Exhibit
10.1
EMPLOYMENT
AGREEMENT
AGREEMENT, dated as of the 31 st day
of October, 2008, by and between Essex Crane Rental Corp., a
Delaware corporation (the “Company”), Hyde Park
Acquisition Corporation, a Delaware corporation (“Hyde
Park”), and Ronald Schad (“Employee”).
WHEREAS the Company is an indirect,
majority-owned subsidiary of Hyde Park;
WHEREAS the Company is engaged in the business
of purchasing, selling, leasing or other provision of new and used
cranes (but excluding the manufacturing of cranes) (the
“Business”); and
WHEREAS Employee shall serve as President and
Chief Executive Officer of the Company and President and Chief
Executive Officer of Hyde Park, and Employee, the Company and Hyde
Park are desirous of formalizing their understanding for
Employee’s employment, all upon the terms and subject to the
conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the parties hereto,
intending to be legally bound, agree as follows:
The Company and Hyde Park agree to employ
Employee, and Employee agrees to be employed by the Company and
Hyde Park, upon the terms and subject to the conditions of this
Agreement.
The term of Employee’s employment under
this Agreement (the “ Term ”) shall commence on
the date hereof (the “ Commencement Date ”) and
shall continue until the earlier of (i) the third anniversary
of the Commencement Date and (ii) such earlier date on which
the Term is terminated pursuant to Section 5. Unless sooner
terminated in accordance with Section 5, the Term shall
automatically be renewed and extended for successive periods of one
(1) year unless either party hereto shall have notified the other
party hereto in writing that such extension shall not take effect
at least 90 days prior to the end of the initial Term or of any
extension.
During the Term, (i) the Company shall
employ the Employee and the Employee shall serve the Company as its
President and Chief Executive Officer and (ii) Hyde Park shall
employ the Employee and the Employee shall serve Hyde Park as its
President and Chief Executive Officer. Subject to the authority and
direction of the Board of Directors of the Company (the
“Board” or “Board of Directors”), the
Employee shall have the duties, authorities and responsibilities
for the general management and control of the affairs and business
of the Company and of Hyde Park, and shall perform such other
duties and exercise such other authorities commensurate with
Employee’s position which are or from time to time may be
delegated to him by the Board of Directors or the Company Bylaws,
all in accordance with basic policies as established by and subject
to the oversight of the Board. The principal location of
Employee’s employment shall be at the Company’s
executive office located in Buffalo Grove, Illinois. Employee shall
devote his entire working time to the affairs of the Company and
Hyde Park and shall faithfully and to the best of his ability
perform his duties hereunder. Notwithstanding the foregoing,
nothing herein shall prohibit Employee from (i) engaging in
personal investment activities for himself and his family that do
not give rise to any conflict of interests with the Company or its
affiliates; (ii) subject to prior approval of the Board of
Directors, acting as a director or in a similar role for an entity
unrelated to the Company if such role does not give rise to any
conflict of interests with the Company or its affiliates; and
(iii) engaging in charitable and civic activities, in each
case and collectively to an extent that does not materially
interfere with the performance of Employee’s duties for the
Company and Hyde Park hereunder.
Employee shall be appointed to the Board and
shall serve as a voting member of the Board throughout the Term. In
addition, the Company also agrees to use its best efforts to cause
Employee to be elected to the Board of Directors of Hyde Park and
to have the Employee serve as a member of the Board of Hyde Park
throughout the Term.
4. Compensation and Benefits
.
(a) The Company shall pay to Employee a base salary
(the “ Base Salary ”) at a rate of $310,000 per
annum, payable in accordance with the Company’s payroll
practices for its executive employees. On each anniversary of the
Commencement Date or such other appropriate date as may be agreed
by the parties during the Term, the Company shall review the Base
Salary and determine if, and by how much, the Base Salary should be
increased. Employee’s Base Salary in effect from time to time
may not be decreased without Employee’s consent. While
serving as a member of the Board of Directors of the Company or the
Board of Hyde Park, Employee shall not be entitled to Board of
Directors’ fees. For the avoidance of doubt, unless otherwise
agreed to by Employee and Hyde Park, Employee shall not be entitled
to any additional compensation from Hyde Park in connection with
his duties pursuant to Section 3.
(b) The Company and Hyde Park have committed to
grant an aggregate number of stock options to senior executives of
the Company representing the right to purchase not less than ten
percent of the number of shares of stock of Hyde Park issued and
outstanding as of the closing date of Hyde Park’s acquisition
of the majority of the equity securities of Essex Holdings LLC (the
“Closing Date”). The Company shall commission a study
to be performed by Towers Perrin (or another nationally recognized
senior executive consulting firm as mutually agreed to by the
parties) of equity grants for senior executives of a comparable
group of companies. Employee shall be granted options to purchase
shares of common stock of Hyde Park in such number and on such
terms and conditions as determined by the Compensation Committee in
accordance with Hyde Park’s 2008 Long Term Incentive Plan,
which terms shall be no less favorable to Employee than the terms
of grants in the top quartile of senior executives as set forth in
such study. Any additional grants of options, restricted stock,
share appreciation rights or similar incentive arrangements will be
at the discretion of the Compensation Committee of Hyde
Park.
(c) For each calendar year ending during the Term,
in addition to Base Salary, Employee shall be entitled to receive a
cash bonus (“Bonus”) which consists of (i) a
percentage of the bonus pool set forth in Exhibit A which
shall be no less than such percentage applied in the most recent
prior year, and (ii) an equipment sale bonus as described in
Footnote 1 to Exhibit A. The Bonus will be paid by
March 15 of the year following the year to which the Bonus
relates (e.g., the Bonus for calendar year 2008 will be paid by
March 15, 2009).
(d) During the Term, Employee shall be entitled to
participate in those retirement plans, deferred compensation plans,
group insurance, life, medical, dental, disability and other
benefit plans of the Company at the same level as those benefits
are provided by the Company from time to time to other senior
executives of the Company. Also, during the Term, Employee shall be
entitled to fringe benefits and perquisites at the same level as
those benefits are provided by the Company from time to time to
other senior executives of the Company generally.
(e) The Company shall promptly pay to Employee the
approved reasonable expenses incurred by him in the performance of
his duties hereunder in accordance with the Company’s
policies in effect from time to time, including, without
limitation, those incurred in connection with business related
travel or entertainment, or, if such expenses are paid directly by
the Employee, shall promptly reimburse him for such payment,
provided that Employee provides proper documentation thereof in
accordance with the Company’s policy. The Company
acknowledges that Employee shall commute throughout the Term from
his residence in Manitowoc, Wisconsin, or such other location, to
the Company’s facilities, including the Company’s
executive office located in Buffalo Grove, Illinois. The Company
shall pay Employee’s reasonably incurred commuting expenses
consistent with past practices in addition to the automobile lease
allowance and expenses provided in Section 4(g).
(f) Effective as of the Commencement Date, Employee
shall be entitled to seventeen (17) days of paid vacation in any
full calendar year. On each anniversary of the Commencement Date,
Employee shall be entitled to one additional day of paid vacation
effective as of the next succeeding calendar year (e.g., on the
second anniversary of the Commencement Date, Employee shall be
entitled to nineteen days of vacation in the next succeeding
calendar year), capped at a maximum of twenty (20) days of paid
vacation per annum.
(g) During the Term, Employee shall be entitled to
lease an automobile at a maximum monthly cost of not more than $860
and to reimbursement of all related expenses related to the
business use of such automobile.
(h) Company shall pay the reasonable costs of
Employee’s memberships in work-related professional
organizations as are appropriate for one in Employee’s
position with the Company.
(i) Company shall pay reasonable legal expenses
incurred by Employee in connection with the negotiation and
consummation of this Agreement, up to an aggregate of $10,000
post-acquisition. Such expenses shall be reimbursed as soon as
administratively feasible.
(j) During the Term, the Company shall pay Employee
the cost of maintaining his existing fifteen (15) year term life
insurance policy. In addition, Employee shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in
an amount such that after payment by Employee of all taxes related
to the Company’s payment of the insurance premium, Employee
retains an amount of the Gross-Up Payment equal to the tax imposed.
Payment made to Employee pursuant to this paragraph shall occur as
soon as administratively feasible following Employee’s
payment of the insurance premium and taxes.
(k) The Company may, at its discretion, subscribe
for and maintain, on behalf of the Company, life insurance or
key-man insurance with respect to Employee in such amount and upon
such terms or conditions as the Company may deem reasonable.
Employee shall cooperate with the Company in connection with the
obtaining of any such policies, including, without limitation, the
submission to physical examination and blood testing by a physician
or other medical professional selected by the Company. The proceeds
of such insurance policies will be owned by the Company, and
neither the Employee nor his heirs will have any rights therein or
claims thereto.
Employee’s employment hereunder shall be
terminated as of the applicable Termination Date upon
Employee’s death or Disability, upon expiration of the Term
in the event of delivery by either party of a notice of non-renewal
pursuant to Section 2, termination by the Company without
Cause or upon Employee’s voluntarily leaving the employ of
the Company without Good Reason, and may also be terminated as of
the applicable Termination Date by delivery of a Notice of
Termination (i) by the Company for Cause or (ii) by
Employee for Good Reason, with each such term defined as
follows:
(a) For Cause . A termination for “ Cause ”
is a termination evidenced by a resolution adopted by the Board
after finding in good faith that Employee has:
(i) engaged in gross negligence or willful
misconduct in connection with or arising out of the performance of
his duties hereunder and such negligence or misconduct has not been
cured (if curable) within a period of thirty (30) days after the
Company has given written notice to Employee;
(ii) been under the influence of drugs (other than
prescription medicine or other medically-related drugs to the
extent that they are taken in accordance with their directions)
during the performance of his duties under this
Agreement;
(iii) engaged in behavior that would constitute
grounds for liability for sexual harassment (as proscribed by the
U.S. Equal Employment Opportunity Commission Guidelines or any
other applicable state regulatory body) or, in the reasonable
opinion of the Board, other egregious conduct violative of laws
governing the workplace; or
(iv) been indicted in for a criminal offense in
connection with an act of fraud, larceny, misappropriation of funds
or falsification or manipulation of any records of the Company or
embezzlement or any other felony or crimes of moral turpitude;
or
(v) materially breached this Agreement (in a manner
not covered by any of subparagraphs (i) through (iv) of this
Section 5(a)) and such breach has not been cured within thirty
(30) days after written notice thereof has been given to the
Employee by the Company.
(b) Good Reason. “Good Reason” shall mean the
occurrence of any of the following conditions which remain uncured
for a period of thirty (30) days after the Company’s receipt
of written notice thereof:
(i) A material breach by the Company of this
Agreement (in a manner not covered by any of
subparagraphs (ii) through (iv) of this
Section 5(b));
(ii) A material reduction in Base Salary or a change
in the bonus program identified in Section 4(c) that
materially reduces the Executive’s bonus
opportunity;
(iii) A material diminution in Employee’s
authorities, duties or responsibilities, including Employee ceasing
to serve on the Board of Directors of the Company or of Hyde Park;
or
(iv) Relocation of the Company’s executive
office located in Buffalo Grove, Illinois, of greater than
twenty-five (25) miles.
(c) Disability . A “Disability” shall be deemed to
exist if Employee has been unable to substantially perform his
duties hereunder for 90 consecutive days or for 180 days in any 365
day period by reason of any physical or mental illness or
injury.
(d) Notice of Termination. A “Notice of Termination” shall mean
a written notice which, to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee’s employment, and sets
for the “Termination Date” (as defined below). No
purported termination by the Company for Cause or by Employee for
Good Reason shall be effective without proper delivery of a Notice
of Termination by the terminating party within 90 days of the
relevant party’s initial knowledge of the existence of the
condition giving rise to the termination.
(e) Termination Date . “Termination Date” shall mean
(i) in the case of the Employee’s death, his date of
death, (ii) in the case of Disability, the date such
Disability first exists as determin
