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EXHIBIT 10(x)
EMPLOYMENT AND CONSULTING AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into by and between
XXXXXXX X. XXXX, an individual ("Xxxx"), and TEAM, INC., a Texas corporation
("Team") to be effective as of June 1, 1997 (the "Effective Date").
R E C I T A L S:
WHEREAS, Team employed Xxxx as its President and Chief Executive Officer
and entered into an employee agreement (the "Employment Agreement") with Xxxx
which was made effective as of August 31, 1995; and,
WHEREAS, Xxxx voluntarily agreed, effective January 1, 1997, to reduce his
base compensation from $300,000, as provided in the Employment Agreement, to
one hundred thousand dollars ($100,000) per annum together with such annual
performance bonus compensation awards as Team's Board of Directors(the "Board")
acting in its sole discretion determines; and,
WHEREAS, the Board awarded Xxxx a performance bonus in the amount of
$50,000 during a scheduled meeting which was held on June 26, 1997 in
recognition of his outstanding performance through the period ended May 31,
1997 and also awarded Xxxx options to acquire 50,000 shares of Team stock
during such meeting in recognition of his past performance and as an incentive
for future performance; and,
WHEREAS, Team and Xxxx have agreed to terminate the Employment Agreement
dated August 25, 1995 and enter into this Agreement to set forth the current
terms and conditions of Ryan's employment and consulting relationship with
Team;
NOW, THEREFORE, in consideration of the premises, and the covenants
herein set forth, the continued employment of Xxxx by Team and for other good
and valuable consideration, the receipt and sufficiency and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
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A G R E E M E N T S:
1. EMPLOYMENT AND CONSULTING. Subject to the terms and conditions
hereinafter stated, Xxxx shall serve as Chief Executive Officer of Team with
the duties specified in section 1(a) below throughout the period ("Employment
Period") beginning as of the Effective Date and ending on the earlier date to
occur of: (i) the date that the Team Board of Directors ("Board") adopts a
resolution designating a new Chief Executive Officer, (ii) the ninetieth (90th)
day following the delivery to Team of Ryan's written notice of resignation, or
(iii) May 31, 2002. From and after the date that Xxxx ceases to serve as
Team's Chief Executive Officer, and through May 31, 2002, Xxxx shall serve as a
Consultant to Team with the duties specified in subsection 1(b) below. The
Employment Agreement dated August 25, 1995 is hereby cancelled and all of the
rights and obligations of the parties thereunder are hereby terminated. In the
event that Xxxx is serving as a member of the Board at the time that he ceases
to serve as Team's Chief Executive Officer, he will continue to serve at the
pleasure of the Team shareholders as a non-employee director of Team and shall
be entitled to the compensation and other benefits which are then made
available to the other non-employee Team directors.
(a) DUTIES AS CHIEF EXECUTIVE OFFICER. Xxxx agrees to serve
throughout the Employment Period as defined above as Chief Executive Officer
of Team subject to the Team Bylaws and management policies, and to perform such
other duties as shall from time to time be assigned to Xxxx by the Board which
are consistent with Ryan's position as President and Chief Executive Officer.
Xxxx shall as consideration for serving hereunder as Team's Chief Executive
Officer be compensated in the manner provided in subsections 2(a) and 2(b)
below. No change in the duties of Xxxx which are consistent with his position
as President and Chief Executive Officer shall result in a termination or
rescission of this Agreement. Xxxx shall devote such time and attention as may
be reasonably necessary to perform his duties hereunder. Xxxx shall be
permitted to serve on the Boards of Directors of other corporations and/or to
engage in other business activities for his own account, provided that none of
such other business activities shall be inconsistent with the terms of Section
6 hereof and provided further that such activities do not materially interfere
with the performance of Ryan's duties hereunder. By way of
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expression and not of limitation, Xxxx shall make available to Team any and all
business opportunities that become available to Xxxx which involve an area of
business in which Team or any Affiliate thereof conducts business. Any such
business opportunities shall be the property of Team.
(b) CONSULTING DUTIES. From and after the end of the Employment
Period as defined above and through May 31, 2002, Xxxx covenants that he will
make himself reasonably available to consult with the Board and Team's officers
at Team's principal offices in Texas; provided, however, that Xxxx shall not be
required to expend more than ten (10) hours a month in performing consulting
services to Team and he shall not be required to perform any services which
would be impossible or impractical for him to perform or would likely damage
his health. As consideration for agreeing to serve as a Consultant to Team
hereunder, Xxxx shall be compensated in accordance with the provisions of
subsection 2(d) below.
2. COMPENSATION.
(a) CHIEF EXECUTIVE OFFICER. Throughout the Employment Period as
defined above and for a period of one full year thereafter ("POST EMPLOYMENT
TERM"), Xxxx shall be paid One Hundred Thousand Dollars ($100,000) per year
("Base Compensation"), in equal and consecutive monthly installments ("Monthly
Salary Payments") of eight thousand three hundred thirty three dollars and
thirty three cents ($8,333.33).
(b) PERFORMANCE BONUS. As promptly as practical following the
end of each fiscal (or any portion thereof) during which Xxxx serves as Team's
Chief Executive Officer pursuant to this Agreement, the Board shall review
Ryan's performance during such fiscal year and ,the Board acting in its sole
discretion shall award Xxxx a performance bonus based upon Xxxx' performance as
Team's Chief Executive Officer during such fiscal year or any part thereof;
provided, however, that such bonus shall not be less than the product of fifty
thousand dollars($50,000) multiplied times that percentage of such fiscal year
during which Xxxx served as Team's Chief Executive Officer.
(c) OTHER BENEFITS AS CHIEF EXECUTIVE OFFICER. While serving as
Team's Chief Executive Officer, Xxxx shall be entitled to paid vacations,
expense reimbursements, automobile allowances and similar perquisites
incidental or necessary to the performance of his duties or in accordance with
the policies and procedures established by Team from time to time. Xxxx shall
further be entitled to
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participate in each plan established to provide fringe benefits or insurance
benefits to employees of Team at the time and for so long as he meets the
eligibility criteria established for the plan and shall receive benefits
thereunder based on the terms of the plan. Ryan's eligibility and benefit
level shall be determined separately for each plan and all determinations shall
be made by the parties charged with responsibility for such determinations in
the plan. Team is under no obligation to establish any plan or plans to provide
benefits for its employees and this provision shall not be interpreted to
require the establishment of any benefit plan. The terms of any benefit plans
existing, established, or provided hereafter do not constitute a part of this
Agreement and are not incorporated herein for any purpose.
(d) CONSULTANT. After the conclusion of the Post Employment Period
and for the remainder of the Term as herein defined Team shall pay Xxxx the sum
of fifty thousand dollars per year in consecutive, equal monthly installments
of four thousand one hundred sixty six dollars and sixty six cents ($4,166.66)
each as consideration for agreeing herein to consult with Team following the
Employment Period. As a Consultant, Xxxx shall also be entitled to
reimbursement for travel and other expenses reasonably incurred in carrying out
his consulting duties.
4. TERM. The Term ("Term") of this Agreement commenced effective June
1, 1997 and unless sooner terminated by mutual agreement of the parties or by
termination "for cause" pursuant to Section 5(b), shall terminate at the close
of business on the 31st day of May, 2002.
5. TERMINATION.
(a) WITHOUT CAUSE. Team may terminate Ryan's employment as its
Chief Executive Officer at any time "without cause" by giving Xxxx written
notice of such termination, and Xxxx xxx terminate his employment as Chief
Executive Officer without cause upon ninety (90) days' prior written notice to
Team. Xxxx shall be entitled to receive a bonus payment pursuant to section
2(b) with respect to the fiscal year during which he ceases to serve as Team's
Chief Executive Officer. Subject to the limitations contained in subsection
5(b) hereof, Xxxx shall immediately after he ceases to be Team's Chief
Executive Officer continue to receive Monthly Salary Payments in the amount of
eight thousand three hundred thirty three dollars and thirty three cents
($8333.33) throughout the Post Employment Period as provided above, and after
the conclusion of the Post
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Employment Period, Xxxx shall receive the sum of four thousand one hundred
sixty-six dollars and sixty-six cents($4,166.66) a month through May 31, 2002
as provided in subsection 2(d) as his total remaining entitlements under this
Agreement.
(b) FOR CAUSE. Notwithstanding anything to the contrary contained or
implied herein, Team may terminate this Agreement and all of its continuing
obligations to Xxxx hereunder "for cause" by giving written notice of such
termination "for cause" to Xxxx. For purposes of section 5(a) this Agreement,
the phrase "for cause" shall exclusively mean the occurrence of one of the
following events:
(i) Xxxx shall be determined by Team to be guilty of fraud,
dishonesty, or violations of criminal statutes; or,
(ii) Xxxx shall be determined by Team to have materially violated
the provisions of section 6 of this Agreement.
In making the determinations described in Section 5(b)(i) and (ii)
above, Team shall act reasonably and in good faith and any such determination
shall be required to be made by the affirmative vote of a majority of the
members of the Board. In the event that Team terminates this Agreement "for
cause" as specified above, Xxxx shall not be entitled to receive any further
compensation under this Agreement from and after the date of such termination
for cause. Notwithstanding anything to the contrary contained or implied
herein, Ryan's death or disability during the Term shall not be "cause" for
terminating Ryan's entitlements under this Agreement. Entitlements to which
Xxxx is entitled pursuant to this Agreement shall in the event of Ryan's death
during the Term be paid to his estate.
6. PROTECTION OF CONFIDENTIAL INFORMATION AND GOODWILL. Xxxx hereby
covenants and agrees as follows:
(a) Xxxx shall not use or disclose, directly or indirectly, for
any reason whatsoever or in any way any confidential or proprietary information
or trade secrets of Team, including, but not limited to, information with
respect to Team or its Affiliates (as hereinafter defined) as follows: the
identity, lists, and/or descriptions of any customers of Team; financial
statements, cost reports, and other financial information; product or service
pricing information; contracts, contract proposals and bidding information;
policies and procedures developed as part of a confidential business plan; and
management systems and procedures, including manuals and supplements thereto,
other than (i) at the direction of Team during the course of Ryan's employment,
(ii) after receipt of the prior written
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consent of Team, (iii) as required by any court or governmental regulatory
agency having competent jurisdiction over Team or its business or over Xxxx, or
(iv) information made public by Team or information known or generally
available within Team's industry.
(b) During the Term and for a period of two (2) years
thereafter, Xxxx shall not, directly or indirectly, either as an employee,
employer, consultant, agent, principal, partner, stockholder, corporate
officer, director, or in any other individual or representative capacity,
engage or participate in any business that is in competition in any manner
whatsoever with the business of Team or any Affiliate of Team (as defined in
Paragraph 14 hereof) as such business is presently conducted and as conducted
during the Term; provided, however, that following the Term, the covenant
contained in this subsection shall not pertain to activities which occur more
than two hundred fifty (250) miles from any operating facility of Team or any
Affiliate of Team.
(c) During the Term and for a period of two (2) years following
the termination of the Term, Xxxx shall not solicit or negotiate, directly or
indirectly, any contract or agreement that constitutes or would constitute
engaging in competition with the business of Team or any Affiliate of Team as
presently conducted and as conducted during the Term; provided, however, that
following the Term, the covenant contained in this subsection shall not pertain
to activities which occur more than two hundred fifty (250) miles from any
operating facility of Team or any Affiliate of Team.
(d) During the Term and for a period of two (2) years following
the Term, Xxxx shall not solicit for employment or employ, directly or
indirectly, any employee employed by Team or any Affiliate within the one (1)
year period immediately prior to such solicitation for employment.
(e) Xxxx shall not use the name of Team or any Affiliate of
Team in connection with any business that is in competition in any manner
whatsoever with the business of Team or any Affiliate of Team as presently
conducted and as conducted during the Term.
(f) Team and Xxxx agree that the covenants set forth in this
Paragraph 6 shall accrue to the benefit of Team, irrespective of the reason for
termination of the other provisions of this Agreement and the corresponding
employment relationship created herein, or Ryan's performance hereunder.
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(g) In connection with the limited protection afforded Team by
the covenants contained within this Paragraph 6, Xxxx recognizes that Team's
need for the covenants is based on the following:
(i) Team has spent and will expend substantial time,
money and effort in developing (x) its maintenance, repair and energy
management businesses and (y) a valuable list of customers and
information about their requirements and needs, purchasing patterns and
internal purchasing procedures;
(ii) Xxxx, in the course of the Term, has been and will
be compensated to help develop, and has been and will be personally
entrusted with and exposed to, Team's contract, business development
plans and opportunities, trade secrets and other confidential and
proprietary information;
(iii) Team, during the Term and after its termination,
will be engaged in the highly competitive maintenance, repair and energy
management businesses in which many firms, including Team, compete;
(iv) Team provides and will provide services throughout
the State of Texas and Xxxx will be involved in providing such services
through operating facilities and affiliates of Team;
(v) Xxxx could, after having access to Team's financial
records, contracts, technology and associated trade secrets and know-how
and receiving further training by and experience with Team, and after
reviewing Team's trade secrets and confidential information, become a
competitor; and
(vi) Team will suffer great loss and irreparable harm if,
during or after the Term, Xxxx enters directly or indirectly into
competition with Team.
(h) Xxxx hereby specifically acknowledges and agrees that the
temporal, geographical and other restrictions contained in this Section 6 are
reasonable and necessary to protect the business and prospects of Team, and
that the enforcement of the provisions of this Section 6 will not work an undue
hardship on him.
(i) Xxxx further agrees that in the event either the length of
time, geographical or any other restrictions, or portion thereof, set forth in
this Section 6 is overly restrictive and unenforceable in any court proceeding,
the court may reduce or modify such restrictions to those which it deems
reasonable and enforceable under the circumstances
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and the parties agree that the restrictions of this Section 6 will remain in
full force and effect as reduced or modified.
(j) Xxxx further agrees and acknowledges that Team does not have
an adequate remedy at law for the breach or threatened breach by him of the
covenants contained in this Section 6 and Xxxx therefore specifically agrees
that Team, in the event of the breach or threatened breach by Xxxx of any of
the Ryan's covenants contained in Section 6 of this Agreement, in addition to
other remedies which may be available to it hereunder, may file a suit in
equity to enjoin Xxxx from such breach or threatened breach.
Xxxx further agrees, in the event that any provision of this Section 6
is held to be invalid or against public policy, the remaining provisions of
this Section 6 and the remainder of this Agreement shall not be affected
thereby.
7. PROPERTY OF TEAM. Xxxx agrees that, upon the termination of the
Term, he will immediately surrender to Team all property, equipment, funds,
lists, books, records, and other materials of Team in the possession of or
provided to Xxxx.
8. LAW GOVERNING. This Agreement and all issues relating to the
validity, interpretation, and performance hereof shall be governed by and
interpreted under the laws of the State of Texas. The parties hereby consent
to jurisdiction and venue in any court of competent jurisdiction in Xxxxxx
County, Texas, or the United States District Court for the Southern District of
Texas, and either party may bring any suit that they desire to institute upon
this Agreement in any such court.
9. REMEDIES. With respect to each and every breach, violation, or
threatened breach or violation by either party of any of the covenants set
forth herein, the other party, in addition to all other remedies available at
law or in equity, including specific performance of the provisions hereof,
shall be entitled to enjoin the commencement or continuance thereof and,
without notice to the other party, may apply for entry of an immediate
restraining order or injunction. In addition, each party agrees, upon demand,
to immediately account for and pay over to the other party an amount equal to
all compensation, commissions, bonuses, salary, gratuities, or other emoluments
of any kind directly or indirectly received by, or for the use or benefit of,
the other party resulting from any activity, transaction, or employment in
breach or violation of any of the covenants set forth in this Agreement, such
amount being agreed to constitute liquidated damages
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because the exact amount of actual damages to be sustained on account of any
such breach or violation cannot be determined with complete accuracy. In
addition, each party agrees to pay the other party a reasonable sum as and for
his or its attorneys' fees and costs of litigation should such other party
bring an action against the breaching party for breach of this Agreement and
prevail in such action. Each party may pursue any of the remedies described in
this Paragraph 9 concurrently or consecutively, in any order, as to any such
breach or violation, and the pursuit of one of such remedies at any time will
not be deemed an election of remedies or waiver of the right to pursue any of
the other such remedies.
10. NOTICES. Any notice or request herein required or permitted to be
given to any party hereunder shall be given in writing and shall be personally
delivered or sent to such party by United States mail, certified or registered
mail, return receipt requested, with postage prepaid, at the address set forth
below the signature of such party hereto or at such other address as such party
may designate by written communication to the other party pursuant to, and in
accordance with, this Paragraph 10. Each notice given in accordance with this
Paragraph 10 shall be deemed to have been given, if personally delivered, on
the date personally delivered, or, if mailed, on the day on which it is
deposited in the United States mail, and shall be deemed to be received or
delivered, if personally delivered, on the date personally delivered, or, if
mailed, on the third day following the day on which it is deposited in the
United States mail.
11. HEADINGS. The headings of the paragraphs of this Agreement have
been inserted for convenience of reference only and shall not be construed or
interpreted to restrict or modify any of the terms or provisions hereof.
12. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable, and this
Agreement and each separate provision hereof shall be construed and enforced as
if such illegal, invalid, or unenforceable provision had never comprised a part
of this Agreement, and the remaining provisions of this Agreement shall remain
in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. In addition,
in lieu of such illegal, invalid, or
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unenforceable provision, there shall be added automatically as a part of this
Agreement, a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable, if such reformation is allowable under applicable law.
13. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of each party hereto and each party's respective
successors, heirs, permitted assigns, and legal representatives.
14. DEFINITION OF "AFFILIATE". For purposes of this Agreement, the
term "Affiliate" means any subsidiary corporation of Team. For purposes of
this definition, a subsidiary of Team means any corporation whose outstanding
common shares are more than fifty percent (50%) directly owned by Team and
shall further mean any corporation whose outstanding common shares are at least
fifty percent (50%) owned through an unbroken chain of ownership through other
subsidiaries of Team.
15. ASSIGNMENT. This Agreement and any interest herein or rights,
duties, or obligations hereunder may be assigned or delegated by Team without
the prior written consent of the Xxxx, but no such assignment may be made by
Xxxx.
16. SEPARATE AGREEMENTS. The provisions of Paragraph 6 shall be
construed as a separate agreement in each of the separate geographical areas,
if any, referred to in Paragraph 6, and to the extent that it may be found to
be illegal and/or unenforceable in any of said geographical areas, this
Agreement shall not be affected thereby with respect to each other geographical
area.
17. TEAM POLICIES, REGULATIONS, AND GUIDELINES FOR EMPLOYEES. Team may
issue policies, rules, regulations, guidelines, procedures, or other
informational material, whether in the form of handbooks, memoranda, or
otherwise, relating to its employees. These materials are general guidelines
for Ryan's information and shall not be construed to alter, modify, or amend
this Agreement for any purpose whatsoever.
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter hereof, unless expressly provided
otherwise herein. No amendment, modification, or termination of this
Agreement, unless expressly provided otherwise herein, shall be valid unless
made in writing and signed by each of the parties whose rights, duties, or
obligations hereunder would in any way be affected by an amendment,
modification, or termination. Unless expressly set forth herein, no
representations, inducements, or
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agreements have been made to induce either Xxxx or Team to enter into this
Agreement. This Agreement is the sole source of rights and duties as between
Team and Xxxx relating to the subject matter of this Agreement.
19. KEY-MAN INSURANCE. Team shall be entitled to own, purchase and
maintain life or other insurance on the life or disability of the Xxxx for
Team's exclusive benefit. Xxxx shall execute all documents and perform all
acts necessary to enable Team to effect such insurance.
IN WITNESS WHEREOF, the parties have executed this Agreement on this the
29th day of July, 1997, to be EFFECTIVE as of June 1, 1997.
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
Address:
0000 Xxxxx
Xxxxxxxx, XX 00000
TEAM, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx Senior Vice President
Address:
0000 X. Xxxx Xxxxxx
Xxxxx, XX 00000
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