**EXECUTIVEEMPLOYMENT AGREEMENT**

 

 

                This ExecutiveEmployment Agreement (“Agreement”) is effective as of the 15th dayof July, 2001 (the “Effective Date”), between U S LIQUIDS INC., a Delawarecorporation (“Employer”), and JOHN P. MIKLICH, who resides at 4 Easy Street,Windham, NH 03087 (“Employee”), under the following terms and conditions.

 

                **WHEREAS**,Employee and Employer desire to enter into this Agreement pursuant to whichEmployee will render services to Employer on the terms and conditions set forthherein.

 

                **NOWTHEREFORE**, in consideration of the mutual promises, covenants andagreements set forth below, it is hereby agreed as follows:

 

                1.             Employment.  Employer hereby employs Employee asExecutive Vice President/Chief Operating Officer.  Employee shall report directly to the Chief Executive Officer ofEmployer and shall perform such duties as are commensurate with his position asExecutive Vice President and Chief Operating Officer.  Employee agrees to serve Employer faithfully, diligently and tothe best of his ability and to faithfully adhere to, execute and fulfill allpolicies established by Employer. The Employee’s place of employment shall bein the Houston, Texas metropolitan area, subject to travel necessary for theperformance of his duties hereunder. Employer shall provide to the Employee adequate office facilities andstaff commensurate with his positions to enable him to perform his dutieshereunder.

 

2.             Termof Employment. The term of this Agreement shall commence on the date hereof(the “Commencement Date”) and shall continue for a term of one (1) year fromthe Commencement Date (this date of termination of this Agreement beingreferred to as the “Scheduled Termination Date”).  However, as of each anniversary date of the Commencement Date, theScheduled Termination Date shall automatically be extended for a successiveone-year period of time, unless more than ninety (90) days prior to theoccurrence of such anniversary date, either party gives notice to the otherthat such Scheduled Termination Date shall not thereafter be so extended.  If any such notice is given, then theScheduled Termination Date hereof shall not be automatically extended upon thefuture occurrence of any such anniversary date.  Following the Scheduled Termination Date, the Employee shall notbe entitled to earn any further compensation or benefits under this Agreement,except as otherwise provided herein. Notwithstanding the foregoing, Employer and Employee understand andagree that Employee’s employment by Company is at the will of Company and theemployment relationship may be terminated either by Employee or Company at anytime, with or without cause.

 

                3.             Compensation.

 

a.                     **Base Salary:**  Employershall pay Employee an annualized salary of $200,000.00 (the “Base Salary”).  The Base Salary will be paid by Employer toEmployee in equal installments payable in accordance with the regular payrollpolicies of Employer in effect during the term of this Agreement, less

 

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                              applicable tax withholdings or otherdeductions required by law or authorized by Employee.  The Base Salary may be increased, on an annual basis, but only inthe sole discretion of Employer.  Theaforesaid reference to the Base Salary as being “annualized” or being increased“on an annual basis” is not intended and shall not be deemed as creating anyterm of employment under this Agreement other than as specifically set forth inSection 2, above.

 

b.                    **Incentive Bonus:**  Employeeshall be entitled to participate in Employer’s Incentive Bonus Plan (the “BonusPlan”).  The award of any such bonus(the “Bonus”) shall be (i) pursuant to the terms of the Bonus Plan, (ii)determined solely at the discretion of Employer and (iii) based on corporateresults and personal performance.

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                4.             Benefits.  In addition to the compensation provided forin Section 3 above, Employer shall provide Employee with employment benefits ofthe type provided to employees of Employer generally during the Term, includingbut not limited to eligibility for any vacation and sick leave benefits andparticipation in any health, life and disability insurance plans, whether nowin effect or subsequently adopted, subject to Employer’s right to amend, alteror terminate such plans.

 

                5.             Expenses.  Employer shall pay all reasonable expensesincurred by Employee in furtherance of the business of the Employer, includingtraveling and entertainment expenses, and shall reimburse Employee monthly forall such expenses paid or incurred by Employee during the preceding month upondelivery of an appropriate expense report and receipts to Employer.

 

                6.             Termination by Employer.  Employer may terminate this Agreement withor without Cause, as provided herein.

 

a.**              ****Termination by Employer with Cause:** Employer may terminate Employee with Cause immediately and withoutnotice.  Upon Employee’s terminationwith Cause, Employer shall be required to pay Employee compensation andbenefits (and any unpaid expenses payable under Section 5) only through theeffective date of termination.  Sums dueEmployee for salary under Section 3 shall be prorated for the then currentmonth through the date of termination. Any proration of compensation or benefits paid on a weekly basis shallbe calculated based on a business week consisting of five (5) days and notseven (7) days.  By way of example andnot of limitation, two weeks of vacation would be calculated as ten (10)business days.

 

b.            **Terminationby the Employer for other than Cause:**  In the eventthat Employer terminates Employee’s employment for any reason other than Cause,Employer shall (i) pay to Employee any accrued but unpaid Base Salary forservices rendered to the date of termination plus a severance payment equal toone times (1x) the Base Salary on the date of such termination, as well as anyaccrued but unpaid expenses required to be

 

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                        reimbursed under Section 5 and anyvacation accrued to the date of termination; and (ii) continue for Employee andEmployee’s spouse and dependents the group health plans, programs orarrangements in which Employee was entitled to participate at any time duringthe six (6) month period prior to the date of termination until the earlierof  the last day of the SeverancePeriod, Employee’s death (provided that benefits payable to Employee’sbeneficiaries shall not terminate upon Employee’s death, to the extent providedin such plans, programs or arrangements) or, with respect to any particularplan, program or arrangement, the date Employee becomes covered by a comparablebenefit provided by a subsequent employer. For purposes of this provision, the “Severance Period” shall beconsidered to be twelve (12) months.

 

c.             **FullSettlement:**  The post-termination payments provided forin this Section 6 shall be the only payments which Employer shall be obligatedto make on account of the termination of Employee’s employment, and after suchtermination, Employer shall not be obligated to make any other payments asdamages or otherwise or provide any other benefits to or on behalf ofEmployee.  All such post-terminationpayments shall be made within the time periods required by applicable law.

 

                7.             Voluntary Termination.  Employee may terminate this Agreement priorto the end of its term by delivering written notice to Employer.  Employer may accept the proposed terminationdate or may set an earlier termination date by mailing or personally deliveringnotice of such earlier date to Employee. In the event Employee voluntarily terminates this Agreement, he/she willreceive the salary due under Section 3 above through the effective date oftermination and no other compensation or benefits, other than any stock optionsor warrants which may have theretofore vested, except as required by applicablelaw.

 

8.             Changeof Control.

 

a.                                       This Section 8 shall becomeeffective, but not operative, immediately upon the Commencement Date and shallremain in effect so long as the Employee remains employed hereunder by theCorporation, but shall not be operative unless and until there has been aChange in Control, as defined in Section 8(d) hereof.  Upon such a Change in Control, thisSection 8 shall become operative immediately.

 

b.                                      If a Change in Control occurs (i) whilethe Employee is employed by the Corporation hereunder, or (ii) subsequent tothe Termination Date of the Employee’s employment hereunder other than by theCorporation for cause, or death or disability, and prior to the later of thefirst anniversary of such Termination Date or the second anniversary of the CommencementDate, or (iii) within 180 days of the Scheduled Termination Date, the Employeemay, in his sole discretion, within twelve

 

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                                                (12) months after the date of the Changein Control, give notice to the Corporation that he intends to elect to exercisehis rights under this Section 8 (the “Notice of Intention”).  Within thirty (30) days after theCorporation’s receipt of the Notice of Intention, the Corporation shall providewritten notice to the Employee setting forth the Corporation’s computation ofthe amount that would be payable pursuant to Section 8(c), accompanied bythe written opinion of the Corporation’s independent certified publicaccountants confirming the Corporation’s computation.  If the Employee takes exception to the Corporation’s computationof such amount, the Employee may (but shall not be prejudiced in this right tolater contest the amount actually paid by failure to do so) give a furtherwritten notice to the Corporation setting forth in reasonable detail theEmployee’s exceptions to the Corporation’s computation, accompanied by thewritten opinion of the Employee’s tax advisor confirming the basis for suchexceptions.  Exercise by the Employee ofhis rights pursuant to this Section 8 shall only be made by giving furthernotice to the Corporation (the “Notice of Exercise”) within six (6) months fromthe date of the Notice of Intention.

 

c.                                       If the Employee gives the Notice ofExercise described in Section 8(b) to the Corporation, the Termination Date ofhis employment hereunder shall then occur; all outstanding stock options whichare not then exercisable shall immediately become exercisable in full; and theCorporation shall pay to the Employee a lump sum amount equal to one times (1x)the Employee’s Base Salary.  TheCorporation shall, within ten (10) business days after the date of the Noticeof Exercise, deliver to the Employee its cashier’s check in the amount payablepursuant to this Section 8(c), and payment of such amount shall terminatethe Employee’s rights to receive any and all other compensation,reimbursements, indemnification, or benefits under this Agreement, other thanthose which are payable to or have accrued to the Employee as in this Agreement.

 

d.                                      For the purposes of this Agreement, aChange in Control shall mean (i) a reportable change in control under the proxyrules of the Securities and Exchange Commission, including the acquisition of a30% beneficial voting interest in the Corporation (other than such acquisitionby Employee or an affiliate of Employee), or (ii) a change in any calendar yearof such number of directors as constitutes a majority of the board of directorsof the Corporation, unless the election, or the nomination for election by theCorporation’s shareholders, of each new director was approved by a vote of atleast two-thirds (2/3) of the directors then in office who were directors atthe beginning of the calendar year.

 

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                9.             Other Activities.  Employee shall devote all of his/her workingtime and efforts during the Employer’s normal business hours (reasonablevacations and sick leave excluded) to the business and affairs of Employerpursuant to this Agreement.  Employee’sexpenditure of reasonable amounts of time for personal, outside business,charitable and professional activities shall not be a breach of this Agreement,provided that such activities do not materially interfere with the servicesrequired to be rendered by Employee to Employer hereunder.  The making of personal investments and theconduct of private business affairs shall not be prohibited hereunder, subjectto Section 11 hereof.

 

                10.           Confidential Information.  During the Term, Employer will disclose toEmployee information, technical data and know-how regarding the businessaffairs, services and products of Employer as well as Employer’s customers,which constitute Confidential Information. “Confidential Information”, under this Agreement, shall consist of anyand all proprietary information and proprietary data related thereto, and anyderivative works thereof including but not limited to research, development,customer information, pricing information, knowledge of Employer’s financialcondition, information and relationships with resources, suppliers andcustomers of Employer, manufacturing processes, techniques, methods, systemsand trade secrets of the Employer, its employees, or other subsidiaries,affiliates, agents or customers, whether or not specifically identified as confidential.  Employee agrees to receive, hold and treatall Confidential Information received from Employer as confidential and secretand Employee agrees to protect the secrecy of said Confidential Information,whether or not specifically identified as confidential.  Such Confidential Information constitutesvaluable, special and unique assets of Employer and Employee agrees that theConfidential Information will be disclosed by Employee only to those personswho are required to have such knowledge in connection with their work forEmployer and that such Confidential Information will not be disclosed byEmployee to persons not in the employ of Employer without the prior writtenconsent of the Employer.  As used herein,“persons who are required to have such knowledge” shall include, but not belimited to the Board of Directors of Employer and such officers, employees andagents of Employer or its affiliates to which such information is furnished inthe normal course of business under established policies approved by Employeror its affiliates and such outside parties as are legally entitled to suchinformation (other than as a result of action by Employee not previouslyapproved or authorized by Employer or the Board of Directors or Employer) andcustomers and banking, lending, collection and data processing institutions oragencies in the course of maintaining ordinary business procedures ofEmployer.  The provisions hereof shallnot be applicable to; (a) information which at the time of disclosure toEmployee is a matter of public knowledge or in the public domain; or (b)information which, after disclosure to Employee, becomes public knowledge or inthe public domain other than through a breach of this Agreement.  Unless the Confidential Information shall beof the type hereinbefore set forth in the two immediately preceding sentences,Employee shall not use such Confidential Information for his/her own benefit orfor a third party’s or parties’ benefit at any time.  The obligations imposed upon Employee by this Section 10 shallsurvive the expiration or termination of this Agreement.

 

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                11.           Covenant Not to Compete andNon-Solicitation by Employee.

 

a.             **CompetitiveActivity:**  Employee covenants and agrees that at alltimes during the Term, and for a period of one (1) year thereafter, Employeewill not, directly or indirectly, engage in, assist, or have any activeinterest or involvement, whether as an employee, agent, consultant, independentcontractor, joint venturer, associate, creditor, advisor, officer, director,stockholder (excluding holding of less than 1% of the stock of a public companyfor investment purposes only), partner, proprietor or any type of principalwhatsoever, directly or indirectly, in any person, firm, or business entity, inany business activities or with any business that competes with or is engagedin the same business as that conducted and carried on by Employer, withoutEmployer’s specific written consent to do so.

 

b.            **Non-solicitation:** Employee covenants and agrees that at all times during the Term, and fora period of one (1) year thereafter, Employee will not directly or indirectly,(i) induce, or attempt to induce, any customers of Employer or entitiesaffiliated with Employer to patronize any similar business which competes withany material business of Employer, (ii) canvass, solicit or accept, or attemptto canvass, solicit or accept, any similar business from any customer ofEmployer or entities affiliated with Employer, (iii) request or advise anycustomers of Employer or entities affiliated with Employer to withdraw, curtailor cancel such customer’s business with Employer, (iv) disclose to any otherperson or entity the names or addresses of any of the customers of Employer orentities affiliated with Employer, or (v) individually or through any person orentity with which Employee is now or may hereafter become associated, cause,solicit, entice, or induce, or attempt to cause, solicit, entice or induce, anypresent or future employee of Employer or any entity affiliated with Employerto leave the employ of Employer, or such other entity to accept employmentwith, or compensation from, Employee or any such person or entity without theprior written consent of  Employer.

 

c.             **Non-Disparagement:** Employee covenants and agrees that Employee shall not engage in anypattern of conduct that involves the making or publishing of written or oralstatements or remarks (including, without limitation, the repetition ordistribution of derogatory rumors, allegations, negative reports or comments)which are disparaging, deleterious or damaging to the integrity, reputation orgood will of Employer, its management, or of corporations affiliated withEmployer or their management.

 

                12.           Inventions.  Any and all inventions, conceptions,processes, discoveries, improvements, patent rights, letter patents, programs,copyrights, trademarks, trade names and applications therefor, in the UnitedStates and all other countries, whether patentable or not, and any and allrights and interest in, to and under the same, that are conceived, made,acquired, or possessed by Employee, whether alone or with other employeesduring the Term shall become

 

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the exclusive property of Employer and shall at all times and for allpurposes be regarded as acquired and held by Employee in a fiduciary capacityfor the sole benefit of Employer, and Employee hereby assigns and agrees toassign the same to Employer without further compensation.  Employee agrees that, upon request, he/shewill promptly make all disclosures, execute all applications, assignments orother instruments and perform all acts whatsoever necessary or desired by Employerto vest and confirm in it, its successors, assigns and nominees, fully andcompletely, all rights and interests created or contemplated by this Section11.

 

                13.           Employer Property.  All products, records, designs, patents,plans, data, manuals, “field guides”, catalogs, brochures, memoranda,machinery, devices, lists and other property delivered to Employee by or onbehalf of Employer or by its customers (including, but not limited to,Employer’s customers solicited by Employee), and all records compiled byEmployee which pertain to the business of Employer shall be and remain theproperty of Employer and be subject at all times to its discretion andcontrol.  Employee shall promptlydeliver to a designated representative of Employer all such Employer property,as well as any and all correspondence with customers and representatives,reports, records, charts, advertising materials, and other materials, andproperty in his/her possession or control which belong to Employer upontermination of Employee’s employment.

 

                14.           Representations of Employee.

 

                                (a)           Employee represents that to the bestof his/her knowledge he/she is not the subject of any pending or threatenedclaim which involves any criminal or governmental proceedings, or allegationsof misfeasance, and that he has not been charged nor threatened to be chargedby any governmental or administrative body with violation of law except forminor traffic violations and similar charges.

 

                                (b)           Employee represents and warrants thathe/she is not prohibited from acting in any capacity for Employer by virtue ofthe operation of any non-competition or similar agreement with any prioremployer, or by any applicable statutes, regulations or ordinances or any otherapplicable law or by the rules and regulations of the U. S. Securities andExchange Commission or any national securities exchange, and that his/heracting in any capacity for Employer, will not subject Employer to claims ormaterially impair the license status of Employer or its affiliates or any business operated by Employer or itsaffiliates.

 

                15.           Defense of Claims.  Employee agrees that during the Term, and atall reasonable times thereafter, he/she will cooperate with Employer in thedefense of any claim that may be made against Employer or any affiliates, tothe extent that such claims may relate to services performed by Employee forEmployer or its affiliates.  Inconnection with such claim, (i) if Employee is required to travel more than one hundred (100) miles fromhis/her home, Employer agrees to reimburse Employee for all of his/herreasonable out-of-pocket expenses associated with such travel and, to theextent reasonably practicable, to provide Employee with notice of at least ten(10) days prior to the date on which such travel is required, and (ii) ifEmployee is no longer employed by Employer, to compensate Employee at areasonable rate.

 

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                16.           Notification of Agreement.  Employee shall notify any future orprospective employers, partners or persons with a similar business relationshipto Employee (“Future Employers”) about the terms of this Agreement for anyperiod during the Term and for one (1) year after the termination of Employee’semployment by Employer.  Employee doeshereby authorize Employer to notify any Future Employers about the terms ofthis Agreement upon discovery by Employer that Employee is being considered foremployment, partnership or similar business relationship (or has entered intosuch a relationship) with a Future Employer in order to ensure Employee’s observanceand compliance herewith.

 

                17.           Injunction and Other Relief.  Both parties hereto recognize that theservices to be rendered under this Agreement by Employee are special, uniqueand of extraordinary character, and that in the event of the breach by Employeeof any of the terms and conditions of this Agreement to be performed byhim/her, or in the event Employee performs services for any person, firm orcorporation in violation of Section 10, or if Employee shall breach theprovisions of this Agreement with respect to Confidential Information, thenEmployer shall be entitled, if it so elects, in addition to all other remediesavailable to it under this Agreement or at law or in equity, to affirmativeinjunctive or other equitable relief, and Employee waives (and shall executesuch documents as may be necessary to further evidence such waiver) anyrequirement that Employer secure or post any bond in connection with suchinjunctive or other equitable relief.

 

                18.           Stipulation.  Employee hereby specifically acknowledges,agrees, stipulates and represents to Employer that:

 

(i)           Employee has received adequate and sufficientconsideration for entering into this Agreement including the above-referencedcompensation and benefits;

 

(ii)        the execution and delivery of this Agreement and theperformance hereunder do not and shall not constitute a violation of anycovenants of non-competition, trade secrecy, or confidentiality to whichEmployee is a party;

 

(iii)     the covenants of Employee contained in Section 9 andSection 10 of this Agreement are in consideration of the promise of Employer toprovide Confidential Information (including trade secrets) to Employee and arenecessary to protect Employer’s interests in such Confidential Information, aswell as Employer’s business goodwill and other business interests;

 

(iv)    Employer will suffer great loss and irreparable harmif Employee competes directly or indirectly with Employer;

 

(v)       the temporal, geographic and other restrictionscontained in this Agreement are in all respects reasonable and necessary toprotect the business goodwill, Confidential Information, trade secrets,prospects and other business interest of Employer; and

 

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(vi)    the enforcement of this Agreement will not work anundue or unfair hardship on Employee or otherwise be oppressive to him/her.

 

                19.           Severability.  In the event that any of the provisions ofthis Agreement shall be held invalid or unenforceable by any court of competentjurisdiction, such invalidity or unenforceability shall not affect theremainder of this Agreement and same shall be construed as if such invalid orunenforceable provisions had never been a part hereof.  If a court of competent jurisdictiondetermines that the length of time, geographical restrictions or any otherrestriction, or portion thereof, set forth in this Agreement is overlyrestrictive and unenforceable, the parties agree that the court shall reduce ormodify such restrictions to those which it deems reasonable and enforceableunder the circumstances, and as so reduced or modified, the parties heretoagree that the restrictions of this Agreement shall remain in full force andeffect.  In the event there is a breach byEmployer or Employee of any other provision of this Agreement, the covenantscontained in Sections 10 and 11 shall remain in full force and effect.

 

                20.           Waiver.  The waiver by either party of a breach orviolation of any provision of this Agreement shall not operate as or beconstrued to be a waiver of any subsequent or continuing breach hereof.  The failure of any party to insist uponstrict adherence to any provision of this Agreement on one or more occasionsshall not be considered a waiver.

 

                21.           Notices.  Any notices provided for in this Agreementshall be given in writing and transmitted by personal delivery or prepaid firstclass registered or certified U.S. mail addressed as follows:

 
| Employer:     | U S Liquids Inc.                       |
|---------------|----------------------------------------|
|          | Attn:  Michael P. Lawlor          |
|          | 411 N. Sam Houston Pkwy. E., Suite 400 |
|          | Houston, TX   77060-3534          |
|          |                                   |
| with copy to: | U S Liquids, Inc.                      |
|          | Attn: General Counsel                  |
|          | 4121 N. Sam Houston Pkwy. E, Suite 400 |
|          | Houston, TX 77060-3534                 |
|          |                                   |
| Employee:     | John P. Miklich                        |
|          | 4 Easy Street                          |
|          | Windham, NH 03087                      |
|          |                                   |

                22.           Successors to Employer.  Except as otherwise provided herein, thisAgreement shall inure to the benefit of Employer and any successor of Employer,including, without limitation, any entity or entities acquiring directly orindirectly all or substantially all of the assets or business of Employerwhether by merger, consolidation, sale or otherwise (and such successor shallthereafter be deemed “Employer” for the purposes of this Agreement), but shallnot otherwise be assignable by Employer.

 

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                23.           Transfer and Assignment.  This agreement is personal as to Employeeand shall not be assigned or transferred by Employee without the prior writtenconsent of Employer.

 

                24.           Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Texas, without regard toapplicable conflicts of law.

 

                25.           Choice of Forum.  The parties hereto agree that in the eventthat any legal suits, actions or proceedings arising out of this Agreement areinstituted by any party hereto, such suits, actions or proceedings shall beinstituted only in the state or federal courts in the County of Harris in theState of Texas.  The parties hereto dohereby consent to the jurisdiction of such courts and waive any objection whichthey may now or hereafter have to the venue of any such suits, actions orproceedings; provided, however, that any party hereto shall have the right toinstitute proceedings in another jurisdiction if the purpose of suchproceedings is to enforce or realize upon any final court judgment arising outof this Agreement.

 

                26.           Consent to Service.  Service of any and all process which may beserved on any party hereto in any suit, action or proceeding related to thisAgreement may be made by registered or certified mail, return receiptrequested, to Employee or Employer at their respective addresses for notice asset forth in Section 20 and service so made shall be taken and held to be validpersonal service upon such party by any party to this Agreement on whose behalfsuch service is made.

 

                27.           Entire Agreement.  This Agreement constitutes the entireagreement between the parties, superseding all prior understandings,arrangements and agreements, whether oral or written, and may not be amendedexcept by a writing signed by the parties hereto.  As used herein, unless the context otherwise indicates, the term“this Agreement” means the Agreement executed to be effective as of theEffective Date and any written amendments thereof.

 

                28.           Counterparts.  This Agreement may be executed in two ormore counterparts, all of which shall be deemed to be an original, but all ofwhich together shall constitute one and the same instrument.

 

 

 

 

 

 

THE REMAINDER OF THISPAGE LEFT INTENTIONALLY BLANK

 

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                IN WITNESSWHEREOF, Employer has, by its appropriate officers, executed this Agreement andEmployee has executed this Agreement on the 31st day of July, 2001 to beeffective as of the Effective Date.

 

 

 
|   |   |   |   |   |   | **U S  LIQUIDS INC.** |
|--------|--------|--------|--------|--------|--------|-----------------------|
|   |   |   |   |   |   |                  |   |
|   |   |   |   |   |   | By:              | /s/ Michael P. Lawlor |
|   |   |   |   |   |   |                  | Michael P. Lawlor, Chairman & |
|   |   |   |   |   |   |                  | Chief Executive Officer |
|   |   |   |   |   |   |                  |   |
|   |   |   |   |   |   | /s/ John P. Miklich   |
|   |   |   |   |   |   | John P. Miklich       |

 

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