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EXHIBIT 10.27
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of March 1, 1997, is between U.S. PLASTIC
LUMBER CORPORATION, a Nevada corporation or any of its affiliates, or
subsidiaries (the "Company"), and Xxxxx X. Xxxxxxx, residing at 0000 X.X. 00xx
Xxxx, Xxxx Xxxxx, XX 00000 (the "Executive").
RECITALS
A. Executive has been employed as a principal executive officer
of the Company, and as such has made a unique contribution to the business of
the Company.
B. The Board of Directors of the Company believes that the
continued services of Executive would be of great value to the Company and
desires retaining his services for a number of years.
C. Executive is willing to accept employment by the Company upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and of the mutual benefits herein provided, the
receipt and sufficiency of which are hereby acknowledged, the Company and
Executive hereby agree as follows:
1. TERM OF EMPLOYMENT.
The Company shall employ Executive and Executive hereby accepts
employment by the Company, on the terms and conditions herein contained, for a
period of three (3) years commencing as of the date hereof and ending on the
third (3rd) anniversary of the date hereof, subject to termination as
hereinafter provided (the period from the date hereof through the third (3rd)
anniversary of the date hereof or the date of such termination, as the case may
be, being the "Employment Period").
2. DUTIES.
(a) GENERAL DUTIES. During the Employment Period, Executive shall serve
the Company and its subsidiaries in a senior Executive capacity, currently
functioning as Executive Vice President and General Counsel with such duties
consistent therewith, and shall perform such other services for the Company and
its subsidiaries consistent with the position of a senior executive officer, as
may be reasonably assigned to him from time to time by the Board of Directors of
the Company.
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(b) PRIMARY ACTIVITY. During the Employment Period, Executive shall
devote his full business efforts, time and energy to the interests and business
of the Company and its parent, subsidiaries and affiliates; however, Executive
shall be excused from performing any services for the Company hereunder during
periods of temporary illness or incapacity and during reasonable vacations, and
Executive may devote a reasonable amount of time to the handling of his personal
affairs, without thereby in any way affecting the compensation to which he is
entitled hereunder. Although it is acknowledged that the duties of a senior
executive officer may require from time to time attention to business at times
other than normal business hours, it is intended by the parties hereto that
Executive shall perform his duties hereunder during normal business hours.
During the Employment Period, Executive shall, to the best of his skill and
ability, use his best efforts and endeavors to the extension and promotion of
the business of the Company and its subsidiaries, to the proper servicing of
such business and to the protection of the good will of such business, both as
now enjoyed and hereafter acquired.
(c) LOCATION AND TRAVEL. During the Employment Period, Executive's
business office shall be located (and his duties shall generally be performable)
at the current executive offices located at 0000 Xxxxxx Xx., Xxxx Xxxxx, XX
unless otherwise agreed to in writing by the Company and Executive. Executive
agrees to travel for business purposes in a reasonable amount for reasonable
lengths of time, commensurate with Executive's senior executive position.
3. COMPENSATION.
As full compensation to Executive for performance of his services
hereunder, the Company agrees to pay Executive and Executive agrees to accept
the following salary and other benefits during the Employment Period:
(a) SALARY. The Company shall pay Executive a salary at the annual
rate of $52,000 per year or such greater annual rate of compensation as the
Board of Directors of the Company may from time to time determine ("Base
Salary"). The Base Salary due Executive hereunder shall be payable in equal
semi-monthly installments, less any amounts required to be withheld by the
Company from time to time from such salary under any applicable federal, state
or local income tax laws or similar laws then in effect.
(b) REIMBURSEMENT OF EXPENSES. The Company shall reimburse Executive
for all expenses properly incurred by him in the performance of his duties
hereunder in accordance with policies established from time to time by the Board
of Directors of the Company.
c) FURTHER BENEFITS. Executive shall be entitled to participate in
any health, accident, retirement or similar employee benefit plans provided by
the Company generally to its employees to the extent commensurate with the
participation therein of executives of the Company; provided, however, that such
employee benefit plans shall be no less favorable to Executive than those
provided by the Company to Executive immediately prior to the entering into this
Agreement. Executive shall be entitled to participate in any present or future
bonus, insurance, pension, retirement, profit sharing or other compensation or
incentive plans adopted
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by the Company, for the general and overall benefit of executives of the
Company, the extent and manner of participation to be determined by the Board of
Directors of the Company. The benefits provided in this subsection (c) shall be
in addition to the compensation and benefits provided in the other subsections
of this Section 3.
(i) Notwithstanding anything to the contrary herein,
the Executive shall receive a monthly granting of stock options
beginning on the 60th day from the date of the signing of this
Agreement and continuing on the first day for each month thereafter
up to a maximum of 10,000 shares. The number of options to be
granted hereunder shall be 2,000 options per month. The exercise
price for all options granted hereunder shall be the fair market
value of the stock as traded on the NASD OTC Bulletin Board as of
the close of business on the date of the signing of this Agreement.
(d) OFFICES. Executive agrees to serve without additional
compensation, if elected or appointed thereto, in one or more offices or as a
director of any of the Company's subsidiaries, provided, however, that Executive
shall not be required to serve as an officer or director of any subsidiary if
such service would expose him to adverse financial consequences.
(e) NON-COMPETITION PAYMENT. At the time of the signing of this
Agreement, Executive will be granted stock options in accordance with Section
3(c)(i) above of U.S. Plastic Lumber Corp. as a material inducement to comply
with Section 4 of this agreement. These options are to be exercised at the fair
market value as traded on the NASD OTC Bulletin Board as of the close of
business on the date of the signing of this Agreement.
(f) LEGAL SERVICES. As part of this Agreement, the Company
guarantees to retain the independent legal services of Xxxxx X. Xxxxxxx in
conjunction with its business activities not to exceed $48,000 during the next
twelve months. The law offices of Xxxxx X. Xxxxxxx will invoice its legal
services separately hereunder for all work performed including customary
documentation as would be provided any other client for which similar services
would be offered.
(g) VACATION. The Executive shall be entitled to three (3) weeks
vacation per year.
4. RESTRICTIONS AGAINST COMPETITION, SOLICITATION, SERVICING,
AND DIVULGING CORPORATE CONFIDENTIAL DATA
(a) COVENANT NOT TO COMPETE. As a material inducement to sign this
Agreement, the Executive agrees that as long as he is an employee of the
Company, he will not Compete with the Company and, further, that he will not
Compete with the Company during the two (2) year period beginning on the date of
termination of this Agreement. During the Employment period and the two year
period subsequent to termination, the Executive shall not within the United
States directly or indirectly, either for Executive's own account, or as a
partner, shareholder
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(other than shares regularly traded in a recognized market), officer, director,
employee, agent, consultant or otherwise, be employed by connected with,
participate in, consult or otherwise associate with any other business,
enterprise or venture that is the same as, similar to or competitive with the
Company. During employment and for a period of two years thereafter, the
Executive shall not, directly or indirectly, solicit for employment or employ
any employee of the Company.
(b) COVENANT NOT TO SOLICIT OR SERVICE. The Executive acknowledges and
agrees that the Company's parent has spent significant amounts of time and money
in the development of a list of its Customers, which list is not available to
the general public or the Company's ordinary employees, and that this list
contains other information about the customers not available to the general
public and that the Executive will be privileged to this list. The Executive
also acknowledges and agrees that many of the Customers on this list do not have
an advertised place of business, the Company's competitors could not recreate
this list without substantial efforts, and the Company's business would be
irreparably and greatly damaged by the use of this information other than for
its benefit. Therefore, as a material inducement to the employment of Executive
and issuing stock options as set forth in Section 3(e) to the Executive, the
Executive will not solicit or do business with, or attempt to solicit or do
business with, directly or indirectly any of the Company's Customers except on
the Company's behalf and will not solicit or do business with or attempt to
solicit or do business with, directly or indirectly, any of the Company's
Customers during the two (2) year period beginning on the termination of this
Agreement.
(c) COVENANT NOT TO VIOLATE CORPORATE CONFIDENCES. The Executive will
have access to and will become aware of confidential information and trade
secrets including Customer data, files, business secrets, and business
techniques not generally available to the public, and this confidential
information has been compiled by the Company, and its parent, its subsidiaries
and affiliates, at great expense and over a great amount of time. The parties
acknowledge that this confidential information gives the Company a competitive
advantage over other businesses in its field of endeavor and that the Company's
business will be greatly and irreparably damaged by the release or use of this
confidential information outside of its own business. Therefore, as a material
inducement to signing this Agreement, the Executive will not, while he is a
Stockholder of U.S. PLASTIC LUMBER CORP. or an employee of the Company, or
during the two (2) year period beginning on the termination of this Agreement,
either disclose or divulge this confidential information to anyone or use this
confidential information in any manner to Compete with the Company. A partial
list of this confidential information may be included as a schedule to the
original of this Agreement maintained by the Company's Secretary, and all
parties agree and acknowledge that this list, as amended from time to time, is
true and accurate, but that it is not necessarily a complete list of such
information, and that the restrictions in this Section shall apply to all such
information and not merely to the information listed on such schedule.
(d) ENFORCEMENT. The Company may enforce the provisions of this
section by suit for damages, injunction, or both.
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(i) The Company would be irreparably injured by the breach of
any provision of this Section , and money damages alone would not be
an appropriate measure of the harm to the Company from such
continuing breach. Therefore, equitable relief, including specific
performance of these provisions by injunction, would be an
appropriate remedy for the breach of these provisions.
(ii) Money damages will be appropriate with respect to any
past breach of any provision of this Section. Therefore, in case of
any breach of this Section, the breaching party shall render a full
and complete accounting of the gross receipts, expenses, and net
profits that have resulted from such breach and shall be liable for
money damages equal to twenty-five percent (25%) of the gross amount
derived by such breaching party from all transactions in breach of
this Section, such amount representing the amount of profit the
Company could have derived from its own transaction of such business.
(iii) Should a court of competent jurisdiction determine that
equitable relief is not available to remedy the continuous breach of
any or all of the provision of this Section, an amount of liquidated
damages shall be paid to the Company by the breaching party equal to
twenty-five percent (25%) of the gross amount derived by such
breaching party from all transactions in breach of this Section, such
amount representing the amount of profit the Company could have
derived from its own transaction of such business.
(iv) If this Agreement is terminated for any reason
whatsoever, not renewed or extended, the provisions of this Agreement
shall survive and shall be in full force and effect for the period
commencing from the date of actual termination of employment of the
Executive.
(a) Definitions. For the purposes of this Agreement,
the following definitions are applicable:
(1) "Compete." "To Compete" and "to Compete with
the Company" both mean to engage in the same or any
similar business as the Company in any manner
whatsoever, including competing as a proprietor,
partner, investor, stockholder, director, officer,
employee, consultant, independent contractor, or
otherwise, within the United States.
(2) "Customer." A "Customer" of the Company is
any person for whom it has performed or attempted to
perform services or sold or attempted to sell any
product or service, whether or not for compensation,
and regardless of the date of such rendition, sale, or
attempted rendition or sale. A partial list of the
Company's Customers may be included as a schedule to
the original of this Agreement maintained by the
Company's Secretary, and all parties agree and
acknowledge that this list, as amended from time to
time, is true and accurate, but that it is not
necessarily a
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complete list of the Customers and that the
restrictions in this section shall apply to all of
the Customers and not merely to those listed on such
schedule.
5. TERMINATION OF AGREEMENT.
(a) EVENTS OF TERMINATION. The Employment Period shall cease and terminate
upon the earliest to occur of the events specified below:
(i) The close of business on the third (3rd) anniversary
of the date hereof;
(ii) the death of Executive;
(iii) termination of Executive's employment for Cause. For
the purpose of this Agreement, the Company shall have "Cause" to
terminate Executive's employment hereunder upon (A) the failure by
Executive to substantially perform his duties hereunder, other than
any such failure resulting from incapacity due to physical or mental
illness, (B) the engaging by Executive in gross negligence or willful
misconduct injurious to the Company, (C) the violation by Executive
of the provisions of Section 4 hereof, or (D) the conviction of
Executive of a felony of a crime involving moral turpitude.
(iv) the election by Executive to terminate his employment
hereunder upon 120 days prior written notice;
(v) the election by the Company to terminate Executive's
employment hereunder; or
(vi) the permanent disability of Executive. For the purpose
of this Agreement, the "permanent disability" of Executive shall mean
Executive's inability, because of his injury, illness, or other
incapacity (physical or mental), to perform the services to the
Company contemplated hereby for a continuous period of 150 days or
for 180 days out of a continuous period of 300 days. Such permanent
disability shall be deemed to have occurred on the 150th consecutive
day or on the 180th day within the specified period, whichever is
applicable.
(b) COMPENSATION UPON TERMINATION. If the Employment Period shall cease
and terminate hereunder:
(i) pursuant to subsection (a)(i), (a)(ii), (a)(iii),
(a)(iv), or (a)(vi) of this Section 5, the Company shall pay to
Executive (or his estate in the case of subsection (a)(ii)) his Base
Salary pursuant to Section 3(a) hereof and the reimbursable expenses
incurred under Section 3(b) hereof through the date of termination.
The Company shall have no additional or further liability to
Executive hereunder; or
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(ii) pursuant to subsection (a)(v) of this Section 5 and
subsequent to January 15, 1998, the Company shall (A) pay to
Executive his Base Salary pursuant to Section 3(a) hereof and the
reimbursable expenses incurred under Section 3(b) hereof through the
date of termination, (B) pay to Executive an amount equal to his then
current annual Base Salary, such amount to be payable in 12 equal
monthly installments, less any amounts required to be withheld by the
Company under any applicable federal, State or local income tax laws
or similar laws then in effect, and (C) continue for a period of one
year from the date of termination (but only if permitted by the
applicable plan) all fringe benefits to which Executive is then
entitled pursuant to Section 3(c) hereof (including payment for any
benefits to which Executive would be entitled to receive under the
Consolidated Omnibus Budget Reconciliation Act of 1985, the benefit
period with respect to which shall commence on the date of
termination); provided, however, that the Employment Period shall be
deemed to have expired on the date of termination for the purposes of
any vesting period, and provided further, that in no event shall
Executive be entitled to receive pursuant to clause (b) above an
amount in excess of that to which Executive would have been entitled
had this Agreement not been so terminated.
(iii) pursuant to Section (a)(v), if the Executive is terminated
prior to January 15, 1998, the Company shall have no additional
liability under this Agreement except as set forth in Section
5(b)(i).
(c) EFFECT OF TERMINATION. This Agreement and all liabilities and
obligations of the parties hereto hereunder shall cease and terminate effective
upon any termination of the Employment Period permitted by this Agreement;
provided, however, that Executive's obligations under Section 4 hereof shall
survive any such termination.
(d) REMEDIES. Nothing herein contained shall be construed as
prohibiting any party hereto from pursuing any other remedies available to it
for any breach of any provision hereof.
6. ASSIGNMENT.
This Agreement shall not be assigned by either party hereto, except
that the Company shall have the right to assign its rights hereunder to any
direct or indirect subsidiary of the Company, any successor in interest of the
Company whether by merger, consolidation, purchase of assets or otherwise, and
any person controlling or which controls or is under common control with the
Company, any such subsidiary or any such successor; provided, however, that any
such assignment shall not relieve the Company of any of its obligations
hereunder.
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7. NOTICES.
All notices requests, demands and other communications hereunder must
be in writing and shall be deemed to have been given if delivered by hand or
mailed by first class, registered mail, return receipt requested, postage and
registry fees prepaid and addressed as follows:
(a) If to the Company:
U.S. Plastic Lumber Corp.
0000 Xxxxxx Xx., Xxxxx 000X
Xxxx Xxxxx, XX 00000
Attention: Xx. Xxxx Xxxxxxxxx, President and CEO
Telecopy: (000) 000-0000
(b) If to Executive, addressed to:
Xxxxx X. Xxxxxxx
0000 X.X. 00xx Xxxx
Xxxx Xxxxx, XX. 00000
Addresses may be changed by notice in writing signed by the addressee.
8. MISCELLANEOUS.
This Agreement embodies the entire understanding between the parties
hereto respecting the subject matter hereof and no change, alteration or
modification hereof may be made except in writing signed by both parties hereto.
Any prior employment agreement between the Company and Executive shall be deemed
to be superseded for all purposes by this Agreement and, upon the execution and
delivery of this Agreement by Executive and the Company, any such prior
employment agreement shall be deemed to be canceled and of no further force or
effect. The headings in this Agreement are for convenience of reference only and
shall not be considered as part of this Agreement or to limit or otherwise
effect the meaning hereof. If any provisions of this Agreement shall be held
invalid, illegal or unenforceable in whole or in part, neither the validity of
the remaining part of such provisions nor the validity of any other provisions
of this Agreement shall in any way be affected thereby. This agreement shall in
all respects be governed by and construed in accordance with the laws of the
State of Florida.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
Witnesses: "COMPANY"
United States Plastic Lumber Corp.
-------------------------- a Nevada corporation
By: /s/ Xxxx Xxxxxxxxx
----------------------
Xxxx Xxxxxxxxx, President
"EXECUTIVE"
-------------------------- /s/ Xxxxx X. Xxxxxxx
--------------------------
Xxxxx X. Xxxxxxx