EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), by and among Quanta Services,
Inc., a Delaware corporation ("Employer"), and ______________ ("Employee"), is
hereby entered into as of this ____ day of ______, 1998, and shall be effective
as of the date (the "Effective Date") of the consummation of the initial public
offering of the common stock of Employer (the "IPO").
R E C I T A L S
A. As of the date of this Agreement, Employer is engaged primarily in the
business of electrical engineering and construction.
B. Employee is employed hereunder by Employer in a confidential
relationship wherein Employee, in the course of Employee's employment with
Employer, has and will continue to become familiar with and aware of information
as to Employer's customers, specific manner of doing business, including the
processes, techniques and trade secrets utilized by Employer ("Confidential
Information"), and future plans with respect thereto, all of which has been and
will be established and maintained at great expense to Employer; this
information is a trade secret and constitutes the valuable goodwill of Employer.
C. Pursuant to that certain Amended and Restated Agreement and Plan of
Organization dated December 11, 1997 by and among Employer, ________________
(the "Company"), and the Stockholders named therein (the "Acquisition
Agreement"), Employer has agreed to purchase the stock of the Company (the
"Acquisition"), the Stockholders have agreed to be bound by certain
noncompetition provisions and Employee is one of the Stockholders.
A G R E E M E N T S
In consideration of the mutual promises, terms, covenants and conditions
set forth herein and the performance of each, the parties hereto hereby agree as
follows:
1. EMPLOYMENT AND DUTIES.
(a) Employer hereby employs Employee as _____________________ of Employer.
As such, Employee shall have responsibilities, duties and authority reasonably
accorded to and expected of a _________________ of Employer and will report
directly to [the Board of Directors] [or insert as appropriate] of Employer (the
"Board"). Employee hereby accepts this employment upon the terms and conditions
herein contained and, subject to paragraph 1(c) hereof, agrees to devote
Employee's time, attention and efforts to promote and further the business of
Employer.
(b) Employee shall faithfully adhere to, execute and fulfill all policies
established by the Board.
(c) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require Employee's services in the operation or affairs of the
companies or enterprises in which such investments are made nor violate the
terms of paragraph 4 hereof.
2. COMPENSATION.
For all services rendered by Employee, Employer shall compensate Employee
as follows:
(a) Base Salary. The base salary payable to Employee shall be $150,000 per
year, payable on a regular basis in accordance with Employer's standard payroll
procedures but not less than monthly. On at least an annual basis, the Board
will review Employee's performance and may make increases to such base salary
if, in its discretion, any such increase is warranted. Such recommended increase
would, in all likelihood, require approval by the Board or a duly constituted
committee thereof.
(b) Incentive Bonus Plan. For 1998 and subsequent years, it is Employer's
intent to develop, as soon as practicable after the Effective Date, a written
Incentive Bonus Plan setting forth the criteria and performance standards under
which Employee and other officers and key employees will be eligible to receive
year-end bonus awards. Employer contemplates that the maximum bonus for which
Employee may be eligible will be [50%] of Employee's base salary.
(c) Executive Perquisites, Benefits, and Other Compensation. Employee
shall be entitled to receive additional benefits and compensation from Employer
in such form and to such extent as specified below:
(i) Payment of all premiums for coverage for Employee and
Employee's dependent family members under health, hospitalization,
disability, dental, life and other insurance plans that Employer may have
in effect from time to time.
(ii) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of Employee's
services pursuant to this Agreement. All reimbursable expenses shall be
appropriately documented in reasonable detail by Employee upon submission
of any request for reimbursement, and in a format and manner consistent
with Employer's expense reporting policy.
(iii) Employer shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for Employee by
the Board and participation in all other Employer-wide employee benefits as
available from time to time.
3. [Intentionally left blank.]
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4. NON-COMPETITION.
(a) Employee recognizes that the Company's willingness to enter into the
Acquisition Agreement and to consummate the Acquisition is based in material
part on Employee's agreement to the provisions of this paragraph 4, and that
Employee's breach of the provisions of this paragraph could materially damage
the Company. Therefore, in consideration of the benefits to be received by
Employee as a result of the Acquisition, Employee hereby agrees that Employee
will not, during the period of Employee's employment with Employer, and for a
period of five (5) years following the date of this Agreement, for any reason
whatsoever, directly or indirectly, for himself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business of whatever nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor or as a sales representative,
in any electrical engineering or construction business in direct
competition with Employer or any subsidiary of Employer, within the United
States or within 100 miles of any other geographic area in which Employer
or any of Employer's subsidiaries conducts business, including any
territory serviced by Employer or any of its subsidiaries (the
"Territory");
(ii) call upon any person who is, at that time, within the
Territory, an employee of Employer (including the subsidiaries thereof) in
a managerial capacity for the purpose or with the intent of enticing such
employee away from or out of the employ of Employer (including the
subsidiaries thereof);
(iii) call upon any person or entity which is, at that time, or which
has been, within one (1) year prior to that time, a customer of Employer
(including the respective subsidiaries thereof) within the Territory for
the purpose of soliciting or selling products or services in direct
competition with Employer or any subsidiary of Employer within the
Territory; or
(iv) call upon any prospective acquisition candidate, on Employee's
own behalf or on behalf of any competitor, which candidate was, to
Employee's actual knowledge after due inquiry, either called upon by
Employer including the respective subsidiaries thereof) or for which
Employer made an acquisition analysis, for the purpose of acquiring such
entity.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than two percent (2%)
of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to Employer as a
result of a breach of the foregoing covenant, and because of the immediate and
irreparable damage that could be caused to Employer for which it would have no
other adequate remedy, Employee agrees that the
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foregoing covenant may be enforced by Employer in the event of breach by him, by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
paragraph 4 impose a reasonable restraint on Employee in light of the activities
and business of Employer (including Employer's subsidiaries) on the date of the
execution of this Agreement and the current plans of Employer (including
Employer's subsidiaries); but it is also the intent of Employer and Employee
that such covenants be construed and enforced in accordance with the changing
activities, business and locations of Employer (including Employer's
subsidiaries) throughout the term of this Agreement, whether before or after the
date of termination of the employment of Employee. For example, if, during the
term of this Agreement, Employer (including Employer's subsidiaries) engages in
new and different activities, enters a new business or establishes new locations
for its current activities or business in addition to or other than the
activities or business enumerated under the Recitals above or the locations
currently established therefor, then Employee will be precluded from soliciting
the customers or employees of such new activities or business or from such new
location and from directly competing with such new business within 100 miles of
its then-established operating location(s) through the term of this Agreement.
It is further agreed by the parties hereto that, in the event that Employee
shall cease to be employed hereunder, and shall enter into a business or pursue
other activities not in competition with Employer (including Employer's
subsidiaries), or similar activities, or business in locations the operation of
which, under such circumstances, does not violate clause (i) of this paragraph
4, and in any event such new business, activities or location are not in
violation of this paragraph 4 or of employee's obligations under this paragraph
4, if any, Employee shall not be chargeable with a violation of this paragraph 4
if Employer (including Employer's subsidiaries) shall thereafter enter the same,
similar or a competitive (i) business, (ii) course of activities or (iii)
location, as applicable.
(d) The covenants in this paragraph 4 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall be reformed in accordance therewith.
(e) All of the covenants in this paragraph 4 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against Employer, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by Employer of such covenants.
(f) Notwithstanding any other provision of this Agreement, if Employee's
employment is terminated by Employer for other than good cause, then no non-
competition provision shall be enforceable for any period of time during which
or for which the Employee is not receiving or has not received severance
compensation.
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5. PLACE OF PERFORMANCE.
Nothing contained herein shall be deemed to require Employee to relocate
from Employee's present residence to another geographic location in order to
carry out Employee's duties and responsibilities under this Agreement.
6. TERM; TERMINATION; RIGHTS ON TERMINATION.
The term of this Agreement shall begin on the date hereof and continue for
three (3) years (the "Term"), and, unless terminated sooner as herein provided,
shall continue thereafter on a year-to-year basis on the same terms and
conditions contained herein in effect as of the time of renewal. This Agreement
and Employee's employment may be terminated in any one of the followings ways:
(a) Death. The death of Employee shall immediately terminate this Agreement
with no severance compensation due to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been absent from Employee's full-time
duties hereunder for four (4) consecutive months, then thirty (30) days after
receiving written notice (which notice may occur before or after the end of such
four (4) month period, but which shall not be effective earlier than the last
day of such four (4) month period), Employer may terminate Employee's employment
hereunder provided Employee is unable to resume Employee's full-time duties at
the conclusion of such notice period. Also, Employee may terminate Employee's
employment hereunder if his or her health should become impaired to an extent
that makes the continued performance of Employee's duties hereunder hazardous to
Employee's physical or mental health or life, provided that Employee shall have
furnished Employer with a written statement from a qualified doctor to such
effect and provided, further, that, at Employer's request made within thirty
(30) days of the date of such written statement, Employee shall submit to an
examination by a doctor selected by Employer who is reasonably acceptable to
Employee or Employee's doctor and such doctor shall have concurred in the
conclusion of Employee's doctor. In the event this Agreement is terminated as a
result of Employee's disability, Employee shall receive from Employer, in a
lump-sum payment due within ten (10) days of the effective date of termination,
the base salary at the rate then in effect for whatever time period is remaining
under the Term of this Agreement or for one (1) year, whichever amount is
greater.
(c) Good Cause. Employer may terminate the Agreement ten (10) days after
delivery of written notice to Employee for good cause, which shall be: (1)
Employee's willful, material and irreparable breach of this Agreement; (2)
Employee's gross negligence in the performance or intentional nonperformance or
inattention continuing for ten (10) days after receipt of written notice of need
to cure of any of Employee's material duties and responsibilities hereunder; (3)
Employee's willful dishonesty, fraud or material misconduct with respect to the
business or affairs of Employer; (4) Employee's conviction of a felony crime; or
(5) chronic alcohol abuse or illegal drug abuse by Employee. In the event of a
termination for good cause, as enumerated above, Employee shall have no right to
any severance compensation.
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(d) Without Good Cause. At any time after the commencement of employment,
either Employee or Employer may, without good cause, terminate this Agreement
and Employee's employment, effective thirty (30) days after written notice is
provided to the other party. Should Employee be terminated by Employer without
good cause during the Term, Employee shall receive from Employer, in a lump-sum
payment due on the effective date of termination, the base salary at the rate
then in effect for whatever time period is remaining under the Term of this
Agreement or for one (1) year, whichever amount is greater. Further, any
termination without good cause by Employer shall operate to shorten the period
set forth in paragraph 4(a) and during which the terms of paragraph 4 apply to
one (1) year from the date of termination of employment. If Employee resigns or
otherwise terminates Employee's employment without cause pursuant to this
paragraph 6(d), Employee shall receive no severance compensation.
(e) Change in Control of Employer. In the event of a "Change in Control of
Employer" (as defined below) during the Term, refer to paragraph 13 below.
Upon termination of this Agreement for any reason provided above, Employee
shall be entitled to receive all compensation earned and all benefits and
reimbursements due through the effective date of termination. Additional
compensation subsequent to termination, if any, will be due and payable to
Employee only to the extent and in the manner expressly provided above or in
paragraph 13 hereof. All other rights and obligations of Employer and Employee
under this Agreement shall cease as of the effective date of termination, except
that Employer's obligations under paragraph 10 hereof and Employee's obligations
under paragraphs 4, 7, 8, 9 and 11 hereof shall survive such termination in
accordance with their terms.
If termination of Employee's employment arises out of Employer's failure to
pay Employee on a timely basis the amounts to which he is entitled under this
Agreement or as a result of any other breach of this Agreement by Employer, as
determined by a court of competent jurisdiction or pursuant to the provisions of
paragraph 17 below, Employer shall pay all amounts and damages to which Employee
may be entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce Employee's rights hereunder. Further, none of the provisions of
paragraph 4 hereof shall apply in the event this Agreement is terminated as a
result of a breach by Employer.
7. RETURN OF COMPANY PROPERTY.
All records, designs, patents, business plans, financial statements,
manuals, memoranda, lists and other property delivered to or compiled by
Employee by or on behalf of Employer, or its representatives, vendors or
customers which pertain to the business of Employer shall be and remain the
property of Employer, and be subject at all times to its discretion and control.
Likewise, all correspondence, reports, records, charts, advertising materials,
and other similar data pertaining to the business, activities or future plans of
Employer which is collected by Employee shall be delivered promptly to Employer
without request by it upon termination of Employee's employment.
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8. INVENTIONS.
Employee shall disclose promptly to Employer any and all significant
conceptions and ideas for inventions, improvements and valuable discoveries,
whether patentable or not, which are conceived or made by Employee, solely or
jointly with another, during the period of employment or within one (1) year
thereafter, and which are directly related to the business or activities of
Employer and which Employee conceives as a result of Employee's employment by
Employer. Employee hereby assigns and agrees to assign all of Employee's
interests therein to Employer or its nominee. Whenever requested to do so by
Employer, Employee shall execute any and all applications, assignments or other
instruments that Employer shall deem necessary to apply for and obtain Letters
Patent of the United States or any foreign country or to otherwise protect
Employer's interest therein.
9. TRADE SECRETS.
Employee agrees that he will not, during or after the Term of this
Agreement with Employer, disclose the specific terms of Employer's or its
subsidiaries' relationships or agreements with its significant vendors or
customers or any other significant and material trade secret of Employer or its
subsidiaries, whether in existence or proposed, to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever.
10. INDEMNIFICATION.
In the event Employee is made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by Employer against Employee), by reason of
the fact that Employee is or was performing services under this Agreement, then
Employer shall indemnify Employee against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, as actually and
reasonably incurred by Employee in connection therewith. In the event that both
Employee and Employer are made a party to the same third-party action,
complaint, suit or proceeding, Employer agrees to engage competent legal
representation, and Employee agrees to use the same representation, provided
that if counsel selected by Employer shall have a conflict of interest that
prevents such counsel from representing Employee, Employee may engage separate
counsel and Employer shall pay all attorneys' fees of such separate counsel.
Further, while Employee is expected at all times to use Employee's best efforts
to faithfully discharge his duties under this Agreement, Employee cannot be held
liable to Employer for errors or omissions made in good faith where Employee has
not exhibited gross, willful or wanton negligence or misconduct or performed
criminal and fraudulent acts which materially damage the business of Employer.
11. NO PRIOR AGREEMENTS.
Employee hereby represents and warrants to Employer that the execution of
this Agreement by Employee and his employment by Employer and the performance of
Employee's duties hereunder will not violate or be a breach of any agreement
with a former employer, client or any other person
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or entity. Further, Employee agrees to indemnify Employer for any claim,
including but not limited to attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against Employer based upon or arising out of any noncompetition agreement,
invention or secrecy agreement between Employee and such third party which was
in existence as of the date of this Agreement.
12. ASSIGNMENT; BINDING EFFECT.
Employee understands that he has been selected for employment by Employer
on the basis of Employee's personal qualifications, experience and skills.
Employee, therefore, shall not assign all or any portion of Employee's
performance under this Agreement. Subject to the preceding two (2) sentences and
the express provisions of paragraph 13 below, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and assigns.
13. CHANGE IN CONTROL.
(a) Unless Employee elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that Employer may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of Employer hereunder or
that Employer may undergo another type of Change in Control. In the event such a
merger or consolidation or other Change in Control is initiated prior to the end
of the Term, then the provisions of this paragraph 13 shall be applicable.
(b) In the event of a pending Change in Control wherein Employer and
Employee have not received written notice at least five (5) business days prior
to the anticipated closing date of the transaction giving rise to the Change in
Control from the successor to all or a substantial portion of Employer's
business and/or assets that such successor is willing as of the closing to
assume and agree to perform Employer's obligations under this Agreement in the
same manner and to the same extent that Employer is hereby required to perform,
then such Change in Control shall be deemed to be a termination of this
Agreement by Employer without good cause during the Term and the applicable
portions of paragraph 6(d) will apply; however, under such circumstances, the
amount of the lump-sum severance payment due to Employee shall be triple the
amount calculated under the terms of paragraph 6(d) and the noncompetition
provisions of paragraph 4 shall not apply.
(c) For purposes of applying paragraph 6 hereof under the circumstances
described in (b) above, the effective date of termination will be the closing
date of the transaction giving rise to the Change in Control and all
compensation, reimbursements and lump-sum payments due Employee must be paid in
full by Employer at or prior to such closing. Further, Employee will be given
sufficient time and opportunity to elect whether to exercise all or any of
Employee's vested options to purchase Employer Common Stock, including any
options with accelerated vesting under the provisions of Employer's 1997 Stock
Option Plan, such that Employee may convert the options to shares of
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Employer Common Stock at or prior to the closing of the transaction giving rise
to the Change in Control, if Employee so desires.
(d) A "Change in Control" shall be deemed to have occurred if:
(i) any person or entity, other than Employer or an employee
benefit plan of Employer, acquires directly or indirectly the Beneficial
Ownership (as defined in Section 13(d) of the Securities Exchange Act of
1934, as amended) of any voting security of Employer and immediately after
such acquisition such person or entity is, directly or indirectly, the
Beneficial Owner of voting securities representing 50% or more of the total
voting power of all of the then-outstanding voting securities of Employer,
unless the transaction pursuant to which such acquisition is made is
approved by at least two-thirds (2/3) of the Board;
(ii) the following individuals no longer constitute a majority of
the members of the Board: (A) the individuals who, as of the closing date
of Employer's initial public offering, constitute the Board (the "Original
Directors"); (B) the individuals who thereafter are elected to the Board
and whose election, or nomination for election, to the Board was approved
by a vote of at least two-thirds (2/3) of the Original Directors then still
in office (such directors becoming "Additional Original Directors"
immediately following their election); and (C) the individuals who are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds (2/3) of the Original
Directors and Additional Original Directors then still in office (such
directors also becoming "Additional Original Directors" immediately
following their election).
(iii) the stockholders of Employer shall approve a merger,
consolidation, recapitalization or reorganization of Employer, a reverse
stock split of outstanding voting securities, or consummation of any such
transaction if stockholder approval is not obtained, other than any such
transaction which would result in at least 75% of the total voting power
represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by at least 75%
of the holders of outstanding voting securities of Employer immediately
prior to the transaction, with the voting power of each such continuing
holder relative to other such continuing holders not substantially altered
in the transaction; or
(iv) the stockholders of Employer shall approve a plan of complete
liquidation of Employer or an agreement for the sale or disposition by
Employer of all or a substantial portion of Employer's assets (i.e., 50% or
more of the total assets of Employer).
(e) Employee shall be reimbursed by Employer or its successor for all
excise taxes that Employee incurs under Section 4999 of the Internal Revenue
Code of 1986, as amended, as a result of any Change in Control. In addition,
Employee shall be reimbursed by Employer or its successor for all federal, state
and local income taxes and additional excise taxes attributable to the payment
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pursuant to the preceding sentence and the payment pursuant to this sentence.
Such amount will be due and payable by Employer or its successor within ten (10)
days after Employee delivers a written request for reimbursement accompanied by
a copy of Employee's tax return(s) showing the excise tax actually incurred by
Employee. Such amount shall not be subject to offset or reduction for any
amount owed or claimed to be owed to Employer or its successor by Employee. If
not paid within ten (10) days from date of demand, the amount due under this
subsection shall bear interest at the maximum nonusurious rate allowed by law
from the date of demand to the date of payment.
14. COMPLETE AGREEMENT.
This Agreement is not a promise of future employment. This Agreement
supersedes any other agreements or understandings, written or oral, between
Employer and Employee, and Employee has no oral representations, understandings
or agreements with Employer or any of its officers, directors or representatives
covering the same subject matter as this Agreement.
This written Agreement is the final, complete and exclusive statement and
expression of the agreement between Employer and Employee and of all the terms
of this Agreement, and it cannot be varied, contradicted or supplemented by
evidence of any prior or contemporaneous oral or written agreements. This
written Agreement may not be later modified except by a written instrument
signed by a duly authorized officer of Employer and Employee, and no term of
this Agreement may be waived except by a written instrument signed by the party
waiving the benefit of such term.
15. NOTICE.
Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:
To Employer: Quanta Services, Inc.
_____________________________
_____________________________
_____________________________
To Employee: _____________________________
_____________________________
_____________________________
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this paragraph 15.
16. SEVERABILITY; HEADINGS.
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If any portion of this Agreement is held invalid or inoperative, the other
portions of this Agreement shall be deemed valid and operative and, so far as is
reasonable and possible, effect shall be given to the intent manifested by the
portion held invalid or inoperative. The paragraph headings herein are for
reference purposes only and are not intended in any way to describe, interpret,
define or limit the extent or intent of the Agreement or of any part hereof.
17. ARBITRATION.
Any unresolved dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, conducted before a
panel of three (3) arbitrators in __________________, in accordance with the
National Rules of the American Arbitration Association for the Resolution of
Employment Disputes in effect on the date of the event giving rise to the claim
or the controversy. The arbitrators shall not have the authority to add to,
detract from or modify any provision hereof nor to award punitive damages to any
injured party. The arbitrators shall have the authority to order back-pay,
severance compensation, vesting of options (or cash compensation in lieu of
vesting of options), reimbursement of costs, including those incurred to enforce
this Agreement, and interest thereon in the event the arbitrators determine that
Employee was terminated without disability or good cause, as defined in
paragraphs 6(b) and 6(c) hereof, respectively, or that Employer has otherwise
materially breached this Agreement. A decision by a majority of the arbitration
panel shall be final and binding. Judgment may be entered on the arbitrators'
award in any court having jurisdiction. The direct expense of any arbitration
proceeding shall be borne by Employer.
18. GOVERNING LAW.
This Agreement shall in all respects be construed according to the laws of
the State of ____________.
19. COUNTERPARTS.
This Agreement may be executed simultaneously in two (2) or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
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