EXHIBIT 10.30
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made effective as of
August 1, 1997, by and between GroupMAC Management Co., a Delaware corporation
(the "Company") and Xxxxxx X. Xxxx, an individual with an address of 0000 X.
Xxxxxx Xxxx Xxxxx, #000, Xxxxxxxxxx, Xxxxxxx 00000 (the "Employee").
1. Employment. The Company hereby agrees to employ the Employee and
Employee hereby accepts employment with the Company upon the terms and
conditions set forth herein.
2. Term of Employment. This Agreement shall continue in effect for an
initial term of three years from the date of this Agreement and shall be
extended from year to year thereafter, unless written notice electing not to
extend from the Company to Employee, or from Employee to the Company, is
delivered not less than 90 days prior to the end of the initial term, or the
anniversary of such one-year extension, as applicable.
3. Scope of Duties; Representations and Warranties.
(a) Employee shall be initially employed by the Company as its President
and Chief Operating Officer. Subject to consultation with the Chief Executive
Officer of the Company and directions, guidelines or policies established by the
Board of Directors of the Company, Employee will have the duties and functions
set forth on Exhibit A hereto. The Company shall nominate Employee to be
elected as a Director and President and Chief Operating Officer of Group
Maintenance America Corp.
(b) So long as he is employed by the Company, Employee shall devote his
skill, energy and best efforts to the faithful discharge of his duties as an
employee of the Company. In the provision of all services to the Company,
Employee shall comply with and follow all directives, policies, standards and
regulations from time to time established by the Board of Directors of the
Company.
(c) Employee represents and warrants that he is under no contractual or
other restrictions or obligations that will significantly limit his activities
on behalf of the Company or that will prohibit or limit the disclosure or use of
by Employee of any information directly or indirectly relating to the nature of
the Company or the services to be rendered by Employee under this Agreement.
(d) To the extent they relate to, or result from, directly or indirectly,
the actual or anticipated operations of the Company, all patents, trademarks,
copyrights, trade secrets and other intellectual property rights, all
inventions, whether or not patentable, and any product, drawing, design,
recording, writing, literary work or other author's work, in any other tangible
form developed in whole or in part by Employee during the term of this
Agreement, or otherwise developed, purchased or acquired by the Company, shall
be
Employment Agreement/Page 1
the exclusive property of the Company ("Intellectual Property"), and unless
otherwise agreed by the Company, all right, title and interest therein shall
remain in the Company.
(e) Employee shall hold all Intellectual Property and Confidential
Information (defined in Section 9 below) in trust for the Company and shall
deliver all Intellectual Property and Confidential Information in his possession
or control to the Company upon request and, in any event, at the end of his
employment with the Company. Employee will promptly disclose to the Company all
Confidential Information, as well as any business opportunity that comes to his
attention during the term of his employment with the Company. Employee shall not
take advantage of or divert any business opportunity for the benefit of himself
or any other party without the prior written consent of the Company.
(f) Employee shall assign and does hereby assign to the Company all
property rights that he may now or hereafter have in the Intellectual Property
and Confidential Information. Employee shall take such action, including, but
not limited to, the execution, acknowledgment, delivery and assistance in
preparation of documents, and the giving of testimony, as may be requested by
the Company to evidence, transfer, vest or confirm the Company's right, title
and interest in the Intellectual Property.
(g) Employee shall not contest the validity of any invention, any
copyright, any trademark or any mask work registration owned by or vesting in
the Company under this Agreement.
(h) The terms and conditions of Sections 3(d), (e), (f) and (g) will
survive the termination of this Agreement for any reason whatsoever.
4. Compensation.
(a) During the first year of the term of this Agreement, the Company shall
pay Employee a base salary, payable semi-monthly, in equal installments at a
rate no less than $150,000.00 per year. In each subsequent year of this
Agreement, the Company shall pay to Employee a salary equal to the greater of
(i) his salary for the immediately preceding year or (ii) if determined
otherwise by the Board of Directors, a salary determined by the Board of
Directors following its annual salary and performance review.
(b) In respect to the calendar year 1997, Employee shall be entitled to
receive such bonus or bonuses as the Board of Directors or the Compensation
Committee of the Board of Directors (if so authorized), in its sole discretion,
may determine to be payable to Employee. Such bonus or bonuses may be payable
in 1997 or 1998.
(c) Commencing with calendar year 1998, Employee shall be eligible for any
annual cash performance bonus instituted for senior management during the term
of this Agreement. Current plans are for the Board of Directors of the Company,
in its sole discretion, or the Compensation Committee of the Board of Directors,
if so authorized, to establish specific annual performance goals for the Company
with respect to each calendar year during the term of this Agreement commencing
after December 31, 1997.
Employment Agreement/Page 2
Such goals will be communicated to Employee not later than the end of the first
quarter of the applicable calendar year. At the end of each such calendar year,
or within a reasonable time thereafter, the Board of Directors of the Company,
or the Compensation Committee of the Board of Directors, if so authorized, will
review the actual performance of the Company and Employee, giving due
consideration to market and other developments outside of the control or
influence of Employee and the Company, and based upon the extent to which the
applicable annual performance goals have been achieved, will determine the
amount of performance bonus payable to Employee with respect to such year. It
is anticipated that the cash performance bonus plan will provide for up to 200%
of Employee's base salary to be earned as a bonus.
(d) The Company shall deduct from all payments of salary and other
compensation to Employee any taxes that are required to be withheld with respect
thereto under applicable federal and state laws.
5. Senior Management Stock Options.
(a) The Company shall grant Employee non-qualified stock options (the
"Initial Senior Management Options") to purchase no less than 35,000 shares of
the common stock of the Company as presently constituted, at an exercise price
of $1.231 per share on the terms set forth in the form of Option Agreement
proposed to be executed between the Company and Employee in the form attached
hereto as Exhibit B (the "Option Agreement"). Subject to the Option Agreement,
the Initial Senior Management Options will vest ratably as of August 1 of the
calendar years 1998, 1999 and 2000. The Initial Senior Management Options shall
have a term of 10 years from the date of grant, and may be exercised in whole or
in part, from time to time, at any time after vesting by the payment of cash or
the tender of shares of the Company's Common Stock having a Designated Value
equal to the exercise price of the Initial Senior Management Options being
exercised, all as set forth in the Option Agreement. Upon the issuance of
shares of Common Stock in connection with the exercise of the Initial Senior
Management Options and as a condition precedent to receiving certificates
representing such Common Stock, Employee shall become a party to that certain
Amended and Restated Shareholders Agreement dated April 30, 1997 (the
"Shareholder's Agreement"), by executing and delivering (and by causing his
spouse to execute and deliver) a counterpart of the Shareholders Agreement
provided same is then in effect.
(b) Commencing with the Company's initial public offering of Common Stock
or earlier, if the Board of Directors so elects, and for each partial or full
calendar year thereafter during the term hereof, provided Employee is then
serving as an employee of the Company, the Company shall grant to Employee
options (together with the Initial Senior Management Options, collectively
referred to as the "Senior Management Options") to purchase such number of
additional shares of Common Stock as the Board of Directors of the Company, or
the Compensation Committee of the Board of Directors, if so authorized, may
determine, on such terms and conditions as shall be established at such time.
At the initial public offering, Employee shall receive Senior Management Options
equal to those given the Chief Executive Officer of the Company. It is
currently
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anticipated that the number of such options (prior to any stock split or reverse
stock split) will be between 125,000 and 140,000.
(c) For purposes hereof, "Designated Value" (i) the average of the closing
prices of the Common Stock on the principal market or registered exchange on
which the Common Stock is traded (or the average of the closing bid and ask
prices, if a single closing price is not reported for such market) on the 10
consecutive trading days next preceding the date for the determination of such
value, provided that the stock is then traded on the over-the-counter market or
on the NASDAQ System or any registered securities exchange, or (ii) if not
publicly traded, the book value per share of the Company as of the end of the
calendar quarter next preceding the date of determination of such value.
(d) The Company shall register under the Securities Act of 1933 and all
applicable state securities laws and regulations the shares of Common Stock
issuable upon the exercise of the foregoing Senior Management Options in the
same manner as shares issuable under any other stock options or stock purchase
plans of the Company. Further, the Company shall grant to Employee "demand" or
"piggyback" registration rights with respect to all such Senior Management
Option shares (to the extent same have not been registered), and all other
shares of common stock owned directly or indirectly by Employee or Employee's
immediate family, equivalent to the "demand" or "piggyback" registration rights
granted under that certain Registration Rights Agreement dated October 24,
1996, by and among Maintenance Specialists of America, Inc., Xxxxxx Xxxx and
other holders of common stock of the Company.
6. Fringe Benefits; Expenses.
(a) So long as Employee is employed by the Company, Employee shall
participate in all employee benefit plans sponsored by the Company for its
executive employees, including but not limited to vacation policy, sick leave
and disability leave, health insurance, dental insurance and pension and/or
profit sharing plans; provided, however, that except as provided below, the
nature, amount and limitations of such plans shall be determined from time to
time by the Board of Directors of the Company.
(b) The Company will reimburse Employee for all reasonable business
expenses incurred by Employee in the scope of his employment in accordance with
the Company's standard expense reporting and reimbursement policies.
(c) Employee shall be entitled to participate in any other stock bonus,
stock purchase or stock option plan instituted by the Company for its managers
or employees generally in the same manner as any other senior executive officer
of the Company, with proper regard and weight given in the issuance of shares or
the grant of options for Employee's position (and without consideration of the
above Senior Management Options or any shares of the Company otherwise owned by
Employee directly or indirectly).
Employment Agreement/Page 4
(d) The Company shall make reasonable efforts to provide life insurance
payable to Employee's designated beneficiary in an amount at least three times
Employee's annual base salary.
(e) The Company shall make a reasonable effort to maintain disability
insurance on behalf of Employee which, as a goal, shall provide for salary
continuation in the event of permanent disability in an amount not less than 60%
of Employee's regular base salary.
(f) Employee shall be entitled to a minimum of three weeks paid vacation,
increasing to four weeks at August 1, 2000 during each calendar year. Any
unused vacation with respect to any calendar year shall lapse and shall not
accumulate.
(g) The Company will pay all license fees, occupation taxes and reasonable
educational costs and expenses necessary to maintain Employee's good standing
under any required professional licenses.
(h) The Company shall reimburse Employee for all reasonable costs of
relocation to Houston, Texas, from Scottsdale, Arizona, including up to three
months' rental expense for temporary living quarters in Houston beginning on the
date of this Agreement. Such reimbursement will be grossed-up to cover any
income tax liability generated as a result of this Section 6(h).
7. Termination.
(a) This Agreement may be terminated by the Company with or without "Cause"
at any time, subject to the terms of this Section 7. Such termination shall be
effective upon delivery of written notice to Employee of the Company's election
to terminate this Agreement under this Section 7. "Cause" when used in
connection with the termination of employment with the Company, shall mean the
termination of Employee's employment by the Company by reason of (i) the
conviction of Employee of a crime involving moral turpitude by a court of
competent jurisdiction as to which no further appeal can be taken; (ii) the
proven commission by Employee of an act of fraud upon the Company, (iii) the
willful and proven misappropriation of any funds or property of the Company by
Employee; (iv) the willful, continued and unreasonable failure by Employee to
perform material duties assigned to him and agreed to by him after reasonable
notice and opportunity to cure such performance; (v) the knowing engagement by
Employee in any direct, material conflict of interest with the Company without
compliance with the Company's conflict of interest policy, if any, then in
effect; (vi) the knowing engagement by Employee, without the written approval of
the Board of Directors of the Company, in any activity that competes with the
business of the Company or that would result in a material injury to the
Company, or (vii) the knowing engagement in any activity that would constitute a
material violation of the provisions of the Company's Xxxxxxx Xxxxxxx Policy or
Business Ethics Policy, if any, then in effect.
Employment Agreement/Page 5
(b) If Employee's employment terminates, unless the Company terminates
Employee's employment under this Agreement for Cause or Employee resigns, the
Company shall, subject to the terms of Section 7(d) below, and only if and as
long as Employee is not in breach of his obligations under this Agreement, pay
to Employee an amount equal to 12 months compensation at his then current
salary, payable semimonthly, and shall continue to provide benefits in the kind
and amounts provided up to the date of termination for said 12 months period
including, without limitation, continuation of any Company-paid benefits as
described in Section 6 for Employee and his family. Notwithstanding anything in
this Agreement to the contrary, in the event Employee's employment terminates
within 12 months after (A) a sale of all or substantially all of the assets of
the Company, or (B) a merger, consolidation, liquidation, reorganization or any
other change of control related to a singular event such as a tender offer
involving the Company, the Company shall pay to Employee an amount equal to 36
months compensation at Employee's then current annual salary, payable either in
one lump sum or semimonthly as determined by the Company in its sole discretion,
and shall continue to provide benefits in the kind and amounts provided up to
the date of termination for such 36 month period.
In the event that this Agreement is terminated by Company without Cause,
Employee shall accept, in full settlement of any and all claims, losses, damages
and other demands that Employee may have arising out of such termination as
liquidated damages and not as a penalty, the applicable amount of which is set
out above and Employee will not be required to mitigate the amount of such
payments by seeking other employment of otherwise, nor will any profits, income,
earnings or other benefits from any source whatsoever create any mitigation,
offset, reduction or any other obligation on the part of Employee under this
Agreement.
(c) If at any time during the term of this Agreement, Employee is unable
due to physical or mental disability, to perform effectively his duties
hereunder, the Company shall continue payment of compensation as provided in
Section 4 during the first 12 month period of such disability to the extent not
covered by the Company's disability insurance policies. Upon the expiration of
such 12 month period, the Company, at its sole option, may continue payment of
Employee's salary for such additional periods as the Company elects, or may
terminate this Agreement without any further obligations hereunder.
(d) If Employee should die during the term of this Agreement, Employee's
employment and the Company's obligations hereunder shall terminate as of the end
of the month in which Employee's death occurs and there will be no salary and
benefit continuation period pursuant to Section 7(b).
(e) Employee shall enter into any lock-up letters, standstill agreements or
other similar documentation required by an underwriter in connection with a
public offering of securities by the Company or take other actions reasonably
related thereto as requested by the Board of Directors of the Company. If
Employee fails to take any such action, Employee shall forfeit any further
rights to the payments in Section 7(b) or (c),
Employment Agreement/Page 6
and the Company can seek and obtain specific performance of such covenant,
including any injunction requiring execution thereof. Employee hereby appoints
the then current chief executive officer of the Company to sign any such
documents on his behalf so long as such documents are prepared on the same basis
as other shareholders generally or as all management shareholders.
8. Covenant Not to Compete.
(a) During the term of this Agreement, Employee will not compete with the
Company or its affiliates, directly or indirectly, either for himself or as a
member of a partnership or as stockholder (except as a stockholder of less than
one percent of the issued and outstanding stock of a publicly-held company whose
gross assets exceed $100 million), investor, owner, officer or director of a
company or other entity, or as an employee, agent, associate or consultant of
any person, partnership, corporation or other entity, in any business in
competition with that carried on by the Company or any of its affiliates.
(b) For a period of six months from and after the date of termination of
Employee's employment under this Agreement, regardless of the reason for such
termination, Employee will neither represent the Company nor engage in or carry
on, directly or indirectly, either for himself or as a member of a partnership
or as a stockholder (other than as a stockholder of less than one percent of the
issued and outstanding stock of a publicly-held company whose gross assets
exceed $100 million), investor, owner, officer or director of a company or other
entity, or as an employee, agent, associate or consultant of any person,
partnership, corporation or other entity, any business in any State of the
United States or in any other part of the world that directly competes with any
services or products produced, sold, conducted, developed or in the process of
development by the Company or its affiliates on the date of termination of
Employee's employment. Notwithstanding the foregoing, nothing herein shall
prevent Employee from working in the indoor air quality, heating, ventilation
and air conditioning or plumbing maintenance services industry, provided that
such activities are in areas not in direct competition with any services or
products produced, sold, conducted, developed or in the process of development
by the Company or its affiliates on the date of termination of Employee's
employment.
(c) Employee acknowledges that the limitations set forth herein on his
rights to compete with the Company and its affiliates are reasonable and
necessary for the protection of the Company and its affiliates. In this regard,
Employee specifically agrees that the limitations to period of time and
geographic area, as well as all other restrictions on his activities specified
herein, are reasonable and necessary for the protection of the Company and its
affiliates. In particular, Employee acknowledges that the parties anticipate
that Employee will be actively seeking markets for the Company's products
throughout the United States during his employment with the Company.
Employment Agreement/Page 7
(d) Employee acknowledges that the remedy at law for any breach by him of
this Section 8 will be inadequate and that the Company shall also be entitled to
injunctive relief.
(e) If there shall be any violation of the covenant not to compete set
forth in Section 8(a) above, then the time limitation thereof shall be extended
for a period of time equal to the period of time during which such violation
continues; and in the even the Company is required to seek relief from such
violation in any court, board of arbitration or tribunal, then the covenant
shall be extended for a period of time equal to the pendency of such
proceedings, including all appeals.
(f) This Agreement shall be construed as a separate agreement covering each
separate jurisdiction in which the Company or any of its affiliates has
conducted business.
9. Confidential Information and Results of Services. During the term of
this Agreement, and for five years after his termination of employment, Employee
shall not make use of or disclose, other than in the discharge and performance
of his duties and responsibilities to the Company, Confidential Information (as
hereinafter defined) relating to the Company or any of its affiliates and shall
return to the Company all written materials in his possession embodying such
Confidential Information. For purposes of this Agreement, "Confidential
Information" includes information conveyed or assigned to the Company by
Employee or conceived, compiled, created, developed, discovered or obtained by
Employee from and during his employment relationship with the Company, whether
solely by Employee or jointly with others, which concerns the affairs of the
Company or its affiliates and which the Company could reasonably be expected to
desire be held in confidence, or the disclosure of which would likely be
embarrassing, detrimental or disadvantageous to the Company or any of its
affiliates and, without limiting the generality of the foregoing, includes
information relating to inventions, trade secrets, technologies, algorithms,
products, services, finances, business plans, marketing plans, legal affairs,
supplier lists, client lists, potential clients, business prospects, business
opportunities, personnel assignments, contracts and assets of the Company and
information made available to the Company by other parties under a confidential
relationship. Confidential Information, however, shall not include information
(i) in the public domain through no wrongful act of Employee, (ii) disclosed to
Employee by one not under obligations of confidentiality to the Company or
Employee, or (iii) which is required by court or governmental order, law or
regulation to be disclosed. Employee acknowledges that the remedy at law for
any breach by him of this Section 9 will be inadequate and that the Company
shall also be entitled to injunctive relief.
10. Notice. All notices, requests, demands and other communications
required by or permitted under this Agreement shall be in writing and shall be
sufficiently delivered if delivered by hand, by courier service, or sent by
registered or certified mail, postage prepaid, to the parties at their
respective addresses listed below:
(a) If to Employee, to the address set out in the beginning of this
Agreement;
Employment Agreement/Page 8
(b) If to the Company:
Group Maintenance America Corp.
0000 Xxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Either party may change such party's address by such notice to the other
parties.
11. Assignment. This Agreement is personal to Employee, and he shall not
assign any of his rights or delegate any of his duties hereunder without the
prior written consent of the Company. Neither Employee nor his spouse shall
have the right to commute, encumber or otherwise dispose of any payments under
this Agreement. The Company shall have the right to assign this Agreement to a
successor in interest in connection with a merger, sale of substantially all
assets, or the like; provided however, that an assignment of this Agreement to
an entity with operations, products or services outside of the industries in
which the Company is then active shall not be deemed to expand the scope of
Employee's covenant not to compete with such operations, products or services
without Employee's written consent.
12. Survival. The provisions of this Agreement shall survive the
termination of Employee's employment hereunder in accordance with their terms.
13. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of Texas without regard to the choice-of-
law provisions thereof.
14. Binding Upon Successors. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legal representatives, successors and permitted assigns.
15. Entire Agreement. This Agreement constitutes the entire agreement
between the Company and Employee with respect to the terms of employment of
Employee by the Company and supersedes all prior agreements and understandings,
whether written or oral, between them concerning such terms of employment.
16. Waiver and Amendments; Cumulative Rights and Remedies.
(a) This Agreement may be amended, modified or supplemented, and any
obligations hereunder may be waived, only by a written instrument executed by
the parties hereto. The waiver by either party of a breach of any provision of
this Agreement shall not operate as a waiver of any subsequent breach.
(b) No failure on the part of any party to exercise, and no delay in
exercising, any right or remedy hereunder shall operate as a waiver hereof, nor
shall any single or partial exercise of any such right or remedy by such party
preclude any other or further exercise thereof or the exercise of any other
right or remedy. All rights and remedies
Employment Agreement/Page 9
hereunder are cumulative and are in addition to all other rights and remedies
provided by law, agreement or otherwise.
(c) Employee's obligations to the Company and the Company's rights and
remedies hereunder are in addition to all other obligations of Employee and
rights and remedies of the Company created pursuant to any other agreement.
17. Construction. Each party to this Agreement has had the opportunity to
review this Agreement with legal counsel. This Agreement shall not be construed
or interpreted against any party on the basis that such party drafted or
authored a particular provision, parts of or the entirety of this Agreement.
18. Severability. If any provision or provisions of this Agreement is held
to be invalid, illegal or unenforceable by any court of law or otherwise, the
remaining provisions of this Agreement shall nevertheless continue to be valid,
legal and enforceable as though the invalid or unenforceable parts had not been
included therein. In addition, in such event the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible with respect to those provisions that are
held to be invalid, illegal or unenforceable.
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
under seal on the date first above written.
GROUP MAC MANAGEMENT CO., a
Delaware corporation
By: /s/ J. Xxxxxxx Xxxxxxxx, Xx.
-----------------------------------
J. Xxxxxxx Xxxxxxxx, Xx.
President
EMPLOYEE:
/s/ Xxxxxx X. Xxxx
-----------------------------------
Xxxxxx X. Xxxx
Employment Agreement/Page 10
EXHIBIT A
DUTIES AND FUNCTIONS
Employee will report to the Chief Executive Officer and serve as a member
of the Board. He will serve as the senior Operations professional, and as a
result, all operating companies will report directly to him as displayed in the
attached organization chart as the same may be changed by the Chief Executive
Officer and/or Board of Directors of the Company. His principle responsibility
will be to begin to build a cohesive operating unit out of the acquired
companies, directing them to achieve maximum financial results. While
preserving the local identities of each company, he will begin to implement
programs that offer synergies in both operating efficiencies and cost savings
across a broad range of functions such as finance, insurance and purchasing.
Simultaneously, he should develop a "best practices" program that will impact
areas such as training, safety and quality. Working with the existing
management at the company level, the Chief Operating Officer will over time need
to put into place a succession management plan at each company. He will also
focus on increasing market share through cross-marketing and other initiatives.
The Chief Operating Officer will be responsible for working closely with
other senior management, including finance, legal and acquisitions. Given the
growth strategy of the Company, he will assist in both identifying and
conducting due diligence on acquisition targets. Finally, as a member of senior
management, he will be a key participate in all strategic and tactical matters
affecting the Company.
Employment Agreement/Page 11
