EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 1, 1999, by and between Brand
Scaffold Services, Inc., a Delaware corporation (the "Company") and Xxxx X.
Xxxxxx ("Executive").
WHEREAS, the Company employs Executive as its President and Chief
Executive Officer; and
WHEREAS, Company and Executive previously entered into an Employment
Agreement dated as of October 1, 1996; and
WHEREAS, the Company and Executive desire to continue the Executive's
employment by the Company and to enter into a new agreement (the "Agreement")
embodying the terms of Executive's future employment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Employment Term. Executive's continued employment by the Company shall
be for a period which shall commence on April 1, 1999, and shall terminate on
March 31, 2003 (the "Expiration Date"). The period commencing as of March 31,
1999, and ending on the Expiration date is hereinafter referred to as the
"Employment Term". Notwithstanding the foregoing, the Employment Term shall
terminate in any and all events upon the termination of Executive's employment
hereunder.
2. Positions. During the Employment Term, executive shall serve as
President and Chief Executive Officer. Executive shall report directly to the
Board of Directors of the Company (the "Board") and shall have such duties and
authority commensurate with such position as shall be determined from time to
time by the Board. Executive shall devote such substantially all of his
business time and best efforts to the performance of his duties hereunder and
shall not engage in any other business, profession or occupation for
compensation or otherwise.
3. Base Salary. During the Employment Term, the Company shall pay
Executive a base salary (the "Base Salary") at the annual rate of not less than
$375,000, payable in arrears, in accordance with the usual payment practices of
the Company. Executive's Base Salary shall be subject to periodic review by the
Compensation Committee of the Company, not less frequently than annually,
beginning January 1, 2000.
4. Bonus.
(a) With respect to each fiscal year in the Employment Term, Executive
shall be eligible for a bonus of up to 120% of his Base Salary (the "Annual
Bonus") to be determined annually in accordance with the Company's annual bonus
plan, as earned through the achievement of certain profitability and
performance objectives which are annually developed by the Executive and the
Compensation Committee of the Board of Directors (the "Bonus Plan").
(b) Any Bonus payable hereunder shall be paid at or about the same
time bonuses are paid to the Company's other senior executives and, in the case
of the Annual Bonus, in accordance with the terms of the Bonus Plan.
5. Employee Benefits. During the Employment Term, Executive shall be
entitled to participate on a basis no less favorable than other senior
executives of the Company in all retirement, welfare benefit, incentive
compensation, perquisite and other plans and arrangements of the Company
applicable to senior executives of the Company, as in effect from time to time.
In addition, the Company shall assume the obligation to pay premiums in an
amount up to $2,000 annually under Executive's life insurance policy with First
Colony (No. 2619072) having a face amount of $600,000. Executive shall be
reimbursed on a monthly basis for the lease of an automobile in an amount not
to exceed $775/month and Executive shall be reimbursed on a monthly basis for
the then- current monthly dues and assessments as charged by Executive's
country club.
6. Business Expenses. During the Employment Term, the Company shall
reimburse such of Executive's travel, entertainment and other business expenses
as are reasonably and necessarily incurred by Executive during the Employment
Term in the performance of his duties hereunder, in accordance with the
Company's policies as in effect from time to time.
7. Upon a termination of the employment Term prior to the Expiration Date,
Executive shall be entitled to the payments described in this Section 7.
(a) For Cause by the Company by Executive. The Employment Term may be
terminated prior to its scheduled expiration by the Company for Cause (as
defined below) or by Executive for any reason.
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If the Employment Term is terminated by the Company for Cause or by
Executive for any reason, Executive shall be entitled to receive his Base
salary through the date of termination, any Bonus that has been earned in
accordance with Section 4 for a prior fiscal year but not yet paid and any
unreimbursed business expenses, payable promptly following the later of the
date of such termination and the date on which the appropriate documentation is
provided.
All other benefits following termination of the Employment Term pursuant
to this Section 7(a) shall be determined in accordance with the plans, policies
and practices of the Company.
(b) Death. The Employment Term shall terminate prior to the Expiration
Date upon Executive's death. If the Employment Term is terminated prior to the
Expiration Date by reason of death. Executive's estate shall receive (i) the
amounts described under Section 7(a) and (ii) continued payment of Base Salary
through the first anniversary of the date of death.
All other benefits following termination of the Employment Term pursuant
to this Section 7(b) shall be determined in accordance with the plans, policies
and practices of the Company. Provided, in the event of the death of Executive,
the provisions of Section 5(f)(i)(B) of the DLJ Brand Holdings, Inc. Stock
Option Plan in effect as of the date of execution of this Agreement shall be of
no effect and neither DLJ Brand Holdings, Inc. nor its successors or designee
shall have the absolute right to acquire any shares owned or acquired by
Executive, his spouse or lineal descendants and any trust the beneficiaries of
which consist only of such Executive's spouse or lineal descendants.
Notwithstanding the foregoing, any such shares shall remain subject to the
terms and conditions of the Amended and Restated Shareholders Agreement dated
as of September 30, 1996 among DLJ Merchant Banking Partners, L.P.; DLJ
International partners, C.V.; DLJ Offshore Partners, C.V.; DLJ Merchant Banking
Funding, Inc.; Carlisle-Brand Investors, L.P.; Rust Industrial Services, Inc.;
DLJ Brand Holdings, Inc.; brand Scaffold Services, Inc.; and Certain
Individuals.
(c) Disability; by the Company without Cause. The Employment Term
shall terminate prior to the Expiration Date, at the Company's election, if
Executive incurs a Disability (as defined below). In addition, the Employment
Term may be terminated prior to the Expiration date by the Company without
Cause.
If the Employment Term is terminated prior to the Expiration date by
reason of Disability or by the Company without Cause, subject to Executive's
continued compliance with the covenants set forth in Section 10, Executive
shall receive (i) the amounts described under Section 7(a); (ii) continued
payment of
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Base salary through the last day of the 24th month following the date of
termination (the "Severance Period"); (iii) continued coverage under the
Company's welfare benefit arrangements as in effect from time to time through
the earlier of (A) the end of the Severance Period, and (B) such time as
Executive is eligible to receive comparable welfare benefits from a subsequent
employer; and (iv) in the case of a termination by the Company without Cause, a
Bonus payment equal to $12,500 multiplied by the number of months remaining in
the Severance period, payable at the time bonuses are paid to the Company's
other senior executives.
All other benefits following termination of the Employment Term pursuant
to this Section 7(c) shall be determined in accordance with the plans, policies
and practices of the Company. Provided, in the event of the disability of
Executive, the provisions of Section 6(f)(i)(B) of the DLJ Brand Holdings, Inc.
Stock Option Plan in effect as of the date of execution of this Agreement shall
be of no effect and neither DLJ Brand Holdings, Inc. nor its successor or
designee shall have the absolute right to acquire any shares owned or acquired
by Executive, his spouse and lineal descendants or any trust the beneficiaries
of which consist only of such Executive, the Executive's spouse or lineal
descendants. Notwithstanding the foregoing, any such shares shall remain
subject to the terms and conditions of the Amended and Restated Shareholders
Agreement dated as of September 30, 1996 among DLJ Merchant Banking Partners,
L.P.; DLJ International Partners, C.V.; DLJ Offshore Partners, C.V.; DLJ
Merchant Banking Funding, Inc.; Carlisle-Brand Investors, L.P.; Rust Industrial
Services, Inc.; DLJ Brand Holdings, Inc.; Brand Scaffold Services, Inc.; and
Certain Individuals.
(d) Definitions. For purposes of this Section 7, the following terms
shall have the following meanings:
(i) "Cause" shall mean:
(A) Executive's willful and continued failure
substantially to perform his duties under the Agreement
(other than as a result of total or partial incapacity due to
physical or mental illness);
(B) An act or acts on Executive's part constituting
a felony under the laws of the United States or any other
state thereof or any other jurisdiction in which the Company
conducts business;
(C) Executive's being under the influence of illegal
drugs or alcohol while performing his duties hereunder;
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(D) Any other act or omission which is materially
injurious to the financial condition or business reputation
of the Company or any of its affiliates; or
(E) Executive's breach of the provisions of
Section 10.
For purposes of this definition, no act or failure to act shall be
deemed "willful" unless effected by Executive not in good faith and without a
reasonable belief that such action or failure to act was in or not opposed to
the Company's best interests.
(ii) "Disability" shall mean Executive's inability, as a
result of physical or mental illness, to perform the duties of the
position(s) specified in Section 2 for a period of 90 consecutive days
or for an aggregate of 90 days in any twelve consecutive month period.
Any question as to the existence of the Disability of Executive as to
which Executive and the Company cannot agree shall be determined in
writing by a qualified independent physician selected by the Company
and reasonably acceptable to Executive. The determination of
Disability made in writing to the Company and Executive shall be final
and conclusive for all purposes of the Agreement.
(e) Notice of Termination. Any purported termination of the Employment
Term prior to its scheduled expiration by the Company or by Executive shall be
communicated by written notice of termination to the other party hereto. For
purposes of this Agreement a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination under the provision so indicated.
(f) Release. Any payments by the Company to Executive under this
Section 7 or in connection with any dispute arising under or in connection with
this Agreement or relating to Executive's employment with the Company (including
payments pursuant to arbitration as provided for in Section 13(l) hereof will be
contingent upon the execution by Executive of a release of any claims Executive
may have against the Company, its affiliates or any successor to the Company,
such release to be in a form satisfactory to the Company in its sole discretion.
8. Change of Control. In the event of a change of control of 51% or more
of the common stock of the Company, other than a sale into the public markets,
Executive shall have the option to terminate his employment with the
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Company and to receive for a period of 24 months following his termination (a)
the Executive's then-current monthly salary; (b) a monthly bonus of $30,000;
and (c) all Employee Benefits described in Section (5) of this Agreement.
9. Change of Job Responsibilities. In the event of a change of control of
51% or more of the common stock of the Company, other than a sale into the
public markets, if Executive's job responsibilities are changed from those
described in Section (2) of this Agreement, Executive shall have the option to
terminate his employment with the Company and to receive for a period ending on
the last day of the 24th month following the Executive's termination or the
Expiration Date, whichever is later, (a) the Executive's then-current monthly
salary; (b) a monthly bonus of $30,000; and (c) all Employee Benefits as
described in Section (5) of this Agreement.
10. Non-Competition/Confidential Information.
(a) Executive acknowledges and recognizes the highly competitive nature
of the businesses of the Company and its affiliates and accordingly agrees that
during the Employment Term and through the later of the Expiration Date and the
first anniversary of the date of termination of employment.
(i) Executive will not directly or indirectly engage in any
business which is in competition with any line of business conducted
by the Company or its affiliates (including without limitation by
performing or soliciting the performance of services for any person
who is a customer or client of the Company or any of its affiliates)
whether such engagement is as an officer, director, proprietor,
employee, partner, investor (other than as holder of less than 1% of
the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent, sales representative or other participant,
in any geographic area in which the Company or any of its affiliates
conducted any such competing line of business.
(ii) Executive will not directly or indirectly assist others
in engaging in any of the activities in which Executive is prohibited
from engaging in by clause (i) above.
(b) Executive will not directly or indirectly induce any employee of
the Company or any of its affiliates to engage in any activity in which
Executive is prohibited to engage by paragraph (a) above or to terminate his
employment with the Company or any of its affiliates, and will not directly or
indirectly employ or offer employment to any person who was employed by the
Company or any of its affiliates unless such person shall have ceased to be
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employed by the Company or any of its affiliates for a period of at least 12
months.
(c) Executive will not at any time (whether during or after his
employment with the Company) disclose or use for his own benefit or purposes or
the benefit or purposes of any other person, firm, partnership, joint venture,
association, corporation or other business organization, entity or enterprise
other than the Company and any of its subsidiaries or affiliates, any trade
secrets, information, data, or other confidential information relating to
customers, development programs, costs, marketing, trading, investment sales
activities, promotion, credit and financial data, manufacturing processes,
financing methods, plans, or the business and affairs of the Company generally
or of any subsidiary or affiliate of the Company, provided that the foregoing
shall not apply to information which is not unique to the Company or which is
generally known to the industry or the public other than as a result of
Executive's breach of this covenant. Executive agrees that upon termination of
his employment with the Company for any reason, he will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof or therefrom, in any way relating to the business
of the Company and its affiliates, except that he may retain personal notes,
notebooks and diaries. Executive further agrees that he will not retain or use
for his account at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the business of the
Company or its affiliates.
11. Specific Performance and Other Remedies. Executive acknowledges and
agrees that the Company has no adequate remedy at law for a breach or
threatened breach of any of the provisions of Section 10 and, in recognition of
this fact, Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company, without posting any
bond and without notice to the Executive, shall be entitled to obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then
be available. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies at law or in equity that it may have
or any other rights that it may have under any other agreement.
12. Stock Option Plan. Notwithstanding anything to the contrary in the
Stock Option Plan to be adopted by the Company, any options granted to
Executive under such Stock Option Plan shall vest upon a Change of Control (as
defined in such Stock Option Plan) of the Company.
13. Miscellaneous.
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(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without reference to
principles of conflict of laws.
(b) Entire Agreement/Amendments. This Agreement, the Minimum
Expectations, the Stretch Objectives and any other performance and
superperformance criteria to be established by the Compensation Committee
pursuant to Section 4, the Stock Option Plan to be adopted by the Company and
any award agreements entered into under the Stock Option Plan, the Key Employee
Stock Purchase Plan to be adopted by the Company and any award agreements
entered under the Purchase Plan and the provisions of any employee plan or
arrangement maintained from time to time by the Company in which Executive
participates contain the entire understanding of the parties with respect to
the employment of Executive by the Company and supersede any prior agreements
between the Company and Executive. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect to the subject matter herein other than those expressly set forth
herein and therein. No provision in his Agreement may be amended unless such
amendment is agreed to in writing.
(c) Continuation of Employment. Unless the parties otherwise agree in
writing, continuation of Executive's employment with the Company beyond the
Expiration Date shall be deemed an employment at will and shall not be deemed
to extend any of the provisions of this Agreement.
(d) No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party's right or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement. No
waiver by either party of any breach by the other party of any condition or
provision contained in this Agreement to be performed by such other party shall
be deemed a waiver of a similar or dissimilar condition or provision at the
same or any prior or subsequent time. Any waiver must be in writing and signed
by the Executive or the Company, as the case may be.
(e) Severability. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in Section 10 to
be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory restriction in Section 10 or
any other restriction contained in Section 10 is an unenforceable restriction
against Executive, such provision shall not be rendered void but shall be
deemed amended to apply to such maximum time and territory, if applicable, or
otherwise to such maximum extent as such court may judicially determine or
indicate to be
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enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in Section 10 is unenforceable, and such restriction
cannot be amended so as to make it enforceable, such finding shall not affect
the enforceability of any of the other restrictions contained herein. In the
event that any one or more of the other provisions of this Agreement shall be
or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not be affected thereby.
(f) Assignment. This Agreement shall not be assignable by either party
without the consent of the other party.
(g) Successors. This Agreement shall inure to the benefit of and be
binding upon the personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees of the parties hereto.
The Executive shall be entitled to select (and change, to the extent permitted
under any applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following the Executive's death by
giving the Company written notice thereof. In the event of the Executive's
death or a judicial determination of his incompetence, reference in this
Agreement to the Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
(h) Communications. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when faxed or delivered or two business
days after being mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed (i) to the Executive at his
address then appearing in the personnel records of the Company and; (ii) to the
Company at the Company's then current headquarters, with a copy to the
Company's _________; or (iii) to such other address as either party may have
furnished to the other in writing in accordance herewith, with such notice of
change of address being effective only upon receipt.
(i) Withholding Taxes. The Company may withhold from any and all
amounts payable under this Agreement such Federal, state, local and any other
applicable taxes as may be required to be withheld pursuant to any applicable
law or regulation.
(j) Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of Executive's employment to the extent
necessary to assure the agreed preservation of such rights and obligations.
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(k) Representations. Each party represents and warrants to the other
than he or it is fully authorized and empowered to enter into this Agreement
and that the performance of his or its obligations under this Agreement will
not violate any agreement between him or it and any other person or entity.
(l) Arbitration. The parties agree that all disputes arising under or
in connection with this Agreement, and any and all claims by the Executive
relating to his employment with the Company, including any claims of
discrimination arising under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, the Americans with
Disabilities Act or any similar federal, state or local law will be submitted
to arbitration in the County and State of New York to the American Arbitration
Association ("AAA") under its rules then prevailing for the type of claim in
issue. The parties each hereby specifically submit to the personal jurisdiction
of any federal or state court located in the County and State of New York for
any such action and further agree that service of process may be made within or
without the State of New York by giving notice in the manner provided herein.
In any action or proceeding relating to this Agreement, the parties agree
that no damages other than compensatory damages shall be sought or claimed by
either party and each party waives any claim, right or entitlement to punitive,
exemplary, statutory or consequential damages, or any other damages, and each
relevant arbitral panel is specifically divested of any power to award any
damages in the nature of punitive, exemplary, statutory or consequential
damages, or any other damages of any kind or nature in excess of compensatory
damages.
(m) Fees and Expenses. In the event of a dispute by the Company or
Executive as to the validity or enforceability of, or liability under, any
provision of this Agreement and with respect to any claims arising in
connection with Executive's employment with the Company, each party shall pay
its own legal fees and expenses incurred in connection with such dispute or
claim.
(n) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(o) Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement. Any reference
to the Executive in the masculine gender herein is for convenience and is not
intended to express any preference by the Company for executives of any gender.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
Xxxx X. Xxxxxx
BRAND SCAFFOLD SERVICE, INC.
By:
---------------------------------
Name:
Title:
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