Exhibit 10.3


 


EMPLOYMENT AGREEMENT


 


AGREEMENT dated May 28,
2008, by and between NUCO2 INC., a Florida corporation
having its principal executive office at 2800 SE Market Place, Stuart, Florida
34997 (hereinafter referred to as the “Corporation”), and WILLIAM SCOTT WADE,
currently residing at 9 East High Point, Stuart, Florida 34996 (hereinafter
referred to as the “Executive”).


 


W I T N E S S E T H:


 


WHEREAS, the Corporation
desires to employ the Executive and the Executive desires to be employed by the
Corporation upon the terms and subject to the conditions hereinafter set forth,


 


NOW, THEREFORE, in
consideration of the mutual covenants herein contained and for other good and
valuable consideration, it is agreed as follows:


 


ARTICLE 1 - EMPLOYMENT TERMS AND DUTIES


 


1.1                                 The Corporation hereby agrees to employ
the Executive and the Executive agrees to provide services for the Corporation
as its Chief Operating Officer.  The
Executive shall serve as and perform the duties of Chief Operating Officer of
the Corporation during the Term (defined hereinafter) of this Agreement.


 


1.2                                 The Executive agrees to devote his full
business time during regular business hours to working for the Corporation and
performing such duties as shall from time to time be assigned to him by the
Board of Directors of the Corporation (“Board”) or the Chief Executive Officer
of the Corporation consistent with his position as Chief Operating
Officer.  During the 


 


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Term of his employment hereunder, the Executive shall
have no interest in, or perform any services during regular business hours for
any other company, whether or not such company is competitive with the
Corporation, except that this prohibition shall not be deemed to apply to passive
investments in businesses not competitive with the business of the Corporation
or to investments of 5% or less of the outstanding stock of public companies
whose stock is traded on a national securities exchange or in the
over-the-counter market.  For purposes of
this Paragraph 1.2, a “passive investment” shall be deemed to mean
investment in a business which does not require or result in the
participation of the Executive in the management or operations of such business
except during times other than regular business hours and which does not
interfere with his duties and responsibilities to the Corporation.  Nothing contained herein shall limit the
right of the Executive to make speeches, write articles or participate in
public debate and discussions in and by means of any medium of communication or
serve as a director or trustee of any non-competing corporation or
organization, provided that such activities are not inconsistent with the
Executive’s obligations hereunder.


 


1.3                                 Consistent with the Executive’s aforesaid
duties the Executive shall, at all times during the Term hereof, be subject to
the supervision and direction of the Board and the Chief Executive Officer with
respect to his duties, responsibilities and the exercise of his powers.


 


1.4                                 The services of the Executive hereunder
shall be rendered primarily at the Corporation’s principal executive office
currently in Stuart, Florida; provided, however, that the Executive shall make
such trips outside of Stuart, Florida as shall be reasonably necessary in
connection with the Executive’s duties hereunder.


 


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1.5                                 The term of the Executive’s employment
hereunder shall commence upon the date of this Agreement and such employment
shall continue, except as otherwise provided herein, through May 28, 2013
(the “Term”).


 


ARTICLE 2 - COMPENSATION


 


2.1                                 The Corporation shall pay to the
Executive during the Term of his employment by the Corporation and the
Executive shall accept as his entire compensation for his services hereunder:


 


(a)                                  A base salary (“Base Salary”) at the rate
of $309,310 per annum, payable in accordance with the Corporation’s regular
payment schedule for its employees.  The
Base Salary will be reviewed annually and may be increased from time to time by
the Board or Chief Executive Officer of the Corporation.


 


(b)                                 During the Term of this Agreement and
subject to the provisions hereof, the Executive shall be entitled, commencing
with respect to fiscal year ending June 30, 2008 (and on each June 30
thereafter during the Term of this Agreement), to an annual cash bonus based
upon the relative performance of the Corporation and the Executive for the
applicable fiscal year, the amount of which will be determined in good faith by
the Chief Executive Officer, in his sole discretion, and approved by the
Board.  The Corporation achieving its
projected EBITDA and/or other operating and financial criteria as projected in
the Corporation’s business plan established by the Board for the applicable
fiscal year shall be the major considerations in determining the amount of the
annual bonus.  The annual cash bonus will
have a target of fifty percent (50%) of Base Salary (the “Target Cash Bonus”)
based on the full achievement of its projected EBITDA and other operating and
financial criteria as projected 


 


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in the Corporation’s business plan approved by the
Board and the Executive meeting individual achievement goals recommended by the
Executive and approved by the Chief Executive Officer.  Any Target Cash Bonus earned shall be paid no
later than sixty (60) days following the end of the applicable fiscal year.


 


(c)                                  The Corporation will reimburse the
Executive for his necessary and reasonable out-of-pocket expenses incurred in
the course of his employment and in connection with his duties hereunder.


 


(d)                                 The Corporation will provide the
Executive with medical insurance coverage under the Corporation’s group medical
insurance policy and the Executive shall be entitled to participate in all
other health, welfare, retirement, disability, and other benefit plans, if any,
available to employees and senior executives of the Corporation (collectively,
the “Benefit Plans”).


 


(e)                                  The Executive shall be entitled to paid
vacation and/or sick days during each twelve (12) month period during the Term
of this Agreement of the same duration as provided to other executive officers
of the Corporation, but in no event shall he receive less than four (4) weeks
paid vacation per year.


 


(f)                                    The Executive shall receive $650 per
month to cover the costs of the Executive’s automobile lease and other
incidentals plus a gross up for any income taxes incurred in connection
therewith.


 


(g)                                 On the date of this Agreement, NUCO2
Parent Inc., a Delaware corporation (“Parent”) shall award to the Executive an
option to purchase 1,920 shares of Parent 


 


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common stock under the Parent’s 2008 Stock Incentive
Plan, in accordance with the terms of a stock option agreement dated of even
date herewith (“Option”).


 


ARTICLE 3 - TERMINATION


 


3.1                                 Except as otherwise provided herein, the
Term of the employment of the Executive shall terminate:


 


(a)                                  automatically upon the death of the
Executive or voluntary termination of employment by the Executive other than
for Good Reason (as such term is defined in Paragraph 5.3 below);


 


(b)                                 at the option of the Corporation, upon
written notice thereof to the Executive, in the event that the Executive shall
become permanently incapacitated (as hereinafter defined);


 


(c)                                  at the option of the Corporation, upon
thirty (30) days’ prior written notice thereof to the Executive specifying the
basis thereof, in the event that the Executive (i) engages in any criminal
conduct constituting a felony and criminal charges are brought against the
Executive by a governmental authority, (ii) knowingly and willfully fails
or refuses to perform his duties and responsibilities in a manner consistent
with his position and other officers of similar position in the Corporation to
the reasonable satisfaction of the Board of Directors of the Corporation, or (iii) knowingly
and willfully engages in activities which would constitute a material breach of
any term of this Agreement, or any applicable policies, rules or
regulations of the Corporation or results in a material injury to the business
condition, financial or otherwise, results of operation or prospects of the
Corporation, as determined in good faith by the Board of 


 


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Directors of the Corporation, and such activity is not
cured by the Executive within the thirty (30) day notice period provided to the
Executive.  For purposes of this
Agreement, termination pursuant to this Paragraph 3.1(c) shall be
deemed a termination “for cause”.


 


For purposes of this
Agreement, the Executive shall be deemed permanently incapacitated in the event
that the Executive shall, by reason of his physical or mental disability, fail
to substantially perform his usual and regular duties for the Corporation for a
consecutive period of four (4) months or for six (6) months in the
aggregate in any eighteen (18) month period; provided, however, that the
Executive shall not be deemed permanently incapacitated unless and until a
physician, duly licensed to practice medicine and reasonably acceptable to the
Corporation and the Executive, shall certify in writing to the Corporation that
the nature of the Executive’s disability is such that it will continue as a
substantial impediment to the Executive’s ability to substantially perform his
duties hereunder.


 


(d)                                 At the option of the Corporation without
Cause within its sole and complete discretion upon thirty (30) days’ prior
written notice.


 


(e)                                  At the option of the Executive, for Good
Reason (as defined in Paragraph 5.3), upon thirty (30) days’ prior written
notice.


 


3.2                                 Notwithstanding anything to the contrary
contained herein:


 


(a)                                  In the event that the Executive shall die
during the Term of this Agreement, the Corporation shall, in lieu of any other
compensation payable hereunder, pay to the beneficiaries theretofore designated
in writing by the Executive (or to the Executive’s estate if no such
beneficiaries shall have been designated), a sum equal to one hundred percent
(100%) of the compensation payable to the Executive during the twelve (12)
month period immediately 


 


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preceding the Executive’s death, payable in twelve
(12) equal monthly installments, without interest, commencing one month following
such death.  To the extent that the
Corporation receives the proceeds on any life insurance on the life of the
Executive (as provided in Paragraph 3.2(d)) such proceeds shall be paid,
promptly after receipt (but no later than thirty (30) days after the
Corporation has received such proceeds), to the beneficiaries theretofore
designated in writing by the Executive (or the Executive’s estate if no such
beneficiaries shall have been designated) to fund the obligations under this
Paragraph 3.2(a) and shall reduce such obligations on a dollar for
dollar basis.  The balance, if any, due to the
beneficiaries theretofore designated in writing by the Executive (or the
Executive’s estate if no such beneficiaries shall have been designated) under
this Paragraph 3.2(a) shall thereafter be paid in twelve (12) equal
monthly installments, without interest, commencing one month following the
Executive’s death.


 


(b)                                 In the event that the employment of the
Executive shall be terminated by reason of the Executive becoming permanently
incapacitated, then, as additional consideration for his past services to the
Corporation, he shall receive one hundred percent (100%) of his then current
annual Base Salary, in equal monthly installments, without interest, for a
period of twelve (12) months from the date of such termination.  Such payments shall be in addition to all
income disability benefits, if any, which the Executive may receive from
policies provided by or through the Corporation, including state-required short
term disability.


 


(c)                                  In the event of a termination of the
Executive’s employment for Cause or voluntarily by the Executive other than for
Good Reason, the Executive shall not be entitled to (i) any payments other
than such compensation as shall have been earned by him prior to the date of
such termination and not paid as of the date of such termination, or (ii) any
bonus pursuant to Paragraph 2.1(b).


 


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(d)                                 In the event that the Corporation shall
desire to fund the death benefits payable under Paragraph 3.2(a) above
with a policy or policies of insurance on the life of the Executive or the
disability benefits payable under Paragraph 3.2(b) above with a disability
policy, the Executive shall cooperate with the Corporation in obtaining such
insurance policy(ies) and shall submit to such medical examinations and execute
such documents as may be required in connection with the obtaining of such
insurance.


 


(e)                                  In the event the Executive’s employment
is terminated at the discretion of the Corporation without Cause pursuant to
Paragraph 3.1(d), or the Executive terminates his employment under Paragraph
3.1(e) for Good Reason, at any time other than during the two-year period
following a Change in Control, he will be paid (i) in consideration for
the non-compete provisions set forth in Paragraph 4.2, one (1) year’s
current Base Salary in equal quarterly installments during the one (1) year
following the termination of employment and (ii) a pro rata portion of the
Target Cash Bonus he would have received during the year of termination had the
Executive not been terminated based on the number of whole or partial months in
which the Executive had been employed during the fiscal year that the Executive
was terminated payable if and when similar performance bonuses are paid to the
other executive officers of the Corporation in respect of the Corporation’s
performance for such fiscal year.


 


(f)                                    In the event of any termination of the
Executive’s employment pursuant to this Article 3, excepting a termination
by the Corporation for Cause and a termination by the Executive not for Good
Reason, the Executive and/or his dependents and beneficiaries shall continue to
participate during the applicable period of salary continuation in all medical
insurance and related benefits provided by the Corporation on the same basis as
prior to the date of his termination.  In
connection with any termination of the Executive’s employment pursuant 


 


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to this Article 3, the Executive shall receive (i) his
unpaid Base Salary accrued through the date of termination; (ii) his
unused vacation accrued through the date of termination; (iii) all of his
accrued and vested benefits due under all employee benefit plans in which the
Executive is participating; (iv) other than in connection with a
termination for Cause, any earned and unpaid Target Cash Bonus and long-term
cash incentive for the previous completed fiscal year and long-term incentive
cycle; and (v) all unreimbursed business expenses incurred through the
date of termination and otherwise qualifying under applicable Corporation
policy.


 


(g)                                 Upon the termination of the Executive’s
employment, the consequences of such termination upon the Executive’s Option
shall be governed by the terms of the Option.


 


ARTICLE 4 — RESTRICTIVE COVENANTS


 


4.1                                 Confidential Information. 
The Executive acknowledges that, because of his duties and his position
of trust under this Agreement, he will become familiar with trade secrets and
other confidential information (including, but not limited to, operating
methods and procedures, secret lists of actual and potential sources of supply,
customers and employees, costs, profits, markets, sales and plans for future
developments) which are valuable assets and property rights of the Corporation
and not publicly known and Executive acknowledges that public disclosure of
such trade secrets and other confidential information will have an adverse
effect on the Corporation and its business. 
Except in connection with the performance of his duties for the
Corporation, the Executive agrees that he will not, during or at any time after
the Term of this Agreement, either directly or indirectly, disclose to any
person, entity, firm or corporation such trade secrets or other confidential
information, including, but not limited to, any facts concerning the systems,
methods, secret lists, procedures or plans 


 


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developed or used by the Corporation, and not to
release, use, or disclose the same except with the prior written consent of the
Corporation.  The Executive agrees to
retain all such trade secrets and other confidential information in a fiduciary
capacity for the sole benefit of the Corporation, its successors and
assigns.  All records, files,
memorandums, reports, price lists, customer lists, secret lists, documents,
equipment, systems, methods, procedures and plans, and the like, relating to
the business of the Corporation, which the Executive shall use or prepare
or come into contact with, shall remain the sole property of the
Corporation.  Upon termination of his
employment by the Corporation or at any time that the Corporation may so
request, the Executive will surrender to the Corporation all non-public papers,
notes, reports, plans and other documents (and all copies thereof) relating to
the business of the Corporation which he may then possess or have under his
control.


 


4.2                                 Non-Compete. 
The Executive acknowledges that (i) the services to be performed by
him under this Agreement are of a special, unique, extraordinary and
intellectual character; (ii) the Executive possesses substantial technical
and managerial expertise and skill with respect to the Corporation’s business; (iii) the
Corporation’s business is national in scope and its products and services are
marketed throughout the nation; (iv) the Corporation competes with other
businesses that are or could be located in any part of the nation; (v) the
covenants and obligations of Executive under this Paragraph 4.2 are
material inducement and condition to the Corporation’s entering into this
Agreement and performing its obligations hereunder; and (vi) the
provisions of this Paragraph 4.2 are reasonable and necessary to protect
the Corporation’s business.


 


In consideration of the
acknowledgments by the Executive above, and in consideration of the
compensation and benefits (including the payments described in
Paragraphs 3.2(e) and


 


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5.1(b)) to be paid or
provided to the Executive by the Corporation, the Executive covenants that he
will not, during the Term and for a period of two (2) years following the
expiration or earlier termination of this Agreement, without the prior written
consent of the Corporation, directly or indirectly:


 


(a)                                  knowingly solicit any business, in the
same product or business line or one that is closely related to that in which
the Executive was engaged during his employment, for or from, or become
associated with, as principal, agent, employee, consultant, or in any other
capacity, any person who, or entity which, at the time of, or during the twelve
(12) months immediately preceding such expiration or termination was in direct
competition with the Corporation; or


 


(b)                                 become a principal, agent, employee,
consultant, or otherwise become associated with any person or entity which is
engaged in direct or indirect competition (i.e., doing indirectly through
others what the Executive could not do directly) with the Corporation.


 


4.3                                 Enforcement. 
The Executive acknowledges that the services provided by him pursuant to
this Agreement are of a unique nature and of extraordinary value and of such a
character that a material breach of the provisions of either Paragraph 4.1
or 4.2 of this Agreement by the Executive will result in irreparable damage and
injury to the Corporation for which the Corporation will not have any adequate
remedy at law.  Therefore, in the event
that the Executive commits or threatens to commit any such breach, the
Corporation will have (a) the right and remedy to have the provisions of
Paragraphs 4.1 and 4.2 of this Agreement specifically enforced by any court
having equity jurisdiction, it being agreed that in any proceeding for an
injunction, and upon any motion for a temporary or permanent injunction, the 


 


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Executive’s ability to answer in damages shall not be
a bar or interposed as a defense to the granting of such injunction and (b) the
right and remedy to require the Executive to account for and to pay over to the
Corporation all compensation, profits, monies, accruals, increments and other
benefits (hereinafter referred to collectively as the “Benefits”) derived or
received by him as a result of any transactions constituting a breach of any of
the provisions of Paragraphs 4.1 and 4.2 of this Agreement, and the Executive
hereby agrees to account for and pay over such Benefits to the
Corporation.  Each of the rights and
remedies enumerated in (a) and (b) above shall be independent of the
other, and shall be severally enforceable, and all of such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Corporation under law or in equity.


 


If any covenant in this Article 4 is
held to be unreasonable, arbitrary, or against public policy, such covenant
will be considered to be divisible with respect to scope, time and geographic
area, and such lesser scope, time, or geographic area, or all of them, as the
court of competent jurisdiction may determine to be reasonable, not arbitrary,
and not against public policy, will be effective, binding, and enforceable
against the Executive.  The undertakings
of Article 4 shall survive the termination or cancellation of the
Agreement or of the Executive’s termination.


 


ARTICLE 5 - CHANGE OF CONTROL


 


5.1                                 Compensation. 
If prior to the expiration of the Term of this Agreement, there is a
Change of Control (defined in Paragraph 5.2 below) and thereafter, within two
(2) years of the Change in Control, the Corporation shall terminate the
Executive’s employment other than for Cause or the Executive shall resign his
employment for Good Reason, the Executive shall be 


 


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entitled to the following compensation (which
compensation shall be in lieu of, and not in addition to, benefits otherwise
payable under Paragraph 3.2):


 


(a)                                  Continuation of all benefits, including
without limitation medical, dental and life insurance for one and one-half (11/2) years
following the date of termination, or until the date on which the Executive
first becomes eligible for insurance coverage of a similar nature provided by a
firm that employs him following termination of employment by the Corporation,
whichever occurs first.


 


(b)                                 A lump sum payment of an amount equal to
the greater of (i) one and one-half (11/2) times the sum of (y) the Executive’s then
current annual Base Salary plus (z) the Executive’s Target Cash Bonus for
the then current year (such Target Cash Bonus calculated as if the targets had
been met in the event the Target Cash Bonus cannot be calculated as of the date
of the termination of the Executive’s employment) and (ii) six hundred
ninety-five thousand nine hundred forty-eight dollars ($695,948), to be paid
within sixty (60) days of termination of employment (except as provided in
Paragraph 6.8); provided such amount shall be paid in equal quarterly
installments over such period as is provided in Paragraph 3.2(e) if the
Change in Control is not also a change in the ownership or effective control of
the Corporation or in the ownership of a substantial portion of the assets of
the Corporation (within the meaning of Section 409A(b)(2)(v) of the
Code (as defined at Paragraph 5.2(b)) and the Treasury regulations
thereunder).  The parties agree that the
amount of $618,620 payable pursuant to this Paragraph 5.1(b) shall be
treated as paid in consideration for the non-compete provisions set forth in
Paragraph 4.2 and shall be subject to the enforcement provisions set forth
in Paragraph 4.3, and the balance shall be treated as severance.


 


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5.2                                 Change of Control.


 


(a)                                  For the purposes of this Agreement, a
Change of Control means the occurrence, during any twelve (12) month period,
of: (i) the direct or indirect sale, lease, exchange or other transfer of
all or substantially all (50% or more) of the assets of the Corporation to any
person or entity or group of persons or entities acting in concert as a
partnership or other group (a “Group of Persons”), (ii) the merger,
consolidation or other business combination of the Corporation with or into
another corporation with the effect that the shareholders of the Corporation,
as the case may be, immediately following the merger, consolidation or other
business combination, hold 50% or less of the combined voting power of the then
outstanding securities of the surviving corporation of such merger,
consolidation or other business combination ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors, (iii) the replacement of a majority of the Corporation’s
Board of Directors in any given year as compared to the directors who constituted
the Corporation’s Board of Directors at the beginning of such year, and such
replacement shall not have been approved by the Corporation’s Board of
Directors, as the case may be, as constituted at the beginning of such year, or
(iv) a person or Group of Persons shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become the beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of securities of the
Corporation representing 50% or more of the combined voting power of the then
outstanding securities of such corporation ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors.


 


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(b)                                 If, by reason of, or in connection with,
any transaction that occurs at any time after the date of this Agreement, the
Executive would be subject to the imposition of the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (“Code”), but the imposition
of such tax could be avoided by approval of shareholders described in Section 280G(b)(5)(B) of
the Code, then the Executive may cause the Corporation to seek such approval,
in which case the Corporation shall use its commercially reasonable efforts to
cause such approval to be obtained and the Executive shall cooperate and
execute such waivers as may be necessary so that such approval avoids
imposition of any excise tax under Section 4999.  If the Executive fails to cause the
Corporation to seek such approval, Subparagraph (i) below shall not apply
and the Executive shall not be entitled to any gross-up payment for any
resulting tax under Section 4999. 
If such approval, even if sought and obtained, would not qualify for
exemption, under Section 280G(b)(5)(A)(ii) of the Code, from the
excise tax imposed under Section 4999, then the following provisions shall
apply without any precedent obligation of the Executive to seek such approval:


 


(i)                                     Anything in
this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, benefit or distribution (including an acceleration
of vesting, a lapse of restrictions on amounts otherwise subject to vesting, or
a combination thereof) by the Corporation, any of its affiliates, or one or
more trusts established by the Corporation for the benefit of its employees, to
or for the benefit of the Executive (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an 


 


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amount such that after payment by the
Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, all Federal, state and
local income and employment taxes (and any interest and penalties imposed with
respect thereon) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment. 
Notwithstanding the foregoing provisions of this Paragraph 5.2(b)(i), if
it shall be determined that the Executive is entitled to a Gross-Up Payment,
but that the payments, benefits and distributions resulting in the imposition
of the Excise Tax do not exceed 110% of the greatest amount that could be paid
to the Executive without giving rise to any Excise Tax (the “Safe Harbor Amount”),
then no Gross-Up Payment shall be made to the Executive and the amounts payable
under this Agreement shall be reduced so that the payments or distributions, in
the aggregate, are reduced to the Safe Harbor Amount.


 


(ii)                                  Subject to the
provisions of part (iii) of this Paragraph 5.2(b), all determinations
required to be made under this Paragraph 5.2(b), including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
one of the major internationally recognized certified public accounting firms
(commonly referred to, as of the date hereof, as a Big Four firm) designated by
the Executive and approved by the Corporation (which approval shall not be
unreasonably withheld) (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Corporation and the Executive within
fifteen (15) business days of the receipt of notice from the Executive that
there has been a Payment, or such earlier time as is requested by the Corporation.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group affecting
the change in the ownership or effective control of the Corporation or in the
ownership of a substantial portion of the assets of 


 


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the Corporation (within the
meaning of Section 280G(b)(2)(A)(i) of the Code), the Executive shall
designate another Big Four accounting firm (subject to the approval of the
Corporation, which approval shall not be unreasonably withheld) to make the
determinations required hereunder (which accounting firm shall then be referred
to as the Accounting Firm hereunder). 
All fees and expenses of the Accounting Firm shall be borne solely by
the Corporation.  Any Gross-Up Payment,
as determined pursuant to this Paragraph 5.2(b), shall be paid by the
Corporation to the Executive within five (5) days of the receipt of the
Accounting Firm’s determination.  Any
determination by the Accounting Firm shall be binding upon the Corporation and
the Executive, except as provided in this part (ii) below and in parts (iii) and
(iv) of this Paragraph 5.2(b).  As a
result of the uncertainty in the application of Section 280G and Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have been made
by the Corporation should have been made (“Underpayment”) consistent with the
calculations required to be made hereunder. 
In the event that the Corporation exhausts its remedies pursuant to part
(iii) of this Paragraph 5.2(b) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for the benefit of
the Executive.


 


(iii)                               The Executive
shall notify the Corporation in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Corporation of
the Gross-Up Payment.  Such notification
shall be given as soon as practicable but no later than fifteen (15) business
days after the Executive is informed in writing of such claim and shall apprise
the Corporation of the nature of such claim and the date on which such claim is
requested 


 


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to be paid. 
The Executive shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which the Executive gives such
notice to the Corporation (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If the Corporation notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:


 


(A)                              give the
Corporation any information reasonably requested by the Corporation relating to
such claim,


 


(B)                                take such
action in connection with contesting such claim as the Corporation shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Corporation,


 


(C)                                cooperate with
the Corporation in good faith in order to effectively contest such claim, and


 


(D)                               permit the
Corporation to participate in any proceedings relating to such claim;


 


provided, however, that the
Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect
thereto) imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the
foregoing provisions of this part (iii) of this Paragraph 5.2(b), the
Corporation shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all 


 


18

















 


administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Corporation shall determine; provided,
however, that if the Corporation directs the Executive to pay such claim and
sue for a refund, the Corporation shall advance the amount of such payment to
the Executive, on an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed with respect to such
advance or with respect to any imputed income with respect to such advance; and
provided, further, that any extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount.  Furthermore, the Corporation’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.


 


(iv)                              If, after the
receipt by the Executive of an amount advanced by the Corporation pursuant to
part (iii) of this Paragraph 5.2(b), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall promptly
take all necessary action to obtain such refund and (subject to the Corporation’s
complying with the requirements of part (iii) of this Paragraph 5.2(b))
upon receipt of such refund shall promptly pay to the Corporation the amount of
such refund (together with any interest paid or credited thereon after 


 


19

















 


taxes applicable thereto).  If after the receipt by the Executive of an
amount advanced by the Corporation pursuant to part (iii) of this
Paragraph 5.2(b), a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Corporation does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.


 


5.3                                 Good Reason. 
The Executive shall have Good Reason for terminating his employment with
the Corporation under this Agreement, whether occurring prior to, or upon or
after, the occurrence of a Change of Control, if one or more of the following
events (each, an “Event”) occurs:


 


(a)                                  an involuntary change in the Executive’s
status or position with the Corporation which constitutes a demotion from the
Executive’s then current status or position and a material change in the nature
or scope of powers, authority or duties inherent in such position;


 


(b)                                 a reduction by the Corporation in the
Executive’s compensation;


 


(c)                                  any action or inaction by the Corporation
that would adversely affect the Executive’s continued participation in any
Benefit Plan on at least as favorable basis as was the case at the time of such
action or inaction, or that would materially reduce the Executive’s benefits in
the future under the Benefit Plan or deprive him of any material benefits that
he then enjoyed, except to the extent that such action or inaction by the
Corporation (i) is also taken or not taken, as the case may be, in respect
of all employees generally; (ii) is required by the terms


 


20














 


of any Benefit Plan as in effect immediately before
such action or inaction; or (iii) is necessary to comply with applicable
law or to preserve the qualification of any Benefit Plan under Section 401(a) of
the Code;


 


(d)                                 a material change in the principal work
location;


 


(e)                                  the failure of the Corporation, its
successor or any Group of Persons acquiring substantially all of the assets of
the Corporation to assume any and all terms of this Agreement; or


 


(f)                                    a material breach of this Agreement by
the Corporation, its successor or any Group of Persons acquiring substantially
all of the assets of the Corporation.


 


Notwithstanding the foregoing, the Executive shall not
have Good Reason unless he has, within ninety (90) days of the Event, notified
the Corporation of the Event in the manner set forth in Paragraph 6.5 and
the Event remains uncured for a period of thirty (30) days after the Executive
provides notice of the Event.


 


5.4                                 Arbitration. 
In the event that the Executive reasonably believes that he has Good
Reason to terminate his employment in reliance upon Paragraph 5.3 hereof,
and if the Corporation disagrees with the Executive’s belief that he has Good
Reason to terminate his employment in reliance upon Paragraph 5.3 hereof,
such unresolved dispute or controversy arising thereunder or in connection
therewith shall be settled exclusively by arbitration conducted in accordance
with the rules of the American Arbitration Association then in
effect.  The arbitration shall take place
in Martin County, Florida before a panel of three arbitrators who shall be
mutually agreed upon by the Corporation and the Executive.  The exclusive question for 


 


21

















 


the arbitrators shall be whether or not Good Reason
for the termination exists.  The
arbitrators shall not have the authority to add to, detract from, or modify any
provision hereof nor to award punitive damages to any injured party.  A decision by a majority of the arbitration
panel shall be final and binding on whether “Good Reason” exists.  Judgment may be entered on the arbitrators’
award in any court having jurisdiction. 
The direct expense of any arbitration proceeding shall be borne by the
Corporation.  Each party shall bear its
own counsel’s fees and expenses.


 


5.5                                 Except as provided in Paragraph 5.2(b),
upon the occurrence of a Change in Control, the consequences of such Change in
Control upon the Executive’s Option shall be governed by the terms of the
Option.


 


ARTICLE 6 - MISCELLANEOUS


 


6.1                                 Severability. 
In the event that any provision, or any portion of any provision, of
this Agreement shall be held to be void or unenforceable, the remaining
provisions of this Agreement, and the remaining portion of any provision found
void or unenforceable in part only, shall continue in full force and effect.


 


6.2                                 Representations and Warranties by the
Executive.  The Executive represents and warrants that he
has made no commitment of any kind whatsoever inconsistent with the provisions
of this Agreement and that he is under no disability of any kind to enter into
this Agreement and to perform all of his obligations hereunder.


 


6.3                                 Binding Effect. 
This Agreement shall inure to the benefit of and shall be binding upon
the parties and their respective successors and permitted assigns.  This Agreement 


 


22

















 


being personal to the Executive, cannot be assigned by
him.  This Agreement may be assigned by
the Corporation in the event and in connection with a merger, consolidation or
sale of all or substantially all of the assets of the Corporation provided that
the assignee agrees in writing to assume all of the obligations of the
Corporation under this Agreement and such assignment shall not relieve the
Corporation of its obligations hereunder. 
Prompt written notice of such assignment shall be provided by the
Corporation to the Executive.


 


6.4                                 Jurisdictional Consent. 
Except as specifically set forth herein, any dispute or controversy
between the parties relating to or arising out of this Agreement or any
amendment or modification hereof shall be determined by the Circuit Court,
County of Martin, State of Florida.  The
service of any notice, process, motion or other document in connection with an
action under this Agreement, may be effectuated by either personal service upon
a party or by certified mail directly addressed to him at his address set forth
on Page 1 hereof.


 


6.5                                 Notices.  Any notice or
communication required or permitted to be given hereunder shall be deemed duly
given if delivered personally or sent by registered or certified mail, return
receipt requested, to the address of the intended recipient as herein set forth
or to such other address as a party may theretofore have specified in writing
to the other.  Any notice or communication
intended for the Corporation shall be addressed to the attention of its Board
of Directors.


 


6.6                                 Waiver.  A waiver of
any breach or violation of any term, provision, agreement, covenant, or
condition herein contained shall not be deemed to be a continuing waiver or a
waiver of any future or past breach or violation.


 


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6.7                                 Entire Agreement/Governing Law. 
This Agreement constitutes the entire agreement and understanding between
the Corporation and the Executive relating to the latter’s employment,
supersedes any prior agreement between the parties relating to such matter,
shall be governed by and construed in accordance with the laws of the State of
Florida and may not be changed, terminated or discharged orally.


 


6.8                                 Section 409A. 
It is the intention of the parties hereto that this Agreement comply
strictly with the provisions of Section 409A of the Code, and Treasury
Regulations and other Internal Revenue Service guidance (the “Section 409A
Rules”).  Accordingly, this Agreement,
including, but not limited to, any provision relating to severance payments,
Change in Control payments or the terms of any grants of stock options
hereunder, including, but not limited to, the timing of payments, may be amended
from time to time with the consent of the Executive as may be necessary or
appropriate to comply with, and to avoid adverse tax consequences under the Section 409A
Rules.  The Executive agrees that no
payment will be made to him until such time as the payment may be made without
the imposition of the 20% excise tax imposed by Section 409A of the Code
by virtue of Section 409A(a)(2)(B)(i) of the Code (which, if
applicable, generally provides that no payment, other than certain severance
payments, may be made to a key employee of a public company prior to the date
that is six months following separation from service within the meaning of Section 409A
of the Code).


 


6.9                                 Indemnification. 
The Corporation and the Executive have entered into a directors and
officers indemnification agreement dated of even date herewith.


 


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IN WITNESS WHEREOF, the
parties hereto have hereunto set their hands as of the day and year first above
written.


 


	
   

  	
  NUCO2 INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric M. Wechsler

  
	
   

  	
  Name:

  	
  Eric M. Wechsler

  
	
   

  	
  Title:

  	
  General Counsel and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ William Scott Wade

  
	
   

  	
  WILLIAM SCOTT WADE