EXHIBIT 10.17
October 26, 1999
Xxxxxx X. Xxxx
Group Maintenance America Corp.
0 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
RE: Employment Agreement ("Employment Agreement") dated March 1, 1998,
by and between Xxxxxx X. Xxxx ("you") and Group Maintenance
America Corp. ("GroupMAC" or the "Company")
Dear Xx. Xxxx:
As you know, the Company is contemplating a merger with Building One Services
Corporation (the "Proposed Transaction"). The Proposed Transaction holds
exciting possibilities for the future of the Company and the Company wants your
to be a part of that future. The purposes of this letter are to indicate to you
that GroupMAC would very much like you to continue your employment with the
Company after the Proposed Transaction is consummated and to request certain
modifications to and waivers of the terms of your existing Employment Agreement.
The requested modifications and waivers are set forth below:
I. Modifications.
A. Position: Your title and position will be Treasurer and CIO.
B. Base Salary: Your Base Salary will be changed to $175,000 per year.
C. Bonus: A new incentive bonus plan for executive management of
the Company will be established beginning in fiscal
year 2000, and you will participate in such plan. Your
bonus potential under the new plan will be 75% of your
Base Salary. Your bonus potential through December 31,
1999, will be determined under the Company's existing
incentive bonus
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October 26, 1999
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plan and your bonus potential thereunder will
remain the same.
D. Stock Options: Under a combination of one or more of the
Company's existing stock option plans, an amended
version of any of such plans or a new stock option
plan, subject to approval of the Board of
Directors of the Company or a committee thereof,
you will be granted options to purchase an
additional 48,000 shares of the common stock of
the Company effective as of a date determined by
the Board of Directors of the Company or a
committee thereof (the "Grant Date"). These
additional options will have the following basic
terms: (1) exercise price equal to the closing
price on the NYSE on the Grant Date, (b) ten (10)
year term, and (c) vesting over 4 (four) years.
E. Stock
Performance Plan: Subject to the approval of the Board of Directors
of the Company or a committee thereof, the Company
intends to adopt a stock performance plan in which
you will participate. Pursuant to such plan, upon
the achievement of certain performance criteria,
the Company will allocate to you a number of
shares of common stock of the Company determined
by the Board of Directors or a committee thereof.
F. Benefits: The employee benefits (other than your
participation in the Company's stock option plan)
described in Section 5 of your Employment
Agreement will remain the same.
G. Term: The initial term of your Employment Agreement set
forth in Section 2 of your Employment Agreement
shall be extended until December 31, 2001. After
the expiration of such initial term, the term of
the Employment Agreement shall be automatically
renewed for additional one year periods unless
terminated in accordance with Section 10 of your
Employment Agreement or unless the Company elects
not to renew the agreement at the end of its then
applicable term.
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October 26, 1999
Page 3
H. Termination
and Severance: The terms and conditions of your Employment
Agreement in Section 10 regarding the right to
terminate your Employment Agreement and the amounts
payable by the Company to you, if any, in the event
of such a termination shall remain the same except
as follows:
1. IF
(a) (i) you execute this letter agreement, and
(ii) the Company terminates the Employment
Agreement without Cause before the
consummation of the Proposed Transaction or
you terminate the Employment Agreement for
Good Reason before the consummation of the
Proposed Transaction, and
(iii) the Proposed Transaction is
consummated,
OR
(b) (i) you execute this letter agreement, and
(ii) the Company terminates the Employment
Agreement without Cause within twelve (12)
months after the consummation of the Proposed
Transaction, or you terminate the Employment
Agreement for Good Reason within twelve (12)
months after the consummation of the Proposed
Transaction,
THEN, upon the occurrence of either of the
scenarios described in Parts H.1.(a) and
H.1.(b) above, the amounts owed to you upon
termination shall be the greater of (A) the
amounts owed to you pursuant to your
Employment Agreement in such circumstances,
and (B) the amounts owed to you upon the
occurrence of a Change of
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Control under your Employment Agreement as it
exists prior to the date of this letter and
without giving effect to this letter.
2. The definition of the term "Good Reason" shall be
modified to include the failure of the Company
to, within ninety (90) days after the
consummation of the Proposed Transaction, present
to you for your execution a Restated Employment
Agreement containing terms and conditions that
are substantially similar to, or better than, the
terms and conditions contained in your Employment
Agreement, as amended by this letter agreement.
Under the new Employment Agreement, a non-renewal
of your employment term at December 31, 2001,
would constitute "Good Reason."
I. Covenant
Not to Compete: The terms and conditions of your Employment
Agreement in Section 12 regarding your covenants not
to compete shall remain the same.
J. Other: Except as set forth above, all other terms and
conditions of your Employment Agreement shall remain
unchanged and in full force and effect.
II. Waiver of Certain Rights in Employment Agreement. Certain aspects of the
Proposed Transaction will constitute a "Change of Control" (as such term is
defined in your Employment Agreement) and will afford you certain rights and
remedies pursuant to Sections 7, 8, 9 and 10(c) of your Employment Agreement.
The Company is requesting that you waive your rights under the Employment
Agreement, including, without limitation, Sections 7, 8, 9, and 10(c), in
connection with each aspect of the Proposed Transaction. Accordingly, by
executing this letter, you agree to waive (i) all of the provisions of your
Employment Agreement, including, without limitation, Sections 7, 8, 9 and 10(c),
in connection with each and every aspect of the Proposed Transaction, (ii) the
application of such provisions, including, without limitation, Sections 7, 8, 9
and 10(c), as a result of any aspect of the Proposed Transaction, and (iii) any
and all rights and remedies available to you pursuant to your Employment
Agreement, including, without limitation, Sections 7, 8, 9 and 10(c), as a
result of any aspect of the Proposed Transaction (the waivers described in
clause (i), (ii) and (iii) being collectively referred to as the "Employment
Agreement Waiver"). The Employment Agreement Waiver is a limited waiver that
applies only to the Proposed Transactions and, except as set forth in this
Sections I and II hereof, the Agreement, including Sections 7, 8, 9 and 10(c),
shall
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October 26, 1999
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remain unchanged and in full force and effect.
III. General.
A. Effective Date. If you execute this letter agreement, unless terminated
pursuant to its terms, the provisions of this letter agreement (i)
contained in Section I. above (except for part H thereof) shall become
effective as of the date of the consummation of the Proposed
Transaction, and (ii) contained in Part H of Section I above and
Sections II and III shall become effective on the date this letter
agreement is executed by you.
B. Termination of Letter Agreement. If GroupMAC does not complete the
Proposed Transactions by March 31, 2000, then this letter agreement,
including, without limitation, the Waivers, will automatically terminate
without any action on the part of GroupMAC or you, and the Employment
Agreement will remain in full force and effect as if this letter
agreement had not been executed by you or GroupMAC.
C. Definitions. All capitalized terms used in this letter agreement but not
defined in this letter agreement shall have the meaning set forth in the
Employment Agreement. Additionally, the term "you" refers to the
addressee of this letter agreement.
D. Restated Employment Agreement. It is the intent of the Company and you
that this letter agreement constitute an amendment to the Employment
Agreement effective on the dates set forth in Section III.A. above. The
Company will in the future request that you execute a restated or
amended version of your Employment Agreement that has been modified to
reflect all of the modifications set forth in this letter agreement, and
you hereby agree to execute such version.
If the foregoing modifications of your Employment Agreement and the Waivers are
acceptable to you, please sign and date the copy of this letter in the space
provided below and return the copy to us by the close of business on October 28,
1999. If you have any questions, please feel free to call me at 000-000-0000 or
GroupMAC's general counsel, Xxxxx Xxxxxx, at 000-000-0000.
Very truly yours,
GROUP MAINTENANCE AMERICA CORP.
By: /s/ J. Xxxxxxx Xxxxxxxx, Xx.
------------------------------------
J. Xxxxxxx Xxxxxxxx, Xx.
Chief Executive Officer
Xxxxxx X. Xxxx
October 26, 1999
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AGREED to and ACCEPTED this 29th day of October, 1999
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
