Exhibit 2(iv)
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT made as of August 31, 1999, between Xxxxxxx Xxxx, an
individual residing at ___________________ San Antonio, Texas 78___ ("Rose") and
June Supply - San Antonio, Inc., a Texas corporation with its principal office
located at 4335 Xxxxx Xxxxxxx, Xx. 0, Xxx Xxxxxxx, Xxxxx 00000 and its intended
successor-in-interest through merger, June Supply Corp., a Nevada corporation,
with its principal office located at 4335 Xxxxx Xxxxxxx, Xx. 0, Xxx Xxxxxxx,
Xxxxx 00000 (hereinafter collectively referred to as the "Company").
WHEREAS, Rose has sold all of his equity interest in the Company pursuant
to that certain Stock Purchase Agreement among Enviro-Clean of America,
Inc.("Enviro-Clean"), June Supply Corp. and June Supply-San Antonio Inc.
dated as of August 31, 1999 (hereinafter, the "Stock Purchase Agreement");
and
WHEREAS, the Company wishes to employ Rose as President of the Company
and the Company desires to ensure the continued availability to the Company
of Rose's services in such capacity, and Rose wishes to accept such
employment and is willing to render such services, all upon and subject to
the terms and conditions contained in this Agreement.
Accordingly, the parties agree as follows:
1. Employment
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The Company hereby employs Rose as the Company's President on the terms and
conditions contained herein and Rose agrees to such terms and conditions of
employment.
2. Term of Employment
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Rose hereby agrees to work as President of the Company for a minimum term
of five years commencing on August 31, 1999, and ending on August 31, 2004. The
term of employment may be renewed beyond August 31, 2004 upon the mutual
agreement of the Company and Rose for such additional period and on such
additional terms as the parties may agree at a future date.
3. Duties
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Rose shall serve the Company as President. Rose shall at all times comply
with the employment policies established by the Company. During his employment
by the Company, Rose shall devote his full time and efforts to the Company.
The duties of the President as set by the Board of Directors shall include
all day-to-day management of the operations of the Company and such other duties
and responsibilities as shall be assigned from time to time by the Board of
Directors, provided, however, that such duties and
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responsibilities shall at all times be reasonable and appropriate and shall be
consistent with the duties normally performed by the president of a company in
similar circumstances.
4. Compensation and Benefits
-------------------------
As full compensation to Rose for the performance of his services and his
acceptance of the responsibilities described herein, the Company agrees to pay
Rose the following compensation and other benefits:
(a) Base Salary. A total annual base salary of Fifty Thousand Dollars
($50,000), payable in accordance with the Company's usual payroll policies and
procedures.
(b) Annual Bonus. In addition to his base salary, Rose shall be eligible
for an annual bonus during each year of the initial term of this Agreement,
which bonus shall be determined in accordance with Section 8.01 of the Stock
Purchase Agreement.
5. Confidentiality: Intellectual Property; Non-Compete.
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In order to induce the Company to enter into this Agreement, Rose hereby
agrees as follows:
(a) Rose agrees to keep confidential and not use, divulge or otherwise
reveal during the term of his employment or after termination thereof, any trade
secrets or other confidential information relating to the business or financial
affairs of the Company.
(b) Rose hereby agrees to preserve and protect as property of the Company
the confidential, proprietary, technical and business information of the
Company. Rose agrees to execute the Company's standard form of confidentiality
and intellectual property agreements containing the foregoing covenants of
Section 5(a) and this Section 5(b).
(c) All papers, books and records, financial documents, computer files and
customer lists relating to the business and affairs of the Company and all
copies thereof, shall be the sole and exclusive property of the Company. Rose
agrees prior to termination of his employment by the Company to turn over to the
Company all such documents which may be in Rose's possession or under his
control.
(d) During the term of this Agreement and for a period beginning on the
date that Rose's employment is terminated, regardless of the reason for the
termination, and ending twenty-four (24) months after the date on which Rose's
employment is terminated, Rose shall not, without the prior written consent of
the Company or any successor to the Company, compete, directly or indirectly,
with the Company or any successor to the Company in any Competing Business,
provided, however, that if Rose is terminated by the Company without cause (as
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defined in Section 6(b) below) or if an Event of Default occurs under the
Promissory Note referred to in Section 2.02(2)(c) of the Stock Purchase
Agreement, then Rose shall not be subject to any noncompetition obligations and
the terms of this paragraph shall not apply. For purposes of this agreement, a
Competing Business is any business located in North America which engages in the
marketing, distribution and/or sale of janitorial, sanitary and cleaning
supplies, whether or not manufactured by such company.
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(e) During the term of this Agreement and for a period beginning on the
date that Rose's employment is terminated, regardless of the reason for the
termination, and ending twenty-four (24) months after the date on which Rose's
employment is terminated, Rose shall not, without the prior written consent of
the Company or any successor to the Company, directly or indirectly, for himself
or another person, induce or attempt to induce any client or customer of the
Company or any successor to terminate his or her relationship with any of those
entities, provided, however, that if Rose is terminated by the Company without
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cause (as defined in Section 6(b) below) then Rose shall not be subject to any
noncompetition obligations and the terms of this paragraph shall not apply.
(f) Rose agrees that any breach or threatened breach of the provisions of
this Section 5 will cause irreparable damage to the Company and that money
damages will not provide an adequate remedy to the Company. Thus, the parties
agree that the Company, in addition to their remedies at law, shall have the
right and remedy to have the provisions of this Section 5 specifically enforced
by any court having jurisdiction.
6. Termination of Employment
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(a) Rose's Voluntary Termination
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In the event that Rose voluntarily terminates his employment with the
Company during the term of this Agreement, Rose shall have no right to any
further salary, bonus, stock options, employee benefits or any other employment-
related compensation from the Company, provided, however, that nothing in this
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Section 6(a) shall be construed to limit Rose's rights to any compensation
earned prior to the date of such termination.
(b) Termination For Cause
---------------------
The Company may terminate Rose's employment pursuant to the terms of
this Agreement at any time for cause by giving written notice to Rose, in
accordance with Section 9(g) below, and such termination shall be effective in
accordance with such Section 9(g). Upon any such termination for cause, Rose
shall have no right to any further compensation, stock options employee benefits
or any other compensation from the Company, provided, however, that nothing in
this Section 6(b) shall be construed to limit Rose's rights to any compensation
earned prior to the date of such termination.
For purpose of this Agreement, "cause" shall mean that (i) Rose is
convicted with respect to the commission of a crime involving moral turpitude;
(ii) Rose has been guilty of gross or willful misconduct in connection with his
duties hereunder or (iii) Rose has failed to follow lawful and material
instructions of the Company's Board of Directors that are reasonable and
appropriate instructions for a board of directors to give to the president of a
company in similar circumstances and Rose has not cured such failure during the
two week period following receipt of written notice from the Board of such
failure.
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(c) Termination Without Cause
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Throughout the term of his employment with the Company, Rose shall
remain an employee at will, and his employment may be terminated for any reason
by the Company at any time. If Rose is terminated by the Company without cause
he shall be entitled to certain minimum severance pay ("Minimum Severance"),
with any additional severance pay above the Minimum Severance to be solely
within the discretion of senior management and/or the Board of Directors. In the
event of Rose's voluntary termination under Section 6(a) above, or his
termination for cause under Section 6(b) above, Rose shall be entitled to no
Minimum Severance. Rose shall receive the following Minimum Severance, under the
terms set forth above:
(i) Termination without cause after commencement of his employment: six
weeks salary and benefits;
(ii) Termination without cause after twelve (12) months of employment: two
months salary and benefits;
(iii) For every six (6) month period beyond the initial twelve (12) months
that he is employed by the Company, Rose shall be entitled to an
additional two (2) weeks of salary and benefits as Minimum Severance
in the event of termination without cause; up to a maximum Minimum
Severance of twelve months salary and benefits.
(d) Death or Disability
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This Agreement and the obligations of the Company hereunder will
terminate upon the death of Rose.
In the event of Rose's permanent disability, the Company may terminate
this Agreement. For purposes of this Section 6(d), permanent disability shall
mean that for a period of 90 days in any 365-day period Rose is incapable of
substantially fulfilling his duties as set forth in Section 3 above because of
physical, mental or emotional incapacity resulting from injury, sickness or
disease.
(e) Liquidated Damages
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Rose acknowledges and agrees that his covenant in Section 2 of this
Agreement to work for the Company for a minimum of five years following the
Closing of the Stock Purchase Agreement was an essential component of the
consideration which induced Enviro-Clean to purchase Rose's equity interest in
the Company and enter into the Stock Purchase Agreement. Accordingly, if this
agreement is terminated sooner than its fifth anniversary either due to Rose's
voluntary departure under Section 6(a) or for cause under Section 6(b), then
Rose agrees that the Company would suffer a degradation in executive
performance (since any replacement executive would necessarily lack Rose's
intimate knowledge of the Company's clients, business and operations) and a
resulting loss of revenues. Rose further agrees that the damages resulting from
such degradation of executive performance and loss of revenues would be
difficult to ascertain, estimate, quantify and/or measure. The parties further
agree that Enviro-Clean's right to be
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compensated for such damages should diminish proportionately as Rose completes
each year of his five year employment commitment. After taking account of all
the foregoing factors, as a reasonable forecast of the measure of such damages,
the parties hereby agree to liquidate and determine today such damages in the
following amounts: depending on whether the termination of this Agreement occurs
in the first, second, third, fourth or fifth year of employment, the liquidated
damages payable by Rose as a result of such termination shall be $150,000 in the
first year, $125,000 in the second year, $100,000 in the third year, $75,000 in
the fourth year and $50,000 in the fifth year.
In the event that Enviro-Clean reasonably believes that liquidated
damages are owed to it pursuant to this Section 6(e), Enviro-Clean shall have
the right, upon written notice to Rose, to withhold from any payment otherwise
to be made to or for the benefit of Rose under the Stock Purchase Agreement, an
amount equal to the amount by which Enviro-Clean believes it is owed liquidated
damages under this Section 6(e). The rights of Enviro-Clean under this Section
6(e) are without prejudice to any other rights or remedies that it may have by
reason of this Agreement or as otherwise provided by law.
If any dispute or disagreement arises between the parties with respect
to any right of set off claimed by Enviro-Clean under this Section 6(e), and the
parties are unable to resolve such dispute, then the Arbitration provisions of
Section 9(h) of this Agreement shall control.
7. Representations and Warranties
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Rose hereby represents and warrants to the Company that his entering into
this Agreement, and the obligations and duties undertaken by him hereunder, will
not conflict with constitute a breach of, or otherwise violate the terms of, any
other agreement to which he is a party.
Rose hereby agrees to indemnify the Company for any losses, costs or other
expenses or damages incurred by the Company in the event that Rose has breached
this representation.
8. Assignment
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This Agreement and any rights (including compensation) hereunder shall not
be assigned or transferred by Rose to any other person. The Company, however,
shall have the right to assign its rights hereunder to any affiliate of the
Company.
9. Miscellaneous
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(a) All payments provided for in this Agreement shall be paid by check from
the Company's general funds. Any withholding and/or any other payroll taxes with
respect to any payments provided for in this Agreement shall be deducted by the
Company as appropriate and as may be required by law.
(b) If any provision of this Agreement shall, for any reason, be judged by
any court of competent jurisdiction to be invalid or unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this Agreement.
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(c) This Agreement constitutes the entire understanding between the parties
and supersedes all prior agreements, arrangements and understandings relating to
the subject matter hereof.
(d) This Agreement may be amended, modified, superseded or cancelled, and
any of the terms, covenants or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver of
any right or benefits provided hereunder, by the party waiving compliance.
(e) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York.
(f) No delay or omission or failure to exercise any right or remedy
provided for herein shall be deemed a waiver thereof or acquiescence in the
event giving rise to such right or remedy, and every such right and remedy may
be exercised from time to time and so often as may be deemed expedient by the
party exercising such right or remedy.
(g) All notices given pursuant to the provisions of this Agreement shall be
in writing and shall be sent by certified mail, postage prepaid, or recognized
overnight courier service, or delivered by hand or by fax, and shall be
effective upon the earlier of (i) two (2) days from the date deposited with the
mail or overnight courier service or (ii) actual receipt, and shall be sent to
the parties at the following addresses:
If to the Company: June Supply Corp.
c/o Enviro-Clean of America, Inc.
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx, President
with a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxx Law Offices
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to Rose: Xxxxxxx Xxxx
__________________
San Antonio, Texas ________
With a copy to: Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx, Inc.
000 Xxxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxxx Xxxxxxxx, Esq.
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(h) The parties to this agreement expressly agree that any and all
disputes, which may arise out of or as a result of this agreement, shall be
submitted to binding Arbitration in accordance with the rules set forth by The
American Arbitration Association (the "Rules"). The parties further agree to be
bound by the result of the arbitration. If such arbitration is initiated by
Rose, the arbitration proceedings shall be conducted by a single arbitrator (the
"Arbitrator") in Denver, Colorado pursuant to the Rules. If such arbitration is
initiated by the Company, the arbitration proceedings shall be conducted by the
Arbitrator in San Antonio, Texas pursuant to the Rules. In the event that the
parties cannot agree as to the Arbitrator to be named, each party to the
controversy shall appoint one arbitrator and those two arbitrators shall select
the Arbitrator.
IN WITNESS WHEREOF, the parties have signed this Agreement on the dates set
forth below, with effect as of the date first above written.
JUNE SUPPLY CORP. JUNE SUPPLY - SAN ANTONIO, INC
By: By:
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Xxxxxxx Xxxxx, Xxxxxxx Xxxx
President President
_____________________________
Xxxxxxx Xxxx, Individually
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