EMPLOYMENT AGREEMENT
This Agreement (this "Agreement") is made and entered into effective
as of October 25, 1996, by and between Primeco Inc., a Texas corporation
("Employer"), and Xxxxx X. York ("Employee").
Employer hereby agrees to employ Employee, and Employee hereby accepts
such employment, on the terms and conditions hereinafter set forth.
1. PERIOD OF EMPLOYMENT. The period of Employee's employment under
this Agreement (the "Period of Employment") shall commence on the date hereof
(the "Effective Date") and shall expire on December 2, 1999 (the "Expiration
Date"), subject to any extension as may be agreed or any earlier termination of
Employee's employment as provided in Section 6 hereof. Upon the expiration of
the initial term of this Agreement, and each subsequent term or extension
thereof, this Agreement shall automatically be extended for an additional term
of one year, unless the employer or the Employee shall have notified the other
party hereto of its election to terminate this Agreement not later than 90 days
prior to the scheduled Expiration Date. If Employee's employment is terminated
pursuant to Section 4 hereof, the Period of Employment shall expire as of the
Date of Termination (as hereinafter defined).
2. DUTIES. During the Period of Employment, Employee will
faithfully perform those duties and responsibilities assigned by the Board of
Directors of the corporate parent ("Parent") of Employer (the "Board") or the
Chief Executive Officer of Employer and Employee will devote his full working
time and use his best efforts to advance the business and welfare of Employer in
furtherance of the policies established by the Board. During the Period of
Employment, Employee shall not engage in any other employment activities for any
direct or indirect remuneration without the concurrence of the Board, except
that Employee may continue to devote reasonable time to the management of
investments and to participation in community and charitable affairs, so long as
such activities do not interfere with his duties under this Agreement. Employee
shall have such title as the Board shall determine from time to time; Employee's
initial title is set forth on Exhibit A hereto.
3. COMPENSATION.
3.1 BASE SALARY. During the Period of Employment, Employer shall pay
Employee a Base Salary at the rate of $125,000 per annum payable at least as
frequently as bi-weekly and subject to payroll deductions as may be necessary or
customary in respect of Employer's salaried employees in general. The amount of
Employee's Base Salary shall be subject to annual review by the Board, provided
that the level of such Base Salary shall not be subject to reduction.
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3.2 INCENTIVE COMPENSATION. In addition to the Base Salary provided
for in Section 3.1 hereof, Employee shall participate in the Management Cash
Incentive Bonus Program (the "Program") as adopted by the Board and pursuant to
which Employee shall be entitled to annual cash bonuses as set forth on Exhibit
B hereto. Employer agrees that it will not amend or modify the Program in any
manner materially adverse to Employee's interest thereunder without Employee's
written consent. It is understood that by its terms the Program terminates
after payment of bonuses for the year ended December 21, 2001 unless extended
beyond that date by the Board in its sole discretion. Notwithstanding the
foregoing, Employee's bonus payment, if any, under the Program for fiscal 1996
shall be based upon achievement of the applicable targets by Employer for the
entire fiscal year, but the amount of such bonus payment shall be prorated in
accordance with the number of days during the 1996 fiscal year that Employee was
employed by Employer, including periods prior to the date of this Agreement.
3.3 BENEFITS. During the Period of Employment, Employee shall be
entitled to participate in all fringe benefit programs maintained by Employer
that are available to its executive officers generally. Any payments or
benefits payable to Employee hereunder in respect of any calendar year during
which Employee is employed by Employer for less than the entire year shall,
unless otherwise provided in the applicable plan or arrangement, be prorated in
accordance with
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the number of days in such calendar year during which he is so employed.
Employee acknowledges that he shall have no vested rights under or to
participate in any such program except as expressly provided under the terms
hereof or thereof.
3.4 EXPENSES. Employer will pay or reimburse Employee for such
reasonable travel, entertainment or other expenses as he may incur on behalf of
Employer during the Period of Employment in connection with the performance of
his duties hereunder but only to the extent that such expenses were either
specifically authorized by Employer or incurred in accordance with policies
established by the Board and provided that Employee shall furnish Employer with
such evidence relating to such expenses as Employer may reasonably require to
substantiate such expenses for tax purposes.
4. TERMINATION OF EMPLOYMENT.
4.1 CIRCUMSTANCES OF TERMINATION. Notwithstanding the terms set
forth in Section 1 hereof, Employee's employment shall terminate under any of
the following circumstances:
(a) DEATH. In the event of Employee's death.
(b) PERMANENT DISABILITY. If during the Period of
Employment Employee becomes physically or mentally incapacitated or disabled so
that (i) he is unable to perform for Employer substantially the same services as
he performed prior to incurring such incapacity or disability or to devote his
full working time or use his best efforts to advance the
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business and welfare of Employer or otherwise to perform his duties under this
Agreement and (ii) such condition exists for an aggregate of six months in any
12 consecutive calendar month period (Employer, at its option and expense, being
entitled to retain a physician reasonably acceptable to Employee to confirm the
existence of such incapacity or disability, and the determination of such
physician being binding upon Employer and Employee).
(c) CAUSE. At the option of Employer, because Employee:
(i) has been convicted of, or has pled guilty or NOLO CONTENDERE to,
a felony or a crime involving moral turpitude, or
(ii) has embezzled or misappropriated Employer funds or property, or
(iii) has continued use of alcohol or drugs to an extent that
interferes with the performance by Employee of his employment
responsibilities, or
(iv) has violated Section 6.1, Section 6.2, Section 6.3 or Section 6.4
hereof, or
(v) has willfully failed or refused to perform those duties
reasonably assigned or delegated to him by the Board of Directors or the
Chief Executive Officer, which failure or refusal continues following
(a) the Board of
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Directors giving the Employee written notice setting forth the facts or
events constituting such failure or refusal and (b) a reasonable
opportunity to correct the deficiencies or other problems specified in such
notice to the reasonable satisfaction of the Board of Directors.
(d) NOT FOR CAUSE. At the option of Employer at any time
for any reason other than those referred to above or for no reason at all,
whereupon the Employer shall become obligated to make those payments set forth
in Section 5.1(d) hereof.
4.2 NOTICE OF TERMINATION. Any termination of Employee's
employment by Employer (other than termination pursuant to Section 4.1(a)
hereof) or by Employee shall be communicated by written Notice of Termination to
the other party hereto in accordance with Section 7.2. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice terminating Employee's
employment by Employer. If a Notice of Termination is given by Employer, such
notice shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
that provide a basis for termination of Employee's employment under the
provision so indicated. For purposes of this Agreement, the "Date of
Termination" shall be the date on which the Notice of Termination is delivered
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except that with respect to Section 4.1(a) the "Date of Termination" shall be
the date of Employee's death.
5. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
5.1 PAYMENTS. In the event that Employee's employment is
terminated prior to the Expiration Date (including any extension thereof), the
Period of Employment shall expire as of the Date of Termination.
(a) If Employer terminates Employee's employment for Cause
or if Employee voluntarily terminates his employment, Employer's obligation to
compensate Employee shall in all respects cease as of the Date of Termination,
except that Employer shall pay Employee the Base Salary accrued under Section 3
and the reimbursable expenses incurred under Section 3.4 of this Agreement up to
such Date of Termination (the "Accrued Obligations");
(b) If Employee's employment is terminated upon the death of
Employee, Employer's obligation to compensate Employee shall in all respects
cease as of the Date of Termination, except that within thirty (30) days after
the Date of Termination Employer shall (i) pay Employee's estate or legal
representative the Accrued Obligations and a lump sum payment equal to 25% of
the Employee's annual Base Salary payable under Section 3 hereof at the rate in
effect immediately prior to such termination and (ii) continue to maintain
during the three-month period following the Date of Termination for the benefit
of the Employee's dependents, basic health and dental insurance and related
medical expenses
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coverage on terms no less favorable to the Employee than Employer provides to
its executive officers generally, as such benefits may be modified from time to
time during such period;
(c) If Employee's employment is terminated upon the
Permanent Disability of Employee, Employer's obligation to compensate Employee
shall in all respects cease as of the Date of Termination, except that within
thirty (30) days after the Date of Termination Employer shall (i) pay Employee
Accrued Obligations and a lump sum payment equal to 50% of the Employee's annual
Base Salary payable under Section 3 hereof at the rate in effect immediately
prior to such termination less the amount of any disability payments payable to
Employee during the six-month period following the Date of Termination pursuant
to any Employer-paid or state sponsored insurance policy or employer
self-insured program and (ii) continue to maintain during the six-month period
following the Date of Termination for the benefit of Employee and his
dependents, basic health, disability and dental insurance and related medical
expenses coverage on terms no less favorable to the Employee than Employer
provides to its executive officers generally, as such benefits may be modified
from time to time during such period PROVIDED that the Employee shall continue
to be obligated to make any contributions or payments in connection with such
benefits to the same extent as other executive officers generally; and
(d) If Employee's employment is terminated by Employer
pursuant to Section 4.1(d), Employer's obligation
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to compensate Employee shall in all respects cease, except that within thirty
(30) days after the Date of Termination Employer shall pay to Employee the
Accrued Obligations and during the period ending on the earlier of the
Expiration Date or the first anniversary of the Date of Termination (the
"Severance Period"), Employer shall (i) pay to Employee on a monthly basis the
sum of one-twelfth (1/12th) of the annual Base Salary of Employee in effect at
the Date of Termination (the "Continuation Payments") and (ii) continue to
maintain, during the Severance Period for the benefit of the Employee and his
dependents, basic health, dental and life insurance and related medical expenses
coverage (including disability and hospitalization coverage) (the "Continuation
Benefits") on terms no less favorable to the Employee than the Employer provides
to its executive officers generally, as such benefits may be modified from time
to time during the Severance Period. During the Severance Period, Employee
shall be required to make any contributions required to maintain such
Continuation Benefits, which may be withheld from the Continuation Payments;
PROVIDED that such contributions are also required to be made by the Employer's
executive officers generally. If at any time during the Severance Period
Employee shall obtain employment with a third party (the "Substitute Employer")
in which Employee is entitled to receive basic health benefits in connection
with such employment on terms provided by the Substitute Employer to its
similarly situated employees generally, the Employer shall no longer be required
to provide
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Continuation Benefits to the Employee, regardless of whether such benefits
differ in any respect from the Continuation Benefits. The Employer shall be
excused from its obligations to make payments under this Section 5.1(d) if the
Employee breaches its obligations hereunder (including its obligations under
Article 6 hereof).
5.2 RELEASE AND SATISFACTION. With respect to Employee, his
heirs, successors and assigns, payment by Employer of the amounts provided under
this Section 5 shall release, relinquish and forever discharge Employer and any
director, officer, employee, shareholder or agent of Employer from any and all
claims, damages, losses, costs, expenses, liabilities or obligations, whether
known or unknown (other than any such claims, damages, losses, costs, expenses,
liabilities or obligations (a) covered by any indemnification arrangement of
Employer with respect to Employee or (b) arising under any written employee
benefit plan or arrangement (whether or not tax-qualified) covering Employee),
which Employee has incurred or suffered or may incur or suffer as a result of
Employee's employment by Employer or the termination of such employment.
5.3 EFFECT ON THIS AGREEMENT. Any termination of Employee's
employment and any expiration of the Period of Employment under this Agreement
shall not affect the continuing operation and effect of Sections 5.2, 6.1, 6.2,
6.3, 6.4 and 6.5 hereof, which shall continue in full force and effect with
respect to Employer and Employee, and its and
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his heirs, successors and assigns. Nothing in Section 5.1 hereof shall be
deemed to operate or shall operate as a release, settlement or discharge of any
liability of Employee to Employer or others from any action or omission by
Employee enumerated in Section 4.1(c) hereof as a possible basis for termination
of Employee's employment for Cause.
5.4 NO DUTY TO MITIGATE. Subject to the provisions of
Sections 6.1, 6.2, 6.3, 6.4 and 6.5 hereof, Employee shall be free to accept
such employment and engage in such business as Employee may desire following the
termination of his employment hereunder, and no compensation received by
Employee therefrom shall reduce or affect any payments required to be made by
Employer hereunder except to the extent expressly provided in the benefit plans
of Employer.
6. NON-DISCLOSURE OF PROPRIETARY INFORMATION, SURRENDER OF RECORDS;
INVENTIONS AND PATENTS; NON-COMPETE.
6.1 PROPRIETARY INFORMATION. Employee shall not during the
Period of Employment or at any time thereafter (irrespective of the
circumstances under which Employee's employment by Employer terminates),
directly or indirectly use for his own purpose or for the benefit of any person
or entity other than Employer, nor otherwise disclose, any proprietary
information, as defined below, to any individual or entity, unless such
disclosure has been authorized in writing by the Board or is otherwise required
by law. For purposes of this Agreement, the term "proprietary information"
shall include, but is not limited to: (a) the name or address of any
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customer, vendor or affiliate of Employer or any information concerning the
transactions or relations of any customer, vendor or affiliate of Employer with
Employer or any of its shareholders; (b) any information concerning any product,
technology or procedure employed by Employer but not generally known to its
customers, vendors or competitors, or under development by or being tested by
Employer but not at the time offered generally to customers or vendors; (c) any
information relating to Employer's computer software, computer systems, pricing
or marketing methods, sales margins, cost of goods, cost of material, capital
structure, operating results, borrowing arrangements or business plans; (d) any
information which is generally regarded as confidential or proprietary in any
line of business engaged in by Employer; (e) any information contained in any of
Employer's written or oral policies and procedures or employee manuals; (f) any
information belonging to customers, vendors or affiliates of Employer which
Employer has agreed to hold in confidence; (g) any inventions, innovations or
improvements covered by Section 6.3 below; (h) any other information which the
Board has reasonably determined by resolution and communicated to Employee to be
confidential or proprietary; and (i) all written, graphic and other material
relating to any of the foregoing. Information that is not novel or copyrighted
or patented may nonetheless be proprietary information. However, proprietary
information shall not include (i) any information that is or becomes generally
known to the industries in which
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Employer competes through sources independent of Employer or through authorized
publication to persons other than Employer's employees by Employer or (ii) other
non-sensitive information that may be disclosed by Employee in the ordinary
course of business, the disclosure of which is not reasonably likely to
adversely affect Employer's business operations, their relationships with
customers, vendors or employees or the results of their operations.
6.2 CONFIDENTIALITY AND SURRENDER OF RECORDS. Employee shall
not during the Period of Employment or at any time thereafter (irrespective of
the circumstances under which Employee's employment by Employer terminates),
except as required by law, directly or indirectly give any "confidential
records" (as hereinafter defined) to, or permit any inspection or copying of
confidential records by, any individual or entity other than in the course of
such individual's or entity's employment or retention by Employer, nor shall he
retain, and will deliver promptly to Employer, any of the same following
termination of his employment. For purposes hereof, "confidential records"
means all correspondence, memoranda, files, manuals, books, lists, financial,
operating or marketing records, magnetic tape, or electronic or other media or
equipment of any kind which may be in Employee's possession or under his control
or accessible to him which contain any proprietary information as defined in
Section 6.1. above. All confidential records shall be and remain the sole
property of Employer during the Period of Employment and thereafter.
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6.3 INVENTIONS AND PATENTS. All inventions, innovations or
improvements in Employer's method of conducting its business (including
policies, procedures, products, improvements, software, ideas and discoveries,
whether paten- table or copyrightable or not) conceived or made by Employee,
either alone or jointly with others, during the Period of Employment belong to
Employer. Employee will promptly disclose in writing such inventions,
innovations or improvements to the Board and perform all actions reasonably
requested by the Board to establish and confirm such ownership by Employer,
including, but not limited to, cooperating with and assisting Employer in
obtaining patents for Employer in the United States and in foreign countries.
Any patent application filed by Employee within a year after termination of his
employment hereunder shall be presumed to relate to an invention which was made
during the Period of Employment unless Employee can provide evidence to the
contrary.
6.4 COVENANT NOT TO COMPETE; NO SOLICITATION.
(a) Employee acknowledges and recognizes the highly
competitive nature of Employer's business and, in consideration of the payment
by Employer to Employee of amounts that may hereafter be paid to Employee
pursuant to Sections 5.1 and 6.4(d) hereof, Employee agrees that during the
period (the "Covered Time") beginning on the Date of Termination and ending
(i) if Employee's employment is terminated for any reason other than pursuant to
Section
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4.1(d) hereof, on the second anniversary of the Date of Termination or (ii) if
Employee's employment is terminated pursuant to Section 4.1(d) hereof and
subject to Section 6.4(d) hereof, on the earlier of (A) the first anniversary of
the Date of Termination or (B) the last day of the Period of Employment
remaining under Section 1 hereof immediately prior to the Date of Termination,
Employee will not compete with the business of Employer, which means that
Employee will not engage, directly or indirectly, in the "Covered Business" (as
hereinafter defined) in any state of the United States of America in which the
Employer is conducting business or proposes to conduct business as of the Date
of Termination and any states contiguous therewith (these areas are hereinafter
collectively referred to as the "Covered Area"). For purposes of this
Agreement, (i) "Covered Business" shall mean the renting and selling of the
following types of equipment (and parts and supplies for such equipment):
high-reach booms, forklifts, tractors, dump trucks, air compressors and
high-reach scissor lifts, and small tools such as electrical generators, power
saws and hand tools; and (ii) the phrase "engage, directly or indirectly" shall
mean engaging directly or having an interest, directly or indirectly, as owner,
partner, shareholder, independent contractor, capital investor, lender, renderer
of consultation services or advice or otherwise (other than as the holder of
less than 2% of the outstanding stock of a publicly-traded corporation), either
alone or in association with others, in the operation of any
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aspect of any type of business or enterprise engaged in any aspect of the
Covered Business. Employee shall be deemed engaged in business in the Covered
Area if his place of business is located in the Covered Area or if he solicits
customers located anywhere in, or delivers products anywhere in, the Covered
Area.
(b) Employee agrees that during the term of this Agreement
(including any extensions thereof) and during the Covered Time he shall not (i)
directly or indirectly solicit or attempt to solicit any of the employees,
agents or representatives of Employer or affiliates of Employer to leave any of
such entities; (ii) directly or indirectly solicit or attempt to solicit any of
the employees, agents, consultants or representatives of Employer or affiliates
of Employer to become employees agents, representatives or consultants of any
other person or entity; or (iii) directly or indirectly solicit or attempt to
solicit any customer, vendor or distributor of Employer or affiliates of
Employer with respect to any product or service being furnished, made, sold or
leased by Employer.
(c) Employee understands that the provisions of
Section 6.4(a) may limit his ability to earn a livelihood in a business similar
to the business of Employer but nevertheless agrees and hereby acknowledges that
the consideration provided under this Agreement, including any amounts or
benefits provided under Section 5 hereof, is sufficient to justify the
restrictions contained in such
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provisions and in consideration thereof and in light of Employee's education,
skills and abilities, Employee agrees that he will not assert that, and it
should not be considered that, such provisions prevent him from earning a living
or otherwise are void or unenforceable or should be voided or held
unenforceable. Employee acknowledges and agrees that his duties with Employer
are of an executive nature and that he is a member of Employer's management
group.
(d) If Employee's employment is terminated pursuant to
Section 4.1(d) hereof, Employer may extend the Covered Time to extend up to and
through the second anniversary of the Date of Termination by delivering written
notice to Employee (specifying the duration of the extended Covered Time),
within ten (10) days of such Date of Termination, that Employer has elected to
continue to pay to Employee the Continuation Payments and provide the
Continuation Benefits (on terms no less favorable to Employee than Employer
provides to its executive officers generally, as such benefits may be modified
from time to time) for each month of such extended Covered Time. During the
extended Covered Time, Employee shall be required to make any contributions
required to maintain such Continuation Benefits, which may be withheld from the
Continuation Payments; PROVIDED that such contributions are also required to be
made by the Employer's executive officers generally. If at any time during the
extended Covered Time Employee shall obtain employment with a Substitute
Employer in which Employee is
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entitled to receive basic health benefits in connection with such employment on
terms provided by the Substitute Employer to its similarly situated employees
generally, Employer shall no longer be required to provide Continuation Benefits
to the Employee, regardless of whether such benefits differ in any respect from
the Continuation Benefits. Employer shall be excused from its obligations to
make payments under this Section 6.4(d) if Employee breaches its obligations
hereunder.
6.5 LITIGATION ASSISTANCE. Employee agrees that after the Date
of Termination he shall, at the request of Employer, render all assistance and
perform all lawful acts that Employer considers necessary or advisable in
connection with any litigation involving Employer or any director, officer,
employee, shareholder, agent, representative, consultant, customer or vendor of
Employer. In the event that Employer requests Employee's assistance under this
Section 6.5, Employer shall pay to Employee for each day such assistance is
rendered an amount equal to the annual Base Salary of Employee in effect at the
Date of Termination divided by 250 and shall promptly pay or reimburse Employee
for such reasonable travel expenses as he may incur in connection with rendering
assistance hereunder.
6.6 DEFINITION OF EMPLOYER. For purposes of this Section 6, the
term Employer shall include Employer and any and all of its subsidiaries,
ventures or affiliates, whether currently existing or hereafter formed, which
are engaged in the Covered Business or a portion thereof, as well
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as any person to whom this Agreement is assigned as permitted by Section 7.8
hereof.
6.7 ENFORCEMENT.
(a) The parties hereto agree and acknowledge that the
covenants and agreements contained herein are reasonably necessary in duration
and to protect the reasonable competitive business interests of Employer,
including, without limitation, the value of the proprietary information and
goodwill of Employer.
(b) Employee agrees that the covenants and undertakings
contained in Article 6 of this Agreement relate to matters which are of a
special, unique and extraordinary character and that Employer cannot be
reasonably or adequately compensated in damages in an action at law in the event
Employee breaches any of these covenants or undertakings. Therefore, Employee
agrees that Employer shall be entitled, as a matter of course, without the need
to prove irreparable injury, to an injunction, restraining order or other
equitable relief from any court of competent jurisdiction, restraining any
violation or threatened violation of any of such terms by Employee and such
other persons as the court shall order. Employee agrees to pay costs and legal
fees incurred by Employer in obtaining such injunction.
(c) Rights and remedies provided for in this Section are
cumulative and shall be in addition to rights
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and remedies otherwise available to the parties under any other agreement or
applicable law.
(d) In the event that any provision of this Agreement shall
to any extent be held invalid, unreasonable or unenforceable in any
circumstances, the parties hereto agree that the remainder of this Agreement and
the application of such provision of this Agreement to other circumstances shall
be valid and enforceable to the fullest extent permitted by law. If any
provision of this Agreement, or any part thereof, is held to be unenforceable
because of the scope or duration of or the area covered by such provision, the
parties hereto agree that the court or arbitrator making such determination
shall reduce the scope, duration and/or area of such provision (and shall
substitute appropriate provisions for any such unenforceable provisions) in
order to make such provision enforceable to the fullest extent permitted by law,
and/or shall delete specific words and phrases, and such modified provision
shall then be enforceable and shall be enforced. The parties hereto recognize
that if, in any judicial proceeding, a court shall refuse to enforce any of the
separate covenants contained in this Agreement, then that unenforceable covenant
contained in this Agreement shall be deemed eliminated from these provisions to
the extent necessary to permit the remaining separate covenants to be enforced.
In the event that any court or arbitrator determines that the time period or the
area, or both, are unreasonable and that any of the covenants
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is to that extent unenforceable, the parties hereto agree that such covenants
will remain in full force and effect, first, for the greatest time period, and
second, in the greatest geographical area that would not render them
unenforceable.
7. MISCELLANEOUS.
7.1 KEY MAN INSURANCE. Employee recognizes and acknowledges
that Employer or its affiliates may seek and purchase one or more policies
providing key man life insurance with respect to Employee, the proceeds of which
would be payable to Employer or such affiliate. Employee hereby consents to
Employer or its affiliates seeking and purchasing such insurance and will
provide such information, undergo such medical examinations (at Employer's
expense), execute such documents, and otherwise take any and all actions
necessary or desirable in order for Employer or its affiliates to seek, purchase
and maintain in full force and effect such policy or policies.
7.2 NOTICE. Any notice required or permitted to be given
hereunder shall be deemed sufficiently given if sent by registered or certified
mail, postage prepaid, addressed to the addressee at his or its address last
provided the sender in writing by the addressee for purposes of receiving
notices hereunder or, unless or until such address shall be so furnished, to the
address indicated opposite his or its signature to this Agreement. For purposes
of this Agreement, notice sent in conformity with this Section 7.2
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shall be deemed to have been received on the third business day following the
date on which such notices are so sent.
7.3 MODIFICATION AND NO WAIVER OF BREACH. No waiver or
modification of this Agreement shall be binding unless it is in writing signed
by the parties hereto. No waiver by a party of a breach hereof by the other
party shall be deemed to constitute a waiver of a future breach, whether of a
similar or dissimilar nature, except to the extent specifically provided in any
written waiver under this Section 7.3.
7.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
AND ALL QUESTIONS RELATING TO THE VALIDITY AND PERFORMANCE HEREOF AND REMEDIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAW.
7.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same agreement.
7.6 CAPTIONS. The captions used herein are for ease of
reference only and shall not define or limit the provisions hereof.
7.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto relating to the matters encompassed hereby
and supersedes any prior oral or written agreements.
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7.8 ASSIGNMENT. The rights of Employer under this Agreement
may, without the consent of Employee, be assigned by Employer to any person,
firm, corporation, or other business entity which at any time, whether by
purchase, merger, or otherwise, directly or indirectly, acquires all or material
portions of the stock, assets or any line of business of Employer.
7.9 NON-TRANSFERABILITY OF INTEREST. None of the rights of
Employee to receive any form of compensation payable pursuant to this Agreement
shall be assignable or transferable except through a testamentary disposition or
by the laws of descent and distribution upon the death of Employee. Any
attempted assignment, transfer, conveyance, or other disposition (other than as
aforesaid) of any interest in the rights of Employee to receive any form of
compensation to be made by Employer pursuant to this Agreement shall be void.
7.10 ARBITRATION. The parties shall endeavor to settle all
disputes by amicable negotiations. Except as otherwise provided herein, any
claim, dispute, disagreement or controversy that arises among the parties
relating to this Agreement that is not amicably settled shall be resolved by
arbitration, as follows:
(a) Any such arbitration shall be heard in The City of New
York, New York, before a panel consisting of one (l) to three (3) arbitrators,
each of whom shall be impartial. Upon the written Request of Arbitration of
either party hereto to commence arbitration hereunder, the parties
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shall attempt to mutually agree as to the number and identity of the
arbitrator(s), within thirty (30) days of the date of such Request. Except as
the parties may otherwise agree, all arbitrators (if not selected by the parties
hereto within thirty (30) days of a written Request for Arbitration) shall be
appointed pursuant to the commercial arbitration rules of the American
Arbitration Association. In determining the number and appropriate background
of the arbitrators, the appointing authority shall give due consideration to the
issues to be resolved, but his or her decision as to the number of arbitrators
and their identity shall be final.
(b) An arbitration may be commenced by any party to this
Agreement by the service of a written Request for Arbitration upon the other
affected parties. Such Request for Arbitration shall summarize the controversy
or claim to be arbitrated.
(c) All attorneys' fees and costs of the arbitration shall
in the first instance be borne by the respective party incurring such costs and
fees, but the arbitrators shall have the discretion to award costs and/or
attorneys' fees as they deem appropriate under the circumstances. The parties
hereby expressly waive punitive damages, and under no circumstances shall an
award contain any amount that in any way reflects punitive damages.
(d) Judgment on the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof.
24
(e) It is intended that controversies or claims submitted
to arbitration under this Section 9.10 shall remain confidential, and to that
end it is agreed by the parties that neither the facts disclosed in the
arbitration, the issues arbitrated, nor the views or opinions of any persons
concerning them, shall be disclosed to third persons at any time, except to the
extent necessary to enforce an award or judgment or as required by law or in
response to legal process or in connection with such arbitration.
(f) Any arbitration under this Section 7.10 shall be
conducted pursuant to the commercial arbitration rules of the American
Arbitration Association.
7.11 JURISDICTION; VENUE. Subject to Section 7.10 hereof, the
parties hereto irrevocably and unconditionally submit to the exclusive
jurisdiction of any State or Federal court sitting in The City of New York over
any suit, action or proceeding arising out of or relating to this Agreement.
Service of any process, summons, notice or document by registered mail addressed
to any party as provided in Section 7.2 hereof shall be effective service of
process for any action, suit or proceeding brought against such party in any
such court. The parties hereto irrevocably and unconditionally waive any
objection to the laying of venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. A final judgment
in any suit, action or proceeding brought in
25
any such court shall be conclusive and binding upon the parties and may be
enforced in any other courts to whose jurisdiction a party is or may be subject,
by suit upon such judgment.
26
IN WITNESS WHEREOF, this Agreement has been duly executed effective as
of the day and year first written above.
Address for notices: PRIMECO INC.
00000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
By:
/s/ XXXXXX X. XXXXXXX
-----------------------------
With a copy to:
INVESTCORP International Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
EMPLOYEE
/s/ XXXXX X. YORK
------------------------- -----------------------------
------------------------- XXXXX X. YORK
27
EXHIBIT A
Employee's initial title shall be:
VICE PRESIDENT OF SALES AND MARKETING
EXHIBIT B
MANAGEMENT CASH BONUS INCENTIVE PROGRAM
1996 ONLY
For 1996 only, cash bonuses shall be payable pursuant to the following
table, with an EBITDA target for 1996 of $90 million. For 1996 only, Earnings
Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is defined as:
a. Consolidated Net Income (loss) of Prime Service, Inc. (the
"Company") and its subsidiaries as it would appear on a consolidated
statement of income (loss) of the Company prepared in accordance with U.S.
GAAP, consistently applied, which shall reflect a reduction for all
management and employee bonuses payable with respect to the Fiscal Year;
plus (minus)
b. Any provision (benefit) for taxes (including franchise taxes)
deducted (added) in calculating such consolidated net income (loss); plus
c. Any interest expense (net of interest income), deducted in
calculating such consolidated net income (loss); (minus)
d. Costs charged against any purchase accounting reserves
established in connection with the acquisition; (minus)
e. The effects of the reversal of any excess purchase accounting
reserves established in connection with the acquisition; plus
f. Amortization expenses deducted in calculating consolidated net
income (loss); plus
g. Depreciation expense deducted in calculating consolidated net
income (loss); plus
h. Management fees paid to Investcorp S.A. or its subsidiaries; plus
(minus)
i. Any unusual losses (gains) deducted (added) in calculating
consolidated net income (loss). (Unusual items are intended to include
transactions considered outside the ordinary course of business. EBITDA
will be adjusted to eliminate the effects, if any, of such transactions,
the intent being to calculate EBITDA as if such transactions had not
occurred); plus (minus)
j. Any compensation expense (income) deducted (added) in calculating
consolidated net income (loss) attributable to transactions involving
equity securities of Holding or its subsidiaries.
The Employee and his or her representative shall be provided reasonable
opportunity to review the computation of EBITDA and reasonable access to the
data and information supporting such computation and shall have the right to
challenge in good faith such computation.
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For 1996 only, the percentage of Base Salary payable as bonus shall be
determined as follows:
% of Base
% of 1996 EBITDA Salary Payable
Target Achieved as Bonus(1)
-------------------------------- ---------------
Equal To Or But Less
Greater Than: Than:
0 85 0
85 90 10-15
90 95 27-40
95 100 43-65
100 110 67-100
110 120 80-120
120 130 93-140
130 140 107-160
140 150 120-180
150 160 133-200
160 170 147-220
170 180 160-240
180 190 173-260
190 200 187-280
200 --- 200-300
___________________________
1 The Company's Board of Directors (the "Board") in its discretion shall set
the bonus percentage amount for each fiscal year within the ranges
indicated, but not less than the bottom of the range. The bonus percentage
will be determined on an individual basis and may differ among eligible
employees.
1997 THROUGH 2001
For 1997 through 2001, cash bonuses under the Management Cash Bonus
Incentive Program are payable to participants in the program in a given year if
the Company's net income for such year exceeds 90% of the net income target (the
"Net Income Percentage") in the Company's budget for such year, as approved by
the Board. EBITDA2 targets for such years shall be as set forth in the
Company's budget for such year, as approved by the Board. EBITDA and net income
targets shall be subject to change in the discretion of the Board for any change
to the capital structure of the Company or Primeco Inc., the Company's
subsidiary, in connection with any acquisitions, equity offerings or other
transactions that would, or would be likely to, materially affect EBITDA or net
income. Upon achievement of the Net Income Percentage, the percentage of Base
Salary payable as bonus shall be determined as follows:
% of Base
% of EBITDA Salary Payable
Target Achieved as Bonus(3)
--------------------------- ------------------
Equal To Or But Less
Greater Than: Than:
-------------- ---------
0 90 0
90 100 50-80
100 110 60-100
110 120 100-105
120 130 105-110
130 140 110-115
140 150 115-120
150 160 120-125
160 170 125-130
170 180 130-135
180 190 135-140
190 200 140-145
200 --- 145-150
_____________________________
2 EBITDA for each of 1997 through 2001 shall be defined by the Board in
the budget for each year.
3 The Board in its discretion shall set the bonus percentage amount for
each fiscal year within the ranges indicated, but not less than the
bottom of the range. The bonus percentage will be determined on an
individual basis and may differ among eligible employees.
