 10.1
AGREEMENT
THIS AGREEMENT, dated as of the 30th day of June, 1999 (the "Effective
Date"), is by and between ITEQ, Inc., a Delaware corporation (the "Company"),
and Xxxx X. Xxxxxxx ("Executive").
In consideration of the payments described below, the agreements set
forth in this Agreement and other good and valuable consideration, the adequacy,
mutuality, receipt and sufficiency of which are hereby acknowledged, the Company
and Executive hereby agree as follows:
1. Employment Agreement. The employment agreement, dated as of
September 30, 1997, between ITEQ, Inc. and Executive (the "Employment
Agreement") is hereby terminated in its entirety, and neither party shall have
any further rights, duties or obligations arising thereunder or in any way
attributable thereto.
2. Term. The Company agrees that it will employ Executive and
Executive agrees to serve the Company from the Effective Date until December 31,
2004 (the "Expiration Date") unless sooner terminated in accordance with
paragraph 5.
3. Nature of Duties.
(a) Transition Period. Until December 31, 1999 (the
"Transition Period"), the Executive shall devote substantially his full
time during normal business hours to insuring an orderly management
transition at the Company and shall undertake such additional executive
duties during the Transition Period (of a stature and dignity
appropriate to a former chief executive officer of the Company) as
shall be assigned to Executive by the chief executive officer of the
Company.
(b) Retention Period. Commencing upon expiration of the
Transition Period and ending on the Expiration Date (the "Retention
Period"), Executive shall continue to be an employee and in such
capacity shall (i) consult with the Company's chief executive officer
on an "as requested" basis concerning acquisitions, divestitures and
similar matters and assist the Company in their execution and (ii)
shall undertake such additional executive duties (of a stature and
dignity appropriate to a former chief executive officer of the Company)
as shall be assigned to Executive by the chief executive officer of the
Company, but such services shall not be required during more than three
days in any week. In addition, such services will be required only at
such times and such places as will result in the least inconvenience to
Executive, having regard for other business commitments during said
period which may obligate him to meet such other commitments prior to
performing services requested hereunder. To the end that there shall be
a minimum interference with Executive's other commitments, his
Retention Period services shall be rendered by personal consultation at
his residence or office, wherever maintained, or by correspondence
through the mails, telephone, or telegraph, including weekends and
evenings, as may be most convenient to Executive. During the Retention
Period, Executive shall not be obligated (i) to occupy any office of
the
2
Company or any of its subsidiaries, or (ii) to render any services
whatsoever to the Company or any of its subsidiaries other than those
specified in this paragraph 3(b). During the Retention Period (prior to
any Termination Date), Executive may accept and maintain employment
with any employer other than an employer that is in direct competition
with any business in which the Company is then engaged.
4. (a) Compensation.
(i) The Company agrees to pay the Executive from the
Effective Date through the end of the Transition Period at a
rate of $33,333 per month, payable on a current basis not less
frequently than monthly in accordance with the Company's
established policy, subject only to such payroll and
withholding deductions as may be required by law; and
(ii) The Company agrees to pay the Executive during
the Retention Period (prior to the Expiration Date) at a rate
of $16,667 per month, payable on a current basis not less
frequently than monthly in accordance with the Company's
established policy, subject only to such payroll and
withholding deductions as may be required by law.
(b) Expense Reimbursement. The Company shall reimburse
the Executive for all direct out-of-pocket expenses incurred by him in
the performance of services through the Expiration Date at the request
of the Company's chief executive officer, to the extent such expenses
are consistent with the Company's normal expense reimbursement
policies.
(c) Insurance and Defined Contribution Plan Benefits
Through the Expiration Date. To the extent permitted by applicable plan
provisions, the Executive and his immediate family shall be permitted
to continue participation through the Expiration Date in all medical,
health, life, accidental death and disability insurance programs and
non-contributory defined contribution plans maintained by the Company
for the benefit of its executive officers, with all premium and medical
reimbursement expense of insurance plans to be borne by the Company to
the same extent applicable to executive officers generally.
(d) Office. The Executive will continue to be provided
with an office at the Company's principal offices through the
Expiration Date, at which location the Company will provide customary
secretarial and other support facilities to Executive.
(e) Club Dues and Expenses. Executive agrees to accept
sole responsibility for all dues and usage charges incurred after the
Transition Period for country club and luncheon club memberships held
by him in his individual name or owned by the Company for Executive's
designated use. The Company hereby relinquishes any interest it may
have in such individually-owned memberships and agrees to cooperate
with Executive in converting (at no out-of-pocket cost to the Company)
any Company-owned corporate club memberships
2
3
on which Executive is the designated user into individual memberships
in the name of Executive. If Executive is unable to so convert any
Company-owned membership into an individual membership by December 31,
1999, the Executive agrees to cooperate with the Company in effecting a
transfer of the use privilege to one or more Company-designated
successor users.
(f) No Other Benefits. In view of the character of
Executive's duties hereunder, Executive hereby irrevocably declines,
waives and rejects participation at all times after the Transition
Period in the Company's employee stock purchase plan and 401(k) plan.
5. Termination. Executive's employment with the Company:
(a) shall terminate on December 31, 2004;
(b) shall terminate automatically upon Executive's
earlier death;
(c) shall terminate automatically on the earliest date at
which Executive does not occupy the position of chairman of the board
of directors of the Company (other than as a result of Executive's
resignation or refusal to serve); or
(d) shall terminate upon written notice from the
Executive to the Company that he declines to stand for reelection as a
director or to serve as chairman of the board, or that he resigns from
such position;
(with each such date being hereinafter referred to as a "Termination Date").
6. Effects of Termination. Anything else in this Agreement to the
contrary notwithstanding, if Executive's employment is terminated:
(a) pursuant to paragraphs 5(a), 5(b) or 5(d), then
Executive shall be entitled to receive (i) payment when due of
Executive's salary through the end of the first monthly pay period
ended on or after the Termination Date and (ii) all benefits under any
benefit plans in which the Executive is at the time a participant, to
the extent the same are vested under the terms thereof at the
Termination Date, and all other obligations of the Company under this
Agreement shall cease; or
(b) pursuant to paragraph 5(c), then Executive shall be
entitled to the following:
(i) on or within ten days following the Termination
Date, the Company shall pay to Executive a lump sum cash
amount equal to the lesser of (A) $600,000 or (B) an amount
equal to $16,667, multiplied by the number of months remaining
between the Termination Date and the Expiration Date; and
3
4
(ii) all unvested benefits under any benefit plans
(including any stock option plan) in which the Executive is at
the time a participant shall on the Termination Date
automatically become fully vested, exercisable, distributable
or otherwise performable by the Company; and
(iii) the insurance benefits provided for in
paragraph 4(c) shall be continued through the Expiration Date;
and all other obligations of the Company under this Agreement shall
cease.
7. Release.
(a) Executive hereby unconditionally, irrevocably and forever
releases and discharges the Company, its subsidiaries, their respective
officers, directors, shareholders, employees, agents and assigns and
all other persons, firms or entities in control of, under the direction
of, or associated with the Company (collectively, the "Company
Representatives") from any and all claims, causes of action, suits,
charges, complaints, obligations, liabilities, promises, agreements,
contracts, damages, accrued benefits or other liabilities of any kind
or character, whether known or hereafter discovered and whether arising
in tort, contract, by law or otherwise, arising from or in any way
connected with or related to the Employment Agreement and/or
Executive's employment with the Company; provided that the foregoing
release shall not apply to (i) any rightful claims for indemnity that
Executive may have arising under the Company's charter or bylaws or any
preexisting contractual indemnity by the Company in favor of Employee
or (ii) any failure of the Company to perform its obligations under
this Agreement. Employee voluntarily acknowledges and agrees that the
consideration described in this Agreement is sufficient payment for the
full, final and complete release stated herein and agrees that no other
promises or representations have been made to him by the Company, any
Company Representative or any other person purporting to act on behalf
the Company.
(b) The Company hereby unconditionally and irrevocably forever
releases and discharges Executive his heirs and legal representatives,
from and against any and all claims, causes of action, suits, charges,
complaints, obligations, liabilities, promises, agreements, contracts,
damages, accrued benefits or other liabilities of any kind or
character, whether known or hereafter discovered and whether arising in
tort, contract, by law or otherwise, arising from or any way connected
with or related to the Employment Agreement and/or the Executive's
employment with the Company. The Company voluntarily acknowledges and
agrees that the consideration described in this Agreement is sufficient
payment for the full, final and complete release stated herein and
agrees that no other promises or representations have been made by
Executive, his agents or representatives to the Company or any Company
Representative.
4
5
8. Further Assurances; Future Cooperation. Each party to this Agreement
agrees to do such things as may be reasonably requested by the other party to
this Agreement in order more effectively to consummate or document the
transactions contemplated by this Agreement.
9. Binding Agreement; Captions. This Agreement is binding upon, and
shall inure to the benefit of, the parties to this Agreement and their
respective legal representatives, heirs, devisees, legatees, successors and
assigns. Titles and captions of or in this Agreement are inserted only as a
matter of convenience and for reference and in no way affect the scope of this
Agreement or the intent of its provisions.
10. Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof, supersedes all
prior agreements of any of the parties to this Agreement with respect to its
subject matter, and may not be amended except in writing signed by both parties.
11. Binding Arbitration. Should any dispute arise between the parties
with respect to this Agreement or the rights, duties and obligations of the
parties hereunder, each of the parties irrevocably agrees that the exclusive
remedy of each of them shall be to commence binding arbitration proceedings
under the rules of the American Arbitration Association, with any such
arbitration proceeding to be conducted in Houston, Texas, applying the
substantive law of the State of Texas. Each party agrees to deposit with the
neutral arbitrator an amount equal to 50% of the arbitrator's preliminary
estimate of the costs of arbitration (excluding counsel fees) as security for
costs. Actual costs of arbitration (including counsel fees of both parties)
shall be apportioned by the arbitrator in such a manner as he shall deem
equitable in light of any financial award.
12. Miscellaneous. Failure of any party to this Agreement at any time
or times to require the performance of any provision of this Agreement shall in
no manner affect the right to enforce the same; and the waiver by any party to
this Agreement of any provision (or a breach of any provision) of this
Agreement, whether by conduct or otherwise, shall not be deemed or construed
either as a further or continuing waiver of any such provision or breach or as a
waiver of any other provision (or a breach of any other provision) of this
Agreement. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of Texas. This Agreement may be executed
in two or more counterparts, each of which shall be an original for all
purposes, but all of which taken together shall constitute but one and the same
instrument.
5
6
IN WITNESS WHEREOF, this Agreement is executed this 13th day of July,
1999.
ITEQ, INC.
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx, President and
Acting Chief Executive Officer
By: /s/ T. Xxxxxxx Xxxxxx
----------------------------------------
T. Xxxxxxx Xxxxxx, Chairman,
Compensation Committee of the Board of
Directors
XXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxxx
----------------------------------------
6
