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EXHIBIT 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of
this 4th day of August, 1998, by and between Xxxx X. Xxxxxx, an individual
resident of the State of Maryland ("Employee"), and Railworks Corporation, a
Delaware corporation (as defined below the "Holding Company").
W I T N E S S E T H
WHEREAS, the Holding Company has been created for the purpose
of carrying on the businesses of the entities listed on Exhibit A, which is
attached hereto and hereby incorporated by reference herein (the "Founding
Companies") and the Holding Company has completed a public offering (the "IPO")
of its common stock under applicable law;
WHEREAS, the Founding Companies desire that the Holding
Company employ the Employee to be the Chief Executive Officer of the Holding
Company on the terms and conditions as contained herein; and
WHEREAS, the Employee desires to be so employed by the Holding
Company, 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 Chief
Executive Officer of the Holding Company and shall be a director of each of the
entities constituting the Founding Companies and shall also serve on any
executive committee which oversees the daily operations of the Holding Company,
or any similar committee having such function.
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 Chief Executive Officer of the Holding
Company, subject to direction by the Board of Directors of the Holding Company
(the "Board of Directors"), as long as such directions are consistent with the
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duties, responsibilities and authority customarily given or required of chief
executive officers generally, with the Employee to report his activities
regularly to the Board of Directors. Notwithstanding anything to the contrary
contained herein, as of the date of this Agreement, the Employee shall be
permitted to invest in entities that sell, and sell himself, financial services
and products generally; provided that such activities do not interfere with the
performance of his duties under this Agreement and such activities are not in
contravention of the terms and conditions of Section 5 hereof.
SECTION 2. TERM OF EMPLOYMENT.
The term of the Employee's employment hereunder (the "Term")
shall be from May 21, 1998 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;
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(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 Holding Company, a corporation
owned directly or indirectly by the stockholders of the
Holding Company (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 the Holding Company representing
50% or more of the total voting power represented by the
Holding Company's then outstanding securities that vote
generally in the election of directors (referred to herein as
"Voting Securities"); (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 Holding Company'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 the Holding
Company approve a merger or consolidation of the Holding
Company with any other corporation, other than a merger or
consolidation (i) which would result in the Voting Securities
of the Holding Company 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 Holding Company 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 Holding Company; (D) the
stockholders of the Holding Company approve a plan of complete
liquidation of the Holding Company or an agreement for the
sale or disposition by the Holding Company of (in one
transaction or a series of transactions) all or substantially
all of the Holding Company's assets; (E) the executive offices
of the Holding Company 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
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(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. Employee will be paid a salary (the "Base
Salary") of no less than Two Hundred Seventy-Five
Thousand Dollars ($275,000) per annum, less
deductions and withholdings required by applicable
law. For the period from March 1, 1998 until August
4, 1998, the Base Salary shall be accrued and shall
be paid in full to the Employee as promptly as
practicable. The Base Salary after the date of this
Agreement 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 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
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 Bonus 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, .5% of
the pre-tax net income, before any
performance or other periodic bonuses for
any
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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, five
percent (5%) of the excess of (a) the
consolidated after tax 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 date the IPO is consummated and
thereafter shall be the first day of the
fiscal year for which such computation
applies.
(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
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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.
3.2 Effect of Termination. 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
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the Continuation Period, and (B) the life insurance benefits specified
hereinabove for the period of the Continuation Period.
(i) 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.
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 Grants. Simultaneously with the consummation of
the IPO, Employee will be granted that number of
shares of all classes of stock of the Holding Company
equal to four and one-half (4 1/2%) of the number of
shares of all classes of stock of the Holding Company
outstanding immediately upon consummation of the IPO.
Such shares so granted shall fully and completely
vest on the date of issuance.
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(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 Holding Company, 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 Employee pay any required income
taxes with respect to the stock granted to the
Employee pursuant to the provisions of Section 4.1
hereof, at any time after the IPO has been
consummated, the Employer, upon thirty (30) days
written notice from the Employee, shall provide to
the Employee a loan (the "Loan") in an amount equal
to such income taxes, to be interest only for a
period of five (5) years, to require yearly payments
of simple interest, at the same interest rate as the
Holding Company 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 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.
(ii) To the extent that the Employee has not repaid the
entire principal balance of the Loan plus any accrued
interest thereon before January 1, 2001, 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
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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 January 1, 2001 the Holding Company
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 Holding Company 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 Holding Company;
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 the
Holding Company. 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 June 1, 2001, Employee has not yet
disposed of the Required Number of Shares,
the Holding Company 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 Holding
Company's stock trades for a ten (10) day
period prior to the date of such sale to the
Holding Company, provided, however, that
such repurchase shall only be required if it
can be effected in a manner that complies
with all applicable securities laws.
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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.
At such time as counsel for the Employee, which is acceptable
to the Holding Company, 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 Holding Company 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
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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.
Company Activities shall not include
investing in entities which sell, or the
provision by the Employee of sales, of
financial services or products of any kind
or nature or consulting with respect to such
sales of such services and/or products
("Permitted Activity" or "Permitted
Activities").
(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
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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 not
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.
(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.
(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.
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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
(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
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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. Sections 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, 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
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national securities exchange or in the over-the-counter market or from engaging
in Permitted Activities.
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,
other than a Permitted Activity, 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
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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,
other than with respect to Permitted
Activities. 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.
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 telescopy transmission or sent by any
express mail service, postage or fees prepaid at the following addresses:
HOLDING COMPANY
RailWorks Corporation
c/o X.X. Xxxxxxxx & Company, Inc.
Xxx Xxxxx Xxxxxxxxx Xxxxxx
00
00
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: RailWorks Chief Executive Officer
Telecopy No.: (000) 000-0000
EMPLOYEE
Xx. Xxxx X. Xxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 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 inures 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. 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.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
HOLDING COMPANY
RAILWORKS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx (SEAL)
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
EMPLOYEE
/s/ Xxxx X. Xxxxxx (SEAL)
--------------------------------------
Xxxx X. Xxxxxx
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EXHIBIT A
Annex Railroad Builders, Inc.
Xxxx Construction Company
Railroad Specialties, Inc.
U.S. Railway Supply, Inc.
Comtrak Construction, Inc.
Xxxxxx Brothers, Inc.
HP XxXxxxxx, Inc.
Xxxxxxx Railroad Builders, Inc.
Alpha-Keystone Engineering, Inc.
Railcorp, Inc.
Merit Railroad Contractors, Inc.
Midwest Construction Services, Inc.
New England Railroad Construction Co.
Xxxxxxxx Holdings, Inc.
Railroad Service, Inc.
Minnesota Railroad Service, Inc.
Southern Indiana Wood Preserving Co.
U.S. Trackworks, Inc.
Northern Rail Service & Supply Co.
W.A. Xxxxx Construction Co., Inc.
W.A. Xxxxx Rerailing Serviceds, Inc.
CPI Concrete Products, Inc.
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