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Exhibit 99.(e)(11)
EMPLOYMENT AGREEMENT
between
UTILX CORPORATION
and
GLEN J. BERTINI
Dated as of September 1, 1993
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This Employment Agreement (this "Agreement"), dated as of September 1,
1993, is between UTILX CORPORATION, a Delaware corporation (the "Company"), and
Glen J. Bertini (the "Executive").
1. EMPLOYMENT
1.1. Scope of Employment
The Company will employ the Executive and the Executive will accept
employment by the Company as its Program Director/CableCure responsible for,
among other things, management of the Company's CableCure service operations,
and, subject to the general supervision of the Board as required by the General
Corporation Law of Delaware, such other duties and responsibilities as are not
inconsistent with the express terms of this Agreement. Such employment may be
with the Company or any of its principal operating subsidiaries, as appropriate
to the management structure developed by the Company.
1.2. Location
The Executive's services shall be performed at the Company's current
headquarters or any office which is subsequently designated as the headquarters
of the Company and is less than 20 miles from such current location, except as
may be otherwise mutually agreed by the Executive and the Company.
2. ATTENTION AND EFFORT
During the Employment Period (as defined below), and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
will devote all of his productive time, ability, attention and effort to the
business and affairs of the Company and the discharge of the responsibilities
assigned to him hereunder, and will use his best efforts to perform faithfully
and efficiently such responsibilities. It shall not be a violation of this
Agreement for the Executive to (a) serve on corporate, civic or charitable
boards or committees, (b) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (c) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities in accordance with this Agreement. It is expressly
understood and agreed that to the extent any such activities have been conducted
by the Executive prior to the Employment Period, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
during the Employment Period shall not thereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.
3. TERM; EMPLOYMENT PERIOD
The term of this Agreement, unless otherwise terminated pursuant to Section
7 hereof or extended pursuant to this Section 3, shall be for one year
commencing September 1, 1993 (the "Employment Period"); provided that,
commencing on September 1, 1994, and on each successive annual anniversary
thereof (each such date being a "Renewal Date"), the Employment Period shall be
automatically extended so as to terminate one year from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive
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or the Executive shall give notice to the Company that the Employment Period
shall not be so extended.
4. COMPENSATION
During the term of this Agreement, the Company agrees to pay or cause to be
paid to the Executive, and the Executive agrees to accept in exchange for the
services rendered hereunder by him, the following compensation:
4.1. Salary
The Executive's compensation shall consist of an annual base salary (the
"Annual Base Salary") of $66,000 before all customary payroll deductions. The
Annual Base Salary shall be paid in substantially equal installments and at the
same intervals as other officers of the Company are paid. The Board or the
Compensation Committee of the Board (the "Compensation Committee") shall review
the Annual Base Salary at least annually and shall determine any increases in
future years.
4.2. Bonus
The Executive may be entitled to receive, in addition to the Annual Base
Salary, an annual bonus in an amount to be determined by the Board or the
Compensation Committee, in its sole discretion (the "Annual Bonus"). For the
fiscal year ended March 31, 1994, the Executive's Annual Bonus, if any, will be
calculated in accordance with the Company's 1994 Executive Incentive Plan, as
modified by the Board or the Compensation Committee from time to time.
5. BENEFITS
5.1. Incentive, Retirement and Welfare Benefit Plans; Vacation
The Executive shall be entitled to participate, subject to and in
accordance with applicable eligibility requirements, in such employee benefit
programs as shall be provided to other executives of the Company and its
affiliated companies from time to time during the Employment Period by action of
the Board (or any person or committee appointed by the Board to determine
employee benefit programs and other emoluments), including, without limitation,
paid vacations; the Voluntary Investment Plan and any other incentive, savings
and retirement plan, practice, policy or program; and all welfare benefit plans,
practices, policies and programs (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and programs).
5.2. Expenses
The Executive shall be entitled to receive prompt reimbursement for all
reasonable employment expenses incurred by him in accordance with the policies,
practices and procedures of the Company and its affiliated companies in effect
for the executives of the Company and its affiliated companies during the
Employment Period.
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6. STOCK PLANS
The Executive shall be eligible to participate, subject to and in
accordance with applicable eligibility requirements, in the Company's employee
stock plans to the extent such plans are available for executives of the Company
and its affiliated companies from time to time during the Employment Period, as
determined by the Board or the Compensation committee.
7. TERMINATION
Employment of the Executive pursuant to this Agreement may be terminated as
follows but, in any case, the noncompetition and nondisclosure provisions set
forth in Sections 10 and 11 hereof shall survive the termination of this
Agreement and the termination of the Executive's employment hereunder:
7.1. By the Company or the Executive
Upon giving Notice of Termination (as defined below), the Company may
terminate the employment of the Executive with or without Cause (as defined
below), and the Executive may terminate his employment for Good Reason (as
defined below) or for any reason, at any time during the Employment Period.
7.2. Automatic Termination
This Agreement and the Executive's employment hereunder shall terminate
automatically upon the death or Total Disability of the Executive. The term
"Total Disability" as used herein shall mean the Executive's inability (with or
without such accommodation as may be required by law and which places no undue
burden on the Company), as determined in good faith by the Board, to perform the
duties set forth in Section 1.1 hereof for a period or periods aggregating 120
calendar days in any 12-month period as a result of physical or mental illness,
loss of legal capacity or any other cause beyond the Executive's control, unless
the Executive is granted a leave of absence by the Board. The Executive and the
Company hereby acknowledge that the Executive's ability to perform the duties
specified in Section 1.1 hereof is of the essence of this Agreement.
7.3. Notice of Termination
Any termination by the Company or by the Executive shall be communicated by
Notice of Termination to the other party given in accordance with Section 13
hereof. The term "Notice of Termination" shall mean a written notice which (a)
indicates the specific termination provision in this Agreement relied upon and
(b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated. The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any right
of the Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the Executive's or
the Company's rights hereunder.
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7.4. Date of Termination
"Date of Termination" means (a) if the Executive's employment is terminated
by reason of death, at the end of the calendar month in which the Executive's
death occurs, (b) if the Executive's employment is terminated by reason of Total
Disability, immediately upon a determination by the Company of the Executive's
Total Disability, and (c) in all other cases, five days after the date of
mailing of the Notice of Termination. The Executive's employment and
performance of services will continue during such five-day period; provided,
however, that the Company may, upon notice to the Executive and without reducing
the Executive's compensation during such period, excuse the Executive from any
or all of his duties during such period.
8. TERMINATION PAYMENTS
In the event of termination of the Executive's employment, 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 for Other Than Cause or by the Executive
for Good Reason
If the Company terminates the Executive's employment other than for Cause
or the Executive terminates his employment for Good Reason prior to the end of
the Employment Period, the Executive shall be entitled to:
(a) receive payment of the following accrued obligations (the "Accrued
Obligations"):
(i) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid;
(ii) the product of (x) the Annual Bonus payable with respect to the
fiscal year in which the Date of Termination occurs, or, if such Annual
Bonus is not determinable on the Date of Termination, the Annual Bonus
payable with respect to the fiscal year immediately preceding the fiscal
year in which the Date of Termination occurs and (y) a fraction, the
numerator of which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365; and
(iii) any compensation previously deferred by the Executive (together
with accrued interest or earnings thereon, if any) and any accrued vacation
pay, in each case to the extent not theretofore paid;
(b) for one year after the Date of Termination, the Company shall continue
benefits to the Executive and/or the Executive's family at least equal to those
which would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 5 if the Executive's employment had
not been terminated; provided, however, that if the Executive becomes reemployed
with another employer and is eligible to receive medical or other welfare
benefits under another employer-provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan during such
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applicable period of eligibility (such continuation of such benefits for the
period herein set forth shall be hereinafter referred to as "Welfare Benefit
Continuation"); and
(c) an amount as severance pay equal to one year's Annual Base Salary
based on the Annual Base Salary established by the Board or the Compensation
Committee for the fiscal year in which the Date of Termination occurs, provided,
that the Executive is entitled to receive such severance pay only so long as
the: Executive has not become reemployed with another employer, and provided
further, that the Executive shall not be required to accept such other
employment.
8.2. Termination for Cause or Other Than For Good Reason
If the Executive's employment shall be terminated by the Company for Cause
or by the Executive for other than Good Reason during the Employment Period,
this Agreement shall terminate without further obligation to the Executive other
than the obligation to pay to the Executive his Annual Base Salary through the
Date of Termination plus the amount of any compensation previously deferred by
the Executive, in each case to the extent theretofore unpaid.
8.3. Expiration of Term
In the case of a termination of the Executive's employment as a result of
the expiration of the term of this Agreement, the Executive shall not be
entitled to receive any payments hereunder, other than the Accrued Obligations.
8.4. Termination Because of Death or Total Disability
If the Executive's employment is terminated by reason of the Executive's
death or Total Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive or his legal
representatives under this Agreement, other than for payment of Accrued
Obligations (which shall be paid to the Executive's estate or beneficiary, as
applicable in the case of the Executive's death), and the timely payment or
provision of the Welfare Benefit Continuation.
8.5. Termination in Connection With a Change of Control
Notwithstanding any other provision of this Agreement, if the Executive
terminates his employment for any reason, or his employment is terminated for
any reason other than cause by the Company, effective within 180 days of a
Change of Control of the Company, the Executive shall be entitled to receive the
payments set forth in Section 8.1; provided, however, that if in such case
either the Company or the Executive receives confirmation from the Company's
certified public accounting firm, or such other accounting firm retained as
independent certified public accountants for the Company, that any payment by
the Company under this Section 8 would be considered to be an "excess parachute
payment" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor statute then in effect, then the aggregate
payments by the Company pursuant to this Section 8 shall be reduced to an amount
which is $1.00 less than the smallest sum which would be deemed to be such an
"excess parachute payment, and, if permitted by applicable law, such reduction
shall be made to the last payment due hereunder; provided, further, that, if
permitted by applicable law, no such
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adjustment shall be made in any year in which the Executive authorizes a
reduction in the payment otherwise due the Executive hereunder by an amount
equal to any loss to be incurred by the Company because such payments would not
be deductible by the Company as a business expense for income tax purposes for
the reason that such payments constitute an "excess parachute payment" in that
year.
8.6. Definition of Change of Control
A "Change of Control" of the Company shall have the meaning ascribed to it
in Appendix A to this Agreement, which is incorporated herein by this reference.
8.7. Payment Schedule
All payments under this Section 8 shall be made to the Executive at the
same intervals as such payments were made to him immediately prior to
termination.
8.8. Cause
For purposes of this Agreement, "Cause" means cause given by the Executive
to the Company and shall include, without limitation, the occurrence of one or
more of the following events:
(a) Failure or refusal to carry out any lawful duties of the Executive
described in Section 1.1 hereof or any directions of the Board reasonably
consistent with the duties herein set forth to be performed by the Executive;
(b) Violation by the Executive of a state or federal criminal law
involving the commission of a crime against the Company or any other criminal
act involving moral turpitude;
(c) Current abuse by the Executive of alcohol or controlled substances;
deception, fraud, misrepresentation or dishonesty by the Executive; any incident
materially compromising the Executive's reputation or ability to represent the
Company with the public; any act or omission by the Executive which
substantially impairs the Company's business, good will or reputation; or any
other misconduct; or
(d) Any other material violation of any provision of this Agreement.
8.9. Good Reason
For purposes of this Agreement, "Good Reason" means
(a) The assignment to the Executive of any duties inconsistent in any
respect with the Executive's position, authority, duties or responsibilities as
contemplated by Section 11 hereof or any other action by the Company which
results in a diminution in such position, authority, duties or responsibilities,
excluding for this purpose an isolated and inadvertent action not taken in bad
faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
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(b) Any failure by the Company to comply with any of the provisions of
Section 4 hereof, other than an isolated and inadvertent failure not occurring
in bad faith and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(c) The Company's requiring the Executive to be based at any office or
location other than that described in Section 1.2 hereof; or
(d) Any failure by the Company to comply with and satisfy Section 14
hereof, provided that the Company's successor has received at least ten days'
prior written notice from the Company or the Executive of the requirements of
Section 14 hereof.
9. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS
In order to induce the Company to enter into this Agreement, the Executive
represents and warrants to the Company that neither the execution nor the
performance of this Agreement by the Executive will violate or conflict in any
way with any other agreement by which the Executive may be bound.
10. NONCOMPETITION AND NONSOLICITATION
10.1. Applicability
This Section 10 and Section 11 hereof shall survive the termination of the
Executive's employment with the Company or the expiration of the term of this
Agreement.
10.2. Scope of Competition
The Executive agrees that he will not, during his employment and for a
period of two years from the date on which his employment with the Company
terminates or this Agreement expires, whichever is later, directly or indirectly
be employed by, consult with or otherwise perform services for, own, manage,
operate, join, control or participate in the ownership, management, operation or
control of or be connected with, in any manner, any Competitor. A "Competitor"
shall include any entity which, directly or indirectly, competes with the
Company or produces, markets, distributes or otherwise derives benefit from the
production, marketing or distribution of products or services which compete with
products then produced or services then being provided or marketed by the
Company or the feasibility for: production of which the Company is then actually
studying, or which is preparing to market or is developing products or services
that will be in competition with the products or services then produced or being
studied or developed by the Company, in each case within the geographical area
described in Appendix B hereto, unless released from such obligation in writing
by the Board. The Executive shall be deemed to be related to or connected with
a Competitor if such Competitor is (a) a partnership in which he is a general or
limited partner or employee, (b) a corporation or association of which he is a
shareholder, officer, employee or director, or (c) a partnership, corporation or
association of which he is a member, consultant or agent; provided, however,
that nothing herein shall prevent the purchase or ownership by the Executive of
shares which constitute less than five percent of the outstanding equity
securities of a publicly or privately held corporation, if the Executive has no
other relationship with such corporation.
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10.3. Scope of Nonsolicitation
The Executive shall not directly or indirectly solicit or entice any
employee or consultant of the Company to cease his or her relationship with the
Company or solicit, influence, entice or in any way divert any customer,
distributor, partner, joint venturer or supplier of the Company to do business
with or in any way become associated with any Competitor. This Section 10.3
shall apply during the time period and geographical area described in Section
10.2 hereof.
10.4. Equitable Relief
The Executive acknowledges that the provisions of this Section 10 are
essential to the Company, that the Company would not enter into this Agreement
if it did not include this Section 10 and that damages sustained by the Company
as a result of a breach of this Section 10 cannot be adequately remedied by
damages, and the Executive agrees that the Company, notwithstanding any other
provision of this Agreement, in addition to any other remedy it may have under
this Agreement or at law, shall be entitled to injunctive and other equitable
relief to prevent or curtail any breach of any provision of this Agreement,
including, without limitation, this Section 10 and Section 11 hereof.
Executive expressly represents and agrees that he has had adequate time and
opportunity to consult with his own counsel and advisors with respect to this
Agreement, specifically with respect to this Section 10. Executive acknowledges
that the restrictions in this Section 10 are reasonable in time, scope and
territory, are designed to eliminate competition which would otherwise be unfair
to the Company, do not stifle his exercise of skill and experience, would not
bar his sole means of support, are fully required to protect the Company's
legitimate interests and do not Confer a benefit on the Company disproportionate
to the detriment to Executive.
10.5. Effect of Violation
The Executive and the Company agree that additional consideration has been
given for the Executive's entering into the noncompetition and nonsolicitation
provisions of this Agreement, such additional consideration including, without
limitation, certain provisions for termination payments pursuant to Section 8
hereof. Violation by the Executive of this Section 10 or of Section 11 hereof
shall relieve the Company of any obligation it may have to make termination
payments, but shall not relieve the Executive of his obligations under this
Section 10 or Section 11 hereof.
10.6. Definition of the Company
For purposes of Sections 10.2 and 10.3 hereof, "the Company" shall include
all subsidiaries of the Company, any parent corporation of the Company and any
business ventures in which the Company, its subsidiaries or any such parent
corporation may participate.
10.7. Tolling
In the event Executive breaches any provisions of this Section 10, such
breach shall toll the remainder of the one-year period set forth in Section 10.2
hereof, from the date the breach
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commences until it fully ceases, and shall relieve the Company of all
obligations to the Executive under this Agreement.
11. NONDISCLOSURE; RETURN OF MATERIALS
11.1. Nondisclosure
Except as required by his employment with the Company, the Executive will
not, at any time during the term of employment by the Company, or at any time
thereafter, directly, indirectly or otherwise, use, communicate, disclose,
disseminate, lecture upon or publish articles relating to any confidential,
proprietary or trade secret information without the prior written consent of the
Company. In this Section 11, the term "employment" means employment as a
regular independent subcontractor or consultant, as well as a full-time or
regular part-time employee of the Company.
All documents, records, notebooks, notes, memoranda, drawings or other
documents made or compiled by the Executive at any time, or in his possession,
including any and all copies thereof, shall be the property of the company and
shall be held by the Executive in trust and solely for the benefit of the
Company, and shall be delivered to the Company by the Executive upon termination
of employment or at any other time upon request by the Company.
The Executive understands that the Company will be relying on this
Agreement in continuing the Executive's employment, paying him compensation,
granting him any promotions or raises, or entrusting him with any information
which helps the Company compete with others.
11.2. Assignment
The Executive will disclose promptly to the Company in writing all ideas,
inventions and discoveries conceived of and/or developed in whole or in part
during the term of his employment with the Company and relating to any of the
Company's business, whether or not conceived or developed during working hours
or on the property of the Company. Such ideas, inventions and discoveries shall
be the property of the Company and it shall have the right to any patents which
may be issued with respect to the same. The Executive will also, and hereby
does, assign to the Company and/or its nominees all his right, title and
interest in such ideas, inventions and discoveries and all rights, title and
interest in any patent applications for patents, assignments and other papers,
and will do such things as the Company may require for establishing and
protecting its ownership and to effectuate the foregoing, either during his
employment or thereafter. There shall be excluded from the operations of this
Agreement the Executive's ideas, inventions and discoveries, patented and
unpatented, which were made prior to the Executive's employment by the Company
and which are specifically listed in Appendix C.
12. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than clause (b), (c) or (d) of Section 8.8 hereof,
before such action is taken, the party asserting the breach of this Agreement
shall give the other party at least ten days' prior written notice of the
existence and the nature of such breach before taking further action hereunder
and shall give the
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party purportedly in breach of this Agreement the opportunity to correct such
breach during the ten-day period.
13. FORM OF NOTICE
Every notice required by the terms of this Agreement shall be given in
writing by serving the same upon the party to whom it was addressed personally
or by registered or certified mail, return receipt requested, at the address set
forth below or at such other address as may hereafter be designated by notice
given in compliance with the terms hereof:
If to the Executive: Glen J. Bertini
6820 Water Street N.E.
Tacoma, Washington 98422
If to the Company: UTILX Corporation
22404 - 66th Avenue South
Kent, Washington 98032
Attn: General Counsel
or such other address as shall be provided in accordance with the terms hereof.
Except as set forth in Section 7.4 hereof, if notice is mailed, such notice
shall be effective upon mailing.
14. ASSIGNMENT
This Agreement is personal to the Executive and shall not be assignable by
the Executive. The Company may assign its rights hereunder to (a) any
corporation resulting from any merger, consolidation or other reorganization to
which the Company is a party or (b) any corporation, partnership, association or
other person to which the Company may transfer all or substantially all of the
assets and business of the Company existing at such time. All the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all the
business and/or assets of the Company to assume expressly 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. As used in
this Agreement, "Company" shall mean UTILX Corporation and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
15. WAIVERS
No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, titles, interests or remedies hereunder, and no
course of dealing or performance with respect thereto, shall constitute a waiver
thereof. The express waiver by a party hereto of any right, title, interest or
remedy in a particular instance or circumstance shall not constitute a waiver
thereof in any other instance or circumstance. All rights and remedies shall be
cumulative and not exclusive of any other rights or remedies.
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16. AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any
provision of this Agreement, nor consent to any departure therefrom by either
party hereto, shall in any event be effective unless the same shall be in
writing, specifically identifying this Agreement and the provision intended to
be amended, modified, waived, terminated or discharged and signed by the Company
and the Executive, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement shall be varied,
contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing add
signed by the Company and the Executive.
17. APPLICABLE LAW
This Agreement shall in all respects, including all matters of
construction, validity and performance, be governed by, and construed and
enforced in accordance with, the laws of the state of Washington, without regard
to any rules governing conflicts of laws.
18. SEVERABILITY
If any provision of this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, for any reason, including, without
limitation, the duration of such provision, its geographical scope or the extent
of the activities prohibited or required by it, then, to the full extent
permitted by law (a) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intent of the parties hereto as nearly as may be possible, (b) such
invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or
arbitrator having jurisdiction thereover shall have the power to reform such
provision to the extent necessary for such provision to be enforceable under
applicable law.
19. ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire
agreement between the Company and the Executive with respect to the subject
matter hereof and all prior or contemporaneous oral or written communications,
understandings or agreements between the Company and the Executive with respect
to such subject matter are hereby superseded and nullified in their entireties.
20. WITHHOLDING
The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation.
21. COUNTERPARTS
This Agreement may be executed in counterparts, each of which counterpart
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EXECUTIVE
/s/
-----------------------------------------
Glen J. Bertini
Date
-------------------------------------
UTILX CORPORATION
/s/
-----------------------------------------
Granville W. Holman, President
Date
-------------------------------------
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APPENDIX A TO
EMPLOYMENT AGREEMENT BETWEEN
UTILX CORPORATION AND GLEN J. BERTINI
For purposes of this Agreement, a "Change of Control" shall mean:
(a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats) of the seats on the Company's
Board are occupied by individuals who were neither (i) nominated by a majority
of the Incumbent Directors nor (ii) appointed by directors so nominated. An
"Incumbent Director" is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) 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 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as hereinafter defined) other than the
Board; or
(b) The acquisition by any individual, entity or group (within the meaning
of Section 13(d) (3) or 14(d) (2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of (i) 20% or more of either (A) the then outstanding shares of
Common Stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"), in the case of either (A) or (B) of this clause (i)
which acquisition is not approved in advance by a majority of the Incumbent
Directors, or (ii) 33% or more of either (A) the Outstanding Company Common
Stock or (B) the Outstanding Company Voting Securities, in the case of either
(A) or (B) of this clause (ii), which acquisition is approved in advance by a
majority of the Incumbent Directors; provided, however, that the following
acquisitions shall not constitute a Change of 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 corporation controlled by the
Company or (z) any acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and (iii) of
subsection (c) of this Section 2 are satisfied; or
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, in each case, unless, immediately following such
reorganization, merger or consolidation, (i) more than 60% of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same
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proportion as their ownership immediately prior to such reorganization, merger
or consolidation of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding the
Company, any employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the Outstanding Company
Common Stock or the Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors, and (iii) at least a majority of the
members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were the Incumbent Directors at the time
of the execution of the initial agreement providing for such reorganization,
merger or consolidation; or
(d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all the assets of the Company, other than to a
corporation with respect to which immediately following such sale or other
disposition, (A) more than 60% of, respectively, the then outstanding, shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common Stock
and the Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding the Company, any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 33% or more of
the Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 33%
or more of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board of directors
of such corporation were approved by a majority of the Incumbent Directors at
the time of the execution of the initial agreement or action of the Board
providing for such sale or other disposition of assets of the Company.
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APPENDIX B
EMPLOYMENT AGREEMENT BETWEEN
UTILX CORPORATION AND GLEN J. BERTINI
Noncompetition Territory
------------------------
All of North America, South America, Central America, Europe, the United
Kingdom and Asia.
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APPENDIX C
EMPLOYMENT AGREEMENT BETWEEN
UTILX CORPORATION AND GLEN J. BERTINI
Excluded Inventions
-------------------
1. Locating faults, splices or other leaks in power cables using a tracer
gas.
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