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EXHIBIT 10.50
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is executed this 1st day of March, 2001 but
effective as of the 1st day of October 2000, by and between Xxxxxxx X. Xxxxxxx,
an individual resident of the State of Maryland ("Employee"), and RailWorks
Corporation, a Delaware corporation ("Employer").
WITNESSETH
WHEREAS, the Employee has been employed by Employer pursuant to an Amended and
Restated Employment Agreement dated as of January 1, 2000 ("Prior Agreement");
WHEREAS, Employer and Employee desire to amend the Prior Agreement and restate
it as so amended; and
WHEREAS, the Employee desires to be so employed by the Employer, on the terms
and conditions as contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the parties hereto,
the parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. EMPLOYMENT.
Subject to the terms hereof, Employer will employ Employee and Employee hereby
accepts such employment. The Employee shall serve as the President and Chief
Operating Officer of Employer and shall be a director of Employer.
Subject to the terms and conditions of this Agreement, from the date hereof,
Employee agrees to devote substantially all of his business time and best
efforts to the performance of his job as President and Chief Operating Officer
of Employer (or such other senior executive position as to which Employee may be
appointed by the Board of Directors with Employee's consent), subject to
direction by the Board of Directors of the Employer (the "Board of Directors"),
as long as such directions are consistent with the duties, responsibilities and
authority customarily given or required of persons holding such office
generally, with the Employee to report his activities regularly to the Board of
Directors.
SECTION 2. TERM OF EMPLOYMENT.
The term of the Employee's employment hereunder (the "Term") shall be from May
21, 1998, the effective date of the commencement of Employee's employment by
Employer, until the occurrence of any of the following events:
(i) The death or total disability of Employee (total disability
meaning the failure to fully perform his normal required
services hereunder for a period of six (6)
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consecutive months during any consecutive twelve (12) month
period during the term hereof, as determined by an independent
medical doctor jointly chosen by the Employee and the
Employer) by reason of mental or physical disability;
(ii) The termination by Employer of Employee's employment
hereunder, upon thirty (30) days prior written notice to
Employee, for "good cause", as reasonably determined by the
Board of Directors. For purposes of this Agreement, "good
cause" for termination of Employee's employment shall exist
(A) if Employee is convicted of, pleads guilty to or confesses
to any felony or any act of fraud, misappropriation or
embezzlement, (B) if Employee has engaged in a dishonest act
to the material damage or prejudice of Employer or an
affiliate of Employer, or in conduct or activities materially
damaging to the property, business, or reputation of Employer
or an affiliate of Employer, or (C) if Employee violates any
of the provisions contained in Section 5 of this Agreement,
after receiving written notice from the Employer specifically
outlining the alleged violations by the Employee of Section 5
hereof and either (1) the Employee fails to stop the alleged
behavior which is claimed to be such a breach within thirty
(30) days of receipt by the Employee of such written notice or
(2) the Employer prevails in mediation or binding arbitration
pursuant to the commercial arbitration rules of the American
Arbitration Association which arbitration is commenced by the
Employee within thirty (30) days of receipt by the Employer of
such notice in accordance with the provisions of Section 5.6
hereof;
(iii) The termination by either the Employee or the Employer, upon
thirty (30) days written notice to the other party, in the
event of a Change of Control of the Employer (as defined
hereinbelow).
For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred if (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), other than a
trustee or other fiduciary holding securities under an
employee benefit plan of Employer, a corporation owned
directly or indirectly by the stockholders of Employer
(immediately after the IPO) or any of their respective
affiliates, becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of Employer representing 50% or more of the total
voting power represented by Employer's then outstanding
securities that vote generally in the election of directors
(referred to herein as "Voting Securities"), including,
without limitation, by reason of the agreement of a third
party (including Employee) to vote the Voting Securities owned
by such third party in the same manner as such person votes
the Voting Securities owned by such person; (B) during any
period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors and
any new directors whose election by the Board of Directors or
nomination for election by Employer's stockholders was
approved by a vote or a majority 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 of the Board of Directors; (C) the stockholders of
Employer approve a merger or consolidation of Employer with
any other corporation, other than a merger or consolidation
(i) which would result in the
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Voting Securities of Employer outstanding immediately prior
thereto continuing to represent (either by remaining
outstanding or by being converted into Voting Securities of
the surviving entity) at least 50% of the total voting power
represented by the Voting Securities of Employer or such
surviving entity outstanding immediately after such merger or
consolidation or (ii) in which 50% or more of the board of
directors of the surviving entity is composed of members from
the Board of Directors of Employer; (D) the stockholders of
Employer approve a plan of complete liquidation of Employer or
an agreement for the sale or disposition by the Employer of
(in one transaction or a series of transactions) all or
substantially all of the Employer's assets; (E) the executive
offices of Employer are relocated from the Greater Baltimore
Metropolitan Area or (F) the Employee is not a member of the
Board of Directors or is not on any Executive Committee or
similar committee of the Board of Directors; or
(iv) After December 31, 2001, this Agreement shall continue upon a
year-to-year basis unless terminated by either the Employer or
the Employee upon ninety days (90) written notice to the other
before January 1 of the next year.
SECTION 3. COMPENSATION.
3.1 Term of Employment. Employer will provide Employee with the following
salary, expense reimbursement and additional employee benefits during the term
of employment hereunder.
(a) Salary. Effective as of October 1, 2000, Employee will be paid
a salary of no less than Three Hundred Thousand Dollars
($300,000) per annum, and subject to increase as hereinafter
provided (the salary then in effect is referred to as the
"Base Salary"), less deductions and withholdings required by
applicable law. The Base Salary shall be paid to Employee in
equal monthly installments (or on such more frequent basis as
other executives of Employer are compensated). The Base Salary
shall be reviewed by the Board of Directors of Employer on at
least an annual basis thereafter and may be increased but not
decreased below the then Base Salary as a result of any such
review.
(b) Performance Bonuses. In addition to the Base Salary, the
Employee shall have the right to receive from the Employer,
and the Employer shall be obligated to pay to the Employee, a
performance bonus (the "Performance Bonus") for each fiscal
year during the term of this Agreement, the amount of which
(if any) will be determined in accordance with the terms of
Employer's Annual Incentive Plan, as adopted from time to time
by the Compensation Committee of the Board of Directors.
(c) Discretionary Bonus. The Board of Directors may, from time to
time, award the Employee an additional discretionary bonus
based upon such factors as the Board of Directors deems
appropriate. The Employer shall have no entitlement to such a
discretionary bonus until and unless so awarded by the Board
of Directors.
(d) Vacation. Employee shall receive four (4) weeks vacation time
per calendar year during the term of this Agreement in
addition to customary holidays afforded
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other employees of Employer. Any unused vacation days in any
calendar year may not be carried over to subsequent years. The
Employer recognizes the benefit to it of the Employee
attending and participating in trade seminars, conventions,
and similar gatherings and educational seminars and encourages
the Employee to attend such seminars and conventions.
Accordingly, any reasonable cost and expenses thereof will be
paid for by the Employer and any time spent by the Employee at
such seminars and conventions shall not constitute vacation
time but shall constitute part of the Employee's duties under
this Agreement.
(e) Expenses. Employer shall reimburse Employee, within thirty
(30) days of its receipt of a reimbursement report from the
Employee, for all reasonable and necessary expenses incurred
by Employee on behalf of Employer.
(f) Benefit Plans. Employee shall have the option of participating
in such medical, dental, disability, hospitalization, life
insurance, stock option and other benefit plans (such as
pension and profit sharing plans) as Employer maintains from
time to time for the benefit of other senior executives of
Employer, on the terms and subject to the conditions set forth
in such plans. Employee is a participant in, and unless
otherwise mutually agreed by the parties, during the Term,
shall be entitled to the benefits of, Employer's Long-Term
Incentive Plan adopted by the Compensation Committee of
Employer and ratified by the Board of Directors of Employer at
a meeting of each held on April 18, 2000, pursuant to which
the "Loan," as hereinafter defined, may be forgiven in whole
or in part.
3.2 Effect of Termination or Change in Control. Except as hereinafter
provided, upon the termination of the employment of Employee hereunder for any
reason, Employee shall be entitled to all compensation and benefits earned or
accrued under Section 3.1 as of the effective date of termination (the
"Termination Date"), but from and after the Termination Date no additional
compensation or benefits shall be earned by Employee hereunder. Except upon
termination by the Employer of the employment of the Employee pursuant to the
provisions of Section 2(ii) hereof, Employee shall be deemed to have earned any
Performance Bonus payable with respect to the fiscal year in which the
Termination Date occurs on a prorated basis (based on the number of days in such
calendar year through and including the Termination Date divided by 365). Any
such Performance Bonus shall be payable on the date on which the Performance
Bonus would have been paid had Employee continued his employment hereunder. In
addition, the Employee and his eligible dependents shall be entitled to receive
at the sole cost of the Employer (A) the health insurance benefits specified
hereunder for a period of twelve (12) months following the Termination Date (the
"Continuation Period") and following such time period, the Employee shall be
entitled to all rights afforded to him under the Federal Omnibus Reconciliation
Act ("COBRA") to Purchase continuation coverage of such health insurance
benefits for himself and his dependents for the maximum period permitted by law,
and the Employee shall be deemed to have elected to exercise his rights under
Cobra as of the first day of the Continuation Period, and (B) the life insurance
benefits specified hereinabove for the period of the Continuation Period.
(i) Immediately upon a Change in Control or upon termination of
this Agreement, pursuant to the provisions of Sections 2 (i)
or (iii) hereof, any stock grants or options previously
awarded to the Employee, either by this Agreement or
otherwise, shall fully and completely vest and the Employee
shall be able to retain
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or obtain as the case may be, such stock, as though there was
no vesting period or criteria of any kind or nature, with
respect to such stock. If stock options have previously been
awarded to the Employee, notwithstanding any terms and
conditions of such award or any plan pursuant to which such
stock options were awarded, the Employee or his authorized
representative shall have a period of three (3) months from
the Termination Date to exercise any or all of such stock
options and acquire for his own benefit the shares of stock
covered by such stock options.
(ii) Upon termination of the Agreement pursuant to the terms of
Section 2(ii) or (iv) hereof, all granted but unvested, at the
Termination Date, stock grants or options shall be forfeited
upon such termination; provided that the Employee shall be
able to retain or exercise any rights for a period of one (1)
month after the Termination Date, notwithstanding the terms
and provisions of such stock options awarded or the plan under
which they were awarded, with respect to any shares of stock
granted or shares of stock covered by stock options that have
fully vested as of the Termination Date.
3.3 Loan Forgiveness on Change in Control. Immediately upon a Change of
Control, any balance of the Loan, together with any accrued but unpaid interest
thereon to the date of forgiveness, shall be forgiven automatically without
further action by the Employer or the Employee, and in addition, Employer shall
pay to Employee an amount equal to the difference between (i) the actual
federal, state and local income taxes payable by Employee for the year in which
the Loan is forgiven, including for the purpose of such calculation the taxes
resulting from the inclusion in Employee's income of the gross up payments under
this Section and (ii) the amount of such taxes which would have been paid by
Employee had the Loan not been forgiven. In the event it is determined that any
payment hereunder is an "excess parachute payment" as defined in Section 280G of
the Internal Revenue Code of 1986, as amended, the Employer shall reimburse
Employee for the excise tax imposed under such section and in addition shall pay
Employee an amount equal to the additional federal, state and local income taxes
payable or paid by Employee for the year in which such payment is made to
Employee, including for the purpose of such calculation, the taxes resulting
from the inclusion in Employee's income of the gross up payments made under this
Section. The amounts payable to Employee hereunder shall be paid by Employer
within five business days after Employee submits a calculation of the amount due
to him under this Section, which statement may be an estimated statement based
upon the information available to Employee at the time the statement is
submitted. If payment is made by Employer based on such estimated payment,
Employee shall submit to Employer a final statement based upon the Employee's
tax return as filed for the year in question, which final statement shall be
submitted not later than 30 days after the date on which Employee files his
federal income tax return for such year. Such final statement shall contain a
reconciliation of to the estimated statement and payment of the amounts due to
or from Employee shall be paid within 3 days after the final statement has been
submitted.
SECTION 4. COMMON STOCK.
4.1 Terms of Employment. So that Employee can share in the increase in
value of the business of Employer over time, Employee will be granted common
stock of Employer as follows:
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(i) Stock Grant. Under the prior agreements, and upon the
consummation of the public offering of Employer's common stock
("IPO"), Employee has been granted that number of shares of
all classes of stock of Employer equal to one percent (1.0%)
of the number of shares of all classes of stock of Employer
outstanding immediately upon consummation of the IPO. Such
shares so granted fully and completely vested on the date of
issuance.
(ii) Stock Splits and Recapitalization. The number of shares of
common stock granted hereby shall be automatically adjusted to
reflect any change in the capitalization of Employer,
including, but not limited to, such changes as stock
dividends, stock splits or recapitalizations. If any
adjustment under this Section would create the right of
Employee to acquire a fractional share of stock, such
fractional share shall be disregarded and the number of shares
of common stock subject to the grant shall be the next higher
number of whole shares of common stock, rounding all fractions
upward.
4.1 Stock Loan.
(i) In order to help the Employee pay any required income taxes
with respect to the stock granted to the Employee pursuant to
the provisions of Section 4.1 hereof, Employer has provided to
the Employee a loan (the "Loan"). The Loan provides for
payment of interest only until June 30, 2005, requires yearly
payments of simple interest at the same interest rate as
Employer incurs to borrow funds from its institutional
lenders, is collateralized only by the stock granted and the
Employee otherwise is not personally obligated to repay the
Loan; provided that upon the termination of this Agreement
pursuant to the provisions of Section 2(i) or (ii), the Loan
shall be fully paid off within three (3) months of the
Termination Date; upon the termination of this Agreement
pursuant to Section (iv), hereof, the Loan shall be fully paid
off within one (1) year after the Termination Date and upon a
Change of Control, the Loan shall be forgiven as hereinabove
provided.
(ii) To the extent that the Employee has not repaid the entire
principal balance of the Loan plus any accrued interest
thereon before June 30, 2005, the Employee agrees to sell, as
promptly as practicable, a sufficient number of shares of
Common Stock to enable the Employee to repay the then
remaining outstanding balance (unpaid principal balance and
unpaid accrued interest from time to time, the ("Unpaid
Balance of the Loan")) of the Loan after any taxes have been
provided for (the "Required Number of Shares"), subject to the
following conditions and requirements:
(A) Such sales shall be made in a manner which shall
reasonably not disrupt the orderly trading of Common
Stock, either through open market or privately
negotiated transactions as long as no sales shall be
made at a price lower that 1/16 below the last sales
price of Common Stock publicly traded immediately
prior to such sale even if such prohibition shall
cause a delay in Employee's compliance with his
obligation to sell Common Stock as provided
hereinabove;
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(B) If after June 30, 2005 the Employer proposes to
register any of its securities under the Securities
Act for sale to the public for its own account or for
the account of other security holders or both,
Employer may, upon 30 days prior written notice to
the Employee, require the Employee to include the
Required Number of Shares in such offering and to
sell such shares as part of such offering. In such
event, all of the costs of registering the Required
Number of Shares, including but not limited to, all
registration and filing fees, printing expenses, fees
and disbursements of counsel and independent public
accountants for Employer; fees of the National
Association of Securities Dealers, Inc., state Blue
Sky fees and expenses, transfer taxes, fees of
transfer agents and registrars and costs of
insurance; and all underwriting discounts and selling
commissions applicable to the sale of shares other
than the Required Number of Shares, shall be paid by
Employer. Notwithstanding the above, the Employee
shall pay all underwriting discounts and selling
commissions directly payable with respect to the
registration of the Required Number of Shares; or
(C) If, as of December 31, 2005, Employee has not yet
disposed of the Required Number of Shares, Employer
will repurchase from the Employee the Required Number
of Shares at a per share price equal to 1/16 lower
than the average of the closing sales price for the
Common Stock as reported on the national stock
exchange on which Employer's stock trades for a ten
(10) day period prior to the date of such sale to
Employer, provided, however, that such repurchase
shall only be required if it can be effected in a
manner that complies with all applicable securities
laws.
Notwithstanding anything contained herein to the contrary, the Employee
shall not be required to sell any of the Required Number of Shares unless the
net proceeds paid to the Employee as a result of such shares equals or exceeds
150% of the IPO Price per share.
Nothing in this Section 4.2(ii) shall be construed to require the
Employee to sell common stock except in compliance with all applicable
securities laws. Any delay imposed due to compliance with requirements of
applicable securities laws shall suspend the Employee's obligation to sell
Common Stock as otherwise provided hereinabove.
Lastly, notwithstanding anything to the contrary contained in this
Section 4.2(ii), the Employee shall have the right but not the obligation, at
any time and from time to time, to repay the Unpaid Balance of the Loan from his
personal resources.
4.3 Securities Act. THE SHARES OF COMMON STOCK (THE "SHARES") GRANTED
PURSUANT TO THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAWS, THE
SHARES ARE OFFERED PURSUANT TO EXEMPTIONS PROVIDED BY SECTION 4(2) OF THE ACT
AND CERTAIN RULES AND REGULATIONS PROMULGATED PURSUANT THERETO. THE SHARES MAY
NOT BE TRANSFERRED BY THE EMPLOYEE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION
OF COUNSEL ACCEPTABLE TO EMPLOYER
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AND ITS COUNSEL, WHICH ACCEPTANCE SHALL NOT BE UNREASONABLY WITHHELD, THAT SUCH
REGISTRATION IS NOT REQUIRED.
At such time as counsel for the Employee, which is acceptable to
Employer, which acceptance shall not be unreasonably withheld, opines that the
aforementioned stock restriction and legend can be removed from the certificates
representing stock granted pursuant to Section 4.1 (i) hereof in accordance with
applicable securities law, Employer agrees to delete any such legend from the
certificates representing such shares that have been so granted.
SECTION 5. PARTIAL RESTRAINT ON COMPETITION.
5.1 Definitions. For the purposes of this Section 5, the following
definitions shall apply.
(a) "Company Activities" means the business of construction and
maintenance of railway beds and tracks; construction and
maintenance of elevated rail systems and structures;
construction and maintenance of railway switching and
signaling equipment, distributorships and supply in the field
of rail and railway construction materials; distributorships
and supply in the field of electromechanical controls for use
in the railroad industry, namely, railway switching equipment
and railway signaling equipment; and design for others in the
field of railroad industry, namely, engineering design of rail
and railway related structures and equipment or any other
business of the Employer and its consolidated (for financial
accounting purposes) subsidiaries (the "Consolidated Group")
which said entities are engaged in on the Termination Date as
long as such business generated gross sales of at least 10% or
more of the total gross sales of the Consolidated Group for
the most recent fiscal year of the Employer before or on the
Termination Date.
(b) "Competitor" means any business, individual, partnership,
joint venture, association, firm, corporation or other entity,
other than the Employer or its affiliates or subsidiaries,
engaged, wholly or partly, in Company Activities.
(c) "Competitive Position" means (i) having any financial interest
in a Competitor, including but not limited to, the direct or
indirect ownership or control of all or any portion of a
Competitor, or acting as a partner, officer, director,
principal, agent or trustee of any Competitor or (ii) engaging
in any employment or independent contractor arrangement,
business or other activity with any Competitor whereby
Employee will serve such Competitor in any senior managerial
capacity.
(d) "Confidential Information" means any confidential, proprietary
business information or data belonging to or pertaining to
Employer that does not constitute a "Trade Secret" (as
hereinafter defined) and that is not generally known by or
available through legal means to the public, including, but
not limited to, information regarding Employer's customers or
actively sought prospective customers, acquisition targets,
suppliers, manufacturers and distributors gained by Employee
as a result of his employment with Employer. Information shall
be excluded from this definition if (i) it, at the time of
disclosure, is generally known to the trade or public, (ii) it
becomes at a later date
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generally known to the trade or public through no fault of the
Employee, (iii) it is known or possessed by the Employee prior
to the effectiveness of this Agreement, (iv) it is disclosed
to the Employee in good faith by a third party who has a right
to such information, (v) it is disclosed in compliance with a
subpoena or court order or (vi) it is possessed by the
recipient of the information prior to receipt of same from the
Employee.
(e) "Customer" means actual customers or actively sought
prospective customers of Employer during the Term.
(f) "Noncompete Period" or "Nonsolicitation Period" means the
period beginning the date hereof and ending on the first
anniversary of the termination of Employee's employment with
Employer; provided that such Noncompete Period or
Nonsolicitation Period shall end on the Termination Date in
the event this Agreement is terminated pursuant to the
provisions of Section 2(iii), hereof and, provided further,
that the Noncompete Period or Nonsolicitation Period may be
shortened at the discretion of the Board of Directors of
Employer.
(g) "Territory" means the area within a one hundred (100) mile
radius of any corporate office or job site of Employer or any
of its subsidiaries, affiliates or divisions.
(h) "Trade Secrets" means information or data of or about
Employer, including but not limited to technical or
non-technical data, formulas, patterns, compilations,
programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, products plans, or lists of
actual or potential customers, clients, distributees or
licensees, information concerning Employer's finances,
services, staff, contemplated acquisitions, marketing
investigations and surveys, that are not generally known to,
and/or are not readily ascertainable by legal means by, other
persons. Information and/or data shall be excluded from this
definition if (i) it, at the time of disclosure, is generally
known to the trade or public or (ii) it becomes at a later
date generally known to the trade or public through no fault
of the Employee.
(i) "Work Product" means any and all work product property, data
documentation or information of any kind prepared, conceived,
discovered, developed or created by Employee for Employer or
its affiliates, or any of Employer's or its affiliates'
clients or customers for utilization in Company Activities,
not generally known by and/or not readily ascertainable by
proper means by other persons who can obtain economic value
from their disclosure or use.
5.2 Trade Name and Confidential Information.
(a) Employee hereby agrees that with regard to each item
constituting all or any portion of the Trade Secrets and
Confidential Information, at all times during the Term and all
times during which such item continues to constitute a Trade
Secret or Confidential Information, respectively:
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(b) Employee shall not, directly or by assisting others own,
manage, operate, join, control or participate in the
ownership, management, operation or control of, or be
connected in any manner with, any business conducted under any
corporate or trade name of Employer or name confusingly
similar thereto, without the prior written consent of
Employer;
(c) Employee shall hold in confidence all Trade Secrets and all
Confidential Information and will not, either directly or
indirectly, use, sell, lend, lease, distribute, license, give,
transfer, assign, show, disclose, disseminate, reproduce,
copy, appropriate or otherwise communicate any Trade Secrets
or Confidential Information, without the prior written consent
of Employer; and
(d) Employee shall immediately notify Employer of any unauthorized
disclosure or use of any Trade Secrets or Confidential
Information of which Employee becomes aware. Employee shall
assist Employer, to the extent necessary, in the procurement
or any protection of Employer's rights to or in any of the
Trade Secrets or Confidential Information.
(e) Upon the request of Employer and, in any event, upon the
termination of Employee's employment with Employer, Employee
shall deliver to Employer all memoranda, notes, records,
manuals and other documents, including all copies of such
materials and all documentation prepared or produced in
connection therewith, pertaining to the performance of
Employee's services hereunder or Employer's business or
containing Trade Secrets or Confidential Information, whether
made or complied by Employee or furnished to Employee from
another source by virtue of Employee's employment with
Employer.
(f) To the greatest extent possible, all Work Product shall be
deemed to be "work made for hire" (as defined in the Copyright
Act, 17 U.S.C.A. ss.101 et seq., as amended) and owned
exclusively by Employer. Employee hereby unconditionally and
irrevocably transfers and assigns to Employer all rights,
title and interest Employee may have in or to any and all Work
Product, including, without limitation, all patents,
copyrights, trademarks, service marks and other intellectual
property rights. Employee agrees to execute and deliver to
Employer any transfers, assignments, documents or other
instruments which Employer may deem necessary or appropriate
to vest complete title and ownership of any and all such Work
Product, and all rights therein, exclusively in Employer.
5.2 Noncompetition.
(a) The parties hereto acknowledge that Employee is conducting
Company Activities throughout the Territory. Employee
acknowledges that to protect adequately the interest of
Employer in the business of Employer it is essential that any
noncompete covenant with respect thereto cover all Company
Activities and the entire Territory.
(b) Employee hereby agrees that, during the Term and the
Noncompete Period, Employee will not, in the Territory, either
directly or indirectly, alone or in conjunction with any other
party, accept, enter into or take any action in conjunction
with or in furtherance of a Competitive Position with
Employer.
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Employee shall notify Employer promptly in writing if Employee
receives an offer of a Competitive Position during the
Noncompete Term, and such notice shall describe all material
terms of such offer.
Nothing contained in this Section 5 shall prohibit Employee from acquiring not
more than five percent (5%) of any Competitor, or from acquiring any percentage
of any company which is non-competitive with Employer, whose common stock is
publicly traded on a national securities exchange or in the over-the-counter
market.
5.4 Nonsolicitation During Employment Term. Employee hereby agrees that
Employee will not, during the Term, either directly or indirectly, alone or in
conjunction with any other party:
(a) solicit, divert or appropriate or attempt to solicit, divert
or appropriate, any Customer for the purpose of providing the
Customer with services or products competitive with those
offered by Employer during the Term, or
(b) solicit or attempt to solicit any officer, director, employee,
consultant, contractor, agent, lessor, lessee, licensor,
licensee, supplier or any shareholder of any of the Founding
Companies or other personnel of Employer or any of its
affiliates or subsidiaries to terminate, alter or lessen that
party's affiliation with Employer or such affiliate or
subsidiary or to violate the terms of any agreement or
understanding between such employee, consultant, contractor or
other person and Employer.
5.5 Nonsolicitation During Nonsolicitation Period. Employee hereby agrees
that Employee will not, during the Nonsolicitation Period, either directly or
indirectly, alone or in conjunction with any other party:
(a) solicit, divert or appropriate or attempt to solicit, divert
or appropriate, any Customer for the purpose of providing the
Customer with services or products that qualify as Company
Activities during the Term; provided, however, that the
covenant in this clause shall limit Employee's conduct only
with respect to those Customers with whom Employee had
substantial contact (through direct or supervisory interaction
with the Customer or the Customer's account) during a period
of time up to but no greater than two (2) years prior to the
last day of the Term; or
(b) solicit or attempt to solicit any officer, director, employee,
consultant, contractor, agent, lessor, lessee, licensor,
licensee, supplier or any shareholder of any of the Founding
Companies or other personnel of Employer or any of its
affiliates or subsidiaries residing at the time of the
solicitation in the Territory to terminate, alter or lessen
that party's affiliation with Employer or such affiliate or
subsidiary or to violate the terms of any agreement or
understanding between such employee, consultant, contractor or
other person and Employer. For purposes of this clause (b),
employees, consultants, contractors, or other personnel are
those with knowledge of or access to Trade Secrets and
Confidential Information of the Employer.
5.6 Binding Arbitration. The parties shall refer any dispute as to whether or
not the Employee has violated the provisions of this Section 5 to a mediator
and, in the event that
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mediation is unsuccessful, such dispute shall be resolved by binding arbitration
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitrator shall be selected by the mediator. The cost of the
mediator and, if necessary, the arbitrator and all other costs of the mediation
and, if necessary, the arbitration shall be split equally between the Employee
and the Employer, except for attorneys fees which shall be paid by the party
employing such attorney.
SECTION 6. MISCELLANEOUS.
6.1 Severability. The covenants in this Agreement shall be construed as
covenants independent of one another and as obligations distinct from any other
contract between Employee and Employer.
6.2 Survival of Obligations. The covenants in Section 5 of this Agreement
shall survive termination of Employee's employment, except in the case of
termination of this Agreement pursuant to the provisions of Section 2(iii)
hereof, in which case they shall terminate also and have no further force or
legal effect as of the Termination Date.
6.3 Notices. Any notice or other document to be given hereunder by any
party hereto to any other party hereto shall be in writing and delivered in
person or by courier, by telecopy transmission or sent by any express mail
service, postage or fees prepaid at the following addresses:
Employer:
RailWorks Corporation
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: RailWorks Chief Executive Officer
Telecopy No.: (000) 000-0000
Employee:
Xx. Xxxxxxx X. Xxxxxxx
00000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.
6.4 Binding Effect. This Agreement ensures to the benefit of, and is
binding upon, Employer and their respective successors and assigns, and
Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.
6.5 Entire Agreement. This Agreement is intended by the parties hereto to
be the final expression of their agreement with respect to the subject matter
hereof and is the complete and exclusive statement of the terms thereof,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement supersedes and terminates all prior employment
and compensation agreements, arrangements and understandings between or among
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Employer and Employee including, without limitation, the Prior Agreement. This
Agreement may be modified only by a written instrument signed by all of the
parties hereto.
6.6 Governing Law. This Agreement shall be deemed to be made in, and in all
respects shall be interpreted, construed, and governed by and in accordance
with, the laws of the State of Maryland. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court of other governmental or judicial authority or by any board of arbitrators
by reasons of such party or its counsel having or being deemed to have
structured or drafted such provision.
6.7 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
6.8 Specific Performance. Each party hereby agrees that any remedy at law
for any breach of provisions contained in this Agreement shall be inadequate and
that the other parties hereto shall be entitled to specific performance and any
other appropriate injunctive relief in addition to any other remedy such party
might have under this Agreement or at law or in equity.
6.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
6.10 Other Employment Agreements. Without the prior written consent of
Employee, no person that is subsequently hired by RailWorks in a position
comparable to the position held by Employee shall be offered an employment
agreement that contain benefits that are more favorable to such person than the
terms contained herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
RAILWORKS CORPORATION
By:
---------------------------------------
Xxxx X. Xxxxxx
Chief Executive Officer
EMPLOYEE
By:
---------------------------------------
Xxxxxxx X. Xxxxxxx
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