Exhibit 10(g)
As of January 1, 1998
Xx. Xxxxxxx X. Xxxxxxxx
00 Xxxxxxx Xxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Dear Xxxxxx:
This shall confirm our agreement that the employment agreement (the
"Original Employment Agreement") between you (the "Executive") and EMCOR Group,
Inc. (the "Company") dated as of September 14, 1987, as amended by letter dated
March 15, 1989 (the "Letter") (collectively, the "Employment Agreement") shall
be modified so that the following provisions shall supersede the provisions of
Section 9 of the Original Employment Agreement and Section 2 of the Letter with
respect to your employment during the period ending January 31, 1999 (the
"Period of Employment").
1. Termination Not For Cause or Resignation for Good Reason. (a) 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 product of two times the sum of (A) Executive's base salary ("Base
Salary") at its current annual rate at the time of termination of employment
plus (B) Executive's "Deemed Bonus" (as defined below) for the calendar year in
which the termination of employment occurs;
(ii) an amount equal to Executive's annual bonus (the "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; and
(iii) an amount equal to Executive's Deemed Bonus for the calendar year in
which the termination of employment occurs, multiplied by a fraction, the
numerator of which is the number of days in such calendar year that Executive
was an employee of the Company, and the denominator of which is 365.
In the event of a termination of Executive's employment by the Company
other than for Cause or by the Executive for Good Reason following a Change of
Control, the factor of two in subsection 1 (a) (i) shall be increased to three.
For purposes of subsections 1 (a) (i) and (ii), 2 (a) and 3, the amount of
the Deemed Bonus shall be the highest Bonus paid to Executive for any year he
has been employed by the Company.
(b) In addition to the amount described in subsection 1 (a), Executive
shall be entitled to receive:
(i) until January 31, 1999, 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 January 31, 1999 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 or the Company will provide,
for equivalent coverage; and
(ii) 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.
(c) For purposes of this letter agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties inconsistent with
Executive's positions, duties, responsibilities, titles or office or any
reduction by the Company of his duties or responsibilities or any removal of
Executive from the position of Executive Vice President and General Counsel,
except in connection with the termination of Executive's employment (A) upon the
termination of the Period of Employment on January 31, 1999, (B) for Cause, (C)
as a result of Executive's Permanent Disability (as hereinafter defined) or
death or (D) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, except as
provided herein, 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
letter 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 the Employment Agreement, including this letter agreement,
where such failure shall not have been remedied within 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 of Control or Executive's principal business location is
changed to a location more than 30 miles from Executive's principal business
location (other than a relocation to New York, New York) immediately prior to a
Change of Control; or
(vi) The Company shall cease to keep in effect during and after the Period
of Employment a policy of directors' and officers' liability insurance for
officers and directors of the Company at such reasonable amount of coverage as
is agreed to by Executive and the board of directors of the Company (the
"Board") from time to time and which insurance policy shall be on a claims-made
basis.
(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
Section 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 Section 28OG 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 1, including the payment provided for in this
subsection 1 (c) 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 letter agreement, a "Change of. Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company benefit
plans) becomes the beneficial owner of securities of the Company having at least
25% of the voting power of the Company's then outstanding securities (unless the
event causing the 25% threshold to be crossed is an acquisition of voting common
securities directly from the Company, other than upon the conversion of
convertible debt securities or other securities and/or the exercise of options
or warrants); or
(ii) the shareholders of the Company shall approve any merger or other
business combination of the Company, sale or lease of the Company's assets or
combination of the foregoing transactions (the "Transactions") other than a
Transaction immediately following which the shareholders of the Company and any
trustee or fiduciary of any Company employee benefit plan immediately prior to
the Transaction own at least 65% of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other business combination;
(B) the purchaser or lessee of the Company's assets; or (C) both the surviving
corporation and the purchaser or lessee in the event of any combination of
Transactions; or
(iii) within any 24 month period, the persons who were directors
immediately before the beginning of such period (the "Incumbent Directors")
shall cease (for any reason other than death) to constitute at least a majority
of the Board or the board of directors of a successor to the Company. For this
purpose, any director who was not a director at the beginning of such period
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent Directors (so long
as such director was not nominated by a person who has expressed an intent to
effect a Change of Control or engage in a proxy or other control contest).
(f) All cash payments under this Section 1 shall be made by the Company
within 30 calendar days following the event giving rise to such payments.
2. Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the 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 the Employment Agreement 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 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, plus
Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365;
(b) until January 31, 1999, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the Company's expense,
under Company's medical, dental, hospitalization, group life, short and
long-term disability, accidental death and dismemberment and travel accident
coverage plans 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.
3. Death. In the event of Executive's death while employed under the
Employment Agreement, 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 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, plus
Executive's Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is the number of
days in such calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided under the
employee benefit programs, in accordance with their terms.
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 letter 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. 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 letter agreement which
breach is not cured within 60 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 4 shall be
communicated by a Notice of Termination given within six months after 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 letter 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 that 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
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 second sentence of this Section 4.
5. Separability; Legal Actions; Legal Fees. If any provision of this
Employment Agreement, including this letter 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 claim
shall remain in full force and effect. Any controversy or claim arising out of
or relating to the Employment Agreement, including this letter agreement, or the
breach of the Employment Agreement, including this letter agreement, that cannot
be resolved by Executive and the Company, including any dispute as to
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 the
Employment Agreement, including this letter 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
arbitration(s) award in any court having jurisdiction.
Please sign and return a copy of this letter to confirm your agreement
with the foregoing:
Very truly yours,
EMCOR GROUP, Inc.
By:
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Agreed to:
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Xxxxxxx X. Xxxxxxxx
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* This Cross Reference Sheet is not part of the Indenture.
