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EXHIBIT 10.45
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of
the 1st day of January 2000, by and between Xxxxxxx X. Xxxxxxx, an individual
resident of the State of New York ("Employee"), and RailWorks Corporation, a
Delaware corporation ("Employer").
W I T N E S S E T H
WHEREAS, the 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
Executive Vice President and Chief Financial Officer of the Employer and shall
be a director of the Employer.
Subject to the terms and conditions of this Agreement, from
the date hereof, Employee agrees to devote substantially all of his business
time and best efforts to the performance of his job as Executive Vice President
and Chief Financial 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 financial officers generally, with the
Employee to report his activities regularly to the Board of Directors.
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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 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 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 owned by such third party in the same manner as such
person votes the Voting Securities owned by such person; (B) during any period
of two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors and any new directors whose election by the
Board of Directors or nomination for election by the Employer's stockholders was
approved by a vote or a majority of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors; (C) the stockholders of 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; (E)
the executive offices of the Employer are relocated from the Greater Baltimore
Metropolitan Area or (F) the Employee is not a member of the Board of Directors
or is not on any Executive Committee or similar committee of the Board of
Directors; or
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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 I 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 of no less
than Two Hundred Seventy Five Thousand Dollars
($275,000) 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
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, .2% 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, two
percent (2%) 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
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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.
(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 ten-n 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. 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 or Change in Control. Except as
hereinafter provided, upon the termination of the employment of Employee
hereunder for any reason, Employee shall be entitled to all compensation and
benefits earned or accrued under Section 3.1 as of the effective date of
termination (the "Termination Date"), but from and after the Termination Date no
additional compensation or benefits shall be earned by Employee hereunder.
Except upon termination by the Employer of the employment of the Employee
pursuant to the provisions of Section 2(ii) hereof, Employee shall be deemed to
have earned any Performance Bonus payable with respect to the fiscal year in
which the Termination Date occurs on a prorated basis (based on the number of
days in such calendar year through and including the Termination Date divided by
365). Any such Performance Bonus shall be payable on the date on which the
Performance Bonus would have been paid had Employee continued his employment
hereunder. In addition, the Employee and his eligible dependents shall be
entitled to receive at the sole cost of the Employer (A) the health insurance
benefits specified hereunder for a period of twelve (12) months following the
Termination Date (the "Continuation Period" and following such time period, the
Employee shall be entitled to all rights afforded to him under the Federal
Omnibus Reconciliation Act ("COBRA") to Purchase continuation coverage of such
health insurance benefits for himself and his dependents for the maximum period
permitted by law, and the Employee shall be deemed to have elected to exercise
his rights under Cobra as of the first day of the Continuation Period, and (B)
the life insurance benefits specified hereinabove for the period of the
Continuation Period.
(i) Immediately upon a Change in Control or upon
termination of this Agreement, pursuant to the provisions of Sections 2 (i) or
(iii) hereof, any stock grants or options previously awarded to the Employee,
either by this Agreement or otherwise, shall fully and completely vest and the
Employee shall be able to retain 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.
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(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 estimated payment, Employee shall
submit to Employer a final statement based upon the Employee's tax return as
filed for the year in question, which final statement shall be submitted not
later than 30 days after the date on which Employee files his federal income tax
return for such year. Such final statement shall contain a reconciliation of to
the estimated statement and payment of the amounts due to or from Employee shall
be paid within 3 days after the final statement has been submitted.
SECTION 4. COMMON STOCK.
4.1. Terms of Employment. So that Employee can share in
the increase in value of the business of Employer over time, Employee will be
granted common stock of Employer as follows:
(i) Stock Grant. Under the Prior Agreement, and upon the
consummation of the public offering of Employer's
common stock ("IPO"), Employee has been granted that
number of shares of all classes of stock of 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 so granted fully and completely vested on
the date of issuance.
(ii) Stock Splits and Recapitalization. The number of
shares of common stock granted hereby shall be
automatically adjusted to reflect any change in the
capitalization of 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 Employee pay any required income
taxes with respect to the stock granted to the
Employee pursuant to the provisions of Section 4.1
hereof Employer has provided to the Employee a loan
(the "Loan"). The Loan provides for payment of
interest only until June 30, 2005, requires yearly
payments of simple interest at the same interest
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rate as the Employer incurs to borrow funds from its
institutional lenders, is collateralized only by the
stock granted and the Employee otherwise is not
personally obligated to repay the Loan; provided that
upon the termination of this Agreement pursuant to
the provisions of Section 2(i) or (ii), the Loan
shall be fully paid off within three (3) months of
the Termination Date; upon the termination of this
Agreement pursuant to Section (iv), hereof, the Loan
shall be fully paid off within one (1) year after the
Termination Date and upon a Change of Control, the
Loan shall be forgiven as hereinabove provided.
(ii) To the extent that the Employee has not repaid the
entire principal balance of the Loan plus any accrued
interest thereon before June 30, 2005, the Employee
agrees to sell, as promptly as practicable, a
sufficient number of shares of Common Stock to enable
the Employee to repay the then remaining outstanding
balance (unpaid principal balance and unpaid accrued
interest from time to time, the ("Unpaid Balance of
the Loan")) of the Loan after any taxes have been
provided for (the "Required Number of Shares"),
subject to the following conditions and requirements:
(A) Such sales shall be made in a manner which
shall reasonably not disrupt the orderly
trading of Common Stock, either through open
market or privately negotiated transactions
as long as no sales shall be made at a price
lower that 1/16 below the last sales price
of Common Stock publicly traded immediately
prior to such sale even if such prohibition
shall cause a delay in Employee's compliance
with his obligation to sell Common Stock as
provided hereinabove;
(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 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
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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 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. Information shall be excluded from
this definition if (i) it, at the time of
disclosure, is generally known to the trade
or public, (ii) it becomes at a later date
generally known to the trade or public
through no fault of the Employee, (iii) it
is known or possessed by the Employee prior
to the effectiveness of this Agreement, (iv)
it is disclosed to the Employee in good
faith by a third party who has a right to
such information, (v) it is disclosed in
compliance with a subpoena or court order or
(vi) it is possessed by the recipient of the
information prior to receipt of same from
the Employee.
(e) "Customer" means actual customers or
actively sought prospective customers of
Employer during the Term.
(f) "Noncompete Period" or "Nonsolicitation
Period" means the period beginning the date
hereof and ending on the first anniversary
of the termination of Employee's employment
with Employer; provided that such Noncompete
Period or Nonsolicitation Period shall end
on the Termination Date in the event this
Agreement is terminated pursuant to the
provisions of Section 2(iii), hereof and,
provided further, that the Noncompete Period
or Nonsolicitation Period may be shortened
at the discretion of the Board of Directors
of Employer.
(g) "Territory" means the area within a one
hundred (100) mile radius of any corporate
office or job site of Employer or any of its
subsidiaries, affiliates or divisions.
(h) "Trade Secrets" means information or data of
or about Employer, including but not limited
to technical or non-technical data,
formulas, patterns, compilations, programs,
devices, methods, techniques, drawings,
processes, financial data, financial plans,
products plans, or lists of actual or
potential customers, clients, distributees
or licensees, information concerning
Employer's finances, services, staff,
contemplated acquisitions, marketing
investigations and surveys, that are not
generally known to, and/or are not readily
ascertainable by legal means by, other
persons. Information and/or data shall be
excluded from this definition if (i) it, at
the time of disclosure, is generally known
to the trade or public or (ii) it becomes at
a later date generally known to the trade or
public through no fault of the Employee.
(i) "Work Product" means any and all work
product property, data documentation or
information of any kind prepared, conceived,
discovered, developed or created by Employee
for Employer or its affiliates, or any of
Employer's or its affiliates' clients or
customers for utilization in Company
Activities, not generally known by and/or
not readily ascertainable by proper means by
other persons who can obtain economic value
from their disclosure or use.
5.2 Trade Name and Confidential Information.
(a) Employee hereby agrees that (i) with regard
to each item constituting all or any portion
of the Trade Secrets and Confidential
Information, at all times during the
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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
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, 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.
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Nothing contained in this Section 5 shall prohibit Employee
from acquiring not more than five percent (5%) of any Competitor, or from
acquiring any percentage of any company which is non-competitive with Employer,
whose common stock is publicly traded on a national securities exchange or in
the over-the-counter market.
5.4 Nonsolicitation During Employment Term. Employee
hereby agrees that Employee will not, during the
Term, either directly or indirectly, alone or in
conjunction with any other party:
(a) solicit, divert or appropriate or attempt to
solicit, divert or appropriate, any Customer
for the purpose of providing the Customer
with services or products competitive with
those offered by Employer during the Term,
or
(b) solicit or attempt to solicit any officer,
director, employee, consultant, contractor,
agent, lessor, lessee, licensor, licensee,
supplier or any shareholder of any of the
Founding Companies or other personnel of
Employer or any of its affiliates or
subsidiaries to terminate, alter or lessen
that party's affiliation with Employer or
such affiliate or subsidiary or to violate
the terms of any agreement or understanding
between such employee, consultant,
contractor or other person and Employer.
5.5 Nonsolicitation During Nonsolicitation Period.
Employee hereby agrees that Employee will not, during the Nonsolicitation
Period, either directly or indirectly, alone or in conjunction with any other
party:
(a) solicit, divert or appropriate or attempt to
solicit, divert or appropriate, any Customer
for the purpose of providing the Customer
with services or products that qualify as
Company Activities during the Term;
provided, however, that the covenant in this
clause shall limit Employee's conduct only
with respect to those Customers with whom
Employee had substantial contact (through
direct or supervisory interaction with the
Customer or the Customer's account) during a
period of time up to but no greater than two
(2) years prior to the last day of the Term;
or
(b) solicit or attempt to solicit any officer,
director, employee, consultant, contractor,
agent, lessor, lessee, licensor, licensee,
supplier or any shareholder of any of the
Founding Companies or other personnel of
Employer or any of its affiliates or
subsidiaries residing at the time of the
solicitation in the Territory to terminate,
alter or lessen that party's affiliation
with Employer or such affiliate or
subsidiary or to violate the terms of any
agreement or understanding between such
employee, consultant, contractor or other
person and Employer. For purposes of this
clause (b), employees, consultants,
contractors, or other personnel are those
with knowledge of or access to Trade Secrets
and Confidential Information of the
Employer.
5.6 Binding Arbitration. The parties shall refer any
dispute as to whether or not the Employee has
violated the provisions of this Section 5 to a
mediator and, in the event that 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.
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6.1 Severability. The covenants in this Agreement shall
be construed as covenants independent of one another and as obligations distinct
from any other contract between Employee and Employer.
6.2 Survival of Obligations. The covenants in Section 5
of this Agreement shall survive termination of Employee's employment, except in
the case of termination of this Agreement pursuant to the provisions of Section
2(iii) hereof, in which case they shall terminate also and have no further force
or legal effect as of the Termination Date.
6.3 Notices. Any notice or other document to be given
hereunder by any party hereto to any other party hereto shall be in writing and
delivered in person or by courier, by telecopy transmission or sent by any
express mail service, postage or fees prepaid at the following addresses:
EMPLOYER
RailWorks Corporation
0000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: RailWorks Chief Executive Officer
Telecopy No.: (000) 000-0000
EMPLOYEE
Xx. Xxxxxxx X. Xxxxxxx
00000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.
6.4 Binding Effect. This Agreement ensures to the benefit
of, and is binding upon, Employer and their respective successors and assigns,
and Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.
6.5 Entire Agreement. This Agreement is intended by the
parties hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement supersedes and terminates all prior
employment and compensation agreements, arrangements and understandings between
or among Employer and Employee including, without limitation, the Prior
Agreement. This Agreement may be modified only by a written instrument signed by
all of the parties hereto.
6.6 Governing Law. This Agreement shall be deemed to be
made in, and in all respects shall be interpreted, construed, and governed by
and in accordance with, the laws of the State of Maryland. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court of other governmental or judicial authority or by any
board of arbitrators by reasons of such party or its counsel having or being
deemed to have structured or drafted such provision.
6.7 Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
6.8 Specific Performance. Each party hereby agrees that
any remedy at law for any breach of provisions contained in this Agreement shall
be inadequate and that the other parties hereto shall be entitled to specific
performance and any other appropriate injunctive relief in addition to any other
remedy such party might have under this Agreement or at law or in equity.
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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 NEXT PAGE.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
RAILWORKS CORPORATION
By: (SEAL)
--------------------------------------
Xxxx X. Xxxxxx
Chief Executive Officer
EMPLOYEE
(SEAL)
-----------------------------------------
Xxxxxxx X. Xxxxxxx
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