EXHIBIT 10.63
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is executed this 1st day of
March, 2001 but effective as of the 1st day of January 2001, by and between
Xxxx Xxxxxxx, an individual resident of the State of Pennsylvania ("Employee"),
and RailWorks Corporation, a Delaware corporation ("Employer").
WITNESSETH
WHEREAS, the Employee has been employed by Employer pursuant
to an Amended and Restated Employment Agreement dated as of January 1, 2000
("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
Director, Business Development of Employer.
Subject to the terms and conditions of this Agreement,
Employee will devote a mutually agreeable portion of his business time and
efforts in the rail and rail supply industries to the performance of his job as
Director, Business Development, of Employer; subject to direction of Employer's
Vice President, Corporate Business Development.
SECTION 2. TERM OF EMPLOYMENT. The term of the Employee's
employment hereunder (the "Term") shall be from May 21, 1998, the effective
date of the commencement of Employee's employment by Employer, 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
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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
herein below).
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 Employer, a corporation owned
directly or indirectly by the stockholders of 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 Employer representing 50% or more of the
total voting power represented by 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 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 Employer approve a merger or consolidation of
Employer with any other corporation, other than a merger or
consolidation (i) which would result in the Voting Securities
of Employer outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being
convened into Voting Securities of the surviving entity) at
least 50% of the total voting power represented by the Voting
Securities of Employer or such surviving entity
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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 Employer; (D) the stockholders of Employer
approve a plan of complete liquidation of 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 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
(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. Effective as of October 1, 2000, Employee will be
paid a salary (the "Base Salary") of Fifty Thousand Dollars
($50,000) per annum, less deductions and withholdings
required by applicable law. The Base Salary will 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 Employer
on at least an annual basis after August 1, 2000, but may not
be decreased below the Base Salary set forth above as a
result of any such review.
(b) 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.
(c) 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 days in any calendar year may
not be carried over to subsequent years.
(d) 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. Employee is a
participant in, and unless otherwise mutually agreed by the
parties, during the Term, shall be entitled
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to the benefits of, Employer's Long-Term Incentive Plan
adopted by the Compensation Committee of Employer and
ratified by the Board of Directors of Employer at a meeting
of each held on April 18, 2000, pursuant to which the "Loan,"
as hereinafter defined, may be forgiven in whole or in part.
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.
(ii) Upon termination of the Agreement pursuant to the terms of
Section 2(ii) or (iv) hereof, all granted but invested, 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.
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3.3 Loan Forgiveness on Change in Control. Immediately
upon a Change of Control, any balance of the Loan, 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 agreements, 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 Employer equal to one percent (1.0%) of the
number of shares of all classes of stock of 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 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.
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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 rate as 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,
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 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
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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 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, 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 Employer's
stock trades for a ten (10) day period
prior to the date of such sale to 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
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 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, Employer agrees to delete
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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.
(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
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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 with regard to
each item constituting all
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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;
(b) 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;
(c) 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
(d) 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.
(e) 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.
(f) 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. ss.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.
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(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 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
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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.
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 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: RailWorks Chief Executive Officer
Telecopy No.: (000) 000-0000
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Employee
Mr. Xxxx Xxxxxxx
000 Xxxxxxxxxx Xxxx
Xxxx Xxxx, 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.
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.
RAILWORKS CORPORATION
By: /s/ Xxxx X. Xxxxxx
-----------------------
Xxxx X. Xxxxxx
Chief Executive Officer
EMPLOYEE
By: /s/ Xxxx Xxxxxxx
-----------------------
Xxxx Xxxxxxx
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