EXHIBIT 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as of
December 26, 2001, by and between National Equipment Services, Inc. (the
"Company"), and Xxxxxxx X. Xxxxxxxx (the "Employee").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company shall employ the Employee, and the Employee
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in Section 4 hereof (the "Employment Period").
2. POSITION AND DUTIES. During the Employment Period, the Employee shall
serve as Chief Financial Officer and Senior Vice President and shall perform the
normal duties and responsibilities of a Chief Financial Officer or such other
services as may be from time to time designated by the Company, subject to the
direction and authority of the Company's Chief Executive Officer or his
designate. The Employee shall devote his best efforts and his full business time
and attention to his duties and shall perform his duties and responsibilities
faithfully and to the best of his ability and to carry out the policies and
directives of the Company. The Employee agrees to take no action prejudicial to
the interests of the Company during the Employment Period.
3. BASE SALARY AND BENEFITS.
(a) During the Employment Period, the Employee's base salary shall be
$300,000 per annum or such higher rate as the Company may designate from time to
time (the "Base Salary"). The Base Salary shall be payable in regular
installments in accordance with the Company's general payroll practices and
shall be subject to customary withholding. In addition, during the Employment
Period, the Employee shall be entitled to participate in all of the Company's
employee benefit programs for which employees of the Company are generally
eligible. The Company reserves the right to unilaterally alter or modify its
employee benefit plans and Company policies at any time as it, in its sole
judgement determines appropriate, without recourse by the Employee.
(b) The Company shall reimburse the Employee for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's requirements with respect to reporting and documentation of such
expenses.
(c) Also, in addition to the Base Salary, the Company may in its sole
discretion,
award a bonus to the Employee of up to 50% of salary following the end of each
fiscal year during the Employment Period based upon the Employee's performance
and the Company's operating results during such year.
(d) The Executive will be issued stock options representing the right to
acquire 100,000 shares of common stock of the Company at the strike price of
$2.00 (the closing price on December 26, 2001, the day of verbal acceptance),
pursuant to the Stock Option Plan, which stock options will be subject to the
vesting and other restrictions as set forth in the related Stock Option
Agreement to be entered into between Executive and NES. A standard draft of the
Stock Option Agreement is attached hereto.
(e) The Executive shall be entitled to 4 weeks vacation per annum, taken
with approval in advance from the Chief Executive Officer. The Executive may
carry over to the next year up to a maximum of 2 weeks of unused vacation.
4. TERM.
(a) The Employment Period shall be for an initial three year period
commencing with the effective date of this Agreement, and continuing on a year
to year basis thereafter, unless earlier terminated (i) by the Employee's
resignation, death or disability, (ii) by the Company for Cause or (iii) by the
Company other than for Cause thereafter.
(b) If the Employment Period is terminated pursuant to clause (a)(i) or
clause (a)(ii) above, the Employee shall be entitled to receive his Base Salary
through the date of termination. If the Employment Period is terminated pursuant
to clause (a)(iii) above, the Employee shall be entitled to receive his Base
Salary through the 12th month anniversary of the date of termination, if and
only if the Employee has not breached and does not breach Section 6, 7, 8, 9, 10
or 11 hereof.
(c) All of the Employee's rights to fringe benefits and bonuses hereunder
(if any) which accrue or become payable after the termination of the Employment
Period shall cease upon such termination, except that health insurance will
continue for a period of 12 month if the Employee is terminated under section
(4)(a)(iii) above.
(d) In the event the Company is sold (i.e., more than 50% of the voting
shares are transferred to a purchaser, merger or substantially all of the assets
are sold), Employee shall have the right to demand that such event be treated as
constructive severance with the same rights accruing to Employee as if
terminated pursuant to clause (a)(iii) above.
(e) For the purposes of this Agreement, "CAUSE" shall mean (i) the
commission of a felony or a crime involving moral turpitude or the commission of
any other act or omission involving dishonesty, disloyalty, or fraud with
respect to the Company or its customers or suppliers, (ii) conduct tending to
bring the Company into substantial public disgrace or disrepute, (iii)
substantial and repeated failure to perform duties as reasonably
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directed by the company, (iv) gross negligence or willful misconduct with
respect to the Company, (v) insubordination or (vi) any other material breach of
this Agreement.
For the purposes of this Agreement,
5. OTHER BUSINESSES. As long as Employee is employed by the Company or any
of its subsidiaries, Employee agrees that he will not, except with the express
written consent of the Company's CEO, become engaged in, or render services for,
any business in competition with any business of the Company, any of its
subsidiaries or any entity in which the Company or any of its subsidiaries have
an equity interest.
6. CONFIDENTIAL INFORMATION.
(a) The Employee acknowledges that the information, observations and data
obtained by him while employed by the Company concerning the business or affairs
of the Company ("Confidential Information") are the property of the Company.
Therefore, the Employee agrees that he shall not disclose to any unauthorized
person or use for his own purposes any Confidential Information without the
prior written consent of the Company, unless and to the extent that the
aforementioned matters become generally known to and available for the use by
the public other than as a result of the Employee's acts or omissions.
(b) Employee acknowledges that all inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable) which relate to the Company's or
any of its subsidiaries' actual or anticipated business, research and
development or existing or future products or services and which are conceived,
developed or made by Employee while employed by the Company or its subsidiaries
("Work Product") belong to the Company or any of its subsidiaries. Employee
shall promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Employment
Period) to establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
7. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. The Employee agrees that,
during the term of his employment with the Company and thereafter, he will not
disclose the Confidential Information or use it in any way, except on behalf of
the Company, whether or not such Confidential Information was produced by the
Employee's own efforts.
8. NON-COMPETITION
(a) The Employee acknowledges that in the courses of his employment with
the Company he shall become familiar with the Company's trade secrets and with
other Confidential Information concerning the Company and that his services
shall be of special, unique and extraordinary value to the Company. Therefore,
based on the
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foregoing and in further consideration of the compensation to be paid to the
Employee hereunder, including NES stock options granted under the Employee Stock
Option Plan, the Employee agrees that, from the date hereof through the first 12
month anniversary following the date of termination of the Employment Period or
any extension thereof (the "Non-Compete Period"), he shall not directly or
indirectly engage (whether as owner, operator, manager, employee, officer,
director, consultant, advisor, representative or otherwise) in any business that
the company is conducting as of the date of termination of the Employee's
employment, within a 100 mile radius of any location where the Employee has
performed duties for the company within two years prior to the date of
termination, except on behalf of the Company as provided in this Agreement.
(b) Should termination of the Employment Period be under Section
(4)(a)(iii) of this Agreement, the Non-Compete Period will extend ONLY until the
expiry of the six month period outlined in Section (4)(b)(i) of this Agreement.
9. NON-SOLICITATION OF CUSTOMERS. Without limiting the generality of
Section 8, employee agrees that he shall not, during the Non-Compete Period,
call on, solicit or service any customer, supplier, licensee, licensor or other
business relation of the Company, NES or any of their subsidiaries, in order to
induce or attempt to induce such person or entity to cease doing business with
the Company, NES or any of their subsidiaries or in any way interfere with the
relationship between any such customer, supplier, licensee, licensor or other
business relation of the Company, NES or any of their subsidiaries (including
making any negative statements or communications about the Company, NES or any
of their subsidiaries). In order to avoid any disputes under this Section 9, the
Parties agree that any person or entity who was a customer of the Company, NES
or any of their subsidiaries during the two year period prior to the date of
Employee's termination is a violation of this Section 9.
10. NON-SOLICITATION OF EMPLOYEES. Employee agrees that he shall not,
during the Non-Compete Period, directly or indirectly either for himself or any
other person or entity, (i) induce or attempt to induce any employee of the
Company, NES or any of their subsidiaries to leave the employ of the Company,
NES or such subsidiaries, or in any way interfere with the relationship between
the Company, NES or any of their subsidiaries and any employee thereof, or (ii)
hire any person who was an employee of the Company, NES or any of their
subsidiaries at any time during the twelve month period immediately prior to the
date on which such hiring would take place (it being conclusively presumed by
the Parties so as to avoid any disputes under this Section 10 that any such
hiring within such twelve month period is in violation of clause (ii) above).
11. RETURN OF COMPANY PROPERTY. Employee shall deliver to the Company at
the termination of the Employment Period, or at any other time the Company may
request, all memoranda, notes, papers, plans, records, reports, computer discs
or tapes, printouts and software and other documents and data (and copies
thereof), (a) prepared by or on behalf of the Company, (b) purchased with
Company funds or (c) in any way relating to the Confidential Information, Work
Product or the business of the Company or any of its subsidiaries, which
Employee may then possess or have under his control, whether or not
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such Confidential Information was produced by the Employee's own efforts.
Employee agrees to refrain from copying, retaining or distributing copies of any
documents relating to such Confidential Information.
12. ENFORCEMENT. The parties hereto agree and acknowledge that the
restrictions stated herein are reasonable. However, if, at the time of
enforcement of Section 7, 8, 9 or 10 of this Agreement, a court holds that the
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area. Because the Employee's services are unique and because the
Employee has access to Confidential Information, the parties hereto agree that
money damages would not be an adequate remedy for any breach of this Agreement.
Therefore, in the event of a breach or threatened breach of this Agreement, the
Company or its successors or assigns may, in additions to other rights and
remedies existing in their favor, apply to any court of competent jurisdiction
for specific performance and/or injunctive relief in order to enforce, or
prevent any violations of the provisions hereof (without posting bond or
security). The Employee agrees that in the event that he breaches this Agreement
or threatens to breach the Agreement, the Employee will be liable to the Company
for all costs incurred by the Company in enforcing this Agreement, including,
but not limited to, reasonable attorneys' fees and costs.
13. EMPLOYEE'S REPRESENTATIONS. The Employee hereby represents and warrants
to the Company that (i) the execution, delivery and performance of this
Agreement by the Employee does not and will not conflict with, breach, violate
or cause a default under any contract, agreement, instrument, order, judgement
or decree to which the Employee is a party or by which he is bound, (ii) the
Employee is not a party to or bound by any employment agreement or non-compete
agreement with any other person or entity, and (iii) upon the execution and
delivery of this Agreement by the Company, this Agreement shall be the valid and
binding obligation of the Employee, enforceable in accordance with its terms.
14. SURVIVAL. Sections 6, 7, 8, 9, 10, and 11 shall survive and continue in
full force in accordance with their terms notwithstanding any termination of the
Employment Period.
15. NOTICES. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipient at the address below indicated:
NOTICES TO THE EMPLOYEE:
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxx, XX 00000
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NOTICES TO THE COMPANY:
Chief Executive Officer
NES
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, XX 00000
Or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
16. SEVERABILITY. Whenever possible, each provision of this Agreement shall
be interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
17. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
The Employee hereby acknowledges and represents that he has had the opportunity
to consult with independent legal counsel regarding his rights and obligations
under this Agreement and that he fully understands the terms and conditions
contained herein.
18. SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and inure to
the benefit of and be enforceable by the Employee, the Company and their
respective heirs, successors and assigns, except that the Employee may not
assign his rights or delegate his obligations hereunder without the prior
written consent of the Company.
19. WAIVERS. The waiver by the Company or the Employee of any action, right
or condition in this Agreement, or any breach of a provision of this Agreement,
shall not constitute a waiver of any other occurrences of the same event.
20. EXTENSION OF RESTRAINTS DURING A PERIOD OF VIOLATION. In the event the
Employee violates any restraint specified in this Agreement, the Employee
understands and agrees that the period of the restraint shall not run during the
period of the violation. The Employee understands that the purpose of this
paragraph is to provide the Company the protection of the restraint to the full
agreed-upon duration.
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21. GOVERNING LAW. This Agreement shall be deemed to have been made in the
State of Illinois and shall be governed by and construed in accordance with the
substantive law of the State of Illinois, without giving effect to any choice of
law or conflict of law rules or provisions that would cause the application of
the laws of any jurisdiction other than the State of Illinois.
22. HEADINGS: GENDER REFERENCES. The section headings in this Agreement are
for reference purposes only and shall not be deemed to be part of this Agreement
or to affect the meaning or interpretation of this Agreement. Wherever used
herein, the masculine pronoun shall, as appropriate, be construed to include the
feminine.
23. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
understanding between the Employee and the Company with respect to its subject
matter, supercedes any prior communication or understanding with respect
thereto, and no modification or waiver or any provision hereof shall be valid
unless made in writing and signed by the parties.
24. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
Signed as an agreement under seal this 31st day of December 2001.
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Xxxxx X. Xxxxxxx
Chief Executive Officer
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Xxxxxxx X. Xxxxxxxx
Employee
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