EXHIBIT 10.13
EMPLOYMENT AGREEMENT
This Employment Agreement dated as of November 18, 1996 (this "AGREEMENT")
is entered into by and between American Residential Services, Inc., a Delaware
corporation (the "CORPORATION"), and Xxxxxx Xxxxxxxxxx (the "EMPLOYEE").
1. EMPLOYMENT. The Corporation hereby employs the Employee and the
Employee hereby accepts employment with the Corporation upon the terms and
subject to the conditions set forth herein.
2. DUTIES AND RESPONSIBILITIES. Subject to the power of the board of
directors of the Corporation to manage the business and affairs of the
Corporation and to elect and remove officers of the Corporation and its
subsidiaries, the Employee shall serve the Corporation as President of the
Corporation's subsidiary, American Mechanical Services, Inc., and shall perform
the services and functions relating to such office or otherwise reasonably
incident to such office. The Employee shall report directly to the chief
executive officer of the Corporation, or such other officer of the Corporation
as the board of directors of the Corporation may determine.
3. COMPENSATION AND OTHER EMPLOYEE BENEFITS.
As compensation for his services under the terms of this Agreement:
(a) Subject to section 4(a) hereof, the Employee shall be paid an
annual salary of $150,000, payable in accordance with the
then-current payroll policies of the Corporation (such annual salary
is herein referred to as the "BASE SALARY"); the Base Salary shall
be subject to increase (but not decrease) at the discretion of the
Corporation;
(b) subject to the right of the Corporation to amend or terminate
any employee and/or group or senior executive benefit, bonus and/or
stock option plan, the Employee shall be entitled to receive the
following employee benefits:
(1) the Employee shall have the right to participate in such medical
and dental plans as are adopted by the Corporation, as well as any
or future employee and/or group benefit plans of the Corporation
that are available to its exempt salaried employees generally
(including, without limitation, disability, accident, medical, life
insurance and hospitalization plans);
(2) the Employee shall have the right to participate, at levels
determined by the board of directors (or the compensation committee
thereof), in such executive
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benefit, bonus and/or stock option plans of the Corporation as shall
be determined by the board of directors (or the compensation
committee thereof); and
(3) the Employee shall be entitled to reimbursement from the
Corporation for reasonable out-of-pocket expenses incurred by him in
the course of the performance of his duties hereunder.
4. TERM.
(a) The term of the Employee's employment under this Agreement shall
commence on the date of this Agreement and shall end on November 18, 1999,
provided, however, after November 18, 1998, the term shall continuously
extend without the necessity of action of either party for a continually
renewing period of one year's duration, until, in either case, an event
has occurred as described in, or one of the parties shall have made an
appropriate election pursuant to, the provisions of Section 6 of this
Agreement. Such term is referred to herein as the "EMPLOYMENT TERM".
(b) The term of this Agreement may be extended for additional
periods by mutual consent of the Employee and the Corporation.
5. COMPETITION AND CONFIDENTIALITY.
(a) If, during the Employment Term (or any extension thereof), the
employment of the Employee is terminated pursuant to Section 6(a) or
Section 6(e), or if the Employee voluntarily terminates his employment
pursuant to Section 6(d), or if this Agreement expires pursuant to its
terms, then for the period of time remaining in the Employment Term, the
Employee shall not (i) accept employment with or render service to any
person, firm or corporation that is engaged in a business directly
competitive with the plumbing, heating, air conditioning or electrical
business of the Corporation, (ii) directly or indirectly own manage,
operate, finance or control or participate in the ownership, management,
operation or control of, or be connected as a principal, agent,
representative, consultant, advisor, investor, owner, partner, financier,
manager or joint venturer with, or permit his name to be used by or in
connection with, any business or enterprise directly competitive with the
plumbing, heating, air conditioning or electrical business of the
Corporation (provided, however, that the Employee may invest as an
investor in the voting securities of any person that is a reporting
company under the Securities Exchange Act of 1934, as amended, so long as
(A) the aggregate amount of such securities that the Employee owns
directly or indirectly is less than five percent of the total outstanding
voting securities of such person and (B) the Employee has no other
affiliation with such person), or (iii) solicit the employment of any
person who, within six months before or after the date of the Employee's
termination, is employed by the Corporation on a full or part-time basis.
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For the purposes of this Section 5, the Corporation shall be deemed to
include all of the subsidiaries of the Corporation.
(b) It is the desire and intent of each of the parties that the
provisions of Section 5(a) shall be enforced to the fullest extent
permissible under the laws and public policies applied in the State of
Texas. Accordingly, if any particular portion of Section 5(a) shall be
adjudicated to be invalid or unenforceable, Section 5(a) shall be deemed
amended to (i) reform the particular portion to provide for such maximum
restrictions as will be valid and enforceable, or if that is not possible,
then (ii) delete therefrom the portion thus adjudicated to be invalid or
unenforceable. Section 5(a) shall inure to the benefit of any successor to
the Corporation.
(c) During the Employment Term and for a period of two years after
termination of the Employment Term, the Employee will not divulge or
appropriate to his own use or to the use of others any secret or
confidential information pertaining to the business of the Corporation
obtained by the Employee in his capacity as an employee of the
Corporation. For purposes of this Agreement, the term secret and
confidential information does not include any information that is or
becomes generally available to and known by the public (other than as a
result of an unpermitted disclosure directly or indirectly by the
Employee).
(d) The Employee acknowledges that Sections 5(a) and (c) are
expressly for the benefit of the Corporation, that the Corporation would
be irreparably injured by a violation of Section 5(a) or (c), and that the
Corporation would have no adequate remedy at law in the event of such
violation. Therefore, the Employee acknowledges and agrees that injunctive
relief, specific performance or any other appropriate equitable remedy
(without any bond or other security being required) are appropriate
remedies to enforce compliance by the Corporation with Sections 5(a) and
(c).
6. TERMINATION OF EMPLOYMENT.
(a) FOR DUE CAUSE. Nothing herein shall prevent the Corporation from
terminating, without prior notice, the Employee for "Due Cause" (as
hereinafter defined), in which event the Employee shall be entitled to
receive his Base Salary on a pro rata basis to the date of termination. In
the event of such termination for Due Cause, all other rights and benefits
the Employee may have under the employee and/or group or senior executive
benefit, bonus and/or stock option plans and programs of the Corporation,
generally, shall be determined in accordance with the terms and conditions
of such plans and programs. The term "DUE CAUSE" shall mean (i) the
Employee has committed a willful serious act, such as fraud, embezzlement
or theft, against the Corporation intending to enrich himself at the
expense of the Corporation, (ii) the Employee has been convicted of a
felony, (iii) the Employee has engaged in improper conduct which has
caused demonstrable and serious injury, monetary or otherwise, to the
Corporation, (iv) the Employee, in carrying out his duties hereunder,
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has been guilty of willful gross neglect or willful gross misconduct, (v)
the Employee has refused to carry out his duties in gross dereliction of
duty and, after receiving written notice to such effect from the
Corporation, the Employee fails to cure the existing problem within five
days, or (vi) the Employee has materially breached this Agreement and has
not remedied such breach within five days after receipt of written notice
from the Corporation that a breach of this Agreement has occurred.
(b) DUE TO DEATH. In the event of the death of the Employee, this
Agreement shall terminate on the date of death and the estate of the
Employee shall be entitled to the Employee's Base Salary through the end
of the month in which he died. In the event of such termination due to
death, all other rights and benefits the Employee (or his estate) may have
under the employee and/or group or senior executive benefit, bonus and/or
stock option plans and programs of the Corporation, generally, shall be
determined in accordance with the terms and conditions of such plans and
programs.
(c) DISABILITY. In the event the Employee suffers a "Disability" (as
hereinafter defined), this Agreement shall terminate on the date on which
the Disability occurs and the Employee shall be entitled to his Base
Salary through the end of the month in which his employment is terminated
due to the Disability. In the event of such termination due to Disability,
all other rights and benefits the Employee may have under the employee
and/or group or senior executive benefit, bonus and/or stock option plans
and programs of the Corporation, generally, shall be determined in
accordance with the terms and conditions of such plans and programs. For
purposes of this Agreement, "DISABILITY" shall mean the inability or
incapacity (by reason of a medically determinable physical or mental
impairment) of the Employee to perform the duties and responsibilities
related to the job or position with the Corporation described in Section 2
for a period that can be reasonably expected to last more than 180 days.
Such inability or incapacity shall be documented to the reasonable
satisfaction of the Corporation by appropriate correspondence from
registered physicians reasonably satisfactory to the Corporation.
(d) VOLUNTARY TERMINATION. The Employee may voluntarily terminate
his employment under this Agreement at any time by providing at least 21
days' prior written notice to the Corporation. In such event, the Employee
shall be entitled to receive his Base Salary until the date his employment
terminates and all other benefits the Employee may have under the employee
and/or group or senior executive benefit, bonus and/or stock option plans
and programs of the Corporation, generally, shall be determined in
accordance with the terms and conditions of such plans and programs.
(e) CONSTRUCTIVE TERMINATION.
(i) If the Corporation (i) terminates the employment of the Employee
other than for Due Cause or because of a Disability, (ii) demotes
the Employee to a lesser position than as provided in Section 2,
(iii) decreases the Employee's Base
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Salary below the level provided for by the terms of Section 3(a), or
(iv) requires the Employee to move his principal residence from the
Englewood, Colorado area, then such action by the Corporation,
unless consented to in writing by the Employee, shall be deemed to
be a constructive termination by the Corporation of the Employee's
employment ("CONSTRUCTIVE TERMINATION").
(ii) In the event of a Constructive Termination, the Employee shall
be entitled to receive, from the date of Constructive Termination,
his Base Salary (as provided in Section 3(a)) for a period equal to
the remaining period in the Employment Term, payable in accordance
with the then-current payroll policies of the Corporation. In the
event of such Constructive Termination, all other rights and
benefits the Employee may have under the employee and/or group or
senior executive benefit, bonus and/or stock option plans and
programs of the Corporation, generally, shall be determined in
accordance with the terms and conditions of such plans and programs,
provided, however, that all stock options previously granted to the
Employee by the Corporation that have not been exercised and are
outstanding as of the time immediately prior to the Employee's
Constructive Termination shall remain outstanding (and continue to
become exercisable pursuant to their respective terms) until that
date which is one year after the date of such Constructive
Termination.
(iii) In the event of the death or Disability of the Employee
following Constructive Termination, the amounts set forth in Section
6(e)(ii) shall continue to be owing and shall be paid to the estate
of the Employee or the Employee, as applicable.
7. NOTICES. All notices, requests, demands and other communications given
under or by reason of this Agreement shall be in writing and shall be deemed
given when delivered in person or when mailed, by certified mail (return receipt
requested), postage prepaid, addressed as follows (or to such other address as a
party may specify by notice pursuant to this provision):
(a) If to the Corporation:
American Residential Services, Inc.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Chief Executive Officer
(b) If to the Employee:
Xxxxxx Xxxxxxxxxx
0000 Xxxxxxx Xxxx
0
Xxxxxxxx, Xxxxxxxx 00000
8. CONTROLLING LAW. The execution, validity, interpretation and
performance of this Agreement shall be governed by and construed in accordance
with the law of the State of Texas.
9. ADDITIONAL INSTRUMENTS. The Employee and the Corporation shall execute
and deliver any and all additional instruments and agreements that may be
necessary or proper to carry out the purposes of this Agreement.
10. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement contains the entire
agreement of the Employee and the Corporation relating to the matters contained
herein and supersedes all prior agreements and understandings, oral or written,
between the Employee and the Corporation with respect to the subject matter
hereof. This Agreement may be changed only by an agreement in writing signed by
the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
11. SEPARABILITY. If any provision of this Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by the decision of any arbitrator or by decree of a court
of last resort, the Employee and the Corporation shall promptly meet and
negotiate substitute provisions for those rendered or declared illegal or
unenforceable to preserve the original intent of this Agreement to the extent
legally possible, but all other provisions of this Agreement shall remain in
full force and effect.
12. ASSIGNMENTS. The Corporation may assign this Agreement to any person
or entity succeeding to all or substantially all of the business interests of
the Corporation by merger or otherwise. The rights and obligations of the
Employee under this Agreement are personal to him, and no such rights, benefits
or obligations shall be subject to voluntary or involuntary alienation,
assignment or transfer, except as otherwise contemplated hereby.
13. EFFECT OF AGREEMENT. Subject to the provisions of Section 12 with
respect to assignments, this Agreement shall be binding upon the Employee and
his heirs, executors, administrators, legal representatives and assigns and upon
the Corporation and its respective successors and assigns, except as otherwise
contemplated hereby.
14. EXECUTION. This Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
and the same instrument.
15. WAIVER OF BREACH. The waiver by either party to this Agreement of a
breach of any provision of the Agreement by the other party shall not operate or
be construed as a waiver by such party of any subsequent breach by such other
party.
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IN WITNESS WHEREOF, the Employee and the Corporation have executed this
Agreement effective as of the date first above written.
AMERICAN RESIDENTIAL SERVICES, INC. XXXXXX XXXXXXXXXX
/s/ C. XXXXXXXX XXXXXX, XX. /s/ XXXXXX XXXXXXXXXX
C. Xxxxxxxx Xxxxxx, Xx.
Chief Executive Officer
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