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EXHIBIT 10.80
This Employment and Noncompetition Agreement (the
"Agreement") is entered into as of the 12 day of January,
1999 by and between Xxxxxxx Xxxxxxxx ("Xxxxxxxx"), an
individual residing at 0000 Xxxxxxxx, Xxxxxx, Xxxx 00000,
and TPSS Acquisition Corporation, an Ohio corporation having
its principal place of business at 0000 Xxxxxxxx Xxxx,
Xxxxxx, Xxxx 00000 ("TPSS").
WITNESSETH
WHEREAS, TPSS has acquired all of the assets and
assumed certain of the liabilities of Toledo Pickling &
Steel Sales, Inc. ("Toledo Pickling") pursuant to an Asset
Purchase Agreement dated as of December 31, 1998 between
TPSS and Toledo Pickling (the "Asset Purchase Agreement");
WHEREAS, TPSS has required, as a condition to the
purchase of the assets and the assumption of certain
liabilities described in the Asset Purchase Agreement, that
Ciralsky enter into this Agreement; and
WHEREAS, Ciralsky desires to be employed by TPSS, each
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing
premises and the mutual promises hereinafter set forth, and
other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto
agree as follows:
Section 1. Employment. TPSS hereby employs Ciralsky,
and Ciralsky hereby accepts employment with TPSS, on the
terms and conditions hereinafter set forth. Ciralsky shall
have the title of Vice-Chairman of TPSS. Any title given to
Ciralsky hereunder or pursuant to any action by the board of
directors of either TPSS or TPSS's parent company,
Consolidated Capital of North America, Inc. ("Consolidated
Capital") shall be subject to change from time to time at
the discretion of the board of directors of TPSS or
Consolidated Capital, as the case may be. In his capacity
as Vice-Chairman of TPSS, Ciralsky shall have all of the
responsibilities normally associated with such position,
subject to such responsibilities being added to or narrowed
or otherwise modified by TPSS's or Consolidated Capital's
board of directors. The parties stipulate and agree that
Ciralsky is not an "employee at will" under any applicable
law.
Section 2. Term. Except as expressly provided in this
Section 2, or in Sections 4 or 5 below, the term of this
Agreement shall commence as of the date hereof and shall
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continue for three (3) TPSS is under no duty or obligation
to extend this Agreement upon expiration of the three year
term.
Section 3. Compensation.
(a) Ciralsky's annual salary shall be $250,000, payable by
TPSS in equal bi-monthly installments in arrears.
(b) Ciralsky shall also be entitled to an annual bonus in
the amount set forth below, to be paid no later than 120
days after the end of calendar years 1999, 2000 and 2001.
The amount of the annual bonus under this Section 3(b) shall
be an amount equal to 10% of the first One Million Dollars
($1,000,000) of net profits of TPSS, as calculated according
to generally accepted accounting principles and after all
extraordinary items are taken into account, and thereafter,
an amount equal to 5% of each successive $1,000,000 of net
profits of TPSS, also calculated according to generally
accepted accounting principles and after all extraordinary
items are taken into account.
(c) Ciralsky shall also be entitled to receive options to
purchase 750,000 shares of Consolidated Capital's common
stock to be vested pursuant to the following schedule:
options for 250,000 shares shall be issued upon closing of
the transaction contemplated in the Asset Purchase Agreement
described above; and options for an additional 500,000
shares shall be issued upon completion of the first year of
employment pursuant to this Agreement, provided that at the
completion of said first year of employment, TPSS reports a
positive EBITDA (as defined in Section 3(d) below) for the
most recently-completed fiscal quarter. All such stock
options will be made pursuant to Consolidated Capital's 1997
Stock Incentive Plan, as amended from time to time and shall
have an exercise price equal to the fair market value of
Consolidated Capital's common stock at the time of issuance.
(d) For purposes of this Section 3, the term "EBITDA" shall
mean the earnings of TPSS, determined in accordance with
generally-accepted accounting principles, consistently
applied, before reduction for interest, corporate income
taxes, depreciation and amortization charges.
(e) Ciralsky shall also be entitled to participate in all
miscellaneous benefits and perquisites generally available
to all employees of TPSS, on a basis consistent with other
employees of similar rank.
(f) All ordinary and necessary expenses reasonably incurred
by Ciralsky in connection with the performance of his duties
hereunder, including expenses for travel, entertainment and
other business activities, shall be paid by TPSS or
reimbursed to Ciralsky as the case may be, all in accordance
with TPSS's policies and procedures generally applicable to
such expenses.
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(g) Ciralsky shall be entitled to four (4) weeks per year
paid vacation time. All such vacations shall be taken at
times approved in advance by the chief executive officer or
president of TPSS's parent corporation. Vacation will not
accumulate and there is no right to be paid for unused
vacation time.
(h) TPSS will provide Ciralsky with a car allowance of
$700.00 per month. In addition, TPSS will be responsible
for all maintenance and operating costs thereof.
Section 4. Termination By TPSS.
(a) Ciralsky's employment under Section 1 of this Agreement
may be terminated by TPSS at any time with or without Cause
(as hereinafter defined).
(b) If Ciralsky's employment is terminated for Cause,
Ciralsky shall have no further rights to a salary or any
other benefits or compensation under Section 3, and,
following such termination, the provisions of Sections 6 and
7 of this Agreement shall continue in full force and effect
in accordance with their terms.
(c) If Ciralsky's employment is terminated without Cause,
Ciralsky shall continue to be entitled to receive the
compensation set forth in Section 3 of this Agreement
through the date of such termination and for one (1) year
following such termination. During such period, the
provisions of Sections 6, excluding Section 6(a), and
Section 7 of this Agreement shall continue in full force and
effect in accordance with their terms.
(d) Ciralsky's employment shall be automatically terminated
upon Ciralsky's death, legal incapacity or a determination
by the board of directors that due to changes in his
physical or mental condition he is unable to continue to
perform his duties under this Agreement. If Ciralsky's
employment is terminated pursuant to the immediately
preceding sentence, Ciralsky (or his estate) shall be
entitled to receive the salary set forth in Section 3(a) of
this Agreement through the date of such termination, but not
thereafter. In addition, if Ciralsky's employment is
terminated pursuant to the first sentence of this Section
4(d), neither Ciralsky nor his estate shall have any further
rights to participate in any bonus or stock options as set
forth in Section 3(b) and (c).
(e) For purposes of this Agreement, the term "Cause" shall
mean (i) neglect of his duties to TPSS or Consolidated
Capital, (ii) breach of fiduciary duties to TPSS or
Consolidated Capital, (iii) commission of a felony in the
course of performing his duties to TPSS or Consolidated
Capital, (iv) usurpation of a corporate opportunity of TPSS
or Consolidated Capital, (v) mismanagement of TPSS or
Consolidated Capital, (vi) a willful and material failure to
follow a legal and reasonable order or directive by the
board of directors of TPSS or Consolidated Capital, or (vii)
a failure to perform the duties described herein.
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Section 5. Resignation By Ciralsky. Ciralsky may
resign as an employee of TPSS under this Agreement upon (i)
TPSS's material breach of this Agreement, provided that
Ciralsky has given TPSS notice of such breach and TPSS has
failed to cure such breach within thirty (30) days following
its receipt of such notice, or (ii) upon thirty (30) days'
prior written notice to TPSS. Upon a resignation by
Ciralsky under any provision in the prior sentence, Ciralsky
shall be entitled to that portion of his salary accrued
through the date of such resignation but shall be entitled
to no further salary or benefits under this Agreement unless
Ciralsky resigns pursuant to clause (i) above, in which
event, Ciralsky shall be entitled to the compensation set
forth in Section 4(c) herein. In the event that Ciralsky
resigns other than as expressly permitted by this Section 5,
TPSS may withhold all amounts then owing to Ciralsky as
liquidated damages for such wrongful termination.
Section 6. Noncompetition, Nondisclosure and
Noninducement.
(a) During the term of his employment, Ciralsky will
have direct responsibilities with respect to a number of
clients or customers of TPSS. Ciralsky acknowledges that
all such clients and customers are the clients and customers
of TPSS and that in dealing with such clients and customers,
he occupies a position of trust with TPSS. Accordingly,
until one year following the termination of this Agreement
pursuant to the terms and provisions of Sections 2, 4 and 5
hereof, Ciralsky will not, either directly or indirectly, on
his own behalf or on behalf of any other enterprise, render
or offer to render goods or services of the kind generally
rendered by TPSS to any of the clients or customers of TPSS
to which goods or services have been rendered by TPSS during
the twelve months immediately preceding the termination of
his employment with TPSS.
(b) As a result of the position that he occupied with
Toledo Pickling and the confidences placed in him by TPSS
and its affiliates, Ciralsky has been entrusted with
significant responsibilities. The parties recognize that if
Ciralsky were to engage in direct competition with TPSS or
its affiliates while employed by TPSS or during the period
immediately after termination of his employment, TPSS would
be unfairly damaged. Accordingly, during the term of his
employment and until the termination of this Agreement
pursuant to the terms and provisions of Sections 2, 4 and 5
hereof, Ciralsky will not provide, directly or indirectly,
on his own behalf or on behalf of any other enterprise, in
the Noncompetition Territory (as herein after defined),
goods or services of the kind generally provided by TPSS
during the term of this Agreement. For purposes of this
Agreement, the term "Noncompetition Territory" shall mean an
area in or within a 1000-mile radius of any facility
operated by TPSS during the term of this Agreement.
(c) Ciralsky acknowledges that during the course of
his employment, he will continue to have free access to
confidential and proprietary information, forms and other
materials, all of which Ciralsky acknowledges to be the
property of TPSS and its affiliates, valuable to its and
their business and not publicly available. Ciralsky agrees
that he will not, either during the term of his employment
by TPSS or thereafter, (i) disclose to any other person or
entity any confidential or proprietary information, trade
secret, forms or other material of TPSS or its affiliates,
except for disclosures to directors, officers, key
employees, independent accountants and counsel of TPSS and
its affiliates as may be necessary or appropriate in the
performance of his duties hereunder, or (ii) use any such
confidential or proprietary information, trade secret, forms
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or other material of TPSS or its affiliates, except as may
be necessary or appropriate in the performance of his duties
hereunder. Ciralsky agrees not to take with him upon
leaving the employ of TPSS any document or paper containing,
constituting or relating to any confidential information or
trade secret of TPSS or its affiliates.
(d) Ciralsky agrees that, for a period of one (1) year
following the termination of his employment with TPSS, he
will not directly or indirectly, on his own behalf or on
behalf of any other enterprise, induce or attempt to induce
any of the employees of TPSS or TPSS's affiliates to leave
the employment of TPSS or of such affiliates.
(e) Ciralsky stipulates that monetary damages will not
adequately compensate TPSS for any violation of this Section
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lacks an interest that could be protected by injunctive
relief if TPSS ceases business following a breach of the
terms hereof by Ciralsky.
(f) The parties agree that nothing in this Agreement
shall prohibit or hinder Ciralsky from conducting brokerage
activities in secondary steel.
Section 7. Miscellaneous.
(a) Ciralsky represents and warrants that neither the
execution and delivery of this Agreement nor the performance
of his duties hereunder violates the provisions of any other
agreement to which he is a party or by which he is bound.
(b) Any notice, request, or other communication given
hereunder shall be in writing and, (i) if given to TPSS,
shall be sent by certified or registered mail, by
telecopier, or by a nationally recognized overnight delivery
service, addressed to TPSS c/o Consolidated Capital at 00000
Xx. Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000; telecopier (310)
787-3177; and (ii) if given to Ciralsky, shall be sent by
certified or registered mail, by telecopier, or by a
nationally recognized overnight delivery service, addressed
to Ciralsky at 0000 Xxxxxxxx, Xxxxxx, Xxxx 00000. Any party
may change the address to which notices, requests and other
communications are to be addressed by notice given to the
other parties in accordance with the provisions of this
Section 7(b). Notices, requests and other communications
shall be deemed to be given when received, which shall be
the date and time indicated on the receipt therefor or
identified by the delivery service with respect thereto.
(c) If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in
part, such invalidity and unenforceability shall not affect
the remaining provisions hereof which shall remain in full
force and effect.
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(d) No modification or waiver of any of the provisions
of this Agreement and no consent by either party to any
departure therefrom shall be effective unless in writing
signed by or on behalf of the party so modifying or waiving,
and the same shall be effective only for the period and on
the conditions and for the specific instance and purposes
specified in such writing.
(e) This Agreement supersedes all prior agreements,
understandings and representations (oral, written, implied
or expressed) between Ciralsky and TPSS relating to the
subject matter hereof.
(f) This Agreement shall be governed by the laws of
the State of Ohio.
(g) In the event that TPSS should be dissolved during
the period of time TPSS is obligated to make payments to
Ciralsky hereunder, the balance due or to become due
hereunder shall be considered a debt of TPSS and shall not
be discharged by reason of such dissolution.
(h) This Agreement is personal in nature and neither
of the parties hereto shall, without the consent of the
other, assign or transfer this Agreement or any rights or
obligations hereunder, except that TPSS shall assign or
transfer this Agreement to any successor corporation in the
event of a merger, consolidation, or transfer or sale of all
or substantially all of the assets of TPSS; provided,
however, that in the case of any such assignment or
transfer, (i) TPSS will require that the assignee or
transferee be bound by and benefit from this Agreement and
(ii) Ciralsky shall release TPSS from any further liability
hereunder following such assignment.
IN WITNESS WHEREOF, this Agreement has been duly executed by
Ciralsky and on behalf of TPSS by its duly authorized
representative, all as of the date first above written.
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
TPSS ACQUISITION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
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The undersigned executes this Employment and Noncompetition
Agreement for the sole and express purpose of acknowledging
its obligations under Section 3(c) and guaranteeing the
Purchaser's obligations under Section 4(c) hereof. It is
understood and stipulated by the parties hereto that the
undersigned shall have no further obligations hereunder.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
