EXHIBIT 10.45
XXXXXXX XXXXX RENTAL, L.P.
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of October 25, 1999, between Xxxxxxx Xxxxx
Rental, L.P., a Pennsylvania limited partnership (the "Company") and Xxxxxxx X.
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Xxxxxx ("Executive").
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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
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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 paragraph 4 hereof (the "Employment Period").
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2. Position and Duties.
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(a) During the Employment Period, Executive shall serve as the chief
executive officer of the Company and shall render such administrative, sales,
marketing and other executive and managerial services to the Company and its
Subsidiaries as the Board of Managers of ACR Management, L.L.C., the Company's
general partner (the "Board"), may from time to time reasonably direct.
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(b) During the Employment Period, Executive shall report to the Board
and shall devote his best efforts and his full business time and attention
(except for permitted vacation periods, reasonable periods of illness or other
incapacity and, with the prior written consent of the Board, time served on the
boards of non-profit organizations) to the business and affairs of the Company
and its Subsidiaries. Executive shall perform his duties and responsibilities to
the Company and its Subsidiaries hereunder to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
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corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company, directly
or through one of more Subsidiaries.
3. Compensation and Benefits.
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(a) During the Employment Period, Executive's base salary shall be
$325,000 per annum or such higher rate as the Board may designate from time to
time (the "Base Salary"), which salary shall be payable in regular installments
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in accordance with the Company's general payroll practices.
(b) 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.
In addition, Executive shall be entitled to the following benefits during the
Employment Period: (i) health insurance, (ii) short-term and long-term
disability coverage, (iii) life insurance with a $500,000 death benefit, (iv) an
automobile leased by the Company, including fuel, maintenance and insurance in
an aggregate amount not to exceed $800 per month, (v) 401(k) plan, with the
Company matching 50% of all contributions made by Executive up to the lesser of
(1) 6% of Executive's then applicable Base Salary and (2) the statutory limit on
contributions, (vi) three (3) weeks vacation each year, (vii) reimbursement for
all reasonable expenses relating to Executive's moving to the Pittsburgh,
Pennsylvania area, purchasing a new residence in the Pittsburgh, Pennsylvania
area and selling his Malvern, Pennsylvania residence, including all closing
costs, reasonable legal fees, inspection fees, packing and unpacking costs, but
excluding any "points" paid to a broker or mortgage lender or any real estate or
other taxes in connection therewith (other than transfer taxes), (viii)
reimbursement for all reasonable costs relating to Executive's living in the
Pittsburgh, Pennsylvania area incurred during the nine months following the date
of this Agreement, including reasonable expenses relating to travel back and
forth between Pittsburgh, Pennsylvania and his Malvern, Pennsylvania residence
during this time period, (ix) expenses incidental to required professional
certifications, (x) reimbursement for the reasonable expenses of preparation of
Executive's annual tax returns and (xi) club memberships approved by the Board.
(c) During the Employment Period, the Company shall reimburse
Executive for all reasonable expenses incurred by him in the course of
performing his duties and responsibilities 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.
(d) In addition to the Base Salary, the Company shall pay Executive a
one-time signing bonus in the amount of $100,000 on the date hereof and
thereafter the Board shall award a bonus to Executive, based upon mutually
agreed upon operating and performance targets, in an amount equal to 0% to 100%
of Executive's then applicable Base Salary (with 66% of Executive's then
applicable Base Salary being the target bonus for meeting such operating and
performance targets), following the end of each fiscal year (including a pro
rated portion of the bonus for the fiscal year ending December 31, 1999) during
the Employment Period.
(e) All amounts payable to Executive as compensation hereunder shall
be subject to customary withholding by the Company.
4. Term.
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(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on October 25, 2004 and shall be
renewed for successive one year
periods thereafter unless terminated by either party by 90 days prior written
notice; provided that (i) the Employment Period shall terminate prior to such
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date immediately upon Executive's resignation, death or permanent mental or
physical disability or incapacity (as determined by the Board in its good
faith judgment) and (ii) the Employment Period may be terminated by the
Company at any time prior to such date for Cause (as defined below) or without
Cause. Except as otherwise provided herein, any termination of the Employment
Period by the Company shall be effective as specified in a written notice from
the Company to Executive.
(b) If the Employment Period is terminated by the Company without
Cause, Executive shall be entitled to continue to receive his Base Salary
payable in regular installments from the date of termination through the end of
the Noncompete Period (as defined in paragraph 7 hereof) (the "Severance
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Period"), the employee benefits set forth in clauses (i), (ii) and (iii) of
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paragraph 3(b) above and the bonus to which Executive would be entitled for the
fiscal year in which the termination occurs, payable at the time such bonus is
paid to other employees of the Company, but only so long as Executive has not
breached the provisions of paragraphs 5, 6 and 7 hereof. As a condition to the
Company's obligations (if any) to make payments pursuant to this paragraph 4(b),
Executive will execute and deliver a general release in form and substance
attached hereto as Exhibit A.
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(c) If the Employment Period is terminated by the Company for Cause or
is terminated pursuant to clause (a)(i) above or expires and is not renewed
hereunder, Executive shall only be entitled to receive his Base Salary through
the date of termination or expiration.
(d) Except as otherwise expressly provided herein or by applicable
law, all of Executive's rights to salary, bonuses, fringe benefits and other
compensation hereunder which accrue or become payable after the termination or
expiration of the Employment Period shall cease upon such termination or
expiration. The Company may offset any amounts Executive owes it or its
Subsidiaries against any amounts it owes Executive hereunder.
(e) For purposes of this Agreement, "Cause" shall mean (i) the
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commission of a felony or a crime involving moral turpitude or the commission of
any other act or omission involving dishonesty, disloyalty or fraud, (ii)
conduct tending to bring the Company or any of its Subsidiaries into substantial
public disgrace or disrepute, (iii) failure to perform duties as reasonably
directed by the Board and such failure is not cured to the Board's satisfaction
within 10 days of the Board's notice to Executive of such failure, (iv) gross
negligence or willful misconduct (including, but not limited to, failing to
follow guidelines as clearly outlined by the Board) with respect to the Company
or any of its Subsidiaries or (v) any breach of this Agreement, and such breach
is not cured to the Board's satisfaction within 10 days of the Board's notice to
Executive of such breach.
5. Confidential Information. Executive acknowledges that the
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information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Subsidiaries concerning the business or
affairs of the Company, or any other Subsidiary ("Confidential Information") are
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the property of the Company or such Subsidiary. Therefore,
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Executive agrees that he shall not disclose (except pursuant to legal or
administrative process) to any unauthorized person or use for his own purposes
any Confidential Information without the prior written consent of the Board,
unless and to the extent that the Confidential Information becomes 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 or expiration 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) embodying or relating to the Confidential Information, Work Product
(as defined below) or the business of the Company, or any other Subsidiaries
which he may then possess or have under his control.
6. Inventions and Patents. Executive acknowledges that all
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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 and its Subsidiaries ("Work Product") belong to the Company or
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such Subsidiary. Executive shall promptly disclose such Work Product to the
Board and, at the Company's expense, 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.
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(a) In further consideration of and in connection with the Employment
Agreement, Executive acknowledges that in the course of his employment with the
Company and its Subsidiaries 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 have been and shall be of special, unique
and extraordinary value to the Company and its Subsidiaries. Therefore,
Executive agrees that, during the Employment Period and for one year thereafter
(the "Noncompete Period"), he shall not directly or indirectly own any interest
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in, manage, control, participate in, consult with, render services for, or in
any manner engage in any business involved in the business of crane and other
lifting equipment sales or rentals, excavation contracting services, sales or
rentals of other construction equipment, the provision of marine transportation
services or competing with the businesses of the Company or its Subsidiaries, as
such businesses exist or are in process on the date of the termination or
expiration of the Employment Period, within any geographical area in which the
Company or its Subsidiaries engage or at such time have existing plans to engage
in such businesses. 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.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce any employee of the Company or any
Subsidiary to leave the
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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 eighteen-month period prior to the termination of the
Employment Period 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 with the Company or any Subsidiary
(including, without limitation, making any negative or disparaging statements
or communications regarding the Company or its Subsidiaries).
(c) If, at the time of enforcement of this paragraph 7, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive acknowledges that the restrictions
contained in this paragraph 7 are reasonable.
(d) In the event of the breach or a threatened breach by Executive of
any of the provisions of this paragraph 7, the Company, in addition and
supplementary to other rights and remedies existing in its favor, shall be
entitled to specific performance and/or injunctive or other equitable relief
from a court of competent jurisdiction 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 this
paragraph 7, the Noncompete Period shall be tolled until such alleged breach or
violation has been proven or admitted and duly cured.
8. Executive's Representations. Executive hereby represents and
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warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, 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 that would adversely
affect his ability to perform his duties on behalf of the Company 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 had an opportunity to consult with independent legal counsel regarding his
rights and obligations under this Agreement and that he fully understands the
terms and conditions contained herein.
9. Survival. Paragraphs 5 through 17 shall survive and continue in
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full force in accordance with their terms, notwithstanding the expiration or
termination of the Employment Period.
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10. Notices. Any notice provided for in this Agreement shall be in
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writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the
recipient at the address indicated below:
Notices to Executive:
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Xxxxxxx X. Xxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
With a copy to:
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Xxxxx X. Xxxxxx
Xxxxxxx Aronchick Xxxxx & Xxxxxx
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxx
Notices to the Company:
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Xxxxxxx Xxxxx Rental, L.P.
c/o Bain Capital, Inc.
Two Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Xxxxxx Xxxxxxx
With a copy to:
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Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Learner, P.C.
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 shall be deemed to have been given when so
delivered, sent or mailed.
11. Severability. Whenever possible, each provision of this Agreement
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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 action in any other jurisdiction, but this Agreement
shall be reformed, construed
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and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision had never been contained herein.
12. Complete Agreement. This Agreement, those documents expressly
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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.
13. No Strict Construction. The language used in this Agreement shall
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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.
14. Counterparts. This Agreement may be executed in separate
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counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15. Successors and Assigns. This Agreement is intended to bind and
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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 duties or obligations hereunder without the prior
written consent of the Company.
16. Arbitration. Any controversy, dispute or claim arising out of or
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relating in any way to this Agreement that cannot be resolved by negotiations
between Executive and the Company shall be settled by arbitration in accordance
with the terms and provisions of Section 8.02 of that certain Recapitalization
Agreement, dated as of July 22, 1998 between the Company, Xxxxxxx Xxxxx Rental
Holdings, L.P., the Purchasers listed on the Schedule of Purchasers and the
Current Owners listed on the Schedule of Current Owners.
17. Choice of Law. All issues and questions concerning the
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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 Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the
Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
18. Amendment and Waiver. The provisions of this Agreement may be
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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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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
XXXXXXX XXXXX RENTAL, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: _____________________________________
Its: _____________________________________
__________________________________________
Xxxxxxx X. Xxxxxx
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