Exhibit
10.3
RETENTION INCENTIVE AGREEMENT
THIS RETENTION INCENTIVE AGREEMENT
(the “Agreement”) is entered into as of this 30th day
of June, 2005, effective for all purposes as of March 1, 2005
(the “Effective Date”) by and between INEI Corporation,
a Delaware corporation (the “Company”), and Robert F.
Hartman (the “Executive”).
WHEREAS, pursuant to an Asset
Purchase Agreement dated June 18, 2003 (the “Asset
Purchase Agreement”), the Company has sold substantially all
of its operating assets (the “Sale Transaction”) to
Insituform Technologies, Inc. (“ITI”); and
WHEREAS, pursuant to a Contract of
Sale Agreement effective July 24, 2003, as amended, the
Company has subsequently sold substantially all of its material
real property (the “Bohrer’s Nest Sale
Transaction”) to Bohrer’s Nest LLC, an affiliate of
Atlantic Transportation Equipment, Ltd (which, together with
Bohrer’s Nest LLC, are referred to as “ATEL”);
and
WHEREAS, the Company has dissolved
and is in the process of winding up; and
WHEREAS, the Board of Directors of
the Company (the “Board”) has determined that retaining
the services of the Executive is critical to the successful
liquidation of the Company and to its final winding-up, including
resolving any claims, including any claims that ATEL has or may
make against the Company with respect to the Bohrer’s Nest
Sale Transaction; and
WHEREAS, the Board and the Executive
desire to enter into a written agreement which sets forth the
mutually agreeable terms and conditions upon which the Executive
will be eligible to receive ongoing base salary, a stay bonus and
severance benefits.
NOW THEREFORE, in consideration of
the mutual promises contained herein, and other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned parties, intending to be legally
bound, agree as follows:
1. Recitals . The foregoing
recitals are incorporated herein and made a substantive part of
this Agreement.
2. Term . The term of this
Agreement shall commence as of the Effective Date and shall
continue through June 30, 2007, that is, the date that is
three (3) years following the effective date of the
Company’s dissolution on June 30, 2004 or, if earlier,
through the date that the Board authorizes a final liquidating
distribution to the Company’s stockholders or to a
liquidating trust (the “Term”).
3. Duties of the Executive .
The Executive hereby agrees that during the Term of this Agreement
his duties shall be as follows:
A. To take all necessary actions to
evaluate and resolve any and all claims made against the Company,
including potential claims with respect to the Bohrer’s Nest
Sale Transaction, or with respect to any of the Company’s
assets or obligations, or with respect to any of its employees or
agents;
B. To see to the sale or liquidation
of all of the Company’s remaining assets; and
C. To take all other actions as are
needed to complete the orderly liquidation and wind up of the
Company.
4. Retention Incentives . In
consideration for the Executive’s commitment to remain in the
employ of the Company and to perform the duties set forth in
Section 3 hereof, but subject to Section 8 and
Section 9 hereof, and except as provided in Section 5
hereof, the Company shall pay the Executive the
following:
A. For the seven (7) month
period beginning March 1, 2005 and ending September 30,
2005, a monthly salary of Nine Thousand Three Hundred Thirty-three
Dollars ($9,333) and, thereafter, until December 31, 2005, a
monthly salary of Four Thousand One Hundred Sixty-six Dollars
($4,166) (this latter amount, the “Reduced Monthly
Salary”);
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B. A bonus of Fifty Thousand Dollars
($50,000) (the “Stay Bonus”), payable in a lump sum
eight (8) days after the Executive executes the Release of
Employment Claims within the time period provided for under
Section 9A hereof without revocation;
C. The continuation, through
December 31, 2005, or if this Agreement shall terminate prior
to December 31, 2005, until the Termination Date (as defined
in Section 5 hereof), of the health, life and disability
insurance benefits that were provided by the Company to the
Executive as of the Effective Date (the “Welfare
Benefits”); provided, that if during such period the Company
ceases to provide any of the Welfare Benefits, in lieu of such
discontinued Welfare Benefits, the Company shall make the Benefit
Payments described under Section 10 hereof; and
D. A lump-sum payment of One Hundred
Twelve Thousand Dollars ($112,000) (the “Severance
Payment”), payable on the earlier of January 1, 2006 or
the Termination Date.
5. Termination . This
Agreement may be terminated prior to the end of the Term (which
earlier termination date is referred to under this Agreement as the
“Termination Date”) as follows:
A. Either the Board or the Executive
may terminate this Agreement at any time upon written notice to the
other; provided, that if the Board terminates this Agreement for
Cause, the notice to the Executive shall specify the grounds
constituting Cause.
B. This Agreement shall
automatically terminate upon the death of the Executive.
C. At the election of the Board,
this Agreement may be terminated upon the Total Disability of the
Executive, by written notice to the Executive.
D. In the event that the Company
terminates this Agreement for Cause, or in the event that the
Executive terminates this Agreement:
(i) As of the Termination Date, all
remaining salary payments, if any, shall cease and, subject to any
statutory continuation rights, all Welfare Benefits (and to the
extent applicable, Benefit Payments) shall cease; and
(ii) The Executive shall not be
entitled to the Stay Bonus or the Severance Payment.
E. In the event that the Board
terminates this Agreement without Cause:
(i) As of the Termination Date, all
remaining salary payments, if any, shall cease and, subject to any
statutory continuation rights, all Welfare Benefits (and to the
extent applicable, Benefit Payments) shall cease; and
(ii) Subject to the execution by the
Executive of the Release of Employment Claims within the time
period provided for under Section 9B hereof without
revocation, and subject to Section 8B hereof, the Executive
shall be paid the Stay Bonus and the Severance Payment.
F. In the event that this Agreement
is terminated as a result of the death or Total Disability of the
Executive:
(i) As of the Termination Date, all
remaining salary payments, if any, shall cease and, subject to any
statutory continuation rights, all Welfare Benefits (and to the
extent applicable, Benefit Payments) shall cease;
(ii) The Executive shall not be
entitled to the Stay Bonus; but
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(iii) Subject to the execution by
the Executive of the Release of Employment Claims within the time
period provided for under Section 9B hereof without
revocation, and subject to Section 8B hereof, the Executive
shall be paid the Severance Payment eight (8) days after he
executes the Release of Employment Claims without revocation;
provided, that in the event of the death of the Executive, the
Severance Payment shall be paid to the Executive’s estate
eight (8) days after the executor of his estate executes a
Release of Employment Claims in substantially the same form as the
Release of Employment Claims attached hereto as Exhibit A and made
a part hereof, without revocation, within the time period provided
for under Section 9B hereof or sixty (60) calendar days
after the death of the Executive, whichever is longer.
6. Definition of Cause . For
purposes of this Agreement, “Cause” shall mean
(i) the Executive’s conviction or the entering of a plea
of guilty or nolo contendere by the Executive to any felony or any
crime involving moral turpitude; (ii) dishonesty or other
willful misconduct on the part of the Executive that is materially
harmful to the Company; (iii) the failure of the Executive,
within ten (10) days after receipt by the Executive of written
notice from the Board, to comply with lawful and reasonable
instructions of the Board; or (iv) the failure of the
Executive to perform the duties specified in Section 3 hereof
in any material respect, other than as a result of illness or other
disability, following written notice thereof from the Board and ten
(10) days’ opportunity to cure such failure.
7. Definition of Total
Disability . For purposes hereof, “Total
Disability” shall mean the inability of the Executive to
perform the duties set forth in Section 3 hereof by reason of
any physical or mental impairment, as determined by a physician or
other appropriate medical evidence acceptable to the Board, which
continues for sixty (60) substantially consecutive days. The
Executive agree
