EXHIBIT 10.31
EMPLOYMENT AND CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement") is made and
entered into as of the 25th day of March, 1996, by and between HI-RISE RECYCLING
SYSTEMS, INC., a Florida corporation (the "Company"), and XXXX X. XXXXXXXX (the
"Executive").
P R E L I M I N A R Y S T A T E M E N T
The Company desires to retain the Executive to serve as its Co-Chairman
of the Board ("Co-Chairman") and President for such period as the Company and
the Executive mutually desire and thereafter as a consultant to the Company, and
the Executive desires to be retained by the Company in such capacities.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties agree as follows:
1. EMPLOYMENT.
1.1. EMPLOYMENT AND TERM. The Company hereby agrees to employ
the Executive and the Executive hereby agrees to serve the Company, on the terms
and conditions set forth herein, for a period of three (3) years (the "Initial
Term") commencing on March 25, 1996 and expiring on March 24, 1999 (the
"Expiration Date") unless sooner terminated as hereinafter set forth. The
Initial Term of this Agreement, and the employment of the Executive hereunder,
will automatically be extended for successive one year terms unless either party
gives notice at least six months prior to the Expiration Date (three months, in
the case of any extension period after the Initial Term) of its intention not to
extend the term hereof. (The Initial Term and any extensions shall be
hereinafter referred to as the "Employment Period").
1.2. DUTIES OF THE EXECUTIVE. The Executive shall, during the
Employment Period, devote such time, energies, talents and efforts to serving in
the capacities of Co-Chairman and President in the best interests of the Company
as shall be consistent with the time and other considerations set forth below,
and shall perform the duties consistent with that office assigned to him from
time to time by the Chief Executive Officer of the Company (the "CEO") and/or
the Board of Directors of the Company or any properly constituted committee
thereof (the "Board") faithfully, efficiently and in a professional manner,
subject to such considerations. If, at any time during the Employment Period,
either the Company or the Executive believes that it is no longer in their
mutual best interests to have the Executive serve as Co-Chairman or President,
either may give notice to the other and, ten (10) days thereafter the Executive
shall cease being the Company's Co-Chairman and President and shall become a
consultant to the
Company for the remainder of the Employment Period. The Company acknowledges
that, both prior to and after the time the Executive ceases to be the Company's
Co-Chairman and President, the Executive may have other business interests to
which Executive will devote time, energies and efforts and further acknowledges
that nothing in this Agreement shall be deemed to require the Executive to
devote any specified minimum amount of time in performing his duties hereunder.
Subject to the foregoing, Executive shall perform such services customary to the
offices described above, but only to the extent consistent with the services
performed by the Executive for the Company, during the twelve (12) months prior
to the execution of this Agreement. Executive shall report to, and shall be
subject solely to the supervision and direction of, the CEO and the Board. Prior
to the time that the Executive ceases to be Co-Chairman and President of the
Company, the Executive shall, at the request of the Board, accept election and
serve as an officer or director of the Company and/or any subsidiary of the
Company, without any additional compensation therefor other than that specified
herein, subject to the existence, to Executive's satisfaction, of appropriate
indemnification and/or insurance for his service in such capacities. The CEO
and/or the Board may delegate certain of the duties of the Executive set forth
herein or formerly performed by the Executive for the Company to other
individuals or entities employed or retained by the Company, without, however,
diminishing in any way the compensation due to the Executive hereunder.
1.3. PLACE OF PERFORMANCE. During the Employment Period, the
Company may request the Executive to travel in order to perform the nature and
extent of his duties hereunder. The Executive's obligation to travel at the
Company's request shall be subject to the Executive's prior written approval,
which approval shall not be unreasonably withheld, and such requested travel
shall not be inconsistent with the limitations on time and other considerations
set forth herein. In no event shall the demands on the Executive's time be such
as would reasonably require him to change his residence from Dade County,
Florida.
2. COMPENSATION. The Company shall pay to Executive compensation
for services provided hereunder as set forth in the Addendum to the Agreement
(the "Addendum"). Payments to Executive shall be less applicable social security
and withholding taxes and any other applicable payroll deductions, if any.
3. TERMINATION PROVISIONS.
3.1. TERMINATION. Either party to this Agreement shall have
the right to terminate this Agreement upon thirty (30) days prior written notice
to the other party. Upon the termination of Executive's employment and/or
consulting relationship with the Company pursuant to this Section 3.1, the
Executive shall, subject to the other provisions of this Agreement, only be
entitled to receive the compensation specified in Sections 4.1, 4.4 and 4.7
hereof.
3.2. DEATH. The Executive's employment and/or consulting
relationship with the Company shall terminate automatically upon the death of
the Executive, without any requirement of notice by the Company to the personal
representative or executor of the
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Executive's estate. Upon termination of the Executive's employment with the
Company pursuant to this Section 3.2, the Executive shall, subject to the other
provisions of this Agreement, only be entitled to the compensation specified in
Sections 4.2, 4.4 and 4.7 hereof.
3.3. NON-RENEWAL. In the event that this Agreement is not
renewed beyond the Initial Term as provided in Section 1.1 hereof, the last day
of the Initial Term shall automatically be the termination date for a
termination pursuant to this Section 3.3. Upon any termination of the
Executive's employment with the Company pursuant to this Section 3.3, the
Executive shall, subject to the other provisions of this Agreement, only be
entitled to the compensation specified in Sections 4.3, 4.5 and 4.7 hereof.
4. COMPENSATION AND BENEFITS UPON TERMINATION.
4.1. TERMINATION. Upon the termination of the Executive's
employment with the Company pursuant to Section 3.1 above, then (i) the Company
shall pay the Executive any unpaid amounts of his Base Salary and accrued bonus,
if any, through the date of termination; and (ii) in lieu of any further salary
payments to the Executive for periods subsequent to the date of termination and
in consideration of, among other things, the continuing obligations of the
Executive and rights of the Company under Section 7 hereof during the remainder
of the Employment Period, the Company shall pay, in a lump sum, the amount of
base salary that would have been paid through the scheduled end of the
Employment Period, as severance to the Executive.
4.2. DEATH. Upon the Executive's death, the Company shall pay
to the person designated by the Executive in a notice filed with the Company or,
if no person is designated, to the personal representative or executor of his
estate (i) in a single lump sum, any unpaid amounts of his Base Salary and
accrued bonus, if any, through the scheduled end of the Employment Period and
(ii) when, as and if received by the Company, any payments to Executive's
spouse, beneficiaries or estate may be entitled to receive pursuant to any
pension or employee benefit plan or life insurance policy or other plan or
policy then maintained by the Company. Any life insurance policy currently
maintained by the Company for the benefit of the Executive shall remain in full
force and effect and shall not be amended or modified except to allow for any
increase in benefits payable pursuant thereto.
4.3. NON-RENEWAL. If this Agreement terminates pursuant
to Section 3.3 hereof, the Company shall pay to the Executive any unpaid amounts
of his Base Salary through the termination date specified in Section 3.3.
4.4. HEALTH AND MEDICAL PLANS UPON TERMINATION. Upon
termination of this Agreement pursuant to Section 3.1 or Section 3.2, during the
remainder of the Employment Period the Executive and his spouse shall be
entitled to the continuation of all health, medical, hospitalization and other
programs as previously provided to Executive by the Company; provided that the
cost payable by the Company therefor shall not exceed the amount that would have
been payable had the Executive remained in the employ of the Company.
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4.5. HEALTH AND MEDICAL PLANS UPON NON-RENEWAL. The Executive
shall be entitled to all continuation of health, medical, hospitalization and
other programs as provided by any applicable law and such additional benefits as
may be provided under plans maintained by the Company from time to time to its
executives or employees upon termination of employment with the Company.
4.6. NO MITIGATION. The aggregate amount payable by the
Company to the Executive pursuant to the foregoing provisions shall not be
reduced or mitigated in any respect.
4.7. BONUS. If the Executive's employment is terminated with
the Company for any reason, the Executive shall be paid, solely in consideration
for services rendered by the Executive prior to such termination, any unpaid
Annual Incentive Bonus previously established in writing by the Board, or any
duly appointed committee thereof, with respect to the Company's fiscal year in
which the termination date occurs, equal to such Annual Incentive Bonus that
would have been payable to the Executive for the fiscal year if the Executive's
employment had not been terminated, multiplied by the number of days in the
fiscal year prior to and including the date of termination and divided by three
hundred sixty-five (365).
5. SUCCESSORS. This Agreement shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns and any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Company's assets and business. This Agreement and the
Executive's rights and obligations hereunder may not be assigned by the
Executive.
6. ENTIRE AGREEMENT. Except as otherwise provided in this Agreement,
this Agreement constitutes the entire agreement among the parties pertaining to
the subject matter hereof, and supersedes and revokes any and all prior or
existing agreements, written or oral, relating to the subject matter hereof,
including, without limitation, any Employment Agreement or Severance Agreement
entered into between the Executive and the Company Companies (which shall be
void and of no further force and effect), and this Agreement shall be solely
determinative of the subject matter hereof. Notwithstanding the foregoing, the
Indemnification Agreement by and between the Executive and the Company dated
_____________, 19__ shall remain in full force and effect and the Company shall
deliver a General Release in the form attached hereto as Exhibit __.
7. CONFIDENTIAL INFORMATION; NON-COMPETITION; EQUITABLE REMEDIES.
7.1. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company's
client list and manner of doing business is proprietary to the Company. Except
as may be required by the lawful order of a court or agency of competent
jurisdiction, the Executive shall keep secret and confidential indefinitely all
nonpublic information concerning the Company, its affiliates and its clients
which was acquired by or disclosed to the Executive during the course of his
employment
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with the Company including, without limitation, information relating to the
Company (including, without limitation, business methods, business policies,
procedures, techniques, trade secrets, client and/or customer lists,
compensation levels, costs, financial data and plans), the Company's clients,
and not to disclose the same, either directly or indirectly, to any other
person, firm or business entity, or to use it in any way; provided, however,
that the provisions of this paragraph 7.1 shall not apply to information which
is in the public domain; and provided further, that the Company recognizes that
the Executive has acquired, prior to his employment with the Company and shall
acquire during the course of his employment with the Company, certain general
information not specific to the Company and its clients which Executive may use
consistent with the provisions of applicable Federal or state laws or the
provisions of paragraph 7 hereof. While he is employed by the Company, the
Executive will not make any statement or disclosure which would be prohibited by
applicable Federal or state laws nor any statement or disclosure which is
intended or reasonably likely to be detrimental to the Company or any of its
subsidiaries or affiliates, or any of their clients.
(b) Upon the termination of the Executive's
employment with the Company for any reason whatsoever, the Executive shall
promptly return to the Company all documents, records, notebooks and other
materials which belong to the Company or any of its affiliates, clients or
clients' customers or sponsors and which are in the possession of the Executive,
including all copies thereof.
(c) In the event that the Executive is required,
by oral questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand or similar process, to disclose nonpublic
information, the Executive shall provide the Company with prompt notice thereof
so that the Company may seek an appropriate protective order and/or waive
compliance by the Executive with the provisions hereof; provided, however, that
if in the absence of a protective order or the receipt of such a waiver, the
Executive is, in the opinion of counsel for the Company, compelled to disclose
nonpublic information not otherwise disclosable hereunder to any legislative,
judicial or regulatory body, agency or authority, or else be exposed to
liability for contempt, fine or penalty or to other censure, such nonpublic
information may be so disclosed; provided that the Executive shall disclose only
that information that is required and shall redact or withhold all information
not required to be disclosed.
7.2. NONCOMPETITION/NONSOLICITATION/NONDISPARAGEMENT.
In addition to the provisions of Section 7.1:
(i) For the period (the "Noncompetition Period")
commencing on the date hereof and continuing through the first anniversary of
the termination of the Executive's employment or consulting relationship
hereunder, the Executive will not serve as or be a consultant to or employee,
officer, agent, director or owner of more than five percent of another
corporation, partnership or other entity which engages in the business of
providing mechanical multi-story recycling (the "Business") and which operates
(excluding corporate offices) within any state in which the Company conducts
business.
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(ii) For the period (the "Nonsolicitation
Period") commencing on the Commencement Date and ending on the second
anniversary of the date on which the Executive's employment or consulting
relationship with the Company is terminated or ceases for any reason, the
Executive shall not solicit or accept business competitive with the Business
from any clients of the Company or its affiliates, from any prospective clients
whose business the Company or any affiliate of the Company is in the process of
soliciting at the time the Executive's employment with the Company terminated or
ceased, or from any former clients which had been doing business with the
Company within one (1) year prior to the time the Executive's employment with
the Company terminated or ceased.
7.3. EQUITABLE REMEDIES.
(a) The Executive acknowledges that the
restrictions contained in the foregoing paragraphs 7.1 and 7.2 in view of the
nature of the business in which the Company is engaged, are reasonable and
necessary in order to protect the legitimate interests of the Company, and that
any violation thereof would result in irreparable injuries to the Company, and
the Executive therefore acknowledges that, in the event of his violation of any
of these restrictions, the Company shall be entitled to obtain from any court of
competent jurisdiction preliminary and permanent injunctive relief as well as
damages and an equitable accounting of all earnings, profits and other benefits
arising from such violation, which rights shall be cumulative and in addition to
any other rights or remedies to which the Company may be entitled.
(b) If the period of time specified in
paragraphs 7.1 and 7.2 above should be adjudged unreasonable in any proceeding,
then the period of time shall be reduced by such number of months so that such
restrictions may be enforced for such time as is adjudged to be reasonable.
8. ARBITRATION. Any dispute or controversy (except for disputes arising
under Section 7) arising under or in connection with this Agreement shall be
settled exclusively by arbitration in accordance with the rules of the American
Arbitration Association then in effect (except to the extent that the procedures
outlined below differ from such rules). Within seven (7) days after receipt of
written notice from either party that a dispute exists and that arbitration is
required, both parties must within seven (7) business days agree on an
acceptable arbitrator. If the parties cannot agree on an arbitrator, then the
parties shall list the "Big Six" accounting firms in alphabetical order and the
first firm that does not have a conflict of interest and is willing to serve
will be selected as the arbitrator. The parties agree to act as expeditiously as
possible to select an arbitrator and conclude the dispute. The arbitrator must
render his decision in writing within thirty (30) days of his or its
appointment. The cost and expenses of the arbitration and of legal counsel to
the prevailing party shall be borne by the non-prevailing party. Each party will
advance one-half of the estimated fees and expenses of the arbitrator. Judgment
may be entered on the arbitrator's award in any court having jurisdiction;
provided that the Company shall be entitled to seek a restraining order or
injunction in any court of competent jurisdiction to prevent any continuation of
any violation of Section 7 hereof.
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9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to its conflict
of laws principles to the extent that such principles would require the
application of laws other than the laws of the State of Florida. Venue for any
action brought hereunder shall be in Dade County, Florida and the parties hereto
waive any claim that such forum is inconvenient.
10. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or when deposited in the United States mail by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Company:
00000 X.X. 00xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
If to the Executive:
Xxxx X. Xxxxxxxx
Apt. #6F
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
or to such other addresses as either party hereto may from time to time give
notice of to the other in the aforesaid manner.
11. SURVIVAL. The provisions of paragraph 7 of this Agreement
shall survive, without limitation as to time, in accordance with their express
terms, the date on which the Executive's employment with the Company ceases or
is terminated for any reason.
12. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses or sections contained in this Agreement shall not
affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and, in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area which would cure such invalidity.
13. WAIVERS. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
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14. DAMAGES. Nothing contained herein shall be construed to prevent the
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement. In the event that either party hereto brings any
action for the collection of any damages resulting from, or the injunction of
any action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable
arbitration or court costs and attorneys' fees of the other, whether such costs
and fees are incurred in an arbitration proceeding, a court of original
jurisdiction or one or more courts of appellate jurisdiction. During the
pendency of any claim for breach hereof or any other claim against the
Executive, the Company shall continue to make payments when due hereunder and
shall not set off or withhold funds, reserving any such determination of whether
any amounts are due from the Executive until finally adjudicated in accordance
with the provisions hereof.
15. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
(other than the parties hereto and, in the case of the Executive, his heirs,
personal representative(s) and/or legal representative) any rights or remedies
under or by reason of this Agreement.
16. PAYMENTS TO DESIGNEE. The Executive may, by notice to the Company,
designate another person or entity to receive any payments to be made hereunder
to the Executive by the Company, and the Company shall thereafter make such
payments to such designee.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
THE COMPANY:
HI-RISE RECYCLING SYSTEMS, INC.
By: /s/ Xxxxxx Xxxxx
----------------------------
THE EXECUTIVE:
/s/ Xxxx X. Xxxxxxxx
-------------------------------
Xxxx X. Xxxxxxxx
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ADDENDUM TO AGREEMENT
THIS ADDENDUM dated as of March 25, 1996 is a part of the Employment
and Consulting Agreement dated as of March 25, 1996, by and between HI-RISE
RECYCLING SYSTEMS, INC., a Florida corporation (the "Company") and XXXX X.
XXXXXXXX (the "Executive"), as follows:
Subject to the terms and conditions of the Employment Agreement, during
the Employment Period, the Executive shall be compensated by the Company for his
services as follows:
(a) BASE SALARY. The Executive's annual salary during the
Employment Period shall be $180,000 subject to increases in
accordance with the Consumer Price Index, payable by check in
equal installments as may be in accordance with the regular
payroll policies of the Company as from time to time in
effect, less such deductions or amounts to be withheld as
shall be required by applicable law and regulations.
(b) OTHER BENEFITS. The Executive shall be entitled to participate
in such family medical/dental insurance and other benefit
plans and policies as the Company may provide for its
executive officers from time to time provided that the
policies may have standard co-insurance and deductible
provisions, and provided that, so long as commercially
practicable, the Company will maintain disability and life
insurance coverage consistent with prior practice.
(c) ANNUAL INCENTIVE BONUS AND DISCRETIONARY BONUS. The Executive
may receive a discretionary bonus during each year of the
Employment Period in an amount determined by the Compensation
Committee of the Board after its annual performance review of
the Executive.
(d) AUTOMOBILE ALLOWANCE; CELLULAR PHONE. The Company shall
provide the Executive with an automobile allowance of seven
hundred fifty dollars ($750) per month. The Executive shall be
responsible for all expenses associated with such automobile,
including, without limitation, insurance, gas and repairs. The
Executive shall be provided with a cellular phone and
reimbursed therefor, up to a maximum amount of $400 per month,
in accordance with the policies of the Company as in effect
from time to time.
(e) EXPENSE REIMBURSEMENT. The Company shall pay or reimburse the
Executive for all reasonable expenses actually incurred or
paid by him in the performance of his duties hereunder,
including travel and entertainment, in accordance with
Company policy and upon the presentation by the Executive
of an itemized
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of an itemized account of such expenditures and such
documentary evidence as the Company may reasonably require.
(f) OFFICE. The Executive shall be provided with an office and
secretarial assistance consistent with those provided to date
to the Executive by the Company and the Company shall maintain
at its expense, at the home of the Executive, a computer, fax
machine and phone connection to the Company's offices or as
otherwise required.
IN WITNESS WHEREOF, the parties have set their hands and seals.
THE EXECUTIVE: THE COMPANY:
HI-RISE RECYCLING SYSTEMS, INC.
/s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxxx
------------------------------ ------------------------------
XXXX X. XXXXXXXX
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