FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or
15(d) of the Securities Exchange Act of 1934
- ------------------------------------------------------------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from __________ to __________
- --------------------------------------------------------------------------
Commission file number 0-2315
EMCOR Group, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its
charter)
Delaware 11-2125338
- ------------------------------------------------- -----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification Number)
101 Merritt Seven Corporate Park 06851-1060
Norwalk, Connecticut -----------------------
- ------------------------------------------------- (Zip)
(Address of principal executive offices)
(203) 849-7800
- -------------------------------------------------
(Registrant's telephone number)
N/A
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
filing requirements for the past 90 days. Yes X No __
Applicable Only To Issuers Involved In Bankruptcy Proceedings During The
Previous Five Years
Indicate by check mark whether the registrant has filed all documents
required to be filed by Section 12, 13 or 15(d) of the Securities and Exchange
Act of 1934, subsequent to the distribution of securities under a plan confirmed
by a court. Yes X No __
Applicable Only To Corporate Issuers
Number of shares of Common Stock outstanding as of the close of business on
July 21, 1999: 9,685,138 shares.
<PAGE>
EMCOR GROUP, INC.
INDEX
Page No.
PART I - Financial Information
Item 1 Financial Statements
Condensed Consolidated Balance Sheets -
as of June 30, 1999 and December 31, 1998 1
Condensed Consolidated Statements of Operations -
three months ended June 30, 1999 and 1998 3
Condensed Consolidated Statements of Operations -
six months ended June 30, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows -
six months ended June 30, 1999 and 1998 5
Condensed Consolidated Statements of Stockholders'
Equity and Comprehensive Income -
six months ended June 30, 1999 and 1998 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 13
PART II - Other Information
Item 1 Legal Proceedings 19
Item 4 Submission of Matters to a Vote of Security Holders 19
Item 6 Exhibits and Reports on Form 8-K 19
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
EMCOR Group, Inc. and Subsidiaries
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
ASSETS (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents .................................................. $ 28,202 $ 83,053
Accounts receivable, net ................................................... 656,613 538,457
Costs and estimated earnings in excess
of billings on uncompleted contracts ................................... 108,944 91,569
Inventories ................................................................ 7,382 7,188
Prepaid expenses and other ................................................. 9,658 11,702
-------- --------
810,799 731,969
Total current assets ...........................................................
Investments, notes and other long-term
receivables ................................................................ 20,903 6,974
Property, plant and equipment, net ............................................. 37,113 32,098
Goodwill ....................................................................... 59,422 22,745
Other assets ................................................................... 8,452 7,216
-------- --------
Total assets ................................................................... $936,689 $801,002
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current liabilities:
Borrowings under working capital credit lines............................... $ 20,000 $ --
Current maturities of long-term debt and capital
lease obligations ....................................................... 1,953 7,963
Accounts payable ........................................................... 284,189 246,856
Billings in excess of costs and estimated
earnings on uncompleted contracts ....................................... 201,568 135,094
Accrued payroll and benefits ............................................... 64,740 62,008
Other accrued expenses and liabilities ..................................... 63,451 59,996
-------- --------
Total current liabilities ............................................... 635,901 511,917
Long-term debt and capital lease obligations ............................... 117,140 117,274
Other long-term obligations ................................................ 53,587 51,995
-------- --------
Total liabilities ....................................................... 806,628 681,186
-------- --------
Stockholders' equity:
Preferred stock, $0.10 par value, 1,000,000 shares.......................... -- --
authorized, zero issued and outstanding
Common stock, $0.01 par value, 1,370,000 shares
authorized, 9,684,538 and 9,830,603 shares issued
and outstanding or issuable, respectively................................ 109 109
Warrants ................................................................... 2,154 2,154
Capital surplus ............................................................ 119,026 114,867
Accumulated other comprehensive income ..................................... (346) (1,822)
Retained earnings .......................................................... 25,954 18,476
Treasury stock, at cost, 1,132,000 shares
and 957,900 shares, respectively ........................................ (16,836) (13,968)
-------- --------
Total stockholders' equity ..................................................... 130,061 119,816
-------- --------
Total liabilities and stockholders' equity ..................................... $936,689 $801,002
======== ========
</TABLE>
See notes to Condensed Consolidated Financial Statements
<PAGE>
EMCOR Group, Inc. and Subsidiaries
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Three months ended June 30, 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues ....................................................................... $696,489 $545,547
Costs and expenses:
Cost of sales .............................................................. 629,861 493,272
Selling, general and administrative ........................................ 54,622 44,212
-------- --------
684,483 537,484
-------- --------
Operating income ............................................................... 12,006 8,063
Interest expense, net .......................................................... 2,462 1,365
-------- --------
Income before income taxes ..................................................... 9,544 6,698
Provision for income taxes ..................................................... 4,117 3,024
-------- --------
Net income ..................................................................... $ 5,427 $ 3,674
======== ========
Basic earnings per share ....................................................... $ 0.56 $ 0.34
======== ========
Diluted earnings per share ..................................................... $ 0.45 $ 0.31
======== ========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Six months ended June 30, 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues ....................................................................... $1,236,472 $1,039,470
Costs and expenses:
Cost of sales .............................................................. 1,117,889 942,955
Selling, general and administrative ........................................ 101,529 84,517
---------- ----------
1,219,418 1,027,472
---------- ----------
Operating income ............................................................... 17,054 11,998
Interest expense, net .......................................................... 3,935 3,771
---------- ----------
Income before income taxes and extraordinary
item ....................................................................... 13,119 8,227
Provision for income taxes ..................................................... 5,641 3,751
---------- ----------
Income before extraordinary item ............................................... 7,478 4,476
Extraordinary item - loss on early
extinguishment of debt, net of income taxes ................................ -- (4,777)
---------- ----------
Net income (loss) .............................................................. $ 7,478 $ (301)
========== ==========
Basic earnings (loss) per share:
Income before extraordinary item ............................................... $ 0.77 $ 0.44
Extraordinary item - loss on early
extinguishment of debt, net of income taxes ................................ -- (0.47)
---------- ----------
Basic earnings(loss) per share ................................................. $ 0.77 $ (0.03)
========== ==========
Diluted earnings (loss) per share:
Income before extraordinary item ............................................... $ 0.66 $ 0.41
Extraordinary item - loss on early
extinguishment of debt, net of income taxes ................................ -- (0.44)
---------- ----------
Diluted earnings (loss) per share .............................................. $ 0.66 $ (0.03)
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Six months ended June 30, 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)........................................................... $ 7,478 $ (301)
Extraordinary item - loss on early extinguishment of debt,
net of income taxes....................................................... -- 4,777
Depreciation and amortization............................................... 5,233 4,128
Amortization of goodwill.................................................... 1,419 186
Other non-cash expenses .................................................... 4,730 2,885
Changes in operating assets and liabilities ................................ (28,183) (11,883)
-------- --------
Net cash used in operating activities .......................................... (9,323) (208)
-------- --------
Cash flows from financing activities:
Issuance of Convertible subordinated notes ................................. -- 115,000
Net proceeds from sale of Common stock ..................................... -- 22,485
Purchase of Treasury stock ................................................. (2,868) --
Debt issuance costs ........................................................ -- (4,074)
Payment of Series C Notes .................................................. -- (61,854)
Premiums paid on early extinguishment of debt .............................. -- (2,437)
Payment of Supplemental SellCo Note ........................................ -- (5,464)
Borrowings(payments)under working capital credit lines ..................... 20,000 (9,497)
Payment of long-term debt and capital lease obligations..................... (6,157) (196)
Exercise of stock options .................................................. 221 289
-------- --------
Net cash provided by financing activities ...................................... 11,196 54,252
-------- --------
Cash flows from investing activities:
Purchase of Property, plant and equipment, net ............................. (5,177) (5,450)
Acquisition of businesses .................................................. (53,752) (1,398)
Decrease (increase) in Investments, notes and other long-term
receivables .............................................................. 2,205 (1,160)
-------- --------
Net cash used in investing activities .......................................... (56,724) (8,008)
-------- --------
(Decrease)increase in cash and cash equivalents ................................ (54,851) 46,036
Cash and cash equivalents at beginning of period ............................... 83,053 49,376
-------- --------
Cash and cash equivalents at end of period ..................................... $ 28,202 $ 95,412
======== ========
Supplemental cash flow information:
Cash paid for:
Interest ................................................................ $ 3,325 $ 1,847
Income Taxes ............................................................ $ 3,610 $ 579
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
<TABLE>
<CAPTION>
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
(In thousands) (Unaudited)
====================================================================================================================================
Accumulated Retained
other earnings
Common Capital comprehensive (accumulated Treasury Comprehensive
Total stock Warrants surplus income(loss)(1) deficit) stock income (loss)
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1999 $119,816 $ 109 $ 2,154 $114,867 $ (1,822) $ 18,476 $(13,968)
Net income 7,478 -- -- -- -- 7,478 -- $ 7,478
Foreign currency
translation adjustments 1,476 -- -- -- 1,476 -- -- 1,476
-------
Comprehensive income -- -- -- -- -- -- -- $ 8,954
=======
NOL utilization, net 3,938 -- -- 3,938 -- -- --
Common stock issued under
stock option plans 221 -- -- 221 -- -- --
Treasury stock repurchased (2,868) -- -- -- -- -- (2,868)
-------- -------- -------- -------- -------- -------- --------
Balance, June 30, 1999 $130,061 $ 109 $ 2,154 $119,026 $ (346) $ 25,954 $(16,836)
======== ======== ======== ======== ======== ======== ========
Balance, January 1, 1998 $ 95,323 $ 96 $ 2,154 $ 87,107 $ (195) $ 6,161 -- $ (301)
Net loss (301) -- -- -- -- (301) --
Foreign currency (275)
translation adjustments (275) -- -- -- (275) -- -- -------
$ (576)
Comprehensive loss -- -- -- -- -- -- -- =======
NOL utilization, net 1,845 -- -- 1,845 -- -- --
Issuance of common stock 22,485 11 -- 22,474 -- -- --
Tax effect of extraordinary
item (2,715) -- -- (2,715) -- -- --
Common Stock issued
under stock option plans 289 -- -- 289 -- -- --
-------- -------- -------- -------- -------- -------- --------
Balance, June 30, 1998 $116,651 $ 107 $ 2,154 $109,000 $ (470) $ 5,860 --
======== ======== ======== ======== ======== ======== ========
</TABLE>
(1) Represents cumulative foreign currency translation adjustments.
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
EMCOR Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE A Basis of Presentation
The accompanying condensed consolidated financial statements have been prepared
by the Company, without audit, pursuant to the interim period reporting
requirements of Form 10-Q. Consequently, certain information and note
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
Readers of this report should refer to the consolidated financial statements and
the notes thereto included in the Company's latest Annual Report on Form 10-K
filed with the Securities and Exchange Commission.
In the opinion of the Company, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting only of a normal
recurring nature) necessary to present fairly the financial position of the
Company and the results of its operations. The results of operations for the
three and six month periods ended June 30, 1999 are not necessarily indicative
of the results to be expected for the year ending December 31, 1999.
Certain reclassifications of prior year amounts have been made to conform to
current year presentation.
NOTE B Goodwill
Goodwill at June 30, 1999 was approximately $59.4 million, which represents the
excess of cost over fair market value of net identifiable assets of companies
acquired in purchase transactions. The increase in Goodwill of $36.7 million,
net of amortization of $1.4 million for the six months ended June 30, 1999, was
primarily attributable to two acquisitions in the three months ended June 30,
1999. In April 1999, the Company acquired all of the capital stock of Monumental
Investment Corporation which owns all of the capital stock of the Poole & Kent
group of companies, providers of mechanical services to water and wastewater
treatment facilities, government agencies, transportation authorities, and
commercial and industrial clients in a variety of industries. The accounting for
this transaction is of a preliminary basis and is subject to certain purchase
accounting adjustments. The purchase price is also subject to finalization based
on contingency adjustments per the purchase agreement. In May 1999, the Company
acquired all of the capital stock of Energy Systems Industries, providers of
operations, maintenance and consulting services for commercial, industrial and
institutional clients. The goodwill associated with these transactions will be
amortized on a straight-line basis over 20 year periods. The total purchase
price paid in 1999 in connection with these two acquisitions, plus additional
payments by reason of earn-out terms in connection with prior acquisitions, was
$53.8 million.
At the end of each quarter, the Company reviews events and changes in
circumstances, if any, to determine whether the recoverability of the carrying
value of Goodwill should be reassessed. Should events or circumstances indicate
that the carrying value may not be recoverable based on undiscounted future cash
flows, an impairment loss measured by the difference between the discounted
future cash flows (or another acceptable method for determining fair value) and
the carrying value of Goodwill would be recognized by the Company.
<PAGE>
NOTE C Long-Term Debt
<TABLE>
<CAPTION>
Long-term debt in the accompanying Condensed Consolidated Balance Sheets
consists of the following amounts at June 30, 1999 and December 31, 1998 (in
thousands):
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Convertible subordinated notes, at 5.75% , due 2005 $115,000 $115,000
Note payable, due 1999 -- 6,164
Other 4,093 4,073
-------- --------
119,093 125,237
Less: current maturities (1,953) (7,963)
-------- --------
$117,140 $117,274
======== ========
</TABLE>
On March 18, 1998, the Company called for redemption approximately $61.9 million
principal amount of Series C Notes and irrevocably funded such amounts, together
with a redemption premium, with the trustee of the Indenture under which the
Series C Notes were issued. In accordance with the Indenture governing the
Series C Notes, the redemption price of the Series C Notes was 104% of the
principal amount redeemed. The Company recorded an extraordinary loss related to
the early retirement of debt amounting to approximately $4.8 million, net of
income taxes. The extraordinary loss consisted primarily of the write-off of the
associated debt discount plus the redemption premium and other costs associated
with the redemption, net of income tax benefits.
On March 18, 1998, the Company sold, pursuant to an underwritten public
offering, $100.0 million principal amount of 5.75% Convertible Subordinated
Notes ("Subordinated Notes"). On March 24, 1998, the underwriter of the
Subordinated Notes offering exercised in full its over-allotment option to
purchase an additional $15.0 million of Subordinated Notes, and accordingly,
Subordinated Notes in the additional principal amount of $15.0 million were
issued. The Subordinated Notes will mature in April 2005 and are general
unsecured obligations of the Company, subordinated in right to all existing and
future Senior Indebtedness (as defined in the indenture pursuant to which
Subordinated Notes were issued (the "Subordinated Indenture") of the Company.
The Subordinated Indenture does not contain any financial covenants or any
restrictions on the payment of dividends, the repurchase of securities of the
Company or the incurrence of Indebtedness (as defined in the Subordinated
Indenture) or Senior Indebtedness (as defined in the Subordinated Indenture).
Holders of the Subordinated Notes have the right at any time to convert the
Subordinated Notes into Common Stock of the Company at a conversion price of
$27.34 per share.
NOTE D Income Taxes
The Company files a consolidated federal income tax return including all U.S.
subsidiaries. At June 30, 1999, the Company had net operating loss carryforwards
("NOLs") for U.S. income tax purposes of approximately $140.0 million, which
expire in the years 2007 through 2012. The NOLs are subject to review by the
Internal Revenue Service. Future changes in ownership of the Company, as defined
by Section 382 of the Internal Revenue Code, could limit the amount of the
Company's NOLs available for use in any one year.
As a result of the adoption of Fresh-Start Accounting, the tax benefit of any
net operating loss carryforwards or net deductible temporary differences which
existed as of the date of the Company's emergence from Chapter 11 in December
1994 will result in a charge to the tax provision (provision in lieu of income
taxes) and be allocated to Capital surplus.
The Company has provided a valuation allowance as of June 30, 1999 for the full
amount of the tax benefit of its remaining NOLs and other deferred tax assets.
Income tax expense recorded for the three and six month periods ended June 30,
1999 and 1998 represent a provision primarily for federal, foreign and state and
local income taxes. The Company's utilization of NOLs and other deferred tax
assets for the six month periods ended June 30, 1999 and 1998 of approximately
$3.9 million and $1.8 million have been added to Capital surplus, respectively.
<PAGE>
NOTE E Earnings Per Share
The following tables summarize the Company's calculation of Basic and Diluted
Earnings per Share ("EPS") for the three and six month periods ended June 30,
1999 and 1998:
---------------------------------------------
Three months ended
June 30, 1999
---------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Net income available to common
stockholders $5,427,000 9,672,355 $0.56
=====
Effect of Dilutive Securities:
Options -- 196,057
Warrants -- 351,385
Convertible Subordinated Notes 1,022,000 4,206,291
---------- ---------
Diluted EPS $6,449,000 14,426,088 $0.45
========== ========== =====
---------------------------------------------
Six months ended
June 30, 1999
---------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Income before extraordinary item
available to common stockholders $7,478,000 9,697,473 $0.77
=====
Effect of Dilutive Securities:
Options -- 249,340
Warrants -- 249,408
Convertible Subordinated Notes 2,044,000 4,206,291
---------- ---------
Diluted EPS - before extraordinary
item $9,522,000 14,402,512 $0.66
========== ========== =====
---------------------------------------------
Three months ended
June 30, 1998
---------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Net income available to common
stockholders $3,674,000 10,725,320 $0.34
=====
Effect of Dilutive Securities:
Options -- 244,979
Warrants -- 322,938
Convertible Subordinated Notes 1,081,000 4,206,291
---------- ---------
Diluted EPS $4,755,000 15,499,528 $0.31
========== ========== =====
---------------------------------------------
Six months ended
June 30, 1998
---------------------------------------------
Income Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ---------
Basic EPS
Income before extraordinary item
available to common stockholders $4,476,000 10,247,819 $0.44
=====
Effect of Dilutive Securities:
Options -- 250,939
Warrants -- 337,330
---------- ---------
Diluted EPS - before extraordinary
item $4,476,000 10,836,088 $0.41
========== ========== =====
For the six month period ended June 30, 1998, the "if converted" amount of Notes
and related after-tax interest expense were excluded from the denominator and
numerator, respectively, in the calculation of Diluted EPS as the effect would
be antidilutive. For the six month period ended June 30, 1999, 305,000 options
were excluded from the calculation of Diluted EPS as the inclusion of the
options would be antidilutive.
<PAGE>
NOTE F Common Stock
On March 18, 1998, the Company sold, pursuant to an underwritten public
offering, 1,100,000 shares of its Common Stock at a price of $21.875 per share.
The proceeds of the offering, together with the proceeds of the Subordinated
Notes public offering, were used to repay the Company's Series C Notes, the
Company's Supplemental SellCo Note and the Company's working capital credit
facility. The balance was used for general corporate purposes and acquisitions.
As a part of a program previously authorized by the Board of Directors, the
Company purchased 174,100 shares of its common stock in the six months ended
June 30, 1999 at an aggregate cost of approximately $2.9 million. This amount is
classified as a component of "Treasury stock, at cost" in the accompanying
Condensed Consolidated Balance Sheet
.
NOTE G New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133" or "the Statement"), which establishes
accounting and reporting standards requiring derivative instruments, as defined,
to be measured in the financial statements at fair value. The Statement also
requires that changes in the derivatives' fair value be recognized currently in
earnings unless certain accounting criteria are met. SFAS No. 133, as amended by
SFAS No. 137, is effective for fiscal quarters beginning after June 15, 2000 and
cannot be applied retroactively. The Company currently has two forward exchange
contracts which are designated as hedges against intercompany loans to the
Company's U.K. subsidiary. The Company does not expect the provision of SFAS No.
133 to have a significant effect on the financial condition or results of
operations of the Company.
NOTE H Segment Information
In 1998, the Company adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information", ("SFAS No. 131") which changed the way the
Company reports information about its operating segments. The Company evaluates
financial performance based on the operating income of the reportable business
units.
The Company has the following reportable segments pursuant to SFAS 131: United
States electrical construction and facilities services ("United States
Electrical Business Units"), United States mechanical construction and
facilities services ("United States Mechanical Business Units"), Canada
construction and facilities services ("Canada Business Units") and United
Kingdom construction and facilities services ("United Kingdom Business Units").
United States "Other" primarily represents those operations that principally
provide consulting operations and maintenance services. "Other International"
represents the Company's operations outside of the United States, Canada, and
the United Kingdom, primarily those in the Middle East and Asia performing
electrical construction, mechanical construction and facilities services ("Other
International Business Units"). Inter-segment sales are not material for any of
the periods presented. The Extraordinary item - loss on early extinguishment of
debt, net of income taxes, of $4.8 million for the six months ended June 30,
1998 is related to corporate administration of the Company.
<PAGE>
<TABLE>
<CAPTION>
The following presents information about industry segments and geographic areas:
(In thousands):
- ------------------------------------------------------------------------------------------------------------------------------------
For the three months ended For the six months ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
United States Electrical Business Units ............................ $231,946 $220,977 $ 451,492 $ 420,310
United States Mechanical Business Units ............................ 275,580 151,364 420,164 279,974
United States Other Business Units ................................. 22,822 2,875 30,750 4,385
-------- -------- -------- ----------
Total United States Operation ...................................... 530,348 375,216 902,406 704,669
Canada Operations Business Units ................................... 41,579 49,663 74,762 96,279
United Kingdom Operations Business Units ........................... 124,447 118,324 258,782 231,031
Other International Operations Business Units ...................... 115 2,344 522 7,491
-------- -------- ---------- ----------
Total Worldwide Operations ......................................... $696,489 $545,547 $1,236,472 $1,039,470
======== ======== ========== ==========
Operating income:
United States Electrical Business Units ............................ $ 8,026 $ 7,382 $ 15,623 $ 12,908
United States Mechanical Business Units ............................ 9,238 5,182 12,936 8,184
United States Other Business Units ................................. (1,112) (1,159) (2,575) (2,156)
-------- -------- ---------- ----------
Total United States Operations ..................................... 16,152 11,405 25,984 18,936
Canada Operations Business Units ................................... 1,470 1,826 1,549 2,438
United Kingdom Operations Business Units ........................... (876) (208) (1,537) (424)
Other International Operations Business Units ...................... (433) (663) (689) (695)
Corporate Administration ........................................... (4,307) (4,297) (8,253) (8,257)
-------- -------- ---------- ----------
Total Worldwide Operations ......................................... 12,006 8,063 17,054 11,998
Other Corporate items:
Interest expense ................................................... (2,706) (3,182) (4,978) (6,319)
Interest income .................................................... 244 1,817 1,043 2,548
-------- -------- ---------- ----------
Income before taxes and
extraordinary item ................................................ $ 9,544 $ 6,698 $ 13,119 $ 8,227
======== ======== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Total assets:
United States Electrical Business Units ..................................... $292,678 $282,580
United States Mechanical Business Units ..................................... 368,237 204,469
United States Other Business Units .......................................... 54,911 25,725
-------- --------
Total United States Operations .............................................. 715,826 512,774
Canada Operations Business Units ............................................ 46,277 49,463
United Kingdom Operations Business Units .................................... 129,993 156,693
Other International Operations Business Units .............................. 19,647 14,605
Corporate Administration .................................................... 24,946 67,467
-------- --------
Total Worldwide Operations .................................................. $936,689 $801,002
======== ========
</TABLE>
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
EMCOR Group, Inc.'s ("EMCOR" or the "Company") Revenues for the three months
ended June 30, 1999 and 1998 were $696.5 million and $545.6 million,
respectively. Net income for the three months ended June 30, 1999 was $5.4
million, an improvement of $1.7 million over the comparable period in 1998.
Basic Earnings per Share ("Basic EPS") were $0.56 per share for the three months
ended June 30, 1999, a 65% increase over Basic EPS of $0.34 per share for the
same 1998 period. Diluted Earnings per Share ("Diluted EPS") were $0.45 per
share for the three months ended June 30, 1999, a 45% increase over Diluted EPS
of $0.31 per share for the same 1998 period. The increase in Revenues and Net
income for 1999 compared to 1998 is primarily attributable to acquisitions
completed in 1998 and 1999.
Revenues for the six months ended June 30, 1999 and 1998 were $1,236.5 million
and $1,039.5 million respectively. Net income for the six months ended June 30,
1999 was $7.5 million compared to a net loss of $0.3 million for the six months
ended June 30, 1998. Basic EPS were $0.77 per share for the six months ended
June 30, 1999 compared to Basic EPS loss of $0.03 per share in the year earlier
period. Diluted EPS were $0.66 per share compared to Diluted EPS loss of $0.03
per share for the six months ended June 30, 1999 and 1998, respectively. Net
income for the six months ended June 30, 1998 included after-tax charges of
approximately $4.8 million ($7.5 million pre-tax), or a Basic EPS loss of $0.47
and a Diluted EPS loss of $0.44, respectively, associated with the early
retirement of approximately $61.9 million of the Company's Series C Notes. These
extraordinary charges are reflected in the accompanying Consolidated Statements
of Operations under the caption "Extraordinary item - loss on early
extinguishment of debt, net of income taxes". The increase in Revenues and Net
income for the six months ended June 30, 1999 versus the same period in 1998 is
also primarily attributable to acquisitions completed in 1998 and 1999.
Gross Profit (Revenues less Cost of sales) ("GP") increased to $66.6 million for
the three months ended June 30, 1999 compared to $52.3 million for the three
months ended June 30, 1998. As a percentage of Revenues, GP remained level at
9.6% for the three months ended June 30, 1999 and 1998. GP increased to $118.6
million for the six months ended June 30, 1999, a $22.1 million increase over
the GP of $96.5 million for the six months ended June 30, 1998. As a percentage
of Revenues, GP increased to 9.6% from 9.3% for the six months ended June 30,
1999 and 1998, respectively.
Selling, general and administrative expenses ("SG&A") for the three months ended
June 30, 1999 were $54.6 million, or 7.8% of Revenues, compared to $44.2
million, or 8.1% of Revenues for the three months ended June 30, 1998. SG&A
expenses for the six months ended June 30, 1999 were $101.6 million compared to
$84.5 million for the same period in 1998. The dollar increase in SG&A for the
three and six months ended June 30, 1999 compared to the comparable prior year
periods was primarily attributable to companies acquired during 1998 and 1999.
The decrease in SG&A as a percentage of Revenues was primarily due to the
geographic area in which the Revenue was earned and the generally lower SG&A
costs for acquired companies. This decrease was offset partially by increases
due to the continued development of the Company's facilities services
operations, which operations generally require greater SG&A than construction
services.
The Company had Operating income of $12.0 million, or 1.7% of Revenues, for the
three months ended June 30, 1999 compared with Operating income of $8.1 million,
or 1.5% of Revenues, for the three months ended June 30, 1998. Operating income
for the six months ended June 30, 1999 was $17.1 million or 1.4 % of Revenues,
compared to $12.0 million or 1.2 % of Revenues for the same 1998 period. The
increase in Operating income for the three and six months ended June 30, 1999 as
compared to the same periods in 1998 was primarily due to increased Revenue and
Operating income attributable to businesses acquired in 1998 and 1999.
EMCOR's Interest expense, net, increased by $1.1 million for the three months
ended June 30, 1999 primarily due to borrowings on its working capital credit
line in the 1999 period, and reduced cash available to invest in 1999 when
compared to the same 1998 period, due primarily to payments for companies
acquired during the second quarter of 1999. For the six months ended June 30,
1999 Interest expense, net, increased by $0.1 million compared to the six months
ended June 30, 1998. This increase in Interest expense, net, for the six month
comparable periods was due to the reasons cited above for the three month
comparable periods, offset by borrowings at lower interest rates plus more cash
available to invest during the first three months of 1999 versus the first three
months of 1998.
The Income tax provision increased to $4.1 million for the three months ended
June 30, 1999, versus $3.0 million for the same period in 1998. For the six
months ended June 30, 1999 the Income tax provision increased to $5.6 million
compared to $3.8 million for the same 1998 period. The increase in provision was
due to increased Income before taxes and extraordinary item, offset partially by
a decrease in the effective income tax rate for the three and six months ended
June 30, 1999. The decrease in the effective income tax rate was due to changes
in the tax jurisdictions in which income was earned as well as continued income
tax planning strategies. A portion of the liability for income taxes, $3.9
million for 1999 and $1.8 million for 1998, is not payable in cash due to the
utilization of NOL's and was recorded as an increase in Capital surplus for both
years.
The Company's backlog was $1,800.7 million at June 30, 1999 and $1,329.1 million
at December 31, 1998. Between December 31, 1998 and June 30, 1999, the Company's
backlog in Canada increased by $25.2 million, its backlog in the United Kingdom
and Other International Operations decreased by $61.2 million and its backlog in
the United States increased by $435.6 million. The increase in the Company's
Canadian backlog was primarily attributable to several large contract awards in
Western Canada. The decrease in the United Kingdom and Other International
backlog was due to the completion in the first quarter of 1999 of previously
awarded change orders on the Jubilee Line contract. The increase in the United
States backlog was due to two acquisitions in the second quarter contributing an
additional $460.0 million to backlog, offset by decreases in backlog due
primarily to the completion of certain major projects in the Western United
States. The Company's backlog as of June 30, 1998 was $1.094.5 million.
Excluding acquisitions, backlog has risen $80.0 million or 7.3%.
United States Operations
The Company's United States operations consist of three segments: electrical
construction and facilities services, mechanical construction and facilities
services and other services.
Revenues of electrical construction and facilities services business units
("Electrical Business Units") for the three months ended June 30, 1999 were
$231.9 million compared to $221.0 million for the three months ended June 30,
1998. Operating income of the Electrical Business Units (before deduction of
general corporate and other expenses discussed below) for the three months ended
June 30, 1999 was $8.0 million or 3.4% of Revenues compared to $7.4 million or
3.3% of Revenues for the three months ended June 30, 1998. Revenues for the six
months ended June 30, 1999 were $451.5 million compared to $420.3 million for
the same six months in 1998. Operating income was $15.6 million or 3.5% of
Revenues for the six months of 1999, an increase of $2.7 million compared to
$12.9 million or 3.1% of Revenues for the same six months of 1998. The increase
in Revenues and Operating income for both the three and six month comparable
periods was primarily attributable to acquisitions made during 1998 which did
not have a full period of results in 1998, combined with sustained market
strength in the Eastern United States driven by renovation projects and new
construction.
Revenues of mechanical construction and facilities services business units
("Mechanical Business Units") for the three months ended June 30, 1999 were
$275.6 million compared to $151.4 million for the three months ended June 30,
1998. Operating income of the Mechanical Business Units (before deduction of
general corporate and other expenses discussed below) for the three months ended
June 30, 1999 was $9.2 million or 3.4% of Revenues compared to $5.2 million or
3.4% of Revenues for the three months ended June 30, 1998. Revenues for the six
months ended June 30, 1999 were $420.2 million versus $280.0 million for the six
months ended June 30, 1998. Operating income was $12.9 million, or 3.1% of
Revenues, for the six months of 1999, a $4.7 million increase compared to $8.2
million, or 2.9% of Revenues, for the same six months of 1998. Acquisitions
contributed approximately $129.9 million and $156.1 million to the increase in
Revenues in the three and six month comparable periods, respectively. The
increase in Revenues was due to acquisitions and was partially offset by the
continued planned reduction of certain operations and completion of several
major projects, primarily in the Western United States.
Other United States Revenues of $22.8 million for the three months ended June
30, 1999, which include those operations that principally provide consulting and
maintenance services, increased by $19.9 million compared to the same three
months in 1998. Revenues for the six months ended June 30, 1999 were $30.8
million compared to $4.4 million for the six months ended June 30, 1998. The
increase in Revenues for both the three and six month comparable periods was
primarily attributable to 1998 and second quarter 1999 acquisitions. Operating
losses attributable to consulting and maintenance services were $1.1 million and
$1.2 million for the three months end June 30, 1999 and 1998, respectively.
Operating losses for the six months ended June 30, 1999 and 1998 were $2.6
million and $2.2 million, respectively. The Operating losses for both the three
and six month comparable periods were primarily attributable to costs associated
with the continued development of the consulting operations and maintenance
services activities.
International Operations
The Company's International Operations consist of three segments: Canada
construction and facilities services, United Kingdom construction and facilities
services and other international construction and facilities services. Revenues
of Canada construction and facilities services business units ("Canada Business
Units") for the three months ended June 30, 1999 were $41.6 million compared to
$49.7 million for the three months ended June 30, 1998. Revenues for the six
months ended June 30, 1999 and 1998 were $74.8 million and $96.3 million,
respectively. Operating income of the Canada Business Units was $1.5 million
compared to $1.8 million for the three months ended June 30, 1999 and 1998,
respectively. For the six months ended June 30, 1999 and 1998, operating income
was $1.6 million and $2.4 million, respectively. The decrease in both Revenues
and Operating income in the 1999 periods compared to 1998 was primarily due to a
reduced level of activities in Eastern Canada and from delays early in 1999 on
the commencement of certain projects. The impact of decreased Revenues on
Operating income has been partially offset by increased GP as a percentage of
Revenues in both the three and six month periods of 1999.
Revenues of United Kingdom construction and facilities services business units
("United Kingdom Business Units") for the three months ended June 30, 1999 were
$124.4 million compared to $118.3 million for the three months ended June 30,
1998. Revenues for the six months ended June 30, 1999 and 1998 were $258.8
million and $231.0 million, respectively. Operating losses of the United Kingdom
business units (before deduction of general and other expenses discussed below)
for the three months ended June 30, 1999 were $0.9 million compared to $0.2
million for the three months ended June 30, 1998. Operating losses for the six
months ended June 30, 1999 and 1998 were $1.5 million and $0.4 million,
respectively. The increase in Revenues for both the three and six month
comparable periods is primarily attributable to continued growth in selected
construction and facilities services markets, combined with an increase in
revenue associated with two major projects. The activity in this segment
continued to produce operating losses for the three and six month periods ended
June 30, 1999.
Other International construction and facilities services business units ("Other
International Business Units") primarily consists of the Company's operations in
the Middle East and Asia. Revenues for the three months ended June 30, 1999 were
$0.1 million compared to $2.3 million for the three months ended June 30, 1998.
Revenues for the six months ended June 30, 1999 and 1998 were $0.5 million and
$7.5 million, respectively. Operating losses decreased by $0.3 million to $0.4
million for the three months ended June 30, 1999 compared to $0.7 million for
the three months ended June 30, 1998. Operating losses for the six months ended
June 30, 1999 and 1998 were $0.7 million. The decline in Revenues for both the
three and six month comparable period, was due to the completion of several
large projects in the Middle East and Asia markets that were active last year,
as well as a reduction of the level of ownership and related share of revenues
for certain joint ventures. The Operating losses were due to costs associated
with the administration and completion of the activities in these regions. The
Company continues to pursue new business selectively in these markets; however,
the availability of opportunities has been reduced significantly as a result of
local economic factors.
General Corporate and Other Expenses
General Corporate expenses for the three months ended June 30, 1999 and 1998
were $4.3 million and $8.3 million for the six months ended June 30, 1999 and
1998. Interest expense for the three months ended June 30, 1999 was $2.7 million
compared to $3.2 million for the same three months in 1998. Interest expense for
the six months ended June 30, 1999 was $5.0 million compared to $6.3 million for
the six months ended June 30, 1998. Interest income for the three months ended
June 30, 1999 was $0.2 million compared to $1.8 million for the three months
ended June 30, 1998. For the six months ended June 30, 1999, Interest income was
$1.0 million, a $1.6 million decrease from $2.6 million for the same period in
1998. For the three month periods ended June 30, 1999 and 1998, both Interest
expense and Interest income were impacted by borrowings on working capital
credit lines in the 1999 period and reduced cash available to invest in 1999
than in the 1998 period. The six month comparable periods were impacted by the
reasons cited for the three month periods, offset by borrowings at lower
interest rates, and more cash available to invest during the first three months
of 1999 versus the first three months of 1998.
Liquidity and Capital Resources
During the third quarter of 1998, the Company's Board of Directors authorized a
stock repurchase program under which the Company could repurchase up to $20.0
million of its Common Stock. As of June 30, 1999 the Company had cumulatively
repurchased 1,132,000 shares of its Common Stock at an aggregate cost of
approximately $16.8 million.
The Company's consolidated cash balance decreased by approximately $54.9 million
from $83.1 million at December 31, 1998 to $28.2 million at June 30, 1999, as a
result of Net cash used in operating activities of $9.3 million, Net cash used
in investing activities of $56.7 million (primarily due to cash paid for
acquisitions of $53.8 million), offset by Net cash provided by financing
activities of $11.2 million.
As of June 30, 1999 the Company's total borrowing capacity under its revolving
credit facility was $150.0 million. The Company had approximately $17.5 million
of letters of credit outstanding as of that date. There were $20.0 million of
revolving loans outstanding as of June 30, 1999 and none at December 31, 1998
under the credit facility.
The Company believes that current cash balances and borrowing capacity available
under its line of credit, combined with cash expected to be generated from
operations, will be sufficient to provide short-term and foreseeable long-term
liquidity and meet expected capital expenditure requirements.
Year 2000
The Year 2000 issue concerns the inability of information systems to properly
recognize and process date sensitive information beyond January 1, 2000.
The Company has performed a comprehensive review of its internal application
systems ("Internal Systems"), including information technology ("IT") systems
and Non-IT systems, to identify those systems that could be affected by the Year
2000 issue (the "Issue") and has developed a plan to resolve the Issue. The
Company defines IT systems as those systems, which are software applications and
related computer hardware critical to operation of its business. These IT
systems include, but are not limited to, accounting systems that encompass
billing and estimating, accounts payable and payroll. Additionally, IT systems
include other non-accounting software applications that are part of business
operations. Non-IT systems would primarily include software applications and
related computer hardware that are used in building systems such as, but not
limited to, temperature controls, security systems and other building systems.
The Company estimates that it is approximately 90% complete with required
modifications to its IT Systems and expects the balance of any required
modifications to be completed by October, 1999. With respect to Non-IT systems,
the Company has completed approximately 75% of the modifications required and
anticipates that the modifications will be substantially complete by the end of
the third quarter of 1999. Modification costs have and will be expensed as SG&A
as incurred and costs of new software have and will be capitalized and amortized
over the expected useful life of the related software.
Since the inception of the Company's efforts to address the Year 2000 issues,
approximately $0.6 million has been expensed as incurred. Additional
modification and testing costs to be incurred are not anticipated to exceed an
additional $0.4 million. The Company is utilizing both internal and external
resources to identify, correct or reprogram, and test its systems to ensure Year
2000 compliance.
The Company expects its Year 2000 conversion project to be completed before
January 1, 2000. While the Company believes its planning efforts are adequate to
address its Year 2000 concerns, the Company's operations and financial results
could be adversely impacted by the Year 2000 issue if the conversion schedule
and cost estimate for its Internal Systems are not met or suppliers and or
customers and other businesses on which the Company relies do not address the
Issue successfully. The Company is requesting that its significant suppliers
confirm that they have plans for achieving Year 2000 compliance. The Company
continues to assess these risks in order to reduce any impact on the Company.
Contingency plans include both ordering and receiving, prior to January 1, 2000,
an inventory of general supplies to be used on jobs and identifying back-up
suppliers for these items. Specific supplies, which may only be available from
limited resources will be identified, and if necessary, ordered in advance to
meet anticipated job requirements near the January 1, 2000 date.
The Company has not yet been able to clearly identify the most reasonably likely
worst case scenarios, if any, and the appropriate contingency plans for such
scenarios. The Company operates in a variety of markets in the United States,
Canada, the United Kingdom and other countries, and in a number of local markets
within these regions. Consequently, it does not believe that a Company-wide risk
associated with the Issue will likely exist. However, the Company will continue
to monitor all identifiable scenarios and prepare contingency plans as necessary
to attempt to mitigate any exposures.
Based on currently available information, the Company does not believe that the
matters discussed above related to its Internal Systems or to services provided
to customers will have a material adverse impact on the Company's financial
condition or overall trends in results of operations; however, it is uncertain
to what extent the Company may be affected by such matters. In addition, there
can be no assurance that the failure to ensure Year 2000 capability by a
supplier, customer or another third party will not have a material adverse
effect on the Company.
This Quarterly Report on Form 10-Q contains certain forward-looking statements
within the meaning of the Private Securities Reform Act of 1995, particularly
statements regarding market opportunities, market share growth, competitive
growth, gross profit, and selling, general and administrative expenses. These
forward-looking statements involved risks and uncertainties, that could cause
actual results to differ materially from those in any such forward-looking
statements. Such factors include, but are not limited to adverse changes in
general economic conditions, including changes in the specific markets for the
Company's services, adverse business conditions, decreased or lack of growth in
the mechanical and electrical construction and facilities services industries,
increased competition, pricing pressures, risks associated with foreign
operations and other factors.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
Except as hereafter indicated, the information on legal proceedings is hereby
incorporated by reference to Note P of the Company's Notes to Consolidated
Financial Statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998. The arbitrator in the arbitration
proceeding arising out of the participation of the Company's subsidiary
Dynalectric Company ("Dynalectric") in a joint venture with Computran has made
an award requiring Dynalectric to pay Computran damages, plus interest thereon,
and certain costs of the arbitration. As a consequence, Dynalectric is required
to pay to Computran approximately $468,000 (net of amounts for which a third
party has agreed to indemnify Dynalectric) in respect of the damage and related
interest award and approximately $190,000 (net of amounts for which a third
party has agreed to indemnify Dynalectric) in respect of the award of costs
representing a portion of the arbitrator's fees and expenses and a portion of
Computran's legal fees and related expenses. In addition, Dynalectric is to pay
interest on the foregoing amounts from the date of the award until paid.
Computran has made a motion in the Superior Court of New Jersey to confirm the
award as it relates to the damage and related interest award but to have the
award vacated as to the award of costs(including legal fees) and has requested
the Court to determine and grant Computran's legal fees and costs. Dynalectric
will not object to the confirmation of the damage and related interest award and
will seek to have confirmed the award as to costs (including legal fees).
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No Description Page Number
10(a) Amended and Restated 22
Employment Agreement dated
as of May 4, 1999 between
the Company and Frank T. MacInnis
10(b) Amended and Restated 32
Employment Agreement dated
as of May 4, 1999 between
the Company and Sheldon I. Cammaker
10(c) Amended and Restated 41
Employment Agreement dated
as of May 4, 1999 between
the Company and Leicle E. Chesser
10(d) Amended and Restated 50
Employment Agreement dated
as of May 4, 1999 between
the Company and Thomas D. Cunningham
10(e) Amended and Restated 59
Employment Agreement dated
as of May 4, 1999 between
the Company and Jeffrey M. Levy
10(f) Amended and Restated 68
Employment Agreement dated
as of May 4, 1999 between
the Company and R. Kevin Matz
10(g) Amended and Restated 77
Employment Agreement dated
as of May 4, 1999 between
the Company and Mark A. Pompa
10(h) Amended and Restated 86
Continuity Agreement dated
as of May 4, 1999 between
the Company and Frank T. MacInnis
10(i) Amended and Restated 88
Continuity Agreement dated
as of May 4, 1999 between
the Company and Sheldon I. Cammaker
10(j) Amended and Restated 90
Continuity Agreement dated
as of May 4, 1999 between
the Company and Leicle E. Chesser
10(k) Amended and Restated 92
Continuity Agreement dated
as of May 4, 1999 between
the Company and Thomas D. Cunningham
10(l) Amended and Restated 94
Continuity Agreement dated
as of May 4, 1999 between
the Company and Jeffrey M. Levy
10(m) Amended and Restated 96
Continuity Agreement dated
as of May 4, 1999 between
the Company and R. Kevin Matz
10(n) Amended and Restated 98
Continuity Agreement dated
as of May 4, 1999 between
the Company and Mark A. Pompa
11 Computation of Basic Note E of the Notes
EPS and Diluted EPS to the Condensed Consolidated
for the six months Financial Statements.
end June 30, 1999
and 1998
27 Financial Data Schedule Filed herewith.
(b) No reports on Form 8-K were filed during the quarter ended June 30, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EMCOR GROUP, INC.
---------------------------------------
(Registrant)
Date: July 29, 1999 By: /s/FRANK T. MACINNIS
---------------------------------------
Frank T. MacInnis
Chairman of the Board of
Directors and
Chief Executive Officer
Date: July 29, 1999 By: /s/LEICLE E. CHESSER
---------------------------------------
Leicle E. Chesser
Executive Vice President
and Chief Financial Officer
Exhibit 10(a)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May, 1999 by and between EMCOR GROUP,
INC. (the "Company") and FRANK T. MACINNIS ("Executive").
The Company and the Executive are parties to an employment agreement made as of
January 1, 1998 and desire to amend the employment agreement in certain
respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as Chief Executive Officer of the Company
and Chairman of the Board of Directors of the Company (the "Board"), the Company
desires to provide Executive with compensation and other benefits under the
conditions set forth in this Agreement.
Executive is willing to accept such continuation of employment and to perform
services for the Company and its subsidiaries, on the terms and conditions
hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as the Chief Executive Officer of the Company. In
his capacity as the Chief Executive Officer of the Company, Executive
shall have the customary powers, responsibilities and authorities of
chief executive officers of similar corporations of the size, type and
nature of the Company as it may exist from time to time, including,
but not limited to, authority over all personnel decisions and
business policies and practices, subject to the direction of the
Board.
1.2 The Company shall, during the Period of Employment (as hereinafter
defined), make its best efforts to ensure the retention of Executive
as Chairman of the Board.
1.3 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as Chief Executive Officer of the Company and shall devote
his full working time and efforts, to the best of his ability,
experience and talent, to the performance of the services, duties and
responsibilities in connection therewith and agrees to serve, if
elected as Chairman of the Board of the Company. Except upon the prior
written consent of the Board, Executive will not during the Period of
Employment (i) accept any other employment or (ii) engage, directly or
indirectly, in any other business activity (whether or not pursued for
pecuniary advantage), whether or not it may be competitive with, or
whether or not it might place him in a competing position to that of,
the Company or any subsidiary thereof. Nothing in this Agreement shall
preclude the Executive from (i) engaging, consistent with his duties
and responsibilities hereunder, in charitable community affairs, (ii)
managing his personal investments, (iii) continuing to serve on the
boards of directors on which he presently serves (to the extent such
service is not precluded by federal or state law or by conflict of
interest by reason of his position with the Company), or (iv) serving,
subject to approval of the Board, as a member of boards of directors
of other companies, provided, that such activities do not interfere
with the performance of Executive's duties hereunder. Notwithstanding
the foregoing, it is expressly acknowledged that Executive's existing
ownership in, and service as a director and/or officer of, ComNet
Communications, Inc. have been disclosed to the Company and that the
continuing ownership thereof and any reasonable actions associated
therewith, including, without limitation, continuing as a director
and/or officer thereof shall be permitted under the terms of this
Agreement and shall in no event constitute a breach hereof.
2. Period of Employment. Executive's period of employment hereunder commenced
on January 1, 1998 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of three years
commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $725,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the Compensation
Committee of the Board (the "Committee") shall establish, after
consultation with Executive, a formula which shall determine the
amount of Executive's Bonus for the calendar year; provided that
Executive's target bonus shall be no less than $600,000 for each such
year.
3.3 Supplemental Benefit Credits. Executive shall be fully vested in all
employee benefit plans of the Company with respect to which the amount
of any benefits payable thereunder is determined in whole or in part
by years of service with the Company.
3.4 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Committee that Executive shall
receive as of the first business day of each calendar year an
option ("Option") to purchase not less than 25,000 shares of
common stock of the Company ("Shares") at fair market value
pursuant to the Company's then applicable stock option plan. Each
such Option shall be exercisable with respect to the Shares
subject thereto on the first anniversary of the date of grant.
(b) In addition, Executive was granted on November 21, 1997 an option
to purchase 200,000 shares at fair market value. This option
shall have a ten-year term and shall vest in full on November 21,
2006 provided that with respect to successive groups of 50,000
shares, the option shall, if earlier, vest when the fair market
value of a share first equals or exceeds $25, $30, $35, and $40,
respectively.
(c) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to
(a) retirement, pension and profit-sharing; and
(b) medical, dental, hospitalization, life insurance, short and
long-term disability, accidental death and dismemberment and
travel accident coverage; provided that Executive shall pay such
portion of the premiums therefor as is customarily paid by senior
executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $700 per month for leasing (plus maintenance and
insurance) of an automobile. The Company shall also reimburse
Executive for
(a) all initiation fees and monthly dues for membership in a club
suitable for entertaining clients of the Company and
(b) all legal expenses incurred by Executive in connection with the
negotiation and drafting of this Agreement. The Company shall
bear the cost of any increased tax liability of Executive caused
by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
the Period of Employment, a policy of directors' and officers' liability
insurance for officers and directors of the Company to the extent
reasonably available, at such reasonable levels of coverage as are agreed
to by Executive and the Board from time to time.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) The Company may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the greater of (A) Executive's Base Salary at the highest
annual rate in effect during the Period of Employment for
the period from the date of termination through the
Expiration Date or (B) two times Executive's Base Salary at
its then current annual rate.
(ii) the greater of (A) Executive's target bonus pursuant to
Section 3.2 times the number of full or partial calendar
years remaining from the date of termination through the
Expiration Date or (B) two times Executive's target Bonus.
(iii)an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid;
(iv) an amount equal to Executive's target Bonus for the calendar
year in which the termination of employment occurs,
multiplied by a fraction, the numerator of which is the
number of days in such calendar year that Executive was an
employee of the Company, and the denominator of which is
365; and
(v) in the event of a termination of Executive's employment by
the Company other than for Cause or by the Executive for
Good Reason following a Change of Control, the factor of two
in Clause (B) of subsection 6.1(a)(i) and (ii) shall be
increased to three.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000, (ii) the third anniversary of a Change of Control of
the Company or (iii) the date that a succeeding one-year
Period of Employment (as provided for under Section 2
hereof) terminates); and
(ii) all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of the
following (without Executive's express prior written consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of Chairman and Chief Executive Officer or any
failure to elect or re-elect Executive as Chairman of the
Board, except in connection with the termination of
Executive's employment (A) upon the termination of the
Period of Employment on the Expiration Date, (B) for Cause,
(C) as a result of Executive's Permanent Disability (as
hereinafter defined) or death or (D) by Executive other than
for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of
the Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control or Executive's
principal business location is changed to a location more
than 30 miles from Executive's principal business location
(other than a relocation to the Borough of Manhattan, New
York, New York) immediately prior to a Change of Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6 (d)(ii) to be made by the Company
to the Executive are not made within such five-day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(d)(ii) hereof
.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6(d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other
business combination;
(B) the purchaser or lessee of the Company's assets; or
(C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;
or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) Except as otherwise specifically provided herein, all cash
payments under this Section 6.1 shall be made by the Company
within 30 calendar days following the event giving rise to such
payments. If any such payment shall not be made within such
30-day period (or any other specifically provided time period),
the Company shall pay interest on the unpaid amount at the rate
of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
target Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's target Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices, including, without
limitation, the supplemental benefit credits provided for under
Section 3.3. hereof. The term "Cause" shall be limited to (a) action
by Executive involving willful malfeasance in connection with his
employment which results in material harm to the Company, (b) material
and continuing breach by Executive of the terms of this Agreement
which breach is not cured within 60 days after Executive receives
written notice from the Company of any such breach or (c) Executive
being convicted of a felony. Termination of Executive for Cause
pursuant to this Section 6.4 shall be communicated by a Notice of
Termination given within six months after the Board both (i) had
knowledge of conduct or an event allegedly constituting Cause and (ii)
had reason to believe that such conduct or event could be grounds for
Cause. For purposes of this Agreement a "Notice of Termination" shall
mean delivery to Executive of a copy of a resolution duly adopted by
the Board at a meeting of the Board called and held for that purpose
(after not less than 10 days notice to Executive ("Preliminary
Notice") and reasonable opportunity for Executive, together with the
Executive's counsel, to be heard before the Board prior to such vote),
finding that in the good faith opinion of the Board, Executive was
guilty of conduct set forth in the third sentence of this Section 6.4
and specifying the particulars thereof in detail. The Board shall no
later than 30 days after the receipt of the Preliminary Notice by
Executive communicate its findings to Executive. A failure by the
Board to make its finding of Cause or to communicate its conclusions
within such 30-day period shall be deemed to be a finding that
Executive was not guilty of the conduct described in the third
sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid
(a) his Base Salary through the last day of the month in which the
termination of employment occurs,
(b) all unpaid amounts in respect of any Bonus for any calendar year
ending before such termination date occurs, which Bonus would
have been payable had Executive remained in employment until the
date such Bonus would otherwise have been paid, and
(c) Executive's target Bonus for the calendar year in which his
employment terminates, multiplied by a fraction, the numerator of
which is the number of days in such calendar year the Executive
was an employee of the Company, and the denominator of which is
365. In addition, Executive shall remain entitled to all vested
amounts, benefits, and rights under the Company's employee
benefit programs, plans and practices, all rights to which he is
entitled under Company severance plans, practices and/or policies
and all other benefits to which he is entitled by law or
contract.
6.6 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof; provided, however, that
Executive's ownership interest in, and service as a director and/or officer
of, ComNet Communications, Inc. shall not be deemed to be competitive with
the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
Frank T. MacInnis
7 Sturges Hollow
Westport, CT 06880
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof,
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of June 22, 1998 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written. EMCOR GROUP, INC.
By:
EXECUTIVE
___________________________
Frank T. MacInnis
Exhibit 10(b)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May, 1999 by and between EMCOR GROUP,
INC. (the "Company") and SHELDON I. CAMMAKER ("Executive").
The Company and the Executive are parties to an employment agreement made as of
March 1, 1999 and desire to amend the employment agreement in certain respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as Executive Vice President and General
Counsel of the Company, the Company desires to provide Executive with
compensation and other benefits under the conditions set forth in this
Agreement.
Executive is willing to accept such employment and to perform services for the
Company and its subsidiaries, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as an Executive Vice President and General
Counsel of the Company. In his capacity as Executive Vice President
and General Counsel of the Company, Executive shall have the customary
powers, responsibilities and authorities of executive vice presidents
and general counsels of similar corporations of the size, type and
nature of the Company as it may exist from time to time, subject to
the direction of the Chairman of the Board of Directors (the "Board")
of the Company and the Chief Executive Officer of the Company (the
"Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as the Executive Vice President and General Counsel of the
Company and shall devote his full working time and efforts, to the
best of his ability, experience and talent, to the performance of the
services, duties and responsibilities in connection therewith. Except
upon the prior written consent of the Chairman, Executive will not
during the Period of Employment (i) accept any other employment or
(ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage), whether or not it
may be competitive with, or whether or not it might place him in a
competing position to that of, the Company or any subsidiary thereof.
Nothing in this Agreement shall preclude the Executive from (i)
engaging, consistent with his duties and responsibilities hereunder,
in charitable community affairs, (ii) managing his personal
investments, (iii) continuing to serve on the boards of directors on
which he presently serves (to the extent such service is not precluded
by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of
the Chairman, as a member of boards of directors of other companies,
provided, that such activities do not interfere with the performance
of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder commenced
on March 4, 1999 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of three years
commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $365,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the amount of the
Bonus shall be determined by the Compensation Committee of the Board
of Directors in its sole discretion.
3.3 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day
of each calendar year an option ("Option") to purchase not less
than 10,000 shares of common stock of the Company ("Shares") at
fair market value pursuant to the Company's then applicable stock
option plan. Each such option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the
date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide the
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to
(a) retirement, pension and profit-sharing; and
(b) medical, dental, hospitalization, life insurance, short and
long-term disability, accidental death and dismemberment and
travel accident coverage; provided that Executive shall pay such
portion of the premiums therefor as is customarily paid by senior
executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, and after
the lease for the current vehicle ("Current Vehicle") provided by the
Company to the Executive expires, the Company shall pay Executive $800
per month for leasing (plus maintenance and insurance) of an
automobile and shall make the initial capital cost reduction payment
with respect to the leasing of such automobile on Executive's behalf.
During the lease of the Current Vehicle the Company shall continue to
pay for maintenance and insurance of such vehicle. The Company shall
also reimburse Executive for (a) all initiation fees and monthly dues
for membership in a club suitable for entertaining clients of the
Company and (b) all legal expenses incurred by Executive in connection
with the negotiation and drafting of this Agreement. The Company shall
bear the cost of any increased tax liability of Executive caused by
the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such
reasonable amount of coverage as is agreed to by Executive and the Board
from time to time and which insurance policy shall be on a claims-made
basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) The Company may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the product of two times the sum of (A) Executive's Base
Salary at its current annual rate at the time of termination
of employment plus (B) Executive's "Deemed Bonus" (as
defined below);
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid; and
(iii)an amount equal to Executive's Deemed Bonus multiplied by a
fraction, the numerator of which is the number of days in
the calendar year in which the termination of employment
occurs that Executive was an employee of the Company, and
the denominator of which is 365.
In the event of a termination of Executive's employment by the
Company other than for Cause or by the Executive for Good Reason
following a Change of Control, the factor of two in subsection
6.1(a)(i) shall be increased to three.
For purposes of subsections 6.1(a)(i) and (iii), 6.2(a) and 6.3,
the amount of the Deemed Bonus shall be the highest Bonus paid to
Executive for any year he has been employed by the Company;
provided, however, in the event Executive's Bonus for 1996, 1997
or 1998 shall be used to determine his Deemed Bonus, then such
Bonus for 1996, 1997 or 1998 shall be deemed increased by
$100,000 for purposes of calculating the Deemed Bonus.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000,
(ii) the third anniversary of a Change of Control of the Company
or (iii) the date that a succeeding one-year Period of
Employment (as provided for under Section 2 hereof)
terminates); and
(iii)all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written
consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of Executive Vice President and General Counsel,
except in connection with the termination of Executive's
employment (A) upon the termination of the Period of
Employment on the Expiration Date, (B) for Cause, (C) as a
result of Executive's Permanent Disability (as hereinafter
defined) or death or (D) by Executive other than for Good
Reason;
(ii) A reduction by the Company in Executive's Base Salary as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of
the Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control; provided if a Change
of Control shall occur prior to determination in the year
2000 by the Board of the Executive's Bonus for 1999, Good
Reason shall include the fact that the sum of the
Executive's annual base salary plus annual bonus shall
aggregate an amount less than the sum of (i) his annual
salary for 1998 plus (ii) his bonus for 1998;
(vi) Executive's principal business location is changed to a
location more than 30 miles from Executive's principal
business location (other than a relocation to the Borough of
Manhattan, New York, New York) immediately prior to a Change
of Control;
(vii)The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(viii) The termination of the Indemnity Agreement, effective as
of April 20, 1995 between Executive and the Company.
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6(d)(ii) to be made by the Company
to the Executive are not made within such five day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(d)(ii) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6 (d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other
business combination;
(B) the purchaser or lessee of the Company's assets; or
(C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;
or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) Except as otherwise specifically provided herein, all cash
payments under this Section 6.1 shall be made by the Company
within 30 calendar days following the event giving rise to such
payments. If any such payment shall not be made within such
30-day period (or any other specifically provided time period),
the Company shall pay interest on the unpaid amount at the rate
of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's Deemed Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices. The term "Cause" shall
be limited to (a) action by Executive involving willful malfeasance in
connection with his employment which results in material harm to the
Company, (b) material and continuing breach by Executive of the terms
of this Agreement which breach is not cured within 60 days after
Executive receives written notice from the Company of any such breach
or (c) Executive being convicted of a felony. Termination of Executive
for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i)
had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds
for Cause. For purposes of this Agreement a "Notice of Termination"
shall mean delivery to Executive of a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
that purpose (after not less than 10 days notice to Executive
("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the
Board, Executive was guilty of conduct set forth in the third sentence
of this Section 6.4 and specifying the particulars thereof in detail.
The Board shall no later than 30 days after the receipt of the
Preliminary Notice by Executive communicate its findings to Executive.
A failure by the Board to make its finding of Cause or to communicate
its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the
third sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid (a) his Base Salary through the last day of
the month in which the termination of employment occurs, (b) all
unpaid amounts in respect of any Bonus for any calendar year ending
before such termination date occurs, which Bonus would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, and (c) Executive's Deemed Bonus for
the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365. In addition, Executive shall remain
entitled to all vested amounts, benefits, and rights under the
Company's employee benefit programs, plans and practices, all rights
to which he is entitled under Company severance plans, practices
and/or policies and all other benefits to which he is entitled by law
or contract.
6.6 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
Sheldon I. Cammaker
29 Lambert Road
White Plains, NY 10605
to Company:
Frank T. MacInnis
Chairman of the Board and Chief Executive Officer
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given. 12.
Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of March 1, 1999 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written. EMCOR GROUP, INC.
By:
EXECUTIVE
___________________________
Sheldon I. Cammaker
Exhibit 10(c)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May, 1999 by and between EMCOR GROUP,
INC. (the "Company") and LEICLE E. CHESSER ("Executive").
The Company and the Executive are parties to an employment agreement made as of
January 1, 1998 and desire to amend the employment agreement in certain
respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as Executive Vice President and Chief
Financial Officer of the Company, the Company desires to provide Executive with
compensation and other benefits under the conditions set forth in this
Agreement.
Executive is willing to accept such employment and to perform services for the
Company and its subsidiaries, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as an Executive Vice President and Chief
Financial Officer of the Company. In his capacity as Executive Vice
President and Chief Financial Officer of the Company, Executive shall
have the customary powers, responsibilities and authorities of
executive vice presidents and chief financial officers of similar
corporations of the size, type and nature of the Company as it may
exist from time to time, subject to the direction of the Chairman of
the Board of Directors (the "Board") of the Company and the Chief
Executive Officer of the Company (the "Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as the Executive Vice President and Chief Financial
Officer of the Company and shall devote his full working time and
efforts, to the best of his ability, experience and talent, to the
performance of the services, duties and responsibilities in connection
therewith. Except upon the prior written consent of the Chairman,
Executive will not during the Period of Employment (i) accept any
other employment or (ii) engage, directly or indirectly, in any other
business activity (whether or not pursued for pecuniary advantage),
whether or not it may be competitive with, or whether or not it might
place him in a competing position to that of, the Company or any
subsidiary thereof. Nothing in this Agreement shall preclude the
Executive from (i) engaging, consistent with his duties and
responsibilities hereunder, in charitable community affairs, (ii)
managing his personal investments, (iii) continuing to serve on the
boards of directors on which he presently serves (to the extent such
service is not precluded by federal or state law or by conflict of
interest by reason of his position with the Company), or (iv) serving,
subject to approval of the Chairman, as a member of boards of
directors of other companies, provided, that such activities do not
interfere with the performance of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder commenced
on January 1, 1998 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of three years
commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $365,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the amount of the
Bonus shall be determined by the Compensation Committee of the Board
of Directors in its sole discretion.
3.3 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day
of each calendar year an option ("Option") to purchase not less
than 10,000 shares of common stock of the Company ("Shares") at
fair market value pursuant to the Company's then applicable stock
option plan. Each such option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the
date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life
insurance, short and long-term disability, accidental death and
dismemberment and travel accident coverage; provided that Executive
shall pay such portion of the premiums therefor as is customarily paid
by senior executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $800 per month for leasing (plus maintenance and
insurance) of an automobile and shall make the initial capital cost
reduction payment with respect to the leasing of such automobile on
Executive's behalf. The Company shall also reimburse Executive for
(a) all initiation fees and monthly dues for membership in a club
suitable for entertaining clients of the Company and
(b) all legal expenses incurred by Executive in connection with the
negotiation and drafting of this Agreement. The Company shall
bear the cost of any increased tax liability of Executive caused
by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such
reasonable amount of coverage as is agreed to by Executive and the Board
from time to time and which insurance policy shall be on a claims-made
basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) The Company may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the product of two times the sum of
(A) Executive's Base Salary at its current annual rate at
the time of termination of employment plus
(B) Executive's "Deemed Bonus" (as defined below);
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid; and
(iii)an amount equal to Executive's Deemed Bonus multiplied by a
fraction, the numerator of which is the number of days in
the calendar year in which the termination of employment
occurs that Executive was an employee of the Company, and
the denominator of which is 365.
In the event of a termination of Executive's employment by
the Company other than for Cause or by the Executive for
Good Reason following a Change of Control, the factor of two
in subsection 6.1(a)(i) shall be increased to three.
For purposes of subsections 6.1(a)(i) and (iii), 6.2(a) and
6.3, the amount of the Deemed Bonus shall be the highest
Bonus paid to Executive for any year he has been employed by
the Company.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000, (ii) the third anniversary of a Change of Control of
the Company or (iii) the date that a succeeding one-year
Period of Employment (as provided for under Section 2
hereof) terminates); and
(ii) all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written
consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of Executive Vice President and Chief Financial
Officer, except in connection with the termination of
Executive's employment (A) upon the termination of the
Period of Employment on the Expiration Date, (B) for Cause,
(C) as a result of Executive's Permanent Disability (as
hereinafter defined) or death or (D) by Executive other than
for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of
the Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control or Executive's
principal business location is changed to a location more
than 30 miles from Executive's principal business location
(other than a relocation to the Borough of Manhattan, New
York, New York) immediately prior to a Change of Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(vii)The termination of the Indemnity Agreement, effective as of
April 20, 1995 between Executive and the Company.
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6(d)(ii) to be made by the Company
to the Executive are not made within such five day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(d)(ii) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6 (d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other
business combination;
(B) the purchaser or lessee of the Company's assets; or
(C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;
or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest). (f)
Except as otherwise specifically provided herein, all cash
payments under this Section 6.1 shall be made by the Company
within 30 calendar days following the event giving rise to
such payments. If any such payment shall not be made within
such 30-day period (or any other specifically provided time
period), the Company shall pay interest on the unpaid amount
at the rate of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's Deemed Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices. The term "Cause" shall
be limited to (a) action by Executive involving willful malfeasance in
connection with his employment which results in material harm to the
Company, (b) material and continuing breach by Executive of the terms
of this Agreement which breach is not cured within 60 days after
Executive receives written notice from the Company of any such breach
or (c) Executive being convicted of a felony. Termination of Executive
for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i)
had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds
for Cause. For purposes of this Agreement a "Notice of Termination"
shall mean delivery to Executive of a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
that purpose (after not less than 10 days notice to Executive
("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the
Board, Executive was guilty of conduct set forth in the third sentence
of this Section 6.4 and specifying the particulars thereof in detail.
The Board shall no later than 30 days after the receipt of the
Preliminary Notice by Executive communicate its findings to Executive.
A failure by the Board to make its finding of Cause or to communicate
its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the
third sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid (a) his Base Salary through the last day of
the month in which the termination of employment occurs, (b) all
unpaid amounts in respect of any Bonus for any calendar year ending
before such termination date occurs, which Bonus would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, and (c) Executive's Deemed Bonus for
the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365. In addition, Executive shall remain
entitled to all vested amounts, benefits, and rights under the
Company's employee benefit programs, plans and practices, all rights
to which he is entitled under Company severance plans, practices
and/or policies and all other benefits to which he is entitled by law
or contract
6.6 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
Leicle E. Chesser
10 Sunrise Lane
New Millford, CT 06776
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof,
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of June 22, 1998 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written. EMCOR GROUP, INC.
By:
EXECUTIVE
__________________________
Leicle E. Chesser
Exhibit 10(d)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May, 1999 by and between EMCOR GROUP,
INC. (the "Company") and THOMAS D. CUNNINGHAM ("Executive").
The Company and the Executive are parties to an employment agreement made as of
January 1, 1998 and desire to amend the employment agreement in certain
respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as an Executive Vice President of the
Company, the Company desires to provide Executive with compensation and other
benefits under the conditions set forth in this Agreement.
Executive is willing to accept such employment and to perform services for the
Company and its subsidiaries, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as an Executive Vice President of the Company. In
his capacity as Executive Vice President of the Company, Executive
shall have the customary powers, responsibilities and authorities of
executive vice presidents of similar corporations of the size, type
and nature of the Company as it may exist from time to time, subject
to the direction of the Chairman of the Board of Directors (the
"Board") of the Company and the Chief Executive Officer of the Company
(the "Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as the Executive Vice President of the Company and shall
devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of the services, duties and
responsibilities in connection therewith. Except upon the prior
written consent of the Chairman, Executive will not during the Period
of Employment (i) accept any other employment or (ii) engage, directly
or indirectly, in any other business activity (whether or not pursued
for pecuniary advantage), whether or not it may be competitive with,
or whether or not it might place him in a competing position to that
of, the Company or any subsidiary thereof. Nothing in this Agreement
shall preclude the Executive from (i) engaging, consistent with his
duties and responsibilities hereunder, in charitable community
affairs, (ii) managing his personal investments, (iii) continuing to
serve on the boards of directors on which he presently serves (to the
extent such service is not precluded by federal or state law or by
conflict of interest by reason of his position with the Company), or
(iv) serving, subject to approval of the Chairman, as a member of
boards of directors of other companies, provided, that such activities
do not interfere with the performance of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder commenced
on January 1, 1998 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of three years
commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $325,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the amount of the
Bonus shall be determined by the Compensation Committee of the Board
of Directors in its sole discretion.
3.3 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day
of each calendar year an option ("Option") to purchase not less
than 5,000 shares of common stock of the Company ("Shares") at
fair market value pursuant to the Company's then applicable stock
option plan. Each such option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the
date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to
(a) retirement, pension and profit-sharing; and
(b) medical, dental, hospitalization, life insurance, short and
long-term disability, accidental death and dismemberment and
travel accident coverage; provided that Executive shall pay such
portion of the premiums therefor as is customarily paid by senior
executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $800 per month for leasing (plus maintenance and
insurance) of an automobile and shall make the initial capital cost
reduction payment with respect to the leasing of such automobile on
Executive's behalf. The Company shall also reimburse Executive for
(a) all initiation fees and monthly dues for membership in a club
suitable for entertaining clients of the Company and
(b) all legal expenses incurred by Executive in connection with the
negotiation and drafting of this Agreement. The Company shall
bear the cost of any increased tax liability of Executive caused
by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such
reasonable amount of coverage as is agreed to by Executive and the Board
from time to time and which insurance policy shall be on a claims-made
basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) The Company may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the product of two times the sum of
(A) Executive's Base Salary at its current annual rate at
the time of termination of employment plus
(B) Executive's "Deemed Bonus" (as defined below);
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid; and
(iii)an amount equal to Executive's Deemed Bonus multiplied by a
fraction, the numerator of which is the number of days in
the calendar year in which the termination of employment
occurs that Executive was an employee of the Company, and
the denominator of which is 365.
In the event of a termination of Executive's employment by
the Company other than for Cause or by the Executive for
Good Reason following a Change of Control, the factor of two
in subsection 6.1(a)(i) shall be increased to three.
For purposes of subsections 6.1(a)(i) and (iii), 6.2(a) and
6.3, the amount of the Deemed Bonus shall be the highest
Bonus paid to Executive for any year he has been employed by
the Company.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000, (ii) the third anniversary of a Change of Control of
the Company or (iii) the date that a succeeding one-year
Period of Employment (as provided for under Section 2
hereof) terminates); and
(ii) all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written
consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of Executive Vice President, except in connection
with the termination of Executive's employment (A) upon the
termination of the Period of Employment on the Expiration
Date, (B) for Cause, (C) as a result of Executive's
Permanent Disability (as hereinafter defined) or death or
(D) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of
the Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control or Executive's
principal business location is changed to a location more
than 30 miles from Executive's principal business location
(other than a relocation to the Borough of Manhattan, New
York, New York) immediately prior to a Change of Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(vii)The termination of the Indemnity Agreement, effective as of
April 20, 1995 between Executive and the Company.
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6(d)(ii) to be made by the Company
to the Executive are not made within such five day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6 (d)(ii) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6 (d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of
(A) thesurviving corporation in any such merger or other
business combination;
(B) the purchaser or lessee of the Company's assets; or
(C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;
or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) Except as otherwise specifically provided herein, all cash
payments under this Section 6.1 shall be made by the Company
within 30 calendar days following the event giving rise to such
payments. If any such payment shall not be made within such
30-day period (or any other specifically provided time period),
the Company shall pay interest on the unpaid amount at the rate
of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's Deemed Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices. The term "Cause" shall
be limited to (a) action by Executive involving willful malfeasance in
connection with his employment which results in material harm to the
Company, (b) material and continuing breach by Executive of the terms
of this Agreement which breach is not cured within 60 days after
Executive receives written notice from the Company of any such breach
or (c) Executive being convicted of a felony. Termination of Executive
for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i)
had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds
for Cause. For purposes of this Agreement a "Notice of Termination"
shall mean delivery to Executive of a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
that purpose (after not less than 10 days notice to Executive
("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the
Board, Executive was guilty of conduct set forth in the third sentence
of this Section 6.4 and specifying the particulars thereof in detail.
The Board shall no later than 30 days after the receipt of the
Preliminary Notice by Executive communicate its findings to Executive.
A failure by the Board to make its finding of Cause or to communicate
its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the
third sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid (a) his Base Salary through the last day of
the month in which the termination of employment occurs, (b) all
unpaid amounts in respect of any Bonus for any calendar year ending
before such termination date occurs, which Bonus would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, and (c) Executive's Deemed Bonus for
the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365. In addition, Executive shall remain
entitled to all vested amounts, benefits, and rights under the
Company's employee benefit programs, plans and practices, all rights
to which he is entitled under Company severance plans, practices
and/or policies and all other benefits to which he is entitled by law
or contract.
6.6 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
Thomas D. Cunningham
8 Nearwater Road
Rowayton, CT 06853
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof,
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of June 22, 1998 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written. EMCOR GROUP, INC.
By:
EXECUTIVE
___________________________
Thomas D. Cunningham
Exhibit 10(e)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May, 1999 by and between EMCOR GROUP,
INC. (the "Company") and JEFFREY M. LEVY ("Executive").
The Company and the Executive are parties to an employment agreement made as of
January 1, 1998 and desire to amend the employment agreement in certain
respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as President and Chief Operating Officer
of the Company, the Company desires to provide Executive with compensation and
other benefits under the conditions set forth in this Agreement.
Executive is willing to accept such employment and to perform services for the
Company and its subsidiaries, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as the President and Chief Operating Officer of
the Company. In his capacity as President and Chief Operating Officer
of the Company, Executive shall have the customary powers,
responsibilities and authorities of presidents and chief operating
officers of similar corporations of the size, type and nature of the
Company as it may exist from time to time, subject to the direction of
the Chairman of the Board of Directors (the "Board") of the Company
and the Chief Executive Officer of the Company (the "Chairman").
1.2 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as the President and Chief Operating Officer of the
Company and shall devote his full working time and efforts, to the
best of his ability, experience and talent, to the performance of the
services, duties and responsibilities in connection therewith. Except
upon the prior written consent of the Chairman, Executive will not
during the Period of Employment (i) accept any other employment or
(ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage), whether or not it
may be competitive with, or whether or not it might place him in a
competing position to that of, the Company or any subsidiary thereof.
Nothing in this Agreement shall preclude the Executive from (i)
engaging, consistent with his duties and responsibilities hereunder,
in charitable community affairs, (ii) managing his personal
investments, (iii) continuing to serve on the boards of directors on
which he presently serves (to the extent such service is not precluded
by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of
the Chairman, as a member of boards of directors of other companies,
provided, that such activities do not interfere with the performance
of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder commenced
on January 1, 1998 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of three years
commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $465,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the Compensation
Committee of the Board (the "Committee") shall establish, after
consultation with Executive, a formula which shall determine the
amount of Executive's Bonus for the calendar year; provided that
Executive's target Bonus shall be no less than $400,000 for each such
year.
3.3 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day
of each calendar year an option ("Option") to purchase not less
than 15,000 shares of common stock of the Company ("Shares") at
fair market value pursuant to the Company's then applicable stock
option plan. Each such Option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the
date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to
(a) retirement, pension and profit-sharing; and
(b) medical, dental, hospitalization, life insurance, short and
long-term disability, accidental death and dismemberment and
travel accident coverage; provided that Executive shall pay such
portion of the premiums therefor as is customarily paid by senior
executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $800 per month for leasing (plus maintenance and
insurance) of an automobile and shall make the initial capital cost
reduction payment with respect to the leasing of such automobile on
Executive's behalf. The Company shall also reimburse Executive for
(a) all initiation fees and monthly dues for membership in a club
suitable for entertaining clients of the Company and
(b) all legal expenses incurred by Executive in connection with the
negotiation and drafting of this Agreement. The Company shall
bear the cost of any increased tax liability of Executive caused
by the provisions of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
and after the Period of Employment, a policy of directors' and officers'
liability insurance for officers and directors of the Company at such
reasonable amount of coverage as is agreed to by Executive and the Board
from time to time and which insurance policy shall be on a claims-made
basis.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) TheCompany may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the product of two times the sum of (A) Executive's Base
Salary at its then current annual rate plus (B) Executive's
target Bonus for the calendar year in which the termination
of employment occurs;
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid; and
(iii)an amount equal to Executive's target Bonus for the calendar
year in which the termination of employment occurs,
multiplied by a fraction, the numerator of which is the
number of days in such calendar year that Executive was an
employee of the Company, and the denominator of which is
365.
In the event of a termination of Executive's employment by
the Company other than for Cause or by the Executive for
Good Reason following a Change of Control, the factor of two
in subsection 6.1(a)(i) shall be increased to three.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000, (ii) the third anniversary of a Change of Control of
the Company or (iii) the date that a succeeding one-year
Period of Employment (as provided for under Section 2
hereof) terminates); and
(ii) all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written
consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of President and Chief Operating Officer, except in
connection with the termination of Executive's employment
(A) upon the termination of the Period of Employment on the
Expiration Date, (B) for Cause, (C) as a result of
Executive's Permanent Disability (as hereinafter defined) or
death or (D) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific assumption
of this Agreement by any successor or assign of the Company
or any person acquiring substantially all of the Company's
assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control or Executive's
principal business location is changed to a location more
than 30 miles from Executive's principal business location
(other than a relocation to the Borough of Manhattan, New
York, New York) immediately prior to a Change of Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(vii)The termination of the Indemnity Agreement, effective as of
April 20, 1995 between Executive and the Company.
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6 (d)(ii) to be made by the Company
to the Executive are not made within such five day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(d)(ii) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6 (d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other
business combination;
(B) the purchaser or lessee of the Company's assets; or
(C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;
or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) Except as otherwise specifically provided herein, all cash
payments under this Section 6.1 shall be made by the Company
within 30 calendar days following the event giving rise to such
payments. If any such payment shall not be made within such
30-day period (or any other specifically provided time period),
the Company shall pay interest on the unpaid amount at the rate
of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
target Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's target Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices. The term "Cause" shall
be limited to (a) action by Executive involving willful malfeasance in
connection with his employment which results in material harm to the
Company, (b) material and continuing breach by Executive of the terms
of this Agreement which breach is not cured within 60 days after
Executive receives written notice from the Company of any such breach
or (c) Executive being convicted of a felony. Termination of Executive
for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i)
had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds
for Cause. For purposes of this Agreement a "Notice of Termination"
shall mean delivery to Executive of a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
that purpose (after not less than 10 days notice to Executive
("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the
Board, Executive was guilty of conduct set forth in the third sentence
of this Section 6.4 and specifying the particulars thereof in detail.
The Board shall no later than 30 days after the receipt of the
Preliminary Notice by Executive communicate its findings to Executive.
A failure by the Board to make its finding of Cause or to communicate
its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the
third sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid (a) his Base Salary through the last day of
the month in which the termination of employment occurs, (b) all
unpaid amounts in respect of any Bonus for any calendar year ending
before such termination date occurs, which Bonus would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, and (c) Executive's Target Bonus for
the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365. In addition, Executive shall remain
entitled to all vested amounts, benefits, and rights under the
Company's employee benefit programs, plans and practices, all rights
to which he is entitled under Company severance plans, practices
and/or policies and all other benefits to which he is entitled by law
or contract.
6.6 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
Jeffrey M. Levy
11 Camberra Drive
Suffern, NY 10901
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof,
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of June 22, 1998 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written. EMCOR GROUP, INC.
By:
EXECUTIVE
________________________
Jeffrey M. Levy
Exhibit 10(f)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May 1999 by and between EMCOR GROUP,
INC. (the "Company") and R. KEVIN MATZ ("Executive").
The Company and the Executive are parties to an employment agreement made as of
January 1, 1998 and desire to amend the employment agreement in certain
respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as Vice President and Treasurer of the
Company, the Company desires to provide Executive with compensation and other
benefits under the conditions set forth in this Agreement.
Executive is willing to accept such employment and to perform services for the
Company and its subsidiaries, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as a Vice President and Treasurer of the Company.
In his capacity as Vice President and Treasurer of the Company,
Executive shall have the customary powers, responsibilities and
authorities of vice presidents and treasurers of similar corporations
of the size, type and nature of the Company as it may exist from time
to time, subject to the direction of the Chief Financial Officer of
the Company.
1.2 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as Vice President and Treasurer of the Company and shall
devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of the services, duties and
responsibilities in connection therewith. Except upon the prior
written consent of the Chairman of the Board of Directors (the
"Board") of the Company (the "Chairman"), Executive will not during
the Period of Employment (i) accept any other employment or (ii)
engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage), whether or not it
may be competitive with, or whether or not it might place him in a
competing position to that of, the Company or any subsidiary thereof.
Nothing in this Agreement shall preclude the Executive from (i)
engaging, consistent with his duties and responsibilities hereunder,
in charitable community affairs, (ii) managing his personal
investments, (iii) continuing to serve on the boards of directors on
which he presently serves (to the extent such service is not precluded
by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of
the Chairman, as a member of boards of directors of other companies,
provided, that such activities do not interfere with the performance
of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder commenced
on January 1, 1998 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of two years and
three months commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $210,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the amount of the
Bonus shall be determined by the Compensation Committee of the Board
of Directors in its sole discretion.
3.3 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day
of each calendar year an option ("Option") to purchase not less
than 5,000 shares of common stock of the Company ("Shares") at
fair market value pursuant to the Company's then applicable stock
option plan. Each such option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the
date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life
insurance, short and long-term disability, accidental death and
dismemberment and travel accident coverage; provided that Executive
shall pay such portion of the premiums therefor as is customarily paid
by senior executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $600 per month for leasing (plus maintenance and
insurance) of an automobile and shall make the initial capital cost
reduction payment with respect to the leasing of such automobile on
Executive's behalf. The Company shall also reimburse Executive for all
initiation fees and monthly dues for membership in a club suitable for
entertaining clients of the Company. The Company shall bear the cost
of any increased tax liability of Executive caused by the payment of
the capital cost reduction payment referred to in the second sentence
and by payment of the initiation fees referred in the third sentence
of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
the Period of Employment, a policy of directors' and officers' liability
insurance for officers and directors of the Company to the extent
reasonably available, at such reasonable levels of coverage as are agreed
to by Executive and the Board from time to time.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) The Company may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the product of 1.5 times the sum of
(A) Executive's Base Salary at its current annual rate at
the time of termination of employment plus
(B) Executive's "Deemed Bonus" (as defined below);
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid; and
(iii)an amount equal to Executive's Deemed Bonus multiplied by a
fraction, the numerator of which is the number of days in
the calendar year in which the termination of employment
occurs that Executive was an employee of the Company, and
the denominator of which is 365.
In the event of a termination of Executive's employment by
the Company other than for Cause or by the Executive for
Good Reason following a Change of Control, the factor of 1.5
in subsection 6.1(a)(i) shall be increased to 2.25.
For purposes of subsections 6.1(a)(i) and (iii), 6.2(a) and
6.3, the amount of the Deemed Bonus shall be the highest
Bonus paid to Executive for any year he has been employed by
the Company.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000, (ii) two years and three months from the date of a
Change of Control of the Company or (iii) the date that a
succeeding one-year Period of Employment (as provided for
under Section 2 hereof) terminates); and
(ii) all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written
consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of Vice President and Treasurer, except in
connection with the termination of Executive's employment
(A) upon the termination of the Period of Employment on the
Expiration Date, (B) for Cause, (C) as a result of
Executive's Permanent Disability (as hereinafter defined) or
death or (D) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of
the Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control or Executive's
principal business location is changed to a location more
than 30 miles from Executive's principal business location
(other than a relocation to the Borough of Manhattan, New
York, New York) immediately prior to a Change of Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(vii)The termination of the Indemnity Agreement, effective as of
April 20, 1995 between Executive and the Company.
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6 (d)(ii) to be made by the Company
to the Executive are not made within such five day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(d)(ii) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6 (d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of
(A) the surviving corporation in any such merger or other
business combination;
(B) the purchaser or lessee of the Company's assets; or
(C) both the surviving corporation and the purchaser or
lessee in the event of any combination of Transactions;
or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) Except as specifically provided herein, all cash payments under
this Section 6.1 shall be made by the Company within 30 calendar
days following the event giving rise to such payments. If any
such payment shall not be made within such 30-day period (or any
other specifically provided time period), the Company shall pay
interest on the unpaid amount at the rate of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's Deemed Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices. The term "Cause" shall
be limited to (a) action by Executive involving willful malfeasance in
connection with his employment which results in material harm to the
Company, (b) material and continuing breach by Executive of the terms
of this Agreement which breach is not cured within 60 days after
Executive receives written notice from the Company of any such breach
or (c) Executive being convicted of a felony. Termination of Executive
for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i)
had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds
for Cause. For purposes of this Agreement a "Notice of Termination"
shall mean delivery to Executive of a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
that purpose (after not less than 10 days notice to Executive
("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the
Board, Executive was guilty of conduct set forth in the third sentence
of this Section 6.4 and specifying the particulars thereof in detail.
The Board shall no later than 30 days after the receipt of the
Preliminary Notice by Executive communicate its findings to Executive.
A failure by the Board to make its finding of Cause or to communicate
its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the
third sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid (a) his Base Salary through the last day of
the month in which the termination of employment occurs, (b) all
unpaid amounts in respect of any Bonus for any calendar year ending
before such termination date occurs, which Bonus would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, and (c) Executive's Deemed Bonus for
the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365. In addition, Executive shall remain
entitled to all vested amounts, benefits, and rights under the
Company's employee benefit programs, plans and practices, all rights
to which he is entitled under Company severance plans, practices
and/or policies and all other benefits to which he is entitled by law
or contract.
6.6 Termination Obligations.
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
R. Kevin Matz
80 Silver Spring Road
Ridgefield, CT 06877
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof;
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of June 22, 1998 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written.
EMCOR GROUP, INC.
By:
EXECUTIVE
___________________________
R. Kevin Matz
Exhibit 10(g)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 4th day of May, 1999 by and between EMCOR GROUP,
INC. (the "Company") and MARK A. POMPA ("Executive").
The Company and the Executive are parties to an employment agreement made as of
January 1, 1998 and desire to amend the employment agreement in certain
respects.
For the sake of convenience and clarity the employment agreement shall be
restated in its entirety to read as follows:
"In order to induce Executive to serve as Vice President and Controller of the
Company, the Company desires to provide Executive with compensation and other
benefits under the conditions set forth in this Agreement.
Executive is willing to accept such employment and to perform services for the
Company and its subsidiaries, on the terms and conditions hereinafter set forth.
It is therefore hereby agreed by and between the parties as follows:
1. Employment.
1.1 Subject to the terms and conditions of this Agreement, the Company
agrees to employ Executive during the Period of Employment (as
hereinafter defined) as a Vice President and Controller of the
Company. In his capacity as Vice President and Controller of the
Company, Executive shall have the customary powers, responsibilities
and authorities of vice presidents and controllers of similar
corporations of the size, type and nature of the Company as it may
exist from time to time, subject to the direction of the Chief
Financial Officer of the Company.
1.2 Subject to the terms and conditions hereof, Executive hereby agrees to
be employed as Vice President and Controller of the Company and shall
devote his full working time and efforts, to the best of his ability,
experience and talent, to the performance of the services, duties and
responsibilities in connection therewith. Except upon the prior
written consent of the Chairman of the Board of Directors (the
"Board") of the Company (the "Chairman"), Executive will not during
the Period of Employment (i) accept any other employment or (ii)
engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage), whether or not it
may be competitive with, or whether or not it might place him in a
competing position to that of, the Company or any subsidiary thereof.
Nothing in this Agreement shall preclude the Executive from (i)
engaging, consistent with his duties and responsibilities hereunder,
in charitable community affairs, (ii) managing his personal
investments, (iii) continuing to serve on the boards of directors on
which he presently serves (to the extent such service is not precluded
by federal or state law or by conflict of interest by reason of his
position with the Company), or (iv) serving, subject to approval of
the Chairman, as a member of boards of directors of other companies,
provided, that such activities do not interfere with the performance
of Executive's duties hereunder.
2. Period of Employment. Executive's period of employment hereunder commenced
on January 1, 1998 (the "Commencement Date") and shall continue through the
earlier of December 31, 2000 or the date of termination hereunder (the
"Period of Employment"); provided, however, that the Period of Employment
shall automatically be extended for successive one-year periods unless the
Company or Executive, at least six months prior to the end of such period,
provides written notice to the other party of intent not to extend the
Period of Employment. Notwithstanding anything in this Agreement to the
contrary, in the event of a Change of Control (as defined in Section
6.1(e)) the Period of Employment shall be for a period of two years and
three months commencing as of the date of such Change of Control.
3. Compensation.
3.1 Salary. The Company shall pay Executive a base salary ("Base Salary")
at the rate of $210,000 per annum for the Period of Employment. Base
Salary shall be payable in accordance with the ordinary payroll
practices of the Company. Executive's rate of Base Salary shall be
increased on the first day of each calendar year occurring during the
Period of Employment, beginning with January 1, 2000, by the
percentage increase for the prior year in the consumer price index for
the area in which the principal office of the Company is located, as
determined by the U.S. Department of Commerce, or the amount specified
by the Board, whichever is greater.
3.2 Bonus. In addition to his Base Salary, Executive shall be entitled,
while he remains employed hereunder, in respect of each calendar year,
to an annual bonus (the "Bonus") payable in cash and at such times as
bonuses are customarily paid to senior executives of the Company. For
each calendar year during the Period of Employment, the amount of the
Bonus shall be determined by the Compensation Committee of the Board
of Directors in its sole discretion.
3.3 Stock Options.
(a) During each calendar year in the Period of Employment, the
Company shall recommend to the Compensation Committee of the
Board that Executive shall receive as of the first business day
of each calendar year an option ("Option") to purchase not less
than 5,000 shares of common stock of the Company ("Shares") at
fair market value pursuant to the Company's then applicable stock
option plan. Each such option shall be exercisable with respect
to the Shares subject thereto on the first anniversary of the
date of grant.
(b) In the event of Executive's termination of employment under
Section 6.1, each Option shall become immediately exercisable in
full and shall remain exercisable for the balance of its ten-year
term.
4. Employee Benefits.
4.1 Employee Benefit Plans and Programs. The Company shall provide
Executive during the Period of Employment with coverage under any
employee benefit programs, plans and practices (commensurate with his
position in the Company) in accordance with the terms thereof, which
the Company currently makes available generally to its senior
executive officers, or which the Company, with Board approval, elects
to make available generally to its senior executive officers
hereafter, including, but not limited to (a) retirement, pension and
profit-sharing; and (b) medical, dental, hospitalization, life
insurance, short and long-term disability, accidental death and
dismemberment and travel accident coverage; provided that Executive
shall pay such portion of the premiums therefor as is customarily paid
by senior executives of the Company.
4.2 Vacation, Fringe and other Benefits. Executive shall be entitled to
the number of vacation days customarily accorded senior executives of
the Company. In addition, during the Period of Employment, the Company
shall pay Executive $600 per month for leasing (plus maintenance and
insurance) of an automobile and shall make the initial capital cost
reduction payment with respect to the leasing of such automobile on
Executive's behalf. The Company shall also reimburse Executive for all
initiation fees and monthly dues for membership in a club suitable for
entertaining clients of the Company. The Company shall bear the cost
of any increased tax liability of Executive caused by the payment of
the capital cost reduction payment referred to in the second sentence
and by payment of the initiation fees referred in the third sentence
of this Section 4.2.
5. Directors and Officers Liability. The Company shall keep in effect during
the Period of Employment, a policy of directors' and officers' liability
insurance for officers and directors of the Company to the extent
reasonably available, at such reasonable levels of coverage as are agreed
to by Executive and the Board from time to time.
6. Termination of Employment.
6.1 Termination Not For Cause or Resignation For Good Reason.
(a) The Company may terminate Executive's employment at any time, and
Executive may terminate his employment at any time. If
Executive's employment is terminated by the Company other than
for Cause (as hereinafter defined), or Executive terminates his
employment for Good Reason (as hereinafter defined), Executive
shall be entitled to receive a lump sum cash payment (but not in
substitution for compensation already earned) in an amount equal
to the sum of:
(i) the product of 1.5 times the sum of
(A) Executive's Base Salary at its current annual rate at
the time of termination of employment plus
(B) Executive's "Deemed Bonus" (as defined below);
(ii) an amount equal to Executive's Bonus, for any calendar year
ending before such termination occurs, which would have been
payable had Executive remained in employment until the date
such Bonus would otherwise have been paid; and
(iii)an amount equal to Executive's Deemed Bonus multiplied by a
fraction, the numerator of which is the number of days in
the calendar year in which the termination of employment
occurs that Executive was an employee of the Company, and
the denominator of which is 365.
In the event of a termination of Executive's employment by
the Company other than for Cause or by the Executive for
Good Reason following a Change of Control, the factor of 1.5
in subsection 6.1(a)(i) shall be increased to 2.25.
For purposes of subsections 6.1(a)(i) and (iii), 6.2(a) and
6.3, the amount of the Deemed Bonus shall be the highest
Bonus paid to Executive for any year he has been employed by
the Company.
(b) In addition to the amounts described in subsection 6.1(a),
Executive shall be entitled to receive:
(i) until the earlier of the Expiration Date (as that term is
hereafter defined) or 18 months from the date of
termination, Executive (and, to the extent applicable,
Executive's dependents) shall continue to be covered, at the
Company's expense, under the Company's medical, dental and
hospitalization coverage plans, and until the earlier of the
Expiration Date or 6 months from the date of termination,
Executive shall continue to be covered, at the Company's
expense, under the Company's group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 hereof or
the Company will provide for equivalent coverage (the term
"Expiration Date" shall mean the later of (i) December 31,
2000, (ii) two years and three months from the date of a
Change of Control of the Company or (iii) the date that a
succeeding one-year Period of Employment (as provided for
under Section 2 hereof) terminates); and
(ii) all payments to which Executive has vested rights as of the
Expiration Date under employee benefit, disability,
insurance and similar plans which provide for payments
beyond the Period of Employment.
(c) For purposes of this Agreement, "Good Reason" shall mean any of
the following (without Executive's express prior written
consent):
(i) The assignment to Executive by the Company of duties
inconsistent with Executive's positions, duties,
responsibilities, titles or office as set forth in Section 1
hereof, or any reduction by the Company of his duties or
responsibilities or any removal of Executive from the
position of Vice President and Controller, except in
connection with the termination of Executive's employment
(A) upon the termination of the Period of Employment on the
Expiration Date, (B) for Cause, (C) as a result of
Executive's Permanent Disability (as hereinafter defined) or
death or (D) by Executive other than for Good Reason;
(ii) A reduction by the Company in Executive's Base Salary, as in
effect on the date hereof or as the same may be increased
from time to time during the Period of Employment;
(iii)The failure by the Company to obtain the specific
assumption of this Agreement by any successor or assign of
the Company or any person acquiring substantially all of the
Company's assets;
(iv) Failure by the Company to perform in any material respect
its obligations under this Agreement, where such failure
shall not have been remedied within 30 days after Executive
shall have notified the Company in writing thereof;
(v) Any material reduction in Executive's compensation or
benefits following a Change of Control or Executive's
principal business location is changed to a location more
than 30 miles from Executive's principal business location
(other than a relocation to the Borough of Manhattan, New
York, New York) immediately prior to a Change of Control;
(vi) The Company shall cease to keep in effect the policy of
directors' and officers' liability insurance for Executive
described in Section 5; or
(vii)The termination of the Indemnity Agreement, effective as of
April 20, 1995 between Executive and the Company.
(d)
(i) Anything in this Agreement to the contrary notwithstanding,
if it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement,
policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or
similar right, or the lapse or termination of any
restriction on or the vesting or exercisability of any of
the foregoing (a "Payment") , would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code") (or any successor provision
thereto) by reason of being "contingent on a change in
ownership or control" of the Company, within the meaning of
Section 28OG of the Code (or any successor provision
thereto) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such
excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred
to as the "Excise Tax") , then the Executive shall be
entitled to receive an additional payment or payments (a
"Gross-Up Payment") in an amount such that, after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of Section 6(d)(i) hereof, all
determinations required to be made under this Section 6(d),
including whether an Excise Tax is payable by the Executive
and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified
public accountants (the "Accounting Firm") used by the
Company prior to the Change of Control (or, if such
Accounting Firm declines to serve, the Accounting Firm shall
be a nationally recognized firm of certified public
accountants selected by the Executive). The Accounting Firm
shall be directed by the Company or the Executive to submit
its determination and detailed supporting calculations to
both the Company and the Executive within 15 calendar days
after the date the Executive's employment is terminated by
the Executive for Good Reason or by the Company other than
for Cause (the "Termination Date"), if applicable, and any
other such time or times as may be requested by the Company
or the Executive. If the Accounting Firm determines that any
Excise Tax is payable by the Executive, the Company shall
pay the required Gross-Up Payment to the Executive within
five business days after receipt of such determination and
calculations. If the Accounting Firm determines that no
Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the
Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal, state, local
income or other tax return. Any determination by the
Accounting Firm as to the amount of the Gross-Up Payment
shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999
of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding applicable
state or local tax law at the time of any determination by
the Accounting Firm hereunder, it is possible that Gross-Up
Payments that will not have been made by the Company should
have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies
pursuant to Section 6(d)(vi) hereof and the Executive
thereafter is required to make a payment of any Excise Tax,
the Executive shall direct the Accounting Firm to determine
the amount of the Underpayment that has occurred and to
submit its determination and detailed supporting
calculations to both the Company and the Executive as
promptly as possible. Any such Underpayment shall be
promptly paid by the Company to, or for the benefit of, the
Executive within five business days after receipt of such
determination and calculations. If payments required
pursuant to this Section 6 (d)(ii) to be made by the Company
to the Executive are not made within such five day period,
the Company shall pay the Executive interest thereon at the
rate of 10% per annum.
(iii)The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records
and documents in the possession of the Company or the
Executive, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the
determination contemplated by Section 6(d)(ii) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive and the Company (or any filing made
by a consolidated tax group which includes the Company)
shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the
Excise Tax payable by the Executive. The Executive shall
make proper payment of the amount of any Excise Tax, and at
the request of the Company, provide to the Company true and
correct copies (with any amendments) of his federal income
tax return as filed with the Internal Revenue Service and
corresponding state and local tax returns, if relevant, as
filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing
such payment. If prior to the filing of the Executive's
federal income tax return, or corresponding state or local
tax return, if relevant, the Accounting Firm determines that
the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company
the amount of such reduction.
(v) The fees and expenses of the Accounting Firm for its
services in connection with the determinations and
calculations contemplated by Sections 6 (d)(ii) and (d)(iv)
hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the
Company shall reimburse the Executive the full amount of
such fees and expenses within five business days after
receipt from the Executive of a statement therefor and
reasonable evidence of his payment thereof. If such
reimbursement is not made by the Company to the Executive
within such five-day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum.
(vi) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of a Gross-Up
Payment. Such notification shall be given as promptly as
practicable but no later than 10 business days after the
Executive actually receives notice of such claim and the
Executive shall further apprise the Company of the nature of
such claim and the date on which such claim is requested to
be paid (in each case, to the extent known by the
Executive). The Executive shall not pay such claim prior to
the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to
the Company and (b) the date that any payment of amount with
respect to such claim is due. If the Company notifies the
Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(A) provide the Company with any written records or
documents in his possession relating to such claim
reasonably requested by the Company;
(B) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without limitation
accepting legal representation with respect to such
claim by an attorney competent in respect of the
subject matter and reasonably selected by the Company;
(C) cooperate with the Company in good faith in order
effectively to contest such claim; and
(D) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred in
connection with such contest and shall indemnify and
hold harmless the Executive, on an after-tax basis, for
and against any Excise Tax or income tax, including
interest and penalties with respect thereto, imposed as
a result of such representation and payment of costs
and expenses. Without limiting the foregoing provisions
of this Section 6 (d)(vi), the Company shall control
all proceedings taken in connection with the contest of
any claim contemplated by this Section 6 (d)(vi) and,
at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of
such claim (provided however, that the Executive may
participate therein at his cost and expense) and may,
at its option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any
administrative tribunal, or a court of initial
jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if
the Company directs the Executive to pay the tax
claimed and sue for a refund, the Company shall advance
the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any
Excise Tax or income tax, including interest and
penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any
extension of the statute of limitations relating to
payment of taxes for the taxable year of the Executive
with respect to which the contested amount is claimed
to be due is limited solely to such contested amount.
Furthermore, the Company's control of any such
contested claim shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(vii)If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 6 (d)(vi) hereof, the
Executive receives any refund with respect to such claim,
the Executive shall (subject to the Company's complying with
the requirements of Section 6 (d)(vi) hereof) promptly pay
to the Company the amount of such refund (together with any
interest paid or credited thereon after any taxes applicable
thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6 (d)(vi)
hereof, a determination is made that the Executive is not
entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its
intent to contest such denial or refund prior to the
expiration of 30 calendar days after such determination,
then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up
Payment required to be made pursuant to this Section 6 (d).
(e) For purposes of this Agreement, a "Change of Control" shall be
deemed to have occurred when:
(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of
the Company having at least 25% of the voting power of the
Company's then outstanding securities; or
(ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale or lease of
the Company's assets or combination of the foregoing
transactions (the "Transactions") other than a Transaction
immediately following which the shareholders of the Company
and any trustee or fiduciary of any Company employee benefit
plan immediately prior to the Transaction own at least 65%
of the voting power, directly or indirectly, of (A) the
surviving corporation in any such merger or other business
combination; (B) the purchaser or lessee of the Company's
assets; or (C) both the surviving corporation and the
purchaser or lessee in the event of any combination of
Transactions; or
(iii)within any 24-month period, the persons who were directors
immediately before the beginning of such period (the
"Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board
or the board of directors of a successor to the Company. For
this purpose, any director who was not a director at the
beginning of such period shall be deemed to be an Incumbent
Director if such director was elected to the Board by, or on
the recommendation of or with the approval of, at least
two-thirds of the directors who then qualified as Incumbent
Directors (so long as such director was not nominated by a
person who has expressed an intent to effect a Change of
Control or engage in a proxy or other control contest).
(f) Except as otherwise specifically provided herein, all cash
payments under this Section 6.1 shall be made by the Company
within 30 calendar days following the event giving rise to such
payments. If any such payment shall not be made within such
30-day period (or any other specifically provided time period),
the Company shall pay interest on the unpaid amount at the rate
of 10% per annum.
6.2 Permanent Disability. If as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent
from his duties with the Company on a full-time basis for six
consecutive months (a "Permanent Disability") during his Period of
Employment, the Company or Executive may terminate his employment on
written notice thereof, the Period of Employment shall terminate on
the giving of such notice, and the compensation to which Executive is
entitled pursuant to Section 3.1 shall be paid through the last day of
the month in which the notice is given. In addition, Executive shall
be entitled to receive:
(a) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the
calendar year in which such termination occurs, which would have
been payable had Executive remained in employment until the date
such Bonus would otherwise have been paid, plus Executive's
Deemed Bonus for the calendar year in which his employment
terminates, multiplied by a fraction, the numerator of which is
the number of days in such calendar year the Executive was an
employee of the Company, and the denominator of which is 365;
(b) until the earlier of the Expiration Date or 24 months from the
date of termination for Permanent Disability, Executive (and, to
the extent applicable, Executive's dependents) shall continue to
be covered, at the Company's expense, under the Company's
medical, dental, hospitalization, group life, short and long-term
disability, accidental death and dismemberment and travel
accident coverage plans described in Section 4.1 or the Company
will provide for equivalent coverage; provided that if Executive
is provided with comparable coverage by a successor employer any
such coverage by the Company shall cease; and
(c) all amounts payable under the Company's disability plans.
6.3 Death. In the event of Executive's death while employed hereunder, the
Period of Employment shall thereupon automatically terminate and the
Executive's estate or designated beneficiaries shall receive (i)
payments of Base Salary for a period of three months after the date of
death; (ii) all unpaid amounts, as of the date of such termination, in
respect of any Bonus for any calendar year ending before the calendar
year in which such termination occurs, which would have been payable
had Executive remained in employment until the date such Bonus would
otherwise have been paid, plus Executive's Deemed Bonus for the
calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365; and (iii) any death benefits provided
under the employee benefit programs, in accordance with their terms.
6.4 Voluntary Resignation; Discharge for Cause. If Executive resigns
voluntarily, other than for Good Reason or Permanent Disability, or
the Company terminates the employment of Executive at any time for
Cause, the Company's obligations under this Agreement to make any
further payments to Executive shall thereupon, to the extent permitted
by law, cease and terminate except with respect to all unpaid amounts,
as of the date of such termination, in respect of any Bonus for any
calendar year ending before such termination occurs, which would have
been payable had Executive remained in employment until the date such
Bonus would otherwise have been paid. In addition, Executive shall
remain entitled to all vested amounts and benefits under the Company's
employee benefit programs, plans and practices. The term "Cause" shall
be limited to (a) action by Executive involving willful malfeasance in
connection with his employment which results in material harm to the
Company, (b) material and continuing breach by Executive of the terms
of this Agreement which breach is not cured within 60 days after
Executive receives written notice from the Company of any such breach
or (c) Executive being convicted of a felony. Termination of Executive
for Cause pursuant to this Section 6.4 shall be communicated by a
Notice of Termination given within six months after the Board both (i)
had knowledge of conduct or an event allegedly constituting Cause and
(ii) had reason to believe that such conduct or event could be grounds
for Cause. For purposes of this Agreement a "Notice of Termination"
shall mean delivery to Executive of a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
that purpose (after not less than 10 days notice to Executive
("Preliminary Notice") and reasonable opportunity for Executive,
together with the Executive's counsel, to be heard before the Board
prior to such vote), finding that in the good faith opinion of the
Board, Executive was guilty of conduct set forth in the third sentence
of this Section 6.4 and specifying the particulars thereof in detail.
The Board shall no later than 30 days after the receipt of the
Preliminary Notice by Executive communicate its findings to Executive.
A failure by the Board to make its finding of Cause or to communicate
its conclusions within such 30-day period shall be deemed to be a
finding that Executive was not guilty of the conduct described in the
third sentence of this Section 6.4.
6.5 Termination On or After Expiration Date. In the event the Period of
Employment shall not be extended and Executive's employment shall be
terminated by the Company on or after the Expiration Date or Executive
shall terminate his employment on or after the Expiration Date, the
Executive shall be paid (a) his Base Salary through the last day of
the month in which the termination of employment occurs, (b) all
unpaid amounts in respect of any Bonus for any calendar year ending
before such termination date occurs, which Bonus would have been
payable had Executive remained in employment until the date such Bonus
would otherwise have been paid, and (c) Executive's Deemed Bonus for
the calendar year in which his employment terminates, multiplied by a
fraction, the numerator of which is the number of days in such
calendar year the Executive was an employee of the Company, and the
denominator of which is 365. In addition, Executive shall remain
entitled to all vested amounts, benefits, and rights under the
Company's employee benefit programs, plans and practices, all rights
to which he is entitled under Company severance plans, practices
and/or policies and all other benefits to which he is entitled by law
or contract.
6.6 Termination Obligations
(a) Executive hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals,
records, reports, notes, contracts, lists, and other documents,
and equipment furnished to or prepared by Executive in the course
of or incident to his employment, belong to the Company and shall
be promptly returned to the Company upon termination of the
Period of Employment.
(b) Upon termination of the Period of Employment, the Executive shall
be deemed to have resigned from all offices and directorships
then held with the Company or any subsidiary or affiliate
thereof.
7. Confidential Information. During and after the Period of Employment,
Executive shall not disclose to any person (other than an employee or agent
of the Company or any affiliate of the Company entitled to receive the
same) any confidential information relating to the business of the Company
and obtained by him while providing services to the Company, without the
consent of the Board, or until such information ceases to be confidential.
8. Non-Competition. In the event Executive's employment is terminated by the
Company for Cause or Executive terminates his employment with the Company
without Good Reason, Executive shall not, for a period ending on the
earlier of (i) 18 months from the date of such termination or (ii) the
Expiration Date, accept any other employment or engage, directly or
indirectly, in any other business activity which is competitive with that
of the Company or any subsidiary thereof.
9. Expenses. Executive is authorized to incur reasonable expenses in carrying
out his duties and responsibilities under this Agreement, including
expenses for travel and similar items related to such duties and
responsibilities. The Company will reimburse Executive for all such
expenses upon presentation by Executive from time to time of an itemized
account of such expenditures.
10. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking (and no payment otherwise required hereunder shall be
reduced on account of) other employment or otherwise, nor will any payments
hereunder be subject to offset in respect of any claims which the Company
may have against Executive.
11. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
to Executive:
Mark A. Pompa
78 Tranquility Drive
Easton, CT 06612
to Company:
Sheldon I. Cammaker, Esq.
Executive Vice President and General Counsel
EMCOR Group, Inc.
101 Merritt Seven, 7th Floor
Norwalk, CT 06851
with a copy to:
Kenneth C. Edgar, Jr., Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Any such notice or communication shall be delivered by hand or sent
certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other address as such party may designate in
a notice duly delivered as described above), and the actual date of
delivery or mailing shall determine the time at which notice was given.
12. Agreement to Perform Necessary Acts. Each party agrees to perform any
further acts and to execute and deliver any further documents that may be
reasonably necessary to carry out the provisions of this Agreement.
13. Separability; Legal Actions; Legal Fees. If any provision of this Agreement
shall be declared to be invalid or unenforceable, in whole or in part, such
invalidity or unenforceability shall not affect the remaining provisions
hereof, which shall remain in full force and effect. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement that cannot be resolved by Executive and the Company, including
any dispute as to the calculation of Executive's benefits or any payments
hereunder, shall be submitted to arbitration in New York, New York in
accordance with the laws of the State of New York and the procedures of the
American Arbitration Association, except that if Executive institutes an
action relating to this Agreement, Executive may, at Executive's option,
bring that action in any court of competent jurisdiction. Judgment may be
entered on an arbitrator(s)' award in any court having jurisdiction.
In addition to all other amounts payable to the Executive under this
Agreement, the Company shall pay or reimburse the Executive for legal fees
(including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result
of any claim, action or proceeding brought by the Company or the Executive
with respect to or arising out of this Agreement or any provision hereof,
unless, in the case of an action brought by the Executive, it is determined
by an arbitrator or by a court of competent jurisdiction that such action
was frivolous and was not brought in good faith. Such legal fees shall be
paid or reimbursed by the Company to the Executive from time to time within
five business days following receipt by the Company of copies of bills for
such fees and if the Company fails to make such payment within such five
day period, the Company shall pay the Executive interest thereon at the
rate of 10% per annum. All other expenses relating to any arbitration or
court proceedings shall be paid by the Company.
14. Assignment. This Agreement shall be binding upon and inure to the benefit
of the heirs and representatives of Executive and the assigns and
successors of the Company, but neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate
succession) or by the Company (any such purported assignment by either
shall be null and void), except that the Company may assign this Agreement
to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company.
15. Amendment; Waiver. The Agreement may be amended at any time, but only by
mutual written agreement of the parties hereto. Any party may waive
compliance by the other party with any provision hereof, but only by an
instrument in writing executed by the party granting such waiver.
16. Entire Agreement. Except as otherwise provided in a Continuity Agreement
dated as of June 22, 1998 between the Company and the Executive, as amended
by agreement dated May 4, 1999, and as may be amended from time to time
hereafter, the terms of this Agreement (i) are intended by the parties to
be the final expression of their agreement with respect to the employment
of Executive by the Company, (ii) may not be contradicted by evidence of
any prior or contemporaneous agreement and (iii) shall constitute the
complete and exclusive statement of its terms, and no extrinsic evidence
whatsoever may be introduced in any judicial, administrative or other legal
proceeding involving this Agreement.
17. Death or Incompetence. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his estate or other legal
representative.
18. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section are in addition to the survivorship provisions
of any other section of this Agreement.
19. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of New York without reference to
rules relating to conflicts of law.
20. Withholdings. The Company shall be entitled to withhold from payment any
amount of withholding required by law.
21. Counterparts. This Agreement may be executed in two or more counterparts,
each of which will be deemed an original."
IN WITNESS WHEREOF, the parties hereto have executed this amended and restated
employment agreement as of the date first above written. EMCOR GROUP, INC.
By:
EXECUTIVE
___________________________
Mark A. Pompa
Exhibit 10(h)
Amendment dated as of May 4, 1999 to Agreement dated as of June 22, 1998 by
and between EMCOR Group, Inc., a Delaware corporation (the "Company"), and FRANK
T. MACINNIS (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of June 22, 1998 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the
Company having at least 25% of the voting power of the Company's then
outstanding securities; or"
2. The first and second paragraphs of subsection 3(a) of the Continuity
Agreement are hereby amended to read as follows:
"The Executive shall be entitled to the severance benefits provided in
Section 4 hereof in the event Executive's employment is terminated (A)
within two years following a Change of Control (i) by the Company
without Cause or (ii) by Executive for Good Reason or (B) prior to a
Change of Control, as a result of an Anticipatory Termination.
Notwithstanding the foregoing, Executive shall not be entitled to
severance benefits in the event of a termination of employment on
account of death, Disability or Retirement, but excluding any such
termination which is coincident with a termination which would
otherwise give rise to severance benefits or subsequent to an event
constituting Good Reason. For purposes of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the
Executive is pending, the Executive shall continue to receive his
salary (including any Bonus) and benefits as if his employment with
the Company had continued through the date of the final determination
thereof (i.e. after decision following any trial or arbitration
proceeding and after all appeals therefrom or after the time for any
appeals therefrom has run) and any such payments or benefits shall not
be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5.
(a) The second sentence of subsection 4(a) of the Continuity Agreement is
hereby amended to read as follows:
"In addition at the time of the above payment, the Executive
shall be entitled to an additional lump sum cash payment equal to
the sum of (A) Executive's annual salary through the date of
termination, (B) an amount equal to Executive's annual bonus, for
any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment
until the date such bonus would otherwise have been paid, (C) a
pro-rata portion of the Bonus (calculated through the date of
termination), and (D) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and
any accrued vacation pay, in each case, in full satisfaction of
Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further amended
by adding the following sentence at the end of such subsection:
"If payment of the amounts referred to herein is not made by the
Company to the Executive within such 10 day period, the Company
shall pay the Executive interest thereon at the rate of 10% per
annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by the
Company to the Executive are not made within such five day period, the
Company shall pay the Executive interest thereon at the rate of 10%
per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the Company
within such five day period, the Company shall pay the Executive
interest thereon at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company,
as may be amended from time to time hereafter, this Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect to the
matters provided for herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written.
EMCOR GROUP, INC.
BY:
___________________________________
Frank T. MacInnis, Executive
Exhibit 10(i)
Amendment dated as of May 4, 1999 to Restated Agreement dated as of March
1, 1999 by and between EMCOR Group, Inc., a Delaware corporation (the
"Company"), and SHELDON I. CAMMAKER (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of March 1, 1999 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company benefit
plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then
outstanding securities; or"
2. The first and second paragraphs of subsection 3(a) of the Continuity
Agreement are hereby amended to read as follows:
"The Executive shall be entitled to the severance benefits provided in
Section 4 hereof in the event Executive's employment is terminated (A)
within two years following a Change of Control (i) by the Company without
Cause or (ii) by Executive for Good Reason or (B) prior to a Change of
Control, as a result of an Anticipatory Termination.
Notwithstanding the foregoing, Executive shall not be entitled to severance
benefits in the event of a termination of employment on account of death,
Disability or Retirement, but excluding any such termination which is
coincident with a termination which would otherwise give rise to severance
benefits or subsequent to an event constituting Good Reason. For purposes
of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the Executive
is pending, the Executive shall continue to receive his salary (including
any Bonus), as provided in Section 2 hereof, and benefits as if his
employment with the Company had continued through the date of the final
determination thereof (i.e. after decision following any trial or
arbitration proceeding and after all appeals therefrom or after the time
for any appeals therefrom has run) and any such payments or benefits shall
not be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5.
(a) The second sentence of subsection 4(a) of the Continuity
Agreement is hereby amended to read as follows:
"In addition at the time of the above payment, the Executive
shall be entitled to an additional lump sum cash payment equal to
the sum of (A) Executive's annual salary through the date of
termination, (B) an amount equal to Executive's annual bonus, for
any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment
until the date such bonus would otherwise have been paid, (C) a
pro-rata portion of the Bonus (calculated through the date of
termination), and (D) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and
any accrued vacation pay, in each case, in full satisfaction of
Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further
amended by adding the following sentence at the end of such
subsection: "If payment of the amounts referred to herein is not
made by the Company to the Executive within such 10 day period,
the Company shall pay the Executive interest thereon at the rate
of 10% per annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by the Company
to the Executive are not made within such five day period, the Company
shall pay the Executive interest thereon at the rate of 10% per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the Company within
such five day period, the Company shall pay the Executive interest thereon
at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company, as may
be amended from time to time hereafter, this Agreement constitutes the
entire agreement between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral or written agreements,
commitments or understandings with respect to the matters provided for
herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written. EMCOR GROUP, INC. By:
______________________________
Sheldon I. Cammaker, Executive
Exhibit 10(j)
Amendment dated as of May 4, 1999 to Agreement dated as of June 22, 1998 by
and between EMCOR Group, Inc., a Delaware corporation (the "Company"), and
LEICLE E. CHESSER (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of June 22, 1998 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the
Company having at least 25% of the voting power of the Company's then
outstanding securities; or"
2. The first and second paragraphs of subsection 3(a) of the Continuity
Agreement are hereby amended to read as follows:
"The Executive shall be entitled to the severance benefits provided in
Section 4 hereof in the event Executive's employment is terminated (A)
within two years following a Change of Control (i) by the Company
without Cause or (ii) by Executive for Good Reason or (B) prior to a
Change of Control, as a result of an Anticipatory Termination.
Notwithstanding the foregoing, Executive shall not be entitled to
severance benefits in the event of a termination of employment on
account of death, Disability or Retirement, but excluding any such
termination which is coincident with a termination which would
otherwise give rise to severance benefits or subsequent to an event
constituting Good Reason. For purposes of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the
Executive is pending, the Executive shall continue to receive his
salary (including any Bonus) and benefits as if his employment with
the Company had continued through the date of the final determination
thereof (i.e. after decision following any trial or arbitration
proceeding and after all appeals therefrom or after the time for any
appeals therefrom has run) and any such payments or benefits shall not
be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5.
(a) The second sentence of subsection 4(a) of the Continuity Agreement is
hereby amended to read as follows
"In addition at the time of the above payment, the Executive
shall be entitled to an additional lump sum cash payment equal to
the sum of (A) Executive's annual salary through the date of
termination, (B) an amount equal to Executive's annual bonus, for
any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment
until the date such bonus would otherwise have been paid, (C) a
pro-rata portion of the Bonus (calculated through the date of
termination), and (D) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and
any accrued vacation pay, in each case, in full satisfaction of
Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further amended
by adding the following sentence at the end of such subsection:
"If payment of the amounts referred to herein is not made by the
Company to the Executive within such 10 day period, the Company
shall pay the Executive interest thereon at the rate of 10% per
annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by
the Company to the Executive are not made within such five day
period, the Company shall pay the Executive interest thereon at
the rate of 10% per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the
Company within such five day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company,
as may be amended from time to time hereafter, this Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect to the
matters provided for herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written.
EMCOR GROUP, INC.
By:
__________________________________
Leicle E. Chesser, Executive
Exhibit 10(k)
Amendment dated as of May 4, 1999 to Agreement dated as of June 22, 1998 by
and between EMCOR Group, Inc., a Delaware corporation (the "Company"), and
THOMAS D. CUNNINGHAM (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of June 22, 1998 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the
Company having at least 25% of the voting power of the Company's then
outstanding securities; or"
2. The first and second paragraphs of subsection 3(a) of the Continuity
Agreement are hereby amended to read as follows:
"The Executive shall be entitled to the severance benefits provided in
Section 4 hereof in the event Executive's employment is terminated (A)
within two years following a Change of Control (i) by the Company
without Cause or (ii) by Executive for Good Reason or (B) prior to a
Change of Control, as a result of an Anticipatory Termination.
Notwithstanding the foregoing, Executive shall not be entitled to
severance benefits in the event of a termination of employment on
account of death, Disability or Retirement, but excluding any such
termination which is coincident with a termination which would
otherwise give rise to severance benefits or subsequent to an event
constituting Good Reason. For purposes of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the
Executive is pending, the Executive shall continue to receive his
salary (including any Bonus) and benefits as if his employment with
the Company had continued through the date of the final determination
thereof (i.e. after decision following any trial or arbitration
proceeding and after all appeals therefrom or after the time for any
appeals therefrom has run) and any such payments or benefits shall not
be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5.
(a) The second sentence of subsection 4(a) of the Continuity Agreement is
hereby amended to read as follows:
"In addition at the time of the above payment, the Executive
shall be entitled to an additional lump sum cash payment equal to
the sum of (A) Executive's annual salary through the date of
termination, (B) an amount equal to Executive's annual bonus, for
any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment
until the date such bonus would otherwise have been paid, (C) a
pro-rata portion of the Bonus (calculated through the date of
termination), and (D) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and
any accrued vacation pay, in each case, in full satisfaction of
Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further amended
by adding the following sentence at the end of such subsection:
"If payment of the amounts referred to herein is not made by the
Company to the Executive within such 10 day period, the Company
shall pay the Executive interest thereon at the rate of 10% per
annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by the
Company to the Executive are not made within such five day period, the
Company shall pay the Executive interest thereon at the rate of 10%
per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the Company
within such five day period, the Company shall pay the Executive
interest thereon at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company,
as may be amended from time to time hereafter, this Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect to the
matters provided for herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written.
EMCOR GROUP, INC.
By:
_______________________________
Thomas D. Cunningham, Executive
Exhibit 10(l)
Amendment dated as of May 4, 1999 to Agreement dated as of June 22, 1998 by
and between EMCOR Group, Inc., a Delaware corporation (the "Company"), and
JEFFREY M. LEVY (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of June 22, 1998 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the
Company having at least 25% of the voting power of the Company's then
outstanding securities; or" 2. The first and second paragraphs of
subsection 3(a) of the Continuity Agreement are hereby amended to read
as follows: "The Executive shall be entitled to the severance benefits
provided in Section 4 hereof in the event Executive's employment is
terminated (A) within two years following a Change of Control (i) by
the Company without Cause or (ii) by Executive for Good Reason or (B)
prior to a Change of Control, as a result of an Anticipatory
Termination.
Notwithstanding the foregoing, Executive shall not be entitled to
severance benefits in the event of a termination of employment on
account of death, Disability or Retirement, but excluding any such
termination which is coincident with a termination which would
otherwise give rise to severance benefits or subsequent to an event
constituting Good Reason. For purposes of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the
Executive is pending, the Executive shall continue to receive his
salary (including any Bonus) and benefits as if his employment with
the Company had continued through the date of the final determination
thereof (i.e. after decision following any trial or arbitration
proceeding and after all appeals therefrom or after the time for any
appeals therefrom has run) and any such payments or benefits shall not
be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5.
(a) The second sentence of subsection 4(a) of the Continuity Agreement is
hereby amended to read as follows:
"In addition at the time of the above payment, the Executive
shall be entitled to an additional lump sum cash payment equal to
the sum of (A) Executive's annual salary through the date of
termination, (B) an amount equal to Executive's annual bonus, for
any calendar year ending before such termination occurs, which
would have been payable had Executive remained in employment
until the date such bonus would otherwise have been paid, (C) a
pro-rata portion of the Bonus (calculated through the date of
termination), and (D) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and
any accrued vacation pay, in each case, in full satisfaction of
Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further amended
by adding the following sentence at the end of such subsection:
"If payment of the amounts referred to herein is not made by
the Company to the Executive within such 10 day period, the
Company shall pay the Executive interest thereon at the rate
of 10% per annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by the
Company to the Executive are not made within such five day period, the
Company shall pay the Executive interest thereon at the rate of 10%
per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the Company
within such five day period, the Company shall pay the Executive
interest thereon at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company,
as may be amended from time to time hereafter, this Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect to the
matters provided for herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written.
EMCOR GROUP, INC.
By:
____________________________
Jeffrey M. Levy, Executive
Exhibit 10(m)
Amendment dated as of May 4, 1999 to Agreement dated as of June 22, 1998 by
and between EMCOR Group, Inc., a Delaware corporation (the "Company"), and R.
KEVIN MATZ (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of June 22, 1998 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company benefit
plans) becomes the beneficial owner of securities of the Company
having at least 25% of the voting power of the Company's then
outstanding securities; or"
2. The first and second paragraphs of subsection 3(a) of the Continuity
Agreement are hereby amended to read as follows: "The Executive shall
be entitled to the severance benefits provided in Section 4 hereof in
the event Executive's employment is terminated
(A) within two years following a Change of Control (i) by the Company
without Cause or (ii) by Executive for Good Reason or
(B) prior to a Change of Control, as a result of an Anticipatory
Termination.
Notwithstanding the foregoing, Executive shall not be entitled to
severance benefits in the event of a termination of employment on
account of death, Disability or Retirement, but excluding any such
termination which is coincident with a termination which would
otherwise give rise to severance benefits or subsequent to an event
constituting Good Reason. For purposes of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the
Executive is pending, the Executive shall continue to receive his
salary (including any Bonus) and benefits as if his employment with
the Company had continued through the date of the final determination
thereof (i.e. after decision following any trial or arbitration
proceeding and after all appeals therefrom or after the time for any
appeals therefrom has run) and any such payments or benefits shall not
be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5.
(a) The second sentence of subsection 4(a) of the Continuity Agreement is
hereby amended to read as follows: "In addition at the time of the
above payment, the Executive shall be entitled to an additional lump
sum cash payment equal to the sum of (A) Executive's annual salary
through the date of termination, (B) an amount equal to Executive's
annual bonus, for any calendar year ending before such termination
occurs, which would have been payable had Executive remained in
employment until the date such bonus would otherwise have been paid,
(C) a pro-rata portion of the Bonus (calculated through the date of
termination), and (D) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral) and any
accrued vacation pay, in each case, in full satisfaction of
Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further amended
by adding the following sentence at the end of such subsection: "If
payment of the amounts referred to herein is not made by the Company
to the Executive within such 10 day period, the Company shall pay the
Executive interest thereon at the rate of 10% per annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by the
Company to the Executive are not made within such five day period, the
Company shall pay the Executive interest thereon at the rate of 10%
per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the Company
within such five day period, the Company shall pay the Executive
interest thereon at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company,
as may be amended from time to time hereafter, this Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect to the
matters provided for herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written.
EMCOR GROUP, INC.
By:
_____________________________
R. Kevin Matz, Executive
Exhibit 10(n)
Amendment dated as of May 4, 1999 to Agreement dated as of June 22, 1998 by
and between EMCOR Group, Inc., a Delaware corporation (the "Company"), and MARK
A. POMPA (the "Executive").
WHEREAS, the Company and the Executive are parties to a certain agreement
dated as of June 22, 1998 (the "Continuity Agreement") providing for employment
and severance benefits under certain circumstances; and
WHEREAS, the Company and the Executive desire to amend the Continuity
Agreement as hereafter provided. NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive hereby agree as follows:
1. Paragraph (i) of Section 1 of the Continuity Agreement setting forth one of
the events of a "Change of Control" (as defined in the Continuity
Agreement) is hereby amended to read as follows:
"(i) any person or persons acting in concert (excluding Company
benefit plans) becomes the beneficial owner of securities of the
Company having at least 25% of the voting power of the Company's then
outstanding securities; or"
2. The first and second paragraphs of subsection 3(a) of the Continuity
Agreement are hereby amended to read as follows:
"The Executive shall be entitled to the severance benefits provided in
Section 4 hereof in the event Executive's employment is terminated (A)
within two years following a Change of Control (i) by the Company
without Cause or (ii) by Executive for Good Reason or (B) prior to a
Change of Control, as a result of an Anticipatory Termination.
Notwithstanding the foregoing, Executive shall not be entitled to
severance benefits in the event of a termination of employment on
account of death, Disability or Retirement, but excluding any such
termination which is coincident with a termination which would
otherwise give rise to severance benefits or subsequent to an event
constituting Good Reason. For purposes of this Agreement:"
3. Clause (v) of subsection 3(c) of the Continuity Agreement is hereby amended
to read as follows: "(v) failure to provide for and obtain the assumption
of this Agreement by any successor entity;"
4. The last sentence of subsection 3(e) of the Continuity Agreement is hereby
amended to read as follows:
"During any period in which a dispute between the Company and the
Executive is pending, the Executive shall continue to receive his
salary (including any Bonus) and benefits as if his employment with
the Company had continued through the date of the final determination
thereof (i.e. after decision following any trial or arbitration
proceeding and after all appeals therefrom or after the time for any
appeals therefrom has run) and any such payments or benefits shall not
be offset against any severance, either under this Agreement or
otherwise, to which Executive may be entitled."
5. (a) The second sentence of subsection 4(a) of the Continuity Agreement is
hereby amended to read as follows:
"In addition at the time of the above payment, the Executive shall be
entitled to an additional lump sum cash payment equal to the sum of
(A) Executive's annual salary through the date of termination, (B) an
amount equal to Executive's annual bonus, for any calendar year ending
before such termination occurs, which would have been payable had
Executive remained in employment until the date such bonus would
otherwise have been paid, (C) a pro-rata portion of the Bonus
(calculated through the date of termination), and (D) an amount, if
any, equal to compensation previously deferred (excluding any
qualified plan deferral) and any accrued vacation pay, in each case,
in full satisfaction of Executive's rights thereto."
(b) Subsection 4(a) of the Continuity Agreement is hereby further
amended by adding the following sentence at the end of such
subsection: "If payment of the amounts referred to herein is not made
by the Company to the Executive within such 10 day period, the Company
shall pay the Executive interest thereon at the rate of 10% per
annum."
6. Subsection 5(a) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If payments required pursuant to this subsection to be made by the
Company to the Executive are not made within such five day period, the
Company shall pay the Executive interest thereon at the rate of 10%
per annum."
7. Subsection 5(e) of the Continuity Agreement is hereby amended by adding the
following sentence at the end of such subsection:
"If such amounts are not reimbursed to the Executive by the Company
within such five day period, the Company shall pay the Executive
interest thereon at the rate of 10% per annum."
8. Section 10 of the Continuity Agreement is hereby amended to read in its
entirety as follows: "10. Expenses. In addition to all other amounts
payable to the Executive under this Agreement, the Company shall pay or
reimburse the Executive for legal fees (including without limitation, any
and all court costs, arbitration costs, and attorneys' fees and expenses),
incurred by the Executive in connection with or as a result of any claim,
action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; unless, in the
case of an action brought by the Executive, it is determined by an
arbitrator or by a court of competent jurisdiction that such action was
frivolous and was not brought in good faith. Such legal fees shall be paid
or reimbursed by the Company to the Executive from time to time within five
business days following receipt by the Company of copies of bills for such
fees and if the Company fails to make such payment within such five day
period, the Company shall pay the Executive interest thereon at the rate of
10% per annum."
9. Section 14 of the Continuity Agreement is hereby deleted in its entirety.
10. Section 15 of the Continuity Agreement is hereby renumbered Section 14 and
Section 16 of the Continuity Agreement is hereby renumbered Section 15.
11. Section 16 of the Continuity Agreement, which is hereby renumbered Section
15, is hereby amended to read in its entirety as follows:
"Except as otherwise provided in an Amended and Restated Employment
Agreement dated as of May 4, 1999 between Executive and the Company,
as may be amended from time to time hereafter, this Agreement
constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior oral or
written agreements, commitments or understandings with respect to the
matters provided for herein."
12. Except as specifically amended hereby, all of the terms, conditions and
provisions of the Continuity Agreement shall stand and remain unchanged and
in full force and effect. No reference to this Amendment to the Continuity
Agreement need be made in any instrument or document at any time referring
to the Continuity Agreement, and reference to the Continuity Agreement in
any of such shall be deemed to be a reference to the Continuity Agreement
as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment Agreement as of
the day and year fist above written.
EMCOR GROUP, INC.
By:
______________________________
Mark A. Pompa, Executive
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
EMCOR's Condensed Consolidated Financial Statements for the six months
ended June 30, 1999 and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000105634
<NAME> EMCOR Group, Inc.
<MULTIPLIER> 1000
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Jun-30-1999
<EXCHANGE-RATE> 1
<CASH> 28202
<SECURITIES> 0
<RECEIVABLES> 656613
<ALLOWANCES> 25587
<INVENTORY> 7382
<CURRENT-ASSETS> 810799
<PP&E> 64752
<DEPRECIATION> 27639
<TOTAL-ASSETS> 936689
<CURRENT-LIABILITIES> 635901
<BONDS> 117201
0
0
<COMMON> 109
<OTHER-SE> 129952
<TOTAL-LIABILITY-AND-EQUITY> 936689
<SALES> 1236472
<TOTAL-REVENUES> 1236472
<CGS> 1117889
<TOTAL-COSTS> 1219418
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 246
<INTEREST-EXPENSE> 3935
<INCOME-PRETAX> 13119
<INCOME-TAX> 5641
<INCOME-CONTINUING> 7478
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7478
<EPS-BASIC> 0.77
<EPS-DILUTED> 0.66
</TABLE>
