AGREEMENT OF EMPLOYMENT
THIS AGREEMENT, effective as of July 8, 1996 (this "Agreement"), is
entered into by and between Eco Specialty, Inc., a Delaware corporation
("Employer"), a wholly owned subsidiary of Eco Soil Systems, inc., a Nebraska
corporation ("Eco"), and Xxxxx Xxxxxxxxxxxx (the "Employee").
RECITALS
A. Employer is a Delaware corporation engaged in the general business
of turf and crop maintenance products sales and service.
B. Contemporaneously with the execution of this Agreement, Turf
Specialty, Inc., a New Hampshire corporation, of whom Employee was a
shareholder, was merged with and into Eco Specialty, Inc., a Delaware
corporation (the merger"), pursuant to an Agreement and Plan of Merger (the
"Merger Agreement).
C. Employer desires to employ Employee in order to retain his
experience, skills, abilities, background and knowledge of the business of
Employer.
D. Employee desires to be employed by Employer and is willing to do so
on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows.
COVENANTS
1. Employment.
Employer hereby employs Employee and Employee hereby accepts
employment with Employer pursuant to the terms and provisions of this Agreement.
2. Effective Date.
The effective date of this Agreement shall be July 8, 1996.
3. Term.
Employee's employment under this Agreement shall commence as
of the effective date of this Agreement and shall continue in full force for a
term of three (3) years, expiring at midnight on July 8, 1999, unless earlier
terminated in the manner specified in Section 20 of this Agreement (hereinafter
referred to as the term"). The parties may by mutual agreement reduced to
writing extend this Agreement upon terms mutually agreed upon by the parties.
4. Title.
Employee's title during the Term shall be Senior Vice
President and Co-General Manager.
5. Duties of Employee.
5.1 Duties During Test Period.
During the Test Period (as that term is defined in the Merger
Agreement), it is the intention of Employer and Eco that Employer be operated as
a free-standing and independent subsidiary of Eco. In order to achieve this,
Employee (together with his counterpart, Xxxxx Xxxxx ("Xxxxx"), who is being
employed by Employer under a separate employment agreement) is hereby vested
with day to day operational control over Employer during the Test Period. In
cooperation with Xxxxx, Employee shall be responsible for the proper and
efficient running, management and promotion of the business, affairs, and
interests of Employer. Without limiting the generality of the foregoing, during
the Test Period Employee shall have complete authority in conjunction with
Xxxxx, without having to secure the approval or consent of Employer, to take all
actions necessary for the operation of the Employer as a going business,
including but not limited to, hiring and firing employees of Employer,
establishing and administering benefit plans for its employees, entering into
contracts for the purchase and sale of Employer's inventory, executing
appropriate contracts with vendors and customers, purchasing and selling or
otherwise disposing of Employer's equipment, maintaining personal contact with
Employer's customers and vendors, establishing (where necessary) and utilizing
credit facilities for the needs of Employer, and taking any and all other
actions that are deemed by Employee, in his reasonable good faith judgment, to
be in the best interests of Employer. Employer shall not interfere with
Employee's exercise of autonomy during the Test Period. It shall be the sole
responsibility of Employee and Xxxxx Xxxxx to divide their specific duties
between themselves as they, in their collective judgment, deem appropriate. The
provisions of Section 19 of the Merger Agreement are hereby incorporated by
reference as covenants of the Employer.
6. Duties Following Test Period.
Employee's duties following the Test Period shall be as
mutually agreed upon by the parties, taking in account Employee's level of
experience, expertise and knowledge of Employer's business and his status as a
senior executive of Employer. Once agreed upon by the parties, those duties
shall be set forth in a duly executed Amendment to this Agreement.
7. Devotion to Employer's Business.
During Employee's employment hereunder, unless prevented by
ill health or accident and except during vacation and holidays permitted by this
Agreement, Employee shall devote his full-time and best efforts to the
performance of his duties as set forth herein.
8. Competitive Activities.
8.1 During the Term of this Agreement and for a period of five
(5) years thereafter, Employee shall not directly or indirectly, either as an
Employee, Employer, Consultant, Agent, Principal, Partner, Shareholder (except
as otherwise provided in Section 8.3 below and except as a ten percent (10%) or
less shareholder in a publicly held company), Corporate Officer, Director, or in
any other individual or representative capacity, engage or participate in any
business that is in competition in any manner with the business of Employer as
it exists when Employee's employment under this Agreement terminates. Such
agreement not to compete shall include such activities in any country, state or
county, in which Employer conducts business.
8.2 The parties intend that this covenant not to compete be
construed in the broadest possible manner. If any court should rule that the
territorial scope of this covenant not to compete is overbroad, and that any
city, county, state, political subdivision of any state, or country, specified
is not permissibly within the scope of the covenant not to compete, this
covenant not to compete shall be narrowed so that its territorial scope would be
limited to the maximum geographical area permitted by law, and shall remain
effective and enforceable with respect to each other specified city, county,
state, territory and country.
8.3 Notwithstanding the foregoing, Employer and Eco are aware
that Employee has an ownership interest in Advanced Agronomics, Inc., a
Massachusetts corporation ("Argonomics"). Employee is not active in the business
affairs of Argonomics. Employee and Eco are also aware that Employee has an
ownership interest in and is active in the business of Universal Turf, Inc., a
Massachusetts corporation. Employer and Eco recognize that Employee will
continue to maintain his ownership interest in Argonomics and his ownership
interest in and business activity with Universal during the Term hereof, and
have agreed that under no circumstances Still such ownership and/or activity by
Employee be construed as a breach by Employee of this Section 8. Employee shall,
however, continue to be obligated to devote his full-time and best efforts to
Employer as required under Section 7 above.
8.4 Employee's obligations under this Section 8 shall cease
immediately without recourse to Employer in any of the following events:
(a) Employee terminates his employment hereunder pursuant
to either Section 20.1 (b) or Section 20.1 (f) below;
(b) Employer terminates Employee's employment hereunder
pursuant to Section 20.1 (c)below;
(c) Employer does not renew Employee's employment
following expiration of the Term on at least as
favorable terms as are provided for hereunder.
In all other events, Employee's obligations under this Section 8 shall continue.
9. Trade Secrets.
The parties acknowledge and agree that during the Term
Employee shall have access to and become acquainted with information concerning
operations and products of Employer and ECO not generally known to the public,
and that such confidential information constitutes Employer's trade secrets.
Employee specifically agrees that he shall not misuse, misappropriate, or
disclose any such trade secrets, directly or indirectly, to any other person or
use them in any way during the term of this Agreement or at any time thereafter.
The term "trade secrets" as used in this Section 9 shall not apply to any
information that is presently or becomes lawfully available to the general
public through a source other than Employee or Employee's agent, representative,
or a person who acquired the information from Employee. Notwithstanding the
foregoing, Employee may make disclosure of "trade secrets":
(a) in response to legal process issued in connection
with any judicial or administrative proceeding; and
(b) in prosecuting or defending litigation concerning
this Agreement to the tribunal before which the
matter is pending.
10. Base Compensation.
The compensation to be paid to Employee during the Term shall
be as follows:
10.1 During the period commencing on the effective date of
this Agreement and ending at midnight on December 31, 1996 (the "Initial
Period"), Employee shall receive a minimum annualized base salary of Eighty
Thousand Dollars ($80,000), payable in equal installments every two weeks, less
withholding and other mandatory wage deductions. Employer shall, at Employee's
direction and in Employee's sole and absolute discretion, raise Employee's
annualized base salary during the Initial Period to One Hundred Sixty-Five
Thousand Dollars ($165,000). In no event shall Employee be entitled to
carry-over beyond the Initial Period any salary that he would have been entitled
to receive during the Initial Period had he exercised his discretion set forth
in the immediately preceding sentence. Following the Initial Period, and during
the balance of Employee's employment with Employer hereunder, Employee shall,
receive a minimum annualized base salary of One Hundred Sixty-Five Thousand
Dollars ($165,000), payable in equal installments every two weeks, less
withholding and other mandatory wage deductions.
10.2 Any change in Employee's base compensation set forth in
Section 10.1 above shall be reflected by a written endorsement attached to this
Agreement and signed by Employee and a duly authorized officer of Employer.
11. Incentive Compensation.
Employee shall be entitled to participate in incentive
compensation programs as may from time to time be established for similarly
situated employees of Employer, Eco or Eco affiliates.
12. Business Expenses.
Subject to compliance by Employee with such policies regarding
expenses and expense reimbursement as may be adopted from time to time by
Employer, Employee is authorized to incur reasonable expenses in the performance
of his duties hereunder in furtherance of the business and affairs of Employer.
Employer shall reimburse Employee for all such reasonable expenses, in all cases
upon the presentation by Employee of an itemized account satisfactory to the
Company in substantiation of the expenses when claiming reimbursement.
13. Locus of Duties; Facilities.
Employee shall perform his duties hereunder at Employer's
premises in Londonderry, New Hampshire and shall not be required to relocate
from Brimfield, Massachusetts. Employee shall undertake such travel both within
the United States and abroad and in such manner and on such occasions as may be
reasonably necessary for the effective discharge of his duties under this
Agreement, as to which Employee shall be the final arbiter. Employee shall be
reimbursed for the expenses incurred by him in connection with all such travel
in accordance with the provisions of Section 12 above. The Employer shall
provide Employee with an office consistent with that which Employee had prior to
the merger of Turf with Employer, appropriate office equipment, supplies,
stenographic and other employee services, and all other facilities and services
suitable to Employee's position and necessary and customary for the performance
of his duties.
14. Fringe Benefits.
During the term of his employment hereunder, Employee shall be
entitled to participate in employee benefit plans or programs established by
Employer to the extent that his position, tenure, salary, age, health, and other
qualifications make him eligible to participate, subject to regulations and
criteria applicable thereto.
15. Medical Insurance.
Employer agrees to provide Employee with suitable medical and
disability insurance commensurate with what Employee was receiving just prior to
entering into this Agreement, as more particularly set forth on Exhibit A
attached hereto.
16. Vacations.
Employee shall be entitled to four (4) weeks vacation each
employment year during which this Agreement remains in effect, without loss of
compensation. The Employee may be absent from his employment for vacation at
such time or times as the Board of Directors shall approve. If the Employee is
unable, for any reason, to take the total amount of vacation time authorized
during any employment year, he may accrue that time or may, in his discretion,
receive cash payment in an amount equal to the amount of annual salary
attributable to that period of time. Employee shall also be entitled to such
holidays as the Board of Directors of Employer establish for the employees of
Employer.
17. Sickness.
Employer acknowledges that Employee may at any time be
prevented by illness or accident or other incapacity from properly performing
his duties under this Agreement. Employee shall receive normal pay, without
reduction, for a reasonable number of days missed as a result of illness.
18. Automobile.
Employee shall be entitled to the use of an automobile
provided by Employer, without charge, for the purpose of performing his duties
under this Agreement. Employer shall pay all expenses, including but not limited
to, gas, oil, insurance, maintenance, and repair, incurred by Employee in
connection with the operation of the vehicle. The automobile provided by
Employer to Employee under this Section 17 shall at all times be equivalent to
the automobile utilized by Employee in connection with the business of Turf
prior to the Merger.
19. Loan to Employee.
Pursuant to Section 3.4 of the Merger Agreement, Employer has
agreed to make a Post-Closing Loan (as that term is defined in the Merger
Agreement) to Employee.
20. Termination.
20.1 Employee's employment with Employer under this Agreement,
Employee's salary and other rights of Employee under this Agreement or otherwise
as an employee of Employer may be terminated (except as to salary, benefits and
rights accrued prior to such termination): (a) by Employer for cause upon thirty
(30) days written notice (for purposes hereof, "cause" refers to dishonesty or
fraud; conviction of a felony or a crime involving embezzlement, theft or other
conversion of property, or Employee's breach of Section 8 hereof); (b) by either
Employer or Employee, if the other party is in material violation of the other
terms and conditions of this Agreement, but then only if the material violation
is not cured to the satisfaction of the non-breaching party within thirty (30)
days of the non-breaching party notifying the breaching party of the violation;
(c) by Employer without cause upon sixty (60) days written notice; (d) by
Employee for any reason upon sixty (60) days written notice; (e) by Employer in
the event of Employee's continuing physical or mental disability of Employee
which prevents Employee from performing any material part of his duties
hereunder for a period in excess of one (1) year; (f) by Employee, immediately
and without notice if Eco defaults on its obligations to either Employee or
Xxxxx under the Purchase Notes (as that term is defined in the Merger Agreement)
and the default is not (i) cured within relevant grace periods (if any), or (ii)
waived in writing by the Payee of the Purchase Note; or (g) in all events, if
not terminated earlier, on June 30, 1999.
20.2 In all events of termination as set forth in Section 20.1
above, any amount then outstanding under any promissory note to which Employee
is Payee executed in connection with the Merger Agreement (the "Promissory
Notes") shall become immediately due and payable to Employee. Notwithstanding
the foregoing, Employee shall have the right to offset dollar for dollar any
amounts then outstanding under the Promissory Notes against amounts then owed by
him under the Loan.
21. Indemnification.
Employee shall not be liable, responsible or accountable in
damages or otherwise to Employer, and Employer shall indemnify, defend and save
harmless Employee from, any loss, damage, claim, liability, cost or expense
arising in connection with the performance of his duties hereunder, or any act
or omission performed or omitted by Employee in good faith on behalf of Employer
and in the reasonable belief of Employee that his conduct was not opposed to the
best interests of Employer; provided, however, that (a) Employee shall not have
been determined to have committed fraud, gross negligence or willful misconduct
with respect to such act or omission, and (b) the satisfaction of any such
indemnification shall be from, and only to the extent of, Employer's assets. Any
act or omission of Employee, or of any of his employees or agents, upon the
advice of legal counsel shall be deemed to have been performed or omitted in
good faith. ECO Soil Systems, Inc., the parent of Employer shall guarantee
Employer's indemnity obligations under this Section 21.
22. Notices.
All notices, requests, demands, and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally to the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
To Employer: ECO SPECIALTY, INC.
c/o Xxxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxx, #000
Xxx Xxxxx, XX 000000
To Employee: XXXXX XXXXXXXXXXXX
000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 000000
23. Arbitration.
Any controversy between Employer and Employee regarding the
construction or application of any of the terms, provisions, or conditions of
this Agreement shall, upon written request of either party served on the other
be submitted to arbitration in accordance with Section 20.21 of the Merger
Agreement.
24. Entire Agreement.
This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to Employee's
employment with Employer, other than Section 3.4 of the Merger Agreement which
remains in full force and effect. Each party to this Agreement acknowledges that
they have read and understood this Agreement and that no representations,
inducements, promises, or agreements, oral or otherwise, have been made by
either party or anyone acting on behalf of either party, which are not embodied
herein, and that no agreement, statement, or promise not contained in this
Agreement shall be valid or binding.
25. Modifications.
Any modification of this Agreement will be effective only if
it is in writing and signed by all parties.
26. Severability
Should any provision in this Agreement be declared invalid,
void or unenforceable, then such portion shall be deemed to be severable from
this instrument and shall not affect the remainder thereof.
27. Governing Law.
This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New Hampshire without giving effect
to the principals of conflict of law thereof.
28. Binding Upon Successors.
This instrument shall be binding upon and inure to the benefit
of the personal and legal representatives, successors and assigns, except as
restricted in Section 29 below, of the parties hereto and also upon the heirs,
executors and administrators of the individual persons executing this
instrument.
29. Non-Assignability Clause.
It is agreed that neither Employee nor any other designee or
successor, other than the estate of Employee, shall have any right to commute,
sell, assign, transfer, encumber or otherwise convey the right to receive any
payments hereunder, which payments and the right thereto are expressly declared
to be non-assignable and nontransferable, and any attempt to do such shall be
null and void.
30. Cumulative Rights.
The various rights, options, elections, powers and remedies of
a party or parties to this instrument shall be construed as cumulative and no
one of them exclusive of any others or of any other legal or equitable remedy
which said party or parties might otherwise have in the event of breach or
default in the terms hereof, and the exercise of one right or remedy by a party
or parties shall not in any way impair his rights to any other right or remedy
until all obligations imposed on a party or parties have been performed.
31. Time.
Time is of the essence of this Agreement.
32. No Waiver of Default.
No waiver of default by any party or parties hereto shall be
implied from any omission by a party or parties to take any action on account of
such default if such default persists or is repeated and no express waiver shall
affect any default other than the default specified in the express waiver, and
that only for the time and to the extent therein stated. One or more waivers of
any covenant, term or condition of this instrument by a party or parties shall
not be construed to be a waiver of any subsequent breach of the same covenant,
term or condition. The consent or approval by any party or parties shall be
deemed to waive or render unnecessary the consent to or approval of said party
or parties of any subsequent or similar acts by a party or parties.
33. Attorney's Fees.
If any action at law or equity is necessary to enforce the
terms of this Agreement, the prevailing party shall be entitled to reasonable
attorney's fees, costs, and necessary disbursements, in addition to any other
relief to which he or it may be entitled.
34. Counterparts.
This Agreement may be executed in one or more counterparts,
all of which together shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of
the dates below.
EMPLOYER:
ECO SPECIALTY, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Dated: July 3, 1996 President
EMPLOYEE:
/s/ Xxxxx Xxxxxxxxxxxx
----------------------------------------
Dated: July 8, 1996 Xxxxx Xxxxxxxxxxxx
GUARANTOR:
ECO SOIL SYSTEMS, INC.
as Guarantor of Employer's obligations
under Section 21
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Dated: July 3, 1996 CEO
