EXHIBIT 10.6
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT shall be effective on 3rd day of September,
2003 (Effective Date) between Greystone Manufacturing, L.L.C. (the "Company")
and Xxxx Xxxxxxxx ("Xxxxxxxx").
RECITALS
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WHEREAS, the Company has determined that Xxxxxxxx'x services to the
Company will be of great value to the Company, and accordingly, the Company
desires to enter into this Agreement with Xxxxxxxx as set forth herein in order
to secure such services;
WHEREAS, Xxxxxxxx hereby represents and warrants to the Company that he
is free to work for the Company without violation of any other agreements to
which Xxxxxxxx is a party;
WHEREAS, Xxxxxxxx desires to serve as an employee of the Company on the
terms set forth herein;
NOW THEREFORE, for and in consideration of Xxxxxxxx'x employment by the
Company, the promises and the mutual agreements set forth herein, Xxxxxxxx and
the Company agree as follows:
1. Employment Duties.
(a) The Company agrees to employ Xxxxxxxx as the Manager and
person in charge of the Company's beverage pallet operations in
Princeton, Iowa, operating as Greystone Pallet Company ("Greystone") a
wholly owned subsidiary of the Company with the duties and
responsibilities generally associated with such position, and such
other reasonable additional responsibilities as may be added to
Xxxxxxxx'x duties from time-to-time by the Company's Board of Directors
(the "Board"). Xxxxxxxx shall report directly to Xxxxxx X. Xxxxxx (the
"President") of the Company.
(b) Xxxxxxxx shall (i) diligently follow and implement all
policies and decisions communicated by the President; (ii) timely
prepare and forward to the President all reports and accountings as may
be requested; and, (iii) devote all of his professional time, attention
and efforts to the business and affairs of the Company, subject to
vacations and to reasonable periods of illness and/or disability
consistent with the Company's policy and applicable law. Xxxxxxxx may
continue his trucking business, but only as it relates to providing
trucking services to the Company at the same rates previously charged
to Greystone Plastic, Inc.
(c) The work product to be produced hereunder by Xxxxxxxx shall be
considered a work made for hire as defined in the Copyright Act of
1976, and is therefore owned exclusively by the Company which vests
copyright ownership of works for hire in the Company for whom the work
is prepared. If any works hereunder shall be found not to be works made
for hire, or ownership does not otherwise automatically vest in the
Company, Xxxxxxxx shall immediately disclose and assign to Company any
right, title and interest in any inventions, models, processes,
patents, copyrights and improvements thereon relating to services or
processes or products of Company that Xxxxxxxx conceives or acquires
during the employment relationship with Company or that Xxxxxxxx may
conceive or acquire, during the period of (1) one year after
termination of this Agreement.
2. Term. The initial term of employment shall be five (5) years
("Initial Term") with three (3) automatic five (5) year renewal periods ("New
Terms"); however, the New Terms shall not renew in the event that either party
gives the other party at least ninety (90) days prior written notice of
non-renewal prior to the end of the then-current term. In the event either party
provides notice of non-renewal or terminates their Agreement pursuant to Section
4, Xxxxxxxx shall jointly and severally diligently assist the Company in
transitioning all matters and work for which he was responsible as the Company
shall direct.
3. Compensation.
(a) Upon Closing the purchase of the Greystone assets of the
Company, Xxxxxxxx shall be paid a total annual cash compensation as
salary totaling $170,000 per year (the "Base Salary"). The company
shall split the Base Salary between Xxxxxxxx as directed by Xxxxxxxx
and the payments shall accrue and be due and payable in equal, or as
nearly equal as practicable, semi-monthly installments.
(b) At Closing, Xxxxxxxx will receive an option from the Company's
parent company, PalWeb Corporation ("PalWeb") to purchase up to 60,000
shares of the PalWeb Common Stock each year for a period of five (5)
years for a total of up to 300,000 shares. The option price and related
terms and conditions shall be set in accordance with the Company's
stock option plan.
(c) Conditioned upon the beverage pallets assembled with the
in-house manufactured fiberglass rods maintaining a net revenue margin
(pre-tax) of at least $4.00 per pallet, the Company agrees to pay
Xxxxxxxx for a period of three (3) years from the date hereof an annual
bonus equal to 50% of the net cash savings resulting from the in-house
manufacturing of the fiberglass rods ("In-House Rods") utilized in the
beverage pallet of Greystone. (Example: the current cost is $1.50 per
fiberglass rod and the actual cost (fully burdened) of producing a
comparable or better In-House Rods by the Company is $0.50 per
fiberglass rod, then the net cash savings would equal $1.00 per
fiberglass and each year 50% of the annual savings (12 months of
accumulated savings) would be bonused out to Xxxxxxxx in single or
split amounts as designated by Xxxxxxxx so long as the combined split
did not exceed 50% of the annual savings).
(d) Xxxxxxxx will also be entitled to related benefits provided by
the Company to other Managers and Operations officers such as:
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(i) The Company will provide health insurance benefits for
Xxxxxxxx and dependents on the same basis of the other Company
employees.
(ii) Xxxxxxxx shall, upon submission of written documentation of
business related expenses incurred, be reimbursed for any and all
necessary, customary and usual expenses, as approved by the
President and incurred by Xxxxxxxx on behalf of Company in the
normal course of business.
(iii) Xxxxxxxx shall receive three (3) weeks of paid vacation.
Accrued unused vacation time shall expire at the end of each
calendar year.
(iv) The Base Salary and any bonuses, allowance payments, and all
other payments shall be subject to withholding for all applicable
taxes as required under applicable federal and state laws.
4. Termination. This Agreement and Xxxxxxxx'x employment can be
terminated by the President of the Company as follows:
(a) Upon the death of Xxxxxxxx; or
(b) Upon Xxxxxxxx'x permanent disability (which shall mean his
inability to perform his duties and responsibilities under this
Agreement for a period of at least six (6) consecutive months); or
(c) By the Company for Cause immediately and without notice. Cause
means either the joint or several conduct of Xxxxxxxx which amounts to
(i) fraud, dishonesty or breach of fiduciary duty against the Company;
(ii) willful misconduct, insubordination, repeated refusal to follow
the reasonable directions of the President or violation of law in the
course of performance of duties with the Company; (iii) repeated
absences from work without a reasonable excuse; (iv) intoxication with
alcohol or drugs while on the Company's premises during regular
business hours; (v) having a primary residence located more than twenty
(20) miles from the Greystone plant; (vi) a conviction or plea of
guilty or NOLO CONTENDERE to a felony or a crime involving dishonesty:
(vii) a material breach or violation of the terms of his Agreement, the
Company's general employment policies or any other agreement to which
Xxxxxxxx and the Company are party; or (viii) any malfeasance or
misfeasance by Xxxxxxxx of his duties to the Company that is not
corrected within ten (10) calendar days after notice thereof to
Xxxxxxxx.
5. Effects of Termination.
Upon termination:
(a) Pursuant to Section 4 (a)(b), the Company shall pay Xxxxxxxx
the Base Salary through the effective date of termination and
thereafter at a rate of 25% of the Base Salary through the conclusion
of the then current term of the Agreement. All other benefits, bonuses
and obligations of the Company to Xxxxxxxx shall terminate upon the
effective date of termination.
(b) Pursuant to Section 4 (c), Xxxxxxxx shall be entitled to no
further payments of the Base Salary or any other amounts or any
benefits under his Agreement and all then accrued but unpaid amounts
and benefits shall be immediately paid, and no further amounts or
benefits shall accrue.
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6. Covenant Not to Compete and Non-Circumvention. The undersigned
parties understand and agree that a substantial portion of the value of the
assets being sold by Xxxxxxxx to the Company by separate agreement is based on
the goodwill, know-how and customer relationships ("Intangible Assets") held and
maintained by Xxxxxxxx. The undersigned parties further understand and agree
that the tangible assets have a greatly diminished value if these Intangible
Assets are denied to Company or otherwise circumvented or diverted by Xxxxxxxx,
then material damages would result to the detriment of the Company.
Accordingly, as further consideration for this Agreement and the
purchase of Xxxxxxxx'x interest in Greystone Plastics, Inc., by the Company,
Xxxxxxxx covenants and agrees that he will not directly or indirectly run,
advise or otherwise participate in the plastic pallet business in the U.S.
during this agreement and for a period of three (3) years thereafter.
7. Severability. The parties agree that each of the provisions
included in this Agreement is separate, distinct, and severable from the other
provisions of these Agreement, and that the invalidity or unenforceability of
any Agreement provision shall not affect the validity or enforceability of any
other provision of these Agreement. Further, if any provision of this Agreement
is ruled invalid or unenforceable by a court of competent jurisdiction because
of a conflict between the provision and any applicable law or public policy, the
provision shall be redrawn to make the provision consistent with and valid and
enforceable under the law or public policy.
8. Assignment. This Agreement and the rights and obligations of the
hereunder may not be assigned by either party hereto without the prior written
consent of the other party hereto. Notwithstanding the foregoing, this Agreement
shall be binding on and inure to the benefit of the Company's successors.
9. Notices. Except as otherwise specifically provided herein, any
notice required or permitted to be given by, or to, either party pursuant to
this Agreement shall be given in writing, and shall be personally delivered, or
mailed by certified mail, return receipt requested, or provided by electronic
transmission with a copy sent contemporaneously by certified mail, return
receipt requested, at the address set forth below or at such other address as
either party shall designate by written notice to the other given in accordance
with this Section. Any notice complying with their Section shall be effective
immediately upon personal delivery or electronic transmission, and if mailed
only, on the third business day after mailing.
10. Waiver. The waiver by either party hereto of any breach of this
Agreement by the other party hereto shall not be effective unless in writing,
and no such waiver shall operate or be construed as the waiver of the same or
another breach on a subsequent occasion.
11. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Oklahoma. The parties agree that
jurisdiction and venue for any matter arising out of or pertaining to this
Agreement shall be proper only in the state courts located in Tulsa County,
Oklahoma, and the federal courts having jurisdiction over the Northern District
of Oklahoma, and the parties hereby consent to such venue and jurisdiction.
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12. Beneficiary. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and his respective successors, heirs, executors, administrators
and permitted assigns.
13. Entire Agreement. This Agreement executed contemporaneously
herewith embody the entire agreement of the parties on the subject matter stated
in the Agreement. No amendment or modification of this Agreement shall be valid
or binding upon the Company or Employee unless made in writing and signed by
both parties. All prior understandings and agreements relating to the subject
matter of this Agreement are hereby expressly terminated.
14. Confidentiality. The terms, conditions and existence of this
Agreement shall be confidential.
IN WITNESS WHEREOF, Xxxxxxxx and the Company have executed and
delivered this Agreement as of the date first shown above.
THE COMPANY: EMPLOYEE:
GREYSTONE MANUFACTURING, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx Xxxxxxxx
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XXXXXX X. XXXXXX, PRESIDENT XXXX XXXXXXXX
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