Employment Agreement - Maintenance Specialists of America Inc. and Chester J. Jachimiec
This Employment Agreement ('AGREEMENT') is made as of October 24, 1996,
by and between MAINTENANCE SPECIALISTS OF AMERICA, INC., a Texas corporation
(the 'COMPANY'), and CHESTER J. JACHIMIEC, an individual with an address of c/o
Maintenance Specialists of America, Inc., 1225 North Loop West, Suite 324,
Houston, Texas 77008 (the 'EMPLOYEE').
1. EMPLOYMENT. The Company hereby agrees to employ the Employee and the
Employee hereby agrees to work for the Company upon the terms and conditions set
2. TERM OF EMPLOYMENT. This Agreement shall continue in effect for an
initial term of three (3) years from the date of this Agreement, unless
terminated in accordance with Section 7, and shall be extended from year to year
thereafter, unless terminated effective as of the end of the initial term or any
one-year extension thereafter by written notice from the Company to Employee, or
by written notice of Employee to the Company, delivered not less than ninety
(90) days prior to the end of the initial term, or the anniversary of such
one-year extension, as applicable.
3. SCOPE OF DUTIES; REPRESENTATIONS AND WARRANTIES.
(a) The Employee shall be initially employed by the Company as
its Executive Vice President - Acquisitions and Finance. At all times, the
Employee shall serve under the direction of the Board of Directors of the
Company and shall perform such services as the Board of Directors, in its sole
discretion, shall deem appropriate.
(b) So long as he is employed by the Company, the Employee shall
devote his skill, energy and best efforts to the faithful discharge of his
duties as an employee of the Company. The Employee agrees that in the provision
of all services to the Company, he will comply with and follow all directives,
policies, standards and regulations from time to time established by the Board
of Directors of the Company.
(c) The Employee represents and warrants that he is under no
contractual or other restrictions or obligations which will significantly limit
his activities on behalf of the Company or which will prohibit or limit the
disclosure or use of by the Employee of any information which directly or
indirectly relates to the nature of the Company or the services to be rendered
by the Employee under this Agreement.
(d) To the extent they relate to, or result from, directly or
indirectly, the actual or anticipated operations of the Company, the Employee
hereby agrees that all patents, trademarks, copyrights, trade secrets, and other
intellectual property rights, all inventions, whether or not patentable and any
product, drawing, design, recording, writing, literary work or other author's
work, in any other tangible form developed in whole or in part by Employee
during the term of this Agreement, or otherwise developed, purchased or acquired
by Employer, shall be the exclusive
property of the Employer ('Intellectual Property'), and unless otherwise agreed
by Employer, all right, title and interest therein shall remain in Employer.
(e) The Employee will hold all Intellectual Property and
Confidential Information (defined below) in trust for the Company and will
deliver all Intellectual Property and Confidential Information in his possession
or control to the Company upon request and, in any event, at the end of his
employment with the Company. The Employee will promptly disclose to the Company
all Confidential Information, as well as any business opportunity which comes to
his attention during the term of his employment with the Company. The Employee
will not take advantage of or divert any business opportunity for the benefit of
himself or any other party without the prior written consent of the Company.
(f) The Employee shall assign and does hereby assign to the
Company all property rights that he may now or hereafter have in the
Intellectual Property and Confidential Information. The Employee shall take such
action, including, but not limited to, the execution, acknowledgment, delivery
and assistance in preparation of documents, and the giving of testimony, as may
be requested by the Company to evidence, transfer, vest or confirm the Company's
right, title and interest in the Intellectual Property.
(g) The Employee will not contest the validity of any invention,
any copyright, any trademark or any mask work registration owned by or vesting
in the Company under this Agreement.
(h) The terms and conditions of SECTIONS 3(D), (E), (F), AND (G)
will survive the termination of this Agreement for any reason whatsoever.
(a) During the first year, the Company shall pay the Employee a
base salary, payable semi-monthly, in equal installments at a rate equal to
$140,000 per year. In each subsequent year of this Agreement, the Company shall
pay to the Employee a salary equal to the greater of (i) his salary for the
immediately preceding year or (ii) if determined otherwise by the Board of
Directors, a salary determined by the Board of Directors following its annual
salary and performance review.
(b) Employee shall receive an annual cash performance bonus of
from zero-percent (0%) to one hundred percent (100%) of Employee's annual base
salary for the calendar year during the term of this Agreement to be determined
according to the following procedure. The Board of Directors of the Company, or
the Compensation Committee of the Board of Directors, if so authorized, shall
establish specific annual performance goals for the Company and for Employee
with respect to each calendar year during the term of this Agreement commencing
on January 1, 1997. Such goals shall be communicated to Employee not later than
the end of the first quarter of the applicable calendar year. At the end of each
calendar year during the term of this Agreement, or within a reasonable time
thereafter, the Board of Directors of the Company, or the Compensation Committee
of the Board of Directors, if so authorized, shall review the actual performance
of the Company and Employee, giving due consideration to market and other
developments outside of the
control or influence of Employee and the Company, and based upon the extent to
which the applicable annual performance goals have been achieved, shall
determine in its sole and absolute discretion, the amount of performance bonus
payable to Employee with respect to such year.
(c) All payments of salary and other compensation to the Employee
shall be made after deduction of any taxes which are required to be withheld
with respect thereto under applicable federal and state laws.
5. SENIOR MANAGEMENT STOCK OPTIONS.
(a) Employee is hereby granted options (the '1996 Senior
Management Options') to purchase 115,000 shares of the common stock of the
Company as presently constituted, at an exercise price of $1.231 per share. The
1996 Senior Management Options shall vest ratably as of the earlier of (i) the
end of the three calendar years, 1997, 1998, 1999, or (ii) when and as the
Designated Value of the Company's common stock has achieved the milestones of
$7.00, $9.00, and $11.00 per share, respectively. The 1996 Senior Management
Options may be exercised in whole or in part, from time to time, at any time
after vesting through December 31, 2006 by the payment of cash or the tender of
shares of the Company's common stock (including shares of common stock otherwise
receivable as a result of the exercise of said options or any other options)
having a Designated Value equal to the exercise price of the 1996 Senior
Management Options being exercised. To the extent that certain Shareholders
Agreement of even date herewith among the Corporation and the shareholders of
the Company, including Employee (the 'Shareholders Agreement') is in effect at
the time Employee exercises any of the Senior Management Options, such shares of
the Company's common stock issued to Employee shall be subject to the provisions
of the Shareholders Agreement.
(b) Commencing with the Company's initial public offering of
Common Stock and for each partial or full calendar year thereafter during the
term hereof, provided Employee is then serving as an employee of the Company,
the Company shall grant to Employee options (together with the 1996 Senior
Management Options, collectively referred to as the 'Senior Management Options')
to purchase such number of additional shares as the Board of Directors of the
Company may determine, on such terms and conditions as shall be established at
(c) For purposes hereof, 'Designated Value' of the shares on a
specified date shall mean (i) the average of the closing prices of the common
stock on the principal market or registered exchange on which the Company's
common stock is traded (or the average of the closing bid and ask prices, if a
single closing price is not reported for such market) on the ten (10)
consecutive trading days next preceding the date for the determination of such
value, provided that the stock is then traded on the over the counter market or
on the NASDAQ System or any registered securities exchange, or (ii) if not
publicly traded, the book value per share of the Company as of the end of the
calendar quarter next preceding the date of determination of such value.
(d) From time to time the Company agrees to register under the
Securities Act of 1933 and all applicable state securities laws and regulations
the shares of common stock issuable upon the exercise of the foregoing Senior
Management Options in the same manner as shares issuable under any other stock
options or stock purchase plans of the Company. Further, the
Company agrees to grant to the Employee 'demand' or 'piggyback' registration
rights with respect to all such Senior Management Option shares (to the extent
same have not been registered), and all other shares of common stock owned
directly or indirectly by the Employee or Employee's immediate family,
equivalent to the 'demand' or 'piggyback' registration rights granted under that
certain Registration Rights Agreement dated October 24, 1996, by and among the
Company, Gordon Cain and other holders of common stock of the Company.
6. FRINGE BENEFITS; EXPENSES.
(a) So long as the Employee is employed by the Company, the
Employee shall participate in all employee benefit plans sponsored by the
Company for its executive employees, including but not limited to vacation
policy, sick leave and disability leave, health insurance, dental insurance and
pension and/or profit sharing plans; PROVIDED, HOWEVER, that except as provided
below, the nature, amount and limitations of such plans shall be determined from
time to time by the Board of Directors of the Company.
(b) The Company will reimburse the Employee for all reasonable
business expenses incurred by the Employee in the scope of his employment.
(c) Employees shall be entitled to participate in any other stock
bonus, stock purchase or stock option plan instituted by the Company for its
managers or employees generally in the same manner as any other senior executive
officer of the Company, with proper regard and weight given in the issuance of
shares or the grant of options for the Employee's position (and without
consideration of the above Senior Management Options or any shares of the
Company otherwise owned by Employee directly or indirectly).
(d) The Company shall make reasonable efforts to provide life
insurance payable to Employee's designated beneficiary in an amount at least
three times Employee's annual base salary.
(e) The Company shall make a reasonable effort to maintain
disability insurance on behalf of Employee which, as a goal, shall provide for
salary continuation in the event of permanent disability in an amount not less
than 60% of the Employee's regular base salary.
(f) The Employee shall be entitled to a minimum of three weeks
paid vacation, increasing to four weeks at January 1, 1999.
(g) The Company will pay all license fees, occupation taxes and
reasonable educational costs and expenses necessary to maintain Employee's good
standing under any professional licenses.
(a) Employee agrees that this Agreement may be terminated by the
Company with or without 'Cause' at any time, subject to the terms of this
Section 7. Such termination shall be effective upon delivery of written notice
to Employee of the Company's election to terminate this
Agreement under this Section 7. 'Cause' when used in connection with the
termination of employment with the Company, shall mean the termination of the
Employee's employment by the Company by reason of (i) the conviction of the
Employee of a crime involving moral turpitude by a court of competent
jurisdiction as to which no further appeal can be taken; (ii) the proven
commission by the Employee of an act of fraud upon the Company; (iii) the
willful and proven misappropriation of any funds or property of the Company by
the Employee; (iv) the willful, continued and unreasonable failure by the
Employee to perform material duties assigned to him and agreed to by him after
reasonable notice and opportunity to cure such performance; (v) the knowing
engagement by the Employee in any direct, material conflict of interest with the
Company without compliance with the Company's conflict of interest policy, if
any, then in effect; (vi) the knowing engagement by the Employee, without the
written approval of the Board of Directors of the Company, in any activity which
competes with the business of the Company or which would result in a material
injury to the Company; or (vii) the knowing engagement in any activity which
would constitute a material violation of the provisions of the Company's Insider
Trading Policy or Business Ethics Policy, if any, then in effect.
If the Employee's employment terminates, unless the Company
terminates the Employee's employment under this Agreement for Cause or the
Employee resigns, the Company shall, subject to the terms of SECTION 7(C) below,
and only if and as long as Employee is not in breach of his obligations under
this Agreement, pay to the Employee an amount equal to twelve (12) months
compensation at his then current salary, payable semimonthly, and shall continue
to provide benefits in the kind and amounts provided up to the date of
termination for said twelve (12) month period including, without limitation,
continuation of any Company-paid benefits as described in SECTION 6 for the
Employee and his family; provided, however, that in the event that Gordon A.
Cain elects to cease payments of outstanding installments in compliance with the
Subscription Agreement dated October 24, 1996 with the Company, and the Company
elects to terminate Employee under this Section 7, or Employee resigns within 60
days of such termination, then if Employee is not in breach of his obligations
under this Agreement, the Company shall pay to the Employee, in lieu of the
severance payments described above, three (3) months compensation under this
Agreement, payable semi-monthly, and the Company shall continue to provide
benefits in the kind and amount provided up to the date of termination for said
three (3) month period. Notwithstanding anything in this Agreement to the
contrary, in the event the Employee's employment terminates within six months
after (A) a sale of all or substantially all of the assets of the Company, or
(B) a merger, consolidation, liquidation or reorganization of the Company, in
which the purchaser or the surviving entity, as applicable, adopts the Company's
obligations under this Agreement, the Company shall pay to the Employee, an
amount equal to two times Employee's severance benefits otherwise available to
Employee under this Agreement.
In the event that this Agreement is terminated by Company without Cause,
Employee agrees to accept, in full settlement of any and all claims, losses,
damages and other demands which Employee may have arising out of such
termination as liquidated damages and not as a penalty, the applicable amount
which is set out above. Employee hereby waives any and all rights he may have to
bring any cause of action or proceeding contesting any termination without
Cause, provided, however, that such waiver shall not be deemed to affect
Employee's rights to enforce any other obligations of the Company. Under no
circumstances shall Employee be entitled to any
compensation or confirmation of any benefits under this Agreement for any period
of time following his date of termination if his termination is for Cause.
(b) If at any time during the term of this Agreement, Employee is
unable due to physical or mental disability, to perform effectively his duties
hereunder, the Company shall continue payment of compensation as provided in
Section 4 during the first twelve (12) month period of such disability to the
extent not covered by the Company's disability insurance policies. Upon the
expiration of such twelve (12) month period, the Company, at its sole option,
may continue payment of Employee's salary for such additional periods as the
Company elects, or may terminate this Agreement without any further obligations
hereunder. If Employee should die during the term of this Agreement, Employee's
employment and the Company's obligations hereunder shall terminate as of the end
of the month in which Employee's death occurs and there will be no salary and
benefit continuation period pursuant to SECTION 7(A).
(c) So long as Employee receives a severance as provided in
SECTION 7(A) or (b) above, Employee agrees that he will sign any lock-up
letters, standstill agreements, or other similar documentation required by an
underwriter in connection with a public offering of securities by the Company or
take other actions reasonably related thereto as requested by the Board of
Directors of the Company. Failure to take any such action shall cause Employee
to forfeit any further rights to the salary continuation payments in SECTION
7(A) or (B). In addition, Employee agrees that in such event the Company can
seek and obtain specific performance of such covenant, including any injunction
requiring execution thereof, and the Employee hereby appoints the then current
president of the Company to sign any such documents on his behalf so long as
such documents are prepared on the same basis as other shareholders generally or
as all management shareholders.
8. COVENANT NOT TO COMPETE.
(a) During the term of this Agreement, Employee will not compete
with the Company or its affiliates, directly or indirectly, either for himself
or as a member of a partnership or as a stockholder (except as a stockholder of
less than one percent (1 %) of the issued and outstanding stock of a
publicly-held company whose gross assets exceed one hundred million dollars),
investor, owner, officer or director of a company or other entity, or as an
employee, agent, associate or consultant of any person, partnership, corporation
or other entity, in any business in competition with that carried on by the
Company or any of its affiliates.
(b) Employee further agrees that, for a period of six (6) months
from and after the date of termination of Employee's employment under this
Agreement, regardless of the reason for such termination, he will neither
represent the Company nor engage in or carry on, directly or indirectly, either
for himself or as a member of a partnership or as a stockholder (other than as a
stockholder of less than one percent (1 %) of the issued and outstanding stock
of a publicly-held company whose gross assets exceed one hundred million
dollars), investor, owner, officer or director of a company or other entity, or
as an employee, agent, associate or consultant of any person, partnership,
corporation or other entity, any business in any State of the United States or
in any other part of the world which directly competes with any services or
products produced, sold, conducted, developed, or in the process of development
by the Company or its affiliates on the date of termination of Employee's
employment. Notwithstanding the foregoing, nothing herein shall prevent
Employee from working in the indoor air quality, heating, ventilation and air
conditioning or plumbing maintenance services industry, provided that such
activities are in areas not in direct competition with any services or products
produced, sold, conducted, developed, or in the process of development by the
Company or its affiliates on the date of termination of Employee's employment.
(c) Employee agrees that the limitations set forth herein on his
rights to compete with the Company and its affiliates are reasonable and
necessary for the protection of the Company and its affiliates. In this regard,
Employee specifically agrees that the limitations as to period of time and
geographic area, as well as all other restrictions on his activities specified
herein, are reasonable and necessary for the protection of the Company and its
affiliates. In particular, Employee acknowledges that the parties anticipate
that the Employee will be actively seeking markets for the Company's products
throughout the United States during his employment with the Company.
(d) Employee agrees that the remedy at law for any breach by him
of this Section 8 will be inadequate and that the Company shall also be entitled
to injunctive relief.
9. CONFIDENTIAL INFORMATION AND RESULTS OF SERVICES. Employee agrees
that during the term of this Agreement, and for five (5) years after his
termination of employment, he will not make use of or disclose, without the
prior consent of the Company, Confidential Information (as hereinafter defined)
relating to the Company, or any of its affiliates, and further agrees, that he
will return to the Company all written materials in his possession embodying
such Confidential Information. For purposes of this Agreement, 'CONFIDENTIAL
INFORMATION' includes information conveyed or assigned to the Company by
Employee or conceived, compiled, created, developed, discovered or obtained by
Employee from and during his employment relationship with the Company, whether
solely by the Employee or jointly with others, which concerns the affairs of the
Company or its affiliates and which the Company could reasonably be expected to
desire be held in confidence, or the disclosure of which would likely be
embarrassing, detrimental or disadvantageous to the Company or its affiliates
and without limiting the generality of the foregoing includes information
relating to inventions, and the trade secrets, technologies, algorithms,
products, services, finances, business plans, marketing plans, legal affairs,
supplier lists, client lists, potential clients, business prospects, business
opportunities, personnel assignments, contracts and assets of the Company and
information made available to the Company by other parties under a confidential
relationship. Confidential Information, however, shall not include information
(a) which is, at the time in question, in the public domain through no wrongful
act of Employee, (b) which is later disclosed to Employee by one not under
obligations of confidentiality to the Company or Employee, (c) which is required
by court or governmental order, law or regulation to be disclosed, or (d) which
the Company has expressly given Employee the right to disclose pursuant to
written agreement. Employee agrees that the remedy at law for any breach by him
of this Section 9 will be inadequate and that the Company shall also be entitled
to injunctive relief.
10. NOTICE. All notices, requests, demands and other communications
required by or permitted under this Agreement shall be in writing and shall be
sufficiently delivered if delivered by hand, by courier service, or sent by
registered or certified mail, postage prepaid, to the parties at their
respective addresses listed below:
(a) If to the Employee, to the address set out in the
beginning of this Agreement;
(b) If to the Company:
Maintenance Specialists of America, Inc.
1225 North Loop West, Suite 324
Houston, Texas 77008
Either party may change such party's address by such notice to
the other parties.
11. ASSIGNMENT. This Agreement is personal to the Employee, and he shall
not assign any of his rights or delegate any of his duties hereunder without the
prior written consent of the Company. Neither the employee nor his spouse will
have the right to commute, encumber, or otherwise dispose of any payments under
this Agreement. The Company shall have the right to assign this Agreement to a
successor in interest in connection with a merger, sale of substantially all
assets, or the like; provided however, that an assignment of this Agreement to
an entity with operations, products or services outside of the industries in
which the Company is then active shall not be deemed to expand the scope of
Employee's covenant not to compete with such operations, products or services
without Employee's written consent.
12. SURVIVAL. The provisions of this Agreement shall survive the
termination of the Employee's employment hereunder in accordance with their
13. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of Texas.
14. BINDING UPON SUCCESSORS. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the Company and the Employee with respect to the terms of employment of
the Employee by the Company and supersedes all prior agreements and
understandings, whether written or oral, between them concerning such terms of
16. WAIVER AND AMENDMENTS; CUMULATIVE RIGHTS AND REMEDIES.
(a) This Agreement may be amended, modified or supplemented, and
any obligation hereunder may be waived, only by a written instrument executed by
the parties hereto. The waiver by either party of a breach of any provision of
this Agreement shall not operate as a waiver of any subsequent breach.
(b) No failure on the part of any party to exercise, and no delay
in exercising, any right or remedy hereunder shall operate as a waiver hereof,
nor shall any single or partial exercise of any such right or remedy by such
party preclude any other or further exercise thereof or the
exercise of any other right or remedy. All rights and remedies hereunder are
cumulative and are in addition to all other rights and remedies provided by law,
agreement or otherwise.
(c) The Employee's obligations to the Company and the Company's
rights and remedies hereunder are in addition to all other obligations of the
Employee and rights and remedies of the Company created pursuant to any other
17. CONSTRUCTION. Each party to this Agreement has had the opportunity
to review this Agreement with legal counsel. This Agreement shall not be
construed or interpreted against any party on the basis that such party drafted
or authored a particular provision, parts of or the entirety of this Agreement.
18. SEVERABILITY. In the event that any provision or provisions of this
Agreement is held to be invalid, illegal or unenforceable by any court of law or
otherwise, the remaining provisions of this Agreement shall nevertheless
continue to be valid, legal and enforceable as though the invalid or
unenforceable parts had not been included therein. In addition, in such event
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible with respect
to those provisions which were held to be invalid, illegal or unenforceable.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement under seal on the date first above written.
MAINTENANCE SPECIALISTS OF AMERICA
INC., A TEXAS CORPORATION
By:/s/ J. PATRICK MILLINOR, JR.
J. Patrick Millinor, Jr., President
/s/ CHESTER J. JACHIMIEC
Chester J. Jachimiec