EXHIBIT 10.27
XXXXXXX XXXXX RENTAL, L.P.
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT is made as of May 28, 1999, between Xxxxxxx Xxxxx
Rental, L.P., a Pennsylvania limited partnership (the "Company") and Xxxxxx X.
-------
Xxxxxxxxxx, Jr. ("Executive").
---------
The execution and delivery of this Agreement by the Company and
Executive is a condition to the sale by Bain/ACR, L.L.C., a Delaware limited
liability company and the issuance by Xxxxxxx Xxxxx Rental Holdings, L.P., a
Pennsylvania limited partnership ("Holdings") of Common Units of Holdings to
--------
Executive, pursuant to an Executive Unit Purchase Agreement of even date
herewith (the "Executive Purchase Agreement").
----------------------------
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 Executive, and Executive
----------
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 paragraph 4 hereof (the "Employment Period").
-----------------
2. Position and Duties.
-------------------
(a) During the Employment Period, Executive shall render such
administrative, sales, marketing and other executive and managerial services to
the Company and its Subsidiaries as the Board of Managers of ACR Management,
L.L.C., the Company's general partner (the "Board") or its chief executive
-----
officer may from time to time direct.
(b) During the Employment Period, Executive shall report to the
Company's chief operating officer and shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and its Subsidiaries. Executive shall perform his duties and
responsibilities to the Company and its Subsidiaries hereunder to the best of
his abilities in a diligent, trustworthy, businesslike and efficient manner.
(c) For purposes of this Agreement, "Subsidiaries" shall mean any
------------
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company, directly
or through one of more Subsidiaries.
3. Compensation and Benefits.
-------------------------
(a) During the Employment Period, Executive's base salary shall be
$185,000 per annum or such other rate (which shall not be less than $185,000) as
the Board may designate from time to time (the "Base Salary"), which salary
-----------
shall be payable in regular installments in accordance with the Company's
general payroll practices. In addition, during the Employment Period, Executive
shall be entitled to participate in all of the Company's employee benefit
programs for which senior executive employees of the Company and its
Subsidiaries are
1
generally eligible, which shall include but not be limited to the continuation
of the following benefits provided to the Executive by the Company prior to the
date of this Agreement: (i) health insurance, (ii) short-term and long-term
disability coverage, (iii) life insurance of $500,000 death benefit, (iv)
automobile allowance, including fuel, maintenance and insurance, and (v)
expenses incidental to required professional certifications.
(b) During the Employment Period, the Company shall reimburse
Executive for all reasonable expenses incurred by him in the course of
performing his duties and responsibilities 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) In addition to the Base Salary, the Board may, in its sole
discretion, award a bonus to Executive following the end of each fiscal year
during the Employment Period based upon Executive's performance and the
Company's operating results during such year.
(d) All amounts payable to Executive as compensation hereunder shall
be subject to customary withholding by the Company.
4. Term.
----
(a) Unless renewed by the mutual agreement of the Company and
Executive, the Employment Period shall end on August 1, 2001 and shall be
renewed for successive one year periods thereafter unless terminated by either
party by 90 days prior written notice; provided that (i) the Employment Period
-------- ----
shall terminate prior to such date immediately upon Executive's resignation,
death or permanent mental or physical disability or incapacity (as determined by
the Board in its good faith judgment) and (ii) the Employment Period may be
terminated by the Company at any time prior to such date for Cause (as defined
below) or without Cause. Except as otherwise provided herein, any termination
of the Employment Period by the Company shall be effective as specified in a
written notice from the Company to Executive.
(b) If the Employment Period is terminated by the Company without
Cause, Executive shall be entitled to continue to receive his Base Salary
payable in regular installments from the date of termination through the end of
the Noncompete Period (as defined in paragraph 7 hereof) (the "Severance
---------
Period"), so long as Executive has not breached the provisions of paragraphs 5,
------
6 and 7 hereof. The amounts payable pursuant to this paragraph 4(b) shall be
reduced by the amount of any compensation Executive receives with respect to any
other employment during the Severance Period. Upon request from time to time,
Executive shall furnish the Company with a true and complete certificate
specifying any such compensation earned or received by him during the Severance
Period.
(c) If the Employment Period is terminated by the Company for Cause or
is terminated pursuant to clause (a)(i) above or expires and is not renewed
hereunder, Executive shall only be entitled to receive his Base Salary through
the date of termination or expiration.
(d) Except as otherwise expressly provided herein, all of Executive's
rights to salary, bonuses, fringe benefits and other compensation hereunder
which accrue or become payable after the termination or expiration of the
Employment Period shall cease upon such termination or expiration. The Company
may offset any amounts Executive owes it or its Subsidiaries against any amounts
it owes Executive hereunder.
2
(e) For 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, (ii)
conduct tending to bring the Company or any of its Subsidiaries into substantial
public disgrace or disrepute, (iii) failure to perform duties as reasonably
directed by the Board, which failure continues to exist for one month after
notice of such failure to the Executive by the Company, (iv) gross negligence or
willful misconduct (including, but not limited to, failing to follow guidelines
as clearly outlined by the Board) with respect to the Company or any of its
Subsidiaries or (v) any breach of this Agreement.
5. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Subsidiaries concerning the business or
affairs of the Company, or any other Subsidiary ("Confidential Information") are
------------------------
the property of the Company or such Subsidiary. Therefore, Executive 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
Board, unless and to the extent that the Confidential Information becomes
generally known to and available for use by the public other than as a result of
Executive's acts or omissions. Executive shall deliver to the Company at the
termination or expiration of the Employment Period, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
embodying or relating to the Confidential Information, Work Product (as defined
below) or the business of the Company, or any other Subsidiaries which he may
then possess or have under his control.
6. Inventions and Patents. Executive 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 Executive while employed
by the Company and its Subsidiaries ("Work Product") belong to the Company or
------------
such Subsidiary. Executive shall promptly disclose such Work Product to the
Board and, at the Company's expense, 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-Compete, Non-Solicitation
-----------------------------
(a) In further consideration of the sale of Executive Units to
Executive pursuant to the Executive Purchase Agreement, and in connection with
the Employment Agreement, Executive acknowledges that in the course of his
employment with the Company and its Subsidiaries he has and shall become
familiar with the Company's trade secrets and with other Confidential
Information concerning the Company and its Subsidiaries and that his services
have been and shall be of special, unique and extraordinary value to the Company
and its Subsidiaries. Therefore, Executive agrees that, during the Employment
Period and for one year thereafter (the "Noncompete Period"), he shall not
-----------------
directly or indirectly own any interest in, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
involved in the business of crane and other lifting equipment sales or rentals
or competing with the businesses of the Company or its Subsidiaries, as such
businesses exist or are in process on the date of the termination or expiration
of the Employment Period, within any geographical area in which the Company or
its Subsidiaries engage or plan to engage in such businesses. Nothing herein
shall prohibit Executive from being a passive owner of not more than 2% of the
3
outstanding stock of any class of a corporation which is publicly traded, so
long as Executive has no active participation in the business of such
corporation. At the Company's option, upon written notice to the Executive, the
Noncompete Period may be changed to during the Employment Period and for not
less than six months nor more than one year after the Employment Period.
(b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce any employee of the Company or any
Subsidiary to leave the employ of the Company or such Subsidiary, or in any way
interfere with the relationship between the Company or any Subsidiary and any
employee thereof, (ii) hire any person who was an employee of the Company or any
Subsidiary at any time during the Employment Period or (iii) induce or attempt
to induce any customer, supplier, licensee, licensor, franchisee or other
business relation of the Company or any Subsidiary to cease doing business with
the Company or such Subsidiary, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation with the
Company or any Subsidiary (including, without limitation, making any negative or
disparaging statements or communications regarding the Company or its
Subsidiaries).
(c) If, at the time of enforcement of this paragraph 7, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law. Executive acknowledges that the restrictions
contained in this paragraph 7 are reasonable and that he has reviewed the
provisions of this Agreement with his legal counsel.
(d) In the event of the breach or a threatened breach by Executive of
any of the provisions of this paragraph 7, the Company, in addition and
supplementary to other rights and remedies existing in its favor, shall be
entitled to specific performance and/or injunctive or other equitable relief
from a court of competent jurisdiction in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
In addition, in the event of an alleged breach or violation by Executive of this
paragraph 7, the Noncompete Period shall be tolled until such breach or
violation has been duly cured.
8. Executive's Representations. Executive hereby represents and
---------------------------
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity that would adversely
affect his ability to perform his duties on behalf of the Company and (iii) upon
the execution and delivery of this Agreement by the Company, this Agreement
shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms. Executive hereby acknowledges and represents that he
has an 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.
9. Survival. Paragraphs 5 through 17 shall survive and continue in
--------
full force in accordance with their terms, notwithstanding the expiration or
termination of the Employment Period.
4
10. Notices. Any notice provided for in this Agreement shall be in
-------
writing and shall be either personally delivered, sent by reputable overnight
courier service or mailed by first class mail, return receipt requested, to the
recipient at the address below indicated:
Notices to Executive:
--------------------
Xxxxxx X. Xxxxxxxxxx, Xx.
Xxxxxxx Xxxxx Rental, L.P.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Notices to the Company:
----------------------
Xxxxxxx Xxxxx Rental, L.P.
0000 Xxxx Xxxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxxxxx, Xx.
With a copy to:
--------------
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Learner
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 shall be deemed to have been given when so
delivered, sent or mailed.
11. Severability. Whenever possible, each provision of this
------------
Agreement shall be interpreted in such 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 action in 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.
12. Complete Agreement. This Agreement, those documents expressly
------------------
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
13. 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.
14. 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.
5
15. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his duties or obligations hereunder without the prior
written consent of the Company.
16. Choice of Law. All issues and questions concerning the
-------------
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law rules or provisions (whether of the
Commonwealth of Pennsylvania or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the Commonwealth of
Pennsylvania.
17. Amendment and Waiver. The provisions of this Agreement may be
--------------------
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
* * * *
[The remainder of the Page left blank intentionally.]
6
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
XXXXXXX XXXXX RENTAL, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By:
--------------------------------------
Its:
-------------------------------------
------------------------------------------
Xxxxxx X. Xxxxxxxxxx, Xx.
