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 William L. Erwin
(“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 Vice President
Operations and Customer Support of the Company, and Employee and
the Company 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 agrees to employ Employee, and
Employee agrees to be employed by the Company, 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, the Company shall employ the
Employee and the Employee shall serve the Company as its Vice
President Operations and Customer Support. Subject to the authority
and direction of the Chief Executive Officer and the Board of
Directors of the Company (the “Board” or “Board
of Directors”), the Employee shall have the duties,
authorities and responsibilities for the operations function of the
Company, including, without limitation, purchasing, machinery,
fleet management, equipment, service support and yard operations,
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 Chief Executive
Officer or 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 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 hereunder.
4.
Compensation and Benefits
.
(a)
The
Company shall pay to Employee a base salary (the “ Base
Salary ”) at a rate of $184,000 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.
(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 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. 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 Winter Springs, Florida,
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(f).
(f)
Effective as of the Commencement Date, Employee
shall be entitled to fifteen (15) 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 seventeen (17) 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 $750
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.
(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; 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
determined in accordance with Section 5(c) above,
(iii) in the case of a termination contemplated by
Section 5(a) or 5(b) above, the date specified in the Notice
of Termination, (iv) in the case of termination by the Company
without Cause or resignation by Employee without Good Reason, the
date of such termination or resignation, and (v) following
delivery of a notice of non-renewal by either party pursuant to
Section 2, the last day of the Term.
6.
Effect of Termination or
Non-Renewal .
(a)
Death . In the event
of the termination of Employee’s employment as a result of
his death, the Company shall:
(i)
pay
to his estate the Base Salary earned through the Termination Date
(pro rated for any partial month) plus accrued but unpaid vacation
and any Bonus in respect of
