Exhibit 10(m)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 15th day of July, 1997 by and between EMCOR
GROUP, INC., a Delaware Corporation (the "Company"), and XXXXXX X. XXXXXXXXXX
("Executive").
RECITALS
In order to induce Executive to serve as Executive Vice President of the
Company, the Company desires to provide Executive with compensation and other
benefits under the conditions set forth in this Agreement.
Executive is willing to perform services for the Company and its subsidiaries,
on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as Executive Vice President of the Company with
such duties of a senior executive nature as shall be assigned to him
from time to time by the Chief Executive Officer of the Company (the
"CEO"). Executive shall have the customary powers, responsibilities and
authorities of similarly situated executive officers of similar
corporations of the size, type and nature of the Company as it may
exist from time to time, subject to the direction of the CEO.
1.2 Subject to the terms and condition hereof, Executive hereby agrees
to serve as Executive Vice President of the Company and shall devote
his full working time and efforts, to the best of his ability,
experience and talent, to the performance of the services, duties and
responsibilities in connection therewith. Except upon the prior written
consent of the CEO, Executive will not during the Period of Employment
(as hereinafter defined) (i) accept any other employment or (ii)
engage, directly or indirectly, in any other business activity (whether
or not pursued for pecuniary advantage), whether or not it may be
competitive with, or whether or not it might place him in a competing
position to that of, the Company or any subsidiary thereof. Nothing in
this Agreement shall preclude the Executive from (i) engaging,
consistent with his duties and responsibilities hereunder, in
charitable community affairs, (ii) managing his personal investments,
(iii) continuing to serve on the boards of directors on which he
presently serves (to the extent such service is not precluded by
federal or state law or by
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conflict of interest by reason of his position with the Company), or
(iv) serving, subject to approval of the CEO, as a member of boards of
directors of other companies, provided, that such activities do not
interfere with the performance of Executive's duties hereunder.
2. Period of Employment.
Executive's employment under this Agreement shall commence on July 15,
1997 (the "Commencement Date") and shall continue through the earlier
of December 31, 1997 or the date of termination hereunder (the "Period
of Employment"); provided, however, that the Period of Employment shall
automatically be extended for successive one-year periods commencing
January 1, unless the Company or Executive, at least six months prior
to the end of such period, provides written notice to the other party
of intent not to extend the Period of Employment.
3. Compensation.
. 3.1 Salary. The Company shall pay Executive a base salary ("Base
Salary") at the rate of $275,000 per annum for the Period of
Employment. Base Salary shall be payable in accordance with the
ordinary payroll practices of the Company. Executive's rate of Base
Salary shall be increased on the first day of each calendar year
occurring during the Period of Employment by the amount specified by
the Compensation and Personnel Committee of the Board of Directors of
the Company (the "Committee").
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. The
amount of the Bonus shall be determined by the Committee in its sole
discretion.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide the
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior executive
officers, or which the Company, with Committee approval, elects to make
available generally to its senior executive officers hereafter,
including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life
insurance, short and long-term disability,
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accidental death and dismemberment and travel accident coverage;
provided that Executive shall pay such portion of the premiums therefor
as is customarily paid by senior executives of the Company.
4.2 Vacation, Fringe and Other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $650 per month for leasing (plus maintenance and
insurance) of an automobile and shall make the initial capital cost
reduction payment with respect to the leasing of such automobile on
Executive's behalf. The Company shall also reimburse Executive for (a)
all initiation fees and monthly dues for membership in a club suitable
for entertaining clients of the Company and (b) all legal expenses
incurred by Executive in connection with the negotiation and drafting
of this Agreement. The Company shall bear the cost of any increased tax
liability of Executive caused by the provisions of this Section 4.2.
5. Directors and Officers Liability.
The Company shall keep in effect during and after the Period of
Employment, a policy of directors' and officers' liability insurance
("Insurance Policy") for directors and officers of the Company at such
reasonable amount of coverage as are agreed to by Executive and the
Board from time to time and which Insurance Policy shall be on a claims
made basis.
6. Termination of Employment.
6.1 Termination Not for Cause or For Good Reason. (a) The Company may
terminate Executive's employment at any time, and Executive may
terminate his employment at any time. If Executive's employment is
terminated by the Company other than for Cause (as hereinafter
defined), or Executive terminates his employment for Good Reason (as
hereinafter defined), Executive shall be entitled to receive a lump sum
cash payment (but not in substitution for compensation already earned)
in an amount equal to the sum of:
(i) the greater of (A) Executive's Base Salary at the highest
annual rate in effect during the Period of Employment, for the
period from the date of termination through December 31, 1997
or (B) one times Executive's Base Salary at its then current
annual rate; and
(ii) the greater of (A) Bonus payable by the Company pursuant
to Section 3.2 times the number of full or partial calendar
years remaining from the date of termination through December
31, 1997
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or (B) one times Executive's Bonus. For purposes of this
Section 6.1 (a), the amount of the Bonus shall be deemed to be
the highest Bonus paid to Executive during the Period of
Employment; and
(iii) In the event of termination of Executive's employment
for Good Reason (within 60 days following the occurrence of
such Good Reason) following a Change in Control (as
hereinafter defined), the amounts payable pursuant to
subsections 6.1 (a) (i) and (ii) shall be increased by 50%;
provided, however, that this clause (iii) shall only apply in
the case of a Change in Control.
In addition to the amount described in subsections 6.1 (a) (i)
- (iii), Executive shall be entitled to receive:
(iv) all unpaid amounts, as of the date of such termination,
in respect of any Bonus, for any calendar year ending before
such termination occurs, which would have been payable had
Executive remained in employment until the date such Bonus
would otherwise have been paid;
(v) until December 31 of the year in which Executive's
employment terminates, Executive (and, to the extent
applicable, Executive's dependents) shall continue to be
covered, at the Company's expense, under the Company's
medical, dental and hospitalization coverage plans, and until
December 31 of the year in which Executive's employment
terminates, Executive shall continue to be covered, at the
Company's expense, under the Company's group life, short and
long-term disability, accidental death and dismemberment and
travel accident coverage plans described in Section 4.1 hereof
or the Company will provide for equivalent coverage; and
(vi) all payments to which Executive has vested rights as of
the expiration of the Period of Employment under employee
benefit, disability, insurance and similar plans which provide
for payments beyond the Period of Employment.
(b) If Executive's employment is terminated by the Company
other than for Cause or Executive terminates his employment
for Good Reason, the Company shall take all action necessary
to cause the Executive to be fully vested as of the expiration
of the Period of Employment in employee benefit plans of the
Company (other than stock options) with respect to which the
amount of any benefit payable thereunder is determined in
whole or in part by years of
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service with the Company. In the event the terms of any such
employee benefit plan do not permit such vesting, the Company
shall pay to the Executive an amount equal to such unvested
benefit.
(c) For purposes of this Agreement, "Good Reason" shall mean
any of the following (without Executive's express prior
written consent):
(i) Any material reduction by the Company of Executive's
duties or responsibilities or any removal of Executive from
his position, except in connection with the termination of
Executive's employment (A) upon the termination of the Period
of Employment on December 31, 1997, (B) upon the termination
of a succeeding one-year Period of Employment (as provided for
under Section 2 hereof), (C) for Cause, (D) as a result of
Executive's Permanent Disability (as hereinafter defined) or
death or (E) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary as
in effect at the commencement of employment hereunder or as
the same may be increased from time to time during the Period
of Employment;
(iii) The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of the
Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure shall
not have been remedied with 30 days after Executive shall have
notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change in Control or Executive's
principal business location is changed to a location more than
30 miles from Executive's principal business location
immediately prior to a Change in Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(vii) The termination of the Indemnity Agreement effective as
of March 20, 1997 between the Executive and the Company.
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(d) If all or any portion of the payments or benefits provided
under this Section 6.1, either alone or together with other
payments and benefits which Executive receives or is then
entitled to receive from the Company, would constitute a
"parachute payment" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended ("Code"), Executive
shall be entitled to such additional payments as may be
necessary to ensure that the net after tax benefit of all
payments under this Section 6.1, including the payment
provided for in this subsection 6.1 (d) shall be equal to the
net after tax benefit of Executive as if no excise tax had
been imposed under Section 4999 of the Code.
The foregoing calculations shall be made, at the Company's
expense, by the Company and Executive. If no agreement on the
calculations is reached, Executive and the Company shall agree
to the selection of an accounting firm to make the
calculations. If no agreement can be reached regarding the
selection of an accounting firm, the Company shall select a
nationally recognized accounting firm which has no current or
recent business relationship with the Company. The
determination of any such firm selected shall be conclusive
and binding on all parties.
(e) For purposes of this Agreement, a "Change in Control of
the Company" shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended), other than a
trustee or other fiduciary holding securities under an
employee benefit plan of the Company, is or becomes the
beneficial owner (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities, (ii) during any period
of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors of the Company
and any new director whose election by the Board of Directors
or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason
to constitute a majority thereof, (iii) the stockholders of
the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger consolidation
which would result in the voting securities of the
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Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at
least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the
stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of
transactions) of all or substantially all the Company's
assets, (iv) there occurs any sale, lease, exchange or other
transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of
the Company or (v) there occurs any other event designated as
a Change in Control by the Board for purposes of this
Agreement.
(f) All cash payments under this Section 6.1 shall be made by
the Company within 30 calendar days following the event giving
rise to such payments.
6.2. Permanent Disability. If as a result of Executive's incapacity due
to physical or mental illness, Executive shall have been absent from
his duties with the Company on a full-time basis for six consecutive
months (a "Permanent Disability") during his Period of Employment, the
Company or Executive may terminate his employment on written notice
thereof, the Period of Employment shall terminate on the giving of such
notice, and the compensation to which Executive is entitled pursuant to
Section 3.1 shall be paid through the last day of the month in which
the notice is given. In addition, Executive shall be entitled to
receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus, for any calendar year ending before, and
the calendar year in which, such termination occurs, which
would have been payable had Executive remained in employment
until the date such Bonus would otherwise have been paid,
provided, however, that any amount described in this
subsection (a) in respect of the calendar year in which
Executive's employment terminates shall be determined with
respect to the period commencing January 1 of such year and
expiring on the day on which the Period of Employment
terminates except if Executive's employment terminates in 1997
such amount shall be determined with respect to the period
commencing July 15, 1997 and expiring on the date on which the
Period of Employment terminates;
(b) until December 31 of the year in which Executive's
employment terminates, Executive (and, to the extent
applicable, Executive's
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dependents shall continue to be covered under Company's
medical, dental, hospitalization, group life, short and
long-term disability, accidental death and dismemberment and
travel accident coverage plans described in Section 4.1 or the
Company will provide for equivalent coverage; provided that if
Executive is provided with comparable coverage by a successor
employer any such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder,
the Period of Employment shall thereupon automatically terminate and
the Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus, for any calendar year ending before, and the
calendar year in which, such termination occurs, which would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, provided, however, that any amount
described in this Section 6.3 in respect of the calendar year in which
Executive's employment terminates shall be determined with respect to
the period commencing January 1 of such year and expiring on the day on
which the Period of Employment terminates except if Executive's
employment terminates in 1997 such amount shall be determined with
respect to the period commencing July 15, 1997 and expiring on the date
on which the Period of Employment terminates; and (iii) any death
benefits provided under the employee benefit programs, in accordance
with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or the
Company terminates the employment of Executive at any time for Cause,
the Company's obligations under this Agreement to make any further
payments to Executive shall thereupon, to the extent permitted by law,
cease and terminate except with respect to all unpaid amounts, as of
the date of such termination, in respect of any Bonus for any calendar
year ending before such termination occurs, which would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid. In addition, Executive shall remain
entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices, including, without
limitation, the benefits referred to in subsection 6.1(b) hereof. The
term "Cause" shall be limited to (a) action by Executive involving
willful malfeasance in connection with his employment which results in
material harm to the Company, (b) material and continuing breach by
Executive of the terms of this Agreement which breach is not cured
within 30 days after Executive
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receives written notice from the Company of any such breach or (c)
Executive being convicted of a felony. Termination of Executive for
Cause pursuant to this Section 6.4 shall be communicated by a Notice of
Termination given within six months after the Board of Directors of the
Company (the "Board") both (i) had knowledge of conduct or an event
allegedly constituting Cause and (ii) had reason to believe that such
conduct or event could be grounds for Cause. For purposes of this
Agreement a "Notice of Termination" shall mean delivery to Executive of
a copy of a resolution duly adopted by the Board at a meeting of the
Board called and held for the purpose (after not less than 10 days'
notice to Executive ("Preliminary Notice") and reasonable opportunity
for Executive, together with the Executive's counsel, to be heard
before the Board prior to such vote), finding that in the good faith
opinion of the Board Executive was guilty of conduct set forth in the
third sentence of this Section 6.4 and specifying the particulars
thereof in detail. The Board shall no later than 30 days after the
receipt of the Preliminary Notice by Executive communicate its findings
to Executive. A failure by the Board to make its finding of Cause or to
communicate its conclusions within such 30-day period shall be deemed
to be a finding that Executive was not guilty of the conduct described
in the third sentence of this Section 6.4
6.5 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records,
reports, notes, contracts, lists, and other documents, and equipment
furnished to or prepared by Executive in the course of or incident to
his employment, belong to the Company and shall be promptly returned to
the Company upon termination of the Period of Employment.
(b) Upon termination of the Period of Employment, Executive shall be
deemed to have resigned from all offices and directorships then held
with the Company or any subsidiary or affiliate thereof.
7. Confidential Information.
During and after the Period of Employment, Executive shall not disclose
to any person (other than an employee or agent of the Company or any
affiliate of the Company entitled to receive the same) any confidential
information relating to the business of the Company and obtained by him
while providing services to the Company, without the consent of the
Board, or until such information ceases to be confidential.
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8. Non-Competition.
In the event Executive's employment is terminated by the Company for
Cause or Executive terminates his employment with the Company without
Good Reason, Executive shall not, for a period ending on December 31 of
the year in which Executive's employment terminates, accept any other
employment or engage, directly or indirectly, in any other business
activity which is competitive with that of the Company or any
subsidiary thereof.
9. Expenses.
Executive is authorized to incur reasonable expenses in carrying out
his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an
itemized account of such expenditures.
10. No Obligation to Mitigate Damages.
Executive shall not be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking (and no
payment otherwise required hereunder shall be reduced on account of)
other employment or otherwise, nor will any payments hereunder be
subject to offset in respect of any claims which the Company may have
against Executive.
11. Notices.
All notices or communications hereunder shall be in writing, addressed
as follows:
to Executive:
Xxxxxx X. Xxxxxxxxxx
000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
to Company:
Xxxxx X. XxxXxxxx
Chairman, President and Chief Executive Officer
EMCOR Group, Inc.
000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000
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with a copy to:
Xxxxxxx X. Xxxxxxxx, Esq.
EMCOR Group, Inc.
000 Xxxxxxx Xxxxx
0xx Xxxxx
Xxxxxxx, XX 00000
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage
prepaid, addressed as above (or to such other address as such party may
designate in a notice duly delivered as described above), and the
actual date of delivery or mailing shall determine the time at which
notice was given.
12. Agreement to Perform Necessary Acts.
Each party agrees to perform any further acts and to execute and
deliver any further documents that may be reasonably necessary to carry
out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees.
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability
shall not affect the remaining provisions hereof, which shall remain in
full force and effect. Any controversy or claim arising out of or
relating to this Agreement or the breach of this Agreement that cannot
be resolved by Executive and the Company, including any dispute as to
the calculation of Executive's benefits or any payments hereunder,
shall be submitted to arbitration in New York, New York in accordance
with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes
an action relating to this Agreement, Executive may, at Executive's
option, bring that action in any court of competent jurisdiction. All
expenses, including legal expenses incurred by Executive, relating to
any arbitration shall be paid by the Company. Judgment may be entered
on an arbitrator(s)' award in any court having jurisdiction.
14. Assignment.
This contract shall be binding upon and inure to the benefit of the
heirs and representatives of Executive and the assigns and successors
of the Company, but neither this Agreement nor any rights hereunder
shall be assignable or otherwise subject to hypothecation by Executive
(except by
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will or by operation of the laws of intestate succession) or by the
Company (any such purported assignment by either shall be null and
void), except that the Company may assign this Agreement to any
successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver.
The Agreement may be amended at any time, but only by mutual written
agreement of the parties hereto. Any party may waive compliance by the
other party with any provision hereof, but only by an instrument in
writing executed by the party granting such waiver.
16. Entire Agreement.
The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of
Executive by the Company and may not be contradicted by evidence of any
prior or contemporaneous agreement. The parties further intend that
this Agreement shall constitute the complete and exclusive statement of
its terms and that no extrinsic evidence whatsoever may be introduced
in any judicial, administrative or other legal proceeding involving
this Agreement.
17. Death or Incompetence.
In the event of Executive's death or a judicial determination of his
incompetence, reference in this Agreement to Executive shall be deemed,
where appropriate, to refer to his estate or other legal
representative.
18. Survivorship.
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to
the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship
provisions of any other section of this Agreement.
19. Governing Law.
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
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20. Withholding.
The Company shall be entitled to withhold from payment the amount of
any taxes required to be withheld by law.
21. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which will be deemed an original.
EMCOR GROUP, INC.
By: /s/ Xxxxx X. XxxXxxxx
---------------------
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
