NEWQUEST, INC. EMPLOYMENT AGREEMENT

 

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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 interest in, manage,

control, participate in, consult with, render services for, be employed in an

executive, managerial or administrative capacity by, or in any manner engage in

any business competing with the businesses of Holdings, the Company or their

Subsidiaries, as such businesses exist during the Employment Period or, as of

the date of termination or expiration of the Employment Period, are contemplated

to exist during the eighteen-month period following the date of termination or

expiration of the Employment Period (the "Restricted Business") within any

geographical area in which Holdings, the Company or any of its Subsidiaries

engage or plan to engage during the eighteen-month period following the date of

termination or expiration of the Employment Period. Nothing herein shall

prohibit Executive from (i) being a

 

 

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passive owner of not more than 2% of the outstanding stock of any class of a

corporation which is publicly traded, so long as Executive has no active