Exhibit 10.34
CONSULTING AND NONCOMPETITION
AGREEMENT
THIS CONSULTING AND
NONCOMPETITION AGREEMENT (“ Agreement ”) effective as
of the 31 st of July, 2004, between H&E EQUIPMENT
SERVICES L.L.C. (“ H&E ”), whose principal
mailing address is 11100 Mead Road, 2 nd floor, Baton
Rouge, Louisiana 70816, and GARY W. BAGLEY (“
Consultant ”), whose mailing address is 9 Altawood
Drive, Salt Lake City, Utah 84092.
RECITALS:
WHEREAS, H&E is the successor by statutory merger of
Head & Engquist Equipment, L.L.C., and ICM Equipment Company
L.L.C. (“ ICM ”), effective June 17,
2002;
WHEREAS, H&E is engaged in the business of selling,
renting, and servicing manufacturing, industrial, construction, and
mining equipment, and the provision of related services;
WHEREAS, H&E has heretofore employed Consultant as an
officer and its Chairman pursuant to an Employment Agreement,
initially dated February 4, 1998, and amended subsequently with the
third and final amendment dated as of June 14, 2002 (“
Employment Agreement ”); and
WHEREAS, H&E and Consultant now desire to terminate
the Employment Agreement and to have Consultant provide his
services pursuant to the terms of this Agreement.
NOW, THEREFORE,
in consideration of the premises
and of the mutual agreements hereinafter set forth, the parties
declare and agree as follows:
W I T N E S S E T
H:
1.
Term and Duties
. H&E hereby appoints and
engages Consultant, for a period of five (5) years (the “
Consulting Period ”) commencing on the date hereof, as
a consultant to H&E and its affiliates and subsidiaries, of all
matters directly or indirectly related to H&E’s business.
The Consultant shall be available to furnish at the reasonable
request of the Board of Directors, the CEO and/or the CFO of
H&E such consulting services hereunder as may reasonably be
requested by H&E; provided, however, that Consultant shall not
be obligated to furnish more than sixteen (16) hours of consulting
services hereunder during any business week averaged over the
course of the preceding year during the Consulting
Period.
2.
Continuation of Term
. At the end of the Consulting
Period, this Agreement thereafter may be renewed on a year to year
basis, subject to the mutual agreement of the parties.
3.
Effect on Employment
Agreement . The
Employment Agreement is terminated effective the date of this
Agreement. Notwithstanding that termination, the provisions in the
Employment Agreement for the payment of Deferred Compensation as
defined in the Employment Agreement and as subsequently defined in
the Deferred Compensation Agreement, the Security Holders
Agreement, and the Registration Rights Agreement, all executed
by
Consultant as of June 17, 2002, and
any and all other rights vested in Consultant prior to the date of
this Agreement remain in full force and effect.
4.
Nondisclosure
. Consultant agrees to
continue to be bound by the nondisclosure requirements of Article V
of the Employment Agreement. However the noncompetition and
nonsolicitation provisions of Article VI of the Employment
Agreement are replaced by the “Restrictive Covenants”
as defined and set forth in Paragraph 7 of this
Agreement.
5.
Deferred Wages
. It is agreed that the
termination of the Employment Agreement is on a no cause basis and
due to a voluntary retirement from H&E by Consultant as an
officer and employee. As a consequence, past wages owed to
Consultant which have been retained by H&E on a deferred basis,
amounting to the sum of $ 1,414,256.61 as of July 31 st
2004, are due to Consultant immediately upon the execution of this
Agreement.
6.
Compensation, Etc
.
(a)
As full and complete compensation
for any and all services which the Consultant may render hereunder,
H&E shall pay Consultant the sum of $150,000.00 per annum.
Consultant shall be responsible for all federal and state taxes and
other payments as required by applicable law. The fee shall be paid
in equal portions to Consultant bi-weekly.
(b)
H&E will reimburse Consultant
for all reasonable and actual out-of-pocket expenses incurred by
him in the performance of his duties hereunder upon presentation of
appropriate documentation.
(c)
Consultant will be provided an
office, appropriate office supplies and equipment, and such support
and secretarial staff as is reasonably needed by Consultant to meet
his obligations under this Agreement. The expenses of the office
and staff will be paid by H&E.
(d)
In keeping with past treatment of
retiring senior executive officers of H&E, and subject to
Subparagraph (e) below, H&E will, during the Consulting Period
and any continuation of the term hereunder, continue to provide the
Consultant and his spouse with the hospitalization and medical
insurance group plan coverages that were available to him pursuant
to the Employment Agreement immediately prior to the effectiveness
of this Agreement or otherwise provide hospitalization and medical
insurance group plan coverages that are substantially similar
thereto in all material respects.
(e)
As an additional consideration for
obligations assumed hereunder by Consultant, and the services
Consultant hereby agrees to furnish to H&E, H&E agrees to
reimburse Consultant for any and all medical expenses incurred by
Consultant and his spouse to the extent, but only to the extent,
that such medical expenses are allowable as medical expenses under
Section 125 of the Internal Revenue Code (the “ Code
”), and such medical expenses are not otherwise paid or
payable by H&E or by any group or
2
individual health or insurance
policy or plan for the benefit of Consultant and his spouse or by
any governmental program, including Medicare and Medicaid, of which
Consultant and his spouse is a beneficiary. Consultant agrees, as
an express condition of entitlement to the reimbursement provided
for in this Paragraph, that Consultant and his spouse shall
promptly apply for enrollment in any private or public program or
health or insurance plan for which Consultant and his spouse may be
eligible, and shall continuously maintain eligibility for and
participation in such programs, policies or plans. Consultant
agrees, as an express condition of entitlement to the reimbursement
provided for in this Paragraph, that Consultant shall execute such
authorizations, consents or other documents as may be necessary to
permit H&E to make a determination whether any claims for
reimbursement under this Paragraph have been paid or are payable
under any private or public program or health insurance policy or
plan. Reg
