1
Exhibit 10(iii).36
Draft of June 11, 1997
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Continuation, Non-competition and
Confidentiality Agreement (this "Agreement"), is made this 17th day of June,
1997, by and between Beneco Enterprises, Inc., a Utah corporation (the
"Company"), OHM Corporation, an Ohio corporation ("OHM"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
("Executive").
W I T N E S S E T H:
WHEREAS, concurrently with the execution of this Agreement,
OHM, the Company, the Executive, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. and ▇▇▇▇▇ ▇▇▇▇▇
(collectively, the "Shareholders") are entering into a certain Stock Purchase
Agreement (the "Stock Purchase Agreement"), pursuant to which OHM is purchasing
from the Executive and the other Shareholders all of the issued and outstanding
shares of capital stock of the Company;
WHEREAS, in order to induce OHM to enter into the Stock
Purchase Agreement and the other agreements contemplated thereby, Executive has
agreed to continue to serve in an executive capacity with the Company pursuant
to the terms and provisions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged,, and subject to the terms and conditions set
forth below, the Company, OHM and Executive agree as follows:
2
Section 1. Term of Employment. The Company hereby employs
Executive, and Executive hereby accepts employment by the Company, upon the
terms and conditions set forth in this Agreement, for a period of three years
commencing on June 1, 1997 (the "Effective Date") and ending on the third
anniversary of the Effective Date (the "Term of Employment"), unless earlier
terminated pursuant to Section 8 of this Agreement.
Section 2. Position, Duties, Responsibilities and Authority.
(a) Executive will assume and perform such , reasonable executive and managerial
responsibilities and duties in connection with the business activities of the
Company (the "Services") as the Executive has performed in connection with the
company prior to the date of this Agreement and consistent with the duties and
responsibilities performed by other executives holding similar positions in
other government contracting companies. Executive shall be appointed and serve
as Controller of the Company during the term of this Agreement. Executive shall
perform the Services in accordance with such procedures and policies as the
Company may adopt from time to time. During the Term of Employment, Executive
will be employed as an employee of the Company or any affiliate thereof in, or
in the vicinity of, Salt Lake City, Utah, or such other place as Executive may
agree in writing. Notwithstanding the foregoing, Executive will be required to
undertake regular and extended travel to such locations and for such duration as
may be required to fulfill his obligations and duties in connection with the
business activities of the Company and such travel shall be undertaken in a
reasonable and customary
2
3
manner and the amount of such travel shall be consistent with past
practice.
(b) During the Term of Employment, Executive will devote his
entire time, attention, skill and energy to the business of the Company during
business hours customary for executives holding similar positions with other
government contracting companies, will use his best efforts to promote the
success of the business of the Company and cooperate fully, with the Board of
Directors of the Company in the advancement of the best interests of the
Company. If Executive is elected as a director of the Company or as director or
officer of any of its affiliates, Executive will fulfill his duties as such
director or officer without additional compensation.
Section -3. Compensation During Term of Employment
3.1. Salary and Bonuses: As compensation for the Services
to be rendered during the Term of Employment, and for the other obligations
undertaken by Executive under this Agreement, Executive will be entitled to the
following:
(a) Salary. The Company will pay to Executive an annual salary
(the "Salary") of $180,000 (which is equivalent to $15,000 per month), which
shall be payable in equal periodic installments according to the Company's
customary payroll practices, but no less frequently than monthly.
(b) Bonus. Executive will be entitled to receive, with respect to each
fiscal year during the Term of Employment an annual bonus (the "Target Bonus")
equal to up to 30% of his annual Salary. The Target Bonus will be determined in
accordance with the terms and conditions
3
4
established pursuant to the Management Incentive Bonus Plan of OHM (the "OHM
Bonus Plan") in effect as of the date hereof, as may be amended by OHM, in its
sole discretion, from time to time.
3.2 Benefits. (a) The Company will, during the Term of
Employment, permit Executive to participate in such retirement savings plan,
life insurance, health insurance and other employee benefit plans of the Company
that may be in effect from time to time, to the extent Executive is eligible
under the terms of those plans in accordance with the policies of OHM.
(b) During the Term of Employment, Executive will be entitled
to a vehicle allowance of $750 a month. Executive shall not be entitled to
reimbursement by the Company for any automobile-related expenses, except for
fuel expense.
(c) Executive will be entitled to vacation in accordance with
the vacation policies in affect for employees of OHM and its
subsidiaries in similar positions to Executive. Executive will also be
entitled to the paid holidays set forth in OHM's policies. Vacation
days and holidays during any fiscal year that are not used by the
Executive during such fiscal year may not be used in any subsequent
fiscal year. In scheduling his vacation, Executive shall give
sufficient notice to his immediate supervisor regarding such vacation
and shall give due regard to the reasonable needs of the Company in
scheduling such vacation.
(d) All reasonable and documented out-of-pocket expenses
incurred by Executive on behalf of the Company in the ordinary and
normal course of business and in accordance with OHM's travel
4
5
and business expense policies in effect from time to time shall be
reimbursed by the company in accordance with the Company's normal
procedures for expense reimbursement.
(e) Executive's accumulated time with the Company prior to the
Effective Date shall be included in calculating his employment time
with the Company to the extent such accumulated time is considered in
determining the amount of benefits provided to the Executive under
Section 3.2(a) and (c).
Section 4. Earnout Consideration.
4.1 Earnout Consideration, (a) If one of the financial
performance levels provided in Section 4.1(b)(i), (ii) or (iii) is achieved, OHM
shall make certain payments (the "Earnout Consideration") to the Executive and
the other Shareholders as provided therein.
(b) The Earnout Consideration, if any, shall be based on the
Average Operating Income (as defined in Section 4.5) for the three-year period
following the Effective Date and shall consist of the following:
(i) If the Average operating Income for the three-year
period following the Effective Date is equal to or greater than $6,000,000, the
Executive and the other Shareholders shall receive an aggregate of $10,000,000
in cash or, in the sole discretion of OHM, shares of OHM Common Stock (as
defined in Section 4.5) with an aggregate market value (as determined pursuant
to Section 4.4(c)) of $10,000,000, or any combination of cash and OHM common
Stock, as determined by OHM.
5
6
(ii) if the Average Operating Income for the three-year period
following the Effective Date is equal to or greater than $5,500,000, but less
than $6,000,000, the Executive and the other Shareholders shall receive an
aggregate of $7,000,000 in cash or, in the sole discretion of OHM, shares of OHM
Common Stock with an aggregate market value of $7,000,000, or any combination of
cash and OHM Common Stock, as determined by OHM.
(iii) if the Average Operating Income for the three-year
period following the Effective Date is equal to or greater than $5,000,000, but
less than $5,500,000, the Executive and the other Shareholders shall receive an
aggregate of $4,000,000 in cash or, in the sole discretion of OHM, shares of OHM
Common Stock with an aggregate market value of $4,000,000, or any combination of
cash and OHM Common Stock, as determined by OHM.
(iv) If the Average Operating Income for the three-year period
following the Effective Date is less than $5,000,000, no Earnout Consideration
shall be paid.
4.2 Adjustments to Average Operating Income; Accounting
Considerations.
Accounting Considerations. (a) In computing the Average Operating Income, (i)
intercompany accounting charges that relate to general overhead allocations by
OHM to the Company shall be excluded from such computation, (ii) intercompany
accounting charges that relate to services actually provided by or caused to be
provided by OHM to or for the direct benefit of the Company shall be included in
such computation, including, without limitation, charges relating to
6
7
employee benefits provided to employees of the Company, insurance, professional
services and bonding fees and (iii) the financial impact of acquisitions which
result in a business combination with the Company shall be excluded from such
computation, unless (A) it is agreed upon in advance by OHM and ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. if he is employed as an executive of the Company at the time of such
acquisition (or Executive, if ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. is not employed as an executive
of the Company at such time and Executive is employed as an executive of the
Company at such time, or ▇▇▇▇▇ ▇▇▇▇▇,if ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. and Executive are not
employed as executives of the Company at such time and ▇▇▇▇▇ is employed as an
executive of the Company at such time) (the "Shareholder Representative"), that
such acquisition will be included in computing the Average Operating Income and
(B) the financial performance levels set forth in section 4.1(b) are adjusted to
take into account the effect of such acquisition, with such adjustments agreed
to by OHM and the Shareholder Representative. Notwithstanding the foregoing, OHM
agrees that it shall not cause the Company to engage in any acquisitions until
after the third anniversary of the Effective Date if (i) none of Executive,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. or ▇▇▇▇▇ ▇▇▇▇▇ are employed by the Company and (ii) one or
more of Executive, ▇▇▇▇▇ or ▇▇▇▇▇ are entitled to the Earnout Consideration.
(b) For purposes of determining the Average operating Income,
(i) the adequacy of any contingency or reserve reflected on the Company's
financial statements or accounting records shall be determined in accordance
with United States generally accepted
7
8
accounting principles ("GAAP") as applied to the company on a stand-alone basis
by OHM and reviewed by the certified public accounting firm regularly engaged by
OHM ("OHM's Accountants"); and (ii) notwithstanding the Company's past
practices, any and all costs incurred by the Company in seeking or retaining
customers, including the costs associated with bid proposals, shall be expensed
on a current basis and not amortized.
4.3 Allocation of Earnout consideration. (a) Except as
otherwise provided in this Section 4.3 and subject to the setoff rights provided
in Section 7.6 of the Stock Purchase Agreement, the Earnout Consideration, if
any, shall be allocated among the Executive and the other Shareholders as
follows:
Earnout Consideration
---------------------
(dollars in millions)
$10.0 $7.0 $4.0
----- ---- ----
▇▇▇▇▇▇ ▇▇▇▇▇ $7.8 $5.3 $2.8
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 1.2 1.0 .7
▇▇▇▇▇ ▇▇▇▇▇ 1.0 .7 .5
(b) (i) Notwithstanding anything to the contrary in Section
4.3(a) and except as otherwise provided in Section 4.3(b)(ii) or (iii), if a
Shareholder is not employed by the Company (except by reason of termination by
the Company without cause pursuant to the Employment Agreement of such
Shareholder) as of the third anniversary of the Effective Date, the Earnout
Consideration allocated to such Shareholder shall not be payable by OHM.
8
9
(ii) Notwithstanding Section 4.3(b)(i), in the event that
▇▇▇▇▇ ▇▇▇▇▇ is not employed by the Company as of the third anniversary
of the Effective Date (except by reason of his termination by the
Company without cause or because of his death or disability (as defined
in the Employment Agreement of ▇▇▇▇▇)), the Earnout Consideration that
would have been payable to ▇▇▇▇▇ shall be allocated on a pro rata basis
to the other Shareholders, provided such Shareholders are otherwise
entitled to receive their respective portion of the Earnout
Consideration.
(iii) If (A) a Shareholder is no longer employed by the
Company by reason of his death or disability, (B) the Average Operating
Income, on an annualized basis, for the period from the Effective Date
through and including the date of death or date of disability of such
Shareholder (each, a "Determination Date") is $5,000,000 or more, and
(C) the Earnout Consideration is determined to be payable under the
terms of this Agreement after the expiration of the three-year period
after the Effective Date, then such Shareholder or his estate or
guardian, in the case of disability, in accordance with the procedures
and within the period described in Section 4.4 shall be entitled to
receive an amount (the "Pro Rata Earnout Amount") equal to (A) the
Earnout Consideration that such Shareholder would have been entitled to
receive if he had remained employed by the Company until the third
anniversary of the Effective Date multiplied by (B) a fraction, the
numerator of which is the number of full months that shall have elapsed
from the Effective Date through and
9
10
including the Determination Date and the denominator of which is 36
months. If the Shareholder who dies or becomes disabled is ▇▇▇▇▇ ▇▇▇▇▇,
then the amount of the Earnout Consideration not paid to ▇▇▇▇▇ ▇▇▇▇▇ or
his estate, as the case may be, as a result of the determination of the
Pro Rata Earnout Amount, shall be allocated on a pro rata basis to the
other Shareholders, provided such Shareholders are otherwise entitled
to receive their respective portion of the Earnout Consideration. If
any other Shareholder dies or becomes disabled, any Earnout
Consideration in excess of the Pro Rata Earnout Amount with respect to
such Shareholder shall not be payable by OHM.
(c) OHM shall provide the Executive and the other shareholders
on a periodic basis not less than once each calendar year with an
interim update regarding the computation of the Average Operating
Income.
4.4 Payment of Earnout Consideration. (a) (i) Within ninety
days after the third anniversary of the Effective Date, OHM shall
determine the Average Operating Income, subject to review by OHM's
accountants (the "Average Operating Income Calculation"). Within three
business days after OHM's receipt of the Average Operating Income
Calculation, OHM shall deliver such calculation to each of the
Shareholders for review.
(ii) Unless a majority of the Shareholders (one of which must
be Executive unless he is no longer employed by the Company or
otherwise entitled to the Earnout Consideration), which for purposes of
this Section 4.4 shall include such Shareholder's
10
11
estate, if any, or guardian, in the case of disability, gives the
Company written notice of their objection to the Average Operating
Income Calculation, which notice shall include the basis of the
Shareholders' objection in reasonable detail ("Notice of Objection"),
within 30 calendar days after receiving the Average Operating Income
Calculation (the "Objection Period"), the Average Operating Income
Calculation shall be final, conclusive and binding on OHM and each of
the Shareholders.
(iii) If a majority of the Shareholders (one of which must be
Executive unless he is no longer employed by the Company or otherwise
entitled to the Earnout Consideration) deliver a Notice of Objection
within the Objection Period, OHM and the Shareholders shall use
reasonable efforts to resolve all disputes regarding objections set
forth in the Notice of Objection, If OHM and the Shareholders are not
able to resolve all disputes regarding the Shareholders' objections set
forth in the Notice of Objection within 14 calendar days after delivery
to OHM of the Notice of Objection, the remaining disputed items shall
be submitted for final resolution to an independent certified public
accounting firm selected by mutual agreement of OHM, on the one hand,
and the Shareholders, on the other hand, or if OHM and the Shareholders
are unable to agree upon such accounting firm within 20 calendar days
after the delivery of a Notice of Objection, OHM, on the one hand, and
the Shareholders, on the other hand, shall promptly instruct their
respective firms of independent
11
12
certified public accountants to select, within five business days
thereafter, a third independent certified public accounting firm and
only the disputed items shall be submitted to such independent
certified public accounting firm (the "Independent Accountants"), After
offering OHM and OHM's representatives and the Shareholders and the
Shareholders' representatives the opportunity to present their
positions as to the disputed items, which opportunity shall not extend
for more than 10 calendar days after the Independent Accountants have
been selected, the Independent Accountants shall deliver a written
report resolving the disputed items submitted for resolution and
setting forth the basis for such resolution within 30 calendar days
after OHM and the Shareholders have presented their positions as to the
disputed items. The resolution of the Independent Accountants shall be
final, conclusive and binding upon OHM and each of the Shareholders and
shall be reflected in any necessary revisions to the Average Operating
Income Calculation. Notwithstanding anything in this Agreement to the
contrary, the scope of the Independent Accountants' review of any
dispute between OHM and the Shareholders regarding the Average
Operating Income Calculation shall be limited solely to the resolution
of the Shareholders' objections that are not resolved prior to
selection of the Independent Accountants and as are set forth in the
Notice of Objection.
(iv) One-half of the fees, costs and expenses of the
Independent Accountants for services rendered pursuant to Section
12
13
4.4(a) shall be paid by the Shareholders and one-half of such fees,
costs and expenses shall be paid by OHM.
(b) If no Notice of Objection is timely delivered by the
Shareholders, OHM shall pay to the Shareholders, subject to Section
4.4(c), their respective portion of the Earnout Consideration, if any,
five business days after the earlier of (i) the expiration of the
Objection Period and (ii) the date of delivery by a majority of the
Shareholders to OHM of written notice that the Average Operating Income
Calculation will be accepted by the Shareholders without objection
(which notice shall be binding on each of the Shareholders, including
any Shareholder that is not a party to such notice). If a Notice of
Objection with respect to the Average Operating Income calculation is
timely delivered by a majority of the shareholders (one of which must
be Executive unless he is no longer employed by the Company or
otherwise entitled to the Earnout Consideration), OHM shall pay to the
Shareholders, subject to Section 4.4(c), their respective portion of
the Earnout Consideration, if any, five business days after the date
all disputed items are fully resolved pursuant to Sections 4.4(a)(ii)
or 4.4(a)(iii). All cash payments constituting the Earnout
Consideration shall be made by wire transfer of immediately available
funds to the respective accounts designated by the Shareholders. All
the OHM Common Stock constituting the Earnout Consideration, when
issued and delivered by OHM to the Shareholders as provided in this
Agreement, will be validly issued, fully paid and nonassessable.
13
14
(c) The value of the OHM Common Stock delivered in payment of
the Earnout Consideration shall be determined using the average of the
closing prices of such stock on the national securities exchange or
over-the-counter market in which such stock is then currently listed or
designated for trading for each business day commencing on the day 30
calendar days prior to the date of issuance to the Shareholders and
ending on the day immediately preceding the date of issuance to the
Shareholders. The OHM Common Stock, if any, issued in payment of the
Earnout Consideration shall be freely transferable upon receipt of such
common stock by the Shareholders. Subject to Section 4.1 of this
Agreement, if OHM is unable to issue freely transferable OHM Common
Stock to the Shareholders within 60 days of the date the amount of the
Earnout Consideration is finally determined pursuant to Section 4.4(b),
OHM shall pay to the Shareholders their respective portion of the
Earnout Consideration in cash by wire transfer of immediately available
funds to the respective accounts designated by the Shareholders.
4.5 Definitions. For purposes of this Agreement, (a) "Average Operating
Income" means (i) the operating income (loss) of the company for the three-year
period following the Effective Date (subject to the adjustments set forth in
Section 4.2(a)) determined in accordance with GAAP (but excluding all items of
gain or loss classified as extraordinary in accordance with GAAP and subject to
the accounting considerations set forth in Section 4.2(b)), divided by (ii)
three.
14
15
Notwithstanding the foregoing, the operating income of the Company shall not
include any of the following: interest expense; income tax expense;
amortization, if any, attributable to the transactions contemplated by the Stock
Purchase Agreement; interest income; and other items of non-operating income and
expense; and (b) "OHM Common Stock" means shares of Common Stock, par value $.10
per share, of OHM or any successor thereto provided the shares of such successor
are listed or designated for trading on a national securities exchange or
over-the-counter market.
Section 5. Trade Secrets, Proprietary Information and Return of
Materials.
5.l Trade Secrets. Executive acknowledges that, by reason of
Executive's duties, Executive will have access to and become informed of
proprietary, non-public information relating to the Company as well as other
confidential business and technical information and trade secrets ("Proprietary
Information"), including, without limitation:
(a) With respect to the Company and its affiliates,
(i) service specifications, schematics, designs, procedures,
practices, testing methods, concepts for new or improved services and other
service data; (ii) sources of supply and potential sources of supply, for
capital equipment, components, products and services; (iii) all technical
information relating to the invention, patenting, technological advancement,
formulation, development, design, specifications, testing, manufacture and use
of services, methods, processes, machinery and equipment (iv) customer
information, such as customer lists, purchasing and servicing habits and credit
15
16
information; (v) cost and pricing information; (vi) selling and marketing
information, such as selling methods, strategies, catalogues, order books and
instructional and promotional materials; (vii) training and recruiting methods
and materials; (viii) corporate planning data; (ix) financial results and
business conditions; and (x) any information that otherwise may be defined as a
"trade secret" under the Uniform Trade Secrets Act; and
(b) With respect to any other person or entity, any of the foregoing
types of information which belong to such person or entity but to which
Executive has had access by reason of his employment with the Company
(including, without limitation, information delivered to the Company or to any
of its affiliates in confidence by persons or entities for whom the Company is
performing services).
5.2 Ownership-of-Company Proprietary Information.
Executive specifically acknowledges (a) that all of the
Proprietary Information set forth in section 5.1(a) of this Agreement, whether
reduced to writing, maintained on any form of electronic media, or maintained in
the mind or memory of Executive, and whether compiled by the Company or
Executive, derives independent economic value from not being readily known to or
ascertainable by proper means by others who can obtain economic value from the
disclosure or use of such Proprietary Information, or any part of it; (b) that
reasonable efforts have been and will be taken by the Company and Executive to
maintain the secrecy of such Proprietary information; (c) that such Proprietary
Information is the sole property of the
16
17
Company; and (d) that any retention in violation of Section 5.4 of this
Agreement or use of such Proprietary Information during or after the Term of
Employment (except in the course of the performance of Executive's duties under
the terms of this Agreement) shall constitute a misappropriation of the trade
secrets of the Company.
5.3 Non-disclosure of Trade Secrets. Executive will keep in strict
confidence and will not, directly or indirectly, at any time during or after
Executive's employment by the Company, disclose, furnish, disseminate, make
available or use (except in the course of the performance of Executive's duties
under the terms of this Agreement) any of the Proprietary Information.
5.4 Return of Documents and Records. Executive agrees that upon
termination of Executive's employment with the Company, for any reason, or
expiration of the Term of Employment (unless Executive remains employed by the
Company), Executive shall return to the Company, in good condition, all property
of the Company, including, without limitation, any document or record
(including, without limitation, computerized records) containing any Proprietary
Information, and Executive shall promptly deliver to the Company all documents
and records (including, without limitation, computerized records) of the Company
in Executive's possession, custody or control. If such items are not so
returned, the Company will have the right to charge Executive for all reasonable
damages, costs, attorneys' fees and other expenses incurred in searching for,
taking and/or recovering such property.
17
18
Section 6. Restrictive Covenants.
6.1 During Term of Employment. During the Term of Employment, Executive
will not compete with the Company anywhere within the United States. In
accordance with this restriction, but without limiting its terms, during the
Term of Employment, Executive will not:
(a) enter into or engage in any business which competes with
the business of the Company; or
(b) solicit customers, business, patronage or orders for, or
sell, any products or services in competition with, or for any business that
competes with, the business of the Company; or
(c) divert, entice, or take away any customers, business,
patronage or orders of the Company; or
(d) promote or assist, financially or otherwise, any person,
firm, association, partnership, corporation or other entity engaged in any
business which competes with the business of the Company.
6.2. After Termination of Employment. For the earlier of five years
after the Effective Date, or three years from and after termination of this
Agreement for any reason other than a termination without cause under Section
8.4, or for a period of two years from the date of such termination without
cause under Section 8.4, Executive will not:
(a) enter into or engage in any business which competes with
the Company's business within the Restricted Territory (as defined in Section
6.4(c)); or
18
19
(b) solicit customers, business, patronage or orders for, or
sell, any products or services in competition with, or for any business,
wherever located, that competes with, the Company's business within the
Restricted Territory; or
(c) divert, entice or otherwise take away any customers,
business, patronage or orders of the Company within the Restricted Territory; or
(d) promote or assist, financially or otherwise, any person,
firm, association, partnership, corporation or other entity engaged in any
business which competes with the Company's business within the Restricted
Territory.
6.3. Related Parties. For the purposes of Sections 6.1 and 6.2,
inclusive, but without limitation thereof, Executive will be in violation
thereof if he engages in any or all of the activities set forth therein directly
as an individual on his own account, or indirectly as a partner, joint venturer,
employee, agent, salesperson, consultant, officer and/or director of any firm,
association, partnership, corporation or other entity, or as a stockholder of
any corporation in which Executive or Executive's spouse, child or parent owns,
directly or indirectly, individually or in the aggregate, more than one percent
of the outstanding stock.
6.4. Certain Definitions. (a) For the purposes of this Agreement, the
term "Company" shall include any and all direct and indirect subsidiaries,
divisions or business units of the Company for which Executive worked or had
responsibility at the time of termination of his employment and at any time
during the two year period prior to such termination.
19
20
(b) For the purposes of Sections 6.1 and 6.2, ,inclusive, the
company's business is defined to be commercial, residential and government
general contracting, construction management, and base and facilities
maintenance, and the provision of related services described in any and all
marketing materials as the same may be altered, amended, supplemented or
otherwise changed from time to time or other services substantially similar to
any such described services. For purposes of Section 6.2. insofar as it extends
for a two-year or three-year period, as the case may be, following termination
of Executive's employment or following expiration of the Term of Employment, the
Company's business is defined to be commercial, residential and government
general contracting, construction management and base and facilities
maintenance, and the provision of related services described in any and all
marketing materials in existence as of the date of termination of Executive's
employment with the Company or expiration of the Term of Employment or other
services substantially similar to any such described services.
(c) For the purposes of Section 6.2, the Restricted Territory
shall be defined as and limited to:
(i) the geographic area(s) within a one-hundred-mile radius of any and
all Company locations) (including, without limitation, Salt Lake City, Utah and
Washington, D.C.) in, to or for which Executive worked, was assigned or had any
responsibility (either direct or supervisory) at the time of termination of his
employment and at any time during his Term of Employment; and
20
21
(ii) all of the specific customer accounts, whether within or outside
of the geographic area described in (i) above, with which Executive had any
contact or for which Executive had any responsibility (either direct or
supervisory) at the time of termination of his employment and at any time during
his Term of Employment.
6.5. Extension of Period. If it shall be judicially determined that
Executive has violated any of his obligations under Section 6.2, then the period
applicable to each obligation that Executive shall have been determined to have
violated shall automatically be extended by a period of time equal in length to
the period during which such violation(s) occurred.
6.6. Adequate Consideration. Executive acknowledges that his
obligations under this Agreement are reasonable in the context of the nature of
the Company's business and the competitive injuries likely to be sustained by
the Company if Executive were to violate such obligations. Executive further
acknowledges that this Agreement is made in consideration of, and is adequately
supported by, the agreement of the Company to employ or to grant compensation or
benefits to the Executive pursuant to the terms of this Agreement, which
Executive acknowledges constitutes new and/or good, valuable and sufficient
consideration.
6.7. Covenant Not to Solicit. Executive will not directly or
indirectly at any time solicit or induce or attempt to solicit or induce any
employees or any sales representatives, agent(s) or consultants of the Company
to terminate their employment,
21
22
representation or other association with the Company, Executive's obligations
under this Section 6.7 shall survive the termination of this Agreement and shall
remain in full force and effect for ten years from the Effective Date.
6.8. Communication of Contents of Agreement. During the Term
of Employment and during any additional period in which the covenants contained
in Sections 6.1 and 6.2 of this Agreement remain in effect, Executive will
communicate the contents of this Agreement to any person, firm, association,
partnership, corporation or other entity which he intends to represent, be
employed by, be associated with, and which is engaged in a business that
competes with the business of the Company.
Section 7. Remedies. In the event of any breach by Executive of the
provisions of Sections 5 or 6 of this Agreement, the parties hereby recognize
and acknowledge that a remedy at law may be inadequate, and the Company may
suffer irreparable injury. Accordingly, Executive consents to injunctive and
other appropriate equitable relief upon the institution of appropriate
proceedings by the Company in order to protect the rights of the Company under
Sections 5 and 6 of this Agreement. Executive, OHM and the Company agree that if
the Company determines that it is necessary to seek such equitable relief, the
Company shall file a notice of arbitration (an "Arbitration Demand") with
Executive and the American Arbitration Association ("AAA") seeking arbitration
under the Expedited Procedure Rules of the Commercial Arbitration Rules of the
AAA, supplemented as follows: (i) within twenty-four hours after Executive's
receipt of an
22
23
Arbitration Demand, the Company and Executive shall select an arbitrator; (ii)
if Executive fails to cooperate in selecting an arbitrator within such
twenty-four-hour period, the company may proceed with obtaining injunctive
relief from a court of competent jurisdiction; (iii) the parties agree that any
hearing by the arbitrator shall be held as soon as possible, but no later than
seven days after the date the arbitrator in selected; and (iv) that the
arbitrator's decision shall be rendered as soon as possible, but no later than
seven days after the date of the closing of the hearing referred to in clause
(iii) above. Such relief will be in addition to any other relief to which the
Company may be entitled at law or in equity Resort to any remedy provided for
under this Section 7 or provided for by law will not prevent the concurrent or
subsequent employment of any other appropriate remedy or remedies or preclude
the recovery by the Company of monetary damages.
Section 8. Termination.
8.1. Termination Upon Death or Disability. This Agreement and
Executive's employment with the Company will terminate automatically upon the
death or disability (as defined below) of Executive and in such event the
Company will have no further obligation to Executive under this Agreement except
to pay Executive or his estate or guardian, in the case of disability, the
unpaid portion, if any, of the Salary payable to Executive under Section 3.1(a)
for the period through the date of his death or disability and, to the extent
provided in this Agreement, a portion of his Earnout Consideration. For purposes
of this Agreement, "disability" means an
23
24
illness or incapacity (mental or physical or both) of a character, nature,
degree or effect that renders Executive incapable of performing his duties
hereunder for a period of more than 90 consecutive days, or more than 120 days
in any 180-day period. The determination of "disability" will be made by
physicians acceptable to the Company, and Executive consents to examination by
such physicians and to the disclosure by any physicians of any and all
diagnoses, test results, opinions and other information obtained by such
physicians during or as a result of such examinations.
8.2. Termination by Executive. If Executive terminates his employment
with the Company, the Company will have no further obligation to Executive under
this Agreement except to pay Executive the unpaid portion, if any, of the Salary
payable to Executive under Section 3.1(a) for the period through the date of
termination.
8.3. Termination for Cause. (a) In the event that the Company
terminates Executive's employment with the Company for "cause" (as defined
below) at any time by delivering notice of termination to Executive, the Company
will have no further obligation to Executive under this Agreement, except to pay
Executive the unpaid portion, if any, of the Salary payable to Executive
pursuant to Section 3.1(a) for the period through the date of termination.
(b) For purposes of this Agreement, "cause", means willful
misconduct by Executive resulting in material harm to the Company and its
affiliates (including harm to the Company and its affiliates' public
reputation), (ii) the breach by Executive of any of his covenants contained in
this Agreement, (iii) Executive's conviction
24
25
of, or Executive's entering of a guilty plea with respect to, a felony or (iv)
Executive's misappropriation of corporate funds. Termination pursuant to this
Section 8.3 shall not be in limitation of any other right or remedy the Company
may have against Executive, and following termination of this Agreement pursuant
to this Section 8.3, Executive shall remain liable to the Company for any
damages caused by any of the foregoing.
8.4. Termination Other Than For Cause. In the event that the Company
terminates Executive's employment with the Company without "cause", the company
will have no further obligation to Executive under this Agreement, except to
provide Executive with the Salary, the Target Bonus, if any, and benefits to
which Executive would have been entitled pursuant to Sections 3.1 and 3.2 for
the period through the six-month anniversary of the date of such termination
and, to the extent provided in this Agreement, his Earnout Consideration, if
any, payable pursuant to Section 4. Amounts payable in respect of the Target
Bonus shall be payable on a pro rata basis in accordance with the OHM Bonus
Plan, except that the requirement under the OHM Bonus Plan that Executive remain
employed by the Company or its subsidiaries in order to be eligible to receive
such bonus shall be deemed waived for purposes of this Section 8.4.
8.5. Continuance of Covenants. Notwithstanding any other provision of
this Agreement to the contrary, if this Agreement is terminated for any reason,
Sections 5 and 6 will survive and continue to bind Executive to the extent set
forth therein.
Section 9. Miscellaneous. (a) Amendment. This Agreement may be amended
only by a writing executed by each of the parties to this Agreement.
25
26
(b) Entire Agreement. This Agreement, the Stock Purchase
Agreement and the documents executed in connection with the Stock Purchase
Agreement contain the entire agreement between the parties and supersede all
prior understandings, agreements or representations by or between the parties,
written or oral, to the extent they have related in any way to the subject
matter hereof, provided, however, that (i) the obligations of the Company and
Executive under this Agreement are expressly conditioned upon the closing of the
transactions contemplated in the Stock Purchase Agreement and (ii) this
Agreement shall be null and void in the event that the transactions contemplated
in the Stock Purchase Agreement are not consummated.
(c) Notices. Any notice, request, consent and other
communication required or permitted under this Agreement must be in writing and
will be deemed to have been duly given (i) when received if personally
delivered, (ii) within one day after being sent by recognized overnight delivery
service, or (iii) within five days after being sent by registered or certified
mail return receipt requested, postage prepaid, to the parties (and to the
persons to whom copies shall be sent) at their respective addresses set forth
below.
If to the Company:
Beneco Enterprises, Inc.
c/o OHM Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
26
27
If to Executive:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Any party may change the address or the persons to whom notice shall be
directed by notifying the other party as provided in this Section.
(d) Assignability. This Agreement shall be assignable by the Company,
in its sole discretion, to any one or more of the Company's direct or indirect
wholly owned subsidiaries, and to its successors and assigns, including any
entity with which the Company may merge or consolidate or to which all or
substantially all of its assets may be transferred. Executive may not assign,
pledge or encumber any interest in this Agreement or any part of this Agreement
(this Agreement being personal to Executive).
(e) Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the internal, substantive laws of the State
of Ohio, without regard to its principles of conflicts of laws.
(f) Construction. Each section and subsection of this Agreement
constitutes a separate and distinct provision of this Agreement. It is the
intent of the parties to this Agreement that the provisions of this Agreement be
enforced to the fullest extent permissible under the laws and public policies
applicable in each jurisdiction in which enforcement is sought. Accordingly, if
any provision of this Agreement shall be adjudicated to be invalid, ineffective
or unenforceable, the remaining provisions shall not be affected thereby.
27
28
The invalid, ineffective or unenforceable provision shall, without further
action by the parties, be automatically amended to effect the original purpose
and intent of such provision to the fullest extent legally permissible,
provided, that such amendment shall apply only with respect to the operation of
such provision in the particular jurisdiction with respect to which such
adjudication is made.
(g) Essential Covenants. Executive acknowledges that: (i) the covenants
by Executive in Sections 5 and 6 are essential elements of this Agreement, and
without Executive's agreement to comply with such covenants, the Company would
not have a ired all of the outstanding shares of capital stock of the Company
pursuant to the Stock Purchase Agreement nor entered into this Agreement or
employed the Executive, (ii) Executive has independently consulted its counsel
and has been advised in all respects concerning the reasonableness and propriety
of such covenants, with specific regard to the nature of the business conducted
by the Company, (iii) the covenants by Executive in Sections 5 and 6 are
independent covenants and the existence of any claim by Executive against the
Company under this Agreement or otherwise will not excuse the Executive's breach
of any covenant in Section 5 or 6, and (iv) if Executive's employment hereunder
expires or is terminated, this Agreement will continue in full force and affect
as is necessary or appropriate to enforce the covenants and agreements of
Executive in Sections 5 and 6.
(h) Waivers. Any waiver by any party or any violation of, breach of, or
default under, any provision of this Agreement by the other party shall not be
construed as, or constitute a continuing
28
29
waiver of such provision, or waiver of any other violation of, breach of or
default under any other provision of this Agreement.
(i) Headings. The headings in this Agreement are solely for convenience
and shall not be given any effect in the construction or interpretation of this
Agreement.
(j) Third Parties. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give to any person or entity
other than the Company and its affiliates, Executive, his estate and any
permitted assignees, any rights or remedies under, or by reason of, this
Agreement.
(k) Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall be
required to be withheld pursuant to any law or government regulation or ruling.
(l) Survival of Certain Obligations. The obligations of the Company and
Executive set forth in this Agreement which by their terms extend beyond or
survive the termination of the Term of Employment shall not be affected or
diminished in any way by the termination of this Agreement.
(m) No Violations. Executive represents and warrants that neither the
execution and delivery of this Agreement nor Executive's performance of his
duties and obligations under this Agreement will conflict with, violate or
result in a breach of any of the terms, conditions or provisions of, or
constitute a default under or (with or without the giving of notice or the
passage of time or both) entitle any party to terminate or declare a default
under any contract,
29
30
agreement, lease, license or instrument to which Executive or the Company is a
party or by which Executive or the Company may be bound.
(n) Succession Planning. Executive agrees that he shall assist the
Company and OHM, in the manner and to the extent reasonably requested by the
Company and OHM, in preparing a succession plan for the Company and in
identifying, assisting and training a successor to Executive and/or successors
to Executive's management team.
(o) Arbitration. Except as provided in Sections 4 (solely with respect
to the matters set forth in Section 4, which shall be governed by the procedures
set forth therein) and 7 of this Agreement, any dispute relating to this
Agreement or the performance by the parties of their respective obligations
hereunder, which is not promptly resolved by mutual agreement of the parties,
shall be finally settled by arbitration administered by the American Arbitration
Association under its Commercial Arbitration Rules. Such arbitration shall be
conducted by a single arbitrator appointed in accordance with such rules. The
arbitrator's award resulting from such arbitration may be confirmed and entered
an a final judgment in any court of competent jurisdiction and enforced
accordingly. The parties hereto agree that any dispute relating to this
Agreement or the performance by the parties of their respective obligations
hereunder shall not in any event be subject to the American Arbitration
Association's National Rules for the Resolution of Employment Disputes.
(p) Earnout Provisions. Executive acknowledges and agrees that (i)
Section 4 of this Agreement is intended to benefit Executive and the other
Shareholders, (ii) each of the Shareholders shall have
30
31
identical provisions in their respective employment agreements and (iii) the
parties may enforce the provisions of Section 4 as if such provisions were
contained in a single agreement to which OHM, the Company, Executive and the
other Shareholders were a party.
(q) Confidentiality. Each of Executive, OHM and the Company will not,
and will direct their representatives and agents not to, disclose to any person
or entity the existence or terms of this Agreement except to the extent required
by law or court order.
IN WITNESS WHEREOF, Executive has duly executed and delivered this
Agreement, and the Company has caused this Agreement to be duly executed and
delivered by its duly authorized officer, as of the date first written above.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Accepted as of such date at Findlay, Ohio.
BENECO ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
------------------------------
Title: President
-----------------------------
OHM CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President and Controller
-----------------------------
31
