Exhibit 10.16
EMPLOYMENT AGREEMENT
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This Employment Agreement, dated as of the 6th day of November, 1998, is
by and between Building One Services Corporation, Inc., a Delaware corporation
(the "Company") and Xxxxxxx Xxxxxxxx, a resident of the State of Florida
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("Employee").
R E C I T A L S
The Company desires to employ Employee and to have the benefit of his
skills and services, and Employee desires to accept employment with the Company,
on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, terms, covenants
and conditions set forth herein, and the performance of each, the parties
hereto, intending legally to be bound, hereby agree as follows:
AGREEMENTS
1. Employment; Term. The term of this Agreement shall begin on the date
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hereof and continue for two (2) years (the "Term"), and, unless terminated as
herein provided, may be extended on such terms and conditions as the parties
hereto mutually agree.
2. Position and Duties. The Company hereby employs Employee as Chairman
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of its contract management/janitorial group. Employee shall have such
responsibilities, duties and authority as are accorded to such office and as are
otherwise assigned to him by the Board of Directors (the "Board") of the
Company. Employee shall report directly to the Chief Executive Officer of the
Company.
3. Compensation. For all services rendered by Employee, the Company shall
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compensate Employee as follows:
(a) Base Salary. Effective on the date, hereof, the base salary payable
to Employee shall be Two Hundred and Fifty Thousand Dollars ($250,000) per year,
payable on a regular basis in accordance with the Company's standard payroll
procedures, but not less than monthly. On at least an annual basis, the Board
will review Employee's performance and may make increases to such base salary
if, in its discretion, any such increase is warranted.
(b) Incentive Bonus Plan. Company agrees to establish an Incentive Bonus
Plan ("Incentive Bonus Plan"). Employee shall be eligible to receive a
performance-based incentive bonus for each calendar year during the Term
beginning
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January 1, 1999, based upon the achievement of the criteria specified in the
Incenctive Bonus Plan.
(c) Stock Options. Employee shall be granted on the date hereof options
to purchase 200,000 shares of Building One Services Corporation pursuant to the
Incentive Plan (as such term is defined in Section 6(g) hereof.
4. Expense Reimbursement. The Company shall reimburse employee for (or,
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at the Company's option, pay) all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of his services
hereunder during the Term. All reimbursable expenses shall be appropriately
documented in reasonable detail by Employee upon submission of any request for
reimbursement, and in a format and manner consistent with the Company's expense
reporting policy, as well as applicable federal and state tax record keeping
requirements.
5. Place of Performance. Employee shall carry out his duties and
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responsibilities hereunder principally in and from Key Largo, Florida. The
Company agrees that it may not request or require, for any reason whatsoever,
Employee to relocate from his present residence to another geographic location.
6. Termination; Rights on Termination. Employee's employment may be
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terminated in any one of the following ways, prior to the expiration of the
Term:
(a) Death. The death of Employee shall immediately terminate the Term,
and no severance compensation shall be owed to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been unable to perform the material
duties of his position on a full-time basis for a period of four (4) consecutive
months, or for six months out of any twelve month period, then 30 days after
written notice to the Employee (which notice may be given before or after the
end of the aforementioned periods, but which shall not be effective earlier than
the last day of the applicable period), the Company may terminate Employee's
employment hereunder if Employee is unable to resume his full-time duties at the
conclusion of such notice period. Also, Employee may terminate his employment
hereunder if his health should become impaired to the extent that makes the
continued performance of his duties hereunder hazardous to his physical or
mental health or his life, provided that Employee shall have furnished the
Company with a written statement from a qualified doctor to such effect and
provided further, that, at the Company's request made within 30 days from the
date of such written statement, Employee shall submit to an examination by a
doctor selected by the Company who is reasonably acceptable to Employee or
Employee's doctor and such doctor shall have concurred in the conclusion of
Employee's doctor.
(c) Termination by the Company "For Cause." The Company may terminate the
Agreement ten (10) days after written notice to Employee for good cause,
EMPLOYMENT AGREEMENT - Page 3
which shall be: (1) Employee's willful, material and irreparable breach of this
Agreement; (2) Employee's gross negligence in the performance or intentional
nonperformance (continuing for ten (10) days after receipt of written notice of
need to cure) of any of employee's duties and responsibilities hereunder;
(3) Employee's unwillingness or failure to perform his duties satisfactorily (as
determined by the Board) in accordance with the provisions specified herein and
such unwillingness or failure is not cured by Employee within ten (10) days of
written notice thereof; (4) Employee's dishonesty, fraud or misconduct with
respect to, or disparagement of, the business or affairs of the Company which
materially and adversely affects the operations or reputation of the Company;
(5) Employee's conviction of a felony; or (6) alcohol or illegal drug abuse by
Employee. In the event of a termination for good cause, as enumerated above,
Employee shall have no right to any severance compensation.
(d) Without Cause. At any time after the commencement of employment, the
Company may, without cause, terminate the Term and Employee's employment,
effective thirty (30) days after written notice is provided to the Employee.
Should Employee be terminated by the Company without cause, subject to Sections
6(f) and 6(g) below, Employee shall receive from the Company the base salary at
the rate then in effect, for whatever time period is remaining under the Term.
Such payments shall be made in accordance with the Company's regular payroll
cycle.
(e) Termination by Employee for Good Reason. Employee may resign or
terminate his employment hereunder for "Good Reason". As used herein, "Good
Reason" shall mean the continuance, after ten (10) days' prior written notice by
Employee to the Company, specifying the basis for such Employee's having Good
Reason to terminate this Agreement, any material breach of this Agreement by the
Company, including the failure to pay Employee on a timely basis the amounts to
which he is entitled under this or any other Agreement. If Employee resigns or
otherwise terminates his employment for any reason other than Good Reason as
defined herein, Employee shall receive no severance compensation. If Employee
resigns for Good Reason, Employee shall be entitled to severance as if he had
been terminated without cause.
(f) Payment Through Termination. Upon termination of Employee's
employment for any reason provided above, Employee shall be entitled to receive
all compensation earned and all benefits and reimbursements (including payments
for accrued vacation and sick leave, in each case in accordance with applicable
policies of the Company) due through the effective date of termination.
Additional compensation subsequent to termination, if any, will be due and
payable to Employee only to the extent and in the manner expressly provided
above in this Section 6. With respect to incentive bonus compensation, Employee
shall be entitled to receive any bonus declared but not paid prior to
termination. In addition, in the event of a termination under Section 6(d) or
6(e), Employee shall be entitled to receive incentive bonus compensation through
the end of the Company's fiscal year in which termination occurs, calculated as
if Employee had remained employed by the Company through the end of such fiscal
year, and paid in such
EMPLOYMENT AGREEMENT - Page 4
amounts, at such times, and in such forms as are determined pursuant to Section
3(b) above. In the event of a termination under Section 6(b), Employee shall be
entitled to receive incentive bonus compensation for the fiscal year in which
termination occurs, calculated only through the date of Employee's termination,
and paid in such amounts, at such times, and in such forms as are determined
pursuant to Section 3(b) above. Except as specified in the preceding three (3)
sentences, Employee shall not be entitled to receive any incentive bonus
compensation after the effective date of termination of his employment. All
other rights and obligations of the Company and Employee under this Agreement
shall cease as of the effective date of termination, except that the Company's
obligations under Section 11 below and Employee's obligations under Sections 7,
8, 9 and 10 below shall survive such termination in accordance with their terms.
(g) Options. The rights relating to Employee's stock options shall be
governed by the terms and conditions of Building One Service Corporation's Long-
Term Incentive Plan (the "Incentive Plan"), it being understood and agreed that
upon or after Employee's termination of employment with the Company for any
reason, including termination without cause, his options shall only be
exercisable if and to the extent that they had become exercisable before such
termination and shall remain exercisable only to the extent provided by that
plan. Notwithstanding the provisions of the preceding sentence, any options
that are not exercisable on the two year anniversary of the date of this
Agreement shall become exercisable on such date if this Agreement is not renewed
for an additional period.
7. Restrictions on Competition.
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(a) For the purposes of this Section 7, references to "the Company" shall
mean Building One Services Corporation and its subsidiaries.
(b) During the Term, and thereafter, if Employee continues to be employed
by the Company, for the duration of such period, and thereafter for the
Restricted Period (defined below), Employee shall not, directly or indirectly,
for himself or on behalf of or in conjunction with any other person, company,
partnership, corporation, business, group, or other entity (each, a "Person"):
(i) engage, as an officer, director, shareholder, owner, partner,
member, joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant, advisor, or sales representative, in any
business selling any products or services in direct competition with Building
Once Service Corporation ("BOSC") and/or any of BOSC's subsidiaries and
affiliates with whom Employee has had personal contact for the purpose of
soliciting or selling products or services in direct competition with BOSC
and/or BOSC's subsidiaries and affiliates, within 100 miles of any office of the
BOSC and/or any of BOSC's subsidiaries and affiliates (the "Territory");
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(ii) call upon any Person who is, at that time, within the Territory,
an employee of the Company in a managerial capacity for the purpose or with the
intent of enticing such employee away from or out of the employ of the Company
and/or any of the Company's subsidiaries;
(iii) call upon any Person within the Territory who is, at the time,
or has been, within one year prior to that time, a customer of the Company
and/or the Company's subsidiaries for the purpose of soliciting or selling
products or services in direction competition with the Company and/or any of the
Company's subsidiaries within the Territory;
(iv) call upon any Person who is, at the time, or has been, within one
year prior to that time, a customer of Building Once Service Corporation
("BOSC") and/or any of BOSC's subsidiaries and affiliates with whom Employee has
had personal contact for the purpose of soliciting or selling products or
services in direct competition with BOSC and/or BOSC's subsidiaries and
affiliates;
(v) on employee's own behalf or on behalf of any competitor, call upon
any Person as a prospective acquisition candidate who is or, during Employee's
employment by the Company, was, to Employee's knowledge, either called upon by
the Company as a prospective acquisition candidate or was the subject of an
acquisition analysis conducted by the Company. Employee, to the extent lacking
the knowledge described in the preceding sentence, shall immediately cease all
contact with any prospective acquisition candidate upon being informed, in
writing, that the Company had so called upon such candidate or made an
acquisition analysis thereof.
(c) The foregoing covenants shall not be deemed to prohibit Employee
from acquiring as an investment not more than one percent (1%) of the capital
stock of a competing business, whose stock is traded on a national securities
exchange or through the automated quotation system of a registered securities
association.
(d) It is further agreed that, in the event that Employee shall cease to
be employed by the Company and enters into a business or pursues other
activities that, at such time, are not in competition with the Company, Employee
shall not be chargeable with a violation of this Section 7 if the Company
subsequently enters the same (or a similar) competitive business or activity or
commences competitive operations within 100 miles of the Employee's new business
or activities. In addition, if Employee has no actual knowledge that his actions
violate the terms of this Section 7, Employee shall not be deemed to have
breached the restrictive covenants contained herein if, promptly after being
notified by the Company of such breach, Employee ceases the prohibited actions.
(e) The covenants in this Section 7 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. If any provision of this Section 7 relating to the time period
or geographic area of the restrictive covenants shall be declared by a court of
competent jurisdiction to
EMPLOYMENT AGREEMENT - Page 6
exceed the maximum time period or geographic area, as applicable, that such
court deems reasonable and enforceable, said time period or geographic area
shall be deemed to be, and thereafter shall become, the maximum time period or
largest geographic area that such court deems reasonable and enforceable and
this Agreement shall automatically be considered to have been amended and
revised to reflect such determination.
(f) All of the covenants in this Section 7 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants; provided, that upon
the termination of Employee's employment by Employee for Good Reason pursuant to
Section 6(e) hereof, the Employee may, upon 30 days' prior written notice to the
Company, waive his right to receive any additional compensation pursuant to this
Agreement and engage in any activity prohibited by the covenants of this Section
7. It is specifically agreed that the Restricted Period defined in this Section
7, during which the agreements and covenants of Employee made in this Section 7
shall be effective, shall be computed by excluding from such computation any
time during which Employee is in violation of any provision of this Section 7.
(g) Employee has carefully read and considered the provisions of this
Section 7 and, having done so, agrees that the restrictive covenants in this
Section 7 impose a fair and reasonable restraint on Employee and are reasonably
required to protect the interests of the Company and its officers, directors,
employees, and stockholder. It is further agreed that the Company and Employee
intend that such covenants be construed and enforced in accordance with the
changing activities, business, and locations of the Company throughout the term
of these covenants.
(h) Nothing contained in the Agreement shall be deemed to prevent
Employee's present ownership of Coastal Building Maintenance (New Jersey).
Employee agrees to sell such company either to Company or to the existing
management of such company by June 1, 1999.
(i) As used herein, the "Restricted Period" shall be defined as follows:
(1) in the event Employee's employment hereunder is terminated for cause as
defined in Section 6(c), the "Restricted Period" shall mean two (2) years from
the date of termination; (2) in the event Employee's employment hereunder is
terminated without cause pursuant to Section 6(d), or for good reason as defined
in Section 6(e), the "Restricted Period" shall mean that period of time equal to
the longer of: (i) one (1) year from the date following the termination of his
employment under this Agreement or (ii) whatever time period is remaining under
the Term; or (3) in the event Employee terminates his employment for any reason
other than for "good reason" as defined in Section 6(e), the "Restricted Period"
shall be two (2) years from the date Employee terminates his employment
hereunder.
EMPLOYMENT AGREEMENT - Page 7
8. Confidential Information. Employee is employed hereunder by the
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Company in a confidential relationship wherein Employee, in the course of his
employment with the Company, has and will continue to become familiar with and
aware of information as to the Company's customers, specific manner of doing
business, including the processes, techniques and trade secrets utilized by the
Company and its future plans with respect thereto, all of which has been and
will be established and maintained at great expense to the Company. This
information is confidential and constitutes the valuable good will of the
Company. Employee therefor agrees that he will not, during or after the term of
his employment with the Company, disclose the specific terms of the Company's
relationships or agreements with its significant vendors or customers or any
other significant and material trade secret of the Company whether in existence
or proposed, to any person, firm, partnership, corporation or business for any
reason or purpose whatsoever, with the exception that the provisions of this
Section will not apply to Confidential Information that otherwise becomes
generally known in the industry or to the public through no act of the Employee
or any person or entity acting by or on the Employee's behalf, or which is
required to be disclosed by court order or applicable law.
9. Inventions. Employee shall disclose promptly to the Company any
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and all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or made by
Employee, solely or jointly with another, during the period of employment or
within one (1) year thereafter, and which are directly related to the business
or activities of the Company and which Employee conceives as a result of his
employment by the Company. Employee hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Employee shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
10. Return of Company Property. All records, designs, patents,
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business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Employee by or on behalf of the Company
(including the respective subsidiaries thereof) or their representatives,
vendors or customers which pertain to the business of the Company (including the
respective subsidiaries or affiliates thereof) shall be and remain the property
of the Company, and be subject at all times to its discretion and control.
Likewise, all correspondence, reports, records, charts, advertising materials
and other similar data pertaining to the business, activities or future plans of
the Company which is collected by Employee shall be delivered promptly to the
Company without request by it upon termination of Employee's employment.
11. Indemnification. In the event Employee is made a party to any
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threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement then the
EMPLOYMENT AGREEMENT - Page 8
Company shall indemnify Employee against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, as actually and
reasonably incurred by Employee in connection therewith to the fullest extent
provided by law and in accordance with the Company's By-laws.
12. No Prior Agreements. Employee hereby represents and warrants to
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the Company that the execution of this Agreement by Employee and his employment
by the Company and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.
13. Assignment; Binding Effect. Employee understands that he has
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been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences, this Agreement shall be binding upon, inure to
the benefit of and be enforceable by the parties hereto and their respective
heirs, legal representatives, successors and assigns.
14. Complete Agreement; Waiver; Amendment. This Agreement is not a
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promise of future employment. Employee has no oral representations,
understandings, or agreements with the Company or any of its officers,
directors, or representatives covering the same subject matter as this
Agreement. This Agreement is the final, complete, and exclusive statement and
expression of the agreement between the Company and Employee with respect to the
subject matter hereof, and cannot be varied, contradicted, or supplemented by
evidence of any prior or contemporaneous oral of written agreements. This
written Agreement may not be later modified except by a further writing signed
by a duly authorized officer of the Company and Employee, and no term of this
agreement may be waived except by a writing signed by the party waiving the
benefit of such term.
15. Notice. Whenever any notice is required hereunder, it shall be
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be given in writing addressed as follows:
To the Company: Building One Services Corporation
000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: General Counsel
To the Employee: Xxxxxxx Xxxxxxxx
_____________________________
_____________________________
EMPLOYMENT AGREEMENT - Page 9
16. Severability; Headings. If any portion of this Agreement is held
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invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. This
severability provision shall be in addition to, and not in place of, the
provisions of Section 7(e) above. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
17. Equitable Remedy. Because of the difficulty of measuring
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economic losses to the Company as a result of a breach of the restrictive
covenants set forth in Sections 7, 8, 9 and 10, and because of the immediate and
irreparable damage that would be caused to the Company for which monetary
damages would not be a sufficient remedy, it is hereby agreed that in addition
to all other remedies that may be available to the Company at law or in equity,
the Company shall be entitled to specific performance and any injunctive or
other equitable relief as a remedy for any breach or threatened breach of the
aforementioned restrictive covenant.
18. Arbitration. Any unresolved dispute or controversy arising under
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or in connection with this Agreement shall be settled exclusively by
arbitration, conducted in accordance with the rules of the American Arbitration
Association then in effect. The arbitrators shall not have the authority to add
to, detract from, or modify any provision hereof nor to award punitive damages
to any injured party. The arbitrators shall have the authority to order back-
pay, severance compensation, reimbursement of costs, including those incurred to
enforce this Agreement, and interest thereon in the event the arbitrators
determine that Employee was terminated without disability or good cause, as
defined herein, or that the Company has otherwise materially breached this
Agreement. A decision by a majority of the arbitration panel shall be final and
binding. Judgment may be entered on the arbitrators' award in any court having
jurisdiction. The direct expense of any arbitration proceeding shall be split
equally by the Company and the Employee. The arbitration proceeding shall be
held in the city where the Company's corporate headquarters is located.
Notwithstanding the foregoing, the Company shall be entitled to seek injunctive
or other equitable relief, as contemplated by Section 17 above, from any court
of competent jurisdiction, without the need to resort to arbitration.
19. Governing Law. This Agreement shall in all respects be
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construed according to the laws of the State of Deleware.
EMPLOYMENT AGREEMENT - Page 10
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be duly executed as of the date first written above.
BUILDING ONE SERVICES CORPORATION, INC.
/s/ X. Xxxxxxx Xxxx
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By: X. Xxxxxxx Xxxx
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
