EXHIBIT 10.61
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of this 1st
day of January, 2000, by and between Xxxx Xxxxxxx, an individual resident of the
State of Pennsylvania ("Employee"), and RailWorks Corporation, a Delaware
corporation (the "Employer").
WITNESSETH
WHEREAS, Employee has been employed by Employer pursuant to an Amended
and Restated Employment Agreement dated as of August 4,1998 ("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 Vice President
and Chief Operating Officer of the Employer.
Subject to the terms and conditions of this Agreement, Employee agrees
to devote substantially all of his business time and best efforts to the
performance of his job as Vice President and Chief Operating Officer of the
Employer, 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 chief
operating officers 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 commencement date of the Prior Agreement, 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)
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 the Employer, a
corporation owned directly or indirectly by the stockholders of the
Employer (immediately after the IP0) 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 the
Employer representing 50% or more of the total voting power represented
by the 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 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 the
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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 or
as previously so approved, cease for any reason to constitute a
majority of the Board of Directors; (C) the stockholders of the
Employer approve a merger or consolidation of the Employer with any
other corporation, other than a merger or consolidation (i) which would
result in the Voting Securities of the 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 the 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 the Employer; (D) the
stockholders of the Employer approve a plan of complete liquidation of
the 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; 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 wall provide Employee with the
following salary, expense reimbursement and additional employee benefits during
the term of employment hereunder,
(a) Salary. From the date of this Agreement, Employee will be paid
a salary (the "Base Salary") of no less than One Hundred
Thousand Dollars ($100,000) 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, equal to the aggregate
amount determined by the bonus formulas delineated herein
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below. Any amount of a Performance Bonus required to be paid
to the Employee for a fiscal year during the. term of this
Agreement shall be paid by the Employer in the first pay
period of the Employer immediately following the finalization
of the accounting audit for financial accounting purposes of
the Employer for the preceding fiscal year but in all events
by March 31 of the year immediately following the end of the
fiscal year for which such Performance Hones is attributable.
The formulas to determine a Performance Bonus for any fiscal
year during the term of this Agreement shall be as follows:
(i) For each fiscal year of the Employer, 15% of the
pre-tax net income, before any performance or other
periodic bonuses for any of the employees of the
Employer and any of its consolidated subsidiaries, of
the Employer on a consolidated basis for financial
accounting basis based upon applying generally
accepted accounting principles and generally accepted
auditing standards on a consistent basis. This bonus
shall be calculated by the independent certified
public accountant regularly employed by the Employer
(the "CPA") applying such generally accepted
accounting principles and generally accepted auditing
standards on a consistent basis.
Plus
(ii) For each fiscal year of the Employer, one point five
percent (1.5%) of the excess of (a) the consolidated
after lax net income of the Employer and its
consolidated subsidiaries for a fiscal year, computed
by the CPA applying generally accepted accounting
principles and generally accepted auditing standards
on a consistent basis over (b) the Wall Street
Estimate (as hereinafter defined) for such fiscal
year. For purposes of this subsection (ii)(b), Wall
Street Estimate ,for a fiscal year shall mean the
simple arithmetical average of the consolidated
earnings per share estimates for a fiscal year of the
Employer and its consolidated subsidiaries in the
possession of First Call on the Determination Date
(as hereinafter defined), translated by the CPA into
the equivalent consolidated after: tax net income of
the Employer and its consolidated subsidiaries !for
such fiscal year. For purposes of this subsection
(ii)(b), the Determination Date shall mean the first
day of the fiscal year for which such computation
applies.
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(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 other employees of
Employer. Any unused vacation days in any calendar year may
not be carried over to subsequent years.
(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.
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 31 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
1-6s 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.
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(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 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", as defined in Section 4.2 hereof,
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
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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 Term 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;
(i) Stock Grant. Under the Prior Agreement, and upon the
consummation of the public offering of Employer's
common stock ("IP0"), Employee has been granted that
number of shares of all classes of stock of the
Employer equal to one percent (1.0%) of the number of
shares of all classes of stock of the Employer
outstanding immediately upon consummation of the IPO.
Such shares 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 the 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.
4.2 Stock Loan.
(i) In order to help the Employer 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 a loan (the "Loan")
in an amount equal to such income taxes, to be
interest only until June 30, 2005, to require
yearly payments of simple interest at the same
interest rate as the Employer incurs to borrow funds
from its institutional lenders, to be collateralized
only by the stock granted and the Employee otherwise
will not be personally obligated to repay the Loan;
provided that upon the
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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 and upon the termination of this
Agreement pursuant to Section 2 (iii) or (iv) hereof,
the Loan shall be fully paid off within one (1) year
after the Termination Date and upon a Change in
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;
(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, the 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 the
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
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commissions applicable to the sale of shares
other than the Required Number of Shares,
shall be paid by the 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, the 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 the
Employer's stock trades for a ten (10) day
period prior to the date of such sale to the
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 AND ITS COUNSEL, WHICH ACCEPTANCE
SHALL NOT BE UNREASONABLY WITHHELD, THAT SUCH REGISTRATION IS NOT REQUIRED.
9
At such time as counsel for the Employee, which is acceptable to the
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, the 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.
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(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 but shall include any information known by
the Employee before March 1, 1998.
(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 second 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.
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(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.
(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 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 (i) 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:
(i) 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;
(ii) 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
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(iii) 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.
(b) 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.
(c) 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. ' ' 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.
5.3 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,
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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. 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
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(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 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.
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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
Mr. Xxxx Xxxxxxx
000 Xxxxxxxxxx Xxxx
Xxxx Xxxx, 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
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.
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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.
SIGNATURES APPEAR ON THE NEXT PAGE
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
EMPLOYER
RAILWORKS CORPORATION
By: /s/ Xxxx X Xxxxxx (SEAL)
------------------
Xxxx X Xxxxxx
Chief Executive Officer
EMPLOYEE
/s/ Xxxx Xxxxxxx (SEAL)
----------------
Xxxx Xxxxxxx
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