Exhibit 10(c)
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of January, 1996 by and between EMCOR
GROUP, INC., a Delaware Corporation (the "Company"), and XXXXXX X. XXXXXXX
("Executive").
RECITALS
In order to induce Executive to continue to serve as Executive Vice President
and Chief Financial Officer 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 continue 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 continue to employ Executive during the Period of Employment (as
hereinafter defined) as Executive Vice President and Chief Financial
Officer of the Company. 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 Chief
Executive Officer of the Company (the "CEO").
1.2 Subject to the terms and condition hereof, Executive hereby agrees to
serve as Executive Vice President and Chief Financial Officer 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 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 January 1,
1996 (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 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 $309,000 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,
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 $700 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) the 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 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 the earlier of December 31, 1997 or 18 months from the
date of termination, 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 the earlier of December
31, 1997 or 6 months from the date of termination, 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 Executives' 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
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
April 20, 1995 between the Executive and the Company.
(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
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;
(b) until the earlier of December 31, 1997 or 24 months from the
date of termination for Permanent Disability, Executive (and, to the
extent applicable, Executive's 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; 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 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.
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 the earlier (i) 18
months from the date of such termination or (ii) December 31, 1997, 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. Xxxxxxx
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
with a copy to:
Xxxxxxx X. Xxxxxxxx
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
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.
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
----------------------
Its Chairman of the Board of Directors,
President and Chief Executive Officer
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
