Exhibit 10.15
EMPLOYMENT AGREEMENT
AGREEMENT, dated November 7, 1996, by and between Robert B. Sheh ("Executive")
and Air & Water Technologies Corporation, a Delaware corporation (the
"Company").
WHEREAS, the Company desires to employ Executive and to enter into an
agreement embodying the terms of such employment (the "Agreement"); and
WHEREAS, Executive desires to accept such employment and enter into such an
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, the parties hereby agree as follows:
1. Position.
(a) Executive shall serve as the Chief Executive Officer and President
of the Company and have the general powers and duties of
supervision and management usually vested in the office of
Chief Executive Officer of the Company. In such position,
Executive shall have such duties and authority as shall be
determined from time to time by the Board of Directors of the
Company (the "Board") in its sole discretion. The Company will
use its best efforts to cause Executive to be nominated to the
Board and to serve as Chairman of the Board. If elected,
Executive agrees to serve on the Board and its committees and
as Chairman without additional compensation. In the
performance of his duties, Executive shall comply with the
policies and procedures of the Company (presently in effect or
as may be reasonably modified or established hereafter) and be
subject to the direction of the Board.
(b) During the term of his employment hereunder, Executive will devote
all of his business time and best efforts to the performance of
his duties hereunder and will not engage in any other business,
profession or occupation for compensation or otherwise which would
conflict with the rendition of such services, either directly or
indirectly, without the prior written consent of the Board.
Notwithstanding any provision of this Agreement to the contrary,
any breach of the provisions of this Section 1(b) shall permit the
Company to terminate the employment of Executive for Cause. The
Company acknowledges that Executive has advised it that he is
receiving and will continue to receive certain unspecified
compensation from his former employer, International Technology
("IT") Corporation, pursuant to a severance arrangement and that
nothing in that severance arrangement precludes Executive from
being employed by the Company. Executive acknowledges and agrees
that in the event IT Corporation ceases to make payments to
Executive under of said severance arrangement or other agreement
because of Executive's employment with the Company, the Company
has no obligation to make him whole or otherwise pay him the
monies and other benefits IT Corporation promised or otherwise may
owe him. The Company acknowledges that Executive presently sits
on the Board of Trustees of the Harvey Mudd College, the Board of
Advisors at the Berkeley School of Chemical Engineering, the
Rensselaer Polytechnic Institute Board of Advisors at the School of
Civil Engineering, and the Board of Trustees of the Hugh O'Brian
Youth Foundation.
(c) To the best of Executive's knowledge, Executive represents and
warrants that he is not a party to any agreement, contract, or
understanding, whether of employment or otherwise, which would in
any way restrict or prohibit him from undertaking or performing his
employment and other obligations in accordance with the terms and
conditions of this Agreement. Executive further agrees to
indemnify and hold harmless the Company and its past and present
officers, directors, employees, agents, owners, stockholders,
represen-tatives, and attorneys from and against and in respect
of any and all claims alleging that (a) Executive is so restricted
or prohibited or (b) the Company has committed a wrongful act in
negotiating with, and employing the services of, Executive.
2. Term of Employment.
The term of Executive's employment under this Agreement shall commence
on the date hereof and shall continue thereafter unless and until
terminated as provided in Section 9 of this Agreement (the "Employment
Term").
3. Compensation.
The Company shall pay Executive an annual gross base salary (the "Base
Salary") at the annual initial rate of Four Hundred Thousand Dollars
($400,000), payable in bi-weekly installments in accordance with the
Company's usual payment practices. The Executive shall be entitled to
such increases in his Base Salary as may be determined from time to time
in the sole discretion of the Board. At such times and in such manner
as is acceptable to the Company, Executive may elect to defer receipt of
up to fifteen percent (15%) of his Base Salary to future fiscal years.
The parties agree to execute such additional documents as may be
necessary to implement this deferral arrangement in accordance with the
U.S. Internal Revenue Code and regulations promulgated thereunder.
4. Bonus and Stock Options
(a) With respect to each fiscal year during the Employment Term,
Executive shall be eligible to receive, in addition to his Base
Salary, a bonus for services rendered during such fiscal year,
which Bonus shall be determined by the Board in its sole
discretion. In each fiscal year, Executive may be paid a bonus of
up to sixty percent (60%) of Executive's Base Salary in such
fiscal year, which bonus shall be paid in cash. However, for his
first fiscal year of service during the Employment Term, Executive
shall be paid a bonus of not less than twenty-five percent (25%)
of his Base Salary for such fiscal year, which bonus will be paid
in cash. At such times and in such manner as is acceptable to the
Company, Executive may elect to defer receipt of all or part of
his bonus, if any, in a particular fiscal year to future fiscal
years. The parties agree to execute such additional documents as
may be necessary to implement this deferral arrangement in
accordance with the U.S. Internal Revenue Code and regulations
promulgated thereunder.
(b)(i) Upon commencing employment with the Company, and subject
to the approval of the Compensation and Stock Option
Committee of the Board ("Committee"), Executive will be
awarded options to purchase fifty thousand (50,000)
shares of the Company's Class A Common Stock ("Common
Stock"), which options will be fully vested upon award by
the Committee and will have an exercise price based on
the per share fair market value of the Common Stock on
the date the Committee approves the award. At the
beginning of the second, third, fourth, and fifth fiscal
years of the Employment Term, if Executive is still
employed by the Company under the terms of this
Agreement, and subject to the approval of the Committee
in each such fiscal year, Executive will be awarded in
each such fiscal year options to purchase fifty thousand
(50,000) shares of Common Stock, which options will vest
in accordance with the following schedule as long as
Executive is still employed by the Company on the vesting
date:
(A) twenty-five percent (25%) one (1) year after the
date of the award by the Committee;
(B) twenty-five percent (25%) two (2) years after the
date of the award by the Committee;
(C) twenty-five percent (25%) three (3) years after the
date of the award by the Committee; and
(D) twenty-five percent (25%) four (4) years after the
date of the award by the Committee,
and which options will have an exercise price based on
the per share fair market value of the Common Stock on
the date in the fiscal year in which the Committee
approves the award. With respect to the stock options to
be awarded at the beginning of the second, third, fourth,
and fifth fiscal years of the Employment Term, and
subject to the approval of the Committee, the quantity of
stock options to be awarded and their exercise prices
will be adjusted in the event of and to reflect the
impact of any major recapitalization of the Company.
(ii) Nothing in Section 4(b)(i) precludes the Committee, in
its sole discretion, from awarding Executive stock
options in addition to those stock options enumerated in
Section 4(b)(i).
(iii) All stock options awarded to Executive under Section
4(b)(i) and (ii) are subject to the terms of the
Company's stock option plan pursuant to which the stock
options are awarded.
5. Relocation Expenses
Upon presentation by Executive of documentation supporting such
expenses, the Company agrees to reimburse Executive or pay on his behalf
up to the total gross amount of One Hundred Thousand Dollars
($100,000.00) to defray the actual reasonable costs of Executive's
moving expenses to relocate his residence from California to the greater
New York metropolitan area ("NY area"). Such moving expenses shall
include temporary living costs in the NY area, costs associated with the
purchase of a new home in the NY area, and costs associated with the
sale of Executive's present home in California. Executive will be
reimbursed by the Company for any taxes payable by him on the monies
paid to him or on his behalf pursuant to this Section 5 but only to the
extent that the sum of the monies paid to him or on his behalf for
moving expenses and the tax reimbursement does not exceed the aforesaid
total gross amount of $100,000.
6. Vacation
Executive shall be entitled to four (4) weeks vacation in each calendar
year, which amount will be prorated in those calendar years in which he
is employed by the Company for only part of the calendar year.
7. Employee Benefits.
Executive shall be provided employee benefits (including fringe
benefits, pension and profit sharing plan participation and life,
health, accident and disability insurance) (collectively "Employee
Benefits") on the same basis as those benefits are generally made
available to senior executives of the Company. In addition, to the
extent not otherwise provided for in this Agreement, Executive shall be
entitled to participate in all plans providing benefits to the senior
executives including incentive compensation, stock option, stock
appreciation, stock bonus and other compensable plans extended by the
Company from time to time to senior corporate officers.
8. Business Expenses and Perquisites
(a) Reasonable travel, entertainment and other business expenses
incurred by Executive in the performance of his duties hereunder
shall be reimbursed by the Company in accordance with Company
policies.
(b) The Company shall provide to Executive during the term of this
Agreement the use of an automobile for which the Company shall
assume the cost of insurance, taxes, maintenance and business
related operating expenses upon presentation by Executive of
documentation supporting such expenses. Executive shall bear the
costs of personal use of the vehicle and such use shall be
governed by the U.S. Tax Code provisions regulating business and
personal use of a Company car.
9. Termination of Employment
(a) For Cause by the Company. Executive's employment hereunder may be
terminated by the Company for "Cause" at any time during the
Employment Term. For purposes of this Agreement, "Cause" shall
mean (i) Executive's willful and continued failure substantially
to perform his duties hereunder (other than as a result of total or
partial incapacity due to physical or mental illness), (ii)
dishonesty or breach of trust in the performance of Executive's
duties hereunder which is materially injurious to the financial
condition or business reputation of the Company or any of its
subsidiaries or affiliates, (iii) any act or omission on
Executive's part constituting a felony under the laws of the United
States or any state thereof that has an adverse impact on
Executive's character, suitability, or fitness to remain as the
Chief Executive Officer of the Company, or (iv) any other willful
act or omission which is materially injurious to the financial
condition or business reputation of the Company or any of its
subsidiaries or affiliates. For purposes of this Section 9(a), no
act or failure to act on the part of Executive shall be deemed
"willful" unless done, or omitted to be done, by Executive not in
good faith and without reasonable belief that the act or omission
of Executive was in, or not opposed to, the best interest of the
Company. If Executive is terminated by the Company for Cause, he
shall be entitled only to receive his Base Salary through the date
of termination. All other benefits due Executive following
Executive's termination of employment pursuant to this Section 9(a)
shall be determined in accordance with the plans, policies and
practices of the Company.
(b) Disability or Death. Executive's employment hereunder shall
terminate upon his death and if Executive becomes physically or
mentally incapacitated and is therefore unable for a period of two
(2) consecutive months or for an aggregate of three (3) months in
any twelve (12) consecutive month period to perform his duties
(such incapacity is hereinafter referred to as "Disability"). Any
question as to the existence of the Disability of Executive as to
which Executive and the Company cannot agree shall be determined
in writing by a qualified independent physician mutually
acceptable to Executive and the Company. If Executive and the
Company cannot agree as to a qualified independent physician, each
shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing. The
determination of Disability made in writing to the Company and
Executive shall be final and conclusive for all purposes of the
Agreement. Upon termination of Executive's employment hereunder
for either Disability or death, Executive or his estate (as the
case may be) shall continue to receive the payment to which
Executive is entitled pursuant to Section 3 hereof (hereinafter
the "Contract Payments") for a period of twelve (12) months from
the date of termination for either Disability or death. All other
benefits due Executive following Executive's termination for
either Disability or death shall be determined in accordance with
the plans, policies and practices of the Company.
(c) Without Cause by the Company. Executive's employment hereunder
may be terminated by the Company without Cause (other than by
reason of Disability or death) at any time during the Employment
Term. If Executive is terminated by the Company without Cause
(other than by reason of Disability or death), Executive shall
continue to receive the Contract Payments for a period of two (2)
years from the date of Executive's termination pursuant to this
Section 9(c). All other benefits due Executive following
Executive's termination of employment by the Company without Cause
(other than by reason of Disability or death) shall be determined
in accordance with the plans, policies and practices of the
Company, except that Executive shall not be entitled to any
separation or severance pay under any such plans, policies and
practices.
(d) Termination by Executive.
(i) If Executive terminates his employment with the Company for
any reason (other than the reason set forth in Section
9(d)(ii)), Executive shall be entitled to the same payment
he would have received if his employment had been terminated
by the Company for Cause.
(ii) If, within thirty (30) days after a "Change of Control",
Executive terminates his employment with the Company because
of the "Change of Control", Executive shall be entitled to
the same payments he would have received if his employment
had been terminated by the Company without Cause. For
purposes of this Agreement, "Change of Control" shall mean
that (A) Compagnie Generale des Eaux ("CGE") ceases to own
at least thirty percent (30%) of the voting power of the
Company's then outstanding securities entitled generally to
vote for the election of the members of the Board of
Directors of the Company or (B) another company or
partnership (other than CGE or one of CGE's affiliated
companies) becomes the largest holder of the voting power of
the Company's then outstanding securities entitled generally
to vote for the election of the members of the Board of
Directors of the Company. In determining whether CGE ceases
to own at least thirty percent (30%) of the voting power or
whether another company or partnership has become the
largest holder of the voting power, the voting power
ownership interests of CGE's affiliated companies (including
subsidiaries (whether wholly or partially owned or whether
directly or indirectly owned), partnerships, and joint
ventures) in the Company shall be aggregated with CGE's
direct voting power ownership interest in the Company.
(e) Notice of Termination. Any purported termination of employment by
the Company or by Executive shall be communicated by written
Notice of Termination to the other party hereto in accordance with
Section 14(g) hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision
so indicated. Executive shall give the Company at least fifteen
(15) days advance written notice of his intention to terminate his
employment (under Section 9(d)) and no such termination shall be
effective unless that notice has been given. In the event
Executive gives notice of his intention to terminate his
employment, the Company is entitled to accelerate his termination
to an earlier date and such termination shall still be deemed a
termination by Executive governed by Section 9(d).
(f) During the period of continued payment provided in Section 9(b)
and (c) hereof, Executive will be available, without additional
compensation and consistent with other responsibilities that he
may then have as an officer or employee of another company, to
answer questions and provide advice to the Company. Executive
shall not be required to mitigate the amount of any Contract
Payment provided for in Section 9(b) and (c) by seeking other
employment or otherwise, and no such employment, if obtained, or
compensation payable in connection therewith, shall reduce any
amounts to which Executive is entitled under Section 9(b) and (c).
10. Non-Competition.
(a) Executive acknowledges and recognizes the highly competitive
nature of the businesses of the Company and its subsidiaries and
affiliates and accordingly agrees that for a two (2) year period
following the termination of his employment under this Agreement
Executive will not, anywhere in the United States of America,
directly or indirectly own, manage, become an employee or officer
of, operate, join, control, participate in, invest in (except for
passive investments of not more than one percent (1%) of the
outstanding shares of, or any other equity interest in, any
company or entity listed or traded on a national securities
exchange or in an over-the-counter securities market), consult
with, or otherwise be connected in any manner with, whether as an
investor or otherwise, any "Pollution Control Companies". For
purposes of this Section 10, "Pollution Control Companies" means
and includes (i) any firm, company, or person which derives
twenty-five percent (25%) or more of its gross revenues before
taxes from the business of consultant engineers for the water
and/or wastewater treatment industry (private or public sector),
(ii) any firm, company, or person which is engaged in the business
of contract operation of water and/or wastewater systems, and/or
(iii) any investor-owned water utility.
Notwithstanding the foregoing, in the event of termination of this
Agreement without cause by the Company pursuant to Section 9(c)
hereof, "Pollution Control Companies" shall mean and include (i)
the following companies and their respective subsidiaries and
affiliates: Montgomery Watson, CH2M Hill, Camp Dresser McKee,
Black & Veatch, Malcolm Pirnie, and Hazen & Sawyer, (ii) any firm,
company, or person which is engaged in the business of contract
operation of water and/or wastewater systems, and/or (iii) any
investor-owned water utility.
Notwithstanding any provision of this Agreement to the contrary,
from and after any breach by Executive of the provisions of this
Section 10(a), the Company shall cease to have any obligations to
make payments to Executive under this Agreement.
(b) Executive will not directly or indirectly induce any employee of
the Company or any of its subsidiaries or affiliates to engage in
any activity in which Executive is prohibited from engaging by
Section 10(a) above or to terminate his employment with the
Company or any of its subsidiaries or affiliates, and will not
directly or indirectly employ or offer employment to any person who
was employed by the Company or any of its subsidiaries or
affiliates unless such person shall have ceased to be employed by
the Company or any of its subsidiaries or affiliates for a period
of at least twelve (12) months.
(c) It is expressly understood and agreed that although Executive and
the Company consider the restrictions contained in this Section 10
to be reasonable, if a final judicial determination is made by a
court of competent jurisdiction that the time or territory or any
other restriction contained in this Agreement is an unenforceable
restriction against Executive, the provisions of this Agreement
shall not be rendered void but shall be deemed amended to apply as
to such maximum time and territory and to such maximum extent as
such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and
such restriction cannot be amended so as to make it enforceable,
such finding shall not affect the enforceability of any of the
other restrictions contained herein.
11. Confidentiality.
Executive will not at any time (whether during or after his employment
with the Company) disclose or use for his own benefit or purposes or the
benefit or purposes of any other person, firm, partnership, joint
venture, association, corporation, or other business organization,
entity or enterprise, other than the Company and any of its subsidiaries
or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs,
costs, marketing, trading, investment, sales activities, promotion,
credit and financial data, manufacturing processes, financing methods,
plans, or the business and affairs of the Company generally, or of any
subsidiary or affiliate of the Company, provided, that the foregoing
shall not apply to information which is not unique to the Company, or
which is generally known to the industry or the public other than as a
result of Executive's breach of this covenant. Executive agrees that
upon termination of his employment with the Company for any reason, he
will return to the Company immediately all memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
subsidiaries and affiliates, except that he may retain personal notes,
notebooks and diaries. Executive further agrees that he will not retain
or use for his account at any time any trade name, trademark or other
proprietary business designation used or owned in connection with the
business of the Company or its subsidiaries and affiliates.
12. Specific Performance. Executive acknowledges and agrees that the
Company's remedies at law for a breach or threatened breach of any of
the provisions of Section 1(b), Section 10 or Section 11 would be
inadequate and, in recognition of this fact, Executive agrees that, in
the event of such a breach or threatened breach, in addition to any
remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any
other equitable remedy which may then be available.
13. Arbitration
(a) Except as provided in Section 13(b) immediately below, any and all
claims arising out of or relating to (i) this Agreement, (ii) any
breach of any provision of this Agreement, (iii) Executive's
employment at any time with the Company, and/or (iv) the
termination of Executive's employment with the Company shall be
settled by arbitration. Such arbitration proceeding shall be
conducted pursuant to the Employment Dispute Resolution Rules of
the American Arbitration Association ("AAA") then in effect, by a
single arbitrator and shall be held in Somerset County, New
Jersey. The cost of the arbitration proceeding and the reasonable
costs and attorneys' fees of the prevailing party shall be paid by
the non-prevailing party, with the dollar amount of these costs
and fees to be fixed by the arbitrator. The judgment upon the
award rendered by the arbitrator may be entered in any court
having competent jurisdiction thereof.
(b) Nothing in Section 13(a) immediately above shall be construed or
interpreted to preclude the Company from filing suit in a court of
competent jurisdiction in order to enforce its rights and remedies
under Sections 1(b), 10, 11 and/or 12 of this Agreement. In any
such suit, the court is empowered to and shall resolve any dispute
as to whether the claims asserted by the Company are within the
scope of Sections 1(b), 10, 11 and/or 12 of this Agreement, and
the court shall not refer such dispute to arbitration under
Section 13(a) immediately above.
(c) With respect to the claims of Executive that are within the scope
of Section 13(a) above, if Executive has the same, similar, or
related claims against any of the Company's employee benefit
plans, trusts, committees, or boards or against any past or
present officers, directors, employees, agents, owners,
stockholders, trustees, fiduciaries, administrators, sponsors,
representatives, or attorneys of the Company, its subsidiaries, or
its affiliates or the Company's employee benefit plans, trusts,
committees, or boards (collectively referred to as the "Other
Defendants"), and if Executive seeks to litigate such claims
against the Other Defendants in a civil action or any other
proceeding (including before an administrative agency), Executive
agrees that any or all of said Other Defendants may compel
Executive to arbitrate his claims against them pursuant to the
terms of this Section 13.
(d) The arbitrator selected by the parties pursuant to the AAA rules
shall have expertise in private industry employee relations and
shall hear and determine the case promptly. The burden of
persuasion shall at all times be upon the party seeking relief.
14. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
(b) Entire Agreement/Amendments. This Agreement contains the entire
understanding of the parties with respect to the employment of
Executive by the Company and fully supersedes any and all prior
restrictions, agreements, statements, representations, promises,
inducements, warranties, covenants or understandings, written or
oral, between Executive and the Company with respect to the
subject matter herein. There are no restrictions, agreements,
statements, representations, promises, inducements, warranties,
covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein.
This Agreement may not be altered, modified, or amended except by
written instrument signed by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party
of the right thereafter to insist upon strict adherence to that
term or any other term of this Agreement.
(d) Severability. In the event that any one or more of the provisions
of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall
not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Executive
and shall be assignable by the Company only with the consent of
Executive.
(f) Successors, Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees of the parties hereto. This Agreement shall
also inure to the benefit of the Other Defendants and their
respective heirs, executors, administrators, successors, assigns,
and legal representatives.
(g) Notice. For the purpose of this Agreement notices and all other
communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when telecopied,
delivered, or mailed by United States registered mail, return
receipt requested, postage prepaid addressed to the respective
addresses set forth on the execution page of this Agreement,
provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the
Company, or to such other address as either party may have
furnished to the other in writing in accordance herewith except
that notice of change of address shall be effective only upon
receipt. Notice by telecopier will be effective only if and when
receipt is confirmed by the sender by telephoning and speaking
directly with the intended recipient or, in the absence of the
intended recipient, in the case of the Company, the regular
secretary of the intended recipient, and in the case of Executive,
a member of his family at his residence.
(h) Withholding Taxes. The Company may withhold from any amounts
payable under this Agreement such Federal, state and local taxes
as may be required to be withheld pursuant to any applicable law
or regulation.
(i) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
(j) Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretations of this Agreement.
IN WITNESS WHEREOF, the parties hereto set their hands as of the day and year
first above written.
AIR & WATER TECHNOLOGIES CORPORATION
P.O. Box 1500
Somerville, New Jersey 08876
By _________________________________
ROBERT B. SHEH
1400 Pasco del Mar
Palos Verdes Estates, California 90274
_______________________________________