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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
29th day of June, 1999, by and between Gulf Wide Industries, L.L.C., a Louisiana
limited liability company (the "COMPANY"), and John M. Engquist, an individual
resident of the State of Louisiana (the "EMPLOYEE").
W I T N E S S E T H :
WHEREAS, the Company, Head & Engquist Equipment, L.L.C., a Louisiana
limited liability company and wholly owned subsidiary of the Company ("HEAD &
ENGQUIST"), and their respective subsidiaries (collectively, the "COMPANY
GROUP") are engaged in the business of selling, renting and servicing industrial
and construction equipment (the "BUSINESS"); and
WHEREAS, the Company wishes to employ Employee as its Chief Executive
Officer, and Employee wishes to accept such employment, on the following terms
and conditions.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I
EMPLOYMENT; TERM
SECTION 1.01 EMPLOYMENT. The Company hereby employs Employee and
Employee accepts employment by the Company, on the terms and conditions
contained in this Agreement.
SECTION 1.02 TERM. The employment of Employee pursuant hereto shall
commence on the date of this Agreement (the "EFFECTIVE DATE"), and shall
remain in effect for an initial term expiring on the fifth anniversary of the
Effective Date (the "INITIAL TERM"), unless sooner terminated pursuant to the
provisions of Article VI. After the Initial Term, the Agreement and the
employment of Employee hereunder shall continue and remain in effect until
the thirtieth day after either party has given the other party written notice
of its intent to terminate this Agreement, unless sooner terminated pursuant
to the provisions of Article VI. The period of time between the Effective
Date and the termination of this Agreement pursuant to its terms is herein
referred to as the "TERM."
ARTICLE II
DUTIES AND EXTENT OF SERVICE
Employee shall serve the Company as its Chief Executive Officer and
shall perform such services and duties for the Company Group as the Board of
Directors of the Company may assign or delegate to him from time to time
commensurate with Employee's education and experience or as provided in the
Operating Agreement of the Company dated as of June 29, 1999 (as it may be
amended from time to time, the "OPERATING AGREEMENT"). So long as Employee
shall serve the Company as its Chief Executive Officer, Employee shall also
serve as a member of the Board of
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Directors of the Company. Employee shall devote his full business time,
attention, skill and effort exclusively to the performance of his duties for
the Company Group and the promotion of its interests. During the Term it
shall not be a violation of this Agreement for Employee to (i) serve on
corporate, civil or charitable boards or committees, (ii) deliver lectures
and fulfill speaking engagements, or (iii) manage personal investments for so
long as such activities do not materially interfere with the performance of
Employee's responsibilities in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such activities
have been conducted by Employee prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in nature
and scope thereto) subsequent to the Effective Date shall not thereafter be
deemed to interfere with the performance of the Employee's responsibilities
to the Company. Employee's duties hereunder shall be performed at the
Company's current location at 11100 Mead Road, Baton Rouge, East Baton Rouge
Parish, Louisiana, or only at any other office or location of the Company
Group within thirty (30) miles of said current location.
ARTICLE III
COMPENSATION
SECTION III.1 BASE SALARY. Employee shall be paid base salary (the "BASE
SALARY") of $300,000 per annum, to be increased on January 1 of each year by an
amount equal to 5% of the Base Salary for the prior year, less deductions and
withholdings required by applicable law. The Base Salary shall be paid to
Employee bi-weekly.
SECTION III.2 BONUS. Employee shall receive a bonus ("BONUS") in such
amount as may be proposed by the officers of the Company and approved annually
by the Company's Board of Directors.
SECTION III.3 INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition to Base
Salary, Employee shall be entitled to participate during the Term in all
incentive, savings and retirement plans, practices, policies and programs,
which, in the aggregate, shall provide the Employee with compensation, benefits
and reward opportunities at least as favorable as those in effect as of the
Effective Date.
SECTION III.4 WELFARE BENEFIT PLANS. During the Term, Employee and/or
Employee's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practices, policies
and programs provided by the Company to other key employees, including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance plans
and programs.
SECTION III.5 EXPENSES. During the Term, Employee shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by Employee in
accordance with the policies, practices and procedures of the Company in effect,
as of the Effective Date, for Employee.
SECTION III.6 FRINGE BENEFITS. During the Term, Employee shall be entitled
to fringe benefits, including use of two (2) automobiles in furtherance of
Employee's position and duties and payment of related expenses and payment of
any professional dues and dues for memberships, in
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accordance with the plans, practices, programs and policies of the Company in
effect, as of the Effective Date, for Employee.
SECTION III.7 OFFICE AND SUPPORT STAFF. During the Term, Employee shall be
entitled to an office or offices of a size and with furnishings and other
appointments and to secretarial and other assistance, at least equal to that
provided to the Employee by the Company as of the Effective Date.
SECTION III.8 VACATION. During the Term, Employee shall be entitled to
paid vacation of three (3) weeks in accordance with the plans, policies,
programs and practices of the Company in effect as of the Effective Date for
Employee.
ARTICLE IV
NONDISCLOSURE
SECTION IV.1 DEFINITION. "CONFIDENTIAL INFORMATION" shall mean all
business information (whether or not in written form) which relates to the
Company Group, any of its affiliates or their respective businesses or products
and which is not to the public generally, including but not limited to technical
notebooks and technical records; technical reports; trade secrets; unwritten
knowledge and "know-how"; formulas; operating instructions; training manuals;
customer lists; customer buying records and habits; product sales records and
documents, and product development, marketing and sales strategies; territory
listings; market surveys; marketing plans; profitability analyses; product cost;
long-range plans; information relating to pricing, competitive strategies and
new product development; information relating to any forms of compensation and
other personnel-related information; contracts; and supplier lists.
SECTION IV.2 ACCESS. The parties hereto agree that during the course of
his employment by the Company, Employee will have access to, and will gain
knowledge with respect to, Confidential Information. The parties acknowledge
that unauthorized disclosure or misuse of such Confidential Information would
cause irreparable damage to the Company Group. Accordingly, Employee agrees to
the nondisclosure covenants in this Article IV.
SECTION IV.3 NONDISCLOSURE. Employee agrees that he shall not (except as
may be required by law), without the prior written consent of the Company during
his employment with the Company under this Agreement, and any extension or
renewal hereof, and thereafter for so long as it remains Confidential
Information, use or disclose or knowingly permit any unauthorized person to use,
disclose or gain access to, any Confidential Information; PROVIDED, that
Employee may disclose Confidential Information to a person to whom disclosure is
reasonably necessary or appropriate in connection with the performance by
Employee of his duties under this Agreement.
SECTION IV.4 RETURN OF DOCUMENTS. Upon termination of this Agreement for
any reason, Employee shall return to the Company the original and all copies of
all documents and correspondence in his possession relating to the business of
the Company Group or any of its affiliates and shall not be entitled to any lien
or right of retention in respect thereof.
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ARTICLE V
NONCOMPETITION
SECTION V.1 DEFINITIONS. (a) "NONCOMPETE PERIOD" or "NONSOLICITATION
PERIOD" shall mean the period beginning on the Effective Date and ending on the
third anniversary of the date of termination of Employee's employment with the
Company; PROVIDED, that if Employee's employment hereunder is terminated as a
result of the occurrence of a No Cause Termination Event (as defined below),
such period shall end on the later of (x) the second anniversary of the date of
termination of Employee's employment with the Company and (y) the scheduled
expiration cf the Term.
(b) "TERRITORY" shall mean (i) the States of Texas, Mississippi,
Arkansas and Tennessee, and the parishes of East Baton Rouge, Ascension,
Jefferson, Orleans, Rapides, Calcasieu, Caddo, Bossier and Ouachita of the State
of Louisiana, and (ii) without limiting the foregoing, the areas within 200
miles of the area where the Company Group or its affiliates conducted its
business within one year prior to termination of Employee's employment including
any areas where customers or actively sought customers of the Company Group were
present.
SECTION V.2 TRADE NAME. During the Noncompete Period, Employee agrees
that he shall not, directly or indirectly, own, manage, operate, join, control
or participate in the ownership, management, operation or control of any
business conducted under any corporate or trade name of the Company or any name
similar thereto without the prior written consent of the Company.
SECTION V.3 NONCOMPETITION. During the Noncompete Period, and to the
fullest extent permitted under applicable law, Employee agrees that he shall
not, directly or indirectly, own, manage, operate, join, control or participate
in the ownership, management, operation or control of any business engaged in
the activities of selling, renting, and servicing industrial and construction
equipment (except with regard to B C Equipment Sales, Inc., the ownership of a
less than 5% stock interest in a publicly traded corporation, or owning an
equity interest in the Company).
SECTION V.4 NONSOLICITATION. During the Nonsolicitation Period, Employee
agrees that he shall not, in any manner (other than as an employee of or a
consultant to the Company or as a shareholder of B C Equipment Sales, Inc.),
directly or indirectly:
(a) solicit or attempt to solicit any business from any of the
Company Group's customers, including actively sought prospective customers,
with whom Employee had material contact during Employee's employment
hereunder for purposes of providing products or services that are
competitive with the Company Group's products or services; or
(b) solicit or attempt to solicit for employment, on Employee's
behalf or on behalf of any other person, firm or corporation, any other
employee of the Company Group or its affiliates with whom Employee had
material contact during his employment hereunder.
SECTION V.5 SEVERABILITY. If a judicial determination is made that any
of the provisions of this Article V constitutes an unreasonable or otherwise
unenforceable restriction against Employee, the provisions of this Article V
shall be rendered void only to the extent that such judicial
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determination finds such provisions to be unreasonable or otherwise
unenforceable. In this regard, the parties hereby agree that any judicial
authority construing this Agreement shall be empowered to sever any portion of
this Territory, any prohibited business activity or any time period from the
coverage of this Article V and to apply the provisions of this Article V to the
remaining portion of the Territory, the remaining business activities and the
remaining time period not so severed by such judicial authority. Moreover,
notwithstanding the fact that any provision of this Article V is determined not
to be specifically enforceable, the Company shall nevertheless be entitled to
recover monetary damages as a result of Employee's breach of such provision. The
time period during which the prohibitions set forth in this Article V shall
apply shall be tolled and suspended for a period equal to the aggregate quantity
of the time during which Employee violates such prohibitions in any respect.
SECTION V.6 COVERAGE. Employee agrees that the foregoing territorial and
time limitations are reasonable and properly required for the adequate
protection of the business and the goodwill of the Company Group.
ARTICLE VI
TERMINATION OF EMPLOYMENT
The employment of Employee hereunder shall terminate prior to the scheduled
expiration of the Term upon the occurrence of any of the following events:
(a) the death or total disability of Employee (total disability
meaning the failure of Employee to perform his normal required services
hereunder for a period of three consecutive months during the term hereof
by reason of Employee's mental or physical disability) (a "DISABILITY
TERMINATION EVENT");
(b) termination by the Company of Employee's employment hereunder,
upon 10 days prior written notice to Employee, for "Good Cause", which
shall exist upon the occurrence of any of the following: (i) Employee is
convicted of, pleads guilty to, confesses to, or enters a plea of NOLO
CONTENDERE to, any felony or any crime that involves moral turpitude or any
act of fraud, misappropriation or embezzlement; (ii) Employee has engaged
in a fraudulent act to the damage or prejudice of the Company or any
affiliate of the Company; (iii) any act or omission by Employee involving
malfeasance or gross negligence in the performance of Employee's duties to
the Company and, within 10 days after written notice from the Company of
any such act or omission, Employee has not corrected such act or omission;
or (iv) Employee otherwise fails to comply with the terms of this Agreement
or deviates from any written policies or directives of the Board of
Directors and, within 10 days after written notice from the Company of such
failure or deviation, Employee has not corrected such failure (in any such
case, a "GOOD CAUSE TERMINATION EVENT");
(c) termination by the Company of Employee's employment hereunder,
upon 10 days prior written notice to Employee, for any reason other than as
a result of a Good Cause Termination Event or Disability Termination Event
(a "NO CAUSE TERMINATION EVENT"); or
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(d) voluntary termination by Employee of Employee's employment
hereunder (a "VOLUNTARY TERMINATION EVENT").
ARTICLE VII
RESULT OF TERMINATION
SECTION VII.1 DISABILITY TERMINATION EVENT. If Employee's employment
hereunder is terminated as a result of the occurrence of a Disability
Termination Event, as of the date of termination of Employee's employment
hereunder, the Company shall have no further obligation to pay Employee any Base
Salary or any other additional benefits pursuant to this Agreement (other than
medical insurance). The Company shall provide medical insurance substantially
similar to the medical insurance provided to Employee and to his covered
dependents (or exclusively to his covered dependents in the case of his death)
prior to the termination of his employment for the three consecutive months
immediately following such termination. Employee shall be entitled to receive a
portion of the Bonus, if any, for the year in which Employee's termination of
employment occurs prorated to the date on which Employee's employment is
terminated. If such termination occurs prior to the end of any pay period,
Employee shall be entitled to receive a portion of the Base Salary for such pay
period prorated to the date on which Employee's employment is terminated.
SECTION VII.2 TERMINATION UPON THE SCHEDULED EXPIRATION OF THE TERM OR AS
RESULT OF VOLUNTARY OR GOOD CAUSE TERMINATION EVENTS. If Employee's employment
hereunder is terminated upon the scheduled expiration of the Term or as a result
of the occurrence of a Voluntary Termination Event or a Good Cause Termination
Event, as of the date of the termination of Employee's employment, the Company
shall have no further obligation to pay to Employee any Base Salary, Bonus or
any other additional benefits pursuant to this Agreement. If such termination
occurs prior to the end of any pay period, Employee shall be entitled to receive
a portion of the Base Salary for such pay period prorated to the date an which
Employee's employment is terminated.
SECTION VII.3 TERMINATION AS RESULT OF NO CAUSE TERMINATION. If Employee's
employment hereunder is terminated as a result of the occurrence of a No Cause
Termination Event, the Company shall pay to Employee as severance pay his Base
Salary, at the annual base rate in effect immediately prior to the date on which
Employee's employment is terminated for the period from such date of termination
through the later of (x) the last day of the Noncompete Period (it being agreed
that the Company may in its sole discretion on 30 days notice to Employee waive
all Employee's obligations under Article V in which case the last day of the
Noncompete Period shall be deemed to be the date such waiver becomes effective)
and (y) the scheduled expiration of the Term, and a portion of the Bonus, if
any, for the year in which Employee's termination of employment occurs prorated
to the date on which Employee's employment is terminated; PROVIDED, that the
Company may, at any time, pay to Employee in a single lump sum an amount equal
to the net present value (as determined in good faith by the Board of Directors
of the Company) of the aggregate Base Salary remaining to be paid to Employee,
calculated using a discount rate equal to The Chase Manhattan Bank's prime
lending rate PER ANNUM in effect 30 days prior to such lump sum payment. In
addition, the Company shall provide medical insurance substantially similar to
the medical
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insurance provided to Employee prior to the termination of his employment for
the three consecutive months immediately following such termination.
ARTICLE VIII
INJUNCTIVE RELIEF WITH RESPECT TO COVENANTS
Employee acknowledges and agrees that the covenants and obligations of
Employee with respect to noncompetition, non-disclosure, non-solicitation,
confidentiality and the property of the Company Group and its affiliates relate
to special, unique and extraordinary matters and that, notwithstanding any other
provision of this Agreement to the contrary, a violation of any of the terms of
such covenants and obligations will cause the Company Group and its affiliates
irreparable injury for which adequate remedies are not available at law.
Therefore, Employee expressly agrees that the Company Group and its affiliates
(which shall be express third-party beneficiaries of such covenants and
obligations) shall be entitled to an injunction (whether temporary or
permanent), restraining order or such other equitable relief (including the
requirement to post bond) as a court of competent jurisdiction may deem
necessary or appropriate to restrain Employee from committing any violation of
the covenants and obligations contained in Articles IV and V. These injunctive
remedies are cumulative and in addition to any other rights and remedies the
Company Group or any such affiliate may have at law or in equity. Further,
Employee represents that his experience and capabilities are such that the
provisions of Articles IV and V will not prevent him from earning his
livelihood.
ARTICLE IX
TERMINATION; SURVIVAL
This Agreement shall terminate upon the earlier of (x) the scheduled
expiration of the Term and (y) the termination of Employee's employment
hereunder pursuant to Article VI. Notwithstanding the foregoing Articles IV, V
and VIII and, if Employee's employment terminates in a manner giving rise to a
payment under Article VII, Article VII shall survive the termination of this
Agreement.
ARTICLE X
MISCELLANEOUS
SECTION X.1 NOTICE. Any notice to be given hereunder shall be deemed
given when personally delivered to the party to receive such notice, or three
business days after being mailed, postage prepaid, by registered or certified
mail, as follows:
If to the Company:
Gulf Wide Industries, L.L.C.
c/o Bruckmann, Rosser & Sherrill & Co., Inc.
126 East 56th Street
New York, NY 10022
Attention: Bruce C. Bruckmann
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Rice Edmonds
If to Employee:
John M. Engquist
10241 Highway 10
Ethel, LA 70730
Such addresses may be changed by notice in writing to the other party as
aforesaid.
SECTION X.2 BINDING EFFECT. This Agreement shall inure to the benefit of
and shall be binding upon Employee and his executor, administrator, heirs,
personal representative and assigns, and the Company Group and its successors
and assigns; PROVIDED, that Employee shall not be entitled to assign or delegate
any of his rights or obligations hereunder without the prior written consent of
the Company.
SECTION X.3 INTERPRETATION. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Louisiana, without regard to the
conflicts of law principles of such State. No provision of this Agreement or any
related document shall be construed against or interpreted to the disadvantage
of any party hereto by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or drafted such
provision.
SECTION X.4 AMENDMENTS. Except as provided in Section 7.03, no provision
of this Agreement may be modified, waived or discharged unless such
modification, waiver or discharge is approved by the Board of Directors and is
agreed to in writing by Employee. No waiver by any party hereto at any time of
any breach by any other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No waiver of any provision of this Agreement shall be
implied from any course of dealing between the parties hereto or from any
failure by any party hereto to assert its rights hereunder on any occasion or
series of occasions.
SECTION X.5 HEADINGS. The Article and Section headings contained in this
Agreement are for reference purposes only, and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION X.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
SECTION X.7 GUARANTY. Head & Engquist hereby guarantees the performance
and payment by the Company of all obligations of the Company to Employee under
this Agreement.
SECTION X.8 ENTIRE AGREEMENT. This Agreement, together with the
Operating Agreement, constitutes the entire agreement between the Company and
Employee, and supersedes all prior
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agreements, if any, whether written or oral, between them, relating to
Employee's employment by the Company Group, unless expressly provided otherwise
herein and except for (i) all rights of Employee under any other existing
benefit plans established and adopted for employees of Company in general, (ii)
all rights of Employee to indemnity under all indemnification provided by
Company or any third parties, and (iii) other similar arrangements of Company
and all agreements with respect to the foregoing.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed the day and year first above written.
GULF WIDE INDUSTRIES, L.L.C.
By: /s/ Terence L. Eastman
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Terence L. Eastman
Sectretary
HEAD & ENGQUIST EQUIPMENT, L.L.C.
By: /s/ Terence L. Eastman
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Terence L. Eastman
Chief Financial Officer
EMPLOYEE
/s/ John M. Engquist
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John M. Engquist