EXHIBIT 10.11.1
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EMPLOYMENT AGREEMENT
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AGREEMENT, made effective the 1st day of December, 1995 (the
"Effective Date") between American Eco Corporation ("Company"), having its
principal office at 1325 South Creek Drive, Suite 100, Houston, Texas
77084; and Michael E. McGinnis, an individual ("Employee") residing at
20415 Chapel Glen Court, Katy, Texas 77450.
WHEREAS, Company desires to continue to retain the services of
Employee to serve as the President and Chief Executive Officer of Company;
and
WHEREAS, Employee is willing to continue to serve as the President
and Chief Executive Officer of Company, all upon the terms and subject to
the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants herein contained, the parties hereby agree as follows:
A. EMPLOYMENT.
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1. Throughout the effective term of this Agreement, Company
shall employ Employee and Employee shall render services to Company and
the businesses heretofore and hereafter conducted by Company in the
capacity and with the title of President and Chief Executive Officer of
Company. Employee shall perform all services, acts or things necessary or
advisable to manage, supervise and conduct the business of Company,
subject to the policy set by the Board of Directors. Employee shall have
full authority to act on behalf of the Company, except to the extent
limited by the Bylaws of the Company.
2. Throughout the period of his employment hereunder, Employee
shall devote his business time, attention, knowledge and skills,
faithfully, diligently and to the best of his ability, to the active
performance of his duties hereunder.
B. TERM OF EMPLOYMENT; TERMINATION OF AGREEMENT.
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1. Subject to the earlier termination of this Agreement in
accordance with the terms hereof, the term of this Agreement shall
commence, effective as of December 1, 1995 (the "Commencement Date") and
the term of this Agreement shall continue through and include November 30,
2000 (the "Termination Date").
2. Anything contained in Section 1 to the contrary
notwithstanding, this Agreement may be terminated at the option of Company
for "Cause" (as herein defined), effective upon the giving of written
notice of termination to Employee. As herein used, the term for "Cause"
shall mean and be limited to:
(a) any act committed by Employee against Company, its parent
or subsidiaries or divisions constituting: (A) fraud, (B)
misappropriation of corporate opportunity, (C) self-dealing, (D)
embezzlement of funds, (E) felony conviction for conduct involving moral
turpitude or other criminal conduct adversely affecting the operations of
Company, or its parent or subsidiaries or divisions, or (F) the continued
disregard by Employee of the reasonable directions and policies of the
Board of Directors of Company, provided that such disregard or non-
compliance by Employee continues for a period of sixty days after written
notice thereof is delivered to the Employee by the Board of Directors of
Company; or
(b) the breach or default by Employee in the performance of any
material covenant on the part of Employee to be performed under this
Agreement; or
(c) chronic alcoholism or any other form of addition which
impairs Employee's ability to perform his duties hereunder.
3. Anything contained in Section 1 to the contrary
notwithstanding, this Agreement may be terminated by Company (i) upon the
death of Employee, or (ii) on thirty (30) days' prior written notice to
Employee, in the event that Employee shall be physically or mentally
disabled or impaired so as to prevent him from continuing the normal and
proper performance of his duties and responsibilities hereunder for a
period of three (3) consecutive months.
The initial determination as to whether Employee is disabled or
impaired shall be made by the physician regularly treating the condition
causing the disability. Company shall have the right to require Employee
to be examined by a physician duly licensed to practice medicine and
surgery in the State of Texas to determine such physician's opinion as to
Employee's disability. If such physician's opinion differs from that of
the physician treating Employee, or a physician thereafter retained by
Employee, they shall forthwith select a third physician so licensed whose
opinion, after examination and review of available information, shall be
conclusive and binding upon all parties thereto. All costs of the
physician regularly treating or thereafter retained by Employee shall be
paid by Employee. All costs of the physician retained by Company shall be
paid by Company. If a third physician is required, then the costs of that
physician shall be paid by Company.
4. Upon any termination of this Agreement by Company as a
result of Employee's death or permanent disability pursuant to Section 3,
Company shall be liable for, and shall pay or shall cause to be paid to
Employee or his personal representative, as the case may be, Employee's
Base Salary for an additional twenty-four (24) month period from the date
of termination less (in the case of permanent disability) any health and
disability insurance payments made to or on behalf of Employee during such
twenty-four (24) month period.
5. Upon any termination of this Agreement by Company for Cause
pursuant to Section 2 above, neither Company nor any shareholder,
subsidiary or division thereof shall be liable for or shall pay or cause
to be paid to Employee any further remuneration, compensation or other
benefits hereunder.
6. If Company terminates Employee for any reason other than as
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provided: (a) in Section 2, (b) in Section 3, or (c) as a result of
Employee's voluntary resignation of employment (not constituting a
constructive discharge), Company shall be obligated to pay or shall cause
to be paid to Employee the Base Salary, as and when the same would have
otherwise become due and payable hereunder until the earlier to occur of
(i) twenty-four (24) months after the date of termination; (ii) the date
that Employee obtains full time re-employment, unless such re-employment
is at a rate of compensation that is less than 80% of the Base Salary, in
which event Company shall pay to Employee the difference between the Base
Salary and the new compensation, until the earlier of the dates described
in clauses (i) and (iii) hereof; or (iii) the Termination Date.
7. Notwithstanding any termination of this Agreement, whether
with cause or without cause the provisions of Section D, below, shall
remain effective and binding on the parties to this Agreement.
C. COMPENSATION; EXPENSES; FRINGE BENEFITS.
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1. BASE SALARY. As compensation for his services to be
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rendered hereunder, Company shall pay or cause to be paid to Employee for
the period commencing as of the Commencement Date and ending on the
Termination Date, a salary at the rate of Ten Thousand Eight Hundred
Thirty-Three and No/100 ($10,833.00) Dollars per month, payable in
accordance with standard company policy.
2. EXPENSES. In addition to the remuneration set forth above,
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throughout the period of Employee's employment hereunder, Company shall
also reimburse, or cause to be reimbursed to Employee, upon presentment by
Employee to Company, as applicable, of appropriate receipts and vouchers
therefor, for any reasonable business expenses, including air and other
travel expenses and customer development expenses, incurred by Employee in
connection with the performance of his duties and responsibilities
hereunder.
3. FRINGE BENEFITS. Company shall also make available, or cause
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to be made available, to Employee, throughout the period of his employment
hereunder, such benefits, including any disability, hospitalization,
medical benefit plan, pension plan or other benefits or policy, as are put
into effect by Company for its other executive employees.
4. AUTOMOBILE ALLOWANCE. In addition to the compensation set
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forth above, Employee shall be provided a car or paid a car allowance of
Seven Hundred Fifty and No/100 ($750.00) Dollars per month. This amount
shall be paid on the first day of each month, and the Company shall also
reimburse Employee for all actual expenses associated with operating and
maintaining Employee's vehicle. Employee shall submit receipts or other
evidence of such expenditures, and Company shall pay these amounts to
Employee within thirty (30) days of receipt of the invoices.
5. STOCK OPTION GRANTS. In addition to the compensation set
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forth above, Company shall issue to Employee an option to purchase twenty
thousand (20,000) shares of the common stock of the Company per annum
pursuant to the currently effective Employee Stock Option Plan, as
approved by the Toronto Stock Exchange. Employee's vesting rights and
other rights and privileges with respect to this stock option shall be
governed by the terms and provisions of said stock option plan, a copy of
which has been delivered to Employee for his review. The stock option set
forth herein is not assignable by Employee.
6. ANNUAL BONUS. In addition to the compensation set forth
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above, Employee shall be entitled to participate in an annual bonus pool
equal to five percent (5%) of the net profits of Company, payable within
ninety (90) days of closing of the Company's fiscal year. Term "Net
Profit" shall mean the consolidated taxable income of Company for the
fiscal year of the Company, determined in accordance with generally
accepted accounting principles, by the certified public accounts retained
by Company to perform its annual audit. The distribution of the annual
bonus pool shall be at the discretion of the President and Chief Executive
Officer.
7. VACATION, HOLIDAY, AND SICK LEAVE. Employee shall be entitled
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to annual vacations, holidays, and sick leave in accordance with the
policies and procedures established and in effect from time to time for
the Company's Employees.
D. CONFIDENTIALITY; NON-COMPETITION.
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1. CONFIDENTIALITY INFORMATION; PERSONAL RELATIONSHIPS.
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Employee agrees that for so long as he is employed by Company (the
"Restrictive Period"), he shall keep secret and retain in strictest
confidence all confidential matters of the Company, its clients and
suppliers, and the "know-how", trade secrets, confidential client lists,
details of client, subcontractor or consultant contracts, pricing
policies, operational methods, marketing plans or strategies, project
development, acquisition or bidding techniques or plans, business
acquisition plans, new personnel acquisition plans, technical processes,
inventions and research projects of Company learned by Employee and
directly or indirectly resulting from his employment by Company, unless
(i) such information is generally available to the public without
restriction, (ii) Employee obtains confidentiality agreements with respect
to such confidential information, (iii) such information is provided to a
customer or supplier of the Company in the ordinary course of business,
(iv) such disclosure is approved by the President or the Board of
Directors of Company, or (v) Employee is under compulsion of either a
court order or a governmental agency's or authority's inquiry, order or
request to so disclose such information.
2. PROPERTY OF COMPANY.
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(a) Except as otherwise provided herein, all lists, records and
other non-personal documents of papers (and all copies thereof), including
such items stored in computer memories, on microfiche or by any other
means, made or complied by or on behalf of Employee, or made available to
Employee relating to Company are and shall be the property of Company,
shall be delivered to Company on the date of termination of this
Agreement.
(b) All inventions, including any procedures, formulas,
methods, processes, uses, apparatuses, patterns, designs, drawings,
devises or configurations of any kind, any and all improvements to them
which are developed, discovered, made, or produced, trade secrets, or
information used by Company shall be the exclusive property of Company,
and shall be delivered to Company as applicable, on the earlier of the
expiration or the termination of this Agreement.
(c) All Company names, logos, trademarks, copyrights, slogans,
insignias and the like shall be the exclusive property of Company, and
Employee shall not be entitled to use, divert, imitate, duplicate or
otherwise deal with said property or property rights, without the prior
written consent of Company; provided, however, that Employee and Company
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agree that in the event the Company at any time during the term of this
Employment Agreement adopts or utilizes the name of Employee in its
advertising or promotional materials, that Employee shall have the right
at any time during or after the termination of this Employment Agreement
to require Company to cease using Employee's name or likeness in
connection with any such advertising or marketing promoting the Company or
its products.
3. EMPLOYEES OF COMPANY. Upon termination of this contract by
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either party for any reason, with or without cause, Employee shall not,
directly or indirectly, during the course of his employment or for a
period of twenty-four (24) months after such termination, solicit any
employee of Company, or encourage any such employee to leave such
employment without the prior written approval of Company as applicable.
E. DEFAULT. In the event that either party hereto shall breach any
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of the terms of this Agreement, Company shall be reimbursed by such
defaulting party for all costs and expenses, including reasonably
attorneys' fees, incurred by the non-defaulting party in enforcing the
terms of this Agreement and/or recovering damages as a result of any such
breach.
F. BINDING EFFECT. This contract is a personal services agreement
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between Company and Employee. Accordingly, Employee is not authorized to
voluntarily or involuntarily transfer or assign any of his contractual
rights contained herein, and any such attempted voluntary or involuntary
transfer or assignment shall be null and void and shall cause an immediate
termination of this agreement. Except for this restriction upon
signability, all of the terms and conditions of this Agreement shall be
binding upon and inure to the benefit of Employee and Company and any
successor-in-interest to any of them.
G. NOTICES. Except as herein provided, any notice, request, demand
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or other communication required or permitted under this Agreement shall be
in writing and shall be deemed to have been given when delivered
personally or when mailed by certified mail, return receipt requested,
addressed to the party at the address of such party first set forth above,
or at such other address as such party may hereafter have designated by
notice.
If to Company at the address first above written with copies to:
American ECO Corporation
Attention: Vice President
1325 South Creek Drive, Suite 100
Houston, Texas 77084
or to any other address as shall be designated from time to time by
Company.
If to Employee at the address first above written.
H. INDEMNIFICATION. The Company shall indemnify, hold harmless and
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protect Employee, his heirs, executors, administrators and legal
representatives, from and against all or any portion of any expenses,
including reasonable attorney's fees incurred by Employee, actually and
necessarily incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his
being or having been an officer and representative of Company, whether or
not he continues to be an officer or representative of the Company at the
time such claim is prosecuted against Employee, such expenses to include
the cost of reasonable settlements and the satisfaction of final, non-
appealable judgments against Employee, in connection with the matters
covered hereby. However, Company shall not indemnify Employee with
respect to matters as to which Employee shall be finally adjudged in any
such action, suit or proceeding to be guilty of negligence or misconduct
in the performance of his duties as an officer of Company or in which
Employee is found to be in material breach this Agreement. The foregoing
rights of indemnification shall not be exclusive of any other rights to
which Employee may be entitled as a matter of law, by agreement, by
approval of the Board of Directors of Company, or otherwise.
I. MISCELLANEOUS.
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1. Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged herewith.
2. The captions and paragraph headings used in the Agreement
are for convenience of reference only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.
3. This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be
governed and construed under the laws of the Province of Ontario, Canada.
4. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but
all of which together shall constitute one and the same instrument.
5. ANY DISPUTE INVOLVING THE INTERPRETATION OR APPLICATION OF
THIS AGREEMENT SHALL BE RESOLVED BY FINAL AND BINDING ARBITRATION BEFORE
ONE OR MORE ARBITRATORS UNLESS MUTUALLY AGREED TO OTHERWISE. THE AWARD OF
SUCH ARBITRATOR(S) MAY BE ENFORCED IN ANY COURT OF COMPETENT JURISDICTION
IN THE PROVINCE OF ONTARIO.
6. This Agreement is intended for the sole and exclusive
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors, and permitted
assigns, and no other person or entity shall have any right to rely on
this Agreement or to claim or derive any benefit herefrom absent the
express written consent of the party to be charged with such reliance or
benefit.
7. In the event this Agreement is terminated by Company for
Cause, in addition to the other rights and remedies that Company shall
have in accordance with the terms of this Agreement, Company shall have
the right to immediately declare due and payable all loans and advances
made or guaranteed by Company or its shareholders to Employee, at which
time Employee shall be required to repay in full said loans and advances,
including all accrued interest thereon, in accordance with the terms and
provisions of the loan documents evidencing said loans and/or advances.
The Company shall have the right to offset and credit against the accrued
interest and unpaid principal balance of such loans, all accrued and
unpaid salary, commissions and/or profit sharing distributions accrued but
unpaid to Employee prior to the date of termination.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on and as of the date first set forth above.
COMPANY:
ATTEST: AMERICAN ECO CORPORATION
/s/ illegible By: /s/ Ronald Mann
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Its: Director
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EMPLOYEE:
/s/ Michael E. McGinnis
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MICHAEL E. MCGINNIS
FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
This First Amendment is made to that certain Employment Agreement by
and between American Eco Corporation ("Company") and Michael E. McGinnis
("Employee"), as of the 1st day of May , 1996.
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WHEREAS, Company and Employee heretofore entered into a certain
Employment Agreement dated December 1, 1995, a true copy of which is
attached hereto and incorporated herein by reference; and
WHEREAS, it is the desire of Company and Employees to amend the
Employment Agreement in a manner hereinafter set forth and to ratify and
confirm the continuing binding effect of the Employment Agreement upon
both parties, as herein amended;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained below, the parties agree as follows:
1. Section C-1 of the Employment Agreement shall be amended in its
entirety to read and state as follows:
"C.1. Base Salary. As compensation for his services to be
rendered
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hereunder, Company shall pay or cause to be paid to Employee the following
base salary:
(a) for the period commencing on the Commencement Date and
ending on April 30, 1996, a salary at the rate of
$10,833.00 per month;
(b) commencing on May 1, 1996, and continuing through the
Termination Date, a salary at the rate of $250,000.00 per
year.
The base salary may from time to time be upwardly adjusted by action
of the Board of Directors of the Company, and any resolution of the Board
duly entered in the minutes of the Company's corporate minute book shall
be deemed to constitute an amendment to this Employment Agreement.
However, the Company shall not have the right to reduce the base salary
without Employee's written consent.
2. Except as amended herein, the terms and provisions of the Employment
Agreement are hereby ratified and confirmed by the parties as being
in full force and effect and fully binding upon the parties.
3. Capitalized terms not otherwise defined herein shall have the same
meanings ascribed to them in the Employment Agreement.
EXECUTED, in multiple counterparts, at Houston, Texas, effective as
of the date first above written.
AMERICAN ECO CORP.
By: /s/ J.C. Pennie
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Its:Director, Vice-Chairman
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/s/ Michael E. McGinnis
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MICHAEL E. MCGINNIS