EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of this 1st day of November,
1998, between UTILX Corporation, a Delaware corporation (the "Company"), and
Xxxxxxx X. Xxxxxxxxx ("Executive").
AGREEMENTS
1. DEFINITIONS
Terms capitalized in this Agreement which are not otherwise defined
shall have the meanings assigned to such terms in that certain Senior
Management Employment Agreement, dated as of November 1, 1998, between the
Company and Executive (the "Senior Management Agreement").
2. EMPLOYMENT
The Company will employ Executive and Executive will accept employment
by the Company as its President, Chief Executive Officer and Chairman of the
Board of Directors (the "Board"). Subject to the Company's Certificate of
Incorporation and Bylaws, Executive shall have the authority and perform the
duties customarily performed by the President, Chief Executive Officer and
Chairman of the Board of a corporation that is, in all respects, similar to
the Company, and such other authority and duties as may be assigned from time
to time by the Board, which relate to the business of the Company, its
subsidiaries, its parent corporation or any business ventures in which the
Company, its subsidiaries or its parent corporation may participate.
3. ATTENTION AND EFFORT
Following a reasonable transition period, executive shall devote his
entire productive time, ability, attention and effort to the Company's
business, shall skillfully serve its interests during the term of this
Agreement, and shall not engage in any business or employment activity that
is not on the Company's behalf (whether or not pursued for gain or profit).
Executive may, however, devote reasonable periods of time to (a) engaging in
personal investment activities that do not involve Executive providing any
advice or services to the businesses in which the investments are made, (b)
engaging in charitable or community service activities, and (c) serving as a
member of the board of directors of other for-profit corporations, so long as
none of the these additional activities materially interfere with Executive's
duties under this Agreement.
4. TERM
Unless earlier terminated as provided in this Agreement, this
Agreement shall expire on November 1, 2001.
5. COMPENSATION
During the term of this Agreement, the Company shall pay or cause to
be paid to Executive, and Executive shall accept in exchange for the services
he renders under this Agreement, the following compensation:
5.1 BASE SALARY
Executive's compensation shall consist of, in part, an annual base
salary (the "Base Salary") of three hundred thousand dollars ($300,000)
before all customary payroll deductions. The Company shall pay Executive his
Base Salary in substantially equal installments and at the same intervals as
other officers of the Company are paid. The Board may, at its discretion,
adjust the Base Salary upward, but not downward, from time to time.
5.2 STOCK OPTIONS
5.2.1 INITIAL GRANT
Upon execution of this Agreement, the Company shall grant to Executive,
pursuant to the terms and conditions of the 1994 Option and Restricted Stock
Plan (the "Option Plan"), options to purchase 200,000 shares of common stock of
the Company (the "Initial Grant"). The Initial Grant shall consist of incentive
stock options to the extent permitted under applicable law. Each option in the
Initial Grant shall have a term of ten years and shall have an exercise price
equal to the fair market value at the close of business on November 11, 1998.
5.2.2 STANDARD GRANTS
In addition to the Initial Grant, Executive shall be eligible to
participate in the stock option plans of the Company, at the discretion of the
Board.
5.3 VESTING
The options in the Initial Grant will vest in four equal installments:
25% on each of the first, second, third and fourth anniversaries of the date of
this Agreement. Any grants in accordance with Section 5.2.2 shall vest in
accordance with the terms of the Option Plan. In the event of a Change in
Control, all options granted to Executive which are not then vested shall vest
and be fully exercisable. In the event of termination of Executive's employment
for any reason after the third anniversary of the date of this Agreement, all
options granted to Executive under the Initial Grant which are not then vested
shall vest and be fully exercisable.
5.4 CASH BONUS
During the term of this Agreement, at the end of each fiscal year the
Company shall pay Executive a performance bonus targeted at 100% of Base
Salary. The level of the bonus will vary depending on the level of
achievement of mutually agreed upon corporate objectives to be established
from time to time by the Board.
6. BENEFITS
During the term of this Agreement, the Company shall provide Executive
with the same health, dental, life insurance, and other benefits (including
pension plans and similar benefits) provided to other senior executives.
Executive shall be entitled to participate, subject to applicable eligibility
requirements, in the fringe benefit programs that the Board (or any person or
committee appointed by the Board to determine fringe benefit programs and
other emoluments) shall provide from time to time. To the extent possible,
the Company shall take all steps necessary or appropriate to make Executive
immediately eligible for such benefits and programs. At the Company's
expense, the Company shall provide Executive with an automobile for his
full-time use.
7. TERMINATION
Employment of Executive under this Agreement may be terminated as
follows:
7.1 BY THE COMPANY
The Company may terminate the employment of Executive with or without
Cause by giving written notice to Executive. The notice shall be effective
immediately if termination is for Cause and thirty (30) days later if
termination is not for Cause.
7.2 BY EXECUTIVE
Executive may terminate this Agreement for any reason upon sixty (60)
days' prior written notice.
7.3 AUTOMATIC TERMINATION
This Agreement and Executive's employment under this Agreement shall
terminate automatically upon Executive's death or total disability. The term
"total disability" shall mean Executive's inability to perform the duties set
forth in Section 2 of this Agreement for a period or periods aggregating 90
calendar days in any 12-month period as a result of physical or mental
illness, loss of legal capacity or any other cause beyond Executive's
control, unless Executive is granted a leave of absence by the Board at its
discretion. Executive and the Company acknowledge that Executive's ability to
perform the duties specified in Section 2 of this Agreement is of the essence
of this Agreement. Termination under this Section 7.3 shall be effective (a)
at the end of the calendar month in which Executive's death occurs or (b)
immediately upon a determination by the Board of Executive's total
disability, as defined in this Section 7.3.
7.4 CHANGE IN CONTROL
This Agreement shall automatically terminate upon the occurrence of a
Change in Control. At such time, however, the Senior Management Agreement
shall remain in effect.
7.5 EFFECT OF TERMINATION
Even if this Agreement terminates or expires, the Company shall remain
liable for any rights or payments to which Executive is entitled under this
Agreement that arose before the expiration or termination.
8. TERMINATION PAYMENTS
If Executive's employment is terminated, all compensation and benefits
set forth in this Agreement shall terminate except as specifically provided
in this Section 8.
8.1 TERMINATION BY THE COMPANY
If the Company terminates Executive's employment without Cause prior
to the end of the term of this Agreement, Executive shall be entitled to
receive (a) termination payments equal to the aggregate Base Salary Executive
would have received from the date of his termination by the Company to the
end of the fourth full calendar month following the date of termination of
this Agreement, and (b) any unpaid portion of the Base Salary that has
accrued for services already performed as of the date termination of
Executive's employment becomes effective. If the Company terminates
Executive for Cause, Executive shall not be entitled to receive any of the
foregoing benefits, other than those set forth in clause (b) of this
Section 8.1.
8.2 TERMINATION BY EXECUTIVE
If Executive's employment is terminated by Executive, Executive shall
not be entitled to any payments under this Section 8, other than those set
forth in clause (b) of Section 8.1.
8.3 EXPIRATION OF TERM
If Executive's employment is terminated following the expiration of the
term of this Agreement, Executive shall not be entitled to receive any payments
under this Section 8.
8.4 PAYMENT SCHEDULE
All payments under this Section 8 shall be made to Executive at the
same interval as payments of the Base Salary were made to Executive
immediately prior to termination.
8.5 CAUSE
"CAUSE" means (a) willful misconduct on the part of Executive that has
a materially adverse effect on the Company and its Subsidiaries, taken as a
whole, (b) Executive's engaging in conduct which could reasonably result in
his conviction of a felony or a crime against the Company or conduct
involving substance abuse, fraud or moral turpitude, or which would
materially compromise the Company's reputation, as determined in good faith
by a written resolution adopted by the affirmative vote of not less than
two-thirds of all of the directors who are not Executives or officers of the
Company, or (c) unreasonable refusal by Executive to perform the duties and
responsibilities of his position in any material respect. No action, or
failure to act, shall be considered willful or unreasonable if the Executive
did it in good faith and with the reasonable belief that his action or
omission was in the best interests of the Company.
9. INDEMNIFICATION
The Company shall indemnify Executive to the fullest extent permitted
by law, and as provided by the Company's Certificate of Incorporation and
Bylaws. The Company shall at all times maintain director and officer
liability insurance at levels not less than the coverage the Company
currently maintains.
10. MISCELLANEOUS
10.1 AMENDMENT
This Agreement may be amended only by written agreement between Executive
and the Company.
10.2 NO MITIGATION
All payments and benefits to which Executive is entitled under this
Agreement shall be made and provided without offset, deduction or mitigation
on account of income Executive could or may receive from other employment or
otherwise.
10.3 LEGAL EXPENSES
In connection with any litigation, arbitration or similar proceeding
regarding the interpretation or enforcement of any provision of this
Agreement, whether or not instituted by the Company or Executive, the
prevailing party shall be entitled to recover from the other party all
related costs and expenses, including reasonable attorneys' fees and
disbursements.
10.4 NOTICES
Any notices required under the terms of this Agreement shall be
effective when mailed, postage prepaid, by certified mail and addressed to,
in the case of the Company:
UTILX Corporation
00000 Xxxxxxx Xxxx, X.X. Xxx 00000
Xxxx, XX 98064-9709
Attention: Chief Financial Officer
with a copy to:
Xxxxxxx X. Xxxxxx
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
and to, in the case of Executive:
Xxxxxxx X. Xxxxxxxxx
0000 Xxxx Xxxxxx Xxx
Xxxxxx Xxxxxx, XX 00000
10.5 WAIVER; CURE
No waiver or modification of any or all of this Agreement shall be
effective against any party unless the party seeking to be bound puts in writing
and signs the waiver or modification. The parties shall not construe a waiver
of any breach of any provision by any party on one occasion as a waiver of any
subsequent breach, and the parties shall not construe a waiver of any right or
power by any party on one occasion as a waiver of, or a bar to, the exercise of
that right or power on any other occasion. The breaching party may cure any
breach of this Agreement within ten (10) days of the date that the breaching
party receives written notice of the breach from the party asserting the breach.
10.6 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the state of Washington applicable to contracts made and to be performed
there.
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the first date written above.
UTILX CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Title: Director
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EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
