EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is made and entered
into as of October 11, 1999 (the "Effective Date") by and between United Road
Services, Inc., a Delaware corporation (the "Company") and Xxxxxx X.
Xxxxxxx, an individual resident of the State of Colorado ("Executive").
RECITALS
WHEREAS, the Company is engaged in the business of motor vehicle and
equipment towing, recovery and transport services (the "Business");
WHEREAS, the Company desires to employ Executive on a full-time basis
as Chief Executive Officer of the Company, and Executive is willing to be
employed by the Company in that capacity on the terms and conditions set forth
in this Agreement; and
WHEREAS, Executive is employed hereunder by the Company in a
confidential relationship wherein Executive, in the course of his employment
with the Company, has and will continue to become familiar with and aware of
information as to the Company's customers, specific manner of doing business,
including the processes, techniques and trade secrets utilized by the Company,
and future plans with respect thereto, all of which have been and will be
established and maintained at great expense to the Company; this information is
a trade secret and constitutes the valuable goodwill of the Company.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Executive hereby
agree as follows:
1. Employment. The Company hereby employs Executive on the
terms set forth herein and Executive hereby accepts such employment.
2. Duties. During the period of his employment with the Company
hereunder, Executive will be employed as Chief Executive Officer of the Company.
Executive will:
(a) Devote his full business time, ability, knowledge and
attention, and give his best effort and skill solely to the
Company's business affairs and interests;
(b) Perform such services and assume such duties and
responsibilities appropriate to the positions identified above
as well as those which may from time to time be reasonably
assigned to him by the Board of Directors of the Company; and
(c) in all respects use his best efforts to further, enhance and
develop the Company's business affairs, interests and welfare.
3. Compensation.
(a) Base Salary and Bonus. In consideration of Executive's
services to the Company during the Employment Term, the
Company will pay Executive a gross base salary of $300,000 per
annum during the employment term. Executive's base salary will
be paid in equal installments (pro rated for portions of a pay
period) on the Company's regular pay days and the Company will
withhold from such compensation all applicable federal and
state income, social security, disability and other taxes as
required by applicable laws. On at least an annual basis, the
Compensation Committee of the Board of Directors (the
"Compensation Committee") will review Executive's performance
and may increase such base salary if, in its discretion, any
such increase is warranted. The Company may also pay Executive
such bonuses and other incentive compensation, including
without limitation, stock options, as are determined from time
to time to be appropriate by the Compensation Committee or
another duly authorized committee of the Board of Directors
based upon the satisfaction of performance targets established
by such committee at the beginning of each year; provided,
that the annual cash bonus payable to Executive hereunder
shall not exceed 100% of Executive's gross base salary in any
given year; and provided further that, as long as Executive
continues to be employed by the Company as of December 31,
1999, Executive shall be entitled to a guaranteed bonus for
fiscal 1999 equal to $50,000 in cash plus the number of shares
of unregistered common stock of the Company determined by
dividing $50,000 by the closing price of the Company's common
stock, as reported by the Nasdaq Stock Market National Market,
on December 31, 1999.
(b) Stock Options. As an inducement essential to Executive
entering into this Agreement, on the Effective Date, pursuant
to the Non-Qualified Stock Option attached hereto as Exhibit
A, the Company shall grant to Executive options to purchase
750,000 shares of the Company's common stock at an exercise
price equal to the closing price of the Company's common
stock, as reported by the Nasdaq Stock Market National Market,
on the Effective Date, which options shall vest in increments
of 33-1/3% per year beginning on the first anniversary of the
date of grant.
4. Change of Control.
(a) Operation of Section 4. This Section 4 shall be effective, but
not operative, immediately upon execution of this Agreement by
the parties hereto and shall remain in effect so long as
Executive remains employed by the Company, but shall not be
operative unless and until there has been a Change of Control,
as defined in subsection 4(b) hereof. Upon such Change of
Control, this Section 4 shall become operative immediately.
(b) Definition. For purposes of this Agreement, a "Change of
Control" means (i) the sale of all or substantially all of the
assets of the Company to any person or entity that, prior to
such sale, did not control, was not under common control with,
or was not controlled by, the Company, (ii) a merger or
consolidation or other reorganization in which the Company is
not the surviving entity or becomes owned entirely by another
entity, unless at least fifty percent (50%) of the outstanding
voting securities of the surviving or parent corporation, as
the case may be, immediately following such transaction are
beneficially held by such persons and entities in the same
proportion as such persons and entities beneficially held the
outstanding voting securities of the Company immediately prior
to such transaction, (iii) any transaction or series of
transactions which results in any person or "group" becoming
the beneficial owner, directly or indirectly, of securities
representing more than fifty percent (50%) of the outstanding
voting securities of the Company, (iv) any time that, as a
result of a tender offer, merger, consolidation, sale of
assets or contested election, or any combination of such
transactions, the persons who were directors of the Company
immediately before such transaction(s) cease to constitute a
majority of the Board of Directors of the Company or of any
successor to the Company within one year of such transaction,
or (v) the voluntary or involuntary dissolution, liquidation
or winding up of the Company.
(c) Executive's Election Upon Change of Control. If, while
Executive is employed by the Company, a Change of Control (as
defined in subsection (b) of Section 4) occurs Executive may,
in his sole discretion, within one (1) year after the
effective date of the Change of Control, give notice to the
Company that he intends to elect to exercise his right to
terminate his employment and receive the payments provided for
in Section 4(d) hereof (the "Notice of Intention"). The right
to give such Notice of Intention shall continue for one (1)
year from the date of the Change of Control irrespective of
any action by the Company pursuant to Section 7.2(c) within
such one (1) year period. In the event that Executive elects
not to exercise such rights, Executive's employment with the
Company shall continue on the terms and conditions provided in
this Agreement. In the event that Executive does elect to
exercise such rights, Executive's employment with the Company
shall terminate effective as of the date upon which the Notice
of Intention is received by the Company. Within ten (10)
business days after the Company's receipt of the Notice of
Intention, payment by the Company to Executive of the amounts
set forth in Section 4(d)(i) below shall be made by cashier's
check, accompanied by a written notice to Executive setting
forth the Company's computation of the amount payable pursuant
to Section 4(d). If Executive takes exception to the Company's
computation of such amount, Executive may (but shall not be
prejudiced in his right to later contest the amount actually
paid by failure to do so) give a further written notice to the
Company setting forth in reasonable detail Executive's
exceptions to the Company's computation. If the Company and
Executive are unable to resolve any dispute over the total
amount to be paid to Executive pursuant to Section 4(d)(i)
hereof in accordance with Section 13 hereof within thirty (30)
days after the date of the Notice of Intention, such dispute
shall be submitted for resolution to an independent third
party agreed upon between the Company and Executive (or if no
agreement can be reached, to a panel selected pursuant to the
rules of the American Arbitration Association) and any
additional amount that is determined to be owed by the Company
to Executive pursuant to Section 4(d)(i) hereof shall be paid
to Executive by cashier's check within ten (10) business days
after such dispute has been finally resolved.
(d) Compensation Upon Change of Control.
(i) If Executive gives the Notice of Exercise described
in Section 4(c), the Company shall pay Executive a
lump sum amount equal to three times Executive's base
amount (as defined by Section 280(G) of the Internal
Revenue Code of 1986, as amended (the "Code")) less
one dollar ($1.00). In addition to the foregoing, the
Company will continue to provide, for a period of
three years from the effective date of Executive's
termination, medical, life, dental and disability
insurance coverage to Executive of the type and
amount provided to Executive under the Company's
insurance policies as in effect at the time of
termination; provided, however, that if such coverage
does not continue to be maintained by the Company or
is otherwise not available to Executive, the Company
shall provide for or make available to Executive
substantially similar economic benefits; provided,
however, that nothing in this subsection (i) shall
obligate the Company to provide for or make any such
similar economic benefits available to Executive if
the Company does not have such benefits available to
its other executive officers. At the conclusion of
such two-year period, Executive shall be entitled to
any COBRA or similar rights required by state or
federal law. Notwithstanding anything in this
Agreement to the contrary, in the event that the
Company determines in good faith that any portion of
the payments or other benefits set forth in this
Section 4(d) constitutes an excess parachute payment
under Section 280(G) of the Code, then the Company
shall have no obligation to provide such portion to
Executive.
(ii) Payment of the amount set forth in Section 4(d)(i)
shall terminate Executive's rights to receive any and
all other payments, rights or benefits pursuant to
Sections 3, 6 and 7 of this Agreement from the date
of termination, other than any payments, rights or
benefits arising (x) pursuant to Section 15.6 of this
Agreement, or (y) from any other agreement, plan or
policy which by its terms or by operation of law
provides for the continuation of such payments,
rights or benefits after the termination of
Executive's relationship with the Company.
(iii) The lump sum payment referred to in subsection (i)
above shall be in addition to and shall not be offset
or reduced by (x) any other amounts that have accrued
or have otherwise become payable to Executive or his
beneficiaries, but have not been paid by the Company,
at the time Executive gives a Notice of Intention
pursuant to Section 4(c) including, but not limited
to, salary, disability benefits, retirement benefits,
life and health insurance benefits, or any other
compensation or benefit payment that is part of any
valid previous, current, or future contract, plan or
agreement, or (y) any indemnification payments that
may be or become payable to Executive pursuant to the
provisions of the Company's Certificate of
Incorporation, By-laws, or similar policy, plan, or
agreement relating to the indemnification of
directors or officers of the Company under certain
circumstances.
5. Vesting of Stock Options Upon Change of Control. In the event of a
Change of Control, in addition to any benefits provided to Executive upon a
Change of Control pursuant to the relevant stock option plan or stock option
agreement governing any grant of stock options to Executive, and regardless of
whether Executive intends to give a Notice of Intention pursuant to Section 4(c)
hereof, any and all stock options granted to Executive pursuant to any of the
Company's stock option plans prior to the effective date of such Change of
Control that are unvested as of the effective date of such Change of Control
will become fully vested and exercisable beginning two business days prior to
the effective date of such Change of Control without regard to any vesting
schedules established in the relevant option plan or option agreement.
6. Benefits and Reimbursements.
6.1 Executive will, during the Employment Term, have the right to
receive such benefits as are generally made available to full-time executive
officers of the Company, including the right to participate in any retirement
plan that the Company may create. In addition, or inclusive of such benefits,
the Company will provide Executive with the following:
(a) The opportunity to apply for coverage under the
Company's medical, life, dental and disability plans,
if any. If Executive is accepted for coverage under
such plans, the Company will provide to Executive and
his immediate family such coverage on the same terms
as is customarily provided by the Company to the plan
participants as modified from time to time.
(b) In addition to normal holidays recognized by the
Company, Executive will be entitled to the greater of
(i) three (3) weeks paid vacation annually, or (ii)
such other amount of paid vacation as may be afforded
executive officers of similar position and seniority
to Executive under the Company's policies in effect
from time to time (prorated for any year in which
Executive is employed for less than the full year).
(c) a housing allowance of up to $2,000 per month for a
period of eight (8) months from the Effective Date;
(d) reimbursement of actual and reasonable expenses
incurred by Executive in connection with travel from
the Company's headquarters in Albany, New York to
Executive's residence in Denver, Colorado up to a
maximum of two (2) trips per month for a period of
eight (8) months from the Effective Date;
(e) reimbursement of actual and reasonable expenses
incurred by Executive in relocating his principal
residence from Denver, Colorado to Albany, New York;
(f) if, after Executive relocates his principal residence
to Albany, New York and prior to one year from the
Effective Date, there is a Change of Control (as
defined in Section 4(b) hereof), reimbursement of
actual and reasonable expenses incurred by Executive
in relocating his principal residence back to Denver,
Colorado or some other location reasonably acceptable
to the Company; and
(g) the use of a Company automobile reasonably acceptable
to Executive selected from among the vehicles damaged
by the Company in the course of conducting its
transport operations that would otherwise have been
sold by the Company at auction.
6.2 The Company will reimburse Executive for travel and other
out-of-pocket expenses reasonably incurred by Executive in the performance of
his duties hereunder, provided that all such expenses will be reimbursed only
(i) upon the presentation by Executive to the Company of such documentation as
may be reasonably necessary to substantiate that all such expenses were incurred
in the performance of his duties, and (ii) if such expenses are consistent with
all policies of the Company in effect from time to time as to the kind and
amount of such expenses.
7. Term; Termination; Rights Upon Termination.
7.1 Term. The Company hereby employs Executive and Executive hereby
accepts employment with the Company for a period beginning on the Effective Date
and ending on the third anniversary of the Effective Date (as extended pursuant
to the following provisions, the "Term"). As of the first day of any month
following the Effective Date, the Term shall be extended for an additional one
(1) month period unless either Executive or the Company gives the other party
written notice at least ten (10) days prior to the first day of such month that
this Agreement shall terminate on the then scheduled expiration date of the
Term. If such notice is given, this Agreement shall automatically terminate on
such expiration date. If this Agreement is extended, the terms in effect under
this Agreement immediately preceding such extension shall apply during the
extension period. If Executive's employment hereunder is terminated by either
the Company or Executive at any time for any reason, the expiration date shall
thereupon no longer be automatically extended.
7.2 Termination. This Agreement and Executive's employment may be
terminated in any one of the following ways:
(a) Death or Permanent Disability of Executive. Subject to the
payment to Executive of the amounts required by Section 7.3
below, this Agreement will terminate immediately upon the
death or permanent disability of Executive, whereupon
Executive shall have no further rights or be entitled to any
other benefits of this Agreement, other than the payments and
benefits referred to in Section 7.3 below. Executive will be
deemed permanently disabled for the purpose of this Agreement
if, in the good faith determination of the Board of Directors,
based on sound medical advice, Executive has become physically
or mentally incapable of performing his duties hereunder for a
continuous period of one hundred eighty (180) days, in which
event Executive will be deemed permanently disabled upon the
expiration of such one hundred eighty (180) day period.
(b) Executive's Discharge for Cause. At any time during the term
of this Agreement, subject to the payment to Executive of the
amounts required by Section 7.3(a) below, the Company may
terminate Executive's employment for "Cause" effective
immediately upon its giving of written notice setting forth
with particularity the facts and circumstances constituting
such Cause, whereupon this Agreement will terminate and
Executive shall have no further rights or be entitled to any
other benefits of this Agreement, other than the payments and
benefits referred to in Section 7.3(a) below. For purposes of
this Agreement, "Cause" means the occurrence of one or more of
the following: (i) the commission by Executive of any act
materially detrimental to the Company, including but not
limited to fraud, embezzlement, theft, bad faith, gross
negligence, recklessness, dishonesty, gross insubordination or
willful misconduct; (ii) gross incompetence or repeated
failure or refusal to perform the duties required by this
Agreement and as may be assigned to Executive by the Board of
Directors from time to time; (iii) conviction of a felony or
of any crime of moral turpitude; (iv) any material
misrepresentation by Executive to the Company regarding the
operation of the business; or (v) material breach of any
covenant of this Agreement, provided, however, that the action
or conduct described in clause (ii) or clause (v) above will
constitute "Cause" only if Executive shall have either failed
to remedy such alleged breach within thirty (30) days from his
receipt of written notice from the Company demanding that he
remedy such alleged breach, or shall have failed to take
reasonable steps in good faith to that end during such thirty
(30) day period and thereafter; and provided further that
there shall have been delivered to Executive a further notice
after the end of such thirty (30) day period asserting that
the Board of Directors has determined that Executive was
guilty of conduct set forth in clause (ii) or clause (v), as
the case may be, that Executive has failed to take reasonable
steps in good faith to remedy such alleged breach, and
specifying the particulars thereof in detail; and provided
further that Executive thereafter shall have received a
certified copy of a resolution of the Board of Directors of
the Company adopted by the affirmative vote of not less than
three-fourths of the entire membership of the Board of
Directors at a meeting called and held for that purpose and at
which Executive was given an opportunity to be heard, finding
that Executive was guilty of conduct set forth in clause (ii)
or clause (v), as the case may be, that Executive has failed
to take reasonable steps in good faith to remedy such alleged
breach, and specifying the particulars thereof in detail.
(c) The Company's Right to Terminate Without Cause. Subject to the
payment to Executive of the amounts required by Section 7.3
below, at any time during the term of this Agreement, the
Company may terminate Executive's employment with the Company
without "Cause" (as defined in Section 7.3 above), effective
immediately upon written notice to Executive, whereupon this
Agreement will terminate and Executive shall have no further
rights or be entitled to any other benefits of this Agreement,
other than the payments and benefits referred to in Section
7.3 below.
(d) Executive's Right to Terminate At Will. Executive shall have
the right at any time during the term of this Agreement, by
giving written notice to the Company, to terminate this
Agreement and Executive's employment with the Company
effective as of the date on which such notice is given by
Executive, unless the Company advises Executive that it
requires the services of Executive for an additional period of
time, not to exceed 30 days, in which case Executive's
employment shall cease as of the end of such period (such
effective date being hereinafter referred to as the "Executive
Termination Date"). On the Executive Termination Date, this
Agreement shall terminate and Executive shall have no further
rights under or be entitled to any other benefits of this
Agreement, other than the payments and benefits referred to in
Section 7.3(a) below.
7.3 Compensation and Benefits Upon Termination.
(a) Upon any termination of Executive's employment pursuant to
this Section 7, Executive will be entitled to: (i) the
compensation provided for in Section 3 hereof for the period
of time ending with the effective date of termination; (ii)
compensation for any unused vacation that Executive may have
accrued, as well as all earned benefits, up to and including
the effective date of termination; (iii) "COBRA" benefits to
the extent required by applicable law; and (iv) reimbursement
for such expenses as Executive may have properly incurred on
behalf of the Company as provided in Section 6.2 above prior
to the effective date of termination.
(b) If (i) the Company terminates Executive's employment pursuant
to Section 7.2(c) above, or (ii) Executive terminates his
employment following the Company's assignment to Executive of
regular duties, responsibilities, or status which the Board of
Directors determines, in good faith, to be materially
inconsistent with Executive's duties, responsibilities, and
status under this Agreement or a reduction or alteration in
the nature or status of Executive's duties and
responsibilities from those in effect prior to such
assignment, then, in addition to the amounts payable in
Section 7.3(a) above:
(i) Executive will be entitled to receive a severance
payment in an amount equal to (i) two times the
amount of Executive's annual base salary in effect at
the time of termination, plus (ii) the aggregate
amount of the annual cash bonuses paid to Executive
in the two years immediately preceding such
termination (provided that if one of such years is
1999, the common stock portion of Executive's bonus
shall be considered a cash bonus for purposes of this
Section 7.3(b)(i)), which amount shall be paid to
Executive over a two-year period in equal
installments (pro rated for portions of a pay period)
on the Company's regular pay days, and the Company
will withhold all applicable federal and state
income, social security, disability and other taxes
as required by applicable law; provided, however,
that Executive's right to receive payments pursuant
to this Section 7.3(b)(i) shall cease immediately
upon a knowing violation by Executive of any of the
provisions of Sections 8, 9 or 10 hereof.
(ii) any and all stock options granted to Executive
pursuant to any of the Company's stock option plans
prior to the effective date of such termination that
are unvested as of the effective date of such
termination will continue to vest, and Executive
shall be permitted to exercise such options on the
terms set forth in the relevant option plan and
option agreement, in the same amounts and at the same
times as such options would have vested had Executive
remained employed by the Company until all such
options become fully vested (the period between the
effective date of termination and the date that all
such options become fully vested being hereafter
referred to as the "Option Vesting Period");
provided, however, that such continued vesting of
options shall immediately cease upon a knowing
violation by Executive during the Option Vesting
Period of any of the provisions of Sections 8, 9 or
10 hereof.
(iii) the Company will continue to provide, for a period of
two years from the effective date of Executive's
termination, medical, life, dental and disability
insurance coverage to Executive of the type and
amount provided to Executive under the Company's
insurance policies as in effect at the time of
termination; provided, however, that if such coverage
does not continue to be maintained by the Company or
is otherwise not available to Executive, the Company
shall provide for or make available to Executive
substantially similar economic benefits; provided,
however, that nothing in this subsection (iii) shall
obligate the Company to provide for or make any such
similar economic benefits available to Executive if
the Company does not have such benefits available to
its other Executive officers.
(iv) the Company will reimburse Executive for actual and
reasonable expenses incurred by Executive in
connection with outplacement services up to a maximum
of $30,000.
(c) In the event of a termination upon the death or permanent
disability of Executive as provided in Section 7.2(a) above,
Executive or his estate shall be entitled to receive from the
Company, for a period of twelve months following the effective
date of termination, 100% of Executive's base salary at the
rate then in effect, payable in equal installments (pro rated
for portions of a pay period) on the Company's regular pay
days, and the Company will withhold all applicable federal and
state income, social security, disability and other taxes as
required by applicable law; provided, however, that in the
case of a termination upon the permanent disability of
Executive, such payments shall be reduced by all payments in
respect of Executive's salary payable to Executive under the
Company's disability insurance, if any, for the same period.
7.4 Effect of Termination. Subject to Section 4 hereof, the payments
set forth in Section 7.3 will fully discharge all responsibilities of the
Company to Executive under this Agreement or relating to or arising out of the
termination of Executive's employment, and all other rights and obligations of
the Company and Executive under this Agreement shall cease as of the effective
date of termination, except that Executive's obligations under Sections 8, 9,
and 10 shall survive such termination.
8. Unfair Competition by Executive.
8.1 Executive agrees that all trade secrets, or confidential or
proprietary information with respect to the activities and businesses of the
Company, including, without limitation, personnel information, secret processes,
know-how, customer lists, databases, ideas, techniques, processes, inventions
(whether patentable or not), and other technical plans, business plans,
marketing plans, product plans, forecasts, contacts, strategies and information
(collectively "Proprietary Information") which were learned by Executive in the
course of his employment by the Company, and any other Proprietary Information
received, developed or learned by Executive hereafter in the course of his
future employment by or in association with the Company, are confidential and
will be kept and held in confidence and trust as a fiduciary by Executive.
Executive will not use or disclose Proprietary Information of the Company except
as necessary in the normal course of the business of the Company for its sole
and exclusive benefit, unless Executive is compelled so to disclose under
process of law, in which case Executive will first notify the Company promptly
after receipt of a demand to so disclose.
8.2 During the term of this Agreement and for the greater of (i) the
period during which Executive is receiving compensation or benefits pursuant to
Section 7.3 hereof and (ii) a period of one year following the expiration or
termination of this Agreement for any reason, directly or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business whatever nature, Executive will not:
(a) engage, as an officer, director, shareholder, owner, partner,
joint venturer, financier, manager, executive, independent
contractor, consultant, advisor, or sales representative, in
any business selling any products or services in direct
competition with the Company or any of its subsidiaries within
100 miles of any geographic location in which the Company or
any of its subsidiaries conducts business at such time (or in
the case of a termination or expiration of this Agreement,
within 100 miles of any geographic location in which the
Company or any of its subsidiaries conducted business at the
time of such expiration or termination) (the "Territory");
(b) call upon any prospective acquisition candidate on Executive's
own behalf or on behalf of any competitor of the Company or
any of its subsidiaries, which candidate was either called
upon by the Company (including its subsidiaries) or for which
the Company made an acquisition analysis, for the purpose of
acquiring such entity; provided, however, that Executive shall
not be charged with a violation of this Section 8.2(b) unless
and until Executive shall have knowledge or notice that such
prospective acquisition candidate was called upon, or that an
acquisition analysis was made, for the purpose of acquiring
such entity;
(c) call upon, contact or solicit any person who is, at that time,
an employee of the Company (including the subsidiaries
thereof) for the purpose or with the intent of enticing such
employee away from or out of the employ of the Company
(including the subsidiaries thereof);
(d) call upon any person or entity which is, at that time, or
which has been, within one (1) year prior to that time, a
customer of the Company (including the subsidiaries thereof)
within the Territory for the purpose of soliciting or selling
products or services in direct competition with the Company
within the Territory;
(e) disclose customers, whether in existence or proposed, of the
Company (or the Company's subsidiaries) to any person, firm,
partnership, corporation or business for any reason or
purpose.
(f) engage in any pattern of conduct that involves the making or
publishing of written or oral statements or remarks
(including, without limitation, the repetition or distribution
of derogatory rumors, allegations, negative reports or
comments) which are disparaging, deleterious or damaging to
the integrity, reputation or good will of the Company, its
management, or of management of corporations affiliated with
the Company.
8.3 Except for activities expressly permitted by the prior written
approval of the Board of Directors of the Company, during the term of this
Agreement, the Executive will not: (a) engage in business independent of
Executive's employment by the Company that requires any substantial portion of
Executive's time; (b) serve as an officer, general partner or member in any
for-profit corporation, partnership or firm; (c) serve as a director of any
corporation, partnership or firm having the Business as its principal
enterprise; or (d) directly, indirectly or through any Affiliate, invest in,
participate in or acquire an interest in any entity engaged in the Business. For
purposes of this Agreement, the terms: (i) "Affiliate" means as to any Person,
each other Person that directly or indirectly (through one (1) or more
intermediaries) controls, is controlled by or is under common control with such
person; and (ii) "Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust, associate (as
defined in regulations promulgated by the Securities and Exchange Commission) or
other legally recognizable entity. Notwithstanding anything herein to the
contrary, the limitations in Sections 8.2 and 8.3 hereof will not prohibit any
investment by the Executive of not more than 3% of the outstanding capital stock
of a company whose securities are listed on a public exchange or the Nasdaq
Stock Market National Market.
8.4 Executive and the Company acknowledge that: (i) each covenant and
restriction contained in Sections 8.1, 8.2, 8.3, 9 and 10 of this Agreement is
necessary, fundamental, and required for the protection of the Company's
business and goodwill; (ii) such covenants and restrictions relate to matters
which are of a special, unique, and extraordinary character that gives each of
them a special, unique, and extraordinary value which is difficult to measure in
economic terms; and (iii) a breach of any such covenant or restriction will
result in immediate and irreparable harm and damage to the Company which cannot
be compensated adequately by a monetary award or other remedy at law.
Accordingly, it is expressly agreed that, in addition to all other remedies
available at law or in equity, and notwithstanding anything to the contrary in
Section 13 below, the Company will be entitled to the immediate remedy of a
temporary restraining order, preliminary injunction, or such other form of
injunctive or equitable relief as may be used by any court of competent
jurisdiction to restrain or enjoin any of the parties hereto from breaching any
such covenant or restriction, or otherwise specifically to enforce the
provisions contained in Sections 8.1, 8.2, 8.3, 9, and 10 of this Agreement.
8.5 Reasonable Restraint. It is agreed by the parties hereto that the
foregoing covenants in Sections 8.1, 8.2 and 8.3 impose a reasonable restraint
on Executive in light of the activities and business of the Company (including
the subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of the Company; but it is also the intent of the Company and
Executive that such covenants be construed and enforced in accordance with the
changing activities and business of the Company (including the subsidiaries
thereof) throughout the term of this Agreement. It is further agreed by the
parties that a portion of the compensation paid to Executive under this
Agreement is paid in consideration of the covenants herein contained, the
sufficiency of which consideration is hereby acknowledged. If the scope of any
restriction contained in Sections 8.1, 8.2 or 8.3 is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall
be enforced to the maximum extent permitted by law, and the parties consent that
such scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
8.6 Independent Covenant. Each of the covenants in Sections 8, 9 and 10
shall be construed as an agreement independent of any other provisions in this
Agreement, and the existence of any claim or cause of action of Executive
against the Company (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of such covenants. It is specifically agreed that the time
periods stated at the beginning of Sections 8.2 and 9, during which the
agreements and covenants of Executive made in Sections 8.2 and 9 shall be
effective, shall be computed by excluding from such computation any time during
which Executive is in violation of any provision of Section 8 or 9. The
covenants contained in Sections 8, 9 and 10 shall not be affected by any breach
of any other provision of this Agreement by any party hereto.
9. Proprietary Matters. Executive expressly understands and agrees that
any and all improvements, inventions, discoveries, processes, or know-how that
are generated, conceived or made by Executive, solely or jointly with another,
during the term of this Agreement or within the greater of (i) the period during
which Executive is receiving compensation or benefits pursuant to Section 7.3
hereof, and (ii) one (1) year following termination or expiration of this
Agreement, and which are directly related to the business or activities of the
Company and which Executive conceives as a result of his employment by the
Company, whether so generated or conceived during Executive's regular working
hours or otherwise, and whether patentable or not, are the sole and exclusive
property of the Company, and Executive shall promptly disclose any such
improvements, inventions, discoveries, processes or know-how to the Company.
Executive hereby assigns and agrees to assign all his interests in such
improvements, inventions, discoveries, processes, and know-how to the Company or
its nominees and agrees, whenever requested to do so by the Company (either
during the term of this Agreement or thereafter), to execute and assign any and
all applications, assignments and/or other instruments and do all things which
the Company may deem necessary or appropriate in order to apply for, obtain,
maintain, enforce and defend Letters of Patent, copyrights, trade names or
trademarks of the United States or of foreign countries for said improvements,
inventions, discoveries, processes, or know-how, or in order to assign and
convey or otherwise make available to the Company the sole and exclusive right,
title, and interest in and to said improvements, inventions, discoveries,
processes, know-how, or otherwise to protect the Company's interest therein.
10. Return of Company Property. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Executive by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Executive shall be delivered promptly to the Company without request by it upon
termination of Executive's employment.
11. No Prior Agreements. Executive hereby represents and warrants to
the Company that the execution of this Agreement by Executive and his employment
by the Company and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity. Further, Executive agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees, costs and expenses and expenses
of investigation, by any such third party that such third party may now have or
may hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Executive and
such third party which was in existence as of the date of this Agreement.
12. Key-Person Insurance. Executive agrees to make himself available
and to undergo, at the Company's request and expense, any physical examination
or other procedure necessary to allow the Company to obtain a key-person
insurance policy on Executive. If the Company obtains such policy, it will
maintain the policy at its expense and all proceeds will be the sole property of
the Company.
13. Resolution of Disputes. The parties will attempt in good faith
promptly by negotiations to resolve any dispute or controversy arising out of or
relating to this Agreement or to the employment or termination of Executive by
the Company. All negotiations pursuant to this clause are confidential and will
be treated as compromise and settlement negotiations for purposes of the Federal
Rules of Evidence and state rules of evidence.
14. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Executive), by reason of the fact that he or she is or was performing
services within the course and scope of his or her employment with the Company
under this Agreement, then the Company shall protect, defend, indemnify and hold
harmless Executive against all expenses (including attorneys' fees, costs and
expenses), judgments, fines, costs, liabilities, damages, and amounts paid in
settlement, actually and reasonably incurred by Executive in connection
therewith. Without limiting the requirement above that Executive be performing
services within the course and scope of his or her employment, activities
constituting violations of law or written Company policy shall not constitute
services within the course and scope of Executive's employment, and the Company
shall not indemnify Executive for any such activities. Executive agrees to
immediately notify the Company of any threatened, pending or completed matter;
provided, however, that Executive's failure to immediately notify the Company of
such matter shall not relieve the Company of any obligation hereunder, unless,
and only to the extent that, the Company is materially prejudiced by such delay
or failure to give notice. Executive agrees to accept any attorney reasonably
assigned by the Company to defend the Executive; provided that if counsel
selected by the Company shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may engage separate counsel and
the Company shall pay all reasonable attorneys fees of such counsel.
15. Miscellaneous.
15.1 Governing Law; Interpretation. This Agreement will be governed by
the substantive laws of the State of New York applicable to contracts entered
into and fully performed in such jurisdiction. The headings and captions of the
Sections of this Agreement are for convenience only and in no way define, limit
or extend the scope or intent of this Agreement or any provision hereof. This
Agreement will be construed as a whole, according to its fair meaning, and not
in favor of or against any party, regardless of which party may have initially
drafted certain provisions set forth herein.
15.2 Assignment. This Agreement is personal to Executive and he may not
assign any of his rights or delegate any of his obligations hereunder without
first obtaining the prior written consent of the Board of Directors of the
Company.
15.3 Notices. Any notice, request, claim or other communication
required or permitted hereunder will be in writing and will be deemed to have
been duly given if delivered by hand or if sent by certified mail, postage and
certification prepaid, to Executive at his residence (as noted in the Company's
records), or to the Company at its address as set forth below its signature on
the signature page of this Agreement, or to such other address or addresses as
either party may have furnished to the other in writing in accordance herewith.
15.4 Severability. If any provision of this Agreement or the
application of any such provision to either of the parties is held by a court of
competent jurisdiction to be contrary to law, such provision will be deemed
amended to the extent necessary to comply with such law, and the remaining
provisions of this Agreement will remain in full force and effect unless the
result would be manifestly unjust or would deprive either party of the benefit
of its bargain.
15.5 Entire Agreement; Amendments. This Agreement and any other
exhibits and attachments hereto constitutes the final and complete expression of
all of the terms of the understanding and agreement between the parties hereto
with respect to the subject matter hereof, and this Agreement replaces and
supersedes any and all prior or contemporaneous negotiations, communications,
understandings, obligations, commitments, agreements or contracts, whether
written or oral, between the parties respecting the subject matter hereof.
Except as provided in Section 15.4 above, this Agreement may not be modified,
amended, altered or supplemented except by means of the execution and delivery
of a written instrument mutually executed by both parties.
15.6 Attorneys' Fees. If it becomes necessary for any party to initiate
legal action or any other proceeding to enforce, defend or construe such party's
rights or obligations under this Agreement, the prevailing party will be
entitled to its reasonable costs and expenses, including attorneys' fees,
incurred in connection with such action or proceeding.
15.7 Counterparts. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
16. EXECUTIVE ACKNOWLEDGMENT. EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE RIGHTS AND
OBLIGATIONS ARISING UNDER THIS AGREEMENT, THAT HE HAS READ AND UNDERSTANDS EACH
AND EVERY PROVISION OF THIS AGREEMENT, AND THAT HE IS FULLY AWARE OF THE LEGAL
EFFECT AND IMPLICATIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Company: Executive:
United Road Services, Inc. Xxxxxx X. Xxxxxxx
00 Xxxxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
By:_____________________________ ____________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board
