Exhibit 10.15
EXECUTION COPY
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated July 20, 2000 by and between United Road
Services, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
(the "Executive").
WHEREAS, the Company desires to continue to employ the Executive and to
enter into an agreement embodying the terms of such continued employment;
WHEREAS, the Executive desires to accept such continued employment and
enter into such an agreement; and
WHEREAS, the Executive is willing to accept his employment on the terms
hereinafter set forth in this agreement (the "Agreement").
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties hereby agree
as follows:
1. Term of Employment. Subject to the provisions of Section 9 of the
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Agreement, the Executive shall continue to be employed by the Company pursuant
to the terms and conditions of the Agreement for a period commencing upon the
consummation of the transaction (the "Closing Date") contemplated by the United
Road Services, Inc. Shares of Series A Participating Convertible Preferred Stock
Purchase Agreement dated as of April 14, 2000 (the "KPS Transaction"), and
ending on the first business day following the second anniversary of the Closing
Date (the "Employment Term").
2. Position.
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(a) The Executive shall serve as the President of the Towing and
Recovery Division of the Company. During the Employment Term the Executive will
(i) devote his full business time, ability, knowledge and attention, and give
his best efforts solely to the Company's business affairs and interest, (ii)
perform such services and assume such duties and responsibilities appropriate to
the positions identified above as well as those which may from time to time be
reasonably assigned to him by the Chief Executive Officer of the Company or by
such other person to whom he may be directed to report by the Chief Executive
Officer or the Board of Directors of the Company (the "Board")
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and (iii) in all respects use his best efforts to further, enhance and develop
the Company's business affairs, interests and welfare.
(b) During the Employment Term, the Executive shall act in
accordance with the Company's general policies and procedures applicable to
other senior executives and shall not, except for activities expressly permitted
by the prior written approval of the Board: (i) engage in business independent
of the Executive's employment by the Company that requires any substantial
portion of the Executive's time or (ii) serve as an officer, general partner or
member in any for-profit corporation, partnership or firm. Notwithstanding the
foregoing sentence the Executive may continue to serve as an officer of the
corporation he currently owns together with his spouse and in which capacity he
currently serves.
3. Base Salary. During the Employment Term, the Company shall pay
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the Executive a base salary (the "Base Salary") at an annual rate of $160,000
payable in regular installments in accordance with the Company's usual payroll
practices. On at least an annual basis, the Compensation Committee of the Board
(the "Compensation Committee") will review the Executive's performance and may
increase the Base Salary if, in its discretion, any such increase is warranted.
The Company may also pay the Executive such bonuses and other incentive
compensation, including without limitation, stock options, as may be determined
from time to time to be appropriate by the Board or the Compensation Committee.
4. Signing and Stay Bonuses. Upon the consummation of the KPS
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Transaction, the Company shall pay to the Executive a lump sum bonus equal to
$62,500 (the "Signing Bonus"). Subject to the Executive's continued employment
with the Company, (i) upon the first business day following the first
anniversary of the Closing Date, the Company shall pay to the Executive a lump
sum payment equal to $31,250 and (ii) upon the first business day following the
second anniversary of the Closing Date the Company shall pay to the Executive an
additional lump sum payment equal to $31,250 (each of these payments,
individually and collectively shall be referred to as the "Stay Bonus"). In the
event of the termination of the Executive's employment for any reason other than
pursuant to Section 9(a) of the Agreement (Termination for Cause) or Section
9(d) of the Agreement (Termination by the Executive other than for Good Reason),
prior to the last date of the Employment Term, the Company shall pay
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to the Executive any Stay Bonus that has not been paid as of the date of such
termination (plus interest at 8% annually, computed from the Closing Date).
5. Bonus. The Executive shall be afforded the opportunity to
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earn an annual cash bonus payment (an "Annual Bonus") with respect to each
calendar year ending during the Employment Term. The amount of such Annual Bonus
shall not exceed 100% of the Executive's Base Salary and shall be contingent
upon the Company's achievement of certain target earnings before interest,
taxes, depreciation and amortization (the "EBITDA Target") established by the
Compensation Committee of the Board pursuant to an incentive compensation
program of the Company. Such Annual Bonus shall be paid at the same time and in
the same manner as bonuses are generally paid to other senior executives.
6. Equity Incentives.
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(a) Subject to shareholder approval, the Company shall
amend the Company's 1998 Stock Option Plan (the "1998 Plan") to permit the
granting of additional options pursuant to the 1998 Plan. Subject to such
approval, the Company shall grant to the Executive as of the Closing Date, an
option to purchase 3,000 shares of the Company's common stock at Fair Market
Value (as defined in the 1998 Plan) of such stock as of the Closing Date
pursuant to a stock option agreement to be entered into by and between the
Company and the Executive and to be governed by the terms of such agreement and
of the 1998 Plan. Such option shall vest as to one-third (1/3) of the shares
underlying the option on each of the first, second and third anniversaries of
the Closing Date. In addition, the stock option agreement evidencing the option
granted pursuant to this Section 6(a) shall provide, to the extent permissible
under the 1998 Plan, that such option will vest and become 100% exercisable upon
death, Disability (as defined in the 1998 Plan) or a termination of the
Executive's employment by the Company other than pursuant to Section 9(a) or
Section 9(d) of the Agreement.
(b) Subject to shareholder approval of the amendment to the
1998 Plan, referred to in Section 6(a), the Company shall grant to the Executive
as of the Closing Date, an option to purchase 8,333 shares of the Company's
common stock at 1.50 *KPS conversion price ("Year One Options"), 8,333 shares of
the Company's common stock at 2.50 * KPS conversion price ("Year Two Options")
and 8,334 shares of the Company's common stock at 3.50*
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KPS conversion price ("Year Three Options"); provided, however, that in all
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events, the exercise price of the option granted pursuant to this Section 6(b)
shall equal or exceed the Fair Market Value (as defined in the 1998 Plan) of
such shares of Common Stock on the date of the grant of such option. Each Year
One Option shall vest and become exercisable as of the first anniversary of the
Closing Date; each Year Two Option shall vest and become exercisable as of the
second anniversary of the Closing Date; and each Year Three Options shall vest
and become exercisable as of the third anniversary of the Closing Date.
(c) Upon the consummation of the KPS Transaction, one-half of the
Executive's unvested stock options granted to him prior to the Closing Date,
shall vest and become exercisable and the remaining one-half shall expire
without further consideration to the Executive. The options which shall vest and
those which shall expire in accordance with this Section 6 are listed on Exhibit
A annexed hereto.
Notwithstanding any of the provisions of this Section 6, in the
event that the requisite shareholder approval above is not granted or if any of
the Stock Options specified in Section 6(a) and (b) are not granted or awarded,
this paragraph 6(c) shall become inoperative and the Executive shall continue to
retain all rights and privileges to all stock options granted to him prior to
the Closing Date.
All options granted pursuant to this Section 6 shall hereinafter
be referred to as the Stock Options.
7. Employee Benefits.
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(a) During the Employment Term, the Executive shall be provided
with benefits on the same basis as employee benefits are generally made
available to other senior executives of the Company. In addition to normal
holidays recognized by the Company, the Executive will be entitled to three (3)
weeks paid vacation annually; provided that any vacation taken by the Executive
may be taken any time the Executive deems appropriate, upon consultation with
the Chief Executive Officer and/or the Board, who may determine the best
interests of the Company require otherwise.
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(b) The Executive agrees to make himself available and to
undergo, at the Company's request and expense, any physical examination or other
procedure necessary to allow the Company to obtain a key-person insurance policy
on the Executive. If the Company obtains such a policy, it shall maintain the
policy at its expense and all proceeds will be the sole property of the Company.
8. Business Expenses and Perquisites. During the Employment Term,
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the Company shall reimburse the Executive for travel and other out-of-pocket
expenses reasonably incurred by the Executive in the performance of his duties.
9. Termination. Notwithstanding any other provision of the
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Agreement:
(a) For Cause by the Company.
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(i) The Employment Term and the Executive's employment
hereunder may be terminated by the Company for "Cause" at any time effective
immediately upon Notice of Termination (as defined below) to the Executive. For
purposes of the Agreement, "Cause" shall mean (i) the commission by the
Executive of any act materially detrimental to the Company, including but not
limited to fraud, embezzlement, theft, bad faith, gross negligence,
recklessness, dishonesty, insubordination or willful misconduct; (ii)
incompetence or repeated failure or refusal to perform the duties required by
the Agreement and as may be assigned to the Executive by the Chief Executive
Officer of the Company or the Board or by such other person to whom the
Executive is directed to report from time to time by the Board; (iii) conviction
of, or pleading no contest to, a felony or any crime of moral turpitude; (iv)
conviction of a lesser crime or offense involving Company property; (v) any
material misrepresentation by the Executive to the Company regarding the
operation of the business; or (vi) material breach of any covenant of the
Agreement, provided, that the action or conduct described in clause (ii) or
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clause (vi) above will constitute "Cause" only if such action or conduct
continues after the Company has provided the Executive with written notice and a
reasonable opportunity (to be not less than 30 days) to cure the same.
(ii) If the Executive is terminated for Cause, he
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shall be entitled to receive his Base Salary through the date of such
termination. Upon termination of the Executive's employment for Cause pursuant
to this Section 9(a), the Executive shall have no further rights to any
compensation (including any Stay Bonus or Annual Bonus) or any other benefits
under the Agreement other than as required by applicable law. The Executive
shall forfeit all Stock Options granted to him whether or not such options have
vested. All other benefits, if any, due the Executive following the Executive's
termination of employment pursuant to this Section 9(a) shall be determined in
accordance with the plans, policies and practices of the Company; provided,
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however, that the Executive shall not participate in any severance plan, policy
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or program of the Company.
(b) Disability or Death.
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(i) The Employment Term and the Executive's employment
hereunder shall terminate upon his death and if the Executive in the good faith
determination of the Board, based on sound medical advice, has become physically
or mentally incapable of performing his duties hereunder for a continuous period
of one-hundred eighty (180) days, in which event the Executive will be deemed
permanently disabled upon the expiration of such one hundred eighty (180) day
period such incapacity to be hereinafter referred to as "Disability."
(ii) Upon termination of the Executive's employment
hereunder on account of either Disability or death, the Executive or his estate
(as the case may be) shall be entitled to receive (A) any accrued but unpaid
Base Salary through the date of death or Disability, (B) any unpaid Stay Bonus,
together with interest calculated pursuant to Section 4, hereof, (C)
compensation for any unused vacation which the Executive may have accrued and
(D) reimbursement for such expenses as the Executive may have properly incurred
on behalf of the Company as provided in Section 8 above, prior to the effective
date of the termination. In addition, in the event of a termination on account
of death or Disability, the Executive or his estate, (as the case may be) shall
continue to receive his Base Salary as in effect as of the date of termination
through one year following the date of such termination; provided, however, that
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in the case of a termination due to Disability, such payments shall be reduced
by all payments in respect of any payments the Executive may receive under the
Company's disability insurance for the same period. Such
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Base Salary continuation shall be in accordance with the Company's regular
payroll practices. All other benefits, if any, due the Executive following the
Executive's termination on account of Disability or death shall be determined in
accordance with the plans, policies and practices of the Company; provided,
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however, that the Executive (or his estate, as the case may be) shall not
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participate in any severance plan, policy or program of the Company, other than
any applicable disability benefit plan of the Company.
(c) Without Cause by the Company.
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(i) through the date which is sixty (60) days from the Closing
Date, the Employment Term and the Executive's employment hereunder may be
terminated by the Company without "Cause" (other than by reason of his
Disability or death) and the Executive shall be solely entitled to the following
payments and benefits within 30 days after the effective date of the
termination: (A) accrued but unpaid Base Salary through the date of termination,
(B) unpaid Stay Bonus, together with interest calculated pursuant to Section 4
hereof, (C) compensation for any unused vacation the Executive may have accrued,
(D) reimbursement of such expenses as the Executive may have properly incurred
on behalf of the Company as provided in Section 8 above, prior to the effective
date of the termination and (E) continuation of his participation in any and all
employee benefit plans or other employee benefits provided by Section 7(a), (b)
and (c) hereof to the extent permitted under the terms of such plans or program
through the date which is 18 months from the effective date of such termination.
In the event that the terms of the Company's health plan do not permit the
Executive to continue to participate in such plan, the Company shall reimburse
the Executive through the date which is 18 months from the effective date of
such termination for the cost of health care coverage (whether through "COBRA"
or such other mutually agreed upon arrangement) for the Executive and his
dependents (as such term is used in the Company health plan), if any.
(ii) The Employment Term and the Executive's employment hereunder
may be terminated by the company without "Cause" upon Notice of Termination (as
defined below) to the Executive. If the Executive's employment is terminated by
the Company without "Cause" (other than by reason of his Disability or death)
after the date which is sixty (60) days from the Closing Date, but prior to the
last day of the Employment Term, the Executive shall receive within 30 days
after the effective date of such termination
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any (A) accrued but unpaid Base Salary through the date of termination, (B)
unpaid Stay Bonus together with interest calculated pursuant to Section 4,
hereof, (C) compensation for any unused vacation that the Executive may have
accrued, (D) a prorated payment with respect to the Annual Bonus with respect to
the year of such termination and (E) reimbursement for such expenses as the
Executive may have properly incurred on behalf of the Company as provided in
Section 8 above, prior to the effective date of the termination. In addition,
the Executive shall (I) continue to receive his Base Salary as in effect as of
the date of such termination, through the later of (X) the last date of the
Employment Term (without regard to the termination of employment pursuant to
this Section 9(c)(i)) or (Y) one year following the date of such termination and
(II) continue to participate in any and all employee benefit plans or other
employee benefits provided by Section 7 hereof to the extent permitted under the
terms of such plans; provided, however, that the Executive's right to continue
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to receive the Base Salary payments pursuant to this Section 9(c)(ii) shall
cease immediately upon a violation by the Executive of any provision of Sections
10, 1l or 12 of the Agreement. Such Base Salary continuation shall be in
accordance with the Company's regular payroll practices.
(i) Upon termination of the Executive's employment by the
Company without Cause pursuant to this Section 9(c), the Executive shall have no
further rights, other than those set forth in this Section 9(c), to any
compensation or any other benefits under the Agreement. The Executive's rights
with respect to the Stock Options granted to him pursuant to Section 6 hereof
shall be determined pursuant to the 1998 Plan and the stock option agreement
evidencing the grant of such options. All other benefits, if any, due the
Executive following termination pursuant to this Section 9(c) shall be
determined in accordance with the plans, policies and practices of the Company;
provided, however, that the Executive shall not participate in any severance
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plan, policy or program of the Company.
(d) Termination by the Executive. The Employment Term and the
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Executive's employment hereunder may be terminated by the Executive for any
reason upon Notice of Termination (as defined below) to the Company. In the
event of such termination (other than a termination for "Good Reason" pursuant
to Section 9(e) hereof), the Executive shall be entitled to receive his Base
Salary through the date of the termination, and he shall have no further rights
to any compensation (including any Stay Bonus) or any other benefits
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under the Agreement. The Executive's rights with respect to the Stock Options
granted to him pursuant to Section 6 hereof shall he determined under the 1998
Plan and the stock option agreement evidencing the grant of such options. All
other benefits, if any, due the Executive following the Executive's termination
of employment pursuant to this Section 9(d) shall be determined in accordance
with the plans, policies and practices of the Company; provided, however, that
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the Executive shall not participate in any severance plan, policy or program of
the Company.
(e) Termination by the Executive for Good Reason. The Employment Term
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and the Executive's employment hereunder may be terminated by the Executive for
Good Reason upon Notice of Termination (as defined below) to the Company.
(i) For purposes of the Agreement, "Good Reason" shall mean: (A)
the occurrence of a "Change of Control" (as defined below) of the Company, and
(B) (1) a material reduction in the assignment of the Executive's duties,
responsibilities, or status without the Executive's consent; (2) a reduction by
the Company in the Executive's Base Salary; (3) the failure of the Company to
pay the Stay Bonus in accordance with Section 4 hereof; (4) a material breach of
the Agreement by the Company or (5) the substantial failure of the Company to
continue in effect the Company's insurance, disability, or any other executive
benefit plans or policies in which the Executive participates.
(ii) For purposes of the Agreement "Change of Control" shall mean
the occurrence of any of the following: (A) any time that, as a result of or in
connection with a tender offer, sale of securities, merger, consolidation, sale
of assets or contested election, or any combination of such transactions, the
persons who were directors of the Company immediately before such transaction or
event cease to constitute a majority of the Board of Directors of the Company or
of any successor to the Company at any time within one year after such
transaction or event; provided, however, that any sale, transfer or other
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disposition by KPS Special Situations Fund, L.P. ("KPS") or any of its
affiliates (each, a "KPS Sale") of securities acquired by KPS or its affiliates
pursuant to or in connection with the KPS Transaction including, without
limitation, any KPS Sale of some or all of the common stock of the Company
received by KPS or its affiliates upon conversion of shares of Series A
Participating Convertible Preferred Stock, par value $0.001 per share, which
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does not otherwise result in a Change of Control under clauses (B), (C), (D) or
(E) of this paragraph shall not constitute a Change of Control for purposes of
this clause (A), (B) the sale of all or substantially all of the assets of the
Company to any person or entity that, prior to such sale, did not control, was
not under common control with, or was not controlled by, the Company, (C) a
merger or consolidation or other reorganization in which the Company is not the
surviving entity or becomes owned entirely by another entity, unless at least
50% of the outstanding voting securities of the surviving or parent corporation,
as the case may be, immediately following such transaction are beneficially held
by the same persons and entities that beneficially held the outstanding voting
securities of the Company immediately prior to such transaction in the same
proportion as such persons or entities held such voting securities immediately
prior to the transaction, (o) any transaction or series of transactions which
results in any person or "group" becoming the beneficial owner, directly or
indirectly, of securities representing more than fifty percent (50%) of the
outstanding voting securities of the Company or (E) the sale of all or
substantially all of the assets of the Towing Division of the Company to any
person or entity that, prior to such sale, did not control, was not under common
control with, or was not controlled by, the Company; provided, however, that it
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is expressly acknowledged, agreed and understood by both the Executive and the
Company, that the consummation of the KPS Transaction or any transaction which
occurs on or after the KPS Transaction in which KPS or its affiliates control
the Company shall not be a Change of Control under the Agreement, any existing
or future stock option agreements, or any other agreements whatsoever between
the Executive and the Company.
Notwithstanding anything in this Section 9(e) to the contrary, if, while
the Executive is employed by the Company, a Change of Control (as defined
herein) occurs, the Executive may, in his sole discretion, within one (1) year
after the effective date of the Change of Control, give notice to the Company
that he intends to elect to exercise his right to terminate his employment for
Good Reason and receive the payments provided in Section 9(e)(iii) (the "Notice
of Intention"). In the event that the Executive elects not to exercise such
rights, the Executive's employment with the Company shall continue for the
balance of the Employment Term. In the event that the Executive does elect to
exercise such rights, the Executive's employment with the Company shall
terminate effective as of the date upon which the Notice of Intention is
received by the Company.
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(iii) If the Executive terminates his employment for Good
Reason pursuant to this Section 9(e), the Executive shall receive within 30 days
after the effective date of the termination any (A) accrued but unpaid Base
Salary through the date of termination, (B) unpaid Stay Bonus, together with
interest calculated pursuant to Section 4 hereof, (C) compensation for any
unused vacation that the Executive may have accrued, and (D) reimbursement for
such expenses as the Executive may have properly incurred on behalf of the
Company as provided in Section 8 above, prior to the effective date of the
termination. In addition, the Executive shall (I) continue to receive his Base
Salary as in effect as of the date of such termination, through the later of (X)
the last date of the Employment Term (without regard to the Executive's
termination of employment pursuant to this Section 9(e), or (Y) one year
following the date of such termination and (II) continue to participate in any
and all employee plans or programs or other employee benefits provided by
Section 7 hereof to the extent permitted under the terms of such plans or
programs through the later of (X) the last date of the Employment Term (without
regard to the Executive's termination of employment pursuant to this Section
9(e), or (Y) one year following the date of such termination; provided that in
all events the Executive and his dependents shall be provided with health
coverage at the Company's expense for such period; provided, however, that the
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Executive's right to continue to receive the Base Salary payments pursuant to
this Section 9(e) shall cease immediately upon a violation by the Executive of
any provision of Sections 10, 11 or 12 of the Agreement. Such Base Salary
continuation shall be in accordance with the Company's regular payroll
practices.
Notwithstanding anything in the Agreement to the contrary,
in the event that the Company determines in good faith that any portion of the
payments or other benefits set forth in the Agreement or any other plan,
arrangement or otherwise constitutes an excess parachute payment under Section
280G of the Code, then the Company shall have no obligation to provide such
portion to the Executive.
(iv) In the event the Executive terminates his employment
for Good Reason which is a Change of Control pursuant to Section 9(e), in
addition to any benefits provided to the Executive upon a Change of Control
pursuant to any stock option plan or stock option agreement governing any grant
of stock options to the Executive, any and all stock options granted to
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the Executive pursuant to any of the Company's stock option plans prior to the
effective date of such Change of Control that are unvested as of the effective
date of such Change of Control shall vest and become fully exercisable upon the
effective date of the Change of Control without regard to any vesting schedule
established in the relevant option plan or option agreement.
(f) Release of Claims. Notwithstanding any other provision of
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the Agreement, the payments required to be made under Sections 9(c) or 9(e)
shall be made only if the Executive executes a release of claims in the form
attached hereto as Exhibit I to the Agreement, or such similar form as the
Company may determine, and such release or form, as applicable, has become
effective.
(g) Notice of Termination. Any purported termination of
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employment by the Executive or the Company shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 15(g)
hereof and within 60 days prior to such termination; provided, however, that in
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the event of a termination under Section 9(e) on account of Good Reason, notice
of such termination must be given within 60 days following the consummation of
the event or events which give rise to the Good Reason other than a Change of
Control, and provided, further, however, that in the event of a termination
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under Section 9(a) on account of Cause, notice of such termination must be given
within 10 days of the effective date of such termination. For purposes of the
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in the Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of employment under the provision so indicated.
10. Non-Solicitation.
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(a) The Executive acknowledges and recognizes the highly
competitive nature of the business of the Company and its Affiliates (defined
below) and accordingly agrees as follows:
(i) During the Employment Term and until the later of (i)
the last day of the Employment Term (without regard to any termination pursuant
to Section 9) or (ii) one year following the effective date of the Executive's
termination (the "Restricted Period"), the Executive will not,
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directly or indirectly, solicit or encourage any employee of the Company or any
Affiliate to leave the employment of the Company or any Affiliate. For purposes
of Sections 10, 11 and 12 of the Agreement, the terms: "Affiliate" means as to
any Person, each other Person that directly or indirectly (through one (1) or
more intermediaries) controls, is controlled by or is under common control with
such person; and "Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust, associate (as
defined in regulations promulgated by the Securities and Exchange Commission) or
other legally recognizable entity.
(ii) During the Restricted Period, the Executive will not,
directly or indirectly, solicit or encourage to cease to work with the Company
or any Affiliate or consultant under contract with the Company or any Affiliate.
11. Confidentiality.
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(a) The Executive hereby agrees that he will comply with the
Company's general policies regarding confidentiality. Without in any way
limiting the foregoing sentence, the Executive further agrees that he will not,
at any time during the Employment Term or Restricted Period, make use of or
divulge to any other person, firm or corporation any trade or business secret,
process, method or means, or any other confidential information concerning the
business or policies of the Company, which he may have learned in connection
with his employment. For purposes of the Agreement, a "trade or business secret,
process, method or means, or any other confidential Information" shall mean and
include written information treated as confidential or as a trade secret by the
Company. The Executive's obligation under this Section 11 shall not apply to any
information which (i) is known publicly; (ii) is in the public domain or
hereafter enters the public domain without the fault of the Executive; (iii) is
known to the Executive prior to his receipt of such information from the
Company, as evidenced by written records of the Executive or (iv) is hereafter
disclosed to the Executive by a third party not under an obligation of
confidence to the Company. The Executive agrees not to remove from the premises
of the Company, except as an employee of the Company in pursuit of the business
of the Company or except as specifically permitted in writing by the Board, any
document or other object containing or reflecting any such confidential
information. The Executive recognizes that all such documents and objects,
whether developed by him or by someone else, will be the sole exclusive
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property of the Company. Except as specifically authorized by the Board upon
termination of his employment hereunder, the Executive shall forthwith deliver
to the Company all such confidential information, including without limitation
all lists of customers, correspondence, accounts, records and any other
documents or property made or held by him or under his control in relation to
the business or affairs of the Company, and no copy of any such confidential
information shall be retained by him.
12. Non Competition.
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(a) During the Restrictive Period, the Executive will not,
directly or on behalf of, or in conjunction with any other Person: (i) engage,
as an officer, director, shareholder, owner, partner, joint venturer, financier,
manager, executive, employee, independent contractor, consultant, advisor, or
sales representative, in any business selling any products or services in direct
competition with the Company or its Affiliates or subsidiaries within 100 miles
of any geographic location in which the Company or any of its Affiliates or
subsidiaries conducts business at such time (or in the case of a termination or
expiration of the Agreement, within 100 miles of any geographic location in
which the Company, or any of its Affiliates or subsidiaries conducted business
at the time of such expiration or termination) (the "Territory"); (ii) call upon
any prospective acquisition candidate on the Executive's own behalf or on behalf
of any competitor of the Company, or any of its Affiliates or subsidiaries,
which candidate was either called upon by the Company (including its Affiliates
or subsidiaries), or for which the Company or any of its Affiliates or
subsidiaries made an acquisition analysis, for the purpose of acquiring such
entity; provided, however, that the Executive shall not be charged with a
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violation of this Section 12 unless and until the Executive shall have knowledge
or notice that such prospective acquisition candidate was called upon, or that
an acquisition analysis was made, for the purpose of acquiring such entity;
(iii) call upon any Person which is, at that time, or which has been, within one
(1) year prior to that time, a customer of the Company including the Affiliates
or its subsidiaries thereof within the Territory for the purpose of soliciting
or selling products or services in direct competition with the Company within
the Territory; (iv) disclose customers, whether in existence or proposed, of the
Company (or the Company's subsidiaries or Affiliates) to any Person for any
reason or purpose; (v) engage in any pattern of conduct that involves the making
or publishing of written or oral statements or remarks (including, without
limitation, the repetition or distribution of derogatory rumors, allegations,
negative reports or comments)
15
which are disparaging, deleterious or damaging to the integrity, reputation or
good will of the Company, its management, or of management of its Affiliates or
subsidiaries.
(b) Notwithstanding anything herein to the contrary, the
limitations in this Section 12 of the Agreement will not prohibit any investment
by the Executive of not more than 5% of the outstanding capital stock of a
company whose securities are listed on a public exchange or the National
Association of Securities Dealers Automated Quotation National Market System.
(c) It is expressly understood and agreed that although the
Executive and the Company consider the restrictions contained in Sections 10, 11
and 12 of the Agreement to be reasonable, if a final judicial determination is
made by a court of competent jurisdiction that the time or territory or any
other restriction contained in the Agreement is an unenforceable restriction
against the Executive, the provisions of the Agreement shall not be rendered
void but shall be deemed amended to apply as to such maximum time and territory
and to such maximum extent as such court may judicially determine or indicate to
be enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in the Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained herein.
13. Specific Performance. The Executive acknowledges and agrees that
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the Company's remedies at law for a breach or threatened breach of any of the
provisions of Sections 10, 11 or 12 of the Agreement would be inadequate and,
in recognition of this fact, the Executive agrees that, in the event of such a
breach or threatened breach, in addition to any remedies at law, the Company,
without posting any bond, shall be entitled to obtain equitable relief in the
form of specific performance, temporary restraining order, temporary or
permanent injunction or any other equitable remedy which may then be available.
14. Indemnification. In the event the Executive 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 the Company
against the Executive), by reason of the fact that he is or was performing
services within the course and scope of his employment with the Company under
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the Agreement, then the Company shall protect, defend, indemnify and hold
harmless the Executive against all expenses (including attorneys' fees, costs
and expenses), judgments, fines, costs, liabilities, damages, and amounts paid
in settlement, actually and reasonably incurred by the Executive in connection
therewith. Without limiting the requirement above that the Executive be
performing services within the course and scope of his employment, activities
constituting violations of laws or the Company policy shall not constitute
services within the course and scope of the Executive's employment, and the
Company shall not indemnify the Executive for any activities. The Executive
agrees to immediately notify the Company of any threatened, pending or completed
matter. The Executive agrees to accept any attorney reasonably assigned by the
Company to defend the Executive; provided that if counsel selected by the
Company shall have a conflict of interest that prevents such counsel from
representing the Executive, the Executive may engage separate counsel and the
Company shall pay all reasonable attorneys fees of such counsel.
15. Miscellaneous.
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(a) Governing Law. The Agreement shall be governed by and
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construed in accordance with the laws of the State of New York.
(b) Entire Agreement/Amendments. The Agreement and any other
---------------------------
exhibits and attachments hereto contains the entire understanding of the parties
with respect to the employment of the Executive by the Company, and the
Agreement replaces and supersedes any and all prior or contemporaneous
negotiations, communications, understandings, obligations, commitments,
agreements or contracts, whether written or oral, between the parties respecting
the subject matter hereof. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. The Agreement
may not be altered, modified, or amended except by written instrument signed by
the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict
---------
adherence to any term of the Agreement on any occasion shall not be considered a
waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of the Agreement.
(d) Severability. In the event that any one or more of the
------------
provisions of the Agreement shall be or become invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions of the Agreement shall not be affected thereby.
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(e) Assignment. The Agreement shall not be assignable by the
----------
Executive. The Agreement may be assigned by the Company to a company which is a
successor in interest to substantially all of the business operations of the
Company. Such assignment shall become effective when the Company notifies the
Executive of such assignment or at such later date as may be specified in such
notice provided that any assignee expressly assumes the obligations, rights and
--------
privileges of the Agreement. Upon such assignment, the rights and obligations of
the Company hereunder shall become the rights and obligations of such successor
company.
(f) Successors; Binding Agreement. The Agreement shall inure to
-----------------------------
the benefit of and be binding upon the Company's and the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributes, devises and legatees.
(g) Notice. For the purpose of the Agreement, notices and all
------
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the execution page of the Agreement, provided
--------
that all notices to the Company shall be directed to the attention of the Chief
Executive Officer, or to such other address as either party may have furnished
to the other in writing in accordance herewith, except that notice of change of
address shall be effective only upon receipt.
(h) Withholding Taxes. The Company may withhold from any amounts
-----------------
payable under the Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
(i) Counterparts. The Agreement may be signed in counterparts,
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each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed the Agreement
as of the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
/s/ ▇ ▇ ▇▇▇▇▇▇▇▇ ▇▇
UNITED ROAD SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
Exhibit A
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
1. Options vested as of Closing Date:
Option to purchase 3,000 shares granted on January 21, 2000.
2. Options expired as of Closing Date:
Option to purchase 3,000 shares granted on January 21, 2000.
