Exhibit 10.3
AMENDED AND RESTATED Executive Employment Agreement
This Amended and Restated Executive Employment Agreement ("Agreement") is
made and entered into as of January 1, 1999 (the "Effective Date") by and
between United Road Services, Inc., a Delaware corporation (the "Company") and
Edward T. Sheehan, an individual resident of the State of New York
("Executive").
RECITALS
WHEREAS, the Company is engaged in the business of motor vehicle and
equipment towing, recovery and transport services (the "Business");
WHEREAS, the Company desires to employ Executive on a full-time basis as
Chief Executive Officer of the Company, and Executive is willing to be employed
by the Company in that capacity on the terms and conditions set forth in this
Agreement; and
WHEREAS, Executive is employed hereunder by the Company in a confidential
relationship wherein Executive, in the course of his employment with the
Company, has and will continue to become familiar with and aware of information
as to the Company's customers, specific manner of doing business, including the
processes, techniques and trade secrets utilized by the Company, and future
plans with respect thereto, all of which have been and will be established and
maintained at great expense to the Company; this information is a trade secret
and constitutes the valuable goodwill of the Company.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and Executive hereby
agree as follows:
1. Employment. The Company hereby employs Executive on the terms set
forth herein and Executive hereby accepts such employment.
2. Duties. During the period of his employment with the Company
hereunder, Executive will be employed as Chief Executive Officer of the Company.
Executive will:
(a) Devote his full business time, ability, knowledge and attention, and
give his best effort and skill solely to the Company's business
affairs and interests;
(b) Perform such services and assume such duties and responsibilities
appropriate to the positions identified above as well as those which
may from time to time be reasonably assigned to him by the Board of
Directors of the Company, to whom Executive will directly report; and
(c) In all respects use his best efforts to further, enhance and develop
the Company's business affairs, interests and welfare.
3. Compensation. In consideration of Executive's services to the Company
during the Employment Term, the Company will pay Executive a gross base salary
of $200,000 per annum during the Employment term. Executive's base salary will
be paid in equal installments (pro rated for portions of a pay period) on the
Company's regular pay days and the Company will withhold from such compensation
all applicable federal and state income, social security,
disability and other taxes as required by applicable laws. On at least an annual
basis, the Compensation Committee of the Board of Directors (the "Compensation
Committee") will review Executive's performance and may increase such base
salary if, in its discretion, any such increase is warranted. The Company may
also pay Executive such bonuses and other incentive compensation, including
without limitation, stock options, as are determined from time to time to be
appropriate by the Compensation Committee or another duly authorized committee
of the Board of Directors.
4. Change of Control.
(a) Operation of Section 4. This Section 4 shall be effective, but not
operative, immediately upon execution of this Agreement by the parties
hereto and shall remain in effect so long as Executive remains
employed by the Company, but shall not be operative unless and until
there has been a Change of Control, as defined in subsection 4(b)
hereof. Upon such Change of Control, this Section 4 shall become
operative immediately.
(b) Definition. For purposes of this Agreement, a "Change of Control"
means (i) the sale of all or substantially all of the assets of the
Company to any person or entity that, prior to such sale, did not
control, was not under common control with, or was not controlled by,
the Company, (ii) a merger or consolidation or other reorganization in
which the Company is not the surviving entity or becomes owned
entirely by another entity, unless the outstanding voting securities
of the surviving or parent corporation, as the case may be,
immediately following such transaction are beneficially held by the
same persons and entities that beneficially held the outstanding
voting securities of the Company immediately prior to such transaction
in the same proportion as such persons or entities held such voting
securities immediately prior to the transaction, (iii) any transaction
or series of transactions which results in any person or "group"
becoming the beneficial owner, directly or indirectly, of securities
representing more than fifty percent (50%) of the outstanding voting
securities of the Company, or (iv) during any period of twelve
consecutive months after the Effective Date the persons who were
directors of the Company at the beginning of such twelve month period
cease to constitute a majority of the Board of Directors of the
Company or of any successor to the Company.
(c) Executive's Election Upon Change of Control. If, while Executive is
employed by the Company, a Change of Control (as defined in subsection
(b) of Section 4) occurs and one or more of the following events
occurs:
(i) The assignment to Executive of duties, responsibilities, or
status inconsistent with his duties, responsibilities, and status
prior to the Change of Control;
(ii) A reduction by the Company in Executive's base salary or bonus
eligibility (as in effect prior to the Change of Control);
2
(iii)The failure to continue in effect the Company's insurance,
disability, stock option plans, or any other Executive benefit
plans, policies, practices or arrangements in which Executive
participates, or the failure to continue Executive's
participation therein on substantially the same basis, both in
terms of the amount of benefits provided and the level of
Executive's participation relative to other participants, as
existed prior to the Change of Control;
(iv) The failure of the Company to obtain a satisfactory agreement
from the successor to the Company to assume and agree to perform
this Agreement;
(v) Any termination by the Company of Executive's employment other
than pursuant to Section 7.2(b) hereof; or
(vi) The persons who were directors immediately before the transaction
that constitutes the Change of Control cease to constitute a
majority of the Board of Directors of the Company after the
transaction;
Executive may, in his sole discretion, within one (1) year after the effective
date of the Change of Control, give notice to the Company that he intends to
elect to exercise his rights to receive the payments provided for in Section
4(d) hereof (the "Notice of Intention"). The right to give such Notice of
Intention shall continue for one (1) year from the date of the Change of
Control. In the event that Executive elects not to exercise such rights,
Executive's employment with the Company shall continue on the terms and
conditions provided in this Agreement. In the event that Executive does elect
to exercise such rights, Executive's employment with the Company shall terminate
effective as of the date upon which the Notice of Intention is received by the
Company. Within ten (10) business days after the Company's receipt of the
Notice of Intention, payment by the Company to Executive of the amounts set
forth in Section 4(d)(i) below shall be made by cashier's check, accompanied by
a written notice to Executive setting forth the Company's computation of the
amount payable pursuant to Section 4(d). If Executive takes exception to the
Company's computation of such amount, Executive may (but shall not be prejudiced
in his right to later contest the amount actually paid by failure to do so) give
a further written notice to the Company setting forth in reasonable detail
Executive's exceptions to the Company's computation. If the Company and
Executive are unable to resolve any dispute over the total amount to be paid to
Executive pursuant to Section 4(d)(i) hereof in accordance with Section 13
hereof within thirty (30) days after the date of the Notice of Intention, such
dispute shall be submitted for resolution to an independent third party agreed
upon between the Company and Executive and any additional amount that is
determined to be owed by the Company to Executive pursuant to Section 4(d)(i)
hereof shall be paid to Executive by cashier's check within ten (10) business
days after such dispute has been finally resolved.
(d) Compensation Upon Change of Control.
(i) If Executive gives the Notice of Intention described in Section
4(c), or if the Company terminates Executive's employment within
one (1) year after a Change of Control other than pursuant to
Section 7.2(b) hereof, the Company shall pay Executive a lump sum
amount equal to three times Executive's base amount (as defined
by Section 280(G) of the Internal
3
Revenue Code of 1986, as amended (the "Code")) less one dollar
($1.00). In addition to the foregoing, the Company will continue
to provide, for a period of three years from the effective date
of Executive's termination, medical, life, dental and disability
insurance coverage to Executive of the type and amount provided
to Executive under the Company's insurance policies as in effect
at the time of termination; provided, however, that if such
coverage does not continue to be maintained by the Company or is
otherwise not available to Executive, the Company shall provide
for or make available to Executive substantially similar economic
benefits; provided, however, that nothing in this subsection (i)
shall obligate the Company to provide for or make any such
similar economic benefits available to Executive if the Company
does not have such benefits available to its other executive
officers.
(ii) Payment of the amount set forth in Section 4(d)(i) shall
terminate Executive's rights to receive any and all other
payments, rights or benefits pursuant to Sections 3, 6 and 7 of
this Agreement from the date of termination, other than any
payments, rights or benefits arising (x) pursuant to Section 15.6
of this Agreement, or (y) from any other agreement, plan or
policy which by its terms or by operation of law provides for the
continuation of such payments, rights or benefits after the
termination of Executive's relationship with the Company.
(iii)The lump sum payment referred to in subsection (i) above shall
be in addition to and shall not be offset or reduced by (x) any
other amounts that have accrued or have otherwise become payable
to Executive or his beneficiaries, but have not been paid by the
Company as of the effective date of termination of Executive's
employment with the Company, including, but not limited to,
salary, consulting fees, disability benefits, termination
benefits, retirement benefits, life and health insurance
benefits, or any other compensation or benefit payment that is
part of any valid previous, current, or future contract, plan or
agreement, written or oral, or (y) any indemnification payments
that may be or become payable to Executive pursuant to the
provisions of the Company's Certificate of Incorporation, By-
laws, or similar policy, plan, or agreement relating to the
indemnification of directors or officers of the Company under
certain circumstances.
(iv) Notwithstanding anything in this Agreement to the contrary, in
the event that the Company determines in good faith that any
portion of the compensation described in this Section 4(d)
constitutes an excess parachute payment under Section 280(G) of
the Code, then the Company shall have no obligation to provide
such portion to Executive.
5. Vesting of Stock Options Upon Change of Control. In the event of a
Change of Control, in addition to any benefits provided to Executive upon a
Change of Control pursuant to the relevant stock option plan or stock option
agreement governing any grant of stock options to Executive, (and regardless of
whether Executive intends to give a Notice of Intention pursuant to
4
Section 4(c) hereof or Executive's employment with the Company terminates after
a Change of Control), any and all stock options granted to Executive pursuant to
any of the Company's stock option plans prior to the effective date of such
Change of Control that are unvested as of the effective date of such Change of
Control will become fully vested and exercisable beginning two business days
prior to the effective date of such Change of Control without regard to any
vesting schedules established in the relevant option plan or option agreement.
6. Benefits and Reimbursements.
6.1 Executive will, during the Employment Term, have the right to receive
such benefits as are generally made available to full-time executive officers of
the Company, including the right to participate in any retirement plan or
executive bonus plan that the Company may create. In addition, or inclusive of
such benefits, the Company will provide Executive with the following:
(a) The opportunity to apply for coverage under the Company's
medical, life, dental and disability plans, if any. If Executive
is accepted for coverage under such plans, the Company will
provide to Executive and his immediate family such coverage on
the same terms as is customarily provided by the Company to the
plan participants as modified from time to time.
(b) In addition to normal holidays recognized by the Company,
Executive will be entitled to the greater of (i) three (3) weeks
paid vacation annually, or (ii) such other amount of paid
vacation as may be afforded executive officers of similar
position and seniority to Executive under the Company's policies
in effect from time to time (prorated for any year in which
Executive is employed for less than the full year).
6.2 The Company will reimburse Executive for travel and other out-of-
pocket expenses reasonably incurred by Executive in the performance of his
duties hereunder, provided that all such expenses will be reimbursed only (i)
upon the presentation by Executive to the Company of such documentation as may
be reasonably necessary to substantiate that all such expenses were incurred in
the performance of his duties, and (ii) if such expenses are consistent with all
policies of the Company in effect from time to time as to the kind and amount of
such expenses.
7. Term; Termination; Rights Upon Termination.
7.1 Term. The Company hereby employs Executive and Executive hereby
accepts employment with the Company for a period beginning on the Effective Date
and ending on the third anniversary of the Effective Date (as extended pursuant
to the following provisions, the "Term"). As of the first day of any month
following the Effective Date, the Term shall be extended for an additional one
(1) month period unless either Executive or the Company gives the other party
written notice at least ten (10) days prior to the first day of such month that
this Agreement shall terminate on the then scheduled expiration date of the
Term. If such notice is given, this Agreement shall automatically terminate on
such expiration date. If this Agreement is extended, the terms in effect under
this Agreement immediately preceding such extension shall
5
apply during the extension period. If Executive's employment hereunder is
terminated by either the Company or Executive at any time for any reason, the
expiration date shall thereupon no longer be automatically extended.
7.2 Termination. This Agreement and Executive's employment may be
terminated in any one of the following ways:
(a) Death or Permanent Disability of Executive. Subject to the payment to
Executive of the amounts required by Section 7.3 below, this Agreement
will terminate immediately upon the death or permanent disability of
Executive, whereupon Executive shall have no further rights or be
entitled to any other benefits of this Agreement, other than the
payments and benefits referred to in Section 7.3 below. Executive will
be deemed permanently disabled for the purpose of this Agreement if,
in the good faith determination of the Board of Directors, based on
sound medical advice, Executive has become physically or mentally
incapable of performing his duties hereunder for a continuous period
of one hundred eighty (180) days, in which event Executive will be
deemed permanently disabled upon the expiration of such one hundred
eighty (180) day period.
(b) Executive's Discharge for Cause. At any time during the term of this
Agreement, subject to the payment to Executive of the amounts required
by Section 7.3(a) below, the Company may terminate Executive's
employment for "Cause" effective immediately upon its giving of
written notice setting forth with particularity the facts and
circumstances constituting such Cause, whereupon this Agreement will
terminate and Executive shall have no further rights or be entitled to
any other benefits of this Agreement, other than the payments and
benefits referred to in Section 7.3(a) below. For purposes of this
Agreement, "Cause" means the occurrence of one or more of the
following: (i) the commission by Executive of any act materially
detrimental to the Company, including but not limited to fraud,
embezzlement, theft, bad faith, gross negligence, recklessness,
dishonesty, insubordination or willful misconduct; (ii) gross
incompetence or repeated failure or refusal to perform the duties
required by this Agreement and as may be assigned to Executive by the
Company's Board of Directors from time to time; (iii) conviction of a
felony or of any crime of moral turpitude; (iv) any material
misrepresentation by Executive to the Company regarding the operation
of the business; or (v) material breach of any covenant of this
Agreement, provided, however, that the action or conduct described in
clause (ii) or clause (v) above will constitute "Cause" only if
Executive shall have either failed to remedy such alleged breach
within thirty (30) days from his receipt of written notice from the
Company demanding that he remedy such alleged breach, or shall have
failed to take reasonable steps in good faith to that end during such
thirty (30) day period and thereafter; and provided further that there
shall have been delivered to Executive a further notice after the end
of such thirty (30) day period asserting that the Board of Directors
has determined that Executive was guilty of conduct set forth in
clause (ii) or clause (v), as the case may be, that Executive has
failed to take reasonable steps in good faith to remedy such alleged
breach, and specifying the particulars thereof in detail; and provided
further that Executive thereafter shall have received a certified copy
of a resolution of the Board of
6
Directors of the Company adopted by the affirmative vote of not less
than three-fourths of the entire membership of the Board of Directors
at a meeting called and held for that purpose and at which Executive
was given an opportunity to be heard, finding that Executive was
guilty of conduct set forth in clause (ii) or clause (v), as the case
may be, that Executive has failed to take reasonable steps in good
faith to remedy such alleged breach, and specifying the particulars
thereof in detail.
(c) The Company's Right to Terminate Without Cause. Subject to the
payment to Executive of the amounts required by Section 7.3 below, at
any time during the term of this Agreement, the Company may terminate
Executive's employment with the Company without "Cause" (as defined in
subsection (b) above), effective immediately upon written notice to
Executive, whereupon this Agreement will terminate and Executive shall
have no further rights or be entitled to any other benefits of this
Agreement, other than the payments and benefits referred to in Section
7.3 below. Notwithstanding the foregoing, if the Company terminates
Executive without "Cause" within one (1) year after a Change of
Control, the Company shall pay Executive the compensation described in
Section 4(d) hereof as though Executive had given the Notice of
Intention described in Section 4(c) (whether or not Executive actually
gave such Notice of Intention).
(d) Executive's Right to Terminate At Will. Executive shall have the
right at any time during the term of this Agreement, by giving written
notice to the Company, to terminate this Agreement and Executive's
employment with the Company effective as of the date on which such
notice is given by Executive, unless the Company advises Executive
that it requires the services of Executive for an additional period of
time, not to exceed 30 days, in which case Executive's employment
shall cease as of the end of such period (such effective date being
hereinafter referred to as the "Executive Termination Date"). On the
Executive Termination Date, this Agreement shall terminate and
Executive shall have no further rights under or be entitled to any
other benefits of this Agreement, other than the payments and benefits
referred to in Section 7.3(a) below.
7.3 Compensation and Benefits Upon Termination.
(a) Upon any termination of Executive's employment pursuant to this
Section 7, Executive will be entitled to: (i) the compensation
provided for in Section 3 hereof for the period of time ending with
the effective date of termination; (ii) compensation for any unused
vacation that Executive may have accrued, as well as all earned
benefits, up to and including the effective date of termination; (iii)
"COBRA" benefits to the extent required by applicable law; and (iv)
reimbursement for such expenses as Executive may have properly
incurred on behalf of the Company as provided in Section 6.2 above
prior to the effective date of termination.
(b) If (i) the Company terminates Executive's employment pursuant to
Section 7.2(c) above, or (ii) Executive terminates his employment
following the Company's assignment to Executive of regular duties,
responsibilities, or status which the
7
Board of Directors determines, in good faith, to be materially
inconsistent with Executive's duties, responsibilities, and status
under this Agreement, then, in addition to the amounts payable in
Section 7.3(a) above:
(i) Executive will be entitled to receive a severance payment in an
amount equal to (i) two times the amount of Executive's base
salary in effect at the time of termination, plus (ii) the
aggregate amount of Executive's annual cash bonuses for the two
years immediately preceding such termination, which amount shall
be paid to Executive over a two-year period in equal installments
(pro rated for portions of a pay period) on the Company's regular
pay days, and the Company will withhold all applicable federal
and state income, social security, disability and other taxes as
required by applicable law; provided, however, that Executive's
right to receive payments pursuant to this Section 7.3(b)(i)
shall cease immediately upon a knowing violation by Executive of
any of the provisions of Sections 8, 9 or 10 hereof.
(ii) any and all stock options granted to Executive pursuant to any of
the Company's stock option plans prior to the effective date of
such termination that are unvested as of the effective date of
such termination will continue to vest, and Executive shall be
permitted to exercise such options on the terms set forth in the
relevant option plan and option agreement, in the same amounts
and at the same times as such options would have vested had
Executive remained employed by the Company until all such options
become fully vested (the period between the effective date of
termination and the date that all such options become fully
vested being hereafter referred to as the "Option Vesting
Period"); provided, that such continued vesting of options shall
immediately cease upon a knowing violation by Executive during
the Option Vesting Period of any of the provisions of Sections 8,
9 or 10 hereof.
(iii)the Company will continue to provide, for a period of two years
from the effective date of Executive's termination, medical,
life, dental and disability insurance coverage to Executive of
the type and amount provided to Executive under the Company's
insurance policies as in effect at the time of termination;
provided, however, that if such coverage does not continue to be
maintained by the Company or is otherwise not available to
Executive, the Company shall provide for or make available to
Executive substantially similar economic benefits; provided, that
nothing in this subsection (iii) shall obligate the Company to
provide for or make any such similar economic benefits available
to Executive if the Company does not have such benefits available
to its other Executive officers.
(c) In the event of a termination upon the death or permanent disability
of Executive as provided in Section 7.2(a) above, Executive or his
estate shall be entitled to receive from the Company, for a period of
twelve months following the effective date of termination, 100% of
Executive's base salary at the rate then in effect, payable in equal
installments (pro rated for portions of a pay period) on the
8
Company's regular pay days, and the Company will withhold all
applicable federal and state income, social security, disability and
other taxes as required by applicable law; provided, however, that in
the case of a termination upon the permanent disability of Executive,
such payments shall be reduced by all payments in respect of
Executive's salary payable to Executive under the Company's disability
insurance, if any, for the same period.
7.4 Effect of Termination. Subject to Section 4 hereof, the payments set
forth in Section 7.3 will fully discharge all responsibilities of the Company to
Executive under this Agreement or relating to or arising out of the termination
of Executive's employment, and all other rights and obligations of the Company
and Executive under this Agreement shall cease as of the effective date of
termination, except that Executive's obligations under Sections 8, 9, and 10 and
each party's obligations under Section 14 hereof shall survive such termination.
8. Unfair Competition by Executive.
8.1 Executive agrees that all trade secrets, or confidential or
proprietary information with respect to the activities and businesses of the
Company, including, without limitation, personnel information, secret processes,
know-how, customer lists, databases, ideas, techniques, processes, inventions
(whether patentable or not), and other technical plans, business plans,
marketing plans, product plans, forecasts, contacts, strategies and information
(collectively "Proprietary Information") which were learned by Executive in the
course of his employment by the Company, and any other Proprietary Information
received, developed or learned by Executive hereafter in the course of his
future employment by or in association with the Company, are confidential and
will be kept and held in confidence and trust as a fiduciary by Executive.
Executive will not use or disclose Proprietary Information of the Company except
as necessary in the normal course of the business of the Company for its sole
and exclusive benefit, unless Executive is compelled so to disclose under
process of law, in which case Executive will first notify the Company promptly
after receipt of a demand to so disclose.
8.2 During the term of this Agreement and for the greater of (i) the
period during which Executive is receiving compensation or benefits pursuant to
Section 7.3 hereof and (ii) a period of one year following the expiration or
termination of this Agreement for any reason, directly or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation or
business whatever nature, Executive will not:
(a) engage, as an officer, director, shareholder, owner, partner, joint
venturer, financier, manager, executive, independent contractor,
consultant, advisor, or sales representative, in any business selling
any products or services in direct competition with the Company or any
of its subsidiaries within 100 miles of any geographic location in
which the Company or any of its subsidiaries conducts business at such
time (or in the case of a termination or expiration of this Agreement,
within 100 miles of any geographic location in which the Company or
any of its subsidiaries conducted business at the time of such
expiration or termination) (the "Territory");
(b) call upon any prospective acquisition candidate on Executive's own
behalf or on behalf of any competitor of the Company or any of its
subsidiaries, which
9
candidate was either called upon by the Company (including its
subsidiaries) or for which the Company made an acquisition analysis,
for the purpose of acquiring such entity; provided, however, that
Executive shall not be charged with a violation of this Section 8.2(b)
unless and until Executive shall have knowledge or notice that such
prospective acquisition candidate was called upon, or that an
acquisition analysis was made, for the purpose of acquiring such
entity;
(c) call upon, contact or solicit any person who is, at that time, an
employee of the Company (including the subsidiaries thereof) for the
purpose or with the intent of enticing such employee away from or out
of the employ of the Company (including the subsidiaries thereof);
provided that Executive shall be permitted to call upon and hire any
member of his or her immediate family;
(d) call upon any person or entity which is, at that time, or which has
been, within one (1) year prior to that time, a customer of the
Company (including the subsidiaries thereof) within the Territory for
the purpose of soliciting or selling products or services in direct
competition with the Company within the Territory;
(e) disclose customers, whether in existence or proposed, of the Company
(or the Company's subsidiaries) to any person, firm, partnership,
corporation or business for any reason or purpose.
(f) engage in any pattern of conduct that involves the making or
publishing of written or oral statements or remarks (including,
without limitation, the repetition or distribution of derogatory
rumors, allegations, negative reports or comments) which are
disparaging, deleterious or damaging to the integrity, reputation or
good will of the Company, its management, or of management of
corporations affiliated with the Company.
8.3 Except for activities expressly permitted by the prior written
approval of the Board of Directors of the Company, during the term of this
Agreement, the Executive will not: (a) engage in business independent of
Executive's employment by the Company that requires any substantial portion of
Executive's time; (b) serve as an officer, general partner or member in any for-
profit corporation, partnership or firm; (c) serve as a director of any
corporation, partnership of firm having the Business as its principal
enterprise; or (d) directly, indirectly or through any Affiliate, invest in,
participate in or acquire an interest in any entity engaged in the Business. For
purposes of this Agreement, the terms: (i) "Affiliate" means as to any Person,
each other Person that directly or indirectly (through one (1) or more
intermediaries) controls, is controlled by or is under common control with such
person; and (ii) "Person" means an individual, corporation, partnership, limited
liability company, association, joint stock company, trust, associate (as
defined in regulations promulgated by the Securities and Exchange Commission) or
other legally recognizable entity. Notwithstanding anything herein to the
contrary, the limitations in Sections 8.2 and 8.3 hereof will not prohibit any
investment by the Executive of not more than 3% of the outstanding capital stock
of a company whose securities are listed on a public exchange or the National
Association of Securities Dealers Automated Quotation National Market System.
8.4 Executive and the Company acknowledge that: (i) each covenant and
restriction contained in Sections 8.1, 8.2, 8.3, 9 and 10 of this Agreement is
necessary, fundamental, and
10
required for the protection of the Company's business and goodwill; (ii) such
covenants and restrictions relate to matters which are of a special, unique, and
extraordinary character that gives each of them a special, unique, and
extraordinary value which is difficult to measure in economic terms; and (iii) a
breach of any such covenant or restriction will result in immediately and
irreparable harm and damage to the Company which cannot be compensated
adequately by a monetary award or other remedy at law. Accordingly, it is
expressly agreed that, in addition to all other remedies available at law or in
equity, and notwithstanding anything to the contrary in Section 13 below, the
Company will be entitled to the immediate remedy of a temporary restraining
order, preliminary injunction, or such other form of injunctive or equitable
relief as may be used by any court of competent jurisdiction to restrain or
enjoin any of the parties hereto from breaching any such covenant or
restriction, or otherwise specifically to enforce the provisions contained in
Sections 8.1, 8.2, 8.3, 9, and 10 of this Agreement.
8.5 Reasonable Restraint. It is agreed by the parties hereto that the
foregoing covenants in Sections 8.1, 8.2 and 8.3 impose a reasonable restraint
on Executive in light of the activities and business of the Company (including
the subsidiaries thereof) on the date of the execution of this Agreement and the
current plans of the Company; but it is also the intent of the Company and
Executive that such covenants be construed and enforced in accordance with the
changing activities and business of the Company (including the subsidiaries
thereof) throughout the term of this Agreement. It is further agreed by the
parties that a portion of the compensation paid to Executive under this
Agreement is paid in consideration of the covenants herein contained, the
sufficiency of which consideration is hereby acknowledged. If the scope of any
restriction contained in Sections 8.1, 8.2 or 8.3 is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall
be enforced to the maximum extent permitted by law, and the parties consent that
such scope may be judicially modified accordingly in any proceeding brought to
enforce such restriction.
8.6 Independent Covenant. Each of the covenants in Sections 8, 9 and 10
shall be construed as an agreement independent of any other provisions in this
Agreement, and the existence of any claim or cause of action of Executive
against the Company (including the subsidiaries thereof), whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Company of such covenants. It is specifically agreed that the time
periods stated at the beginning of Sections 8.2 and 9, during which the
agreements and covenants of Executive made in Sections 8.2 and 9 shall be
effective, shall be computed by excluding from such computation any time during
which Executive is in violation of any provision of Section 8 or 9. The
covenants contained in Sections 8, 9 and 10 shall not be affected by any breach
of any other provision of this Agreement by any party hereto.
9. Proprietary Matters. Executive expressly understands and agrees that
any and all improvements, inventions, discoveries, processes, or know-how that
are generated, conceived or made by Executive, solely or jointly with another,
during the term of this Agreement or within the greater of (i) the period during
which Executive is receiving compensation or benefits pursuant to Section 7.3
hereof, and (ii) one (1) year following termination or expiration of this
Agreement, and which are directly related to the business or activities of the
Company and which Executive conceives as a result of his employment by the
Company, whether so generated or conceived during Executive's regular working
hours or otherwise, and whether patentable or not, are the sole and exclusive
property of the Company, and Executive shall promptly disclose any such
improvements, inventions, discoveries, processes or know-how to the Company.
Executive
11
hereby assigns and agrees to assign all his interests in such improvements,
inventions, discoveries, processes, and know-how to the Company or its nominees
and agrees, whenever requested to do so by the Company (either during the term
of this Agreement or thereafter), to execute and assign any and all
applications, assignments and/or other instruments and do all things which the
Company may deem necessary or appropriate in order to apply for, obtain,
maintain, enforce and defend Letters of Patent, copyrights, trade names or
trademarks of the United States or of foreign countries for said improvements,
inventions, discoveries, processes, or know-how, or in order to assign and
convey or otherwise make available to the Company the sole and exclusive right,
title, and interest in and to said improvements, inventions, discoveries,
processes, know-how, or otherwise to protect the Company's interest therein.
10. Return of Company Property. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Executive by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Executive shall be delivered promptly to the Company without request by it upon
termination of Executive's employment.
11. No Prior Agreements. Executive hereby represents and warrants to the
Company that the execution of this Agreement by Executive and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Executive agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees, costs and expenses and expenses
of investigation, by any such third party that such third party may now have or
may hereafter come to have against the Company based upon or arising out of any
non-competition agreement, invention or secrecy agreement between Executive and
such third party which was in existence as of the date of this Agreement.
12. Key-Person Insurance. Executive agrees to make himself available and
to undergo, at the Company's request and expense, any physical examination or
other procedure necessary to allow the Company to obtain a key-person insurance
policy on Executive. If the Company obtains such policy, it will maintain the
policy at its expense and all proceeds will be the sole property of the Company.
13. Resolution of Disputes. The parties will attempt in good faith
promptly by negotiations to resolve any dispute or controversy arising out of or
relating to this Agreement or to the employment or termination of Executive by
the Company. All negotiations pursuant to this clause are confidential and will
be treated as compromise and settlement negotiations for purposes of the Federal
Rules of Evidence and state rules of evidence.
14. Indemnification. In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Executive), by reason of the fact that he is or was performing services
within the course and scope of his employment with the Company under this
Agreement, then the Company shall protect, defend, indemnify and hold harmless
Executive against all expenses (including attorneys' fees, costs and expenses),
12
judgments, fines, costs, liabilities, damages, and amounts paid in settlement,
actually and reasonably incurred by Executive in connection therewith. Without
limiting the requirement above that Executive be performing services within the
course and scope of his employment, activities constituting violations of law or
Company policy shall not constitute services within the course and scope of
Executive's employment, and the Company shall not indemnify Executive for any
such activities. Executive agrees to immediately notify the Company of any
threatened, pending or completed matter; provided, however, that Executive's
failure to immediately notify the Company of such matter shall not relieve the
Company of any obligation hereunder, unless, and only to the extent that, the
Company is materially prejudiced by such delay or failure to give notice.
Executive agrees to accept any attorney reasonably assigned by the Company;
provided that if counsel selected by the Company shall have a conflict of
interest that prevents such counsel from representing Executive, Executive may
engage separate counsel and the Company shall pay all reasonable attorneys fees
of such counsel.
15. Miscellaneous.
15.1 Governing Law; Interpretation. This Agreement will be governed by
the substantive laws of the State of New York applicable to contracts entered
into and fully performed in such jurisdiction. The headings and captions of the
Sections of this Agreement are for convenience only and in no way define, limit
or extend the scope or intent of this Agreement or any provision hereof. This
Agreement will be construed as a whole, according to its fair meaning, and not
in favor of or against any party, regardless of which party may have initially
drafted certain provisions set forth herein.
15.2 Assignment. This Agreement is personal to Executive and he may not
assign any of his rights or delegate any of his obligations hereunder without
first obtaining the prior written consent of the Board of Directors of the
Company.
15.3 Notices. Any notice, request, claim or other communication required
or permitted hereunder will be in writing and will be deemed to have been duly
given if delivered by hand or if sent by certified mail, postage and
certification prepaid, to Company at its current address or to Executive at his
residence (as noted in the Company's records) or to such other address or
addresses as either party may have furnished to the other in writing in
accordance herewith.
15.4 Severability. If any provision of this Agreement or the application
of any such provision to either of the parties is held by a court of competent
jurisdiction to be contrary to law, such provision will be deemed amended to the
extent necessary to comply with such law, and the remaining provisions of this
Agreement will remain in full force and effect unless the result would be
manifestly unjust or would deprive either party of the benefit of its bargain.
15.5 Entire Agreement; Amendments. This Agreement and any other exhibits
and attachments hereto constitutes the final and complete expression of all of
the terms of the understanding and agreement between the parties hereto with
respect to the subject matter hereof, and this Agreement replaces and supersedes
any and all prior or contemporaneous negotiations, communications,
understandings, obligations, commitments, agreements or contracts, whether
written or oral, between the parties respecting the subject matter hereof.
Except as provided in Section 15.4 above, this Agreement may not be modified,
amended,
13
altered or supplemented except by means of the execution and delivery of a
written instrument mutually executed by both parties.
15.6 Attorneys' Fees. If it becomes necessary for any party to initiate
legal action or any other proceeding to enforce, defend or construe such party's
rights or obligations under this Agreement, the prevailing party will be
entitled to its reasonable costs and expenses, including attorneys' fees,
incurred in connection with such action or proceeding.
15.7 Counterparts. This Agreement may be executed simultaneously in two
(2) or more counterparts, each of which shall be deemed an original and all of
which together shall constitute but one and the same instrument.
16. EXECUTIVE ACKNOWLEDGMENT. EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN
GIVEN THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE RIGHTS AND
OBLIGATIONS ARISING UNDER THIS AGREEMENT, THAT HE HAS READ AND UNDERSTANDS EACH
AND EVERY PROVISION OF THIS AGREEMENT, AND THAT HE IS FULLY AWARE OF THE LEGAL
EFFECT AND IMPLICATIONS OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Company: Executive:
United Road Services, Inc. Edward T. Sheehan
By:/s/ Allan D. Pass /s/ Edward T. Sheehan
----------------------------- ---------------------------------
Allan D. Pass
President and Chief Operating Officer
14