Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is made and entered into this 18th day of
May, 2004 (the "EFFECTIVE DATE"), by and between GUNDLE/SLT ENVIRONMENTAL, INC.,
a Delaware corporation, having its corporate headquarters located at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "COMPANY"),
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (hereinafter referred to as the "EMPLOYEE").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee in an executive
capacity and the Employee desires to remain in the Company's employ.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants
and obligations contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Employee hereby agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following terms have
the meanings prescribed below:
AFFILIATE is used in this Agreement to define a relationship to a person or
entity and means a person or entity who, directly or indirectly through one or
more intermediaries, controls, is controlled by, or is under common control
with, such person or entity.
BASE SALARY shall have the meaning assigned thereto in SECTION 4(a) hereof.
BONUS shall have the meaning assigned thereto in SECTION 4(b) hereof.
BOARD shall mean the board of directors of the Company.
CAUSE shall have the meaning assigned thereto in SECTION 5(c) hereof.
CHANGE IN CONTROL shall be deemed to have occurred if (i) the Company or
Parent merges or consolidates, or agrees to merge or to consolidate, with any
other corporation (other than a wholly-owned direct or indirect subsidiary of
the Company) and in which Company or Parent shareholders own less than 50% of
the surviving, resulting or continuing entity, (ii) the Company or Parent sells,
or agrees to sell, all or substantially all of its assets to any other person or
entity, (iii) the Company or Parent is dissolved, (iv) any third person or
entity together with its Affiliates (other than Code ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC and
its Affiliates or a management buyout of which Employee is a member) shall
become or shall have publicly announced its intention to become (by tender offer
or otherwise), directly or indirectly, the beneficial owner of at least 50% of
the common stock of the Company or Parent or (v) the individuals who constitute
the Board as of the Effective Date (the "INCUMBENT BOARD") or the individuals
who constitute the Parent Board as of the Effective Date (the "INCUMBENT PARENT
BOARD") shall cease for any reason to constitute at least a majority of the
Board or Parent Board, respectively; PROVIDED, that any person becoming a
director of the Company or Parent whose election or nomination for election was
approved by a majority of the members of the Incumbent Board or Incumbent Parent
Board,
respectively, or who shall be appointed upon the nomination or request of Code
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ IV LP or its Affiliates shall be considered, for the purposes
of this Agreement, a member of the Incumbent Board or the Incumbent Parent
Board, respectively.
COMMON STOCK means the Company's common stock, par value $.01 per share.
COMPANY means Gundle/SLT Environmental, Inc., a Delaware corporation, with
its corporate headquarters located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇, a
wholly owned subsidiary of Parent.
COMPETITIVE BUSINESS shall have the meaning assigned thereto in SECTION
10(b) hereof.
CONFIDENTIAL INFORMATION shall have the meaning assigned thereto in SECTION
8(b) hereof.
DATE OF TERMINATION means the earliest to occur of (i) the date of the
Employee's death, (ii) the last day of the Employment Period, or (iii) the date
of receipt of the Notice of Termination, or such later date as may be prescribed
in the Notice of Termination in accordance with SECTION 5(g) hereof.
DISABILITY means an illness or other disability which prevents the Employee
from discharging his responsibilities under this Agreement for a period of 180
consecutive calendar days or an aggregate of 180 calendar days in any calendar
year, during an Employment Period, all as determined in good faith by the Board
or the Parent Board (or a committee thereof).
EFFECTIVE DATE has the meaning set forth in the introduction of this
Agreement.
EMPLOYEE means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
EMPLOYMENT PERIOD shall have the meaning assigned thereto in SECTION 3
hereof.
INITIAL EMPLOYMENT PERIOD shall mean the period commencing on the Effective
Date and ending on the 18 month anniversary of the Effective Date.
MARKET shall have the meaning assigned thereto in SECTION 10(c) hereof.
NOTICE OF TERMINATION shall have the meaning assigned thereto in SECTION
5(g) hereof.
PARENT shall mean GEO Holdings Corp., a Delaware corporation, which owns
all of the outstanding capital stock of the Company.
PARENT BOARD shall mean the board of directors of Parent.
RESTRICTED PERIOD shall have the meaning assigned thereto in SECTION 10(d)
hereof.
VACATION TIME shall have the meaning assigned thereto in SECTION 4(d)
hereof.
WITHOUT CAUSE shall have the meaning assigned thereto in SECTION 5(d)
hereof.
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WORK PRODUCT shall have the meaning assigned thereto in SECTION 9 hereof.
2. GENERAL DUTIES OF COMPANY AND EMPLOYEE.
(a) The Company agrees to employ the Employee, and the Employee agrees to
accept employment by the Company to serve as the President and Chief
Executive Officer of the Company. The authority, duties and
responsibilities of the Employee shall include those consistent with
such positions in business entities of similar size in the Company's
industry and such other or additional duties as may from time to time
be assigned to the Employee by the Board or Parent Board (or a
committee thereof) consistent with such titles and positions. While
employed hereunder, the Employee shall devote reasonable time and
attention during normal business hours to the affairs of the Company
and use his best efforts to perform faithfully and efficiently his
duties and responsibilities.
(b) The Employee agrees and acknowledges that he owes a fiduciary duty of
loyalty, fidelity and allegiance to act at all times in the best
interests of the Company.
(c) The Employee agrees to comply at all times during the Employment
Period with all applicable policies, rules and regulations of the
Company, including, without limitation, the Company's Code of Ethics
and the Company's policy regarding trading in the Company's Common
Stock or an Affiliate's common stock, as each is in effect from time
to time during the Employment Period.
3. TERM. Unless sooner terminated pursuant to other provisions hereof, the
Employee's period of employment under this Agreement shall be a period of
three years beginning on the Effective Date (the "EMPLOYMENT PERIOD"). This
Agreement and the Employment Period shall automatically be extended for
successive twelve (12) month terms unless either the Company or the
Employee provides a written notice of its/his intent to not extend the
Employment Period not less than 90 calendar days prior to the expiration of
the then current Employment Period ("AUTOMATIC EXTENSION"). Notwithstanding
the foregoing, the Employee's employment shall cease and shall not extend
past the last day of the month in which the Employee attains age 70.
4. COMPENSATION AND BENEFITS.
(a) BASE SALARY. As compensation for services to the Company, the Company
shall pay to the Employee until the Date of Termination an annual base
salary of $432,000 (the "BASE SALARY"). The Board or Parent Board (or
a committee thereof) shall review the Employee's Base Salary no less
than annually and, in its discretion, may increase, but not decrease,
the Base Salary based upon relevant circumstances. If the Employee's
Base Salary is increased at any time, it may not thereafter be
decreased below such amount. The Base Salary shall be payable in equal
semi-monthly installments or in accordance with the Company's
established policy, subject only to such payroll and withholding
deductions as may be required by law and other deductions applied
generally to employees of the Company for insurance and other employee
benefit plans.
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(b) BONUS. In addition to the Base Salary, the Employee shall be awarded,
for each fiscal year until the Date of Termination, an annual bonus
(pursuant to a bonus or incentive plan maintained by the Company as of
the Effective Date) in an amount to be determined by the Board (or a
committee thereof) based upon a bonus program established for
executives generally as of the Effective Date, taking into account the
Employee's Base Salary and position (the "BONUS"); PROVIDED, that the
Company may alter or substitute for, any such bonus plan generally for
all employees or executives (as applicable), in its sole discretion,
as long as such alteration or substitution results in substantially
the same or greater opportunity for Employee to earn a Bonus. For the
year 2004, such Bonus shall be based upon: (i) the Company's
achievement of targeted EBITDA and average working capital versus
sales and achievement of business goals (together, the "BONUS
MEASURES") as established by the Board in the approved budget; (ii) if
the Company achieves the targeted amounts for the Bonus Measures, the
Bonus shall be no less than 70% of the Employee's Base Salary; and
(iii) the Bonus shall be increased to the extent the Company's
achievement of the Bonus Measures exceeds the targeted amounts, to a
maximum of 140% of the Base Salary. Each Bonus shall be payable at a
time to be determined by the Board (or a committee thereof) in its
sole discretion but no later than thirty days after delivery to the
Company of final financial statements certified by its auditors. The
Bonus Measures and percentages of Base Salary used in 2004 shall be
used as Bonus Measures and percentages of Base Salary for future Bonus
years unless such Bonus Measures and percentages of Base Salary are
changed or altered for participating executives generally by the Board
in advance of the applicable future Bonus year.
(c) STOCK OPTIONS. The Employee shall be entitled to receive grants of
stock options when awarded to executives generally, in amounts and on
terms commensurate with his position, as determined from time to time
by the Board or the Parent Board acting in good faith subject to the
terms of the applicable stock option plan and agreement.
(d) VACATION. Until the Date of Termination, the Employee shall be
entitled to paid vacation during each one-year period in accordance
with the Company's standard practices for executives commencing on the
Effective Date (the "VACATION TIME"). Any Vacation Time not taken
during the applicable one-year period will not accrue and will expire
on the applicable anniversary of the Effective Date.
(e) INCENTIVE SAVINGS AND RETIREMENT PLANS. Until the Date of Termination,
the Employee shall be eligible to participate in and shall receive all
benefits under all executive incentive, savings and retirement plans
and programs maintained as of the Effective Date or hereinafter
established by the Company for the benefit of its executive officers
and/or employees subject to the terms and conditions contained in the
governing documents of such plans; PROVIDED, that the Company may
alter or substitute for, any such plan generally for all employees or
executives (as applicable), in its sole discretion, as long as such
alteration or substitution results
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in substantially the same savings and retirement benefits being
available to Employee.
(f) WELFARE BENEFIT PLANS. Until the Date of Termination, the Employee
and/or the Employee's family, as the case may be, shall be eligible to
participate in and shall receive all benefits under each welfare
benefit plan of the Company maintained as of the Effective Date or
hereinafter established by the Company for the benefit of its
employees subject to the terms and conditions contained in the
governing documents of such plans; PROVIDED, that the Company may
alter, substitute for, or discontinue any such plan generally for all
employees or executives (as applicable), in its sole discretion, as
long as such alteration or substitution results in substantially the
same welfare benefits being available to Employee. Such welfare
benefit plans may include, without limitation, medical, dental,
disability, group life, accidental death and travel accident insurance
plans and programs.
(g) AUTOMOBILE. The Company shall provide Employee with an automobile, of
the quality as in effect on the date of this Agreement and to be
updated in accordance with the Company's procedures for employees
generally, for business and personal use and shall pay all reasonable
use and maintenance costs related to such automobile, including, but
not limited to, gasoline, oil, tires, repairs, maintenance, and
insurance.
(h) REIMBURSEMENT OF EXPENSES. The Employee may from time to time until
the Date of Termination incur various business expenses customarily
incurred by persons holding positions of like responsibility,
including, without limitation, travel, entertainment and similar
expenses incurred for the benefit of the Company. Subject to the
Company's policy regarding the reimbursement of such expenses as in
effect from time to time during the Employment Period, which does not
necessarily allow reimbursement of all such expenses, the Company
shall reimburse the Employee for such expenses from time to time, at
the Employee's request, and the Employee shall account to the Company
for all such expenses.
5. TERMINATION.
(a) DEATH. This Agreement shall terminate automatically upon the death of
the Employee.
(b) DISABILITY. The Company may terminate this Agreement, upon written
notice to the Employee delivered in accordance with SECTIONS 5(g) and
12(c) hereof, upon the Disability of the Employee.
(c) CAUSE. The Company may terminate this Agreement, upon written notice
to the Employee delivered in accordance with SECTIONS 5(g) and 12(c)
hereof, for Cause. For purposes of this Agreement, "CAUSE" means (i)
the commission by the Employee (as determined in good faith by the
Board or the Parent Board or a committee thereof) of a crime or
criminal offense involving theft, fraud, embezzlement or other felony
or otherwise involving dishonesty, in each case
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with respect to the Company, (ii) the Employee's willful refusal,
without proper legal cause, to perform his duties and responsibilities
as contemplated in this Agreement or (iii) the Employee's engaging (A)
in activities which would constitute a material breach of a material
term of this Agreement, the Company's Code of Ethics, the Company's
policies and regulations, including but not limited to, policies
regarding trading in the Common Stock or reimbursement of business
expenses or any other applicable policies, rules or regulations of the
Company, or (B) in improper conduct which would result in a material
injury to the business, condition (financial or otherwise), results of
operations or prospects of the Company or its Affiliates (as
determined in good faith by the Board or the Parent Board or a
committee thereof), (iv) willful misconduct by Employee injurious to
the Company, or (v) conduct by Employee tending to bring the Company
into substantial public disgrace or disrepute; PROVIDED, HOWEVER, that
no termination pursuant to clause (ii) hereof shall become effective
unless Employee shall have failed to cure such Cause to the
satisfaction of the Board or the Parent Board in their sole discretion
within thirty (30) days after receiving a Notice of Termination
detailing the alleged Cause.
(d) WITHOUT CAUSE. The Company may terminate this Agreement Without Cause,
upon written notice to the Employee delivered in accordance with
SECTIONS 5(g) and 12(c) hereof. For purposes of this Agreement, the
Employee will be deemed to have been terminated "WITHOUT CAUSE" if the
Employee is terminated by the Company for any reason, including
non-renewal of this Agreement pursuant to SECTION 3, but excluding
termination for Cause, Disability or death.
(e) GOOD REASON. The Employee may terminate his employment hereunder for
Good Reason, upon written notice to the Company delivered in
accordance with SECTIONS 5(g) and 12(c) hereof. For purposes of this
Agreement, "GOOD REASON" shall mean (i) a material diminution of the
Employee's title, authority, status or responsibilities; (ii) a
material breach by the Company of this Agreement; (iii) the Company
requires Employee to locate his office to a location outside a thirty
mile radius of the Houston, Texas metropolitan area without the
consent of Employee, which consent will not be unreasonably withheld;
or (iv) Employee dies or becomes permanently disabled; PROVIDED,
HOWEVER, that the Company shall have the opportunity to cure the
reasons contained in clauses (i), (ii) or (iii) for thirty (30) days
following receipt by the Company of a Notice of Termination from
Employee detailing the alleged Good Reason.
(f) VOLUNTARY TERMINATION. The Employee may voluntarily terminate this
Agreement, upon written notice to the Company delivered in accordance
with SECTIONS 5(g) and 12(c) hereof.
(g) NOTICE OF TERMINATION. Any termination of this Agreement by the
Company for Cause, Without Cause or as a result of the Employee's
Disability, the Employee's Termination for Good Reason, or Voluntary
Termination by the Employee, shall be communicated by Notice of
Termination to the other party hereto given in accordance with this
Agreement. For purposes of this Agreement, a "NOTICE OF
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TERMINATION" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth
in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision
so indicated and (iii) specifies the termination date, if such date is
other than the date of receipt of such notice (which termination date
shall not be more than 30 days after the giving of such notice).
6. OBLIGATIONS OF COMPANY UPON TERMINATION.
(a) CAUSE OR VOLUNTARY TERMINATION BY EMPLOYEE. If this Agreement shall be
terminated either by the Company for Cause or Voluntary Termination by
Employee, the Company shall pay to the Employee:
(i) payment in accordance with regular payroll procedures of
Employee's Base Salary (as in effect on the Date of
Termination) due through the Date of Termination; and
(ii) all benefits under the Company's benefit plans and programs in
which Employee participates, subject to the terms and
conditions of such plans. Employee's participation in all
Company benefit plans and programs shall cease as of the Date
of Termination subject to the terms and conditions of the
governing plan documents of such plans.
(b) DURING THE INITIAL EMPLOYMENT PERIOD: WITHOUT CAUSE, DISABILITY OR FOR
GOOD REASON. If during the Initial Employment Period, this Agreement
shall be terminated by the Company Without Cause, or due to Employee's
Disability, or by the Employee for Good Reason, the Company shall pay
to the Employee, (i) payment in accordance with regular payroll
procedures of Employee's Base Salary (as in effect on the Date of
Termination) due through the Date of Termination; (ii) payment of a
pro rata Bonus for the period through the Date of Termination; (iii)
all benefits under the Company's benefit plans and programs in which
Employee participates, subject to the terms and conditions of such
plans; PROVIDED, HOWEVER, that group medical benefits for Employee and
dependents of Employee on the Date of Termination shall be continued
for a period of three years, with premiums to be paid by Employee at
the same rate paid by employees who have not been terminated and such
period of coverage shall not be offset by any period of group health
continuation coverage required under the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended ("COBRA") and (iv) payment in a
lump sum on or within ten days following the applicable Date of
Termination of an amount equal to the sum of (A) three times the base
salary as in effect on the Date of Termination and (B) three times the
highest Bonus received in any one of the three years preceding the
Date of Termination. All amounts shall be paid in accordance with the
Company's normal payroll practices and subject to applicable federal,
state and local taxes.
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(c) AFTER THE INITIAL EMPLOYMENT PERIOD AND BEFORE A CHANGE IN CONTROL:
WITHOUT CAUSE, DISABILITY OR FOR GOOD REASON. If after the expiration
of the Initial Employment Period but before a Change in Control, this
Agreement shall be terminated by the Company Without Cause, or due to
Employee's Disability, or by the Employee for Good Reason, the Company
shall pay to the Employee, (i) payment in accordance with regular
payroll procedures of Employee's Base Salary (as in effect on the Date
of Termination) due through the Date of Termination; (ii) payment of a
pro rata Bonus for the period through the Date of Termination; (iii)
all benefits under the Company's benefit plans and programs in which
Employee participates, subject to the terms and conditions of such
plans; PROVIDED, HOWEVER, that group medical benefits for Employee and
dependents of Employee on the Date of Termination shall be continued
for a period of 18 months, with premiums to be paid by Employee at the
same rate paid by employees who have not been terminated and such
period of coverage shall not be offset by any period of group health
continuation coverage required under COBRA and (iv) an amount, payable
pro rata over a period of 18 months, equal to the sum of (A) one and
one-half times the Base Salary as in effect on the Date of Termination
and (B) one and one-half times the Bonus paid for the immediately
preceding full year. All amounts shall be paid in accordance with the
Company's normal payroll practices and subject to applicable federal,
state and local taxes.
(d) AFTER A CHANGE IN CONTROL: WITHOUT CAUSE, DISABILITY OR FOR GOOD
REASON. If after a Change in Control, this Agreement shall be
terminated by the Company Without Cause, or due to Employee's
Disability, or by the Employee for Good Reason, the Company shall pay
to the Employee, (i) payment in accordance with regular payroll
procedures of Employee's Base Salary (as in effect on the Date of
Termination) due through the Date of Termination; (ii) payment of a
pro rata Bonus for the period through the Date of Termination; (iii)
all benefits under the Company's benefit plans and programs in which
Employee participates, subject to the terms and conditions of such
plans; PROVIDED, HOWEVER, that group medical benefits for Employee and
dependents of Employee on the Date of Termination shall be continued
for a period of three years, with premiums to be paid by Employee at
the same rate paid by employees who have not been terminated and such
period of coverage shall not be offset by any period of group health
continuation coverage required under COBRA; and (iv) payment in a lump
sum on or within ten days following the applicable Date of Termination
of an amount equal to the sum of (A) three times the Base Salary as in
effect on the Date of Termination and (B) three times the highest
Bonus received in any one of the three years preceding the Date of
Termination. All amounts shall be subject to applicable federal, state
and local taxes, and (excepting payment pursuant to clause (iv) of the
preceding sentence) paid in accordance with the Company's normal
payroll practices.
(e) CHANGE IN CONTROL: REQUIREMENT OF AN ADDITIONAL PAYMENT IN CERTAIN
CIRCUMSTANCES.
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(i) In the event that Employee is deemed to have received an
"excess parachute payment" (as defined in Section 280G(b) of
the Code) which is subject to the excise taxes (the "EXCISE
TAXES") imposed by Section 4999 of the Code in respect of any
payment pursuant to this Agreement or any other agreement,
plan, instrument or obligation, in whatever form, the Company
shall make the Additional Payment (defined below) to Employee
notwithstanding any contrary provision in this Agreement or any
other agreement, plan, instrument or obligation.
(ii) The term "ADDITIONAL PAYMENT" means a cash payment in an amount
equal to the sum of (i) all Excise Taxes payable by Employee,
plus (ii) all additional Excise Taxes and federal or state
income taxes to the extent such taxes are imposed in respect of
the Additional Payment, such that Employee shall be in the same
after-tax position and shall have received the same benefits
that he would have received if the Excise Taxes had not been
imposed. For purposes of calculating any income taxes
attributable to the Additional Payment, Employee shall be
deemed for all purposes to be paying income taxes at the
highest marginal federal income tax rate, taking into account
any applicable surtaxes and other generally applicable taxes
which have the effect of increasing the marginal federal income
tax rate and, if applicable, at the highest marginal state
income tax rate, to which the Additional Payment and Employee
are subject. An example of the calculation of the Additional
Payment is set forth below. Assume that the Excise Tax rate is
20%, the highest federal marginal income tax rate is 40% and
Employee is not subject to state income taxes. Further assume
that Employee has received an excess parachute payment in the
amount of $200,000, on which $40,000 ($200,000 x 20%) in Excise
Taxes are payable. The amount of the required Additional
Payment is thus computed to be $100,000, i.e., the Additional
Payment of $100,000, less additional Excise Taxes on the
Additional Payment of $20,000 (i.e., 20% x $100,000) and income
taxes of $40,000 (i.e., 40% x $100,000), yields $40,000, the
amount of the Excise Taxes payable in respect of the original
excess parachute payment.
(iii) Employee agrees to reasonably cooperate with the Company to
minimize or eliminate the amount of the excess parachute
payments, including, without limitation, taking all actions
necessary to allow the Company to satisfy the requirements of
Section 280G(b)(5)(A)(ii) of the Code and assisting the Company
in establishing that some or all of the payments received by
Employee that are "contingent on a change," as described in
Section 280G(b)(2)(A)(i) of the Code, are reasonable
compensation for personal services actually rendered by
Employee before the date of such change or to be rendered by
Employee on or after the date of such change. In the event that
the Company is able to establish that the amount of the excess
parachute payments is less than originally anticipated by
Employee, Employee shall refund to the Company any excess
Additional Payment to the extent not required to pay Excise
Taxes or income taxes
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(including those incurred in respect of receipt of the
Additional Payment). Notwithstanding the foregoing, Employee
shall not be required to take any action which his attorney or
tax advisor advises him in writing (i) is improper or (ii)
exposes Employee to personal liability. Employee may require
the Company to deliver to Employee an indemnification agreement
in form and substance reasonably satisfactory to Employee as a
condition to taking any action required by this subsection
(iii).
(iv) The Company shall make any payment required to be made under
this SECTION 6(e) in a cash lump sum after the date on which
Employee received or is deemed to have received any such excess
parachute payment. Any payment required to be paid by the
Company under this SECTION 6(e) which is not paid within 30
days of receipt by the Company of Employee's written demand
therefor shall thereafter be deemed delinquent, and the Company
shall pay to Employee immediately upon demand interest at an
interest rate equal to 10% per annum from the date such payment
becomes delinquent to the date of payment of such delinquent
sum with interest.
(v) In the event that there is any change to the Code which results
in the recodification of Section 280G or Section 4999 of the
Code, or in the event that either such section of the Code is
amended, replaced or supplemented by other provisions of the
Code of similar import ("SUCCESSOR PROVISIONS"), then this
Agreement shall be applied and enforced with respect to such
new Code provisions in a manner consistent with the intent of
the parties as expressed herein, which is to assure that
Employee is in the same after-tax position and has received the
same benefits that he would have been in and received if any
taxes imposed by Section 4999 (or any Successor Provisions) had
not been imposed.
(vi) All determinations required to be made under this SECTION 6(e)
including, without limitation, whether and when a Additional
Payment is required, and the amount of such Additional Payment
and the assumptions to be utilized in arriving at such
determinations, unless otherwise expressly set forth in this
Agreement, shall be made within 30 days from the date of the
Change in Control by the independent tax consultant(s) selected
by the Company and reasonably acceptable to Employee ("TAX
CONSULTANT"). The Tax Consultant must be a qualified tax
attorney or certified public accountant. All fees and expenses
of the Tax Consultant shall be paid in full by the Company. Any
Excise Taxes as determined pursuant to this SECTION 6(d) shall
be paid by the Company to the Internal Revenue Service, or any
other appropriate taxing authority on Employee's behalf within
five (5) business days after receipt of the Tax Consultant's
final determination by the Company and Employee.
(vii) If the Tax Consultant determines that there is substantial
authority (within meaning of Section 6662 of the Code) that no
Excise Taxes are payable by
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Employee, the Tax Consultant shall furnish Employee with a
written opinion that failure to disclose or report the Excise
Taxes on Employee's federal income tax return will not
constitute a substantial understatement of tax or be reasonably
likely to result in the imposition of a negligence or any other
penalty.
(viii) The Company shall indemnify and hold harmless the Employee, on
an after-tax basis, from any costs, expenses, penalties, fines,
interest or other liabilities ("LOSSES") incurred by Employee
with respect to the exercise by the Company of any of its
rights under this SECTION 6(e). The Company shall pay all fees
and expenses incurred under this SECTION 6(e), and shall
promptly reimburse Employee for the reasonable expenses
incurred by Employee in connection with any actions taken by
the Company or required to be taken by Employee hereunder. Any
payments owing to Employee and not made within 30 days of
delivery to the Company of evidence of Employee's entitlement
thereto shall be paid to Employee together with interest at an
interest rate equal to 10% per annum.
(f) The Company shall be required to make the payments provided for in
this SECTION 6, if and only if Employee has executed and delivered to
the Company the General Release substantially in form and substance as
set forth in EXHIBIT A attached hereto and the General Release has
become effective, and only so long as Employee has not revoked or
breached the provisions of the General Release or breached the
provisions of SECTIONS 8, 9 and 10 hereof and does not apply for
unemployment compensation chargeable to the Company or any Affiliate
during the period in which Employee is receiving payments pursuant to
this SECTION 6.
7. EMPLOYEE'S OBLIGATION TO AVOID CONFLICTS OF INTEREST.
(a) In keeping with the Employee's fiduciary duties to the Company and in
addition to the Company's policies and procedures regarding conflicts
of interest, the Employee agrees that he shall not knowingly during
the term of his employment hereunder become involved in a conflict of
interest with the Company, or upon discovery thereof, allow such a
conflict to continue. The Employee further agrees to disclose to the
Company, promptly after discovery, any facts or circumstances which
might involve a conflict of interest with the Company.
(b) The Company and the Employee recognize that it is impossible to
provide an exhaustive list of actions or interests which constitute a
"conflict of interest." Moreover, the Company and the Employee
recognize that there are many borderline situations. In some
instances, full disclosure of facts by the Employee to the Company is
all that is necessary to enable the Company to protect its interests.
In others, if no improper motivation appears to exist and the
Company's interests have not suffered, prompt elimination of the
outside interest will suffice. In still others, it may be necessary
for the Company to terminate the employment relationship.
11
(c) In this connection, it is agreed that any direct or indirect interest
in, connection with or benefit from any outside activities,
particularly commercial activities, which interest might in any way
adversely affect the Company or its Affiliates, involves a possible
conflict of interest; PROVIDED, HOWEVER, that the Company acknowledges
that Employee is a director of Wembley Limited and the Employee's
provision of such services to Wembley Limited is acceptable to the
Company as long as such services do not result in a conflict of
interest. Circumstances in which a conflict of interest on the part of
the Employee would or might arise, and which should be reported
immediately to the Company, include, but are not limited to, the
following:
(i) Ownership of a material interest in any lender, supplier,
contractor, subcontractor, customer or other entity with which
the Company does business;
(ii) Acting in any capacity, including director, officer, partner,
consultant, employee, distributor, agent or the like, for any
lender, supplier, contractor, subcontractor, customer or other
entity with which the Company does business;
(iii) Acceptance, directly or indirectly, of payments, services or
loans from a lender, supplier, contractor, subcontractor,
customer or other entity with which the Company does business,
including, without limitation, gifts, trips, entertainment or
other favors of more than a nominal value, but excluding loans
from publicly held insurance companies and commercial or
savings banks at market rates of interest;
(iv) Improper use of information or facilities to which the Employee
has access in a manner which will be detrimental to the
Company's interests, such as use for the Employee's own benefit
of know-how or information developed through the Company's
business activities;
(v) Improper disclosure or other misuse of information of any kind
obtained through the Employee's connection with the Company;
and
(vi) Acquiring or trading in, directly or indirectly, other
properties or interests connected with the design or marketing
of products or services designed or marketed by the Company.
8. EMPLOYEE'S CONFIDENTIALITY OBLIGATION.
(a) Employee acknowledges that his employment hereunder gives him access
to Confidential Information relating to the business of the Company,
its Affiliates and their customers that must remain confidential.
Employee acknowledges that this information is valuable, special, and
a unique asset of the business of the Company and its Affiliates, and
that it has been and will be developed by the Company and its
Affiliates at considerable effort and expense, and if it were to be
known and used by others engaged in a Competitive Business, it would
be
12
harmful and detrimental to the interests of the Company and its
Affiliates. In consideration of the foregoing, Employee hereby agrees
and covenants that, during and after the Employment Period, Employee
will not, directly or indirectly in one or a series of transactions,
disclose to any person, or use or otherwise exploit for Employee's own
benefit or for the benefit of anyone other than the Company or its
Affiliates, Confidential Information (as defined in SECTION 8(b))
whether prepared by Employee or not; PROVIDED, HOWEVER, that any
Confidential Information may be disclosed (i) to officers,
representatives, employees and agents of the Company and its
Affiliates who need to know such Confidential Information in order to
perform the services or conduct the operations required or expected of
them in the business of the Company or its Affiliates, or (ii)
otherwise in connection with Employee's performance of his duties
hereunder on behalf of the Company. Employee shall not remove any
Confidential Information from the premises of the Company and its
Affiliates, except as required in his normal course of employment by
the Company. Employee shall instruct all persons or entities to whom
any Confidential Information shall be disclosed by him hereunder to
observe the terms and conditions set forth herein as though each such
person or entity was bound hereby. Employee shall have no obligation
hereunder to keep confidential any Confidential Information if and to
the extent disclosure of any such Confidential Information is
specifically required by law; PROVIDED, HOWEVER, that in the event
disclosure is required by applicable law, Employee shall provide the
Company with prompt notice of such requirement, if practicable, prior
to making any disclosure, so that the Company may seek an appropriate
protective order. At the request of the Company, Employee agrees to
deliver to the Company, at any time during the Employment Period, or
thereafter, all Confidential Information which he may possess or
control. Employee agrees that all Confidential Information of the
Company (whether now or hereafter existing) conceived, discovered or
made by him during the Employment Period exclusively belongs to the
Company (and not to Employee). Employee will promptly disclose such
Confidential Information to the Company and perform all actions
reasonably requested by the Company to establish and confirm such
exclusive ownership.
(i) In the event that Employee breaches his obligations in any
material respect under this SECTION 8, the Company, in addition
to pursuing all available remedies under this Agreement, at law
or otherwise, including but not limited to, an injunction, and
without limiting its right to pursue the same, shall cease all
payments and benefits to Employee under SECTION 6 of this
Agreement (provided that the Restricted Period shall continue
as if the payment continued for the period originally provided
for).
(ii) The terms of this SECTION 8 shall survive the termination of
this Agreement regardless of who terminates this Agreement, or
the reasons therefor.
(b) "CONFIDENTIAL INFORMATION" means information, which is used in the
business of the Company or its Affiliates and (i) is proprietary to,
about or created by the Company or its Affiliates, (ii) gives the
Company or its Affiliates some
13
competitive business advantage or the opportunity of obtaining such
advantage or the disclosure of which could be detrimental to the
interests of the Company or its Affiliates, (iii) is designated as
Confidential Information by the Company or its Affiliates, is known by
the Employee to be considered confidential by the Company or its
Affiliates, or from all the relevant circumstances should reasonably
be assumed by the Employee to be confidential and proprietary to the
Company or its Affiliates, or (iv) is not generally known by
non-Company personnel; PROVIDED, that to the extent that the
information described in clauses (i) through (iv) above becomes
generally known to and available for use by the public other than as a
result of Employee's acts or omissions, such information will not be
deemed to be Confidential Information. Such Confidential Information
includes, without limitation, the following types of information and
other information of a similar nature (whether or not reduced to
writing or designated as confidential):
(i) Internal personnel and financial information of the Company or
its Affiliates, vendor information (including vendor
characteristics, services, prices, lists and agreements),
purchasing and internal cost information, internal service and
operational manuals, and the manner and methods of conducting
the business of the Company or its Affiliates;
(ii) Marketing and development plans, price and cost data, price and
fee amounts, pricing and billing policies, quoting procedures,
marketing and sales techniques, forecasts and forecast
assumptions and volumes, and future plans and potential
strategies (including, without limitation, all information
relating to any acquisition prospect and the identity of any
key contact within the organization of any acquisition
prospect) of the Company or its Affiliates which have been or
are being discussed;
(iii) Names of customers and their representatives, contracts
(including their contents and parties), customer services, and
the type, quantity, specifications and content of products and
services purchased, leased, licensed or received by customers
of the Company or its Affiliates;
(iv) Confidential and proprietary information provided to the
Company or its Affiliates by any actual or potential customer,
government agency or other third party (including businesses,
consultants and other entities and individuals);
(v) Any trade secret, confidential study, data, calculations,
software storage media or other compilation of information,
patent, patent application, copyright, trademark, trade-name,
service ▇▇▇▇, service name, "know-how" and trade secrets; and
(vi) Business acquisition plans or any portion or phase of any
scientific or technical information, ideas, discoveries,
designs, computer programs (including source of object codes),
processes, procedures, research or
14
technical data, improvements or other proprietary or
intellectual property of the Company or its Affiliates, whether
or not in written or tangible form, and whether or not
registered, and including all files, records, manuals, books,
catalogues, memoranda, notes, summaries, plans, reports,
records, documents and other evidence thereof.
(c) As a consequence of the Employee's acquisition or anticipated
acquisition of Confidential Information, the Employee shall occupy a
position of trust and confidence with respect to the affairs and
business of the Company and its Affiliates. In view of the foregoing
and of the consideration to be provided to the Employee, the Employee
agrees that it is reasonable and necessary that the Employee make each
of the following covenants:
(i) At any time during the Employment Period and thereafter, the
Employee shall not disclose Confidential Information to any
person or entity, either inside or outside of the Company and
its Affiliates, other than as necessary in carrying out his
duties and responsibilities as set forth in SECTION 2 hereof,
without first obtaining the Company's prior written consent
(unless such disclosure is compelled pursuant to court orders
or subpoena, and at which time the Employee shall give notice
of such proceedings to the Company).
(ii) At any time during the Employment Period and thereafter, the
Employee shall not use, copy or transfer Confidential
Information other than as necessary in carrying out his duties
and responsibilities as set forth in SECTION 2 hereof, without
first obtaining the Company's prior written consent.
(iii) On the Date of Termination, the Employee shall promptly deliver
to the Company (or its designee) all written materials, records
and documents made by the Employee or which came into his
possession prior to or during the Employment Period concerning
the business or affairs of the Company or its Affiliates,
including, without limitation, all materials containing
Confidential Information.
9. INTELLECTUAL PROPERTY, INVENTIONS AND PATENTS. Employee acknowledges that
all discoveries, concepts, ideas, inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports, patent
applications, copyrightable work and mask work (whether or not including
any confidential information) and all registrations or applications related
thereto, all other proprietary information and all similar or related
information (whether or not patentable) which relate to the Company's or
any of its Affiliates' actual or anticipated business, research and
development or existing or future products or services and which are
conceived, developed or made by Employee (whether alone or jointly with
others) while employed by the Company or its predecessor and its
Affiliates, whether before or after the date of this Agreement ("WORK
PRODUCT"), belong to the Company or such Affiliate. Employee shall promptly
disclose such Work Product to the Board or the Parent Board and, at the
Company's expense,
15
perform all actions reasonably requested by the Board or the Parent Board
(whether during or after the Employment Period) to establish and confirm
such ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments). Employee acknowledges that all
Work Product shall be deemed to constitute "works made for hire" under the
U.S. Copyright Act of 1976, as amended. The terms of this SECTION 9 shall
survive termination of this Agreement regardless of who terminates this
Agreement, or the reasons therefor.
10. EMPLOYEE'S NON-COMPETITION OBLIGATION.
(a) Employee acknowledges that the services to be provided by him under
this Agreement give him the opportunity to have special knowledge of
the Company and its Confidential Information and the capabilities of
individuals employed by or affiliated with the Company, and that
interference in these relationships would cause irreparable injury to
the Company. In consideration of this Agreement, including, but not
limited to, the amounts payable by the Company upon termination of
Employee Without Cause, Employee covenants and agrees that:
(i) During the Restricted Period, Employee will not, without the
express written approval of the Board or Parent Board, anywhere
in the Market, directly or, indirectly, in one or a series of
transactions, own, manage, operate, control, invest or acquire
an interest in, or otherwise engage or participate in, whether
as a proprietor, partner, stockholder, lender, director,
officer, employee, joint venturer, investor, lessor, supplier,
customer, agent, representative or other participant, in any
Competitive Business without regard to (A) whether the
Competitive Business has its office, manufacturing or other
business facilities within or without the Market, (B) whether
any of the activities of Employee referred to above occur or
are performed within or without the Market or (C) whether
Employee resides, or reports to an office, within or without
the Market; PROVIDED, HOWEVER, that (x) Employee may, anywhere
in the Market, directly or indirectly, in one or a series of
transactions, own, invest or acquire an interest in up to five
percent (5%) of the capital stock of a Competitive Business
whose capital stock is traded publicly, so long as Employee has
no active participation in the business of such entity or (y)
Employee may accept employment with a successor company to the
Company.
(ii) During the Restricted Period, Employee will not without the
express prior written approval of the Board or the Parent Board
(A) directly or indirectly, in one or a series of transactions,
recruit, solicit or otherwise induce or influence any
proprietor, partner, stockholder, lender, director, officer,
employee, sales agent, joint venturer, investor, lessor,
supplier, customer, agent, representative or any other person
which has a business relationship with any of the Company or
had a business relationship with the Company within the
twenty-four (24) month period preceding the date of the
incident in question, to discontinue, reduce or modify such
16
employment, agency or business relationship with the Company,
or (B) employ or seek to employ or cause any Competitive
Business to employ or seek to employ any person or agent who is
then (or was at any time within six months prior to the date
Employee or the Competitive Business employs or seeks to employ
such person) employed or retained by the Company.
Notwithstanding the foregoing, nothing herein shall prevent
Company from providing a letter of recommendation to an
employee with respect to a future employment opportunity.
(iii) The scope and term of this SECTION 10 would not preclude him
from earning a living with an entity that is not a Competitive
Business.
(iv) The terms of this SECTION 10 shall survive termination of this
Agreement regardless of who terminates this Agreement, or the
reasons therefor.
(b) "COMPETITIVE BUSINESS" means any business which competes, directly or
indirectly, with the Company's, Parent's or any of their subsidiaries'
business, as of the Effective Date, in the Market.
(c) "MARKET" means any county in the United States of America and each
other similar jurisdiction in any other country in which the business
of the Company, Parent or any of their subsidiaries was conducted,
pursued by, or engaged in prior to the date hereof or is conducted or
engaged in or pursued, or is proposed to be conducted, engaged in or
pursued, by the Company, Parent or any of their subsidiaries during
the Employment Period.
(d) "RESTRICTED PERIOD" means (i) with respect to a termination by the
Company for Cause, the period commencing on the date of this Agreement
and continuing for one (1) year from the Date of Termination and (ii)
with respect to a termination for any reason other than by the Company
for Cause, the period commencing on the date of this Agreement and
continuing through the period during which Employee receives payments
from the Company pursuant to SECTION 6 of this Agreement; PROVIDED,
that in the event Employee receives a lump sum payment pursuant to
SECTION 6(b) or (d), the Restricted Period means the period commencing
on the date of this Agreement and continuing for three (3) years from
the Date of Termination.
(e) In the event that Employee breaches his obligations in any material
respect under this SECTION 10, the Company, in addition to pursuing
all available remedies under this Agreement, at law or otherwise,
including but not limited to an injunction, and without limiting its
right to pursue the same, shall cease all payments and benefits to
Employee under SECTION 6 of this Agreement (provided that the
Restricted Period shall continue as if the payment continued for the
period originally provided for).
11. EMPLOYEE'S REPRESENTATIONS. Employee hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement
by Employee do not
17
and shall not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which
Employee is a party or by which he is bound, (ii) Employee is not a party
to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon
the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of Employee, enforceable in
accordance with its terms. Employee hereby acknowledges and represents that
he has consulted with independent legal counsel regarding his rights and
obligations under this Agreement and that he fully understands the terms
and conditions contained herein.
12. MISCELLANEOUS.
(a) ATTORNEY'S FEES. Except as otherwise provided herein, Employee's
reasonable attorneys' fees actually incurred in connection with
negotiating and/or enforcing this Agreement shall be paid by the
Company.
(b) INSURANCE. The Company may, at its discretion, apply for and procure
in its own name and for its own benefit life and/or disability
insurance on Employee in any amount or amounts considered advisable.
Employee agrees to cooperate in any medical or other examination,
supply any information and execute and deliver any applications or
other instruments in writing as may be reasonably necessary to obtain
and constitute such insurance; PROVIDED, that the Company shall
request that any such information be held in confidence by the
applicable insurance company.
(c) NOTICES. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when delivered by
hand or mailed by registered or certified mail, return receipt
requested, as follows (provided that notice of change of address shall
be deemed given only when received):
If to the Company to:
Gundle/SLT Environmental, Inc.
c/o Code ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLC
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Employee to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
18
or to such other names or addresses as the Company or the Employee, as
the case may be, shall designate by notice to the other party hereto
in the manner specified in this SECTION 12(c).
(d) WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement shall neither operate nor be construed as
a waiver of any subsequent breach by any party.
(e) NO MITIGATION; NO OFFSET. In the event of any termination of the
Employee's employment hereunder, the Employee shall be under no
obligation to seek other employment or otherwise mitigate the
obligations of the Company under this Agreement, and there shall be no
offset against amounts or benefits due the Employee under this
Agreement or otherwise on account of (a) any claim that the Company
may have against him or (b) any remuneration or other benefit earned
or received by the Employee after such termination.
(f) ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors, legal representatives and
assigns, and upon the Employee, his heirs, executors, administrators,
representatives and assigns; PROVIDED, HOWEVER, the Employee agrees
that his rights and obligations hereunder are personal to him and may
not be assigned without the express written consent of the Company.
(g) ENTIRE AGREEMENT; NO ORAL AMENDMENTS. This Agreement, together with
any exhibit attached hereto and any document, policy, rule or
regulation referred to herein, replaces and merges all previous
agreements and discussions relating to the same or similar subject
matter between the Employee and the Company (including, without
limitation, that certain Executive Employment Agreement, dated as of
September 18, 2002, between Employee and the Company) and constitutes
the entire agreement between the Employee and the Company with respect
to the subject matter of this Agreement. This Agreement may not be
modified in any respect by any verbal statement, representation or
agreement made by any employee, officer, or representative of the
Company or by any written agreement unless signed by an officer of the
Company who is expressly authorized by the Company to execute such
document.
(h) ENFORCEABILITY. If any provision of this Agreement or application
thereof to anyone or under any circumstances shall be determined to be
invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provisions or applications of this Agreement
which can be given effect without the invalid or unenforceable
provision or application.
(i) JURISDICTION; VENUE. The laws of the State of Texas shall govern the
interpretation, validity and effect of this Agreement without regard
to the place of execution or the place for performance thereof, and
the Company and the Employee agree that the state and federal courts
situated in ▇▇▇▇▇▇ County, Texas shall have personal jurisdiction over
the Company and the Employee to hear all disputes arising under
19
this Agreement. This Agreement is to be at least partially performed
in ▇▇▇▇▇▇ County, Texas, and as such, the Company and the Employee
agree that venue shall be proper with the state or federal courts in
▇▇▇▇▇▇ County, Texas to hear such disputes. In the event either the
Company or the Employee is not able to effect service of process upon
the other party hereto with respect to such disputes, the Company and
the Employee expressly agree that the Secretary of State for the State
of Texas shall be an agent of the Company and/or the Employee to
receive service of process on behalf of the Company and/or the
Employee with respect to such disputes.
(j) INDEMNIFICATION.
(i) If Employee is made a party or is threatened to be made a party
to or is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a
"PROCEEDING"), by reason of the fact that he is or was a
director or officer of the Company or is or was serving at the
request of the Company as a director, officer, employee,
fiduciary, or agent of another corporation or of a partnership,
joint venture, trust or other enterprise, Employee shall be
indemnified and held harmless by the Company to the fullest
extent which it is empowered to do so by the General
Corporation Law of the State of Delaware, as the same exists or
may hereafter be amended against all expense, liability and
loss (including attorneys' fees actually and reasonably
incurred by such person in connection with such proceeding) and
such indemnification shall inure to the benefit of his heirs,
executors and administrators; PROVIDED, HOWEVER, that, except
as provided in SECTION 12(j)(ii) hereof, the Company shall
indemnify any such person seeking indemnification in connection
with a proceeding initiated by such person only if such
proceeding was authorized by the Board.
(ii) Any indemnification of Employee under SECTION 12(j)(i) or
advance of expenses under SECTION 12(j)(iv) shall be made
promptly, and in any event within 30 days, upon the written
request of the Employee. If a determination by the Company that
the Employee is entitled to indemnification pursuant to this
SECTION 12(j) is required, and the Company fails to respond
within sixty days to a written request for indemnity, the
Company shall be deemed to have approved the request. If the
Company denies a written request for indemnification or
advancing of expenses, in whole or in part, or if payment in
full pursuant to such request is not made within 30 days, the
right to indemnification or advances as granted by this SECTION
12(j) shall be enforceable by the Employee in any court of
competent jurisdiction. Employee's costs and expenses incurred
in connection with successfully establishing his right to
indemnification, in whole or in part, in any such action shall
also be indemnified by the Company. It shall be a defense to
any such action (other than an action brought to enforce a
claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required
20
undertaking, if any, has been tendered to the Company) that the
Employee has not met the standards of conduct which make it
permissible under the General Corporation Law of the State of
Delaware for the Company to indemnify the Employee for the
amount claimed, but the burden of such defense shall be on the
Company. Neither the failure of the Company (including the
Board, its independent legal counsel, or its stockholders) to
have made a determination prior to the commencement of such
action that indemnification of the Employee is proper in the
circumstances because he has met the applicable standard of
conduct set forth in the General Corporation Law of the State
of Delaware, nor an actual determination by the Company
(including the Board, its independent legal counsel, or its
stockholders) that the Employee has not met such applicable
standard of conduct, shall be a defense to the action or create
a presumption that the Employee has not met the applicable
standard of conduct.
(iii) The Company may purchase and maintain insurance on its own
behalf and on behalf of any person who is or was a director,
officer, employee, fiduciary, or agent of the Company or was
serving at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability
asserted against him or her and incurred by him or her in any
such capacity, whether or not the Company would have the power
to indemnify such person against such liability under its
bylaws or the provisions of this Agreement.
(iv) Expenses incurred by Employee described in SECTION 12(j)(i) in
defending a proceeding shall be paid by the Company in advance
of such proceeding's final disposition unless otherwise
determined by the Board in the specific case upon receipt of an
undertaking by or on behalf of the Employee to repay such
amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Company.
(k) INJUNCTIVE RELIEF. The Company and the Employee agree that a breach of
any term of SECTIONS 8, 9 or 10 of this Agreement by the Employee
would cause irreparable damage to the Company and that, in the event
of such breach, the Company shall have, in addition to any and all
remedies of law, the right to any injunction, specific performance and
other equitable relief to prevent or to redress the violation of the
Employee's duties or responsibilities hereunder.
(l) ARBITRATION.
(i) If a dispute arises about whether Cause or Good Reason has
occurred, the Employee's Termination Date shall be deferred
until such dispute is resolved under American Arbitration
Association rules for the resolution of employment disputes
(the "RULES"). Any arbitration hereunder shall be conducted
before a panel of three arbitrators unless the parties mutually
agree that the arbitration shall be conducted before a single
arbitrator. The
21
arbitrators shall be selected (from lists provided by the AAA)
through mutual agreement of the parties, if possible. If the
parties fail to reach agreement upon appointment of arbitrators
within twenty (20) days following receipt by one party of the
other party's notice of desire to arbitrate, then within five
(5) days following the end of such 20-day period, each party
shall select one arbitrator who, in turn, shall within five (5)
days jointly select the third arbitrator to comprise the
arbitration panel hereunder. The site for any arbitration
hereunder shall be in ▇▇▇▇▇▇ County, Texas, unless otherwise
mutually agreed by the parties, and the parties hereby waive
any objection that the forum is inconvenient.
(ii) The party submitting any matter to arbitration shall do so in
accordance with the Rules. Notice to the other party shall
state the question or questions to be submitted for decision or
award by arbitration.
(iii) The arbitrator shall set the date, time and place for each
hearing, and shall give the parties advance written notice in
accordance with the Rules. Any party may be represented by
counsel or other authorized representative at any hearing. The
arbitration shall be governed by the Federal Arbitration Act, 9
U.S.C. Sections 1 et. seq. (or its successor). The arbitrator
shall apply the substantive law and the law of remedies, if
applicable, of the State of Texas to the claims asserted to the
extent that the arbitrator determines that federal law is not
controlling.
(iv) (1) Any award of an arbitrator shall be final and binding upon
the parties to such arbitration, and each party shall
immediately make such changes in its conduct or provide such
monetary payment or other relief as such award requires. The
parties agree that the award of the arbitrator shall be final
and binding and shall be subject only to the judicial review
permitted by the Federal Arbitration Act; and (2) the parties
hereto agree that the arbitration award may be entered with any
court having jurisdiction and the award may then be enforced as
between the parties, without further evidentiary proceedings,
the same as if entered by the court at the conclusion of a
judicial proceeding in which no appeal was taken. The Company
and the Employee hereby agree that a judgment upon any award
rendered by an arbitrator may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law.
(v) Each party shall pay any monetary amount required by the
arbitrator's award, and the fees, costs and expenses for its
own counsel, witnesses and exhibits, unless otherwise
determined by the arbitrator in the award. The compensation and
costs and expenses assessed by the arbitrator(s) and the AAA
shall be split evenly between the parties unless otherwise
determined by the arbitrator in the award. If court proceedings
to stay litigation or compel arbitration are necessary, the
party who opposes such proceedings to stay litigation or compel
arbitration, if such party is unsuccessful, shall
22
pay all associated costs, expenses, and attorney's fees which
are reasonably incurred by the other party as determined by the
arbitrator.
(m) EMPLOYEE'S COOPERATION. During the Employment Period and thereafter,
Employee shall cooperate with the Company and its Affiliates in any
internal investigation, any administrative, regulatory or judicial
proceeding or any dispute with a third party as reasonably requested
by the Company (including, without limitation, Employee being
available to the Company upon reasonable notice for interviews and
factual investigations, appearing at the Company's request to give
testimony without requiring service of a subpoena or other legal
process, volunteering to the Company all pertinent information and
turning over to the Company all relevant documents which are or may
come into Employee's possession, all at times and on schedules that
are reasonably consistent with Employee's other permitted activities
and commitments). In the event the Company requires Employee's
cooperation in accordance with this SECTION 12(m), the Company shall
reimburse Employee for reasonable travel expenses (including lodging
and meals) upon submission of receipts and in the event such
cooperation is provided by the Employee after the termination of the
Employment Period, the Company will pay Employee $500 for each day
Employee provides such cooperation.
(n) INDEMNIFICATION AND REIMBURSEMENT OF PAYMENTS ON BEHALF OF EMPLOYEE.
The Company and its Affiliates shall be entitled to deduct or withhold
from any amounts owing from the Company or any of its Affiliates to
Employee any federal, state, local or foreign withholding taxes,
excise tax, or employment taxes ("TAXES") imposed with respect to
Employee's compensation or other payments from the Company or any of
its Affiliates or Employee's ownership interest in the Company
(including, without limitation, wages, bonuses, dividends, the receipt
or exercise of equity options and/or the receipt or vesting of
restricted equity). In the event the Company or any of its Affiliates
does not make such deductions or withholdings, Employee shall
indemnify the Company and its Affiliates for any amounts paid with
respect to any such Taxes, together with any interest, penalties and
related expenses thereto.
(o) SURVIVAL OF CERTAIN PROVISIONS. Provisions in this Agreement which are
expressed to operate or have effect after the termination of this
Agreement or of the Employment Period shall remain in effect
thereafter, including, without limitation, SECTIONS 6, 8, 9, 10, 11
and 12(c) through 12(p).
(p) TAX DISCLOSURES. Notwithstanding anything herein to the contrary, the
Company and Employee and each other party to the transaction
contemplated hereby (and each affiliate and person acting on behalf of
any such party) agree that each party (and each employee,
representative and other agent of such party) may disclose to any and
all persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to such party or
such person relating to such tax treatment and tax structure, except
to the extent necessary to comply with any
23
applicable federal or state securities laws. This authorization is not
intended to permit disclosure of any other information, including
(without limitation) (i) any portion of any materials to the extent
not related to the tax treatment or tax structure of the transaction,
(ii) the identities of participants or potential participants in the
transaction, (iii) the existence or status of any negotiations, (iv)
any pricing or financial information (except to the extent such
pricing or financial information is related to the tax treatment or
tax structure of the transaction) or (v) any other term or detail not
relevant to the tax treatment or the tax structure of the transaction.
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IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Executive Employment Agreement as of the date first written above.
GUNDLE/SLT ENVIRONMENTAL, INC.
By: /s/ C. WAYNE CASE
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Name: C. Wayne Case
---------------------------------
Title: Vice President
--------------------------------
EMPLOYEE:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
EXHIBIT A
GENERAL RELEASE
I, ▇▇▇▇▇ ▇▇▇▇▇▇, in consideration of and subject to the performance by
Gundle/SLT Environmental, Inc., a Delaware corporation (together with its
subsidiaries, the "COMPANY"), of its obligations under the Employment Agreement,
dated as of May 18, 2004 (the "AGREEMENT"), do hereby release and forever
discharge as of the date hereof the Company and its affiliates and all present
and former directors, officers, agents, representatives, employees, successors
and assigns of the Company and its affiliates and the Company's direct or
indirect owners (collectively, the "RELEASED PARTIES") to the extent provided
below.
1. I understand that any payments or benefits paid or granted to me under
SECTION 6 of the Agreement represent, in part, consideration for signing
this General Release and are not salary, wages or benefits to which I was
already entitled. I understand and agree that I will not receive the
payments and benefits specified in SECTION 6 of the Agreement unless I
execute this General Release and do not revoke this General Release within
the time period permitted hereafter or breach this General Release. Such
payments and benefits will not be considered compensation for purposes of
any employee benefit plan, program, policy or arrangement maintained or
hereafter established by the Company or its affiliates. I also acknowledge
and represent that I have received all payments and benefits that I am
entitled to receive (as of the date hereof) by virtue of any employment by
the Company.
2. Except as provided in paragraph 4 below and except for the provisions of my
Employment Agreement which expressly survive the termination of my
employment with the Company, I knowingly and voluntarily (for myself, my
heirs, executors, administrators and assigns) release and forever discharge
the Company and the other Released Parties from any and all claims, suits,
controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, compensatory damages, liquidated damages, punitive or
exemplary damages, other damages, claims for costs and attorneys' fees, or
liabilities of any nature whatsoever in law and in equity, both past and
present (through the date this General Release becomes effective and
enforceable) and whether known or unknown, suspected, or claimed against the
Company or any of the Released Parties which I, my spouse, or any of my
heirs, executors, administrators or assigns, may have, which arise out of or
are connected with my employment with, or my separation or termination from,
the Company (including, but not limited to, any allegation, claim or
violation, arising under: Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991; the Age Discrimination in Employment
Act of 1967, as amended (including the Older Workers Benefit Protection
Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities
Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment
Retraining and Notification Act; the Employee Retirement Income Security Act
of 1974; any applicable Executive Order Programs; the Fair Labor Standards
Act; or their state or local counterparts; or under any other federal, state
or local civil or human rights law, or under any other local, state, or
federal law, regulation or ordinance; or under any public policy, contract
or tort, or under common law; or arising under any policies, practices or
procedures of the Company; or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, defamation; or any claim for
costs, fees, or other expenses, including attorneys' fees incurred in these
matters) (all of the foregoing collectively referred to herein as the
"CLAIMS").
3. I represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.
4. I agree that this General Release does not waive or release any rights or
claims that I may have under the Age Discrimination in Employment Act of
1967 which arise after the date I execute this General Release. I
acknowledge and agree that my separation from employment with the Company in
compliance with the terms of the Agreement shall not serve as the basis for
any claim or action (including, without limitation, any claim under the Age
Discrimination in Employment Act of 1967).
5. In signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned
or implied. I expressly consent that this General Release shall be given
full force and effect according to each and all of its express terms and
provisions, including those relating to unknown and unsuspected Claims
(notwithstanding any state statute that expressly limits the effectiveness
of a general release of unknown, unsuspected and unanticipated Claims), if
any, as well as those relating to any other Claims hereinabove mentioned or
implied. I acknowledge and agree that this waiver is an essential and
material term of this General Release and that without such waiver the
Company would not have agreed to the terms of the Agreement. I further agree
that in the event I should bring a Claim seeking damages against the
Company, or in the event I should seek to recover against the Company in any
Claim brought by a governmental agency on my behalf, this General Release
shall serve as a complete defense to such Claims. I further agree that I am
not aware of any pending charge or complaint of the type described in
paragraph 2 as of the execution of this General Release.
6. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.
7. I agree that I will forfeit all amounts payable by the Company pursuant to
the Agreement if I challenge the validity of this General Release. I also
agree that if I violate this General Release by suing the Company or the
other Released Parties, I will pay all costs and expenses of defending
against the suit incurred by the Released Parties, including reasonable
attorneys' fees, and return all payments received by me pursuant to the
Agreement.
8. I agree that this General Release is confidential and agree not to disclose
any information regarding the terms of this General Release, except to my
immediate family and any tax, legal or other counsel I have consulted
regarding the meaning or effect hereof or as required by law, and I will
instruct each of the foregoing not to disclose the same to anyone.
Notwithstanding anything herein to the contrary, each of the parties (and
each affiliate and person acting on behalf of any such party) agree that
each party (and each employee, representative, and other agent of such
party) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of this transaction contemplated in the
Agreement and all materials of any kind (including opinions or other tax
analyses) that are provided to such party or such person relating to such
tax treatment and tax structure, except to the extent necessary to comply
with any applicable federal or state securities laws. This authorization is
not intended to permit disclosure of any other information including
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(without limitation) (i) any portion of any materials to the extent not
related to the tax treatment or tax structure of this transaction, (ii) the
identities of participants or potential participants in the Agreement, (iii)
any financial information (except to the extent such information is related
to the tax treatment or tax structure of this transaction), or (iv) any
other term or detail not relevant to the tax treatment or the tax structure
of this transaction.
9. Any non-disclosure provision in this General Release does not prohibit or
restrict me (or my attorney) from responding to any inquiry about this
General Release or its underlying facts and circumstances by the Securities
and Exchange Commission (SEC), the National Association of Securities
Dealers, Inc. (NASD), any other self-regulatory organization or governmental
entity.
10. I agree to reasonably cooperate with the Company in any internal
investigation, any administrative, regulatory, or judicial proceeding or any
dispute with a third party. I understand and agree that my cooperation may
include, but not be limited to, making myself available to the Company upon
reasonable notice for interviews and factual investigations; appearing at
the Company's request to give testimony without requiring service of a
subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents which
are or may come into my possession all at times and on schedules that are
reasonably consistent with my other permitted activities and commitments. I
understand that in the event the Company asks for my cooperation in
accordance with this provision, the Company will reimburse me for reasonable
travel expenses, (including lodging and meals), upon my submission of
receipts and in the event I provide such cooperation after the termination
of the Employment Period, the Company will pay me $500 for each day I
provide such cooperation.
11. I agree not to disparage the Company, its past and present investors,
officers, directors or employees or its affiliates and to keep all
confidential and proprietary information about the past or present business
affairs of the Company and its affiliates confidential unless a prior
written release from the Company is obtained. I further agree that as of the
date hereof, I have returned to the Company any and all property, tangible
or intangible, relating to its business, which I possessed or had control
over at any time (including, but not limited to, company-provided credit
cards, building or office access cards, keys, computer equipment, manuals,
files, documents, records, software, customer data base and other data) and
that I shall not retain any copies, compilations, extracts, excerpts,
summaries or other notes of any such manuals, files, documents, records,
software, customer data base or other data.
12. Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect any
rights or claims arising out of any breach by the Company or by any Released
Party of the Agreement after the date hereof.
13. Whenever possible, each provision of this General Release shall be
interpreted in, such manner as to be effective and valid under applicable
law, but if any provision of this General Release is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or any other jurisdiction, but this General
Release shall be reformed,
3
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.
BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:
(i) I HAVE READ IT CAREFULLY;
(ii) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP
IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER
THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED,
TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE
EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF
1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
AS AMENDED;
(iii) I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
(iv) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE
EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND
CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
(v) I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS
RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __,
_____ TO CONSIDER IT AND THE CHANGES MADE SINCE THE
_______________ __, _____ VERSION OF THIS RELEASE ARE NOT
MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;
(vi) THE CHANGES TO THE AGREEMENT SINCE _______________ ___, _____
EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.
(vii) I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS
RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS
EXPIRED;
(viii) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY
AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
RESPECT TO IT; AND
(ix) I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE
AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN
WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY
AND BY ME.
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DATE:
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