EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of October 1, 1996 by and
between Brand Scaffold Services, Inc., a Delaware corporation, (the "COMPANY")
and Xxxx X. Xxxxxx ("EXECUTIVE").
WHEREAS, the Company desires to employ Executive as its
President and Chief Executive Officer;
WHEREAS, the Company and Executive desire to enter into an
agreement (the "AGREEMENT") embodying the terms of such employment;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
parties agree as follows:
1. Employment Term. Executive's employment by the Company
shall be for a period which shall commence on the date hereof and shall
terminate on March 31, 1999 (the "EXPIRATION DATE"). The period commencing as
of the date hereof and ending on the Expiration Date is hereinafter referred to
as the "EMPLOYMENT TERM". Notwithstanding the foregoing, the Employment Term
shall terminate in any and all events upon the termination of Executive's
employment hereunder.
2. Positions. During the Employment Term, Executive shall
serve as President and Chief Executive Officer. Executive shall report directly
to the Board of Directors of the Company (the "BOARD") and shall have such
duties and authority commensurate with such position as shall be determined
from time to time by the Board. Executive shall devote such substantially all
of his business time and best efforts to the performance of his duties
hereunder and shall not engage in any other business, profession or occupation
for compensation or otherwise.
3. Base Salary. During the Employment Term, the Company shall
pay Executive a base salary (the "BASE SALARY") at the annual rate of not less
than $350,000, payable in arrears, in accordance with the usual payment
practices of the Company. Executive's Base Salary shall be subject to periodic
review by the Compensation Committee of the Company, not less frequently than
annually, for possible increase to up to $375,000 beginning October 1, 1997 and
up to $400,000 beginning October 1, 1998, based on the Company's achievement of
the Minimum Expectations and Stretch Objectives set forth on Annex A hereto
(the "PERFORMANCE CRITERIA"). Any such increased rate will thereafter be the
Base Salary for all purposes of this Agreement.
4. Bonus. (a) With respect to each fiscal year in the
Employment Term, Executive shall be eligible for a bonus of up to 100% of his
Base Salary (the "ANNUAL
BONUS") to be determined by the Compensation Committee based on the Company's
achievement of the Performance Criteria in accordance with the Company's annual
bonus plan (the "BONUS PLAN").
(b) With respect to each fiscal year in the Employment Term,
Executive shall be eligible for an additional annual bonus of up to $50,000 to
be determined by the Compensation Committee based on the Company's achievement
of the Performance Criteria (the "SUPER BONUS" and together with the Annual
Bonus, the "BONUS").
(c) Any Bonus payable hereunder shall be paid at or about the
same time bonuses are paid to the Company's other senior executives and, in the
case of the Annual Bonus, in accordance with the terms of the Bonus Plan.
5. Employee Benefits. During the Employment Term, Executive
shall be entitled to participate on a basis no less favorable than other senior
executives of the Company in all retirement, welfare benefit, incentive
compensation, perquisite and other plans and arrangements of the Company
applicable to senior executives of the Company, as in effect from time to time.
In addition, the Company shall assume the obligation to pay premiums in an
amount up to $1,500 annually under Executive's life insurance policy with First
Colony (No. 2619072) having a face amount of $600,000 and Executive shall be
reimbursed on a monthly basis for the lease of an automobile in an amount not
to exceed $700/month.
6. Business Expenses. During the Employment Term, the Company
shall reimburse such of Executive's travel, entertainment and other business
expenses as are reasonably and necessarily incurred by Executive during the
Employment Term in the performance of his duties hereunder, in accordance with
the Company's policies as in effect from time to time.
7. Termination. Upon a termination of the Employment Term
prior to the Expiration Date, Executive shall be entitled to the payments
described in this Section 7.
(a) For Cause by the Company; by Executive. The Employment
Term may be terminated prior to its scheduled expiration by the Company for
Cause (as defined below) or by Executive for any reason.
If the Employment Term is terminated by the Company for Cause
or by Executive for any reason, Executive shall be entitled to receive his Base
Salary through the date of termination, any Bonus that has been earned in
accordance with Section 4 for a prior fiscal year but not yet paid and any
unreimbursed business expenses, payable promptly following the later of the
date of such termination and the date on which the appropriate documentation is
provided.
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All other benefits following termination of the Employment
Term pursuant to this Section 7(a) shall be determined in accordance with the
plans, policies and practices of the Company.
(b) Death. The Employment Term shall terminate prior to the
Expiration Date upon Executive's death. If the Employment Term is terminated
prior to the Expiration Date by reason of death, Executive's estate shall
receive (i) the amounts described under Section 7(a), (ii) continued payment of
Base Salary through the first anniversary of the date of death and (iii) the
Special Bonus if not yet paid.
All other benefits following termination of the Employment Term
pursuant to this Section 7(b) shall be determined in accordance with the plans,
policies and practices of the Company.
(c) Disability; by the Company without Cause. The Employment
Term shall terminate prior to the Expiration Date, at the Company's election,
if Executive incurs a Disability (as defined below). In addition, the
Employment Term may be terminated prior to the Expiration Date by the Company
without Cause.
If the Employment Term is terminated prior to the Expiration
Date by reason of Disability or by the Company without Cause, subject to
Executive's continued compliance with the covenants set forth in Section 8,
Executive shall receive (i) the amounts described under Section 7(a), (ii)
continued payment of Base Salary through the later of first anniversary of the
date of termination and the Expiration Date (the "SEVERANCE PERIOD"), (iii)
continued coverage under the Company's welfare benefit arrangements as in
effect from time to time through the earlier of (A) the end of the Severance
Period and (B) such time as Executive is eligible to receive comparable welfare
benefits from a subsequent employer, (iv) the Special Bonus if not yet paid and
(v) in the case of a termination by the Company without Cause, a Bonus payment
equal to $12,500 multiplied by the number of months remaining in the Severance
Period, payable at the time bonuses are paid to the Company's other senior
executives.
All other benefits following termination of the Employment Term
pursuant to this Section 7(c) shall be determined in accordance with the plans,
policies and practices of the Company.
(d) Definitions. For purposes of this Section 7, the
following terms shall have the following meanings:
(i) "CAUSE" shall mean:
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(A) Executive's willful and continued failure substantially
to perform his duties under the Agreement (other than as a result of total or
partial incapacity due to physical or mental illness);
(B) an act or acts on Executive's part constituting a felony
under the laws of the United States or any state thereof or any other
jurisdiction in which the Company conducts business;
(C) Executive's being under the influence of illegal drugs or
alcohol while performing his duties hereunder;
(D) any other act or omission which is materially injurious
to the financial condition or business reputation of the Company or any of its
affiliates; or
(E) Executive's breach of the provisions of Section 8.
For purposes of this definition, no act or failure to act
shall be deemed "willful" unless effected by Executive not in good faith and
without a reasonable belief that such action or failure to act was in or not
opposed to the Company's best interests.
(iii) "DISABILITY" shall mean Executive's inability, as a
result of physical or mental illness, to perform the duties of the position(s)
specified in Section 2 for a period of 90 consecutive days or for an aggregate
of 90 days in any twelve consecutive month period. Any question as to the
existence of the Disability of Executive as to which Executive and the Company
cannot agree shall be determined in writing by a qualified independent
physician selected by the Company and reasonably acceptable to Executive. The
determination of Disability made in writing to the Company and Executive shall
be final and conclusive for all purposes of the Agreement.
(e) Notice of Termination. Any purported termination of the
Employment Term prior to its scheduled expiration by the Company or by
Executive shall be communicated by written notice of termination to the other
party hereto. For purposes of this Agreement, a "NOTICE OF TERMINATION" shall
mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under the provision so
indicated.
(f) Release. Any payments by the Company to Executive under
this Section 7 or in connection with any dispute arising under or in connection
with this Agreement or relating to Executive's employment with the Company
(including payments pursuant to arbitration as provided for in Section 11(m)
hereof) will be contingent upon the execution by Executive of a release of any
claims Executive may have against the
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Company, its affiliates or any successor to the Company, such release to be in
a form satisfactory to the Company in its sole discretion.
8. Non-Competition/Confidential Information. (a) Executive
acknowledges and recognizes the highly competitive nature of the businesses of
the Company and its affiliates and accordingly agrees that during the
Employment Term and the through the later of the Expiration Date and the first
anniversary of the date of termination of employment:
(i) Executive will not directly or indirectly engage in any
business which is in competition with any line of business conducted
by the Company or its affiliates (including without limitation by
performing or soliciting the performance of services for any person
who is a customer or client of the Company or any of its affiliates)
whether such engagement is as an officer, director, proprietor,
employee, partner, investor (other than as a holder of less than 1% of
the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent, sales representative or other participant,
in any geographic area in which the Company or any of its affiliates
conducted any such competing line of business.
(ii) Executive will not directly or indirectly assist others
in engaging in any of the activities in which Executive is prohibited
from engaging in by clause (i) above.
(b) Executive will not directly or indirectly induce any
employee of the Company or any of its affiliates to engage in any activity in
which Executive is prohibited to engage by paragraph (a) above or to terminate
his employment with the Company or any of its affiliates, and will not directly
or indirectly employ or offer employment to any person who was employed by the
Company or any of its affiliates unless such person shall have ceased to be
employed by the Company or any of its affiliates for a period of at least 12
months.
(c) Executive will not at any time (whether during or after
his employment with the Company) disclose or use for his own benefit or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise other than the Company and any of its subsidiaries or affiliates,
any trade secrets, information, data, or other confidential information
relating to customers, development programs, costs, marketing, trading,
investment, sales activities, promotion, credit and financial data,
manufacturing processes, financing methods, plans, or the business and affairs
of the Company generally, or of any subsidiary or affiliate of the Company,
provided that the foregoing shall not apply to information which is not unique
to the Company or which is generally known to the industry or the public other
than as a result of Executive's breach of this covenant. Executive agrees that
upon termination of his employment with the Company for any
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reason, he will return to the Company immediately all memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
affiliates, except that he may retain personal notes, notebooks and diaries.
Executive further agrees that he will not retain or use for his account at any
time any trade names, trademark or other proprietary business designation used
or owned in connection with the business of the Company or its affiliates.
9. Specific Performance and Other Remedies. Executive
acknowledges and agrees that the Company has no adequate remedy at law for a
breach or threatened breach of any of the provisions of Section 8 and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond and without notice to the Executive, shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available. Nothing in this Agreement shall be
construed as prohibiting the Company from pursuing any other remedies at law or
in equity that it may have or any other rights that it may have under any other
agreement.
10. Stock Option Plan. Notwithstanding anything to the
contrary in the Stock Option Plan to be adopted by the Company, any options
granted to Executive under such Stock Option Plan shall vest upon a Change of
Control (as defined in such Stock Option Plan) of the Company.
11. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
reference to principles of conflict of laws.
(b) Entire Agreement/Amendments. This Agreement, the Minimum
Expectations, the Stretch Objectives and any other performance and
superperformance criteria to be established by the Compensation Committee
pursuant to Section 4, the Stock Option Plan to be adopted by the Company and
any award agreements entered into under the Stock Option Plan, the Key Employee
Stock Purchase Plan to be adopted by the Company and any award agreements
entered under the Purchase Plan and the provisions of any employee plan or
arrangement maintained from time to time by the Company in which Executive
participates contain the entire understanding of the parties with respect to
the employment of Executive by the Company and supersede any prior agreements
between the Company and Executive. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect to the subject matter herein other than those expressly set forth
herein and therein. No provision in this Agreement may be amended unless such
amendment is agreed to in writing.
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(c) Continuation of Employment. Unless the parties otherwise
agree in writing, continuation of Executive's employment with the Company
beyond the Expiration Date shall be deemed an employment at will and shall not
be deemed to extend any of the provisions of this Agreement.
(d) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement. No waiver by either party of any breach by the other party of any
condition or provision contained in this Agreement to be performed by such
other party shall be deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time. Any waiver must be in
writing and signed by the Executive or the Company, as the case may be.
(e) Severability. It is expressly understood and agreed that
although Executive and the Company consider the restrictions contained in
Section 8 to be reasonable, if a final judicial determination is made by a
court of competent jurisdiction that the time or territory restriction in
Section 8 or any other restriction contained in Section 8 is an unenforceable
restriction against Executive, such provision shall not be rendered void but
shall be deemed amended to apply to such maximum time and territory, if
applicable, or otherwise to such maximum extent as such court may judicially
determine or indicate to be enforceable. Alternatively, if any court of
competent jurisdiction finds that any restriction contained in Section 8 is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein. In the event that any one or more of the
other provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
(f) Assignment. This Agreement shall not be assignable by
either party without the consent of the other party.
(g) Mitigation. Except to the extent set forth in Section
7(b), Executive shall not be required to mitigate the amount of any payment or
benefit to be provided pursuant to Section 7 by seeking other employment or
otherwise.
(h) Successors. This Agreement shall inure to the benefit of
and be binding upon the personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees of the
parties hereto. The Executive shall be entitled to select (and change, to the
extent permitted under any applicable law) a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive'
death by giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his incompetence, reference in
this
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Agreement to the Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
(i) Communications. For the purpose of this Agreement,
notices and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given when faxed or delivered or
two business days after being mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed (A) to the Executive
at his address then appearing in the personnel records of the Company and (B)
to the Company at the Company's then current headquarters, with a copy to the
Company's ________ or (C) to such other address as either party may have
furnished to the other in writing in accordance herewith, with such notice of
change of address being effective only upon receipt.
(j) Withholding Taxes. The Company may withhold from any and
all amounts payable under this Agreement such Federal, state, local and any
other applicable taxes as may be required to be withheld pursuant to any
applicable law or regulation.
(k) Survivorship. The respective rights and obligations of
the parties hereunder shall survive any termination of Executive's employment
to the extent necessary to the agreed preservation of such rights and
obligations.
(l) Representations. Each party represents and warrants to
the other that he or it is fully authorized and empowered to enter into this
Agreement and that the performance of his or its obligations under this
Agreement will not violate any agreement between him or it and any other person
or entity.
(m) Arbitration. The parties agree that all disputes arising
under or in connection with this Agreement, and any and all claims by the
Executive relating to his employment with the Company, including any claims of
discrimination arising under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, the Americans with
Disabilities Act and any similar federal, state and local law will be submitted
to arbitration in the County and State of New York to the American Arbitration
Association ("AAA") under its rules than prevailing for the type of claim in
issue. The parties each hereby specifically submit to the personal jurisdiction
of any federal or state court located in the County and State of New York for
any such action and further agree that service of process may be made within or
without the State of New York by giving notice in the manner provided herein.
In any action or proceeding relating to this Agreement, the
parties agree that no damages other than compensatory damages shall be sought
or claimed by either party and each party waives any claim, right or
entitlement to punitive, exemplary, statutory or consequential damages, or any
other damages, and each relevant arbitral panel is specifically divested of any
power to award any damages in the nature of punitive,
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exemplary, statutory or consequential damages, or any other damages of any kind
or nature in excess of compensatory damages.
(n) Fees and Expenses. In the event of a dispute by the
Company or Executive as to the validity or enforceability of, or liability
under, any provision of this Agreement and with respect to any claims arising
in connection with Executive's employment with the Company, each party shall
pay its own legal fees and expenses incurred in connection with such dispute or
claim.
(o) Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(p) Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement. Any reference
to the Executive in the masculine gender herein is for convenience and is not
intended to express any preference by the Company for executives of any gender.
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the day and year first above written.
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Xxxx X. Xxxxxx
BRAND SCAFFOLD SERVICES, INC.
By:
-----------------------------------
Name:
Title:
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