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AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
This Amendment No. 2 to Employment Agreement (this "Agreement") is made
and entered into effective as of November 30, 1996 by and between Primeco Inc.,
a Texas corporation ("Employer"), Xxxxxx X. Xxxxxxx ("Employee"), and Prime
Service, Inc., a Delaware corporation and parent company of Employer ("Parent").
WHEREAS, Employer and Employee have entered into an Employment
Agreement, dated as of December 2, 1994 (as amended pursuant to Amendment No. 1
to Employment Agreement, dated as of October 25, 1997, the "Employment
Agreement");
WHEREAS, Employer, Employee and Parent desire to amend the Employment
Agreement to return Employee's bonus percentages for fiscal 1996 to the original
percentages in the unamended Employment Agreement;
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Capitalized terms not defined herein shall
have the meanings set forth in the Employment Agreement.
2. Replacement of Exhibit B. Exhibit B to the Employment
Agreement is hereby amended and restated in its entirety by the Exhibit B
attached hereto.
3. Other Terms and Conditions. Except as expressly amended or
modified in this Agreement, all terms and conditions of the Employment
Agreement remain in full force and effect.
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IN WITNESS WHEREOF, each of the parties to this Agreement has executed
and delivered this Agreement as of the date first written above.
PRIMECO INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx
Executive Vice President and
Chief Financial Officer
PRIME SERVICE, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Xxxxx Xxxxxxx
Executive Vice President and
Chief Financial Officer
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxx
--------------------------
Xxxxxx X. Xxxxxxx
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EXHIBIT B
Management Cash Bonus Incentive Program
1996 ONLY
For 1996 only, cash bonuses shall be payable pursuant to the following
table, with an EBITDA target for 1996 of $90 million. For 1996 only, Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is defined as:
a. Consolidated Net Income (loss) of Prime Service,
Inc. (the "Company") and its subsidiaries as it would appear on a
consolidated statement of income (loss) of the Company prepared in
accordance with U.S. GAAP, consistently applied, which shall reflect
a reduction for all management and employee bonuses payable with
respect to the Fiscal Year; plus (minus)
b. Any provision (benefit) for taxes (including
franchise taxes) deducted (added) in calculating such consolidated net
income (loss); plus
c. Any interest expense (net of interest income),
deducted in calculating such consolidated net income (loss); (minus)
d. Costs charged against any purchase accounting
reserves established in connection with the acquisition; (minus)
e. The effects of the reversal of any excess purchase
accounting reserves established in connection with the acquisition;
plus
f. Amortization expenses deducted in calculating
consolidated net income (loss); plus
g. Depreciation expense deducted in calculating
consolidated net income (loss); plus
h. Management fees paid to Investcorp S.A. or its
subsidiaries; plus (minus)
i. Any unusual losses (gains) deducted (added) in calculating
consolidated net income (loss). (Unusual items are intended to include
transactions considered outside the ordinary course of business. EBITDA
will be adjusted to eliminate the effects, if any, of such
transactions, the intent being to calculate EBITDA as if such
transactions had not occurred); plus (minus)
j. Any compensation expense (income) deducted (added) in
calculating consolidated net income (loss) attributable to transactions
involving equity securities of Holding or its subsidiaries.
The Employee and his or her representative shall be provided reasonable
opportunity to review the computation of EBITDA and reasonable access to the
data and information
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supporting such computation and shall have the right to challenge in good
faith such computation.
For 1996 only, the percentage of Base Salary payable as bonus shall be
determined as follows:
% of Base
% of 1996 EBITDA Salary Payable
Target Achieved as Bonus(1)
------------------------------- --------------
Equal To Or But Less
Greater Than: Than:
------------- --------
0 85 0
85 90 17-25
90 95 37-55
95 100 67-100
100 110 100-150
110 120 113-170
120 130 127-190
130 140 140-210
140 150 153-230
150 160 167-250
160 170 180-270
170 180 193-290
180 190 207-310
190 200 220-330
200 --- 223-350
---------------------------
(1) The Company's Board of Directors (the "Board") in its discretion shall set
the bonus percentage amount for each fiscal year within the ranges indicated,
but not less than the bottom of the range. The bonus percentage will be
determined on an individual basis and may differ among eligible employees.
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1997 THROUGH 2001
For 1997 through 2001, cash bonuses under the Management Cash Bonus
Incentive Program are payable to participants in the program in a given year if
the Company's net income for such year exceeds 90% of the net income target (the
"Net Income Percentage") in the Company's budget for such year, as approved by
the Board. EBITDA(2) targets for such years shall be as set forth in the
Company's budget for such year, as approved by the Board. EBITDA and net
income targets shall be subject to change in the discretion of the Board for
any change to the capital structure of the Company or Primeco Inc., the
Company's subsidiary, in connection with any acquisitions, equity offerings or
other transactions that would, or would be likely to, materially affect EBITDA
or net income. Upon achievement of the Net Income Percentage, the percentage
of Base Salary payable as bonus shall be determined as follows:
% of EBITDA % of Base Salary
Target Achieved Payable as
---------------------------------- Bonus(3)
Equal To Or But Less ----------------
Greater Than: Than:
------------- ---------
0 90 0
90 100 60-80
100 110 80-100
110 120 100-120
120 130 120-130
130 140 130-140
140 150 140-150
150 160 150-160
160 170 160-170
170 180 170-180
180 190 180-190
190 200 190-200
200 --- 200
-----------------------------
(2) EBITDA for each of 1997 through 2001 shall be defined by the Board in the
budget for each year.
(3) The Board in its discretion shall set the bonus percentage amount for each
fiscal year within the ranges indicated, but not less than the bottom of the
range. The bonus percentage will be determined on an individual basis and may
differ among eligible employees.
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EMPLOYMENT AGREEMENT
This Agreement is made and entered into effective as
of February 3, 1997, by and between Primeco Inc., a Texas
corporation ("Employer"), and Xxxxxxx X. Xxxxxxxxxx
("Employee").
Employer hereby agrees to employ Employee, and Employee hereby
accepts such employment, on the terms and conditions hereinafter set forth.
1. Period of Employment. The period of Employee's employment
under this Agreement (the "Period of Employment") shall commence on the date
hereof (the "Effective Date") and shall expire on December 31, 1999 (the
"Expiration Date"), subject to any extension as may be agreed or any earlier
termination of Employee's employment as provided in Section 6 hereof. Upon the
expiration of the initial term of this Agreement, and each subsequent term or
extension thereof, this Agreement shall automatically be extended for an
additional term of one year, unless the Employer or the Employee shall have
notified the other party hereto of its election to terminate this Agreement not
later than 90 days prior to the scheduled Expiration Date. If Employee's
employment is terminated pursuant to Section 6 hereof, the Period of Employment
shall expire as of the Date of Termination (as hereinafter defined).
2. Duties. During the Period of Employment,
Employee will faithfully perform those duties and
responsibilities assigned by the Board of Directors of the
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corporate parent ("Parent") of Employer (the "Board") or the Chief Executive
Officer of Employer and Employee will devote his full working time and use his
best efforts to advance the business and welfare of Employer in furtherance of
the policies established by the Board. During the Period of Employment, Employee
shall not engage in any other employment activities for any direct or indirect
remuneration without the concurrence of the Board, except that Employee may
continue to devote reasonable time to the management of investments and to
participation in community and charitable affairs, so long as such activities do
not interfere with his duties under this Agreement. Employee shall have such
title as the Board shall determine from time to time; Employee's initial title
is set forth on Exhibit A hereto.
3. Compensation.
3.1 Base Salary. During the Period of
Employment, Employer shall pay Employee a Base Salary at the rate of $140,000
per annum payable at least as frequently as bi-weekly and subject to payroll
deductions as may be necessary or customary in respect of Employer's salaried
employees in general. The amount of Employee's Base Salary shall be subject to
annual review by the Board, provided that the level of such Base Salary shall
not be subject to reduction.
3.2 Incentive Compensation. In addition to
the Base Salary provided for in Section 3.1 hereof, Employee
shall be entitled to annual cash bonuses as set forth on
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Exhibit B hereto. Notwithstanding the foregoing, Employee's bonus payment, if
any, for fiscal 1997 shall be based upon achievement of the applicable targets
by Employer for the entire fiscal year, but the amount of such bonus payment
shall be prorated in accordance with the number of days during the 1997 fiscal
year that Employee was employed hereunder. Employer agrees that it will not
amend or modify Exhibit B in any manner materially adverse to Employee's
interest thereunder without Employee's written consent.
4. Benefits. During the Period of Employment, Employee shall
be entitled to participate in all fringe benefit programs maintained by Employer
that are available to its executive officers generally. Any payments or benefits
payable to Employee hereunder under any such fringe benefit programs in respect
of any calendar year during which Employee is employed by Employer for less than
the entire year shall, unless otherwise provided in the applicable plan or
arrangement, be prorated in accordance with the number of days in such calendar
year during which he is so employed. Employee acknowledges that he shall have no
vested rights under or to participate in any such program except as expressly
provided under the terms hereof or thereof.
5. Expenses. Employer will pay or reimburse
Employee for such reasonable travel, entertainment or other
expenses as he may incur on behalf of Employer during the
Period of Employment in connection with the performance of his
duties hereunder but only to the extent that such expenses
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were either specifically authorized by Employer or incurred in accordance with
policies established by the Board and provided that Employee shall furnish
Employer with such evidence relating to such expenses as Employer may reasonably
require to substantiate such expenses for tax purposes.
6. Termination of Employment.
6.1 Circumstances of Termination.
Notwithstanding the terms set forth in Section 1 hereof, Employee's employment
shall terminate under any of the following circumstances:
(a) Death. In the event of Employee's
death.
(b) Permanent Disability. If during the
Period of Employment Employee becomes physically or mentally incapacitated or
disabled so that (i) he is unable to perform for Employer substantially the same
services as he performed prior to incurring such incapacity or disability or to
devote his full working time or use his best efforts to advance the business and
welfare of Employer or otherwise to perform his duties under this Agreement and
(ii) such condition exists for an aggregate of six months in any 12 consecutive
calendar month period (Employer, at its option and expense, being entitled to
retain a physician reasonably acceptable to Employee to confirm the existence of
such incapacity or disability, and the determination of such physician being
binding upon Employer and Employee).
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(c) Cause. At the option of Employer,
because Employee:
(i) has been convicted of, or
has pled guilty or nolo contendere to, a felony or
a crime involving moral turpitude, or
(ii) has embezzled or
misappropriated Employer funds or property, or
(iii) has continued use of
alcohol or drugs to an extent that interferes with
the performance by Employee of his employment
responsibilities, or
(iv) has violated Section 8.1,
Section 8.2, Section 8.3 or Section 8.4 hereof,
or
(v) has willfully failed or
refused to perform those duties reasonably assigned
or delegated to him by the Board or the Chief
Executive Officer, which failure or refusal continues
following (a) the Board giving the Employee written
notice setting forth the facts or events constituting
such failure or refusal and (b) a reasonable
opportunity to correct the deficiencies or other
problems specified in such notice to the reasonable
satisfaction of the Board.
(d) Not For Cause. At the option of
Employer at any time for any reason other than those referred
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to above or for no reason at all, whereupon the Employer shall become obligated
to make those payments set forth in Section 7.1(d) hereof.
6.2 Notice of Termination. Any termination of
Employee's employment by Employer (other than termination pursuant to Section
6.1(a) hereof) or by Employee shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 9.2. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice
terminating Employee's employment by Employer. If a Notice of Termination is
given by Employer, such notice shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances that provide a basis for termination of Employee's employment
under the provision so indicated. For purposes of this Agreement, the "Date of
Termination" shall be the date on which the Notice of Termination is delivered
except that with respect to Section 6.1(a) the "Date of Termination" shall be
the date of Employee's death.
7. Payments Upon Termination of Employment.
7.1 Payments. In the event that Employee's
employment is terminated prior to the Expiration Date (including any extension
thereof), the Period of Employment shall expire as of the Date of Termination.
(a) If Employer terminates Employee's
employment for Cause or if Employee voluntarily terminates his
employment, Employer's obligation to compensate Employee shall
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in all respects cease as of the Date of Termination, except that Employer shall
pay Employee the Base Salary accrued under Section 3 and the reimbursable
expenses incurred under Section 5 of this Agreement up to such Date of
Termination (the "Accrued Obligations");
(b) If Employee's employment is
terminated upon the death of Employee, Employer's obligation to compensate
Employee shall in all respects cease as of the Date of Termination, except that
within thirty (30) days after the Date of Termination Employer shall (i) pay
Employee's estate or legal representative the Accrued Obligations and a lump sum
payment equal to 25% of the Employee's annual Base Salary payable under Section
3 hereof at the rate in effect
immediately prior to such termination and (ii) continue to maintain during the
three-month period following the Date of Termination for the benefit of the
Employee's dependents, basic health and dental insurance and related medical
expenses coverage on terms no less favorable to the Employee than Employer
provides to its executive officers generally, as such benefits may be modified
from time to time during such period;
(c) If Employee's employment is
terminated upon the Permanent Disability of Employee, Employer's obligation to
compensate Employee shall in all respects cease as of the Date of Termination,
except that within thirty (30) days after the Date of Termination Employer shall
(i) pay Employee Accrued Obligations and a lump sum payment equal to 50% of the
Employee's annual Base Salary
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payable under Section 3 hereof at the rate in effect immediately prior to such
termination less the amount of any disability payments payable to Employee
during the six-month period following the Date of Termination pursuant to any
Employer-paid or state sponsored insurance policy or employer self-insured
program and (ii) continue to maintain during the six-month period following the
Date of Termination for the benefit of Employee and his dependents, basic
health, disability and dental insurance and related medical expenses coverage on
terms no less favorable to the Employee than Employer provides to its executive
officers generally, as such benefits may be modified from time to time during
such period provided that the Employee shall continue to be obligated to make
any contributions or payments in connection with such benefits to the same
extent as other executive officers generally; and
(d) If Employee's employment is
terminated by Employer pursuant to Section 6.1(d), Employer's obligation to
compensate Employee shall in all respects cease, except that within thirty (30)
days after the Date of Termination Employer shall pay to Employee the Accrued
Obligations and during the period ending on the earlier of the Expiration Date
or the first anniversary of the Date of Termination (the "Severance Period"),
Employer shall (i) pay to Employee on a monthly basis the sum of one-twelfth
(1/12th) of the annual Base Salary of Employee in effect at the Date of
Termination (the "Continuation Payments") and (ii) continue to
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maintain, during the Severance Period for the benefit of the Employee and his
dependents, basic health, dental and life insurance and related medical expenses
coverage (including disability and hospitalization coverage) (the "Continuation
Benefits") on terms no less favorable to the Employee than the Employer provides
to its executive officers generally, as such benefits may be modified from time
to time during the Severance Period. During the Severance Period, Employee shall
be required to make any contributions required to maintain such Continuation
Benefits, which may be withheld from the Continuation Payments; provided that
such contributions are also required to be made by the Employer's executive
officers generally. If at any time during the Severance Period Employee shall
obtain employment with a third party (the "Substitute Employer") in which
Employee is entitled to receive basic health benefits in connection with such
employment on terms provided by the Substitute Employer to its similarly
situated employees generally, the Employer shall no longer be required to
provide Continuation Benefits to the Employee, regardless of whether such
benefits differ in any respect from the Continuation Benefits. The Employer
shall be excused from its obligations to make payments under this Section 7.1(d)
if the Employee breaches its obligations hereunder (including its obligations
under Article 8 hereof).
7.2 Release and Satisfaction. With respect to
Employee, his heirs, successors and assigns, payment by Employer of the amounts
provided under this Section 7 shall
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release, relinquish and forever discharge Employer and any director, officer,
employee, shareholder or agent of Employer from any and all claims, damages,
losses, costs, expenses, liabilities or obligations, whether known or unknown
(other than any such claims, damages, losses, costs, expenses, liabilities or
obligations (a) covered by any indemnification arrangement of Employer with
respect to Employee or (b) arising under any written employee benefit plan or
arrangement (whether or not tax-qualified) covering Employee), which Employee
has incurred or suffered or may incur or suffer as a result of Employee's
employment by Employer or the termination of such employment.
7.3 Effect on This Agreement. Any termination
of Employee's employment and any expiration of the Period of Employment under
this Agreement shall not affect the continuing operation and effect of Sections
7.2, 8.1, 8.2, 8.3, 8.4 and 8.5 hereof, which shall continue in full force and
effect with respect to Employer and Employee, and its and his heirs, successors
and assigns. Nothing in Section 7.1 hereof shall be deemed to operate or shall
operate as a release, settlement or discharge of any liability of Employee to
Employer or others from any action or omission by Employee enumerated in Section
6.1(c) hereof as a possible basis for termination of Employee's employment for
Cause.
7.4 No Duty to Mitigate. Subject to the
provisions of Sections 8.1, 8.2, 8.3, 8.4 and 8.5 hereof, Employee shall be free
to accept such employment and engage in
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such business as Employee may desire following the termination of his employment
hereunder, and no compensation received by Employee therefrom shall reduce or
affect any payments required to be made by Employer hereunder except to the
extent expressly provided in the benefit plans of Employer.
8. Non-disclosure of Proprietary Information,
Surrender of Records; Inventions and Patents;
Non-Compete.
8.1 Proprietary Information. Employee shall
not during the Period of Employment or at any time thereafter (irrespective of
the circumstances under which Employee's employment by Employer terminates),
directly or indirectly use for his own purpose or for the benefit of any person
or entity other than Employer, nor otherwise disclose, any proprietary
information, as defined below, to any individual or entity, unless such
disclosure has been authorized in writing by the Board or is otherwise required
by law. For purposes of this Agreement, the term "proprietary information" shall
include, but is not limited to: (a) the name or address of any customer, vendor
or affiliate of Employer or any information
concerning the transactions or relations of any customer, vendor or affiliate of
Employer with Employer or any of its shareholders; (b) any information
concerning any product, technology or procedure employed by Employer but not
generally known to its customers, vendors or competitors, or under development
by or being tested by Employer but not at the time offered generally to
customers or vendors; (c) any information relating to Employer's computer
software, computer systems,
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pricing or marketing methods, sales margins, cost of goods, cost of material,
capital structure, operating results, borrowing arrangements or business plans;
(d) any information which is generally regarded as confidential or proprietary
in any line of business engaged in by Employer; (e) any information contained in
any of Employer's written or oral policies and procedures or employee manuals;
(f) any information belonging to customers, vendors or affiliates of Employer
which Employer has agreed to hold in confidence; (g) any inventions, innovations
or improvements covered by Section 8.3 below; (h) any other information which
the Board has reasonably determined by resolution and communicated to Employee
to be confidential or proprietary; and (i) all written, graphic and other
material relating to any of the foregoing. Information that is not novel or
copyrighted or patented may nonetheless be proprietary information. However,
proprietary information shall not include (i) any information that is or becomes
generally known to the industries in which Employer competes through sources
independent of Employer or through authorized publication to persons other than
Employer's employees by Employer or (ii) other non-sensitive information that
may be disclosed by Employee in the ordinary course of business, the disclosure
of which is not reasonably likely to adversely affect Employer's business
operations, their relationships with customers, vendors or employees or the
results of their operations.
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8.2 Confidentiality and Surrender of Records. Employee shall not during the
Period of Employment or at any time thereafter (irrespective of the
circumstances under which Employee's employment by Employer terminates), except
as required by law, directly or indirectly give any "confidential records" (as
hereinafter defined) to, or permit any inspection or copying of confidential
records by, any individual or entity other than in the course of such
individual's or entity's employment or retention by Employer, nor shall he
retain, and will deliver promptly to Employer, any of the same following
termination of his employment. For purposes hereof, "confidential records" means
all correspondence, memoranda, files, manuals, books, lists, financial,
operating or marketing records, magnetic tape, or electronic or other media or
equipment of any kind which may be in Employee's possession or under his control
or accessible to him which contain any proprietary information as defined in
Section 8.1. above. All confidential records shall be and remain the sole
property of Employer during the Period of Employment and thereafter.
8.3 Inventions and Patents. All inventions,
innovations or improvements in Employer's method of conducting its business
(including policies, procedures, products, improvements, software, ideas and
discoveries, whether patentable or copyrightable or not) conceived or made by
Employee, either alone or jointly with others, during the Period of Employment
belong to Employer. Employee will promptly disclose in writing such inventions,
innovations or
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improvements to the Board and perform all actions reasonably requested by the
Board to establish and confirm such ownership by Employer, including, but not
limited to, cooperating with and assisting Employer in obtaining patents for
Employer in the United States and in foreign countries. Any patent application
filed by Employee within a year after termination of his employment hereunder
shall be presumed to relate to an invention which was made during the Period of
Employment unless Employee can provide evidence to the contrary.
8.4 Covenant Not to Compete; No
Solicitation.
(a) Employee acknowledges and recognizes
the highly competitive nature of Employer's business and, in consideration of
the payment by Employer to Employee of amounts that may hereafter be paid to
Employee pursuant to Sections 7.1 and 8.4(d) hereof, Employee agrees that during
the period (the "Covered Time") beginning on the Date of Termination and ending
(i) if Employee's employment is terminated for any reason other than pursuant to
Section 6.1(d) hereof, on the second anniversary of the Date of Termination or
(ii) if Employee's employment is terminated pursuant to Section 6.1(d) hereof
and subject to Section 8.4(d) hereof, on the earlier of (A) the first
anniversary of the Date of Termination or (B) the last day of the Period of
Employment remaining under Section 1 hereof immediately prior to the Date of
Termination, Employee will not compete with the business of Employer, which
means that Employee will not engage, directly or indirectly, in the "Covered
Business" (as
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hereinafter defined) in any state of the United States of America in which the
Employer is conducting business or proposes to conduct business as of the Date
of Termination and any states contiguous therewith (these areas are hereinafter
collectively referred to as the "Covered Area"). For purposes of this Agreement,
(i) "Covered Business" shall mean the renting and selling of the following types
of equipment (and parts and supplies for such equipment): high-reach booms,
forklifts, tractors, dump trucks, air compressors and high- reach scissor lifts,
and small tools such as electrical generators, power saws and hand tools; and
(ii) the phrase "engage, directly or indirectly" shall mean engaging directly or
having an interest, directly or indirectly, as owner, partner, shareholder,
independent contractor, capital investor, lender, renderer of consultation
services or advice or otherwise (other than as the holder of less than 2% of the
outstanding stock of a publicly-traded corporation), either alone or in
association with others, in the operation of any aspect of any type of business
or enterprise engaged in any aspect of the Covered Business. Employee shall be
deemed engaged in business in the Covered Area if his place of business is
located in the Covered Area or if he solicits customers located anywhere in, or
delivers products anywhere in, the Covered Area.
(b) Employee agrees that during the term
of this Agreement (including any extensions thereof) and
during the Covered Time he shall not (i) directly or
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indirectly solicit or attempt to solicit any of the employees, agents or
representatives of Employer or affiliates of Employer to leave any of such
entities; (ii) directly or indirectly solicit or attempt to solicit any of the
employees, agents, consultants or representatives of Employer or affiliates of
Employer to become employees, agents, representatives or consultants of any
other person or entity; or (iii) directly or indirectly solicit or attempt to
solicit any customer, vendor or distributor of Employer or affiliates of
Employer with respect to any product or service being furnished, made, sold,
leased or rented by Employer.
(c) Employee understands that the
provisions of Section 8.4(a) may limit his ability to earn a livelihood in a
business similar to the business of Employer but nevertheless agrees and hereby
acknowledges that the consideration provided under this Agreement, including any
amounts or benefits provided under Section 7 hereof, is sufficient to justify
the restrictions contained in such provisions and in consideration thereof and
in light of Employee's education, skills and abilities, Employee agrees that he
will not assert that, and it should not be considered that, such provisions
prevent him from earning a living or otherwise are void or unenforceable or
should be voided or held unenforceable. Employee acknowledges and agrees that
his duties with Employer are of an executive nature and that he is a member of
Employer's management group.
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(d) If Employee's employment is
terminated pursuant to Section 6.1(d) hereof, Employer may extend the Covered
Time to extend up to and through the second anniversary of the Date of
Termination by delivering written notice to Employee (specifying the duration of
the extended Covered Time), within ten (10) days of such Date of Termination,
that Employer has elected to continue to pay to Employee the Continuation
Payments and provide the Continuation Benefits (on terms no less favorable to
Employee than Employer provides to its executive officers generally, as such
benefits may be modified from time to time) for each month of such extended
Covered Time. During the extended Covered Time, Employee shall be required to
make any contributions required to maintain such Continuation Benefits, which
may be withheld from the Continuation Payments; provided that such contributions
are also required to be made by the Employer's executive officers generally. If
at any time during the extended Covered Time Employee shall obtain employment
with a Substitute Employer in which Employee is entitled to receive basic health
benefits in connection with such employment on terms provided by the Substitute
Employer to its similarly situated employees generally, Employer shall no longer
be required to provide Continuation Benefits to the Employee, regardless of
whether such benefits differ in any respect from the Continuation Benefits.
Employer shall be excused from its obligations to make payments under this
Section 8.4(d) if Employee breaches its obligations hereunder.
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8.5 Litigation Assistance. Employee agrees that after the Date of Termination he
shall, at the request of Employer, render all assistance and perform all lawful
acts that Employer considers necessary or advisable in connection with any
litigation involving Employer or any director, officer, employee, shareholder,
agent, representative, consultant, customer or vendor of Employer. In the event
that Employer requests Employee's assistance under this Section 8.5, Employer
shall pay to Employee for each day such assistance is rendered an amount equal
to the annual Base Salary of Employee in effect at the Date of Termination
divided by 250 and shall promptly pay or reimburse Employee for such reasonable
travel expenses as he may incur in connection with rendering assistance
hereunder.
8.6 Definition of Employer. For purposes of
this Section 8, the term Employer shall include Employer and any and all of its
subsidiaries, ventures or affiliates, whether currently existing or hereafter
formed, which are engaged in the Covered Business or a portion thereof, as well
as any person to whom this Agreement is assigned as permitted by Section 9.8
hereof.
8.7 Enforcement.
(a) The parties hereto agree and
acknowledge that the covenants and agreements contained herein are reasonably
necessary in duration and to protect the reasonable competitive business
interests of Employer,
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including, without limitation, the value of the proprietary
information and goodwill of Employer.
(b) Employee agrees that the covenants
and undertakings contained in Article 8 of this Agreement relate to matters
which are of a special, unique and extraordinary character and that Employer
cannot be reasonably or adequately compensated in damages in an action at law in
the event Employee breaches any of these covenants or undertakings. Therefore,
Employee agrees that Employer shall be entitled, as a matter of course, without
the need to prove irreparable injury, to an injunction, restraining order or
other equitable relief from any court of competent jurisdiction, restraining any
violation or threatened violation of any of such terms by Employee and such
other persons as the court shall order. Employee agrees to pay costs and legal
fees incurred by Employer in obtaining such injunction.
(c) Rights and remedies provided for in
this Section are cumulative and shall be in addition to rights and remedies
otherwise available to the parties under any other agreement or applicable law.
(d) In the event that any provision of
this Agreement shall to any extent be held invalid, unreasonable or
unenforceable in any circumstances, the parties hereto agree that the remainder
of this Agreement and the application of such provision of this Agreement to
other circumstances shall be valid and enforceable to the fullest
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extent permitted by law. If any provision of this Agreement, or any part
thereof, is held to be unenforceable because of the scope or duration of or the
area covered by such provision, the parties hereto agree that the court or
arbitrator making such determination shall reduce the scope, duration and/or
area of such provision (and shall substitute appropriate provisions for any such
unenforceable provisions) in order to make such provision enforceable to the
fullest extent permitted by law, and/or shall delete specific words and phrases,
and such modified provision shall then be enforceable and shall be enforced. The
parties hereto recognize that if, in any judicial proceeding, a court shall
refuse to enforce any of the separate covenants contained in this Agreement,
then that unenforceable covenant contained in this Agreement shall be deemed
eliminated from these provisions to the extent necessary to permit the remaining
separate covenants to be enforced. In the event that any court or arbitrator
determines that the time period or the area, or both, are unreasonable and that
any of the covenants is to that extent unenforceable, the parties hereto agree
that such covenants will remain in full force and effect, first, for the
greatest time period, and second, in the greatest geographical area that would
not render them unenforceable.
9. Miscellaneous.
9.1 Key Man Insurance. Employee recognizes
and acknowledges that Employer or its affiliates may seek and
purchase one or more policies providing key man life insurance
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with respect to Employee, the proceeds of which would be payable to Employer or
such affiliate. Employee hereby consents to Employer or its affiliates seeking
and purchasing such insurance and will provide such information, undergo such
medical examinations (at Employer's expense), execute such documents, and
otherwise take any and all actions necessary or desirable in order for Employer
or its affiliates to seek, purchase and maintain in full force and effect such
policy or policies.
9.2 Notice. Any notice required or permitted
to be given hereunder shall be deemed sufficiently given if sent by registered
or certified mail, postage prepaid, addressed to the addressee at his or its
address last provided the sender in writing by the addressee for purposes of
receiving notices hereunder or, unless or until such address shall be so
furnished, to the address indicated opposite his or its signature to this
Agreement. For purposes of this Agreement, notice sent in conformity with this
Section 9.2 shall be deemed to have been received on the third business day
following the date on which such notices are so sent.
9.3 Modification and No Waiver of Breach. No
waiver or modification of this Agreement shall be binding unless it is in
writing signed by the parties hereto. No waiver by a party of a breach hereof by
the other party shall be deemed to constitute a waiver of a future breach,
whether of a similar or dissimilar nature, except to the extent
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specifically provided in any written waiver under this
Section 9.3.
9.4 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AND ALL QUESTIONS RELATING TO THE VALIDITY AND PERFORMANCE
HEREOF AND REMEDIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.
9.5 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
but all of which taken together shall constitute one and the same agreement.
9.6 Captions. The captions used herein are
for ease of reference only and shall not define or limit the
provisions hereof.
9.7 Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto relating to the
matters encompassed hereby and supersedes any prior oral or written agreements.
9.8 Assignment. The rights of Employer under
this Agreement may, without the consent of Employee, be assigned by Employer to
any person, firm, corporation, or other business entity which at any time,
whether by purchase, merger, or otherwise, directly or indirectly, acquires all
or material portions of the stock, assets or any line of business of Employer.
9.9 Non-Transferability of Interest. None of
the rights of Employee to receive any form of compensation
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payable pursuant to this Agreement shall be assignable or transferable except
through a testamentary disposition or by the laws of descent and distribution
upon the death of Employee. Any attempted assignment, transfer, conveyance, or
other disposition (other than as aforesaid) of any interest in the rights of
Employee to receive any form of compensation to be made by Employer pursuant to
this Agreement shall be void.
9.10 Arbitration. The parties shall endeavor
to settle all disputes by amicable negotiations. Except as otherwise provided
herein, any claim, dispute, disagreement or controversy that arises among the
parties relating to this Agreement that is not amicably settled shall be
resolved by arbitration, as follows:
(a) Any such arbitration shall be heard
in The City of New York, New York, before a panel consisting of one (l) to three
(3) arbitrators, each of whom shall be impartial. Upon the written Request of
Arbitration of either party hereto to commence arbitration hereunder, the
parties shall attempt to mutually agree as to the number and identity of the
arbitrator(s), within thirty (30) days of the date of such Request. Except as
the parties may otherwise agree, all arbitrators (if not selected by the parties
hereto within thirty (30) days of a written Request for Arbitration) shall be
appointed pursuant to the commercial arbitration rules of the American
Arbitration Association. In determining the number and appropriate background of
the arbitrators, the appointing authority shall give due consideration to the
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issues to be resolved, but his or her decision as to the number of arbitrators
and their identity shall be final.
(b) An arbitration may be commenced by
any party to this Agreement by the service of a written Request for Arbitration
upon the other affected parties. Such Request for Arbitration shall summarize
the controversy or claim to be arbitrated.
(c) All attorneys' fees and costs of the
arbitration shall in the first instance be borne by the respective party
incurring such costs and fees, but the arbitrators shall have the discretion to
award costs and/or attorneys' fees as they deem appropriate under the
circumstances. The parties hereby expressly waive punitive damages, and under no
circumstances shall an award contain any amount that in any way reflects
punitive damages.
(d) Judgment on the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
(e) It is intended that controversies or
claims submitted to arbitration under this Section 9.10 shall remain
confidential, and to that end it is agreed by the parties that neither the facts
disclosed in the arbitration, the issues arbitrated, nor the views or opinions
of any persons concerning them, shall be disclosed to third persons at any time,
except to the extent necessary to enforce an award or judgment or as required by
law or in response to legal process or in connection with such arbitration.
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(f) Any arbitration under this Section 9.10 shall be conducted pursuant to the
commercial arbitration rules of the American Arbitration Association.
9.11 Jurisdiction; Venue. Subject to Section
9.10 hereof, the parties hereto irrevocably and unconditionally submit to the
exclusive jurisdiction of any State or Federal court sitting in The City of New
York over any suit, action or proceeding arising out of or relating to this
Agreement. Service of any process, summons, notice or document by registered
mail addressed to any party as provided in Section 9.2 hereof shall be effective
service of process for any action, suit or proceeding brought against such party
in any such court. The parties hereto irrevocably and unconditionally waive any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. A final judgment in
any suit, action or proceeding brought in any such court shall be conclusive and
binding upon the parties and may be enforced in any other courts to whose
jurisdiction a party is or may be subject, by suit upon such judgment.
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IN WITNESS WHEREOF, this Agreement has been duly executed effective as of the
day and year first written above.
Address for notices: PRIMECO INC.
00000 Xxxx Xxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Xxxxxx X. Xxxxxxx
President
With a copy to:
INVESTCORP International Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxxxx
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EXHIBIT A
Employee's initial title shall be:
Corporate General Counsel and Assistant Secretary
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EXHIBIT B
Cash bonuses are payable to Employee in a given year if the
consolidated net income of Prime Service, Inc., a Delaware corporation and
parent of Employer (the "Company") for such year exceeds 90% of the net income
target (the "Net Income Percentage") in the Company's budget for such year, as
approved by the Board. Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA")(1) targets for such years shall be as set forth in the
Company's budget for such year, as approved by the Board. EBITDA and net income
targets shall be subject to change in the discretion of the Board for any change
to the capital structure of the Company or Employer in connection with any
acquisitions, equity offerings or other transactions that would, or would be
likely to, materially affect EBITDA or net income. Upon achievement of the Net
Income Percentage, the percentage of Base Salary payable as bonus shall be
determined as follows:
% of Base
% of EBITDA Salary
Target Achieved Payable
------------------------------------ as Bonus(2)
Equal To Or -----------
Greater But Less
Than: Than:
----------- --------
0 90 0
90 -- 35-50
-----------------------------
(1) The EBITDA target for each year shall be defined by the Board in the
budget for each year.
(2) The Board in its discretion shall set the bonus percentage amount for
each fiscal year within the ranges indicated, but not less than the
bottom of the range.
