EXHIBIT 10.U#
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into by
and between WILLIAM A. RYAN, an individual ("Employee"), and TEAM, INC., a Texas
corporation ("Employer").
R E C I T A L S:
WHEREAS, Employer employed Employee as its President and Chief
Executive Officer effective August 25, 1995; and
WHEREAS, the Employer and the Employee wish to enter into this
Agreement to set forth the terms and conditions of Employee's employment with
Employer;
NOW, THEREFORE, in consideration of the premises, and the covenants
herein set forth, the employment of Employee by Employer and for other good and
valuable consideration, the receipt and sufficiency and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
A G R E E M E N T S:
1. EMPLOYMENT.
(A) AGREEMENT. Subject to the terms and conditions hereinafter stated,
Employer hereby employees Employee, and Employee hereby accepts such employment.
(B) POSITION AND DUTIES OF EMPLOYEE. Employee agrees to serve as
President and Chief Executive Officer of the Employer subject to the Bylaws and
the management policies of the Board of Directors of Employer, along with those
other duties from time to time assigned to Employee by Employer which are
consistent with Employee's position as President and Chief Executive Officer. No
change in the duties of Employee which are consistent with Employee's position
as President and Chief Executive Officer shall result in a termination or
rescission of this Agreement.
(C) TIME DEVOTED. Employee shall serve on a full-time basis and shall
devote such time and attention as may be reasonably necessary to perform
Employee's duties hereunder. Employee shall be permitted to serve on the Boards
of Directors of other corporations and/or to engage in other business activities
for his
1.
own account, provided that none of such other business activities shall be
inconsistent with the terms of Section 6 hereof and provided further that such
activities do not materially interfere with the performance of Employee's duties
hereunder.
By way of expression and not of limitation, Employee shall make
available to Employer any and all business opportunities that become available
to Employee which involve an area of business in which the Employer or any
Affiliate thereof conducts business. Any such business opportunities shall be
the property of Employer.
2. COMPENSATION.
(A) SALARY. As Compensation for services rendered hereunder, Employee
shall be paid Three Hundred Thousand Dollars ($300,000) per year, which amount
shall be paid in equal and consecutive monthly installments ("Periodic Salary
Payments") subject, however, to the provisions of the Salary Deferred
Compensation Agreement between Employee and Employer dated December 21, 1995.
Employee shall receive such upward compensation adjustments and/or bonuses, if
any, as may be determined by Employer in its sole discretion from time to time.
Notwithstanding anything to the contrary contained herein, if, as a result of
any mental or physical disability, Employee hereafter receives payments
("Disability Insurance Payments") under, through, or as a result of any
disability insurance plan or policy sponsored by Employer, the Periodic Salary
Payments which would otherwise be due thereafter shall be reduced by the exact
amount of the Disability Insurance Payments. It is the intention of the
foregoing sentence that the sum of (i) each Periodic Salary Payment and (ii) any
Disability Insurance Payment, be equal to but not in excess of each Periodic
Salary Payment provided for above.
(B) INCENTIVE BONUS. The Employee shall receive bonus compensation in
addition to the salary provided in paragraph 2(a) above which shall be equal to
20% of his salary during each fiscal year of the Term of this Agreement that the
company's after-tax earnings equal or exceed $1,000,000.
(C) OTHER BENEFITS. Employee shall be entitled to paid vacations,
expense reimbursements, automobile allowances and similar perquisites incidental
or necessary to the performance of Employee's duties or in accordance with the
policies and procedures established by Employer from time to time. Employee
shall further be entitled to participate in each plan established to provide
fringe benefits or insurance benefits to employees of Employer at the time
Employee meets the eligibility criteria established for the plan and shall
receive benefits thereunder based on the terms of the plan. Employee's
eligibility and benefit level shall be determined separately for each plan and
all determinations shall be made by the parties charged with responsibility for
such determinations in the plan. Employer is under no obligation to establish
any plan or plans to provide benefits for its employees and this provision shall
not be interpreted to require the establishment of any benefit plan. The terms
of any benefit plans existing, established, or provided hereafter do not
constitute a part of this Agreement and are not incorporated herein for any
purpose.
4. TERM. The Primary Term ("Primary Term") of this Agreement commenced
effective August 25, 1995 and unless sooner terminated by mutual agreement of
the parties or pursuant to the provisions of Paragraph 5 of this Agreement,
shall terminate on the 31st day of August, 1997.
5. TERMINATION.
(A) BY EMPLOYER. The Employer may terminate Employee's employment at
any time "without cause" by giving Employee ninety (90) days' prior written
notice of such termination and Employee shall in such event be entitled to
receive three monthly Periodic Salary Payments as his total severance pay
entitlement. In addition, Employee's employment may be terminated "for cause" by
Employer by giving written notice of termination to Employee. For purposes of
this Paragraph 5(a), the phrase "for cause" shall mean the occurrence of any of
the following events:
(i) Employee shall be determined by Employer to have
materially failed or materially refused to perform faithfully or
diligently the duties of Employee under this Agreement or otherwise to
have breached any material term or provision contained herein, and such
material failure, refusal or breach is not either (y) cured within
thirty (30) days after written notice thereof, specifying with
particularity the nature of such failure, refusal or breach, is
delivered by Employer to Employee, or (z) caused by, or the result of,
a mental or physical disability of Employee; or
(ii) Employee shall be determined by Employer (which
determination shall be required to be made by a vote of not less than
two-thirds (2/3rds) of the Employer's directors) to be guilty of fraud,
dishonesty, violations of statutes or public policy or similar acts of
misconduct.
In making the determinations described above, Employer shall act
reasonably and in good faith. In the event that the Employer terminates
Employee's employment "for cause" as specified above, Employee shall not be
entitled to receive any further compensation from and after the date of such
termination of employment.
(B) BY EMPLOYEE. Employee's employment may be terminated by Employee
"for cause" by giving written notice of termination to Employer. For purposes of
this Paragraph 5(b), the phrase "for cause" shall mean the occurrence of any of
the following:
(i) failure by Employer to pay to Employee the compensation
provided for in Paragraph 2(a) hereof so long as such failure to pay is
not the result of Employer exercising the rights under Paragraph 5(a)
hereof and the failure to cure such failure of payment within five (5)
days after receipt of written notice of such failure from Employee; or
(ii) upon a breach by Employer of any material term or
provision contained herein other than in Paragraph 2(a) and the failure
to cure any such breach within thirty (30) days after receipt of
written notice thereof by Employer.
(C) DEATH. In the event that Employee dies prior to the termination of
his employment under this Agreement, Employee's employment shall terminate and
Employee's estate shall, in lieu of any other rights to payment hereunder, be
entitled to receive the Periodic Salary Payment provided by Paragraph 2(a)
throughout the month which ends on the last day of the month during which
Employee's death occurs.
(D) EFFECT. Except for the provisions of Paragraphs 6, 7, and 8 and the
procedural and remedial provisions of this Agreement, and except as otherwise
specifically provided in Paragraphs 2(a), 5(a), 5(b), 5(c) and 6(f) of this
Agreement, all rights and obligations under this Agreement shall cease upon the
termination of Employee's employment with Employer.
6. PROTECTION OF CONFIDENTIAL INFORMATION AND GOODWILL. Employee hereby
covenants and agrees as follows:
(A) Employee shall not use or disclose, directly or indirectly, for any
reason whatsoever or in any way any confidential or proprietary information or
trade secrets of Employer, including, but not limited to, information with
respect to Employer or its Affiliates (as hereinafter defined) as follows: the
identity, lists, and/or descriptions of any customers of Employer; financial
statements, cost reports, and other financial information; product or service
pricing information; contracts, contract proposals and bidding information;
policies and procedures developed as part of a confidential business plan; and
management systems and procedures, including manuals and supplements thereto,
other than (i) at the direction of Employer during the course of Employee's
employment, (ii) after receipt of the prior written consent of Employer, (iii)
as required by any court or governmental regulatory agency having competent
jurisdiction over Employer or its business or over Employee, or (iv) information
made public by Employer or information known or generally available within
Employer's industry.
(B) During the employment of Employee by Employer and for a period of
two (2) years following the termination of Employee's employment with Employer
for any reason (except pursuant to Paragraph 5(b) hereof), Employee shall not,
directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, engage or participate in any business
that is in competition in any manner whatsoever with the business of Employer or
any Affiliate of Employer (as defined in Paragraph 14 hereof) as such business
is presently conducted and as conducted during the term of the employment of
Employee by Employer; provided, however, that following the termination of
Employee's employment by Employer, the covenant contained in this subparagraph
shall not pertain to activities which occur more than two hundred fifty (250)
miles from any operating facility of Employer or any Affiliate of Employer.
(C) During the employment of Employee by Employer and for a period of
two (2) years following the termination of Employee's employment with Employer
for any reason (except pursuant to Paragraph 5(b) hereof), Employee shall not
solicit or negotiate, directly or indirectly, any contract or agreement that
constitutes or would constitute engaging in competition with the business of
Employer or any Affiliate of Employer as presently conducted and as conducted
during the term of the employment of Employee; provided, however, that following
the termination of Employee's employment by Employer, the covenant contained in
this subparagraph shall not pertain to activities which occur more than two
hundred fifty (250) miles from any operating facility of Employer or any
Affiliate of Employer.
(D) For a period of two (2) years following the termination of
Employee's employment with Employer for any reason, Employee shall not solicit
for employment or employ, directly or indirectly, any employee employed by
Employer or any Affiliate within the one (1) year period immediately prior to
such solicitation for employment.
(E) Employee shall not use the name of Employer or any Affiliate of
Employer in connection with any business that is in competition in any manner
whatsoever with the business of Employer or any Affiliate of Employer as
presently conducted and as conducted during the term of the employment of
Employee by Employer.
(F) Employer and Employee agree that the covenants set forth in this
Paragraph 6 shall accrue to the benefit of Employer, irrespective of the reason
for termination of the other provisions of this Agreement and the corresponding
employment relationship created herein, or Employee's performance hereunder,
provided that the covenants set forth in Subparagraphs 6(b) and 6(c) shall not
survive following the termination of Employee's employment if such termination
results from Employee leaving employment in accordance with Subparagraph 5(b) of
this Agreement.
(G) In connection with the limited protection afforded Employer by the
covenants contained within this Paragraph 6, Employee recognizes that Employer's
need for the covenants is based on the following:
(i) Employer has spent and will expend substantial time, money
and effort in developing (x) its maintenance, repair and project
management businesses and (y) a valuable list of customers and
information about their requirements and needs, purchasing patterns and
internal purchasing procedures;
(ii) Employee, in the course of his employment, has been and
will be compensated to help develop, and has been and will be
personally entrusted with and exposed to, Employer's contract, business
development plans and opportunities, trade secrets and other
confidential and proprietary information;
(iii) Employer, during the term of this Agreement and after
its termination, will be engaged in the highly competitive maintenance,
repair and project management businesses in which many firms, including
Employer, compete;
(iv) Employer provides and will provide services throughout
the State of Texas and Employee will be involved in providing such
services through operating facilities and affiliates of Employer;
(v) Employee could, after having access to Employer's
financial records, contracts, technology and associated trade secrets
and know-how and receiving further training by and experience with
Employer, and after reviewing Employer's trade secrets and confidential
information, become a competitor; and
(vi) Employer will suffer great loss and irreparable harm if
Employee's employment was terminated and thereafter enter directly or
indirectly into competition with Employer.
(H) Employee hereby specifically acknowledges and agrees that the
temporal, geographical and other restrictions contained in this Paragraph 6 are
reasonable and necessary to protect the business and prospects of Employer, and
that the enforcement of the provisions of this Paragraph 6 will not work an
undue hardship on him.
(I) Employee further agrees that in the event either the length of
time, geographical or any other restrictions, or portion thereof, set forth in
this Paragraph 6 is overly restrictive and unenforceable in any court
proceeding, the court may reduce or modify such restrictions to those which it
deems reasonable and enforceable under the circumstances and the parties agree
that the restrictions of this Paragraph 6 will remain in full force and effect
as reduced or modified.
(J) Employee further agrees and acknowledges that Employer does not
have an adequate remedy at law for the breach or threatened breach by him of the
covenants contained in this Paragraph 6 and Employee therefore specifically
agrees that Employer, in the event of the breach or threatened breach by
Employee of any of the Employee's covenants contained in Paragraph 6 of this
Agreement, in addition to other remedies which may be available to it hereunder,
may file a suit in equity to enjoin Employee from such breach or threatened
breach.
Employee further agrees, in the event that any provision of this
Paragraph 6 is held to be invalid or against public policy, the remaining
provisions of this Paragraph 6 and the remainder of this Agreement shall not be
affected thereby.
Employee further agrees that the covenants contained in Article III of
the Consulting Agreement are in addition to the covenants contained in this
Agreement and shall not be limited in any respect by the provisions of this
Paragraph 6.
7. PROPERTY OF EMPLOYER. Employee agrees that, upon the termination of
Employee's employment with Employer, Employee will immediately surrender to
Employer all property, equipment, funds, lists, books, records, and other
materials of Employer in the possession of or provided to Employee.
8. LAW GOVERNING. This Agreement and all issues relating to the
validity, interpretation, and performance hereof shall be governed by and
interpreted under the laws of the State of Texas. The parties hereby consent to
jurisdiction and venue in any court of competent jurisdiction in Harris County,
Texas, or the United States District Court for the Southern District of Texas,
and either party may bring any suit that they desire to institute upon this
Agreement in any such court.
9. REMEDIES. With respect to each and every breach, violation, or
threatened breach or violation by either party of any of the covenants set forth
herein, the other party, in addition to all other remedies available at law or
in equity, including specific performance of the provisions hereof, shall be
entitled to enjoin the commencement or continuance thereof and, without notice
to the other party, may apply for entry of an immediate restraining order or
injunction. In addition, each party agrees, upon demand, to immediately account
for and pay over to the other party an amount equal to all compensation,
commissions, bonuses, salary, gratuities, or other emoluments of any kind
directly or indirectly received by, or for the use or benefit of, the other
party resulting from any activity, transaction, or employment in breach or
violation of any of the covenants set forth in this Agreement, such amount being
agreed to constitute liquidated damages because the exact amount of actual
damages to be sustained on account of any such breach or violation cannot be
determined with complete accuracy. In addition, each party agrees to pay the
other party a reasonable sum as and for his or its attorneys' fees and costs of
litigation should such other party bring an action against the breaching party
for breach of this Agreement and prevail in such action. Each party may pursue
any of the remedies described in this Paragraph 9 concurrently or consecutively,
in any order, as to any such breach or violation, and the pursuit of one of such
remedies at any time will not be deemed an election of remedies or waiver of the
right to pursue any of the other such remedies.
10. NOTICES. Any notice or request herein required or permitted to be
given to any party hereunder shall be given in writing and shall be personally
delivered or sent to such party by United States mail, certified or registered
mail, return receipt requested, with postage prepaid, at the address set forth
below the signature of such party hereto or at such other address as such party
may designate by written communication to the other party pursuant to, and in
accordance with, this Paragraph 10. Each notice given in accordance with this
Paragraph 10 shall be deemed to have been given, if personally delivered, on the
date personally delivered, or, if mailed, on the day on which it is deposited in
the United States mail, and shall be deemed to be received or delivered, if
personally delivered, on the date personally delivered, or, if mailed, on the
third day following the day on which it is deposited in the United States mail.
11. HEADINGS. The headings of the paragraphs of this Agreement have
been inserted for convenience of reference only and shall not be construed or
interpreted to restrict or modify any of the terms or provisions hereof.
12. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, and this Agreement and
each separate provision hereof shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part of this
Agreement, and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. In addition, in
lieu of such illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement, a provision as similar in terms to
such illegal, invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable, if such reformation is allowable under applicable
law.
13. BINDING EFFECT. This Agreement shall be binding upon and shall
inure to the benefit of each party hereto and each party's respective
successors, heirs, permitted assigns, and legal representatives.
14. DEFINITION OF "AFFILIATE". For purposes of this Agreement, the term
"Affiliate" means any subsidiary corporation of Employer. For purposes of this
definition, a subsidiary of Employer means any corporation whose outstanding
common shares are more than fifty percent (50%) directly owned by Employer and
shall further mean any corporation whose outstanding common shares are at least
fifty percent (50%) owned through an unbroken chain of ownership through other
subsidiaries of Employer.
15. ASSIGNMENT. This Agreement and any interest herein or rights,
duties, or obligations hereunder may be assigned or delegated by Employer
without the prior written consent of the Employee, but no such assignment may be
made by Employee.
16. SEPARATE AGREEMENTS. The provisions of Paragraph 6 shall be
construed as a separate agreement in each of the separate geographical areas, if
any, referred to in Paragraph 6, and to the extent that it may be found to be
illegal and/or unenforceable in any of said geographical areas, this Agreement
shall not be affected thereby with respect to each other geographical area.
17. EMPLOYER POLICIES, REGULATIONS, AND GUIDELINES FOR EMPLOYEES.
Employer may issue policies, rules, regulations, guidelines, procedures, or
other informational material, whether in the form of handbooks, memoranda, or
otherwise, relating to its employees. These materials are general guidelines for
Employee's information and shall not be construed to alter, modify, or amend
this Agreement for any purpose whatsoever.
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, whether written
or oral, relating to the subject matter hereof, unless expressly provided
otherwise herein. No amendment, modification, or termination of this Agreement,
unless expressly provided otherwise herein, shall be valid unless made in
writing and signed by each of the parties whose rights, duties, or obligations
hereunder would in any way be affected by an amendment, modification, or
termination. Unless expressly set forth herein, no representations, inducements,
or agreements have been made to induce either Employee or Employer to enter into
this Agreement. This Agreement is the sole source of rights and duties as
between Employer and Employee relating to the subject matter of this Agreement.
19. KEY-MAN INSURANCE. Employer shall be entitled to own, purchase and
maintain life or other insurance on the life or disability of the Employee for
Employer's exclusive benefit. Employee shall execute all documents and perform
all acts necessary to enable Employer to effect such insurance.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
the 10th day of January, 1996, to be EFFECTIVE as of August 25, 1995.
/s/ WILLIAM A. RYAN, Employee
Address:
1550 Tower Rd
Winnetka Il 60093
TEAM, INC., Employer
By: /s/ GEORGE W. HARRISON
George W. Harrison
Senior Vice President
Address:
1019 S. Hood Street
Alvin, TX 77511