EXHIBIT 10.14
[EXECUTION COPY]
CONSULTING AND NON-COMPETITION AGREEMENT
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THIS AGREEMENT is entered into as of July 22, 1998 by and between
Xxxxxx X. Xxxxxxx (the "Consultant") and Xxxxxxx Xxxxx Rental, L.P., a
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Pennsylvania limited partnership (the "Company"). The Company and Consultant are
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sometimes collectively referred to herein as the "Parties" and individually as a
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"Party".
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Consultant has been an employee, officer, director and stockholder of
the Company, and as such, possesses special knowledge, abilities and experience
regarding the business of the Company. The Company, Bain/ACR, L.L.C., a Delaware
limited liability company, ACR Management, L.L.C., a Delaware limited liability
company and certain other person are parties to a Recapitalization Agreement
dated as of June 1, 1998 and amended as of July 21, 1998, whereby a
recapitalization of the Company will be consummated (the "Recapitalization").
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Upon the consummation of the Recapitalization, the Company desires to obtain the
services of Consultant to consult with and perform services as an independent
contractor for the Company with respect to its businesses, and Consultant
desires to provide services to the Company upon the terms and conditions set
forth in this Agreement.
In consideration of the mutual covenants and agreements set forth
herein, the Parties agree as follows:
1. Consulting Services. The Company hereby engages Consultant as an
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independent contractor, and not as an employee, to render consulting services to
the Company as hereinafter provided, and Consultant hereby accepts such
engagement, for a period commencing on the Closing Date (as defined in the
Recapitalization Agreement) and terminating as provided in paragraph 3 below
(the "Consulting Period"). Consultant shall not have any authority to bind or
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act on behalf of the Company. During the Consulting Period, Consultant shall
render such consulting services to the Company in connection with the Company's
business as the Company's Chief Executive Officer or the Executive Committee of
the Board of Managers of the Company's general partner from time to time
requests, provided that Consultant shall be entitled to four weeks of vacation
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per annum.
2. Compensation; Reimbursement. In consideration of Consultant's
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consulting services set forth in paragraph 1 above, and in consideration of the
non-competition covenant set forth in paragraph 6 below, the Company shall pay
to Consultant $255,000 annually to be paid monthly (the "Consulting and Non-
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Compete Payment"). Consultant shall not be entitled to any fringe benefits or
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perquisites from the Company. The Company shall reimburse Consultant for all
reasonable expenses incurred by him in the course of performing his duties under
this Agreement which are consistent with the Company's policies in effect from
time to time with respect to travel, entertainment and other business expenses,
subject to the Company's requirements with respect to reporting and
documentation of such expenses.
3. Term.
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(a) The Consulting Period shall continue until the earlier to occur
of (i) Consultant's resignation, death or permanent disability or incapacity (as
determined by the Board of Managers of the Company's general partner (the
"Board") in its good faith judgment), (ii) termination by the Company at any
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time for Cause (as defined below) or without Cause or (iii) July 22, 2003.
(b) If the Consulting Period is terminated by the Company without
Cause during the term of this Agreement, Consultant shall be entitled to receive
the Consulting and Non-Compete Payment until July 22, 2003. Any such amounts
payable under this Section 3(b) will be payable to Consultant at such times as
such amounts would have been payable had the Consulting Period not been
terminated.
(c) If the Consulting Period is terminated pursuant to clause (a)(i)
above, Consultant shall be entitled to receive the Consulting and Non-Compete
Payment through the date of termination. Any such amounts payable under this
Section 3(c) will be payable at such times as such amounts would have been
payable to Consultant had the Consulting Period not been terminated.
(d) If the Consulting Period is terminated by the Company for Cause,
Consultant shall be entitled to receive the Consulting and Non-Compete Payment
through the date of termina tion. Any such amounts payable under this Section
3(d) will be payable at such times as such amounts would have been payable to
Consultant had the Consulting Period not been terminated.
(e) The Company may offset any amounts Consultant owes it or its
Subsidiaries against any amounts it owes Consultant hereunder.
(f) For purposes of this Agreement, "Cause" means (i) the commission
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of a felony or a crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud, (ii) conduct tending
to bring the Company or any of its Subsidiaries into public disgrace or
disrepute, (iii) failure to perform duties as reasonably directed by the Board,
(iv) gross negligence or willful misconduct with respect to the Company or any
of its Subsidiaries or (v) any breach of this Agreement.
4. Confidential Information. Consultant acknowledges that the
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information, observations and data relating to the business of the Company and
its subsidiaries which Consultant has obtained as an employee, officer, director
and stockholder of the Company and its subsidiaries or shall obtain during the
course of his association with the Company and its subsidiaries and his
performance under this Agreement are the property of the Company and its
subsidiaries. Consultant agrees that he shall not use for his own purposes or
disclose to any third party any of such information, observations or data
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a result of Consultant's acts or omissions. Consultant
shall deliver to the Company at the end of the Consulting Period, or at any
other time the Company may request, all
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memoranda, notes, plans, records, reports, computer tapes, printouts and
software and other documentation (and copies thereof) relating to the business
of the Company and its subsidiaries which Consultant may then possess or have
under his control.
5. Inventions and Patents. Consultant acknowledges that all
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inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether patentable or
not) which relate to the actual or anticipated business, research and
development or existing or future products or services of the Company and its
subsidiaries and which are conceived, developed or made by him during the
Consulting Period ("Work Product") belong to the Company. Consultant shall
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promptly disclose such Work Product to the Board and perform all actions
reasonably requested by the Board (whether during or after the Consulting
Period) to establish and confirm such ownership (including, without limitation,
assignments, powers of attorney and other instruments).
6. Non-Competition.
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(a) In further consideration of the compensation to be paid to
Consultant hereunder, Consultant agrees that during the period beginning on the
Closing Date and ending on the fifth anniversary of the Closing Date (the "Non-
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Competition Period"), he shall not, directly or indirectly, either for himself
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or for any other person, partnership, corporation or company, permit his name to
be used by or participate in any business or enterprise identical to or similar
to any such business which is engaged in by the Company or its subsidiaries as
of the date of this Agreement and which is located anywhere in the world. For
purposes of this Agreement, the term "participate" includes any direct or
indirect interest in any enterprise, whether as an officer, director, employee,
partner, sole proprietor, agent, representative, independent contractor,
consultant, franchisor, franchisee, creditor, owner or otherwise; provided that
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the term "participate" shall not include ownership of less than 2% of the stock
of a publicly-held corporation whose stock is traded on a national securities
exchange or in the over-the-counter market. Consultant agrees that this
covenant is reasonable with respect to its duration, geographical area and
scope.
(b) During the Non-Competition Period, Consultant shall not (i)
induce or attempt to induce any employee of the Company or any of its
subsidiaries to leave their employ or in any way interfere with the relationship
between the Company or any of its subsidiaries and any of their employees, (ii)
hire any person who was an employee of the Company or any subsidiary at any time
during the Employment Period or (iii) induce or attempt to induce any supplier,
licensee, licensor, franchisee or other business relation of the Company or any
of its subsidiaries to cease doing business with them or in any way interfere
with the relationship between the Company or any of its subsidiaries and any
such person or business relation (including, without limitation, making any
negative statements or communications about the Company or its subsidiaries).
(c) The Parties hereto agree that the Company would suffer
irreparable harm from a breach by Consultant of any of the covenants or
agreements contained herein. In the event of an alleged or threatened breach by
the Consultant of any of the provisions of this paragraph 6, the Company or its
successors or assigns may, in addition to all other rights and remedies existing
in its favor, apply to any court of competent jurisdiction for specific
performance and/or injunctive or
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other relief in order to enforce or prevent any violations of the provisions
hereof (including the extension of the Non-Competition Period by a period equal
to the length of the violation of this paragraph 6). In the event of an alleged
breach or violation by Consultant of any of the provisions of this paragraph 6,
the Non-Competition Period described above shall be tolled until such alleged
breach or violation has been duly cured. Consultant agrees that these
restrictions are reasonable.
(d) If, at the time of enforcement of any of the provisions of
paragraph 6, a court holds that the restrictions stated therein are unreasonable
under the circumstances then existing, the Parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area.
(e) Consultant agrees that the covenants made in paragraphs 6(a) and
6(b) shall be construed as an agreement independent of any other provision of
this Agreement and shall survive any order of a court of competent jurisdiction
terminating any other provision of this Agreement.
7. Tax Returns. Consultant shall file all tax returns and reports
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required to be filed by him on the basis that Consultant is an independent
contractor, rather than an employee, as defined in Treasury Regulation
(S)31.3121(d)-1(c)(2), and Consultant shall indemnify the Company for the amount
of any employment taxes paid by the Company as the result of Consultant not
withholding employment taxes from the Consulting and Non-Compete Payment.
8. Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the Company and its affiliates, successors and assigns
and shall be binding upon and inure to the benefit of Consultant and his legal
representatives and assigns; provided that in no event shall Consultant's
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obligations to perform future services for the Company be delegated or
transferred by Consultant without the prior written consent of the Company
(which consent may be withheld in its sole discretion). The Company may assign
or transfer its rights hereunder to any of its affiliates or to a successor
corporation in the event of merger, consolidation or transfer or sale of all or
substantially all of the assets of the Company.
9. Modification of Waiver. No amendment, modification or waiver of
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this Agreement shall be binding or effective for any purpose unless it is made
in a writing signed by the Party against who enforcement of such amendment,
modification or waiver is sought. No course of dealing between the Parties to
this Agreement shall be deemed to affect or to modify, amend or discharge any
provision or term of this Agreement. No delay on the part of the Company or
Consultant in the exercise of any of their respective rights or remedies shall
operate as a waiver thereof, and no single or partial exercise by the Company or
Consultant of any such right or remedy shall preclude other or further exercises
thereof. A waiver of right or remedy on any one occasion shall not be construed
as a bar to or waiver of any such right or remedy on any other occasion.
10. Governing Law. All issues and questions concerning the
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construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice of law or conflict of law rules or provisions
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(whether of the Commonwealth of Pennsylvania or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the
Commonwealth of Pennsylvania.
11. Severability. Whenever possible each provision and term of this
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Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision or term of this Agreement shall be held to
be prohibited by or invalid under such applicable law, then such provision or
term shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or affecting in any manner whatsoever the remainder of such
provision or term or the remaining provisions or terms of this Agreement;
provided that if a court having competent jurisdiction shall find that the
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covenant contained in paragraph 6(a) hereof is not reasonable, such court shall
have the power to reduce the duration and/or geographic area and/or scope of
such covenant, and the covenant shall be enforceable in this reduced form.
12. No Strict Construction. The language used in this Agreement shall
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be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Party.
13. Consultant's Representations. Consultant represents and warrants
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to the Company that (i) his execution, delivery and performance of this
Agreement does not and shall not conflict with, or result in the breach of or
violation of, any other agreement, instrument, order, judgment or decree to
which he is a party or by which he is bound, (ii) he is not a party to or bound
by any employment agreement, noncompete agreement or confidentiality agreement
with any other person or entity and (iii) upon the execution and delivery of
this Agreement by the Company, this Agreement shall be the valid and binding
obligation of his, enforceable in accordance with its terms.
14. Notice. Any notice required or permitted hereunder shall be given
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in writing and shall be deemed effectively given upon personal delivery, upon
being sent by reputable overnight courier service (charges prepaid) or upon
deposit in the United States Post Office mail, postage prepaid, addressed to the
other Party hereto at his or its address shown below:
If to the Company:
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Xxxxxxx Xxxxx Rental, L.P.
c/o Bain Capital, Inc.
Two Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxx
If to Consultant:
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Xxxxxx X. Xxxxxxx
0000 XxXxxxxx Xxxx
Xxxxxxx, XX 00000
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or at such other address as such Party may designate by ten days advance written
notice to the other Party.
15. Arbitration. Any controversy, dispute or claim arising out of or
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relating in any way to this Agreement that cannot be resolved by negotiation
between the Company and Consultant shall be settled by arbitration in
Pittsburgh, Pennsylvania. Such arbitration shall be administered by the Center
for Public Resources Institute for Dispute Resolutions (the "Institute") in
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accordance with its then prevailing Rules for Non-Administered Arbitration of
Business Disputes by an independent and impartial arbitrator. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. (S) 1 et seq.
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The fees and expenses of the Institute and the arbitrator shall be shared
equally by Consultant and the Company and advanced by them from time to time as
required; provided that at the conclusion of the arbitration, the arbitrator
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shall award costs and expenses (including the costs of the arbitration
previously advanced and the fees and expenses of attorneys, accountants and
other experts) to the prevailing party. The arbitrator shall permit and
facilitate all reasonable requests for discovery. The arbitrator shall render
his award within 90 days of the conclusion of the arbitration hearing. The
arbitrator shall be expressly empowered to award to either party the full amount
of any losses in connection with any dispute between them arising out of or
relating in any way to this Agreement. The award rendered by the arbitrator
shall be final and not subject to judicial review, and judgment thereon may be
entered in any court of competent jurisdiction.
16. Headings. The headings used in this Agreement are for convenience
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of reference only and do not constitute a part of this Agreement and shall not
be deemed to limit, characterize or in any way affect any provision of this
Agreement, and all provisions of this Agreement shall be enforced and construed
as if no heading had been used in this Agreement.
17. Counterparts. This Agreement may be executed in counterparts, any
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one of which need not contain the signatures of more than one party, but all
such counterparts taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Consulting
Agreement as of the date first above written.
XXXXXXX XXXXX RENTAL, L.P.
By: ACR Management, L.L.C.
Its: General Partner
By: /s/ Xxxxxx X. Xxxxxx
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Its: Secretary
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/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
