<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DECEMBER 2, 1998
Date of Report
(Date of earliest event reported)
UTILX CORPORATION
COMMISSION FILE NUMBER 0-16821
DELAWARE 91-1171716
(State of Incorporation) (I.R.S. Identification Number)
P. O. BOX 97009
KENT, WASHINGTON 98064-9709 (253) 395-0200
(Address of Principal Executive (Telephone Number)
Offices)
-----------------------------
The total number of pages in this Form 8-K is 3.
<PAGE>
ITEM 5. OTHER EVENTS
UTILX Corporation (the "Company") announced on November 20, 1998, that its
Board of Directors had elected its Chairman, William M. Weisfield, to the
permanent position of President and Chief Executive Officer. Mr. Weisfield,
who has served on the Company's Board of Directors since January 1995 and as
its Chairman since January 1996, had been appointed to serve as the Company's
acting President and Chief Executive Officer on October 30, 1998.
ITEM 7. EXHIBITS
<TABLE>
<S> <C>
10.1 Executive Employment Agreement
10.2 Senior Management Employment Agreement
99.1 Press Release
</TABLE>
-2-
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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.
UTILX CORPORATION
---------------------------------------
(Registrant)
Date: December 2, 1998 By: /s/ Larry D. Pihl
-----------------------------------
Larry D. Pihl, Vice President/Chief
Financial Officer
-3-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
10.1 Executive Employment Agreement dated
November 1, 1998.
10.2 Senior Management Employment Agreement
dated November 1, 1998.
99.1 Press release issued November 20, 1998.
</TABLE>
<PAGE>
EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, dated as of this 1st day of November,
1998, between UTILX Corporation, a Delaware corporation (the "Company"), and
William M. Weisfield ("Executive").
AGREEMENTS
1. DEFINITIONS
Terms capitalized in this Agreement which are not otherwise defined
shall have the meanings assigned to such terms in that certain Senior
Management Employment Agreement, dated as of November 1, 1998, between the
Company and Executive (the "Senior Management Agreement").
2. EMPLOYMENT
The Company will employ Executive and Executive will accept employment
by the Company as its President, Chief Executive Officer and Chairman of the
Board of Directors (the "Board"). Subject to the Company's Certificate of
Incorporation and Bylaws, Executive shall have the authority and perform the
duties customarily performed by the President, Chief Executive Officer and
Chairman of the Board of a corporation that is, in all respects, similar to
the Company, and such other authority and duties as may be assigned from time
to time by the Board, which relate to the business of the Company, its
subsidiaries, its parent corporation or any business ventures in which the
Company, its subsidiaries or its parent corporation may participate.
3. ATTENTION AND EFFORT
Following a reasonable transition period, executive shall devote his
entire productive time, ability, attention and effort to the Company's
business, shall skillfully serve its interests during the term of this
Agreement, and shall not engage in any business or employment activity that
is not on the Company's behalf (whether or not pursued for gain or profit).
Executive may, however, devote reasonable periods of time to (a) engaging in
personal investment activities that do not involve Executive providing any
advice or services to the businesses in which the investments are made, (b)
engaging in charitable or community service activities, and (c) serving as a
member of the board of directors of other for-profit corporations, so long as
none of the these additional activities materially interfere with Executive's
duties under this Agreement.
<PAGE>
4. TERM
Unless earlier terminated as provided in this Agreement, this
Agreement shall expire on November 1, 2001.
5. COMPENSATION
During the term of this Agreement, the Company shall pay or cause to
be paid to Executive, and Executive shall accept in exchange for the services
he renders under this Agreement, the following compensation:
5.1 BASE SALARY
Executive's compensation shall consist of, in part, an annual base
salary (the "Base Salary") of three hundred thousand dollars ($300,000)
before all customary payroll deductions. The Company shall pay Executive his
Base Salary in substantially equal installments and at the same intervals as
other officers of the Company are paid. The Board may, at its discretion,
adjust the Base Salary upward, but not downward, from time to time.
5.2 STOCK OPTIONS
5.2.1 INITIAL GRANT
Upon execution of this Agreement, the Company shall grant to Executive,
pursuant to the terms and conditions of the 1994 Option and Restricted Stock
Plan (the "Option Plan"), options to purchase 200,000 shares of common stock of
the Company (the "Initial Grant"). The Initial Grant shall consist of incentive
stock options to the extent permitted under applicable law. Each option in the
Initial Grant shall have a term of ten years and shall have an exercise price
equal to the fair market value at the close of business on November 11, 1998.
5.2.2 STANDARD GRANTS
In addition to the Initial Grant, Executive shall be eligible to
participate in the stock option plans of the Company, at the discretion of the
Board.
5.3 VESTING
The options in the Initial Grant will vest in four equal installments:
25% on each of the first, second, third and fourth anniversaries of the date of
this Agreement. Any grants in accordance with Section 5.2.2 shall vest in
accordance with the terms of the Option Plan. In the event of a Change in
Control, all options granted to Executive which are not then vested shall vest
and be fully exercisable. In the event of termination of Executive's employment
for any reason after the third anniversary of the date of this Agreement, all
options granted to Executive under the Initial Grant which are not then vested
shall vest and be fully exercisable.
<PAGE>
5.4 CASH BONUS
During the term of this Agreement, at the end of each fiscal year the
Company shall pay Executive a performance bonus targeted at 100% of Base
Salary. The level of the bonus will vary depending on the level of
achievement of mutually agreed upon corporate objectives to be established
from time to time by the Board.
6. BENEFITS
During the term of this Agreement, the Company shall provide Executive
with the same health, dental, life insurance, and other benefits (including
pension plans and similar benefits) provided to other senior executives.
Executive shall be entitled to participate, subject to applicable eligibility
requirements, in the fringe benefit programs that the Board (or any person or
committee appointed by the Board to determine fringe benefit programs and
other emoluments) shall provide from time to time. To the extent possible,
the Company shall take all steps necessary or appropriate to make Executive
immediately eligible for such benefits and programs. At the Company's
expense, the Company shall provide Executive with an automobile for his
full-time use.
7. TERMINATION
Employment of Executive under this Agreement may be terminated as
follows:
7.1 BY THE COMPANY
The Company may terminate the employment of Executive with or without
Cause by giving written notice to Executive. The notice shall be effective
immediately if termination is for Cause and thirty (30) days later if
termination is not for Cause.
7.2 BY EXECUTIVE
Executive may terminate this Agreement for any reason upon sixty (60)
days' prior written notice.
<PAGE>
7.3 AUTOMATIC TERMINATION
This Agreement and Executive's employment under this Agreement shall
terminate automatically upon Executive's death or total disability. The term
"total disability" shall mean Executive's inability to perform the duties set
forth in Section 2 of this Agreement for a period or periods aggregating 90
calendar days in any 12-month period as a result of physical or mental
illness, loss of legal capacity or any other cause beyond Executive's
control, unless Executive is granted a leave of absence by the Board at its
discretion. Executive and the Company acknowledge that Executive's ability to
perform the duties specified in Section 2 of this Agreement is of the essence
of this Agreement. Termination under this Section 7.3 shall be effective (a)
at the end of the calendar month in which Executive's death occurs or (b)
immediately upon a determination by the Board of Executive's total
disability, as defined in this Section 7.3.
7.4 CHANGE IN CONTROL
This Agreement shall automatically terminate upon the occurrence of a
Change in Control. At such time, however, the Senior Management Agreement
shall remain in effect.
7.5 EFFECT OF TERMINATION
Even if this Agreement terminates or expires, the Company shall remain
liable for any rights or payments to which Executive is entitled under this
Agreement that arose before the expiration or termination.
8. TERMINATION PAYMENTS
If Executive's employment is terminated, all compensation and benefits
set forth in this Agreement shall terminate except as specifically provided
in this Section 8.
8.1 TERMINATION BY THE COMPANY
If the Company terminates Executive's employment without Cause prior
to the end of the term of this Agreement, Executive shall be entitled to
receive (a) termination payments equal to the aggregate Base Salary Executive
would have received from the date of his termination by the Company to the
end of the fourth full calendar month following the date of termination of
this Agreement, and (b) any unpaid portion of the Base Salary that has
accrued for services already performed as of the date termination of
Executive's employment becomes effective. If the Company terminates
Executive for Cause, Executive shall not be entitled to receive any of the
foregoing benefits, other than those set forth in clause (b) of this
Section 8.1.
<PAGE>
8.2 TERMINATION BY EXECUTIVE
If Executive's employment is terminated by Executive, Executive shall
not be entitled to any payments under this Section 8, other than those set
forth in clause (b) of Section 8.1.
8.3 EXPIRATION OF TERM
If Executive's employment is terminated following the expiration of the
term of this Agreement, Executive shall not be entitled to receive any payments
under this Section 8.
8.4 PAYMENT SCHEDULE
All payments under this Section 8 shall be made to Executive at the
same interval as payments of the Base Salary were made to Executive
immediately prior to termination.
8.5 CAUSE
"CAUSE" means (a) willful misconduct on the part of Executive that has
a materially adverse effect on the Company and its Subsidiaries, taken as a
whole, (b) Executive's engaging in conduct which could reasonably result in
his conviction of a felony or a crime against the Company or conduct
involving substance abuse, fraud or moral turpitude, or which would
materially compromise the Company's reputation, as determined in good faith
by a written resolution adopted by the affirmative vote of not less than
two-thirds of all of the directors who are not Executives or officers of the
Company, or (c) unreasonable refusal by Executive to perform the duties and
responsibilities of his position in any material respect. No action, or
failure to act, shall be considered willful or unreasonable if the Executive
did it in good faith and with the reasonable belief that his action or
omission was in the best interests of the Company.
9. INDEMNIFICATION
The Company shall indemnify Executive to the fullest extent permitted
by law, and as provided by the Company's Certificate of Incorporation and
Bylaws. The Company shall at all times maintain director and officer
liability insurance at levels not less than the coverage the Company
currently maintains.
<PAGE>
10. MISCELLANEOUS
10.1 AMENDMENT
This Agreement may be amended only by written agreement between Executive
and the Company.
10.2 NO MITIGATION
All payments and benefits to which Executive is entitled under this
Agreement shall be made and provided without offset, deduction or mitigation
on account of income Executive could or may receive from other employment or
otherwise.
10.3 LEGAL EXPENSES
In connection with any litigation, arbitration or similar proceeding
regarding the interpretation or enforcement of any provision of this
Agreement, whether or not instituted by the Company or Executive, the
prevailing party shall be entitled to recover from the other party all
related costs and expenses, including reasonable attorneys' fees and
disbursements.
10.4 NOTICES
Any notices required under the terms of this Agreement shall be
effective when mailed, postage prepaid, by certified mail and addressed to,
in the case of the Company:
UTILX Corporation
22820 Russell Road, P.O. Box 97009
Kent, WA 98064-9709
Attention: Chief Financial Officer
with a copy to:
Stephen M. Graham
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, WA 98101
and to, in the case of Executive:
<PAGE>
William M. Weisfield
3629 West Mercer Way
Mercer Island, WA 98040
10.5 WAIVER; CURE
No waiver or modification of any or all of this Agreement shall be
effective against any party unless the party seeking to be bound puts in writing
and signs the waiver or modification. The parties shall not construe a waiver
of any breach of any provision by any party on one occasion as a waiver of any
subsequent breach, and the parties shall not construe a waiver of any right or
power by any party on one occasion as a waiver of, or a bar to, the exercise of
that right or power on any other occasion. The breaching party may cure any
breach of this Agreement within ten (10) days of the date that the breaching
party receives written notice of the breach from the party asserting the breach.
10.6 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the state of Washington applicable to contracts made and to be performed
there.
<PAGE>
IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the first date written above.
UTILX CORPORATION
By: /s/ Robert E. Runice
------------------------
Title: Director
--------
EXECUTIVE
/s/ William M. Weisfield
----------------------------
William M. Weisfield
<PAGE>
EXHIBIT 10.2
SENIOR MANAGEMENT EMPLOYMENT AGREEMENT
SENIOR MANAGEMENT EMPLOYMENT AGREEMENT, dated as of the 1st day of
November, 1998, between UTILX CORPORATION, a Delaware corporation (the
"Company"), and William M. Weisfield ("Executive").
RECITALS
A. Executive is currently employed by the Company or one of its
Subsidiaries.
B. The Board of Directors of the Company (the "Board") has determined
that it is appropriate to reinforce the continued attention and dedication of
certain members of the Company's management, including Executive, to their
assigned duties without distraction by the potentially disturbing
circumstances arising from a Change in Control of the Company (as defined in
the attached Schedule A).
AGREEMENTS
NOW, THEREFORE, in consideration of the covenants and agreements set
forth below, the Company and Executive agree as follows:
1. DEFINITIONS
Terms capitalized in this Agreement which are not otherwise defined shall
have the meanings assigned to such terms in Schedule A.
2. EFFECTIVENESS
Except with respect to Sections 6 through 9 of this Agreement, which
shall be effective immediately, this Agreement shall become effective
immediately upon a Change in Control, provided that Executive is employed by
the Company immediately before the Change in Control.
3. TERM
Unless earlier terminated as provided in this Agreement, the initial
term of this Agreement shall be from the date of this Agreement until its
second anniversary date. Unless earlier terminated or a Change in Control
occurs, on each annual anniversary date this Agreement shall automatically be
renewed for successive two-year terms. If a Change in Control occurs, this
Agreement shall expire on the second anniversary date of the Change in
Control, unless earlier terminated as provided in this Agreement.
<PAGE>
4. BENEFITS UPON CHANGE IN CONTROL
Regardless of whether a Termination occurs, Executive shall be entitled
to the following payments and benefits following a Change in Control:
(a) SALARY AND BENEFITS.
(i) Executive shall receive an annual base salary not less than
the Executive's annual base salary in effect immediately before the Change in
Control, including any salary which Executive has earned but deferred, and an
annual bonus equal to at least the average of the three annual bonuses paid
to Executive in the three years before the Change in Control.
(ii) Executive shall be entitled to participate in all employee
expense reimbursement, incentive, savings and retirement plans, practices,
policies and programs (including any Company plan qualified under Section
401(a) of the Code) available to other peer executives of the Company and its
Subsidiaries. In no event, however, shall the benefits provided to Executive
under this item (ii) be less favorable, in the aggregate, than the most
favorable of those plans, practices, policies or programs in effect
immediately before the Change in Control.
(b) WELFARE PLAN BENEFITS. The Company shall, at the Company's
expense (except for the amount, if any, of any required employee contribution
that Executive would have had to contribute as an active employee under the
plan or program in effect on the date of the Change in Control), continue to
cover Executive (and his dependents) under the Company's life, disability,
health, dental and any other employee welfare benefit plans or programs, as
in effect on the date of the Change in Control. Alternatively, the Company
may provide Executive (and his dependents) with insurance coverage no less
favorable than these welfare benefits (such benefits or insurance, the
"Welfare Benefits").
(c) DEATH OF EXECUTIVE. If the Executive dies before Termination
but while employed by the Company or any Subsidiary, his spouse, if any, or
otherwise the personal representative of his estate, shall be entitled to
receive
(i) Executive's salary at the rate then in effect through the date
of death, as provided under the Company's pay policy,
<PAGE>
(ii) any Accrued Benefits for the periods of service before the date
of death, and
(iii) Welfare Benefits for two (2) years following the date of death.
(d) DISABILITY OF EXECUTIVE. If Executive experiences a
Disability before Termination but while employed by the Company or any
Subsidiary, Executive shall be entitled to receive
(i) his salary at the rate then in effect through the date of the
determination of Disability, as provided under the Company's pay policy,
(ii) any Accrued Benefits for the periods of service before the
date of the determination of Disability,
(iii) payments under the Company's short- and long-term disability
plans following the determination of Disability, and
(iv) Welfare Benefits for two (2) years following the determination
of Disability.
(e) CAUSE; UPON EXPIRATION OF THIS AGREEMENT; OTHER THAN FOR GOOD
REASON. If, before Termination, the Company terminates Executive's
employment for Cause or upon expiration of this Agreement, or the Executive
terminates Executive's employment other than for Good Reason, Executive shall
be entitled to receive
(i) his salary at the rate then in effect through the date of the
termination, as provided under the Company's pay policy, and
(ii) any Accrued Benefits for the periods of service before the
date of the termination.
(f) WITHHOLDING. All payments under this Section 4 are subject to
applicable federal and state payroll withholding or other applicable taxes.
5. PAYMENTS AND BENEFITS UPON TERMINATION
Executive shall be entitled to the following payments and benefits
following Termination:
<PAGE>
(a) TERMINATION PAYMENT. In recognition of Executive's past
services to the Company, the Company shall make a lump sum payment in cash to
Executive as severance pay equal to two (2) times the sum of:
(i) Executive's annual base salary in effect immediately before the
date of the Change in Control or the date of Termination, whichever salary is
higher, provided that if the Executive is a part-time employee on the date of
Termination, then the Company shall use Executive's base salary in effect
immediately before the date of Termination to calculate the payment under
this Section 5(a);
plus
(ii) a percentage of Executive's annual base salary specified in
subparagraph (i) above, equal to the percentage bonus paid to Executive for
the fiscal year ended immediately before the Change in Control. If
Termination occurs before the Company determines a percentage for a fiscal
year that has ended or Executive did not receive a percentage bonus in the
previous year, this percentage shall be ten percent (10%).
The Company shall pay all payments under this Section 5(a) (the
"Termination Payments") within ten (10) business days following the date of
Termination.
(b) CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. Notwithstanding
the above, if all or any portion of the Termination Payments (either alone or
together with all other payments and benefits which Executive receives or is
then entitled to receive, pursuant to this Agreement or otherwise, from the
Company or any Subsidiary (all such payments and benefits, including the
Termination Payments, the "Termination Benefits")), would constitute a
Parachute Payment, then the payments to Executive under Section 5(a) shall be
increased (such increase, a "Gross-Up Payment"). The payments shall be
increased, however, only to the extent necessary to ensure that, after
Executive pays all taxes (including any interest or penalties imposed on
those taxes), including, without limitation, any income taxes and Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Termination
Benefits.
The Company and Executive shall make the foregoing calculations at
the Company's expense. If no agreement on the calculations is reached within
thirty (30) business days after the date of Termination, then the accounting
firm which regularly audits the financial statements of the Company (the
"Auditors") shall review the calculations, at the Company's expense. The
determination of the Auditors shall be conclusive and binding on all parties.
Pending this determination, the Company shall continue to make all other
required payments to Executive at the time and in the manner provided in this
Agreement and shall pay the largest portion of such payments and benefits
that, in the Company's reasonable judgment, the Company may pay without
triggering the Excise Tax.
<PAGE>
Because of the uncertainty in the application of Section 4999 of
the Code, the Company possibly may make Termination Payments or Gross-Up
Payments that should not be made (an "Overpayment") or may fail to make
additional Gross-Up Payments that should be made (an "Underpayment"). If the
Company and Executive determine, or if the Company and Executive do not reach
agreement, the Auditors determine, that the Company has made an Overpayment,
the Overpayment shall be treated for all purposes as a loan to Executive that
the Executive shall repay to the Company, together with interest at the
applicable federal rate provided for in section 7872(f)(2) of the Code. If
the Company and Executive determine, or if the Company and Executive do not
reach agreement, the Auditors determine, that the Company has made an
Underpayment, the Company shall promptly pay the Underpayment to or for the
benefit of Executive, together with interest at the applicable federal rate
provided for in section 7872(f)(2)(A) of the Code. The Company and Executive
shall give each other prompt written notice of any information that could
reasonably result in the determination that an Overpayment or Underpayment
has been made.
(c) ACCRUED BENEFITS. The Company shall make a lump sum payment
in cash to Executive in the amount of any Accrued Benefits for the periods of
service before the date of Termination.
(d) WELFARE PLAN BENEFITS. The Company shall, at the Company's
expense (except for the amount, if any, of any required employee contribution
that Executive would have had to contribute as an active employee under the
plan or program in effect on the date of Termination) continue to cover
Executive (and his dependents) with Welfare Benefits (as in effect on the
date of the Change in Control or, at the option of Executive, on the date of
Termination) for a period of one year following the date of Termination. At
the Company's option, in lieu of providing such Welfare Benefits, the Company
may make a lump sum cash payment equal to the then-present value of the cost
to the Company of the Welfare Benefits.
If during this one-year period, however, another employer provides
Executive with benefits substantially comparable to the benefits provided by
one or more of the Company's plans or programs, the Company shall reduce the
benefits it provides by the benefits provided by the other employer (unless a
lump sum payment has been made by the Company), but only to the extent of the
benefits otherwise payable under the corresponding Company employee welfare
benefit plan or program.
(e) DEATH OF EXECUTIVE. If the Executive dies after Termination
but before receiving all benefits and payments provided for by this Section
5, the Company shall pay the benefits to his spouse, if any, or otherwise to
the personal representative of his estate, unless Executive has otherwise
directed the Company in writing before his death.
(f) EXCLUSIVE SOURCE OF SEVERANCE PAY. Benefits provided under
this Agreement shall replace the amount of any severance payments to which
Executive would otherwise be entitled under any severance plan or policy
generally available to employees of the Company.
<PAGE>
(g) NONSEGREGATION. No assets of the Company need be segregated
or earmarked to represent the liability for benefits payable under this
Agreement. The rights of any person to receive benefits under this Agreement
shall be only those of a general unsecured creditor.
(h) WITHHOLDING. All payments under this Section 5 are subject to
applicable federal and state payroll withholding or other applicable taxes.
6. ARBITRATION
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Seattle, Washington,
in accordance with the Rules of the American Arbitration Association then in
effect. A court in any jurisdiction may enter judgment on the arbitrator's
award.
7. CONFLICT IN BENEFITS
Except for the amount of any severance payments to which Executive would
otherwise be entitled under any severance plan or policy generally available
to employees of the Company, this Agreement shall not adversely affect, limit
or terminate any other agreement or arrangement between Executive and the
Company presently in effect or entered into in the future, including any
employee benefit plan under which Executive is entitled to benefits.
8. TERMINATION
(a) TERMINATION BEFORE A CHANGE IN CONTROL.
(i) At any time before a Change in Control, the Company may
terminate this Agreement upon thirty (30) days' prior written notice, in the
form of a Notice of Termination. This Agreement shall terminate on the
effective date specified in the Notice of Termination. If a Change in
Control occurs before the effective date, however, the Notice of Termination
shall have no force or effect.
(ii) At any time before a Change in Control, Executive may
terminate this Agreement upon thirty (30) days' prior written notice, in the
form of a Notice of Termination. This Agreement shall terminate upon the
effective date specified in the Notice of Termination, even if a Change in
Control occurs before the effective date.
(b) TERMINATION AFTER A CHANGE IN CONTROL. After a Change in
Control, either party may terminate this Agreement upon thirty (30) days'
prior written notice, in the form of a Notice of Termination.
(c) EFFECT OF TERMINATION. Even if this Agreement terminates or
expires, the Company shall remain liable for any rights or payments to which
Executive is entitled under this Agreement that arose before the expiration
or termination .
<PAGE>
9. MISCELLANEOUS
(a) AMENDMENT. This Agreement may be amended only by written
agreement between Executive and the Company.
(b) NO MITIGATION. All payments and benefits to which Executive
is entitled under this Agreement shall be made and provided without offset,
deduction or mitigation on account of income Executive could or may receive
from other employment or otherwise, except as provided in Section 5(d) hereof.
(c) EMPLOYMENT NOT GUARANTEED. Nothing contained in this
Agreement, and no decision as to the eligibility for benefits or the
determination of the amount of any benefits, shall give Executive any right
to be retained in the employ of the Company or rehired, and the Company
specifically reserves its right and power to dismiss or discharge any
employee for any reason. Except as expressly provided in this Agreement, no
employee or any person claiming under or through him shall have any right,
interest, or benefit under this Agreement.
(d) LEGAL EXPENSES. In connection with any litigation,
arbitration or similar proceeding regarding the interpretation or enforcement
of any provision of this Agreement, whether or not instituted by the Company
or Executive, the prevailing party shall be entitled to recover from the
other party all related costs and expenses, including reasonable attorneys'
fees and disbursements. The Company shall pay prejudgment interest on any
money judgment Executive obtains as a result of such proceedings, calculated
at the published commercial interest rate of Seafirst Bank for its best
customers, as in effect from time to time, from the date that the Company
should have paid Executive under this Agreement.
(e) NOTICES. Any notices required under the terms of this
Agreement shall be effective when mailed, postage prepaid, by certified mail
and addressed to, in the case of the Company:
UTILX Corporation
22820 Russell Road, P.O. Box 97009
Kent, WA 98064-9709
Attention: Chief Financial Officer
and to, in the case of Executive:
William M. Weisfield
3629 West Mercer Way
Mercer Island, WA 98040
Either party may designate a different address by giving written notice of
change of address in the manner provided above.
(f) WAIVER; CURE. No waiver or modification of any or all of this
Agreement shall be effective against any party unless the party seeking to be
bound puts in writing and signs the waiver or modification. The parties
shall not construe a waiver of any breach of any
<PAGE>
provision by any party on one occasion as a waiver of any subsequent breach,
and the parties shall not construe a waiver of any right or power by any
party on one occasion as a waiver of, or a bar to, the exercise of that right
or power on any other occasion. The breaching party may cure any breach of
this Agreement within ten (10) days of the date that the breaching party
receives written notice of the breach from the party asserting the breach.
(g) BINDING EFFECT; SUCCESSORS. Subject to the provisions in this
Agreement, nothing in this Agreement shall prevent the consolidation of the
Company with, or its merger into, any other corporation, or the sale by the
Company of all or substantially all of its properties and assets, or the
assignment of this Agreement by the Company in connection with any of the
foregoing actions. This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Company and Executive and their
respective heirs, legal representatives, successors and assigns. If the
Company shall be merged into or consolidated with another entity, the
provisions of this Agreement shall be binding upon and inure to the benefit
of the entity that survives the merger or results from the consolidation.
The Company shall require any successor (whether direct or indirect) to all
or substantially all business or assets of the Company, including the
successor to all or substantially all of the business or assets of any
Subsidiary, division or profit center of the Company, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place. The provisions of this Section 10(g) shall continue to apply to
each subsequent employer of Executive in the event of any subsequent merger,
consolidation or transfer of assets of the subsequent employer.
(h) SEVERABILITY. Any provision of this Agreement that an
arbitrator or court in any jurisdiction holds to be unenforceable or invalid
in any respect shall be ineffective in that jurisdiction to the extent that
it is unenforceable or invalid, without affecting the remaining provisions,
which shall continue in full force and effect. The unenforceability or
invalidity of any provision of this Agreement in one jurisdiction shall not
invalidate or render that provision unenforceable in any other jurisdiction.
(i) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the state of Washington applicable
to contracts made and to be performed there.
<PAGE>
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement
as of the first date written above.
UTILX CORPORATION
By: /s/ Robert E. Runice
------------------------
Title: Director
--------
EXECUTIVE:
/s/ William M. Weisfield
----------------------------
William M. Weisfield
<PAGE>
Schedule A
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CERTAIN DEFINITIONS
As used in this Agreement, and unless the context requires a different
meaning, the following terms have the meanings indicated:
"ACCRUED BENEFITS" means
(a) the aggregate of any compensation previously deferred by Executive
(together with any accrued interest or earnings on that compensation), any
accrued vacation pay, and if the Termination occurs after the end of a Fiscal
Year for which a bonus is payable to Executive, that bonus (in each case to
the extent previously earned and not paid), plus
(b) an amount equal to the product of the bonus paid to Executive the
prior Fiscal Year and a fraction, the numerator of which is the number of
days since the end of the prior Fiscal Year, and the denominator of which is
365.
"BENEFICIAL OWNER" and "BENEFICIAL OWNERSHIP" have the meanings set
forth in Rules 13d-3 and 13d-5 of the Exchange Act.
"BOARD CHANGE" means that a majority of the seats (other than vacant
seats) on the Board have been occupied by individuals who were neither (a)
nominated or appointed by a majority of the Incumbent Directors nor (b)
nominated or appointed by directors so nominated or appointed.
"BUSINESS COMBINATION" means a reorganization, merger or consolidation
or sale of substantially all of the assets of the Company.
"CAUSE" means (a) willful misconduct on the part of Executive that has a
materially adverse effect on the Company and its Subsidiaries, taken as a
whole, (b) Executive's engaging in conduct which could reasonably result in
his conviction of a felony or a crime against the Company or involving
substance abuse, fraud or moral turpitude, or which would materially
compromise the Company's reputation, as determined in good faith by a written
resolution duly adopted by the affirmative vote of not less than two-thirds
of all of the directors who are not employees or officers of the Company, or
(c) unreasonable refusal by Executive to perform the duties and
responsibilities of his position in any material respect. No action, or
failure to act, shall be considered willful or unreasonable if the Executive
did it in good faith and with the reasonable belief that his action or
omission was in the best interests of the Company.
A "CHANGE IN CONTROL" occurs upon the happening of any one of the
following:
(a) A Board Change.
(b) The acquisition by any Person (whether directly or indirectly,
beneficially or of record) of (i) fifteen percent (15%) or more of the
combined voting power of the then-
<PAGE>
outstanding voting securities of the Company, which a majority of the
Incumbent Directors has not approved in advance; or (ii) thirty-three percent
(33%) or more of the combined voting power of the then-outstanding voting
securities of the Company, which a majority of the Incumbent Directors has
approved in advance. The following acquisitions, however, shall not
constitute a Change in Control: (x) any acquisition by the Company, (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any company controlled by the Company, or (z)
any acquisition by any company pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or consolidation,
the conditions described in clauses (i), (ii) and (iii) of the following
subsection (c) are satisfied.
(c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation in which the Company is not the continuing or
surviving corporation, or pursuant to which shares of the Company's Common
Stock are converted into cash, securities or other property, unless following
the reorganization, merger or consolidation all of the following conditions
are satisfied:
(i) all or substantially all of the individuals and entities who were
the beneficial owners of the Company's voting securities immediately before
the reorganization, merger or consolidation then beneficially own, directly
or indirectly, at least sixty-six and two-thirds percent (66-2/3%) of the
then-outstanding shares of common stock of the company resulting from the
reorganization, merger or consolidation and the combined voting power of the
then-outstanding voting securities of the resulting company; and
(ii) no Person (excluding the Company, any employee benefit plan (or
related trust) of the Company or the company resulting from such
reorganization, merger or consolidation and excluding any Person beneficially
owning, directly or indirectly, immediately before the reorganization, merger
or consolidation, thirty-three percent (33%) or more of the Company's voting
securities) beneficially owns, directly or indirectly, thirty-three percent
(33%) or more of either the then-outstanding shares of common stock of the
company resulting from the reorganization, merger or consolidation or the
combined voting power of the then-outstanding voting securities of the
resulting company; and
(iii) at least a majority of the members of the board of directors of
the company resulting from the reorganization, merger or consolidation were
members of the Incumbent Board at the time of the execution of the initial
agreement providing for the reorganization, merger or consolidation.
(d) Approval by the Company's shareholders of:
(i) any plan or proposal for liquidation or dissolution of the Company; or
(ii) any sale, lease, exchange or other transfer in one transaction or a
series of transactions of all or substantially all of the assets of the
Company other than to a company where following such sale or other
disposition (A) all or substantially all of the individuals and entities who
were the beneficial owners of the Company's voting securities immediately
before the sale or other
<PAGE>
disposition then beneficially own, directly or indirectly, at least sixty-six
and two-thirds percent (66-2/3%) of the then-outstanding shares of common
stock of that company and the combined voting power of the then-outstanding
voting securities of that company; (B) no Person (excluding the Company and
any employee benefit plan (or related trust) of the Company or that company
and any Person beneficially owning, directly or indirectly, immediately
before such sale or other disposition, thirty-three percent (33%) or more of
the Company's voting securities) beneficially owns, directly or indirectly,
thirty-three percent (33%) or more of either the then-outstanding shares of
common stock of that company or the combined voting power of the
then-outstanding voting securities of that company, and (c) a majority of the
incumbent board approved at least a majority of the members of the board of
directors of that company at the time of the execution of the initial
agreement or action of the board providing for the sale or other disposition
of assets of the company.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DISABILITY" means that (a) a person has been incapacitated by bodily
injury or physical or mental disease so as to be prevented from performing
his duties with the Company for one hundred twenty (120) days in any twelve
(12) month period, and (b) that person is disabled for purposes of any and
all of the plans or programs of the Company or any Subsidiary that employs
Executive under which benefits, compensation or awards are contingent upon a
finding of disability. The determination of whether Executive is suffering
from such a Disability will be made by a mutually acceptable physician or, if
there is no physician mutually acceptable to the Company and Executive, by a
physician selected by the then Dean of the University of Washington Medical
School.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCISE TAX" means the excise tax, including any interest or penalties on
the excise tax, imposed by Section 4999 of the Code.
"FISCAL YEAR" means the twelve (12) month period ending on December 31 in
each year (or such other fiscal year period the Board establishes).
"GOOD REASON" means, without Executive's express written consent:
(a) (i) the assignment to Executive of duties, or limitation of
Executive's responsibilities, inconsistent with Executive's title,
position, duties, responsibilities and status with the Company or any
Subsidiary that employs Executive, as such duties and responsibilities
existed immediately before the date of the Change in Control, or
(ii) removal of Executive from, or failure to re-elect Executive to,
Executive's positions with the Company or any Subsidiary that employs
Executive immediately before the Change in Control, except in
connection with the involuntary termination of Executive's employment
by the Company for Cause or as a result of Executive's death or
Disability; or
<PAGE>
(b) failure by the Company to pay, or reduction by the Company of,
Executive's annual base salary, as reflected in the Company's payroll
records for Executive's last pay period immediately before the Change
in Control;
(c) failure by the Company to pay, or reduction by the Company of,
Executive's salary and benefits or Welfare Benefits under Section 4(a)
or Section 4(b) of this Agreement;
(d) the relocation of the principal place of Executive's employment to a
location that is more than twenty-five (25) miles further from
Executive's principal residence than Executive's principal place of
employment immediately before the Change in Control; or
(e) the breach of any material provision of this Agreement by the Company,
including, without limitation, failure by the Company to bind any
successor to the Company to the terms and provisions of this Agreement
in accordance with Section 9(g) of this Agreement.
"INCUMBENT DIRECTOR" means a member of the Board who has been either
(a) nominated by a majority of the directors of the Company then in office or
(b) appointed by directors so nominated, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used in Rule 14a-11
of Regulation 14A of the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board.
"NOTICE OF TERMINATION" means a written notice to Executive or to the
Company, as the case may be, which indicates the specific provisions in this
Agreement relied upon and which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for the termination of Executive's
employment constituting a Termination, if any, under the indicated provisions.
"PARACHUTE PAYMENT" means any payment constituting a "parachute payment" as
defined in Section 280G of the Code.
"PERSON" means any individual, entity or group within the meaning of
Section 3(a)(9) or of Section 13(d)(3) (as in effect on the date of this
Agreement) of the Exchange Act.
"SUBSIDIARY" has the meaning set forth in Rule 12b-2 of the Exchange Act.
"TERMINATION" means, following any Change in Control by the Company, (a)
the involuntary termination of the employment of Executive for any reason
other than death, Disability or for Cause or (b) the termination of
employment by Executive for Good Reason.
"VOTING SECURITIES" means the voting securities entitled to vote
generally in the election of directors.
<PAGE>
EXHIBIT 99.1
[LOGO]
UTILX Corporation
22820 Russell Road Larry D. Pihl
P.O. Box 97009 Vice President & CFO
Kent, Washington 98064-9709 (253) 395-4596
Tel: 253/395-0200
Fax: 253/395-1040
PRESS RELEASE
-------------
UTILX CORPORATION ANNOUNCES WILLIAM M. WEISFIELD ELECTED PRESIDENT AND CEO
--------------------------------------------------------------------------
Kent, WA - November 20, 1998 - UTILX Corporation (Nasdaq: UTLX) announced
today that its Board of Directors had elected its Chairman, William M.
Weisfield to the additional, permanent position of President and CEO. Mr.
Weisfield has served on the Company's Board of Directors since January 1995
and as its Chairman since January 1996 and has been Acting President and CEO
since October 30, 1998. Mr. Weisfield has previously been involved in
several successful turn-arounds in the Puget Sound area.
The Weisfield name is well known for the chain of jewelry stores in the
western U.S., for which Mr. Weisfield served as President and CEO in the
1970s. Currently, Mr. Weisfield is Senior Vice President of Benaroya Capital
Corporation, a privately held, rapidly growing company specializing in
development of Pacific Northwest real estate and investment in a wide range
of U.S. operating companies. Mr. Weisfield has previously served as COO for
Robbins Company, the largest underground tunnel boring manufacturing company
in the world, and as President and CEO of Cornerstone Columbia Development
Company, a real estate joint venture between Weyerhaeuser and Portland
General Electric. Previous positions included President and CEO of Northwest
Building Company, a real estate company, Brittsport Ltd., a Hong Kong based
clothing manufacturer, and Quorum Corporation, a restaurant holding company.
Weisfield has both a bachelor's degree and a law degree from the University
of Washington and is a member of the Washington State Bar Association.
"I am pleased to be able to step into this position on a permanent basis,"
said Weisfield. "I see a great deal of potential in this business and have a
high degree of confidence in the UTILX employees and their ability to serve
our customers."
UTILX Corporation provides critical services for the installation and
renovation of underground utilities in the U.S. and Canada through a network
of regional sales and service centers. The Company also conducts service
operations throughout Europe through its wholly owned subsidiary in the
United Kingdom.
NOTE: TRANSMITTED ON BUSINESSWIRE ON NOVEMBER 20, 1998 AT 12:05PM (PACIFIC)
