Exhibit 10.13
November 18, 1996
Mr. Anthony Hooper
2274 Dogwood Meadows Cove
Germantown, Tennessee 38139
Dear Tony:
This letter will confirm the offer we discussed to have you
serve as the President and chief executive officer of Insituform
Technologies, Inc. ("ITI"). The principal terms and conditions of
the offer are as follows:
1. Base Salary. The annual base salary for the position will
be $325,000 (the "Base Salary"). Base Salary will be
reviewed on an annual basis.
2. Bonus. Upon accomplishment of such annual goals for ITI
as shall be determined by the Board of Directors of ITI,
you will be entitled to receive a bonus in a maximum
amount of 50% of your Base Salary. The amount of your
bonus will also be reviewed annually.
3. Board Appointment. The Company will endeavor to have you
appointed as a director of ITI. As a director you will
be entitled to an indemnification agreement in the form
supplied to all directors of the Company.
4. Stock Options. Effective upon your assumption of the
position of President and chief executive officer of ITI,
and appointment to the Board of Directors (the "Effective
Date"), an award of the following stock options pursuant
to ITI's 1992 Director Stock Option Plan (the "Plan")
will become effective:
(a) Stock options (the "Initial Options) for
the purchase of 100,000 shares of the class A
common stock, $.01 par value (the "Common Stock"),
of ITI, such options to become exercisable with
respect to 10% of such shares on the first
anniversary of the Effective Date, with respect to
an additional 20% of such shares on the second
anniversary of the Effective Date, with respect to
an additional 30% of such shares on the third
anniversary of the Effective Date, and with respect
to the remaining 40% of such shares on the fourth
anniversary of the Effective Date, such options to
expire on the fifth anniversary of the Effective
Date. The exercise price per share for the Initial
Options shall be the fair market value per share on
the Effective Date as determined under the terms of
the Plan.
(b) Stock options (the "Additional Options")
for the purchase of 50,000 shares of Common Stock,
such options to become exercisable with respect to
10% of such shares on the second anniversary of the
Effective Date, with respect to an additional 20%
of such shares on the third anniversary of the
Effective Date, with respect to an additional 30%
of such shares on the fourth anniversary of the
Effective Date, and with respect to the remaining
40% of such shares on the fifth anniversary of the
Effective Date, such options to expire on the sixth
anniversary of the Effective Date. The exercise
price per share for the Additional Options shall be
$15.00.
The Initial Options and the Additional Options shall be
in addition to the options to acquire shares of Common
Stock you presently hold, and: (x) to the maximum extent
permitted under the limitations contained in the Internal
Revenue Code (the "Code") and considering your
outstanding options, the Initial Options shall be
"incentive stock options", the remainder of which shall
be non-qualified stock options; and (y) after giving
effect to the foregoing clause (x), to the maximum extent
permitted under the limitations contained in the Code the
Additional Options shall be "incentive stock options",
the remainder of which shall be non-qualified stock
options. The foregoing exercise schedules anticipate
your continued employment with ITI as set forth in the
Plan, such options otherwise to conform to the provisions
of the Plan and the form of option agreements thereunder
heretofore adopted by the Director Stock Option Committee
of the Board of Directors.
In addition, the Initial Options and the Additional
Options will provide that they become immediately
exercisable upon the occurrence of a change in control of
ITI of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A
promulgated under the Securities Exchange Act of 1934 (or
in response to any similar item on any similar schedule
or form), whereby any "person" (as defined under Section
13(d) of said Act) who is not on the date hereof the
"beneficial owner" (as defined in Rule 13d-3 under said
Act) of in excess of 5% of the outstanding Common Stock
becomes the beneficial owner of in excess of 50% of the
outstanding Common Stock.
5. Additional Benefits.
(a) You shall be provided with a car allowance in
the amount currently paid to you, subject to adjustment
in accordance with ITI's policy.
(b) You will be reimbursed for country club
membership fees for one club in the Memphis area.
(c) You will participate in the ITI 401(k) Profit-
Sharing Plan, and medical insurance and life insurance
programs, including ITI's supplemental executive life
insurance and long-term disability program.
(d) You will receive holidays and vacations in
accordance with ITI's policy, with the understanding that
the position of President currently provides four weeks
of vacation.
6. Severance. In the event you are terminated for reasons
other than "cause", you would be entitled to severance
equal to twelve months' Base Salary, which would be paid
over that period. "Cause" shall be defined as a
substantial dereliction of duty after written notice
thereof, conviction of a felony or inability to report
for work for a period of four months or greater.
7. Secrecy; Non-Competition. You hereby acknowledge and
agree that you have previously entered into a Non-
Disclosure and Non-Competition Agreement dated January
27, 1994 with ITI, the terms of which are hereby
incorporated by this reference herein and deemed to be a
part of this letter. Without limiting the provisions
thereof, you hereby agree that, during your employment or
other relationship with ITI or any Affiliate thereof (as
hereinafter defined), and for a period of one year
subsequent to the termination of your employment or other
relationship with ITI or any Affiliate thereof, you will
not, directly or indirectly, engage in the business of
rehabilitating, lining, relining, coating, constructing
or reconstructing pipelines, sewers, conduits or
passageways (the "Services") anywhere in the world, or
otherwise engage in Prohibited Competition (as
hereinafter defined). You agree and acknowledge that it
is contemplated that ITI will continue to seek and obtain
work in the United States and internationally and
acknowledge that ITI's business presently involves
operations in the United States and internationally.
Accordingly, you agree that the foregoing geographic
scope is reasonable in light of current and presently
anticipated operations of ITI.
For purposes of this Section 7, "Prohibited Competition"
shall include, but not be limited to, acting as
consultant, advisor, independent contractor, officer,
manager, employee, principal, agent, director or trustee
of any corporation, partnership, association or agent or
agency, or directly or indirectly owning more than one
percent of the outstanding capital stock of any
corporation, or being a member or employee of any
partnership or any owner or employee of any other
business, any of which is engaged in providing any of the
Services. "Prohibited Competition" also shall include (in
addition to the foregoing):
(i) Accepting employment with a customer of
ITI or of its Affiliates with the intent or purpose
of transferring defined business performed by ITI
or its Affiliates to a department, division or
affiliate of the customer;
(ii) Requesting or advising any of the
customers, suppliers, or other business contacts of
ITI or its Affiliates to withdraw, curtail or
cancel their business with ITI or its Affiliates;
or
(iii) Causing or inducing, or attempting to
cause or induce, either directly or indirectly, any
employees, sales representatives, consultants or
other personnel of ITI or its Affiliates to
terminate their relationships or employment or
breach their agreements with ITI or its Affiliates,
whether for the purpose of accepting employment
with you or any other person, firm, association or
corporation with which you are associated, or
otherwise.
As used herein, "Affiliate" shall mean any entity
directly or indirectly controlled by ITI.
You recognize that the breach of any of your obligations
under this Section 7 may give rise to irreparable injury
to ITI or its Affiliates inadequately compensable in
damages and that, accordingly, ITI or any of its
Affiliates may seek injunctive relief against the breach
or threatened breach of the within undertaking, in
addition to other remedies at law or in equity which may
be available. You acknowledge that compliance with your
obligations under this Section 7 will not impair your
ability to earn a livelihood.
If any restriction set forth in this Section 7 is found
by any court of competent jurisdiction to be
unenforceable because it extends for too long a period of
time or over too great range of activities or in too
broad a geographic area, it shall be interpreted and
amended automatically to extend only over the maximum
period of time, range of activities or geographic area as
to which it may be enforceable to protect the interests
of ITI and its Affiliates.
* * *
I look forward to your assuming the position of President and
chief executive officer of ITI and continuing as a part of this
exciting opportunity in your new capacity. If the above accurately
reflects our understandings, please sign the copy of his letter
where indicated and send such copy back to me acknowledging your
acceptance of the offer.
Very truly yours,
INSITUFORM TECHNOLOGIES, INC.
By s/Jerome Kalishman
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Jerome Kalishman
Chairman of the Board
Accepted and Agreed
this 18th day of November, 1996
s/Anthony W. Hooper
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Anthony W. Hooper