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EXHIBIT 10.25
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of March 17, 1997, by and between NES Acquisition Corp., a Delaware corporation
(the "Company"), and Xxxxx Xxxxxxx ("Executive").
WHEREAS, the Company is a wholly-owned subsidiary of National Equipment
Services, Inc., a Delaware corporation ("NES").
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in Section 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the President
of the Lone Star Rentals Division of the Company and shall have the normal
duties, responsibilities and authority of the President of the Lone Star
Rentals Division of the Compan, subject to the overall direction and authority
of the Company's Chief Executive Officer and the Company's board of directors
(the "Board").
(b) Executive shall report to the Company's Chief Executive Officer, and
Executive shall devote his best efforts and his full business time and
attention to the business and affairs of the Company and its Subsidiaries.
Executive shall perform his duties and responsibilities to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by the Company,
directly or through one or more Subsidiaries.
3. Base Salary and Benefits.
(a) During the Employment Period, Executive's base salary shall be
$100,000.00 per annum and shall be subject to review by the Board on an annual
basis (the "Base Salary"), which salary shall be payable in regular
installments in accordance with the Company's general payroll practices and
shall be subject to customary withholding. In addition, during the Employment
Period, Executive shall be entitled to participate in all of the Company's
employee benefit programs for which senior executive employees of the Company
and its Subsidiaries are generally eligible.
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(b) The Company shall reimburse Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) The Company shall provide Executive a monthly allowance of $_______
for expenses incurred by Executive in connection with Executive's use of his
personal vehicles in connection with the performance of his duties hereunder.
(d) In addition to the Base Salary, Executive will be eligible to earn an
annual bonus to be calculated in the manner set forth on Exhibit A attached
hereto.
4. Term.
(a) The Employment Period shall terminate upon the second anniversary of
the date hereof unless extended by mutual agreement of the parties or unless
earlier terminated (i) by Executive's resignation, death or disability, (ii) by
the Company for Cause or (iii) by the Company other than for Cause.
(b) If the Employment Period is terminated pursuant to clause (a)(i) or
clause (a)(ii) above, Executive shall be entitled to receive his Base Salary
through the date of termination. If the Employment Period is terminated
pursuant to clause (a)(iii) above, Executive shall be entitled to receive his
Base Salary through the first to occur of (i) the six month anniversary of the
date of termination and (ii) the second anniversary of the date hereof, if and
only if Executive has not breached and does not breach Section 5, 6 or 7
hereof.
(c) All of Executive's rights to fringe benefits and bonuses hereunder (if
any) which accrue or become payable after the termination of the Employment
Period shall cease upon such termination.
(d) For purposes of this Agreement, "Cause" shall mean (i) the commission
of a felony or a crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud with respect to the
Company or any of its Subsidiaries or any of their customers or suppliers, (ii)
conduct tending to bring the Company or any of its Subsidiaries into
substantial public disgrace or disrepute, (iii) substantial and repeated
failure to perform duties as reasonably directed by the Board, (iv) gross
negligence or willful misconduct with respect to the Company or any of its
Subsidiaries or (v) any other material breach of this Agreement.
5. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while he was employed by Lone Star
Rentals, Inc., the Company's predecessor, and while employed by the Company and
its Subsidiaries concerning the business or affairs of the Company or any of its
Subsidiaries ("Confidential Information") are the property of the Company or
such Subsidiary. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for his own purposes any Confidential Information
without the
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prior written consent of the Board, unless and to the extent that the
aforementioned matters become generally known to and available for use by the
public other than as a result of Executive's acts or omissions. Executive
shall deliver to the Company at the termination of the Employment Period, or at
any other time the Company may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data
(and copies thereof) relating to the Confidential Information, Work Product (as
defined below) or the business of the Company or any Subsidiary which he may
then possess or have under his control.
6. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable)
which relate to the Company's or any of its Subsidiaries' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company or its Subsidiaries ("Work Product") belong to the Company or such
Subsidiary. Executive shall promptly disclose such Work Product to the Board
and perform all actions reasonably requested by the Board (whether during or
after the Employment Period) to establish and confirm such ownership
(including, without limitation, assignments, consents, powers of attorney and
other instruments).
7. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of his employment with the
Company he shall become familiar with the Company's trade secrets and with
other Confidential Information concerning the Company and its Subsidiaries and
that his services shall be of special, unique and extraordinary value to the
Company and its Subsidiaries. Therefore, Executive agrees that during the
Employment Period and two years thereafter (the "Noncompete Period"), he shall
not directly or indirectly own any interest in, manage, control, participate
in, consult with or render services for any business competing with the
businesses of the Company or NES or any of the Affiliates of NES (including,
without limitation, the sale, rental and maintenance of construction equipment)
(a) prior to termination of the Employment Period, anywhere in the United
States or (b) after termination of the Employment Period, within 150 miles of
any store location of NES or any Affiliate of NES (but excluding any store
location of the Company, NES or any Affiliate of NES which is opened within 150
miles of any store location of a competing enterprise with respect to which
Executive has previously incurred significant financial obligations or in which
Executive has previously made a significant financial investment without
violating the provisions of this Section 7). Nothing herein shall prohibit
Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such corporation. The
earlier termination of the noncompetition agreements contained in Article 4 of
the Asset Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"), among Executive, the Company and Lone Star Rentals, Inc.
("Seller"), shall not affect in any manner the operation and effectiveness of
this Section 7. Notwithstanding any provision to the contrary, if the
Employment Period has terminated, the obligations of Executive
under this Section 7 shall terminate if (i) the Company fails to make a payment
to Seller when due pursuant to Section 2.3(a) or Section 2.5 of the Purchase
Agreement and such non-payment
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continues after sixty (60) days written notice from Executive to NES and the
Company; or (ii) NES ceases to pay quarterly interest payments as provided in
the Promissory Note (as such term is defined in the Purchase Agreement) and
such non-payment continues after sixty (60) days written notice from Seller to
NES and the Company; or (iii) the Company fails to make a payment of rent when
due under any of the Stockholder Lease Agreements (as such term is defined in
the Purchase Agreement), other than as a result of a breach of such Stockholder
Lease Agreement by Executive, and without the written consent of Executive,
and such non-payment continues after sixty (60) days written notice from
Executive to NES and the Company.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company
or any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or during the Noncompete Period, without the prior written consent of
the Board (as to Executive's brother, which consent shall not be unreasonably
withheld) or (iii) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the Company or any
Subsidiary to cease doing business with the Company or such Subsidiary, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any Subsidiary (including,
without limitation, making any negative statements or communications about the
Company or its Subsidiaries).
8. Enforcement. If, at the time of enforcement of Section 5, 6 or 7 of
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
Because Executive's services are unique and because Executive has access to
Confidential Information and Work Product, the parties hereto agree that money
damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in addition to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond or
other security). In addition, in the event of an alleged breach or violation
by Executive of Section 7, the Noncompete Period shall be tolled until such
breach or violation has been duly cured. Executive agrees that the
restrictions contained in Section 7 are reasonable.
9. Other Businesses. As long as Executive is employed by the Company or
any of its Subsidiaries, Executive agrees that he will not, except with the
express written consent of the Board (which shall not be unreasonably
withheld), become engaged in, or render services for, any business other than
the business of the Company, any of its Subsidiaries or any corporation or
partnership in which the Company or any of its Subsidiaries have an equity
interest.
10. Executive's Representations. Executive hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and will not conflict with, breach, violate or
cause a default under any contract, agreement,
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instrument, order, judgment or decree to which Executive is a party or by which
he is bound, (ii) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this Agreement by
the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby
acknowledges and represents that he has consulted with independent legal
counsel regarding his rights and obligations under this Agreement and that he
fully understands the terms and conditions contained herein.
11. Survival. Sections 5, 6 and 7 shall survive and continue in full
force in accordance with their terms notwithstanding any termination of the
Employment Period.
12. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipient at the address below indicated:
Notices to Executive:
--------------------
Xxxxx Xxxxxxx
00000 Xxxxxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
With copy to:
------------
Xxxxxxx X. Xxxx
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Notices to the Company:
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NES Acquisition Corp.
c/o National Equipment Services
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx
With a copy to:
--------------
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Perl
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or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
13. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
14. Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof
in any way.
15. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
16. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
17. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his obligations hereunder without the prior written
consent of the Company.
18. Choice of Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of Illinois, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Illinois or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Illinois.
19. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company and Executive, and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
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* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
NES ACQUISITION CORP.
By: /s/ Xxxxxx X'Xxxxxx
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Its: Chief Financial Officer
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/s/ Xxxxx X. Xxxxxxx
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Xxxxx Xxxxxxx
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EXHIBIT A
BONUS CALCULATION
[TO COME FROM X. XXXXXXX]
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