EXHIBIT 99.(d)(4)
Employment Agreement
This Employment Agreement (this "Agreement"), is dated as of June 28, 2000,
and is made by and between UTILX Corporation, a Delaware corporation
("Employer"), InfrastruX Group, Inc., a Washington corporation ("InfrastruX
Group") and Xxxxxxx X. Xxxxxxxxx ("Employee").
W I T N E S S E T H:
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WHEREAS, Employee is the Chief Executive Officer of Employer ; and
WHEREAS, pursuant to a Merger Agreement, dated as of the date hereof, by
and among InfrastruX Group, InfrastruX Acquisition, Inc. and Employer (the
"Merger Agreement"), Employer agreed to be acquired by InfrastruX Group (the
"Merger") and following the Merger will operate as a wholly-owned subsidiary of
InfrastruX Group; and
WHEREAS, Employer desires to retain the services of Employee following the
Merger upon the terms and conditions set forth herein; and
WHEREAS, Employee is willing to provide services to Employer upon the terms
and conditions set forth herein;
A G R E E M E N T S:
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NOW, THEREFORE, for and in consideration of the foregoing premises and for
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, Employer and Employee hereby agree as follows:
1. EFFECTIVE DATE
Other than Section 20, which shall be effective as of the date hereof, this
agreement shall be effective as of the Effective Time (as that term is defined
in the Merger Agreement) of the Merger.
2. EMPLOYMENT
Employer will employ Employee and Employee will accept employment by
Employer as its President. Employee will have the authority, subject to
Employer's Certificate of Incorporation and Bylaws, as may be granted from time
to time by the Board of Directors of Employer. Employee will perform the duties
customarily performed by the President of a corporation which is, in all
respects, similar to Employer and such other duties as may be assigned from time
to time by the Board of
Directors of Employer, which relate to the business of InfrastruX Group, its
subsidiaries, Employer or any business ventures in which InfrastruX Group, its
subsidiaries or Employer may participate.
3. ATTENTION AND EFFORT
Employee will devote all of his entire productive time, ability, attention
and effort to Employer's business and will skillfully serve its interests during
the term of this Agreement; provided, however, that Employee may devote
reasonable periods of time to (a) engaging in personal investment activities
that do not involve Employee providing advice or services to the business in
which the investments are made, (b) serving on the Board of Directors of other
corporations, if such service would not otherwise be prohibited by Section 9
hereof, and (c) engaging in charitable or community service activities, so long
as none of the foregoing additional activities in (a) through (c) materially
interfere with Employee's duties under this Agreement.
4. TERM
Employee's employment will be "at will," and either Employee or Employer
may terminate the employment relationship at any time with or without reason.
Unless otherwise terminated pursuant to Section 7, Employee's term of employment
under this Agreement shall expire on the second anniversary of the date of this
Agreement ("Expiration Date"). This Agreement shall automatically be renewed for
successive one-year terms unless the party wishing to terminate this Agreement
does so as provided in Section 7 hereto prior to the Expiration Date. Upon
renewal of this Agreement, the term "Expiration Date" will refer to the end of
the one-year renewal period.
5. COMPENSATION
During the term of this Agreement, Employer agrees to pay or cause to be
paid to Employee, and Employee agrees to accept in exchange for the services
rendered hereunder by him, the following compensation:
5.1 Base Salary
Employee's compensation shall consist, in part, of an annual base salary of
$325,000 before all customary payroll deductions. Such annual base salary shall
be paid in substantially equal installments and at the same intervals as other
officers of Employer are paid. The Board of Directors of Employer shall
determine any increases in the amount of the annual base salary in future years.
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5.2 Bonus
Employee may be entitled to receive, in addition to the annual base salary
described above, an annual cash bonus in an amount to be determined by the Board
of Directors of Employer. The level of the bonus for fiscal year ended March 31,
2001, shall be as determined by the Board of Directors of the Employer in April
2000, subject to equitable adjustment with respect to the costs associated with
the Offer (as defined in the Merger Agreement) and the Merger. The level of the
bonus for subsequent years will vary depending on the level of achievement of
mutually agreed upon corporate objectives to be established from time to time by
the Board of Directors of Employer.
5.3 Stock Options
As soon as practicable following the adoption of InfrastruX Group's stock
option plan, the Board of Directors of InfrastruX Group shall grant Employee
options under such stock option plan to purchase that number of shares of common
stock of InfrastruX Group equal to 1% of the outstanding common stock of
InfrastruX Group on a fully diluted basis as calculated at the Effective Time
(as that term is defined in the Merger Agreement) of the Merger (the "Options").
Such Options shall be subject to the standard vesting schedule as set forth in
the InfrastruX Group's stock option plan and shall have an exercise price equal
to the fair market value of InfrastruX Group's common stock on the date of
grant. The grant of such Options shall be conditioned on Employee executing
InfrastruX Group's standard form of stock option letter agreement.
5.4 Car Allowance
Employee shall receive a monthly car allowance of $1,100.
6. BENEFITS
During the term of this Agreement, Employee will be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in fringe benefit programs as shall be provided from time to time
to executive-level employees of Employer.
7. TERMINATION
Employment of Employee pursuant to this Agreement may be terminated as
follows, but in any case, the provisions of Section 9 hereof shall survive the
termination of this Agreement and the termination of Employee's employment
hereunder:
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7.1 By Employer
With or without Cause (as defined below), Employer may terminate the
employment of Employee at any time during the term of employment by giving
written notice to Employee. 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 Employee
Employee may terminate his employment at any time, for any reason, upon
giving 60 days' prior written notice.
7.3 Automatic Termination
This Agreement and Employee's employment hereunder shall terminate
automatically upon the death or total disability of Employee. The term "total
disability" as used herein shall mean Employee's inability to perform the duties
set forth in Section 2 hereof for a period or periods constituting 90
consecutive calendar days in any 12-month period as a result of physical or
mental illness, loss of legal capacity or any other cause beyond Employee's
control, unless Employee is granted a leave of absence by the Board of Directors
of Employer. Employee and Employer hereby acknowledge that Employee's ability to
perform the duties specified in Section 2 hereof is of the essence of this
Agreement. Termination hereunder shall be deemed to be effective (a) at the end
of the calendar month in which Employee's death occurs or (b) immediately upon a
determination by the Board of Directors of Employer of Employee's total
disability, as defined herein.
8. TERMINATION PAYMENTS
In the event of termination of the employment of Employee, all compensation
and benefits set forth in this Agreement shall terminate except as specifically
provided in this Section 8:
8.1 Termination by Employer
If Employer terminates Employee's employment without Cause prior to the
Expiration Date, Employee shall be entitled to receive (a) termination payments
equal to that portion of the aggregate annual base salary Employee would have
received from the date of his termination by Employer ("Termination Date") to
the end of the eighth full calendar month following the Termination Date, and
(b) any unpaid annual base salary which has accrued for services already
performed as of the Termination Date. If Employee is terminated by Employer for
Cause (as defined in Section 8.4
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below), Employee shall not be entitled to receive any of the foregoing benefits,
other than those set forth in clause (b) above.
8.2 Termination by Employee
(a) If Employee resigns for Good Reason prior to the Expiration Date,
Employee shall be entitled to receive the same termination payments and unpaid
annual base salary as provided for in Section 8.1. "Good Reason" means only any
one or more of the following: (1) material breach by Employer of this Agreement,
and its failure to cure such breach within thirty (30) days after written notice
from Employee to Employer specifying in reasonable detail the alleged breach;
(2) reduction, without Employee's consent, of Employee's salary or reduction or
elimination of any compensation or benefit plan benefiting Employee, unless the
reduction or elimination is generally applicable to substantially all similarly
situated employees (or employees of a successor or controlling entity of
Employer) formerly benefited; (3) assignment to Employee, without his consent,
of substantial authority or duties materially inconsistent with Employee's
position as of the date of this Agreement except that the assignment of duties
relating to the business of InfrastruX Group or a subsidiary or business venture
of InfrastruX Group as contemplated by Section 2 hereof shall not be deemed
duties that are inconsistent with Employee's position; or (4) geographic
reassignment of Employee resulting in a commute increase of more than forty-five
(45) miles from Employee's residence to his new worksite.
(b) In the case of the termination of Employee's employment by Employee
for other than Good Reason, Employee shall not be entitled to any payments
hereunder, other than those set forth in clause (b) of Section 8.1 hereof.
8.3 Payment Schedule
All payments under this Section 8 shall be made to Employee at the same
interval as payments of salary were made to Employee immediately prior to
termination.
8.4 Cause
Wherever reference is made in this Agreement to termination being with or
without Cause, "Cause" shall mean:
(a) willful misconduct on the part of Employee that has a material
adverse effect on Employer 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 Employer or conduct involving
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substance abuse, fraud or moral turpitude, or which would materially
compromise Employer'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 officers of Employer, or
(c) unreasonable refusal by Employee 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 Employee did it in good faith and with the reasonable
belief that his action or omission was in the best interests of Employer.
9. NONCOMPETITION AND NONSOLICITATION
9.1 Applicability
This Section 9 shall survive the termination of Employee's employment with
Employer or the expiration of the term of this Agreement.
9.2 Scope of Competition
Employee agrees that he will not, directly or indirectly, during his
employment and for a period of one year from the date on which his employment
with Employer terminates for any reason, or this Agreement expires, be employed
by, consult with or otherwise perform services for, own, manage, operate, join,
control or participate in the ownership, management, operation or control of or
be connected with, in any manner, any Competitor. A "Competitor" shall include
any entity which, directly or indirectly, competes with Employer or produces,
markets, distributes or otherwise derives benefit from the production, marketing
or distribution of products or services which compete with products then
produced or services then being provided or marketed, by Employer or the
feasibility for production of which Employer is then actually studying, or which
is preparing to market or is developing products or services that will be in
competition with the products or services then produced or being studied or
developed by Employer, in each case within North America and the other markets
in which the Employer or UTILX conducts business operations, unless released
from such obligation in writing by Employer's Board of Directors. Employee shall
be deemed to be related to or connected with a Competitor if such Competitor is
(a) a partnership in which he is a general or limited partner or employee, (b) a
corporation or association of which he is a shareholder, officer, employee or
director, or (c) a partnership, corporation or association of which he is a
member, consultant or agent; provided, however, that nothing herein shall
prevent the purchase or ownership by Employee of shares which constitute less
than five percent of the outstanding
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equity securities of a publicly or privately held corporation, if Employee had
no other relationship with such corporation.
9.3 Scope of Nonsolicitation
Employee shall not directly or indirectly solicit, influence or entice, or
attempt to solicit, influence or entice, any employee or consultant of Employer
to cease his relationship with Employer or solicit, influence, entice or in any
way divert any customer, distributor, partner, joint venturer or supplier of
Employer to do business or in any way become associated with any Competitor.
This Section 9.3 shall apply during the time period and geographical area
described in Section 9.2 hereof.
9.4 Nondisclosure; Return of Materials
During the term of his employment by Employer and following termination of
such employment, he will not disclose (except as required by his duties to
Employer), any concept, design, process, technology, trade secret, customer
list, plan, embodiment, or invention, any other Intellectual Property or any
other confidential information, whether patentable or not, of Employer of which
Employee becomes informed or aware during his employment, whether or not
developed by Employee. In the event of the termination of his employment with
Employer or the expiration of this Agreement, Employee will return all
documents, data and other materials of whatever nature, including, without
limitation, drawings, specifications, research, reports, embodiments, software
and manuals to Employer which pertain to his employment with Employer or to any
Intellectual Property and shall not retain or cause or allow any third party to
retain photocopies or other reproductions of the foregoing.
9.5 Equitable Relief
Employee acknowledges that the provisions of this Section 9 are essential
to Employer, that Employer would not enter into this Agreement if it did not
include this Section 9 and that damages sustained by Employer as a result of a
breach of this Section 9 cannot be adequately remedied by damages, and Employee
agrees that Employer, notwithstanding any other provision of this Agreement,
including, without limitation, Section 14 hereof, and in addition to any other
remedy it may have under this Agreement or at law, shall be entitled to
injunctive and other equitable relief to prevent or curtail any breach of any
provision of this Agreement, including, without limitation, this Section 9.
9.6 Effect of Violation
Employee and Employer acknowledge and agree that additional consideration
has been given for Employee entering into this Section 9, such additional
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consideration including, without limitation, the grant of Options pursuant to
Section 5.3 of this Agreement and the payments made pursuant to Section 8 of
this Agreement. Violation by Employee of this Section 9 shall relieve Employer
of any obligation it may have to make such termination payments, but shall not
relieve Employee of his obligations, as required hereunder, not to compete.
9.7 Definition of Employer
For purposes of Section 9.2 and Section 9.3 hereof, "Employer" shall
include InfrastruX Group, all subsidiaries of InfrastruX Group, Employer and any
business ventures in which InfrastruX Group, its subsidiaries or Employer
participate.
10. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, the party asserting the breach of this Agreement shall give
the other party at least five days' prior written notice of the existence and
the nature of such breach before taking further action hereunder and shall give
the party purportedly in breach of this Agreement the opportunity to correct
such breach during the five-day period.
11. FORM OF NOTICE
All notices given hereunder shall be given in writing, shall specifically
refer to this Agreement and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission or by registered or certified mail,
return receipt requested, at the address set forth below or at such other
address as may hereafter be designated by notice given in compliance with the
terms hereof:
If to Employee:
Xxxxxxx X. Xxxxxxxxx
0000 Xxxx Xxxxxx Xxx
Xxxxxx Xxxxxx, XX 00000
If to Employer:
InfrastruX Group, Inc.
000-000xx Xxx. X.X.
Xxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.
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12. ASSIGNMENT
This Agreement is personal to Employee and shall not be assignable by
Employee. Employer may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which
Employer is a party or (b) any corporation, partnership, association or other
person to which Employer may transfer all or substantially all of the assets and
business of Employer existing at such time. All of the terms and provisions of
this Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
13. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
14. ARBITRATION
Subject to the provisions of Section 9.5 hereof, any controversies or
claims arising out of or relating to this Agreement shall be fully and finally
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association then in effect (the "AAA Rules"), conducted
by one arbitrator either mutually agreed upon by Employer and Employee or chosen
in accordance with the AAA Rules, except that the parties thereto shall have any
right to discovery as would be permitted by the Federal Rules of Civil Procedure
for a period of 90 days following the commencement of such arbitration and the
arbitrator thereof shall resolve any dispute which arises in connection with
such discovery. The prevailing party shall be entitled to costs, expenses and
reasonable attorneys' fees, and judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
15. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified,
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waived, terminated or discharged and signed by InfrastruX Group, Employer and
Employee, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by InfrastruX Group, Employer and Employee.
16. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the state of Washington, without regard
to any rules governing conflicts of laws.
17. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
18. HEADINGS
All headings used herein are for convenience only and shall not in any way
affect the construction of, or be taken into consideration in interpreting this
Agreement.
19. COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant to
Section 15 hereof, may be executed in any number of counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original
and all of which counterparts, taken together, shall constitute one and the same
instrument.
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20. STATUS OF PRIOR AGREEMENTS
Employer and Employee agree and acknowledge that (1) the Senior Management
Employment Agreement, dated as of November 1, 1998, between Employer and
Employee (the "Change of Control Agreement"), shall be terminated as of the date
immediately prior to the acceptance for payment of the Shares (as that term is
defined in the Merger Agreement) pursuant to the Offer (as that term is defined
in the Merger Agreement) and (2) the Executive Employment Agreement, dated as of
November 1, 1998, between Employer and Employee (the "Executive Employment
Agreement") shall be terminated immediately prior to the Effective Date of the
Merger. Neither Employer nor InfrastruX Group shall have any obligations or
liabilities in connection with such agreements following their termination as
contemplated herein; provided, however, that if the Merger Agreement is
terminated and the Merger is not consummated, the Change of Control Agreement
and Executive Employment agreement will remain in effect in accordance with
their terms as if such agreements had not been terminated hereby.
21. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between Employer,
InfrastruX Group and Employee with respect to the subject matter hereof and all
prior or contemporaneous oral or written communications, understandings or
agreements between Employer, InfrastruX Group and Employee with respect to such
subject matter (including, but not limited to, the Change of Control Agreement
and the Executive Employment) are hereby superseded and nullified in their
entireties.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EMPLOYEE:
/s/ Xxxxxxx Xxxxxxxxx
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EMPLOYER:
By /s/ Xxxxx Xxxxx Xxxxxx
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Its VP & CFO
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INFRASTRUX GROUP, INC:
By /s/ Xxxx Xxxxxx
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Its President and Chief Executive Officer
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