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Exhibit 10.59
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of July 18, 1997, by and between MST Enterprises, Inc. (d/b/a Equipco Sales &
Rentals), a Virginia corporation (the "Company") and Xxxx X. Xxxxxxx (the
"Executive").
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment. The Company shall employ the Executive, and the Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in Section 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, the Executive shall serve as the
President of the Company and shall have the normal duties, responsibilities and
authority of a President, subject to the overall direction and authority of the
Company's Chief Executive Officer and the Company's board of directors (the
"Board"). Executive shall perform the services hereunder primarily within a
100-mile radius of the Company's current business premises in Harrisonburg,
Virginia, which shall be Executive's principal office and Executive shall not
be required to move such principal office outside of Harrisonburg, Virginia
without his consent.
(b) The Executive shall report to the Company's Chief Executive Officer
(or to such other person as the Company's Chief Executive Officer may
reasonably designate), and the Executive shall devote his best efforts and
substantially all of his business time and attention to the business and
affairs of the Company; provided, that Executive may make and manage personal
investments, engage in outside noncompetitive business activities, act as a
director and engage in other activities for any charitable, educational, or
other non-profit institution, if such investments and activities do not
interfere with the performance of Executive's duties hereunder. It is
acknowledged by the Company that Executive has disclosed that Executive is a
legal resident of the state of Florida and travels there frequently.
Therefore, the Company acknowledges that Executive's work schedule shall be
flexible and that Executive shall be required to be at the business premises
during regular working hours no more frequently than was Executive's practice
in calendar year 1996, all as previously discussed and agreed to by and between
Executive and Xxxxx Xxxxxxx, all without reduction of Executive's Base Salary,
benefits, bonus, or other compensation and Executive's time away from the
business premises shall be taken when reasonably deemed appropriate by
Executive. The Executive shall perform his duties and responsibilities to the
best of his abilities in a diligent, trustworthy, businesslike and efficient
manner.
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3. Base Salary and Benefits.
(a) During the Employment Period, the Executive's base salary shall be
$100,000 per annum (the "Base Salary"), which salary shall be payable in
regular installments in accordance with the Company's general payroll
practices, but in no event less frequently than monthly, and shall be subject
to customary withholding. In addition, during the Employment Period, the
Executive shall be entitled to participate in all of the Company's employee
benefit programs for which the senior executive employees of the Company are
generally eligible. The Company agrees that, during the Employment Period, the
health and hospitalization benefits provided by the Company to which Executive
shall be entitled to participate shall be no less favorable, and the expense to
Executive shall be no greater, than were available to Executive immediately
prior to the date hereof.
(b) The Company shall reimburse the Executive for all reasonable expenses
incurred by him in the course of performing his duties under this Agreement
which are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses, subject to
the Company's normal requirements with respect to reporting and documentation
of such expenses.
(c) In addition to the Base Salary, the Executive will be eligible to earn
an annual bonus of up to 45% of his Base Salary to be calculated in the manner
set forth on Exhibit A attached hereto.
4. Term.
(a) The Employment Period shall terminate upon the first anniversary of
the date hereof, unless earlier terminated (i) by the Executive's death or
Total Disability, (ii) by the Executive's resignation in the absence of a
Constructive Termination Event, or by the Company for Cause or (iii) by the
Company other than for Cause or by the Executive resigning as a result of a
Constructive Termination Event.
(b) If the Employment Period is terminated pursuant to clause (a)(i)
above, the Executive shall be entitled to receive his Base Salary through the
date of termination plus any bonus awarded, earned, which accrues or becomes
payable or which would have been earned prior to the first anniversary of the
date hereof but for such termination, prorated to the date of termination. If
the Employment Period is terminated pursuant to clause (a)(ii) above, the
Executive shall be entitled to receive his Base Salary through the date of
termination and all of the Executive's right to fringe benefits and bonuses
hereunder (if any) which accrue or become payable after the termination of the
Employment Period shall cease upon such termination pursuant to clause (a)(ii).
If the Employment Period is terminated pursuant to clause (a)(iii) above, the
Executive shall be entitled to receive his Base Salary through the first
anniversary of the date hereof, plus any bonus awarded, earned, which accrues
or becomes payable or which would have been earned prior to the first
anniversary of the date hereof but for such termination.
(c) For purposes of this Agreement, "Cause" shall mean (i) the commission
of a felony or any other material act or omission involving dishonesty or fraud
with respect to the
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Company or any of its subsidiaries or any of their customers or suppliers, (ii)
any willful or wanton misconduct which brings the Company or any of its
subsidiaries into substantial public disgrace or disrepute, (iii) willful,
substantial and repeated failure to perform duties as reasonably directed by
the Board, (iv) breach by Executive of the Noncompetition Agreement, dated as
of the date hereof, by and among National Equipment Services, Inc., the
Executive and others, or (v) any other knowing and material breach of this
Agreement.
(d) For purposes of this Agreement, "Total Disability" shall mean the
inability of Executive, by reason of illness or physical or mental disability,
to perform any of the customary duties of his employment for either (i) one
continuous period of two months, or (ii) a total of three months out of any six
consecutive months, in which event the Company shall have the right to
terminate Executive's employment hereunder by giving Executive thirty (30)
days' written notice to that effect. The determination of Executive's Total
Disability shall be made by Executive's regular treating physician. If the
Company disagrees with the conclusion of said physician, it may engage a second
physician to examine Executive. If these physicians disagree, then the parties
shall select a third physician to examine Executive, in which event their
majority opinion shall be conclusive. In such a case, the termination of
employment shall be effective on the date specified in such notice.
(e) For purposes of this Agreement, "Constructive Termination Event" shall
mean a material breach by the Company of the terms of this Agreement which is
not cured by the Company within fifteen (15) days after receipt of written
notice from Executive of such breach, action by the Company which is directed
at the Executive specifically and not at all employees generally and which has
the effect of significantly reducing the Executive's employment
responsibilities, authority, or the accommodations in which the Executive
performs his job, or the nonpayment by the Company of compensation due and
owing to Executive under this Agreement, which has not been cured by the
Company within fifteen (15) days of receipt of written notice from the
Executive that such nonpayment has occurred.
5. Executive's Representations. The Executive hereby represents and
warrants to the Company that (i) the execution, delivery and performance of
this Agreement by the Executive do not and will not conflict with, breach,
violate or cause a default under any contract, agreement, instrument, order,
judgment or decree to which the Executive is a party or by which he is bound,
(ii) the Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or
entity and (iii) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms. The Executive hereby
acknowledges and represents that he has consulted with independent legal
counsel regarding his rights and obligations under this Agreement and that he
fully understands the terms and conditions contained herein.
6. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when personally delivered or
received by certified mail, return receipt requested, or sent by guaranteed
overnight courier service. Notices, demands and communications will be sent to
parties hereto at the addresses indicated below:
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Notices to the Executive:
Xxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
With a Copy to:
Xxxxx X. Xxxxxx, Esquire
Williams, Parker, Xxxxxxxx, Xxxxx & Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Notices to the Company:
MST Enterprises, Inc.
c/o National Equipment Services, Inc.
0000 Xxxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxxx
With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxxxx X. Perl
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
7. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
8. Complete Agreement. This Agreement, those documents expressly referred
to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.
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9. No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any party.
10. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
11. Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of and be enforceable by the Executive, the Company and their
respective heirs, successors and assigns, except that the Executive may not
assign his rights or delegate his obligations hereunder without the prior
written consent of the Company.
12. Choice of Law; Venue; Attorneys' Fees. All issues and questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by, and
construed in accordance with, the laws of the State of Virginia, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Virginia or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Virginia.
The parties agree that any controversy, claim, or dispute arising out of or
relating to the terms and conditions of this Agreement shall be settled by
litigation initiated in a federal or state court having a situs in the county
for Harrisonburg, Virginia. The parties consent to the jurisdiction of these
courts for this purpose. The prevailing party shall be entitled to all costs
(including reasonable attorneys' fees and expenses) resulting from such dispute
or controversy.
13. Amendment and Waiver. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company and the Executive,
and no course of conduct or failure or delay in enforcing the provisions of
this Agreement shall affect the validity, binding effect or enforceability of
this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first written above.
MST ENTERPRISES, INC. (d/b/a EQUIPCO SALES
& RENTALS)
By: /s/ Xxxxx Xxxxxxx
----------------------
Its: CEO
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/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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EXHIBIT A
July 17, 1997
Xxxx Xxxxxxx
President
EQUIPCO
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
RE: BONUS PLAN FOR 12 MONTHS ENDING AUGUST 31, 1998
Set forth below is your bonus plan for the 12 month period beginning August 1,
1997 and ending July 31, 1998. The plan assumes that NES' acquisition of
EQUIPCO is concluded sometime during July 1997.
The bonus plan has three levels of probability: MAXIMUM; TARGET; and THRESHOLD.
The thought behind the plan is to set a MAXIMUM goal that has a reasonable
probability of being earned in 3 out of 10 years. The TARGET goal should be
earned in 6 out of 10 years and the THRESHOLD goal should be earned in 8 out of
10 years.
Your MAXIMUM bonus will be 45% of base salary with a TARGET of 30% and a
THRESHOLD of 15%. The bonus will be based on EBITDA (earnings before income
taxes, depreciation and amortization) growth calculated over the trailing 12
months for the period ending July 31, 1997, based on OCBOA consistently
applied. The MAXIMUM, TARGET and THRESHOLD amounts would be as follows based
on a base pay of $100,000.
MAXIMUM bonus at 45% $45,000
TARGET bonus at 30% $30,000
THRESHOLD bonus at 15% $15,000
The bonus for performance falling anywhere among the three levels will be
adjusted on a pro rata basis. Of course, the budget will be flexed for new
acquisitions and significant, unbudgeted projects, i.e., approved start ups.
An amount representing the estimated bonus payable under this plan (as well as
any others affecting EQUIPCO employees) must be accrued just like any other
expense. For example, in order for the MAXIMUM bonus level to be achieved, the
EBITDA target must be met or exceeded after the proper accrual is made for any
amounts earned under EQUIPCO's bonus plans.
The bonus will be paid within thirty (30) days of the close of the 12 month
period ending July 31, 1998.
EBITDA BUDGET
The bonus will be determined based on the EBITDA achieved from existing
operations for the 12 month period ending July 31, 1998. The MAXIMUM bonus for
this component shall be paid upon achieving an EBITDA equal to the trailing 12
month EBITDA (for the period ending July 31, 1997)
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plus 20%; TARGET bonus at EBITDA plus 15% and THRESHOLD bonus at EBITDA plus
10%. The EBITDA shall be measured before head office charges or fees, if any,
from NES.
Based on your base pay of $100,000, your bonus for EBITDA performance would be
determined as follows:
MAXIMUM bonus if EBITDA for $45,000
8/1/97-7/31/98 equals or exceeds 120%
of EBITDA for 8/1/96-7/31/97
TARGET bonus if EBITDA for 8/1/97- $30,000
7/31/98 equals or exceeds 115% of
EBITDA for 8/1/96-7/31/97
THRESHOLD bonus if EBITDA for $15,000
8/1/97-7/31/98 equals or exceeds
100% of EBITDA for 8/1/96-7/31/97
We all are looking forward to a long lasting and mutually beneficial
relationship
Very truly yours,
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