Exhibit 10-K
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 18th day of September,
2002, 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"), to be effective as of January 1,
2002.
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 enter 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 4.1
hereof.
Bonus shall have the meaning assigned thereto in Section 4.2 hereof.
Cause shall have the meaning assigned thereto in Section 5.3 hereof.
Change in Control shall be deemed to have occurred if (i) the Company
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 Gundle/SLT Environmental, Inc. shareholders own less than
50% of the surviving, resulting or continuing entity, (ii) the Company sells, or
agrees to sell, all or substantially all of its assets to any other person or
entity, (iii) the Company is dissolved, (iv) any third person or entity together
with its Affiliates (other than Wembley Limited 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 (v) the individuals who constitute the Board of Directors of
the Company as of the Effective Date (the "Incumbent Board") shall cease for any
reason to constitute at least a majority of the Board of Directors; provided,
that any person becoming a director whose election or nomination for election
was approved by a majority of the members of
the Incumbent Board shall be considered, for the purposes of this Agreement, a
member of the Incumbent Board.
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 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
Competitive Business shall have the meaning assigned thereto in Section
9.2 hereof.
Confidential Information shall have the meaning assigned thereto in
Section 8.2 hereof.
Date of Termination means the earliest to occur of (i) the date of the
Employee's death, (ii) the last day of 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 5.7 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 of Directors of the Company (or a committee thereof).
Effective Date means January 1, 2002.
Employee means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
Employment Period shall have the meaning assigned thereto in Section 3
hereof.
Market shall have the meaning assigned thereto in Section 9.3 hereof.
Notice of Termination shall have the meaning assigned thereto in
Section 5.7 hereof.
Restricted Period shall have the meaning assigned thereto in Section
9.4 hereof.
Vacation Time shall have the meaning assigned thereto in Section 4.4
hereof.
Without Cause shall have the meaning assigned thereto in Section 5.4
hereof.
2. General Duties of Company and Employee.
2.1 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 and to serve the Company as its Chairman of the
Board 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 of
-2-
Directors (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.
2.2 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.
2.3 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 30
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.
4.1 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 $400,000 (the "Base Salary"). The Board of Directors (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.
4.2 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) in an amount
to be determined by the Board of Directors (or a committee thereof) based upon a
bonus program established for executives generally taking into account the
Employee's Base Salary and position (the "Bonus"). For the year 2002, 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 of Directors 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
-3-
Base Salary. Each Bonus shall be payable at a time to be determined by the Board
of Directors (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 2002 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.
4.3 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 of
Directors acting in good faith subject to the terms of the applicable stock
option plan and agreement.
4.4 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.
4.5 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 currently maintained 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.
4.6 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 currently maintained 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. Such welfare benefit plans may include,
without limitation, medical, dental, disability, group life, accidental death
and travel accident insurance plans and programs.
4.7 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.
4.8 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.
-4-
5. Termination.
5.1 Death. This Agreement shall terminate automatically upon the death
of the Employee.
5.2 Disability. The Company may terminate this Agreement, upon written
notice to the Employee delivered in accordance with Sections 5.7 and 10.1
hereof, upon the Disability of the Employee.
5.3 Cause. The Company may terminate this Agreement, upon written
notice to the Employee delivered in accordance with Sections 5.7 and 10.1
hereof, for Cause. For purposes of this Agreement, "Cause" means (i) the
conviction of the Employee of a crime or criminal offense involving theft,
fraud, embezzlement or other felony, (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 of Directors of the Company or a committee thereof);
provided, however, that no termination pursuant to clause (ii) or (iii) hereof
shall become effective unless Employee shall have failed to cure such Cause to
the satisfaction of the Board of Directors of the Company in their sole
discretion within thirty (30) days after receiving a Notice of Termination
detailing the alleged Cause.
5.4 Without Cause. The Company may terminate this Agreement Without
Cause, upon written notice to the Employee delivered in accordance with Sections
5.7 and 10.1 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 other than Cause, Disability or death.
5.5 Good Reason. Prior to a Change in Control, the Employee may
terminate his employment hereunder for Good Reason. 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; or (iii) the Company requires Employee to locate his
office to a location more than fifty miles outside of the Houston, Texas
metropolitan area.
5.6 Voluntary Termination. The Employee may voluntarily terminate this
Agreement, upon written notice to the Company delivered in accordance with
Sections 5.7 and 10.1 hereof.
5.7 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
-5-
of this Agreement, a "Notice of 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, except as provided
in Section 5.3, shall not be more than 15 days after the giving of such notice).
6. Obligations of Company upon Termination.
6.1 Cause; Death or Voluntary Termination by Employee. If this
Agreement shall be terminated either by the Company for Cause, or as a result of
the Employee's death or Voluntary Termination by Employee, or expiration of the
Employment Period, the Company shall pay to the Employee or, if applicable, to
Employee's estate:
(a) 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
(b) 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.
In addition, if this Agreement is terminated on account of the Employee's death,
a pro rata portion of the Bonus payable pursuant to Section 4.2 due through the
Date of Termination shall be paid to the Employee's estate in a cash lump sum.
6.2 Prior to a Change in Control: Without Cause, Disability or for Good
Reason. If prior to 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 the
lesser of 18 months or the remainder of the Employment Term without the
application of the Automatic Extension described in Section 3 not yet in effect
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 be offset by any period of
group health continuation coverage required under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"); and (iv) an amount,
payable pro rata over a period of 18 months, equal to the sum of (A) the lesser
of (1) one and one-half times the Base Salary in effect during the current year
and (2) the aggregate amount of Base Salary that would be due under the
remaining term of the Employment Period without the application of any Automatic
Extension described in Section 3 not yet in effect; and (B) one and one-half
times the Bonus paid for the
-6-
immediate 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.
6.3 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 the 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 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)) paid in accordance with the Company's normal payroll practices.
6.4 Change in Control; Requirement of an Additional Payment in
Certain Circumstances.
(a) 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.
(b) 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
-7-
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.
(c) Employee agrees to reasonably cooperate with the Company to
minimize the amount of the excess parachute payments, including,
without limitation, 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 (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 (c).
(d) The Company shall make any payment required to be made
under this Section 6.4 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 6.4 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 the highest nonusurious rate per annum allowed
by applicable law from the date such payment becomes delinquent to the
date of payment of such delinquent sum with interest.
(e) 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.
(f) All determinations required to be made under this Section
6.4 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 Change in Control Date by the independent tax
consultant(s) selected by the Company and reasonably acceptable to
Employee ("Tax Consultant").
-8-
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 6.4 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 to Company and Employee.
(g) If the Tax Consultant determines that there is substantial
authority (within the meaning of Section 6662 of the Code) that no
Excise Taxes are payable by 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.
(h) 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 6.4, including, without limitation, any Losses related to the
Company's decision to contest a claim of any imputed income to
Employee. The Company shall pay all fees and expenses incurred under
this Section 6.4, 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 the maximum nonusurious rate
permitted by law.
7. Employee's Obligation to Avoid Conflicts of Interest.
7.1 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.
7.2 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.
7.3 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
-9-
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:
(a) Ownership of a material interest in any lender, supplier,
contractor, subcontractor, customer or other entity with which the
Company does business.
(b) 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.
(c) 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.
(d) 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.
(e) Improper disclosure or other misuse of information of any
kind obtained through the Employee's connection with the Company.
(f) 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.
8.1 (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 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 8.2) whether prepared by Employee or not;
provided, however, that any Confidential Information may be disclosed (i) to
officers, representatives, employees and agents of the
-10-
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 thereof 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). Executive 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.
(b) 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.
(c) The terms of this Section 8 shall survive the termination of this
Agreement regardless of who terminates this Agreement, or the reasons therefor.
8.2 "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 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, or (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, and (iv) is not
generally known by non-Company personnel. 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):
(a) 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;
-11-
(b) 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;
(c) 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;
(d) 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).
(e) 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
(f) 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 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.
8.3 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:
(a) 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).
(b) 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.
-12-
(c) 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. Employee's Non-Competition Obligation.
9.1 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:
(a) During the Restricted Period, Employee will not, without the
express written approval of the Board of Directors of the Company, 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, or
that (y) Employee may accept employment with a successor company to the
Company.
(b) During the Restricted Period, Employee will not without the
express prior written approval of the Board of Directors of the Company (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 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.
-13-
(c) The scope and term of this Section 9 would not preclude him from
earning a living with an entity that is not a Competitive Business.
(d) The terms of this Section 9 shall survive termination of this
Agreement regardless of who terminates this Agreement, or the reasons
therefor.
9.2 "Competitive Business" means any business which competes, directly or
indirectly, with the Company's or an Affiliate's business in the Market.
9.3 "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 or its Affiliates 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 or an Affiliate during the
Employment Period.
9.4 "Restricted Period" means the period commencing on the date of this
Agreement and continuing through (i) prior to a Change in Control, the
eighteen-month anniversary of the Date of Termination or (ii) after a Change in
Control, the three year period after the Date of Termination.
9.5 In the event that Employee breaches his obligations in any material
respect under this Section 9, 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.
10. Miscellaneous.
10.1 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.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman, Compensation Committee
If to the Employee to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-14-
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 10.1.
10.2 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.
10.3 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.
10.4 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.
10.5 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 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.
10.6 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.
10.7 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 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
-15-
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.
10.8 Indemnification. Employee shall be entitled to indemnification
as provided to other officers and directors generally under the Company's
indemnification policies and procedures.
10.9 Injunctive Relief. The Company and the Employee agree that a
breach of any term of Sections 8 or 9 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.
10.10 Arbitration.
(a) 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 commercial
dispute resolution rules and procedures (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 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.
(b) 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.
(c) 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.
(d) (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
-16-
parties hereto agree that the arbitration award may he 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.
(e) 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 pay all
associated costs, expenses, and attorney's fees which are reasonably
incurred by the other party as determined by the arbitrator.
10.11 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.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of the date first written above.
GUNDLE/SLT ENVIRONMENTAL, INC.
By: /s/ E. T. ▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇. ▇. ▇▇▇▇▇▇▇
------------------
Title: Chairman Compensation Committee
-------------------------------
EMPLOYEE:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-17-