Exhibit 10.7


 


EMPLOYMENT AGREEMENT


 


AGREEMENT
dated May 18, 2009, 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 KEITH GORDON, currently residing at 4 Ivy Chase NE, Atlanta, GA 30342
(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 Senior Vice
President of Marketing and Business Development.  The Executive shall serve as and perform the
duties of Senior Vice President of Marketing and Business Development 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 Senior Vice President of Marketing
and 


 

















 


Business Development.  During the
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 June 30, 2014 (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 $300,000 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, 2010 (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 make available to the Executive
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; provided, however,
that such gross up shall be paid on or before the last day of the Executive’s
taxable year following the taxable year in which the taxes are remitted.


 


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(g)           On the date of this Agreement, NUCO2 Parent, Inc., a Delaware corporation (“Parent”)
shall award to the Executive an option to purchase 2,126 shares of Parent
common stock under the Parent’s 2008 Stock Incentive Plan, in accordance with
the terms of a stock option agreement (“Option”).


 


(h)           The Corporation shall pay the
reasonable costs to relocate the Executive and move the Executive’s household
goods from his current residence to a residence within seventy-five miles of
the Corporation’s principal executive offices in Stuart, Florida, provided that
the aggregate of such costs shall not exceed $100,000.


 


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 


 


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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 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.


 


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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 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 quarterly installments, without interest, during the one (1) year
following the termination of employment. 
Such payments shall be in addition to all 


 


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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).


 


(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 


 


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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 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 


 


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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 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 


 


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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 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.


 


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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 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 


 


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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 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 seventy-five thousand dollars ($675,000),
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 


 


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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 $600,000
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.


 


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 


 


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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.


 


(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 


 


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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 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 


 


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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
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 


 


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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 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


 


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(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 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 


 


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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 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 


 


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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 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 


 


21

















 


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
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.


 


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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 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 


 


23

















 


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.


 


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 


 


24

















 


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).


 


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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Keith Gordon

  
	
   

  	
  KEITH
  GORDON

  



 


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