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EXHIBIT 10.13
NEWQUEST, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of March 1, 2005, between NewQuest, Inc., a
Delaware corporation (the "Company"), and Jeffrey L. Rothenberger ("Executive").
The execution and delivery of this Agreement by the Company and
Executive are conditions to the Company's obligations to consummate the
transactions contemplated by that certain Purchase and Exchange Agreement, dated
as of November 10 2004, among NewQuest, LLC, a Texas limited liability company
("NQLLC"), NewQuest Holdings, Inc., a Delaware corporation ("Holdings"), the
Company and certain other persons identified therein (the "Purchase Agreement").
In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in paragraph 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Chief
Operating Officer of the Company and Holdings and shall have the normal duties,
responsibilities, functions and authority of the Chief Operating Officer,
subject to the power and authority of the Company's Chief Executive Officer to
expand or limit such duties, responsibilities, functions and authority and to
overrule actions of officers of the Company and Holdings. During the Employment
Period, Executive shall render such administrative, financial and other
executive and managerial services to Holdings, the Company and their respective
Subsidiaries which are consistent with Executive's position as the Board may
from time to time reasonably direct.
(b) During the Employment Period, Executive shall report to the
Company's Chief Executive Officer and shall devote his full business time and
attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of Holdings, the
Company and their respective Subsidiaries. Executive shall perform his duties,
responsibilities and functions to Holdings, the Company and their respective
Subsidiaries hereunder in good faith in a diligent, trustworthy and professional
manner and shall comply with Holdings', the Company's and their respective
Subsidiaries' policies and procedures in all material respects. During the
Employment Period, Executive shall not serve as an officer or director of, or
otherwise perform services for compensation for, any other entity without the
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prior written consent of the Board (which shall not be unreasonably withheld,
conditioned or delayed); provided that Executive may participate on boards of
charitable entities or other civic entities so long as such service does not
materially interfere with Executive's duties under this Agreement.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by Holdings or the
Company, directly or through one or more Subsidiaries.
3. Compensation and Benefits.
(a) During the Employment Period, Executive's base salary shall be
$400,000 per annum or such higher rate as the Board may determine from time to
time (as adjusted from time to time, the "Base Salary"), which salary shall be
payable by the Company or one of its Subsidiaries in regular installments in
accordance with such entity's general payroll practices (in effect from time to
time). During the period beginning on the date of this Agreement and ending
December 31, 2005, the Base Salary shall be pro rated on an annualized basis. In
addition, during the Employment Period, Executive shall be entitled to
participate in all of the Company's employee benefit programs for which senior
executive employees of the Company and its Subsidiaries are generally eligible.
During the Employment Period, Executive shall also be entitled to five weeks of
paid vacation each calendar year in accordance with the Company's policies,
which if not taken during any year may not be carried forward, other than with
respect to one week per year, to any subsequent calendar year and no
compensation shall be payable in lieu thereof. The Company or one of its
affiliates or Subsidiaries shall obtain and maintain customary directors and
officers' liability insurance coverage covering Executive on terms reasonably
satisfactory to the Board.
(b) In addition to the Base Salary, Executive shall be eligible for an
annual bonus in an amount up to 75% of the Base Salary then in effect following
the end of each fiscal year of the Company (ending December 31) based upon the
achievement by Executive and the Company and its Subsidiaries of budgetary and
other objectives set by the Board, in consultation with the Chief Executive
Officer and the Chief Operating Officer; provided that with respect to the first
year for which Executive is eligible for a bonus, such bonus shall be paid on a
pro rata basis based upon that portion of the year that remained after the date
hereof. Such bonus shall be paid on or before March 15 of the following year.
(c) During the Employment Period, the Company or one of its
Subsidiaries shall reimburse Executive for all reasonable business expenses
incurred by him in the course of performing his duties and responsibilities
under this Agreement which are consistent with the Company's and its
Subsidiaries' policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company's and its
Subsidiaries' requirements with respect to reporting and documentation of such
expenses.
(d) All amounts payable to Executive as compensation hereunder shall
be subject to all required and customary withholding by the Company.
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4. Term.
(a) The Employment Period will continue until (i) Executive's
resignation, Disability (as defined in paragraph 4(f) below) or death, or (ii)
the Board decides to terminate Executive's employment with or without Cause (as
defined in paragraph 4(e) below). Except as otherwise provided herein, any
termination of the Employment Period by the Company shall be effective as
specified in a written notice from the Company to Executive.
(b) If the Employment Period is terminated by the Company without
Cause or upon Executive's resignation with Good Reason, Executive shall be
entitled to (x) continue to receive his Base Salary payable in regular
installments and (y) to continue to participate in employee benefit programs for
senior executive employees (other than bonus and incentive compensation plans),
at the Company's cost, to the extent permitted under the terms of such programs
and under applicable law, as special severance payments from the date of
termination for a period of twelve (12) months thereafter (the "Severance
Period") if and only if Executive has executed and delivered to the Company the
General Release substantially in form and substance as set forth in Exhibit A
attached hereto and the General Release has become effective, and only so long
as Executive has not revoked or breached the provisions of the General Release
or breached the provisions of paragraphs 5, 6 or 7 hereof and does not apply for
unemployment compensation chargeable to Holdings, the Company or any Subsidiary
during the Severance Period, and Executive shall not be entitled to any other
salary, compensation or benefits after termination of the Employment Period,
except as specifically provided for in the Company's employee benefit plans or
as otherwise expressly required by applicable law. The amounts payable pursuant
to this paragraph 4(b) shall be payable in regular monthly installments. Unless
Executive is terminated by the Company or its successor without Cause in
connection with a Sale of the Company (as defined below), the amounts payable
pursuant to this paragraph 4(b) shall be reduced by the amount of any
compensation Executive receives with respect to any other employment during the
Severance Period; provided that Executive shall have no duty or obligation to
seek other employment during the Severance Period or otherwise mitigate damages
hereunder. Upon request from time to time, Executive shall furnish the Company
with a true and complete certificate specifying any such compensation earned or
received by him during the Severance Period. For purposes of this Agreement,
"Sale of the Company" shall mean the sale of Holdings or the Company to an
Independent Third Party or group of Independent Third Parties pursuant to which
such party or parties acquire (y) 50% or more of the common stock of Holdings,
par value $.01 per share ("Common Stock") outstanding at the time of such
transaction or series of transactions or (z) all or substantially all of the
Company's assets determined on a consolidated basis. For purposes of this
Agreement, "Independent Third Party" shall mean any person who, immediately
prior to the contemplated transaction, does not own in excess of 5% of the
Common Stock on a fully-diluted basis (a "5% Owner"), who is not controlling,
controlled by or under common control with any such 5% Owner and who is not the
spouse or descendant (by birth or adoption) of any such 5% Owner or a trust for
the benefit of such 5% Owner and/or such other persons.
(c) If the Employment Period is terminated by the Company for Cause or
is terminated pursuant to clause (a)(i) above (other than termination with Good
Reason), Executive shall only be entitled to receive his Base Salary through the
date of termination or expiration and
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shall not be entitled to any other salary, compensation or benefits from
Holdings, the Company or any of their respective Subsidiaries thereafter, except
as otherwise specifically provided for under the Company's employee benefit
plans or as otherwise expressly required by applicable law.
(d) Except as otherwise expressly provided herein, all of Executive's
rights to salary, bonuses, employee benefits and other compensation hereunder
which would have accrued or become payable after the termination or expiration
of the Employment Period shall cease upon such termination or expiration, other
than those expressly required under applicable law (such as COBRA). The Company
may offset any amounts Executive owes Holdings, the Company or any of their
respective Subsidiaries against any amounts Holdings, the Company or any of
their respective Subsidiaries owes Executive hereunder.
(e) For purposes of this Agreement, "Cause" shall mean with respect to
Executive one or more of the following: (i) the conviction of a felony or other
crime involving moral turpitude or the commission of any other act or omission
involving material dishonesty or fraud with respect to the Company or any of its
Subsidiaries, (ii) reporting to work under the influence of illegal drugs, the
use of illegal drugs (whether or not at the workplace) or other repeated conduct
causing the Company or any of its Subsidiaries substantial public disgrace or
disrepute or substantial economic harm, which is not cured within 20 days
following written notice thereof to the Executive, (iii) material and repeated
failure to perform his duties as reasonably directed by the Board or the
Company's Chief Executive Officer, which is not cured within 20 days following
written notice thereof to the Executive, (iv) breach of fiduciary duty or
engaging in gross negligence or willful misconduct with respect to the Company
or any of its Subsidiaries or (v) any other material breach of this Agreement
which is not cured within 20 days after written notice thereof to Executive.
(f) For purposes of this Agreement, "Disability" shall mean the
disability of Executive caused by any physical or mental injury, illness or
incapacity as a result of which Executive is unable to effectively perform or
fails to perform the essential functions of Executive's duties for 90
consecutive days or 120 days during any 12-month period.
(g) For purposes of this Agreement, "Good Reason" shall mean if
Executive resigns from employment with Holdings, the Company and their
respective Subsidiaries prior to the end of the Employment Period as a result of
one or more of the following reasons: (i) the Company reduces the amount of the
Base Salary, (ii) Holdings or the Company materially reduces his
responsibilities, in each case which is not cured within 20 days after written
notice thereof to the Company, (iii) the relocation of the Company's principal
executive offices and/or the location at which Executive provides services
pursuant to this Agreement to a location outside the metropolitan Nashville,
Tennessee area, or (iv) the Company's material breach of this Agreement;
provided that written notice of Executive's resignation for Good Reason must be
delivered to the Company within 45 days after the occurrence of any such event
in order for Executive's resignation with Good Reason to be effective hereunder.
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5. Confidential Information.
(a) Executive acknowledges that the information, observations and data
(including trade secrets) obtained by him while employed by the Company and its
Subsidiaries (including those obtained by him while employed by NQLLC or any of
its subsidiaries prior to the date of this Agreement and the acquisition of
NQLLC by Holdings and the Company) concerning the business or affairs of
Holdings or the Company or NQLLC or any other Subsidiary ("Confidential
Information") are the property of Holdings, the Company or such Subsidiary.
Therefore, Executive agrees that, except as set forth in, and pursuant to, this
paragraph 5(a), he shall not disclose to any unauthorized person or entity or
use for his own purposes any Confidential Information or any confidential or
proprietary information of other persons or entities in the possession of the
Company and its Subsidiaries ("Third Party Information"), without the prior
written consent of the Board, unless and to the extent that the Confidential
Information or Third Party Information becomes generally known to and available
for use by the public other than as a result of Executive's acts or omissions.
In the event that Executive is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, such Executive shall notify the Company promptly of
the request or requirement so that the Company may seek an appropriate
protective order or waive compliance with the provisions of this Section. If, in
the absence of a protective order or the receipt of a waiver hereunder,
Executive is, on the advice of counsel, compelled to disclose any Confidential
Information to any tribunal, such Executive may disclose the Confidential
Information to the tribunal; provided that such disclosing Executive shall use
its reasonable best efforts to assist the Company to obtain, at the request of
the Company (and at the Company's sole expense), an order or other assurance
that confidential treatment shall be accorded to such portion of the
Confidential Information required to be disclosed as the Company shall
designate. Executive shall deliver to the Company at the termination or
expiration of the Employment Period, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer files, disks
and tapes, printouts and software and other documents and data (and copies
thereof) embodying or relating to Third Party Information, Confidential
Information, Work Product (as defined below) or the business of Holdings, the
Company, NQLLC or any other Subsidiaries which he may then possess or have under
his control.
(b) Executive shall be prohibited from using or disclosing any
confidential information or trade secrets that Executive may have learned
through any prior employment. If at any time during this employment with
Holdings, the Company or any Subsidiary, Executive believes he is being asked to
engage in work that will, or will be likely to, jeopardize any confidentiality
or other obligations Executive may have to former employers, Executive shall
immediately advise the Board so that Executive's duties can be modified
appropriately. Executive represents and warrants to the Company that Executive
took nothing with him which belonged to any former employer when Executive left
his prior position and that Executive has nothing that contains any information
which belongs to any former employer. If at any time Executive discovers this is
incorrect, Executive shall promptly return any such materials to Executive's
former employer. The Company does not want any such materials, and Executive
shall not be permitted to use or refer to any such materials in the performance
of Executive's duties hereunder.
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6. Intellectual Property, Inventions and Patents. Executive
acknowledges that all discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, designs, analyses, drawings, reports,
patent applications, copyrightable work and mask work (whether or not including
any Confidential Information) and all registrations or applications related
thereto, all other proprietary information and all similar or related
information (whether or not patentable) which relate to Holdings', the Company's
or any of their Subsidiaries' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Executive (whether alone or jointly with others) while
employed by Holdings, the Company and its Subsidiaries, whether before or after
the date of this Agreement ("Work Product"), belong to Holdings, the Company or
such Subsidiary. Executive shall promptly disclose all patentable inventions and
other material Work Product to the Board and, at the Company's expense, perform
all actions reasonably requested by the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, assignments, consents, powers of attorney and other instruments).
Executive acknowledges that all Work Product shall be deemed to constitute
"works made for hire" under the U.S. Copyright Act of 1976, as amended.
In accordance with Title 19, Section 805 of the Delaware Code,
Executive is hereby advised that this paragraph 6 regarding Holdings', the
Company's and their Subsidiaries' ownership of Work Product does not apply to
any invention for which no equipment, supplies, facilities or trade secret
information of Holdings, the Company or any Subsidiary was used and which was
developed entirely on Executive's own time, unless (i) the invention relates to
the business of Holdings, the Company or any Subsidiary or to Holdings', the
Company's or any Subsidiaries' actual or demonstrably anticipated research or
development or (ii) the invention results from any work performed by Executive
for Holdings, the Company or any Subsidiary.
7. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that during the course of his
employment with the Company and its Subsidiaries he shall become familiar, and
during his employment with NQLLC or any of its subsidiaries he has become
familiar with Holdings', the Company's and their Subsidiaries' trade secrets and
with other Confidential Information concerning Holdings, the Company and their
predecessors and Subsidiaries and that his services have been and shall continue
to be of special, unique and extraordinary value to Holdings, the Company and
their Subsidiaries, including NQLLC, and therefore Executive agrees that, during
the Employment Period and for eighteen months thereafter (the "Noncompete
Period"), he shall not directly or indirectly own any inte






