EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between United Road
Services, Inc., a Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxx
("Founder") is hereby entered into and effective as of the date of the
consummation of the initial public offering of the common stock of the Company.
This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between the Company and Employee.
R E C I T A L S
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in
the business of providing towing and transport services.
Founder is employed hereunder by the Company in a confidential
relationship wherein Founder, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. Employment and Duties. The Company hereby employs Founder as a Vice
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President of the Company. As such, Founder shall have responsibilities, duties
and authority reasonably accorded to and expected of a Vice President and will
report directly to the Chief Executive Officer of the Company or such other
officer as shall be determined by the Chief Executive Officer of the Company.
Founder hereby accepts this employment upon the terms and conditions herein
contained and agrees to devote his working time, attention and efforts to
promote and further the business of the Company.
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2. Compensation. For all services rendered by Founder, the Company shall
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compensate Founder as follows:
(a) Base Salary. The base salary payable to Founder shall be
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$150,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures but not less than monthly. On at least an annual
basis, the board of directors of the Company (the "Board") will review Founder's
performance and may make increases to such base salary if, in its discretion,
any such increase is warranted. Such recommended increase would, in all
likelihood, require approval by the Board or a duly constituted committee
thereof. Founder shall be eligible for such bonuses, if any, as may be granted
to him from time to time by the Board.
(b) Founder Benefits and Other Compensation. Founder will, during
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the Employment Term, have the right to receive such benefits as are generally
made available to full-time officers of the Company, including the right to
participate in any retirement plan or bonus plan that the Company may create. In
addition, or inclusive of such benefits, the Company will provide Founder with
the following:
(i) the opportunity to apply for coverage under the Company's
medical, life and disability plans, if any. If Founder is accepted for
coverage under such plans, the Company will provide to Founder and his
immediate family such coverage on the same terms as is customarily provided
by the Company to the plan participants as modified from time to time.
(ii) in addition to normal holidays recognized by the Company,
Founder will be entitled to three weeks paid vacation annually or such
other amount as may be afforded officers and key employees generally under
the Company's policies in effect from time to time (pro rated for any year
in which Founder is employed for less than the full year).
3. Term; Termination; Rights on Termination. The term of this Agreement
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shall begin on the date hereof and continue for three (3) years (the "Initial
Term"), and, unless terminated sooner as herein provided, shall continue
thereafter on a year-to-year basis on the same terms and conditions contained
herein unless either party gives to the other party written notice of nonrenewal
of the Agreement at least ninety (90) days prior to the end of the then-current
term. This Agreement and Founder's employment may be terminated in any one of
the followings ways:
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(a) Death. The death of Founder shall immediately terminate the
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Agreement with no severance compensation due to Founder's estate.
(b) Disability. This Agreement will terminate upon the permanent
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disability of Founder. Founder will be deemed permanently disabled for the
purpose of this Agreement if, in the good faith determination of the Board,
based on sound medical advice, Founder has become physically or mentally
incapable of performing his duties hereunder for a continuous period of one
hundred eighty (180) days, in which event Founder will be deemed permanently
disabled upon the expiration of such one hundred eighty (180) day period. Also,
Founder may terminate his employment hereunder if his health should become
impaired to an extent that makes the continued performance of his duties
hereunder hazardous to his physical or mental health or his life, provided that
Founder shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided, further, that, at the Company's
request made within thirty (30) days of the date of such written statement,
Founder shall submit to an examination by a doctor selected by the Company who
is reasonably acceptable to Founder or Founder's doctor and such doctor shall
have concurred in the conclusion of Founder's doctor. In the event this
Agreement is terminated as a result of Founder's permanent disability, Founder
shall receive from the Company, in a lump-sum payment due within thirty (30)
days of the effective date of termination, an amount equal to the difference
between (a) the base salary at the rate then in effect for the lesser of (i)
whatever time period is remaining under the Initial Term of this Agreement and
(ii) one (1) year, minus (b) all payments in respect of Founder's salary payable
to Founder under the Company's disability insurance, if any, for the same
period.
(c) Good Cause. The Company may terminate the Agreement ten (10)
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days after written notice to Founder for good cause, which shall be: (1)
Founder's material and irreparable breach of this Agreement; (2) Founder's gross
negligence in the performance or intentional nonperformance (continuing for ten
(10) days after receipt of the written notice) of any of Founder's material
duties and responsibilities hereunder; (3) Founder's dishonesty, fraud or
misconduct with respect to the business or affairs of the Company which
materially and adversely affects the operations or reputation of the Company;
(4) Founder's conviction of a felony crime; (5) chronic alcohol abuse or illegal
drug abuse by Founder; or (6) any other termination in connection with the good
faith determination of the Board that Founder has engaged in any act that has a
material adverse effect on the business, affairs or reputation of the Company.
In the event of a termination for good cause, as enumerated above, Founder shall
have no right to any severance compensation.
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(d) Without Cause. At any time after the commencement of employment,
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the Company may, without cause, terminate this Agreement and Founder's
employment, effective thirty (30) days after written notice is provided to the
Founder. Should Founder be terminated by the Company without cause, Founder
shall receive from the Company one hundred percent (100%) of Founder's base
salary at the rate then in effect for whatever time period is remaining under
the Initial Term of this Agreement in either of the following payment forms, at
the Company's sole discretion: (x) a discounted lump sum payment due on the
effective date of termination based upon then current prime rate as reported in
the Wall Street Journal, or (y) periodic payments, over the period remaining
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under the Initial Term of the Agreement, in accordance with the payment schedule
set forth in Section 2(a) above. Notwithstanding the foregoing, the Company
immediately may cease such periodic payments in the event that, following
termination pursuant to this Section 3(d), Founder makes any disparaging remarks
to any third party regarding the Company.
(e) Termination by Founder Without Cause. If Founder resigns or
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otherwise terminates his employment Founder shall receive no severance
compensation.
Upon termination of this Agreement for any reason provided in this
Section 3, Founder shall be entitled to receive all compensation earned and all
benefits and reimbursements vested or due through the effective date of
termination. Additional compensation subsequent to termination, if any, will be
due and payable to Founder only to the extent and in the manner expressly
provided above. All other rights and obligations of the Company and Founder
under this Agreement shall cease as of the effective date of termination, except
that the Company's obligations under paragraph 8 herein and Founder's
obligations under paragraphs 4, 5, 6, 7, 8 and 9 herein shall survive such
termination in accordance with their terms.
4. Return of Company Property. All records, designs, patents, business
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plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Founder by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Founder shall be delivered promptly to the Company without request by it upon
termination of Founder's employment.
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5. Noncompetition. During the term of his employment with the Company
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(including the subsidiaries thereof) and for a period of one (1) year following
the effective date of his termination of employment for any reason whatsoever
(together, the "Noncompetition Period"), Founder agrees to be bound by each of
the provisions set forth in Section 13 of that certain Agreement and Plan of
Reorganization dated of even date herewith by and among the Company and the
"Stockholders" named therein (the "Reorganization Agreement"), to the extent
that such Noncompetition Period extends beyond the five (5) year time period
provided for in the Reorganization Agreement. It is specifically agreed that the
Noncompetition Period shall be computed by excluding from such computation any
time during which Founder is in violation of any provision of this Section 5.
6. Inventions. Founder shall disclose promptly to the Company any and
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all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Founder,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
activities of the Company and which Founder conceives as a result of his
employment by the Company. Founder hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Founder shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
7. Trade Secrets. Founder agrees that he will not, during or after the
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term of this Agreement with the Company, disclose the specific terms of the
Company's relationships or agreements with its respective significant vendors or
customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever.
8. Indemnification. In the event Founder is made a party to any
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threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Founder), by reason of the fact that he is or was performing services
within the course and scope of his employment with the Company under this
Agreement, then the Company shall indemnify Founder against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Founder in connection therewith. Without
limiting the requirement above that Founder be performing services within the
course and scope of his employment, activities constituting violations of law or
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Company policy shall not constitute services within the course and scope of
Founder's employment. In the event that both Founder and the Company are made a
party to the same third-party action, complaint, suit or proceeding, the Company
agrees to engage competent legal representation, and Founder agrees to use the
same representation, provided that if counsel selected by the Company shall have
a conflict of interest that prevents such counsel from representing Founder,
Founder may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel.
9. No Prior Agreements. Founder hereby represents and warrants to the
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Company that the execution of this Agreement by Founder and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Founder agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Founder and such third party
which was in existence as of the date of this Agreement.
10. Assignment; Binding Effect. Founder understands that he has been
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selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Founder agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, legal representatives, successors
and assigns.
11. Complete Agreement. This Agreement is not a promise of future
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employment. Founder has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between the
Company and Founder and of all the terms of this Agreement, and it cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
oral or written agreements. This written Agreement may not be later modified
except by a further writing signed by a duly authorized officer of the Company
and Founder, and no term of this Agreement may be waived except by writing
signed by the party waiving the benefit of such term.
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12. Notice. Whenever any notice is required hereunder, it shall be given
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in writing addressed as follows:
To the Company: United Road Services, Inc.
0 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
with a copy to: Xxxxxx X. Xxxxxxx, Esq.
Howard, Rice, Nemerovski, Canady,
Xxxx & Rabkin
A Professional Corporation
Three Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
To Founder: Xxxxxx X. Xxxxxxxx
Northland Auto Transporters, Inc.
00000 Xxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
with a copy to: Xxxx Xxxxxxx, Esq.
Xxxxxxxxx, Xxxx et al.
0000 Xxxxxx
Xxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this Section 12.
13. Severability; Headings. In the event any court of competent
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jurisdiction shall determine that the scope, time or territorial restrictions
set forth herein are unreasonable, then it is the intention of the parties that
such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed. The paragraph headings
herein are for reference purposes only and are not intended in any way to
describe, interpret, define or limit the extent or intent of the Agreement or of
any part hereof.
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14. Guarantee. The Company hereby unconditionally guarantees the
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performance of the Company's obligations under this Agreement in accordance
with, and subject to, the terms hereof.
15. Governing Law. This Agreement shall in all respects be construed
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according to the laws of the State of New York.
16. Counterparts. This Agreement may be executed simultaneously in two
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(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY
By:
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Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
FOUNDER
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Xxxxxx X. Xxxxxxxx
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