SENIOR MANAGEMENT AGREEMENT
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This SENIOR MANAGEMENT AGREEMENT (this "Agreement") is made as
of
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August 25, 1999, between ZEFER Corp., a Delaware corporation (the
"Company"),
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and James H. Slamp ("Executive").
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The Company and Executive desire to enter into an agreement
pursuant
to which Executive will purchase, and the Company will sell, up to
300,000
shares of the Company's Common Stock, par value $.01 per share (the
"Common
------
Stock"). All shares of Common Stock acquired by Executive are referred
to
- -----
herein as "Executive Stock." In addition, the Company desires to employ
the
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Executive and the Executive desires to be employed by the Company.
Certain
definitions are set forth in Section 10 of this Agreement.
The execution and delivery of this Agreement by the Company
and
Executive was contemplated as a condition to the purchase of shares of
Common
Stock and shares of the Class A Preferred by GTCR Fund VI, L.P., a
Delaware
limited partnership ("GTCR"), GTCR VI Executive Fund, L.P., a Delaware
limited
----
partnership ("Executive Fund") and GTCR Associates VI, a Delaware
general
--------------
partnership ("Associates Fund") (each an "Investor" and collectively,
the
--------------- --------
"Investors") pursuant to a purchase agreement between the Company and
the
---------
Investors dated as of March 23, 1999 (the "Purchase Agreement").
Certain
------------------
provisions of this Agreement are intended for the benefit of, and will
be
enforceable by, the Investors.
In consideration of the mutual covenants and promises
contained herein
and other good and valuable consideration, the receipt and sufficiency
of which
is hereby acknowledged by the parties hereto, the parties agree as
follows:
PROVISIONS RELATING TO EXECUTIVE STOCK
1. Purchase and Sale of Executive Stock.
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(a) Upon execution of this Agreement, Executive will
purchase, and
the Company will sell, 300,000 shares of Common Stock at a price of
$0.34 per
share. The Company will deliver to Executive the certificates
representing such
Executive Stock, and Executive will deliver to the Company a cashier's
or
certified check or wire transfer of funds in the aggregate amount of
$27,195.48
and a promissory note in the form of Exhibit A attached hereto in an
aggregate
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principal amount of $74,804.52 (the "Executive Note").
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(b) Within 30 days after the date hereof, Executive will make
an
effective election with the Internal Revenue Service under Section 83(b)
of the
Internal Revenue Code and the regulations promulgated thereunder in the
form of
Exhibit B attached hereto.
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(c) Until the occurrence of a Sale of the Company or a Public
Offering, all certificates evidencing shares of Executive Stock shall be
held by
the Company for the benefit of the Executive and the other holder(s) of
Executive Stock. Upon the occurrence of a Sale of the Company or a
Public
Offering, the Company will return the certificates for the Executive
Stock to
the record holders thereof.
(d) In connection with the purchase and sale of the Executive
Stock,
Executive represents and warrants to the Company that:
(i) The Executive Stock to be acquired by Executive
pursuant to
this Agreement will be acquired for Executive's own account and not
with a
view to, or intention of, distribution thereof in violation of the
Securities Act, or any applicable state securities laws, and the
Executive
Stock will not be disposed of in contravention of the Securities
Act or any
applicable state securities laws.
(ii) Executive is an executive officer of the Company,
is
sophisticated in financial matters and is able to evaluate the
risks and
benefits of the investment in the Executive Stock.
(iii) Executive is able to bear the economic risk of her
investment in the Executive Stock for an indefinite period of time
because
the Executive Stock has not been registered under the Securities
Act and,
therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available.
(iv) Executive has had an opportunity to ask questions
and
receive answers concerning the terms and conditions of the offering
of
Executive Stock and has had full access to such other information
concerning the Company as he has requested.
(v) This Agreement constitutes the legal, valid and
binding
obligation of Executive, enforceable in accordance with its terms,
and the
execution, delivery and performance of this Agreement by Executive
does not
and will not conflict with, violate or cause a breach of any
agreement,
contract or instrument to which Executive is a party or any
judgment, order
or decree to which Executive is subject.
(vi) Executive has not and will not take any action that
will
conflict with, violate or cause a breach of any noncompete,
nonsolicitation
or confidentiality agreement to which Executive is a party to or by
which
Executive is bound.
(vii) Executive is a resident of the State of
Massachusetts.
(e) As an inducement to the Company to issue the Executive
Stock to
Executive, and as a condition thereto, Executive acknowledges and agrees
that
neither the issuance of the Executive Stock to Executive nor any
provision
contained herein shall entitle Executive to remain
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in the employment of the Company or any of its Subsidiaries or affect
the right
of the Company to terminate Executive's employment at any time for any
reason,
subject, however, to the terms of this Agreement.
(f) Concurrently with the execution of this Agreement, (i)
Executive
shall execute in blank ten stock transfer powers in the form of Exhibit
C
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attached hereto (the "Stock Powers") with respect to the Executive Stock
and
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shall deliver such Stock Powers to the Company. The Stock Powers shall
authorize the Company to assign, transfer and deliver the shares of
Executive
Stock to the appropriate acquiror thereof pursuant to Section 3 below or
Section
5 of the Stockholders Agreement and under no other circumstances, and
(ii) the
Executive's spouse shall execute the consent in the form of Exhibit D
attached
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hereto.
2. Vesting of Executive Stock.
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(a) All of the shares of Executive Stock acquired hereunder
shall be
subject to vesting in the manner specified in this Section 2. Except as
otherwise provided in Sections 2(b) and 2(c) below, the Executive Stock
will
become vested in accordance with the following schedule (the "Vesting
-------
Schedule"), if as of each such date Executive is still employed by the
Company
- --------
or any of its Subsidiaries:
Date Cumulative Percentage of
---- Executive Stock to be Vested
----------------------------
March 31, 2000 20%
March 31, 2001 40%
March 31, 2002 60%
March 31, 2003 80%
March 31, 2004 100%
(b) After an initial Public Offering, the above Vesting
Schedule
shall remain effective until the end of the quarter in which the Public
Offering
occurred (the "Modification Date"), at which time the Vesting Schedule
shall be
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modified such that, so long as Executive is still employed by the
Company or any
of its Subsidiaries, the Executive Stock will vest as follows:
(i) If the Modification Date is June 30, then an
additional 5%
of Holder Stock will vest on such Modification Date and an
additional 5% of
Holder Stock will vest on each subsequent September 30, December
31, March
31 and June 30 so that the Holder Stock will be 100% vested on
March 31,
2004.
(ii) If the Modification Date is September 30, then an
additional
10% of Holder Stock will vest on such Modification Date and an
additional
5% of Holder
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Stock will vest on each subsequent December 31, March 31, June 30
and
September 30 so that the Holder Stock will be 100% vested on
March 31, 2004.
(iii) If the Modification Date is December 31, then an
additional 15% of Holder Stock will vest on such Modification Date
and an
additional 5% of Holder Stock will vest on each subsequent March
31,
June 30, September 30 and December 31 so that the Holder Stock will
be 100%
vested on March 31, 2004.
(iv) If the Modification Date is March 31, then an
additional
5% of Executive Stock will vest on each subsequent June 30,
September 30,
December 31 and March 31 so that the Executive Stock will be 100%
vested on
March 31, 2004.
(c) Upon the occurrence of a Transaction, all shares of Executive
Stock
which have not yet vested shall automatically vest one
business day
prior to the time of such event. The term "Transaction" shall
mean (i)
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a Sale of the Company or (ii) the liquidation, dissolution or
winding
up of the Company. Shares of Executive Stock which have become
vested
are referred to herein as "Vested Shares" and all other shares
of
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Executive Stock are referred to herein as "Unvested Shares."
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3. Repurchase Option.
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(a) In the event (i) Executive ceases to be employed by
the
Company and its Subsidiaries for any reason (the "Separation") or (ii)
Executive
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fails to make any principal or interest payment under the Executive Note
after
such payment becomes due and after giving effect to any applicable grace
period
(a "Triggering Event"), the Executive Stock (whether held by Executive
or one or
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more of Executive's transferees, other than the Company and Investors)
will be
subject to repurchase pursuant to the terms and conditions set forth in
this
Section 3 (the "Repurchase Option").
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(b) In the event of a Separation, (i) the purchase price
for
each Unvested Share of Executive Stock will be Executive's Original Cost
for
such share and (ii) the purchase price for each Vested Share of
Executive Stock
will be the Fair Market Value for such share as at the date of the
Separation;
provided, however, that if Executive's employment is terminated with
Cause, the
- -------- -------
purchase price for each Vested Share of Executive Stock will be
Executive's
Original Cost for such share. Notwithstanding anything in this Section 3
to the
contrary, upon a Triggering Event (even if there is also a Separation),
the
purchase price for each share of Executive Stock (whether a Vested Share
or
Unvested Share) will be Executive's Original Cost for such shares.
(c) The Company may elect to purchase all or any portion
of the
Unvested Shares or the Vested Shares by delivering written notice (the
"Repurchase Notice") to the holder or holders of the Executive Stock
within 120
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days after the Separation or Triggering Event. The Repurchase Notice
will set
forth the number of Unvested Shares and Vested Shares to be acquired
from each
holder, the aggregate consideration to be paid for such shares and the
time and
place for the closing of the transaction. The number of shares to be
repurchased by the Company shall first be satisfied
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to the extent possible from the shares of Executive Stock held by
Executive at
the time of delivery of the Repurchase Notice. If the number of shares
of
Executive Stock then held by Executive is less than the total number of
shares
of Executive Stock which the Company has elected to purchase, the
Company shall
purchase the remaining shares elected to be purchased from the other
holder(s)
of Executive Stock under this Agreement, pro rata according to the
number of
shares of Executive Stock held by such other holder(s) at the time of
delivery
of such Repurchase Notice (determined as nearly as practicable to the
nearest
share). The number of Unvested Shares and Vested Shares to be
repurchased
hereunder will be allocated among Executive and the other holders of
Executive
Stock (if any) pro rata according to the number of shares of Executive
Stock to
be purchased from such person.
(d) If for any reason the Company does not elect to purchase
all of
the Executive Stock pursuant to the Repurchase Option, all other
executives who
are parties to an agreement with the Company which is substantially
similar in
form and substance to this Agreement (each a "Senior Manager", and
collectively,
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the "Senior Management") on the date of the Separation or Triggering
Event and
-----------------
the Investors shall be entitled to exercise the Repurchase Option for
all or any
portion of the shares of Executive Stock the Company has not elected to
purchase
(the "Available Shares"). As soon as practicable after the Company has
----------------
determined that there will be Available Shares, but in any event within
90 days
after the Separation or Triggering Event, the Company shall give written
notice
(the "Option Notice") to the Senior Management and Investors setting
forth the
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number of Available Shares and the purchase price for the Available
Shares.
Senior Management and the Investors may elect to purchase any or all of
the
Available Shares by giving written notice to the Company within one
month after
the Option Notice has been given by the Company. If Senior Management
and the
Investors elect to purchase an aggregate number of shares greater than
the
number of Available Shares, the Available Shares shall be allocated
among Senior
Management and the Investors based upon the number of shares of Common
Stock
owned by each Senior Manager and each Investor on a fully diluted basis.
As
soon as practicable, and in any event within ten days, after the
expiration of
the one-month period set forth above, the Company shall notify each
holder of
Executive Stock as to the number of shares being purchased from such
holder by
the Senior Management and the Investors (the "Supplemental Repurchase
Notice").
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At the time the Company delivers the Supplemental Repurchase Notice to
the
holder(s) of Executive Stock, the Company shall also deliver written
notice to
each Senior Manager and each Investor setting forth the number of shares
such
Senior Manager and such Investor is entitled to purchase, the aggregate
purchase
price and the time and place of the closing of the transaction. The
number of
Unvested Shares and Vested Shares to be repurchased hereunder shall be
allocated
among the Company, Senior Management and the Investors pro rata
according to the
number of shares of Executive Stock to be purchased by each of them.
(e) The closing of the purchase of the Executive Stock
pursuant to
the Repurchase Option shall take place on the date designated by the
Company in
the Repurchase Notice or Supplemental Repurchase Notice, which date
shall not be
more than one month nor less than five days after the delivery of the
later of
either such notice to be delivered. The Company will pay for the
Executive Stock
to be repurchased by it pursuant to the Repurchase Option with (i) a
check or
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wire transfer of funds for (A) any shares of Executive Stock to be
repurchased
at Executive's Original Cost and (B) in the case of Executive Stock to
be
repurchased at Fair Market Value, that portion of such Executive Stock
which is
equal to the Executive's Original Cost, and (ii) in the case of
Executive Stock
to be repurchased at Fair Market Value, a subordinate note or notes for
that
portion of such Executive Stock which exceeds the Executive's Original
Cost; it
being understood and agreed that such note or notes shall be payable in
up to
two annual installments beginning on the first anniversary of the
closing of
such repurchase and bearing interest (payable quarterly) at a rate per
annum
equal to the prime rate as published in The Wall Street Journal from
time to
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time. Notwithstanding anything in this Section 3 to the contrary, any
amounts to
be paid by the Company with a check or wire transfer of funds pursuant
to this
Section 3(e) shall first be reduced (on a dollar for dollar basis) by
all
amounts outstanding under any bona fide debts owed by Executive to the
Company.
Each Senior Manager and each Investor will pay for the Executive Stock
to be
purchased by each of them pursuant to the Repurchase Option with a check
or wire
transfer of funds. The Company, the Senior Management and the Investors
will be
entitled to receive customary representations and warranties from the
sellers
regarding each seller's title to such Executive Stock.
(f) Notwithstanding anything to the contrary contained in
this
Agreement, all repurchases of Executive Stock by the Company shall be
subject to
applicable restrictions contained in the Delaware General Corporation
Law and in
the Company's and its Subsidiaries' debt and equity financing
agreements. If
any such restrictions prohibit the repurchase of Executive Stock
hereunder which
the Company is otherwise entitled or required to make, the Company may
make such
repurchases as soon as it is permitted to do so under such restrictions.
(g) Notwithstanding anything to the contrary contained in
this
Agreement, if the Fair Market Value of a share of Executive Stock is
finally
determined to be an amount at least 10% greater than the per share
repurchase
price for such share of Executive Stock in the Repurchase Notice or in
the
Supplemental Repurchase Notice, each of the Company and the Investors
shall have
the right to revoke its exercise of the Repurchase Option for all or any
portion
of the Executive Stock elected to be repurchased by it by delivering
notice of
such revocation in writing to the holders of Executive Stock during the
thirty-
day period beginning on the date that the Company and/or the Investors
are given
written notice that the Fair Market Value of a share of Executive Stock
was
finally determined to be an amount at least 10% greater than the per
share
repurchase price for Executive Stock set forth in the Repurchase Notice
or in
the Supplemental Repurchase Notice.
(h) The provisions of this Section 3 shall terminate with
respect to
Vested Shares upon consummation of a Public Offering or the occurrence
of a
Transaction.
4. Restrictions on Transfer of Executive Stock.
-------------------------------------------
(a) Transfer of Executive Stock. The holder of Executive
Stock shall
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not Transfer any interest in any shares of Executive Stock, except
pursuant to
(i) the provisions of Section 3 hereof, (ii) the provisions of Section
3 of the
Stockholders Agreement (a "Participating Sale"), (iii) an Approved Sale
(as
------------------
defined in Section 5 of the Stockholders Agreement), or (iv) the
-6-
provisions of Section 4(b) below.
(b) Certain Permitted Transfers. The restrictions in this
Section 4
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will not apply with respect to any Transfer of Executive Stock if made
(i)
pursuant to applicable laws of descent and distribution or to such
Person's
legal guardian in the case of any mental incapacity or among such
Person's
Family Group, or (ii) at a time when (A) the Common Stock of the Company
has
been trading for at least 45 consecutive days (including the day
immediately
preceding such Transfer) at a price that exceeds the initial Public
Offering
price by at least 20% and (B) the Common Stock bid and asked price on
the day of
such Transfer was at least 20% greater than the initial Public Offering
price,
but in the case of this clause (ii) only an amount of shares per
calendar year
up to the lesser of (x) the number of Vested Shares owned by Executive
at the
time of such Transfer and (y) 10% of the total number of shares of
Common Stock
owned by Executive at the time of the Company's initial Public Offering,
or
(iii) at such time as the Investors sell shares of Common Stock in a
Public
Sale, but in the case of this clause (iii) only an amount of shares (the
"Transfer Amount") equal to the lesser of (C) the number of Vested
Shares of
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Common Stock owned by Executive at the time of such Transfer and (D) the
number
of shares of Common Stock owned by Executive multiplied by a fraction
(the
"Transfer Fraction"), the numerator of which is the number of shares of
Common
-----------------
Stock sold by the Investors in such Public Sale and the denominator of
which is
the total number of shares of Common Stock held by the Investors prior
to the
Public Sale; provided that, if at the time of a Public Sale of shares by
the
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Investors, Executive chooses not to Transfer the Transfer Amount,
Executive
shall retain the right to Transfer an amount of Executive Stock at a
future date
equal to the lesser of (x) the number of Vested Shares owned by
Executive at
such future date and (y) the number of shares of Executive Stock owned
by
Executive at such future date multiplied by the Transfer Fraction;
provided
--------
further, that at any particular point in time during any given calendar
year the
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number of shares of Common Stock which the Executive has a right to
Transfer
pursuant to clause (ii) above shall be reduced by the number of shares
of Common
Stock which the Executive has Transferred in such calendar year pursuant
to
clause (iii) above and the number of shares of Common Stock which the
Executive
has a right to Transfer pursuant to clause (iii) above shall be reduced
by the
number of shares of Common Stock which the Executive has Transferred in
such
calendar year pursuant to clause (ii) above. Notwithstanding anything
in this
Section 4 to the contrary, the restrictions contained in this Section 4
will
continue to be applicable to the Executive Stock after any Transfer of
the type
referred to in clause (i) and the transferees of such Executive Stock
will agree
in writing to be bound by the provisions of this Agreement. Any
transferee of
Executive Stock pursuant to a transfer in accordance with the provisions
of this
Section 4(b)(i) is herein referred to as a "Permitted Transferee." Upon
the
--------------------
transfer of Executive Stock pursuant to this Section 4(b), the
transferring
Executive Stockholder will deliver a written notice (a "Transfer
Notice") to the
---------------
Company. In the case of a Transfer pursuant to clause (i) hereof, the
Transfer
Notice will disclose in reasonable detail the identity of the Permitted
Transferee(s). In addition, following the completion of an initial
Public
Offering, Executive, in her sole discretion, may pledge up to $2 million
worth
of Vested Shares as collateral for a loan so long as the pledgee of such
stock
and the Executive enter into a pledge agreement in form and substance
reasonably
satisfactory to the Board of Directors of the Company (the "Board"),
pursuant to
which pledgee, among other things, agrees that pledgee may only sell
such stock
in a Public Sale.
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(c) Termination of Restrictions. The restrictions set forth
in this
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Section 4 will continue with respect to each share of Executive Stock
until the
earlier of (i) the date on which such share of Executive Stock has been
transferred in a Public Sale permitted by this Section 4, or (ii) the
consummation of an Approved Sale.
5. Additional Restrictions on Transfer of Executive Stock.
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(a) Legend. The certificates representing the Executive
Stock will
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bear a legend in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED AS OF AUGUST ___, 1999, HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
---
BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, CERTAIN REPURCHASE OPTIONS AND CERTAIN OTHER
AGREEMENTS SET FORTH IN A SENIOR MANAGEMENT AGREEMENT BETWEEN
THE COMPANY AND AN EXECUTIVE OF THE COMPANY DATED AS OF AUGUST
___, 1999. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE
HOLDER HEREOF AT THE COMPANY'S PRINCIPAL PLACE OF BUSINESS
WITHOUT CHARGE."
(b) Opinion of Counsel. No holder of Executive Stock may
sell,
------------------
transfer or dispose of any Executive Stock (except pursuant to an
effective
registration statement under the Securities Act) without first
delivering to the
Company an written notice describing in reasonable detail the proposed
transfer,
together with an opinion of counsel (reasonably acceptable in form and
substance
to the Company) that neither registration nor qualification under the
Securities
Act and applicable state securities laws is required in connection with
such
transfer. In addition, if the holder of the Executive Stock delivers to
the
Company an opinion of counsel that no subsequent transfer of such
Executive
Stock shall require registration under the Securities Act, the Company
shall
promptly upon such contemplated transfer deliver new certificates for
such
Executive Stock which do not bear the Securities Act portion of the
legend set
forth in Section 5(a). If the Company is not required to deliver new
certificates for such Executive Stock not bearing such legend, the
holder
thereof shall not transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the
conditions
contained in this Section 5.
PROVISIONS RELATING TO EMPLOYMENT
6. Employment. The Company agrees to employ Executive and
Executive
----------
accepts such employment for the period beginning as of the date hereof
and
ending upon his/her
-8-
separation pursuant to Section 6(c) hereof (the "Employment Period").
-----------------
(a) Position and Duties.
-------------------
During the Employment Period, Executive shall serve as Executive
Vice
President and Chief Financial Officer of the Company and shall have
the
normal duties, responsibilities and authority of such office
subject to the
power of the President and Chief Executive Officer of the Company
(the
"President") to expand or limit such duties, responsibilities and
-----------
authority.
(ii) Executive shall report to the President and
Executive shall
devote his/her best efforts and his/her full business time and
attention to
the business and affairs of the Company and its subsidiaries.
(b) Salary, Bonus and Benefits. During the Employment
Period, the
--------------------------
Company will pay the Executive a base salary (the "Annual Base Salary")
of
------------------
$175,000 per annum, subject to any increase as determined by the
President.
Executive's Annual Base Salary for any partial year will be prorated
based upon
the number of days elapsed in such year. For the fiscal year ended
December 31,
1999, the Executive will be eligible for a bonus in an amount not to
exceed
$35,000. Therafter, during the Employment Period, the Executive shall
also be
eligible for an annual bonus in an amount not to exceed 35% of
Executive's then
applicable Annual Base Salary for such year; such bonus to be determined
by the
President based upon the Company's achievement of budgetary and other
objectives
set by the President. In addition, during the Employment Period, the
Company
will provide the Executive with (i) medical insurance benefits, and (ii)
such
other benefits approved by the President and made available to the
Company's
senior management. In addition, the Company will reimburse you for up to
a
maximum of $50,000 of necessary and reasonable expenses incurred by you
in
connection with your relocation to the greater Boston, Massachusetts
area.
(c) Events of Separation. The Employment Period will
continue until
--------------------
Executive's resignation, disability (as determined by the President in
his good
faith judgment) or death or until the President decides to terminate
Executive's
employment.
(d) Separation Without Cause; Resignation for Good Reason.
In the
-----------------------------------------------------
event that (i) the Company terminates the Executive's employment without
Cause
or (ii) the Executive resigns from his/her position with the Company for
Good
Reason, then the Executive shall be entitled to the following:
(i) the Company shall pay to the Executive, in a lump
sum within
15 days after such termination or resignation, an amount equal to
the sum
of (A) any unpaid base salary owed to the Executive for services
performed
prior to such termination, plus (B) the amount of any compensation
previously deferred by the Executive (together with any accrued
interest or
earnings thereon) and any accrued vacation pay, in each case to the
extent
not previously paid (the obligations set forth in clauses (A) and
(B) are
collectively referred to herein as the "Accrued Obligations");
-------------------
-9-
(ii) the Company shall pay each month to the Executive,
beginning on the date of the first normal executive payroll of the
Company
that occurs more than 30 days after such termination or
resignation, an
amount equal to one-twelfth (1/12) of the Executive's Annual Base
Salary as
of the date immediately before such termination or resignation;
provided
--------
however, that such payments shall immediately cease upon the
earliest to
--------
occur of (x) the Executive's death and (y) the six month
anniversary of
such termination or resignation. Notwithstanding anything in this
Section
6(d) to the contrary, in the event that the Executive becomes
employed with
another employer, then the payments to be made by the Company
pursuant to
this Section 6(d)(ii) shall be reduced (on a dollar for dollar
basis) in an
amount equal to the cash compensation received by Executive from
such
employer; and
(iii) the Company shall continue to provide medical
insurance
benefits to the Executive and to the Executive's family at least
equal to
those medical insurance benefits that would have been provided to
them in
the absence of such termination or resignation; provided however,
that such
-------- -------
payments shall immediately cease upon the earliest to occur of (x)
the
Executive's death and (y) the six month anniversary of such
termination or
resignation. Notwithstanding anything in this Section 6(d) to the
contrary,
in the event that the Executive becomes employed with another
employer and
is eligible for medical insurance benefits under another employer-
provided
plan, then the medical insurance benefits to be provided by the
Company
pursuant to this Section 6(d)(iii) shall be reduced to the extent
that the
Executive and his/her family is eligible to receive medical
insurance
benefits under such other employer-provided plan.
(e) Other Separations. In the event of a Separation other
than a
-----------------
termination by the Company without cause or a resignation by the
Executive for
Good Reason, the Company shall pay to the Executive (or his/her estate,
if
applicable), in a lump sum in cash within 15 days after such Separation,
an
amount equal to any Accrued Obligations.
7. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data obtained by him during the course of
his/her
performance under this Agreement concerning the business and affairs of
the
Company and its affiliates are the property of the Company, including
information concerning acquisition opportunities in or reasonably
related to the
Company's business or industry of which Executive becomes aware during
the
Employment Period. Therefore, Executive agrees that he will not disclose
to any
unauthorized person or use for his/her own account any of such
information,
observations or data without the Company's written consent, unless and
to the
extent that the aforementioned matters become generally known to and
available
for use by the public other than as a result of Executive's acts or
omissions to
act. Executive agrees to deliver to the Company at a Separation, or at
any other
time the Company may request in writing, all memoranda, notes, plans,
records,
reports and other documents (and copies thereof) relating to the
business of the
Company and its affiliates (including, without limitation, all
acquisition
prospects, lists and contact information) which he may then possess or
have
under his/her control.
-10-
8. Noncompetition and Nonsolicitation. Executive
acknowledges
----------------------------------
that in the course of his/her employment with the Company he will become
familiar with the Company's and its Subsidiaries' trade secrets and with
other
confidential information concerning the Company and such Subsidiaries
and that
his/her services will be of special, unique and extraordinary value to
the
Company. Therefore, Executive agrees that:
(a) Noncompetition. During the Employment Period and for a
period of
--------------
one year thereafter (the "Noncompete Period"), Executive shall not,
within the
-----------------
United States, directly or indirectly own, manage, control, participate
in,
consult with, render services for, or in any manner engage in any
business
competing with the businesses of the Company or its Subsidiaries or any
business
in which the Company or any of its Subsidiaries has requested and
received
information relating to the acquisition of such business by the Company
and the
Subsidiaries prior to the Separation; provided that passive ownership of
less
--------
than 5% of the outstanding stock of any publicly-traded corporation
shall not,
in and of itself, be deemed to violate this Section 8(a); provided
further that
--------
if the Executive's Employment with the Company is terminated by the
Company
without Cause or the Executive resigns for Good Reason within a twenty
four
month period following a Sale of the Company, the one year period
referenced
above shall be shortened to a six month period.
(b) Nonsolicitation. During the Noncompete Period, Executive
shall
---------------
not directly or indirectly through another entity (i) induce or attempt
to
induce any employee of the Company or its Subsidiaries to leave the
employ of
the Company or such Subsidiary, or in any way interfere with the
relationship
between the Company and any Subsidiary and any employee thereof, (ii)
hire any
person who was an employee of the Company and any Subsidiary within 180
days
prior to the time such employee was hired by the Executive, (iii) induce
or
attempt to induce any customer, supplier, licensee or other business
relation of
the Company and any Subsidiary to cease doing business with the Company
or such
Subsidiary or in any way interfere with the relationship between any
such
customer, supplier, licensee or business relation and the Company and
any
Subsidiary or (iv) directly or indirectly acquire or attempt to acquire
an
interest in any business relating to the business of the Company and any
Subsidiary and with which the Company and any Subsidiary has entertained
discussions or has requested and received information relating to the
acquisition of such business by the Company and any Subsidiary in the
two-year
period immediately preceding a Separation.
(c) Enforcement. If, at the time of enforcement of Section 7
or this
-----------
Section 8, a court holds that the restrictions stated herein are
unreasonable
under circumstances then existing, the parties hereto agree that the
maximum
duration, scope or geographical area reasonable under such circumstances
shall
be substituted for the stated period, scope or area and that the court
shall be
allowed to revise the restrictions contained herein to cover the maximum
duration, scope and area permitted by law. Because Executive's services
are
unique and because Executive has access to confidential information, the
parties
hereto agree that money damages would be an inadequate remedy for any
breach of
this Agreement. Therefore, in the event a breach or threatened breach of
this
Agreement, the Company or its successors or assigns may, in addition to
other
rights and
-11-
remedies existing in their favor, apply to any court of competent
jurisdiction
for specific performance and/or injunctive or other relief in order to
enforce,
or prevent any violations of, the provisions hereof (without posting a
bond or
other security).
(d) Additional Acknowledgments. Executive acknowledges that
the
--------------------------
provisions of this Section 8 are in consideration of: (i) employment
with the
Company, (ii) the issuance of the Executive Stock and (iii) additional
good and
valuable consideration as set forth in this Agreement. In addition,
Executive
agrees and acknowledges that the restriction contained in Section 7 and
this
Section 8 do not preclude Executive from earning a livelihood, nor do
they
unreasonably impose limitations on Executive's ability to earn a living.
In
addition, Executive agrees and acknowledges that the potential harm to
the
Company of the non-enforcement of Section 7 and this Section 8 outweighs
any
potential harm to Executive of its enforcement by injunction or
otherwise.
Executive acknowledges that he has carefully read this Agreement and has
given
careful consideration to the restraints imposed upon Executive by this
Agreement, and is in full accord as to their necessity for the
reasonable and
proper protection of confidential and proprietary information of the
Company now
existing or to be developed in the future. Executive expressly
acknowledges and
agrees that each and every restraint imposed by this Agreement is
reasonable
with respect to subject matter, time period and geographical area.
GENERAL PROVISIONS
10. Definitions.
-----------
"Affiliate" of an Investor means any direct or indirect
general or
---------
limited partner of such Investor, or any employee or owner thereof, or
any other
person, entity or investment fund controlling, controlled by or under
common
control with such Investor, and will include, without limitation, its
owners and
employees.
"Cause" means (i) the commission of a felony or a crime
involving
-----
moral turpitude or the commission of any other act or omission involving
dishonesty or fraud with respect to the Company or any of its
Subsidiaries or
any of their customers or suppliers, (ii) conduct which brings the
Company or
any of its Subsidiaries into substantial public disgrace or disrepute,
(iii)
substantial and repeated failure to perform duties of the office held by
Executive as reasonably directed by the President, (iv) gross negligence
or
willful misconduct with respect to the Company or any of its
Subsidiaries or (v)
any material breach of Section 6(a)(ii), 7 or 8 of this Agreement.
"Closing" shall have the meaning set forth in the Purchase
Agreement.
-------
"Executive's Family Group" means Executive's spouse and
descendants
------------------------
(whether natural or adopted), any trust solely for the benefit of
Executive
and/or Executive's spouse and/or descendants and any retirement plan for
the
Executive.
"Executive Stock" will continue to be Executive Stock in the
hands of
---------------
any holder
-12-
other than Executive (except for the Company and the Investors and
except for
transferees in a Public Sale), and except as otherwise provided herein,
each
such other holder of Executive Stock will succeed to all rights and
obligations
attributable to Executive as a holder of Executive Stock hereunder.
Executive
Stock will also include shares of the Company's capital stock issued
with
respect to Executive Stock by way of a stock split, stock dividend or
other
recapitalization. Notwithstanding the foregoing, all Unvested Shares
shall
remain Unvested Shares after any Transfer thereof.
"Fair Market Value" of each share of Executive Stock means the
average
-----------------
of the closing prices of the sales of such Executive Stock on all
securities
exchanges on which such Executive Stock may at the time be listed, or,
if there
have been no sales on any such exchange on any day, the average of the
highest
bid and lowest asked prices on all such exchanges at the end of such
day, or, if
on any day such Executive Stock is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ System as of
4:00 P.M.,
New York time, or, if on any day such Executive Stock is not quoted in
the
NASDAQ System, the average of the highest bid and lowest asked prices on
such
day in the domestic over-the-counter market as reported by the National
Quotation Bureau Incorporated, or any similar successor organization, in
each
such case averaged over a period of 21 days consisting of the day as of
which
the Fair Market Value is being determined and the 20 consecutive
business days
prior to such day. If at any time such Executive Stock is not listed on
any
securities exchange or quoted in the NASDAQ System or the over-the-
counter
market, the Fair Market Value will be the fair value of such Executive
Stock as
determined in good faith by the Board. If the Executive reasonably
disagrees
with such determination, the Executive shall deliver to the Board a
written
notice of objection within ten days after delivery of the Repurchase
Notice (or
if no Repurchase Notice is delivered, then within ten days after
delivery of the
Supplemental Repurchase Notice). Upon receipt of the Executive's written
notice
of objection, the Board and the Executive will negotiate in good faith
to agree
on such Fair Market Value. If such agreement is not reached within 30
days after
the delivery of the Repurchase Notice (or if no Repurchase Notice is
delivered,
then within 30 days after the delivery of the Supplemental Repurchase
Notice),
Fair Market Value shall be determined by an appraiser jointly selected
by the
Board and the Executive, which appraiser shall submit to the Board and
the
Executive a report within 30 days of its engagement setting forth such
determination. If the parties are unable to agree on an appraiser within
45 days
after delivery of the Repurchase Notice or the Supplemental Repurchase
Notice,
within seven days, each party shall submit the names of four nationally
recognized investment banking firms, and each party shall be entitled to
strike
two names from the other party's list of firms, and the appraiser shall
be
selected by lot from the remaining four investment banking firms. The
expenses
of such appraiser shall be borne by the party whose Fair Market Value
determination when subtracted from the appraiser's determination of Fair
Market
Value has the greater absolute value; provided that, in the event that
there is
no difference between each party's absolute value, then the expenses of
such
appraiser shall be shared equally by the parties. The determination of
such
appraiser as to Fair Market Value shall be final and binding upon all
parties.
"GAAP" means United States generally accepted accounting
principles as
----
in effect
-13-
from time to time.
"Good Reason" means an action by the Company which results in
(i) a
-----------
significant diminution of the duties of Executive from the standard
duties of
senior executives of companies comparable to the Company, or (ii) a
reduction of
the Executive's Annual Base Salary.
"Original Cost" means, with respect to each share of Common
Stock
-------------
purchased hereunder, $.34 (as proportionately adjusted for all
subsequent stock
splits, stock dividends and other recapitalizations).
"Person" means an individual, a partnership, a limited
liability
------
company, a corporation, an association, a joint stock company, a trust,
a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Public Offering" means the sale in an underwritten public
offering
---------------
registered under the Securities Act of shares of the Company's Common
Stock
approved by the Board.
"Public Sale" means (i) any sale pursuant to a registered
public
-----------
offering under the Securities Act or (ii) any sale to the public
pursuant to
Rule 144 promulgated under the Securities Act effected through a broker,
dealer
or market maker (other than pursuant to Rule 144(k) prior to a Public
Offering).
"Sale of the Company" means any transaction or series of
transactions
-------------------
pursuant to which any person(s) or entity(ies) other than the Investor
and its
Affiliates in the aggregate acquire(s) (i) capital stock of the Company
possessing the voting power (other than voting rights accruing only in
the event
of a default, breach or event of noncompliance) to elect a majority of
the
Company's board of directors (whether by merger, consolidation,
reorganization,
combination, sale or transfer of the Company's capital stock,
shareholder or
voting agreement, proxy, power of attorney or otherwise) or (ii) all or
substantially all of the Company's assets determined on a consolidated
basis.
"Securities Act" means the Securities Act of 1933, as amended
from
--------------
time to time.
"Stockholders Agreement" means the Stockholders Agreement of
even date
----------------------
herewith among the Company and certain of its stockholders.
"Subsidiary" means any corporation of which the Company owns
----------
securities having a majority of the ordinary voting power in electing
the board
of directors directly or through one or more subsidiaries.
"Transfer" means to sell, transfer, assign, pledge or
otherwise
--------
dispose of (whether with or without consideration and whether
voluntarily or
involuntarily or by operation of law).
11. Notices. Any notice provided for in this Agreement must
be in
-------
writing and
-14-
must be either personally delivered, mailed by first class mail (postage
prepaid
and return receipt requested) or sent by reputable overnight courier
service
(charges prepaid) to the recipient at the address below indicated:
If to the Company:
-----------------
ZEFER Corp.
105 South Street
Boston, MA 02111
Attention: President
with copies to:
--------------
GTCR Fund VI, L.P.
GTCR VI Executive Fund, L.P.
GTCR Associates VI
c/o GTCR Golder Rauner, L.L.C.
6100 Sears Tower
Chicago, Illinois 60606-6402
Attention: Philip A. Canfield
Timothy P. McAdam
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Stephen L. Ritchie, Esq.
Rope & Gray
One International Place
Boston, Massachusetts 02110
Attention: Keith Higgins, Esq.
If to the Executive:
-------------------
James H. Slamp
28 Cedar Street
Cohasset, MA 02025
-15-
If to the Investors:
-------------------
GTCR Fund VI, L.P.
GTCR VI Executive Fund, L.P.
GTCR Associates VI
c/o GTCR Golder Rauner, L.L.C.
6100 Sears Tower
Chicago, Illinois 60606-6402
Attention: Philip A. Canfield
Timothy P. McAdam
with a copy to:
--------------
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Stephen L. Ritchie, Esq.
or such other address or to the attention of such other person as the
recipient
party shall have specified by prior written notice to the sending party.
Any
notice under this Agreement will be deemed to have been given when so
delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
12. General Provisions.
------------------
(a) Expenses. The Company agrees to pay the reasonable legal
expenses
--------
of the Executive incurred in connection with the negotiation and
execution of
this Agreement. In addition, expenses (including reasonable attorneys'
fees)
incurred by the Executive in defending any civil, criminal,
administrative or
investigative action, suit or proceeding shall be paid by the Company in
advance
of the final disposition of such action, suit or proceeding, unless
otherwise
determined by the Outside Directors (as defined in that certain
Stockholders
Agreement, dated as of March 23, 1999, by and among the Company, the
Investors,
the Executive and certain other stockholders), upon receipt of an
undertaking by
or on behalf of the Executive to repay such amount if it shall
ultimately be
determined that the Executive is not entitled to indemnification by the
Company.
(b) Transfers in Violation of Agreement. Any Transfer or
attempted
-----------------------------------
Transfer of any Executive Stock in violation of any provision of this
Agreement
shall be void, and the Company shall not record such Transfer on its
books or
treat any purported transferee of such Executive Stock as the owner of
such
stock for any purpose.
(c) Severability. Whenever possible, each provision of this
Agreement
------------
will be interpreted in such manner as to be effective and valid under
applicable
law, but if any provision of this Agreement is held to be invalid,
illegal or
unenforceable in any respect under any applicable law
-16-
or rule in any jurisdiction, such invalidity, illegality or
unenforceability
will not affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction
as if
such invalid, illegal or unenforceable provision had never been
contained
herein.
(d) Complete Agreement. This Agreement, those documents
expressly
------------------
referred to herein and other documents of even date herewith embody the
complete
agreement and understanding among the parties and supersede and preempt
any
prior understandings, agreements or representations by or among the
parties,
written or oral, which may have related to the subject matter hereof in
any way.
(e) Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which
taken
together constitute one and the same agreement.
(f) Successors and Assigns. Except as otherwise provided
herein, this
----------------------
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company, the Investors and their respective successors
and
assigns (including subsequent holders of Executive Stock); provided that
the
rights and obligations of Executive under this Agreement shall not be
assignable
except in connection with a permitted transfer of Executive Stock
hereunder.
(g) Choice of Law. The laws of Delaware shall govern all
issues
-------------
concerning the relative rights of the Company and its stockholders and
all other
questions concerning the construction, validity and interpretation of
this
Agreement, without giving effect to any choice of law or other conflict
of law
provision or rule (whether of the State of Delaware or any other
jurisdiction)
that would cause the application of the laws of any jurisdiction other
than the
State of Delaware.
(h) Remedies. Each of the parties to this Agreement
(including the
--------
Investors) will be entitled to enforce its rights under this Agreement
specifically, to recover damages and costs (including attorney's fees)
caused by
any breach of any provision of this Agreement and to exercise all other
rights
existing in its favor. The parties hereto agree and acknowledge that
money
damages may not be an adequate remedy for any breach of the provisions
of this
Agreement and that any party may in its sole discretion apply to any
court of
law or equity of competent jurisdiction (without posting any bond or
deposit)
for specific performance and/or other injunctive relief in order to
enforce or
prevent any violations of the provisions of this Agreement.
(i) Amendment and Waiver. The provisions of this Agreement
may be
--------------------
amended and waived only with the prior written consent of the Company,
the
Executive and the Majority Holders (as defined in the Purchase
Agreement).
(j) Insurance. The Company, at its discretion, may apply for
and
---------
procure in its own name and for its own benefit life and/or disability
insurance
on Executive in any amount or amounts considered available. Executive
agrees to
cooperate in any medical or other examination,
-17-
supply any information, and to execute and deliver any applications or
other
instruments in writing as may be reasonably necessary to obtain and
constitute
such insurance. Executive hereby represents that he has no reason to
believe
that her life is not insurable at rates now prevailing for healthy
persons of
his/her age.
(k) Business Days. If any time period for giving notice or
taking
-------------
action hereunder expires on a day which is a Saturday, Sunday or holiday
in the
state in which the Company's chief executive office is located, the time
period
shall be automatically extended to the business day immediately
following such
Saturday, Sunday or holiday.
(l) Indemnification and Reimbursement of Payments on Behalf
of
----------------------------------------------------------
Executive. The Company and its Subsidiaries shall be entitled to deduct
or
- ---------
withhold from any amounts owing from the Company or any of its
Subsidiaries to
the Executive any federal, state, local or foreign withholding taxes,
excise
taxes, or employment taxes ("Taxes") imposed with respect to the
Executive's
-----
compensation or other payments from the Company or any of its
Subsidiaries or
the Executive's ownership interest in the Company, including, without
limitation, wages, bonuses, dividends, the receipt or exercise of stock
options
and/or the receipt or vesting of restricted stock. The Executive shall
indemnify
the Company and its Subsidiaries for any amounts paid with respect to
any such
Taxes, together with any interest, penalties and related expenses
thereto.
(m) Termination. This Agreement (except for the provisions of
Section
-----------
7) shall survive a Separation and shall remain in full force and effect
after
such Separation.
(n) Generally Accepted Accounting Principles; Adjustments of
Numbers.
----------------------------------------------------------------
Where any accounting determination or calculation is required to be made
under
this Agreement or the exhibits hereto, such determination or calculation
(unless
otherwise provided) shall be made in accordance with generally accepted
accounting principles, consistently applied, except that if because of a
change
in generally accepted accounting principles the Company would have to
alter a
previously utilized accounting method or policy in order to remain in
compliance
with generally accepted accounting principles, such determination or
calculation
shall continue to be made in accordance with the Company's previous
accounting
methods and policies. All numbers set forth herein which refer to share
prices
or amounts will be appropriately adjusted to reflect stock splits, stock
dividends, combinations of shares and other recapitalizations affecting
the
subject class of stock.
(o) Deemed Transfer of Executive Stock. If the Company
(and/or the
----------------------------------
Investors and/or any other Person acquiring securities) shall make
available, at
the time and place and in the amount and form provided in this
Agreement, the
consideration for the Executive Stock to be repurchased in accordance
with the
provisions of this Agreement, then from and after such time, the person
from
whom such shares are to be repurchased shall no longer have any rights
as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement), and such shares shall
be
deemed purchased in accordance with the applicable provisions hereof and
the
Company (and/or the Investors and/or any other Person acquiring
securities)
shall be
-18-
deemed the owner and holder of such shares, whether or not the
certificates
therefor have been delivered as required by this Agreement.
(p) No Pledge or Security Interest. The purpose of the
Company's
------------------------------
retention of the Executive's stock certificates and executed stock
powers is
solely to facilitate the repurchase provisions set forth in Section 3
herein and
does not constitute a pledge by the Executive of, or the granting of a
security
interest in, the underlying stock.
(q) Rights Granted to GTCR and its Affiliates. Any rights
granted to
-----------------------------------------
GTCR and its Affiliates hereunder may also be exercised (in whole or in
part) by
its designees (which may be Affiliates).
* * * * *
-19-
IN WITNESS WHEREOF, the parties hereto have executed this
Senior
Management Agreement on the date first written above.
ZEFER CORP.
By: /s/ Sean W. Mullaney
-------------------------------------------
Sean W. Mullaney
Executive Vice President and General
Counsel
/s/ James H. Slamp
-------------------------------------------
James H. Slamp
Agreed and Accepted:
GTCR FUND VI, L.P.
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR Golder Rauner, L.L.C.
Its: General Partner
By: /s/ illegible
----------------------------------
Name:
----------------------------------
Its: Principal
GTCR VI EXECUTIVE FUND, L.P.
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR Golder Rauner, L.L.C.
Its: General Partner
By: /s/ illegible
----------------------------------
Name:
----------------------------------
Its: Principal
GTCR ASSOCIATES VI
By: GTCR Partners VI, L.P.
Its: Managing General Partner
By: GTCR Golder Rauner, L.L.C.
Its: General Partner
By: /s/ illegible
----------------------------------
Name:
----------------------------------
Its: Principal
