Exhibit 10(h)
EMPLOYMENT AGREEMENT
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This Employment Agreement is made and entered into effective as of the 17th
day of December, 1996, by and between Xxxxx Remedial Construction Services, LLC,
a Colorado limited liability company (the "Company"), and Xxxxxxx X. Xxxxx, an
individual ("Executive").
RECITALS
A. The Company desires to be assured of the association and services of
Executive for the Company.
B. Executive is willing and desires to be employed by the Company, and
the Company is willing to employ Executive, upon the terms, covenants and
conditions hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. The Company hereby employs Executive as the Chief
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Executive Officer of the Company, subject to the supervision and direction of
the Managers of the Company (provided, that at such time as the Company is
converted or merged into a corporation Executive shall become the President and
Chief Executive Officer of the Company and shall be subject to the supervision
and direction of the Company's Board of Directors).
2. Term. The term of this Agreement shall be for a period of three (3)
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years commencing on the effective date hereof, unless terminated earlier
pursuant to Section 6 below; provided, however, that Executive's obligations in
Section 5 below shall continue in effect after such termination.
3. Compensation; Reimbursement.
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3.1 Base Salary. For all services rendered by Executive under this
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Agreement, the Company shall pay Executive a base salary of One Hundred Twenty
Thousand Dollars ($120,000.00) per annum, payable monthly in equal installments
(the "Base Salary"). The amount of the Base Salary may be increased at any time
and from time to time by the Managers of the Company (or the Board of Directors
of the Company, as applicable). No such change shall in any way abrogate,
alter, terminate or otherwise affect the other terms of this Agreement.
3.2 Bonus Compensation. Executive shall be entitled to receive
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$50,000 in bonus compensation payable as follows: (i) $25,000 payable upon
completion by Enviro-Dredge, LLP, a New Jersey general partnership of which the
Company is a Partner (the "Venture"), of the 100,000
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cubic yard dredging demonstration project under the Venture's contract (the
"Dredging Contract") with the Port Authority of New York and New Jersey (the
"Port Authority") designated Contract #MFP-204; and (ii) $25,000 payable upon
the Port Authority's final permission to the Venture to proceed under the
extension of the Dredging Contract (the "Extension") for an additional 700,000
to 1,300,000 cubic yards of materials; provided, that such final permission
includes a firm commitment (the "Firm Commitment") for at least 700,000
additional cubic yards of material to be dredged and processed by the Venture.
3.3 Incentive Compensation. In order to provide incentive to
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executive to procure the Firm Commitment and complete the processing under the
Extension, Executive shall be entitled to the following incentive payments: (i)
$80,000 payable on December 1, 1997, if the Company has received the Firm
Commitment on or before March 15, 1997; (ii) $80,000 payable on December 1,
1998, if the Company has processed at least an aggregate of 700,000 cubic yards
of material under the Extension on or before such date, and (iii) $80,000
payable on December 1, 1999, if the Company has processed at least 600,000
additional cubic yards (in addition to the first 700,000 cubic yards processed
under the Extension) of material under the Extension as of such date.
3.4 Stock Options. Executive shall be granted incentive stock
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options to acquire 60,000 shares of the Common Stock of GDC Group under GDC
Group's 1996 Stock Option Plan (the "Plan") for an exercise price of $1.00 per
share and with an option exercise period of five years from the date of grant;
provided, that such option shall not be exercisable until after such time as the
Venture has received the Firm Commitment. GDC Group and Executive shall execute
a standard Stock Option Agreement under the Plan evidencing the described
option. Executive shall continue to be eligible for additional grants of stock
options under the Plan; provided, that such grants shall be at the discretion of
the Stock Option Committee as provided in the Plan.
3.5 WRCS Management Profit Sharing Pool. The Company intends to
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establish a bonus plan and profit sharing program. When such a plan and program
is established and duly approved, Executive shall be entitled to participate in
such plan and program as delineated in the plan and program.
3.6 Cancellation of Promissory Note. Upon execution of this
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Agreement, the Company hereby agrees to waive, forgive and cancel all
outstanding indebtedness of the Executive to the Company under the Promissory
Note in the principal amount of $4,000 dated March 13, 1995 and executed by the
Executive in favor of the Company.
3.7 Additional Benefits. In addition to the Base Salary and the
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Incentive Bonus, Executive shall be entitled to all other benefits of employment
(including without limitation health and dental benefits), provided to the
employees of GDC Group, Inc., a Colorado corporation that is the indirect parent
corporation of the Company ("GDC Group"). Executive also shall be entitled to
obtain, at the Company's expense, an annual health physical examination from a
physician chosen by
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employee; provided, that such physician must be qualified for the provision of
such services under the existing health insurance plan that applies to Executive
in accordance with the preceding sentence. Both the Company and Executive shall
be entitled to receive the results of any such physical examination. Executive
also shall be entitled to 3 weeks paid vacation time during each year of the
term hereof; provided, that unused vacation time shall only accrue and
accumulate at the rate of two-thirds of the days not utilized by Executive in a
given year. In addition, the Company shall be required to procure and maintain a
term life insurance policy on the life of Executive with a face value death
benefit of at least $100,000. Executive shall have sole discretion to designate
the beneficiary or beneficiaries of such term life insurance policy.
3.8 Reimbursement. Executive shall be reimbursed for all reasonable
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"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement
(1) so long as such expenses constitute business deductions from taxable income
for the Company and are excludable from taxable income to the Executive under
the governing laws and regulations of the Internal Revenue Code (provided,
however, that Executive shall be entitled to full reimbursement in any case
where the Internal Revenue Service may, under Section 274(n) of the Internal
Revenue Code (or any successor provision), disallow to the Company any
percentage of meals and entertainment expenses); and (2) to the extent such
expenses do not exceed the amounts allocable for such expenses in budgets that
are approved from time to time by the Company. The reimbursement of Executive's
business expenses shall be upon monthly presentation to and approval by the
Company of valid receipts and other appropriate documentation for such expenses.
In addition, Executive shall be entitled to receive a non-accountable automobile
reimbursement expense of $500.00 per month for the use of his personal vehicle.
3.9 Tax Deferral. Executive shall be entitled to elect the deferral
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of up to 50% of any Base Salary payments or other cash payments due to Executive
under this Section 3 for tax planning purposes; provided, that any such election
must be accomplished in accordance with applicable laws and regulations and must
be evidenced by a written instrument executed by both Executive and the Company.
4. Scope of Duties.
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4.1 Assignment of Duties. Executive shall have such duties as may be
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assigned to him from time to time by the Company's Managers (or Board of
Directors, as applicable) commensurate with his experience and responsibilities
in the position for which he is employed pursuant to Section 1 above. Such
duties shall be exercised subject to the control and supervision of the
Company's Managers (or Board of Directors, as applicable).
4.2 Executive's Devotion of Time. Executive hereby agrees to devote
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all of his business time, abilities and energy to the faithful performance of
the duties assigned to him and to the
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promotion and forwarding of the business affairs of the Company, and not to
divert any business opportunities from the Company to himself or to any other
person or business entity.
4.3 Conflicting Activities.
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(a) Executive shall not, during the term of this Agreement, be
engaged in any other business activity without the prior consent of the
Company's Managers (or Board of Directors, as applicable); provided, however,
that this restriction shall not be construed as preventing Executive from
investing his personal assets in passive investments in business entities which
are not in competition with the Company or its affiliates, or from pursuing
business opportunities as permitted by paragraph 4.3(b).
(b) Executive hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated
future business of the Company, in a manner consistent with the best interests
of the Company and with his duties under this Agreement. Should Executive
discover a business opportunity that does not relate to the current or
anticipated future business of the Company, he shall first offer such
opportunity to the Company. Should the Company's Managers (or Board of
Directors, as applicable) not exercise its right to pursue this business
opportunity within a reasonable period of time, not to exceed sixty (60) days,
then Executive may develop the business opportunity for himself; provided,
however, that such development may in no way conflict or interfere with the
duties owed by Executive to the Company under this Agreement. Further,
Executive may develop such business opportunities only on his own time, and may
not use any service, personnel, equipment, supplies, facility, or trade secrets
of the Company in their development. As used herein, the term "business
opportunity" shall not include business opportunities involving investment in
publicly traded stocks, bonds or other securities, or other investments of a
personal nature.
5. Confidentiality of Trade Secrets and Other Materials.
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5.1 Trade Secrets. Other than in the performance of his duties
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hereunder, Executive agrees not to disclose, either during the term of his
employment by the Company or at any time thereafter, to any person, firm or
corporation any information concerning the business affairs, the trade secrets
or the customer lists or similar information of the Company. Any technique,
method, process or technology used by the Company shall be considered a "trade
secret" for the purposes of this Agreement.
5.2 Ownership of Trade Secrets; Assignment of Rights. Executive
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hereby agrees that all know-how, documents, reports, plans, proposals, marketing
and sales plans, client lists, client files and materials made by him or by the
Company are the property of the Company and shall not be used by him in any way
adverse to the Company's interests. Executive shall not (except in the normal
and usual performance of his duties) deliver, reproduce or in any way allow such
documents
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or things to be delivered or used by any third party without specific direction
or consent of the Board of Directors of the Company. Executive hereby assigns to
the Company any rights which he or she may have in any such trade secret or
proprietary information.
6. Termination and Severance.
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6.1 Bases for Termination.
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(a) Executive's employment hereunder may be terminated at any
time by mutual agreement of the parties.
(b) This Agreement shall automatically terminate on the last day
of the month in which Executive dies or becomes permanently incapacitated.
"Permanent incapacity" as used herein shall mean mental or physical incapacity,
or both, reasonably determined by the Company's Managers (or Board of Directors,
as applicable) based upon a certification of such incapacity by, in the
discretion of the Company's Managers (or Board of Directors, as applicable),
either Executive's regularly attending physician or a duly licensed physician
selected by the Company's Managers (or Board of Directors, as applicable),
rendering Executive unable to perform substantially all of his duties hereunder
and which appears reasonably certain to continue for at least six consecutive
months without substantial improvement. Executive shall be deemed to have
"become permanently incapacitated" on the date the Company's Managers (or Board
of Directors, as applicable) has determined that Executive is permanently
incapacitated and so notifies Executive.
(c) Executive's employment may be terminated by the Company
"with cause," effective upon delivery of written notice to Executive given at
any time (without any necessity for prior notice) if any of the following shall
occur:
(i) failure to perform duties as prescribed by paragraph
4.1 hereof or refusal to obey written direction or instruction of the Company's
Managers (or Board of Directors, as applicable);
(ii) any material breach of Executive's obligations under
the provisions of this Agreement; or
(ii) any material acts or events which inhibit Executive
from fully performing his responsibilities to the Company in good faith, or
which discredit the Company, its management, products or services, such as (i) a
felony criminal conviction; (ii) any other criminal conviction involving
Executive's lack of honesty or Executive's moral turpitude; (iii) drug or
alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
misconduct.
6.2 Payment Upon Termination.
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(a) Upon termination under paragraph 6.1, the Company shall pay
to Executive within 30 days after termination an amount equal to the sum of (1)
Executive's Base Salary accrued to the date of termination; and (2) unreimbursed
expenses accrued to the date of termination. After any such termination, the
Company shall not be obligated to compensate Executive, his estate or
representatives except for the foregoing compensation then due and owing, nor
provide the benefits to Executive described in Section 3 (except as provided by
law).
(b) In the event of termination by the Company of Executive
during the term hereof for any reason or reasons other than those set forth
under paragraph 6.1 above, Executive (i) shall be entitled to continue to
receive from the Company, for a one-year period commencing on the date of such
termination (and regardless of whether the term hereof expires prior to the end
of such one-year period), Executive's Base Salary as set forth in paragraph 3.1
above payable at the times and in the manner specified in paragraph 3.1, and
(ii) shall be paid within 10 days after termination an amount equal to the sum
of unreimbursed expenses accrued to the date of termination. After any such
termination, the Company shall not be obligated to compensate Executive, his
estate or representative except for the foregoing compensation, nor provide the
benefits to Executive described in Paragraph 3 (except as provided by law).
7. Disclosure. The parties each acknowledge that this Employment
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Agreement is being entered into in connection with the acquisition of the
Company by GDC Group, Inc. ("GDC") under the Limited Liability Company
Acquisition Agreement (the "Acquisition Agreement") between GDC, Xxxxx X. Xxxxx
& Associates, Inc. and Executive dated December 13, 1996. Executive hereby
represents and warrants to the Company that the disclosure material provided to
GDC by the Company in connection with the Acquisition Agreement does not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements contained therein not misleading. Executive
agrees to indemnify the Company for any cost, damage or liability arising from a
breach of the foregoing representation and warranty.
8. Injunctive Relief. The Company and Executive hereby acknowledge and
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agree that any default under Section 5 above will cause damage to the Company in
an amount difficult to ascertain. Accordingly, in addition to any other relief
to which the Company may be entitled, the Company shall be entitled to such
injunctive relief as may be ordered by any court of competent jurisdiction
including, but not limited to, an injunction restraining any violation of
Section 5 above and without the proof of actual damages.
9. Miscellaneous.
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9.1 Transfer and Assignment. This Agreement is personal as to
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Executive and shall not be assigned or transferred by Executive without the
prior written consent of the Company.
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This Agreement shall be binding upon and inure to the benefit of all of the
parties hereto and their respective permitted heirs, personal representatives,
successors and assigns.
9.2 Severability. Nothing contained herein shall be construed to
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require the commission of any act contrary to law. Should there be any conflict
between any provisions hereof and any present or future statute, law, ordinance,
regulation, or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.
9.3 Governing Law. This Agreement is made under and shall be
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construed pursuant to the laws of the State of Colorado.
9.4 Counterparts. This Agreement may be executed in several
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counterparts and all documents so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all of the parties
did not sign the original or the same counterparts.
9.5 Entire Agreement. This Agreement constitutes the entire
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agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto. No representation, promise, inducement,
statement or intention has been made by any party hereto that is not embodied
herein, and no party shall be bound by or liable for any alleged representation,
promise, inducement, or statement not so set forth herein.
9.6 Modification. This Agreement may be modified, amended,
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superseded, or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the party or parties to be bound by any such modification,
amendment, supersession, cancellation, or waiver.
9.7 Attorneys' Fees and Costs. In the event of any dispute arising
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out of the subject matter of this Agreement, the prevailing party shall recover,
in addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.
9.8 Waiver. The waiver by either of the parties, express or implied,
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of any right under this Agreement or any failure to perform under this Agreement
by the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.
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9.9 Cumulative Remedies. Each and all of the several rights and
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remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right or remedy,
and the exercise of any one of such rights or remedies shall not be deemed a
waiver of, or an election to exercise, any other such right or remedy.
9.10 Headings. The section and other headings contained in this
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Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement.
9.11 Notices. Any notice under this Agreement must be in writing, may
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be telecopied, sent by express 24-hour guaranteed courier, or hand-delivered, or
may be served by depositing the same in the United States mail, addressed to the
party to be notified, postage-prepaid and registered or certified with a return
receipt requested. The addresses of the parties for the receipt of notice shall
be as follows:
If to the Company:
Xxxxx Remedial Construction Services, LLC
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
If to the Executive:
Xxxxxxx X. Xxxxx
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice
by giving notice thereof in the manner provided above.
9.12 Survival. Any provision of this Agreement which imposes an
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obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Executive and the
Company.
9.13 Right of Set-Off. Upon termination or expiration of this
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Agreement, the Company shall have the right to set-off against the amounts due
Executive hereunder the amount of any outstanding loan or advance from the
Company to Executive.
9.14 Effective Date. This Agreement shall become effective as of the
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date set forth on page 1 when signed by Executive and the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
EXECUTIVE:
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
COMPANY:
XXXXX REMEDIAL
CONSTRUCTION SERVICES, LLC
By:
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Name:
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Title:
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