EXHIBIT 10.16
October 26, 1999
Xxxxxx X. Xxxxx, Xx.
Group Maintenance America Corp.
0 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
RE: Employment Agreement ("Employment Agreement") dated March 1, 1998, by
and between Xxxxxx X. Xxxxx, Xx. ("you") and Group Maintenance America
Corp. ("GroupMAC" or the "Company")
Dear Xx. Xxxxx:
As you know, the Company is contemplating a merger with Building One Services
Corporation (the "Proposed Transaction"). The Proposed Transaction holds
exciting possibilities for the future of the Company and the Company wants your
to be a part of that future. The purposes of this letter are to indicate to you
that GroupMAC would very much like you to continue your employment with the
Company after the Proposed Transaction is consummated and to request certain
modifications to and waivers of the terms of your existing Employment Agreement.
The requested modifications and waivers are set forth below:
I. MODIFICATIONS.
A. Position: Your title and position will be Executive Vice
President-Mechanical Division
B. Base Salary: Your Base Salary will be changed to $240,000 per
year.
C. Bonus: A new incentive bonus plan for executive management
of the Company will be established beginning in
fiscal year 2000, and you will participate in such
plan. Your bonus potential under the new plan will be
80% of your Base Salary. Your bonus potential through
December 31, 1999, will be determined under the
Company's existing incentive bonus
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October 26, 1999
Page 2
plan and your bonus potential thereunder will remain
the same.
D. Stock Options: Under a combination of one or more of the Company's
existing stock option plans, an amended version of
any of such plans or a new stock option plan, subject
to approval of the Board of Directors of the Company
or a committee thereof, you will be granted options
to purchase an additional 81,000 shares of the common
stock of the Company effective as of a date
determined by the Board of Directors of the Company
or a committee thereof (the "Grant Date"). These
additional options will have the following basic
terms: (1) exercise price equal to the closing price
on the NYSE on the Grant Date, (b) ten (10) year
term, and (c) vesting over 4 (four) years.
E. Stock
Performance Plan: Subject to the approval of the Board of Directors of
the Company or a committee thereof, the Company
intends to adopt a stock performance plan in which
you will participate. Pursuant to such plan, upon the
achievement of certain performance criteria, the
Company will allocate to you a number of shares of
common stock of the Company determined by the Board
of Directors or a committee thereof.
F. Benefits: The employee benefits (other than your participation
in the Company's stock option plan) described in
Section 5 of your Employment Agreement will remain
the same.
G. Term: The initial term of your Employment Agreement set
forth in Section 2 of your Employment Agreement shall
be extended until December 31, 2001. After the
expiration of such initial term, the term of the
Employment Agreement shall be automatically renewed
for additional one year periods unless terminated in
accordance with Section 10 of your Employment
Agreement or unless the Company elects not to renew
the agreement at the end of its then applicable term.
Xxxxxx X. Xxxxx, Xx.
October 26, 1999
Page 3
H. Termination
and Severance: The terms and conditions of your Employment Agreement
in Section 10 regarding the right to terminate your
Employment Agreement and the amounts payable by the
Company to you, if any, in the event of such a
termination shall remain the same except as follows:
1. IF
(a) (i) you execute this letter agreement,
and
(ii) the Company terminates the
Employment Agreement without Cause
before the consummation of the Proposed
Transaction or you terminate the
Employment Agreement for Good Reason
before the consummation of the Proposed
Transaction, and
(iii) the Proposed Transaction is
consummated,
OR
(b) (i) you execute this letter agreement,
and
(ii) the Company terminates the
Employment Agreement without Cause
within twelve (12) months after the
consummation of the Proposed
Transaction, or you terminate the
Employment Agreement for Good Reason
within twelve (12) months after the
consummation of the Proposed
Transaction,
THEN, upon the occurrence of either of
the scenarios described in Parts
H.1.(a) and H.1.(b) above, the amounts
owed to you upon termination shall be
the greater of (A) the amounts owed to
you pursuant to your Employment
Agreement in such circumstances, and
(B) the amounts owed to you upon the
occurrence of a Change of
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October 26, 1999
Page 4
Control under your Employment
Agreement as it exists prior to the
date of this letter and without
giving effect to this letter.
2. The definition of the term "Good Reason" shall
be modified to include the failure of the
Company to, within ninety (90) days after the
consummation of the Proposed Transaction,
present to you for your execution a Restated
Employment Agreement containing terms and
conditions that are substantially similar to,
or better than, the terms and conditions
contained in your Employment Agreement, as
amended by this letter agreement. Under the new
Employment Agreement, a non-renewal of your
employment term at December 31, 2001, would
constitute "Good Reason."
I. Covenant
Not to Compete: The terms and conditions of your Employment Agreement
in Section 12 regarding your covenants not to compete
shall remain the same.
J. Other: Except as set forth above, all other terms and
conditions of your Employment Agreement shall remain
unchanged and in full force and effect.
II. WAIVER OF CERTAIN RIGHTS IN EMPLOYMENT AGREEMENT. Certain aspects of the
Proposed Transaction will constitute a "Change of Control" (as such term is
defined in your Employment Agreement) and will afford you certain rights and
remedies pursuant to Sections 7, 8, 9 and 10(c) of your Employment Agreement.
The Company is requesting that you waive your rights under the Employment
Agreement, including, without limitation, Sections 7, 8, 9 and 10(c), in
connection with each aspect of the Proposed Transaction. Accordingly, by
executing this letter, you agree to waive (i) all of the provisions of your
Employment Agreement, including, without limitation, Sections 7, 8, 9 and 10(c),
in connection with each and every aspect of the Proposed Transaction, (ii) the
application of such provisions, including, without limitation, Sections 7, 8, 9
and 10(c), as a result of any aspect of the Proposed Transaction, and (iii) any
and all rights and remedies available to you pursuant to your Employment
Agreement, including, without limitation, Sections 7, 8, 9 and 10(c), as a
result of any aspect of the Proposed Transaction (the waivers described in
clause (i), (ii) and (iii) being collectively referred to as the "Employment
Agreement Waiver"). The Employment Agreement Waiver is a limited waiver that
applies only to the Proposed Transactions and, except as set forth in this
Sections I and II hereof, the Agreement, including Sections 7, 8, 9 and 10(c),
shall
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October 26, 1999
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remain unchanged and in full force and effect.
III. GENERAL.
A. Effective Date. If you execute this letter agreement, unless
terminated pursuant to its terms, the provisions of this letter
agreement (i) contained in Section I. above (except for part H
thereof) shall become effective as of the date of the consummation of
the Proposed Transaction, and (ii) contained in Part H of Section I
above and Sections II and III shall become effective on the date this
letter agreement is executed by you.
B. Termination of Letter Agreement. If GroupMAC does not complete the
Proposed Transactions by March 31, 2000, then this letter agreement,
including, without limitation, the Waivers, will automatically
terminate without any action on the part of GroupMAC or you, and the
Employment Agreement will remain in full force and effect as if this
letter agreement had not been executed by you or GroupMAC.
C. Definitions. All capitalized terms used in this letter agreement but
not defined in this letter agreement shall have the meaning set forth
in the Employment Agreement. Additionally, the term "you" refers to the
addressee of this letter agreement.
D. Restated Employment Agreement. It is the intent of the Company and you
that this letter agreement constitute an amendment to the Employment
Agreement effective on the dates set forth in Section III.A. above. The
Company will in the future request that you execute a restated or
amended version of your Employment Agreement that has been modified to
reflect all of the modifications set forth in this letter agreement,
and you hereby agree to execute such version.
If the foregoing modifications of your Employment Agreement and the Waivers are
acceptable to you please sign and date the copy of this letter in the space
provided below, and return the copy to use by the close of business October 28,
1999. If you have any questions, please feel free to call me at 000-000-0000 or
GroupMAC's general counsel, Xxxxx Xxxxxx, at 000-000-0000.
Very truly yours,
GROUP MAINTENANCE AMERICA CORP.
By: /s/ J. Xxxxxxx Xxxxxxxx, Xx.
-----------------------------------
J. Xxxxxxx Xxxxxxxx, Xx.
Chief Executive Officer
Xxxxxx X. Xxxxx, Xx.
October 26, 1999
Page 6
AGREED to and ACCEPTED this 30 day of October, 1999
/s/ Xxxxxx X. Xxxxx, Xx.
----------------------------
Xxxxxx X. Xxxxx, Xx.
