1
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 15th day of
December, 1999 by and between ORIUS CORP., a Florida corporation (the "Company")
and XXXXXX XXXXX (the "Executive").
Recitals
WHEREAS, Executive has been employed by the Company as its chief financial
officer;
WHEREAS, on the date of this Agreement, the Company will effect a corporate
reorganization (the "Reorganization") pursuant to which the Company will be
recapitalized and combined with LISN Holdings, Inc., an Ohio corporation; and
WHEREAS, in connection with the Reorganization, the Company, through its
Board of Directors, desires to retain the services of Executive, and Executive
desires to be retained by the Company, on the terms and conditions set forth in
this Agreement.
Agreement
For and in consideration of the foregoing and of the mutual covenants of
the parties herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs Executive to serve in the
capacities described herein and Executive hereby accepts such employment and
agrees to perform the services described herein upon the terms and conditions
hereinafter set forth.
2. TERM. The term of Executive's employment pursuant to this Agreement
shall commence on the effective date hereof and shall terminate at the close of
business on December 15, 2001 (the "Term") subject to earlier termination in
accordance with the other terms and conditions set forth herein.
3. DUTIES. Executive shall serve as and have the title of Chief Financial
Officer of the Company. The Executive's principal place of employment shall be
in West Palm Beach, Florida. Executive agrees to devote his full business time,
energy, skills and best efforts to such employment while so employed. Nothing in
this Agreement shall preclude Executive from engaging, so long as, in the
reasonable determination of the Board of Directors, such activities do not
interfere with his duties and responsibilities hereunder, in charitable and
community affairs, from managing any passive investment made by him or from
serving, subject to the prior approval of the Board of
2
Directors, as a member of the board of directors or as a trustee of any other
corporation, association or entity.
4. COMPENSATION.
(a) Base Compensation. The Company shall pay Executive, and Executive
agrees to accept, base compensation at the rate of $195,000 per year, payable in
equal installments no less frequently than monthly, through the Term of this
Agreement ("Base Compensation"). The Base Compensation specified in this Section
4(a) may be increased annually during the Term of this Agreement in the sole
discretion of the Compensation Committee of the Board of Directors.
5. FRINGE BENEFITS.
(a) Generally. Executive shall be eligible for fringe benefits pursuant to
any insurance, pension or other employee fringe benefit plan approved by the
Board of Directors that now or hereafter may be made available to employees of
the Company and for which Executive will qualify according to his eligibility
under the provisions thereof.
(b) Health and Disability Insurance. Executive shall be entitled to
participate in such health and disability insurance plans that the Company
offers to other executive officers of the Company from time to time.
(c) Vacation, Holidays and Illness. During the Term of this Agreement,
Executive shall be entitled to such number of days off for vacation, holidays,
illness or any other purposes as currently provided to the Executive in
accordance with the Company's past practice and custom.
6. EXPENSES. Except as otherwise agreed to herein, the Executive shall be
reimbursed for all usual expenses incurred on behalf of the Company, in
accordance with Company practices and procedures, provided that:
(a) Each such expenditure is of a nature deductible under Section 162 of
the Internal Revenue Code on the Federal income tax return of the Company as a
business expense and not as deductible compensation to Executive; and
(b) Executive furnishes the Company with adequate documentary evidence
required by the Code or any regulation promulgated thereunder for the
substantiation of such expenditures as a deductible business expense of the
Company and not as deductible compensation to Executive.
Executive agrees that, if at any time, any payment made to Executive by the
Company as a business expense reimbursement shall be disallowed in whole as a
deductible expense to the Company by the appropriate taxing authorities,
Executive shall reimburse the Company to the full extent of such disallowance.
2
3
7. TERMINATION. The term of Executive's employment under this Agreement
may be terminated prior to expiration of the term provided in Section 2 hereof
only in accordance with the following paragraphs:
(a) For Cause. This Agreement may be immediately terminated by the Company
for Cause (as herein defined). For purposes of this Agreement, the term "Cause"
shall mean the termination of the Executive by the Board of Directors of the
Company as a result of the existence or occurrence of one or more of the
following conditions or events:
(i) a material breach by the Executive of any provision of this
Agreement, or the willful and continued failure of Executive substantially to
perform his duties under his employment with the Company;
(ii) Executive's willful misconduct in connection with the performance
of his duties as an employee or officer of the Company;
(iii) performance by the Executive of any act of fraud or material
misrepresentation or a material act of misappropriation which results or is
intended to result in Executive's personal enrichment at the expense of the
Company;
(iv) conviction of the Executive of any crime which constitutes a
felony offense involving violence (but not involving a motorized vehicle) or
fraud, embezzlement, theft or business activities;
(v) the entry of a judgment or order enjoining or preventing the
Executive from such activities as are essential for the Executive to perform his
services as required by this Agreement unless such judgment or order is the
subject of an appeal or other proceedings to set it aside or modify it and such
proceedings are timely filed and being pursued with due diligence; or
(vi) Executive has engaged in willful and deliberate conduct or
activities intended to materially damage the business of the Company, it being
understood that neither conduct or activities pursuant to the Executive's
exercise of his good faith business judgment nor unintentional physical damage
to properties by the Executive shall be a ground for such a determination.
(b) Mutual. Executive's employment under this Agreement may be terminated
upon mutual written agreement of the Company and the executive.
(c) Death. In the event of the death of Executive, this Agreement shall
terminate immediately.
(d) Disability. If, during Executive's employment under this Agreement,
Executive shall become permanently disabled and unable to perform his duties as
required herein ("Disability") for
3
4
a consecutive period of one hundred eighty (180) days, then the Company may,
upon thirty (30) days written notice to Executive, terminate Executive's
employment under this Agreement.
8. DEATH AND DISABILITY. In the event of the termination of Executive's
employment under this Agreement by reason of the Executive's death or
Disability, the Company shall pay Executive (or his heirs and/or personal
representatives), Base Compensation through a date which is one (1) year after
the date of Death or the date of termination for Disability as provided in
Paragraph 7(d), respectively.
9. SEVERANCE. In the event of the termination of Executive's employment
under this Agreement for any reason other than Executive's death or Disability,
the Company shall provide the payments and benefits to Executive as indicated
below:
(a) With Cause or Voluntary Termination by Executive. If Executive is
terminated for Cause (as defined in Section 7(a) of this Agreement), or if
Executive voluntarily terminates his employment with the Company for any reason
other than because of the relocation of the Company's executive offices outside
the West Palm Beach, Florida area, the Company shall be obligated only to
continue to pay to Executive his Base Compensation, if any, earned up to the
date of termination and shall reimburse the Executive for any expenses to which
the Executive is due reimbursement by the Company under Section 6 hereof. In
addition, Company shall pay vested benefits, if any, owed to Executive under any
plan provided for Executive under Paragraph 5 hereof in accordance with the
terms of such plan as in effect on the date of termination of employment under
this Paragraph 9(a).
(b) Without Cause. In the event that the Company shall terminate the
Executive without cause (or if Executive voluntarily terminates his employment
with the Company because of the relocation of the Company's executive offices
outside the West Palm Beach, Florida area), the Company shall be obligated to
continue to pay full compensation and benefits to the Executive through and
including December 15, 2001 as if the Executive had not been so terminated.
10. CONFIDENTIAL INFORMATION. Executive recognizes and acknowledges that
he will have access to certain confidential information of the Company and of
corporations with whom the Company does business, and that such information
constitutes valuable, special and unique property of the Company and such other
corporations. For the period of time which is the greater of (i) the third
anniversary of the date hereof or (ii) one year after the Executive is no longer
employed by the Company ("Confidentiality Period"), Executive agrees not to
disclose or use any confidential information, including without limitation,
information regarding research, developments, product designs or specifications,
manufacturing processes, "know-how," prices, suppliers, customers, costs or any
knowledge or information with respect to confidential or trade secrets of the
Company, it being understood that such confidential information does not include
information that is publicly available unless such information became publicly
available as a result of a breach of this Agreement. Executive acknowledges and
agrees that all notes, records, reports, sketches, plans, unpublished memoranda
or other documents belonging to the Company, but held
4
5
by Executive, concerning any information relating to the Company's business,
whether confidential or not, are the property of the Company and will be
promptly delivered to it upon Executive's leaving the employ of the Company.
Executive also agrees to execute such confidentiality agreements that the Board
may adopt and may modify from time to time, as a standard form to be executed by
all employees of the Company, to the extent such standard forms are not
materially more restrictive than the provisions of this Agreement.
11. NON-SOLICITATION. At all times during the term of this Agreement, and
thereafter during the Noncompete Period (as defined below), Executive shall not,
directly or indirectly, induce, influence, combine or conspire with, or attempt
to induce, influence, combine or conspire with, any of the officers, employees,
agents, consultants, customers or supplies of the Company to terminate their
employment, or other relationship, with or compete against the Company or any
future subsidiaries, parents or affiliates of the Company in the cable industry
(the "Business").
12. NON-COMPETITION. Executive acknowledges that his services and
responsibilities are unique in character and are of particular significance to
the Company, that the Company engages in a competitive business with a national
market and that Executive's continued and exclusive service to the Company under
this Agreement is of a high degree of importance to the Company. Therefore,
subject to the last sentence of this Paragraph 12, for one year after the
Executive is no longer employed by the Company (the "Noncompete Period"),
Executive shall not, directly or indirectly, engage in the Business, or in any
other business which, at the time of Executive's termination, the Company is
actively engaged in, except as an employee or agent of the Company, and shall
not, directly or indirectly, as owner, partner, joint venturer, employee,
broker, agent, corporate officer, principal, licensor, shareholder (unless as
owner of no more than three percent (3%) of the issued and outstanding capital
stock of such entity if such stock is publicly traded) or in any other capacity
whatsoever, engage in or have any connection with any business which is
competitive with the Business, and which operates anywhere in the United States
where the Company is doing or has done business within the prior three (3)
years. In the event Executive is terminated by the Company without Cause prior
to the expiration of the term of this Agreement, the Noncompete Period shall be
modified such that it expires on the date of such involuntary termination.
13. RESTRICTIVE COVENANTS.
(a) If, in any judicial proceedings, a court shall refuse to enforce any
of the covenants included in Paragraphs 10, 11, or 12 hereof, then such
unenforceable covenant shall be amended to relate to such lesser period or
geographical area as shall be enforceable. In the event the Company should bring
any legal action or other proceeding against Executive for enforcement of this
Agreement, the calculation of the Noncompete Period, if any, shall not include
the period of time commencing with the filing of legal action or other
proceeding to enforce this Agreement through the date of final judgment or final
resolution including all appeals, if any, of such legal action or other
proceeding unless the Company is receiving the practical benefits of Paragraphs
10, 11 and 12 during such time.
5
6
(b) Executive hereby acknowledges that the restrictions on his activity as
contained in this Agreement are required for the Company's reasonable protection
and is a material inducement to the Company to enter into this Agreement.
Executive hereby agrees that in the event of the violation by him of any of the
provisions of this Agreement, the Company will be entitled to institute and
prosecute proceedings at law or in equity to obtain damages with respect to such
violation or to enforce the specific performance of this Agreement by Executive
or to enjoin Executive from engaging in any activity in violation hereof. The
prevailing party in any litigation brought to enforce the restrictive provisions
contained in this Agreement shall be entitled to reimbursement from the
nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation.
(c) Notwithstanding anything to the contrary contained herein, in the
event that Executive engages in any material conduct prohibited by Paragraphs
10, 11, or 12 hereof for any reason whatsoever, Executive shall not receive any
of the severance benefits he otherwise would be entitled to receive pursuant to
Paragraph 9 hereof.
14. REMEDIES. The Executive acknowledges that the Company would be
irreparably injured by a violation of Paragraphs 10, 11 or 12 and agrees that
the Company shall be entitled to an injunction restraining the Executive from
any actual or threatened breach of Paragraphs 10, 11 or 12 or any other
appropriate remedy, without bond or other security being required. The Executive
understands and acknowledges that his failure to provide services to the Company
in accordance with the terms of this Agreement will result in financial injury
to the Company, and the Company will be entitled to damages for any such failure
arising from reasons entirely or partly within Executive's control.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered mail to
the addresses below or to such other address as either party shall designate by
written notice to the other:
If to the Executive: To the address set forth below his signature on the
signature page hereof.
If to the Company:
Orius Corp.
0000 Xxxxx Xxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
6
7
16. ENTIRE AGREEMENT; MODIFICATION.
(a) This Agreement contains the entire agreement of the Company and
Executive, and the Company and Executive hereby acknowledge and agree that this
Agreement supersedes any prior statements, writings, promises, understandings or
commitments between the parties hereof.
(b) No future oral statements, promises or commitments with respect to the
subject matter hereof, or other purported modification hereof, shall be binding
upon the parties hereto unless the same is reduced to writing and signed by each
party hereto.
17. ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and permitted assigns of the parties. Neither party may assign his or its rights
or obligations under this Agreement without the prior written consent of the
other party.
18. TERMINATION. All of the provisions of this Agreement shall terminate
after the expiration of the Term of this Agreement, except that (i) Paragraphs
10 and 11 shall only terminate upon the expiration of the Confidentiality Period
and (ii) Paragraph 12 (except as set forth in the last sentence thereof) shall
only terminate upon the expiration of the Noncompete Period.
19. MISCELLANEOUS.
(a) The section headings contained herein are for reference purposes only
and shall not in any way affect the meaning or the interpretation of this
Agreement.
(b) The failure of any party to enforce any provision of this Agreement
shall in no manner affect the right to enforce the same, and the waiver by any
party of any breach of any provision of this Agreement shall not be construed to
be a waiver by such party of any succeeding breach of such provision or a waiver
by such party of any breach of any other provision.
(c) All written notices required in this Agreement shall be sent postage
prepaid by certified or registered mail, return receipt requested or by
overnight delivery service against receipt or by overnight delivery service
against receipt.
(d) In the event any one or more of the provisions of this Agreement shall
for any reason be held invalid, illegal or unenforceable, the remaining
provisions of this Agreement shall be unimpaired, and the invalid, illegal or
unenforceable provision shall be replaced by a mutually acceptable valid, and
enforceable provision which comes closest to the intent of the parties.
(e) The prevailing party in any litigation brought to enforce the
provisions contained in this Agreement shall be entitled to reimbursement from
the nonprevailing party for reasonable attorneys' fees and expenses incurred in
connection with such litigation.
7
8
(f) This Agreement may be executed in any number of counterparts, each of
which shall constitute an original and all of which together shall constitute
one and the same instrument.
* * * * *
8
9
IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the day and year first above written.
COMPANY:
ORIUS CORP.
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Its: President
EXECUTIVE:
/s/ Xxxxxx Xxxxx
-----------------------------------
Xxxxxx Xxxxx
Address:
0000 XX 00xx Xxxxx
Xxxxxxxx, Xxxxxxx 00000
9
