EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of the 22nd day of
November, 1996, (the "Effective Date") between JOTAN, INC., a Florida
corporation, including its successors, assigns, and affiliated companies
(the "Company"), and Xxxx X. Xxxxx ("Employee").
Section 1. Employment. The Company hereby agrees to employ
Employee and Employee hereby agrees to remain in the employ of the
Company, for a three (3) year period commencing on the Effective Date (the
"Employment Period").
Section 2. Position and Duties.
(a) The Board of Directors of the Company has appointed
Employee as President and Chief Executive Officer of the Company.
(b) During the Employment Period, Employee shall report to the
Board of Directors of the Company. Employee's services will be performed
at the location designated by the Board of Directors.
(c) The duties of Employee shall be those assigned to Employee
by the Board of Directors of the Company. Employee acknowledges that his
duties may vary from time to time and he further acknowledges that the
Company retains the flexibility to assign various types of duties to
Employee. Employee does not have the authority to enter into any
contracts on behalf of the Company or set salaries for any corporate
employee without the prior approval of the Board of Directors.
(d) Excluding periods of vacation and sick leave to which
Employee is entitled as set forth in Section 3(d) hereof, Employee agrees
that during the Employment Period he shall devote his full business time
to his responsibilities as described herein and shall perform such
responsibilities faithfully and efficiently and to the best of his
abilities. Employee will not work as an employee of any other person,
business, or entity, including self-employment, while in the employment of
the Company, without prior written permission from the Company.
Notwithstanding the foregoing, Employee may serve on corporate, civic or
charitable boards or committees so long as such activities do not
materially interfere with the performance of Employee's duties and
responsibilities for the Company.
(e) The Company shall reimburse Employee for reasonable travel,
lodging, entertainment and other business expenses incurred by him in
connection with the Company's business, and Employee shall keep such
receipts and maintain such records as required by Company policy.
Section 3. Compensation. During the Employment Period, Employee
shall receive the following compensation and benefits:
(a) Salary.
(i) Employee shall receive a salary of Eighty-five
Thousand Dollars ($85,000.00) per annum ("Base
Salary"). Employee's Base Salary shall be reviewed
annually and may be adjusted, in the sole discretion
of the Company, to reflect cost of living or the
achievement of annual performance goals set by the
Board of Directors or Compensation Committee of the
Company.
(ii) If Employee achieves the performance goals referred to
in clause (i) above, and Employee is then employed by
the Company, then once per year, within forty-five
(45) days of satisfying such goals as determined by
the Board of Directors or Compensation Committee of
the Company, Employee shall be entitled to receive
such cash bonuses and stock options and/or other
awards as determined by the Board of Directors or
Compensation Committee of the Company.
(iii) Any salary payable to Employee shall be paid bi-
monthly, in arrears, by Company check.
(b) Life Insurance. The Company shall use reasonable efforts
to secure one or more policies of standard term life insurance on the life
of Employee from a "AAA" rated provider providing, in the aggregate, a
face amount of not less than $500,000 in the event of Employee's death
during the Employment Period (with a provision for double indemnity in the
case of accidental death) (the "Death Benefit") payable to a beneficiary
chosen by Employee and to maintain such policy or policies in effect
throughout the Employment Period, and to assign such policy to or pursuant
to the directions of Employee at the termination of Employee's employment;
provided, however, that the Company shall be required to secure and pay
for such policy or policies only if the same is commercially available to
the Company at a cost and pursuant to such terms and conditions as are
acceptable to the Company. The life insurance benefit provided pursuant
to this Section 3(b) shall be integrated with the Company's normal life
insurance benefit program so that upon the death of Employee during the
Employment Period in no event shall the Employee's beneficiary be entitled
to receive an amount in excess of the Death Benefit.
(c) Disability and Health Insurance. The Company shall provide
Employee with disability and health insurance in accordance with Company
policy.
(d) Vacation and Sick Leave. Employee shall be entitled to
vacation and sick leave in accordance with Company policy.
Section 4. Termination.
(a) This Agreement may be terminated with 30-days' prior
written notice by the Company only for cause. The term "cause" means (i)
the willful and continued failure of Employee substantially to perform his
duties with the Company after a demand for substantial performance is
communicated to him by the Board of Directors which identifies the manner
in which the Board believes he has not substantially performed his duties,
(ii) willful misconduct materially and demonstrably injurious to the
Company, or (iii) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company or any affiliate, or
conviction of Employee for a felony or any crime involving moral turpitude
(which conviction, due to the passage of time or otherwise, is not subject
to further appeal). An act or failure to act by Employee shall be
considered willful if such act or failure to act was not in good faith or
such act or failure to act was without reasonable belief that it was in
the best interests of the Company. Upon termination for cause, Employee
shall not be entitled to any payments or other rights under this
Agreement.
(b) If Employee is terminated by the Company for any reason
other than cause as defined above, in addition to any other rights and
remedies Employee may have under this Agreement or otherwise, all earned
and awarded and unvested options to purchase capital stock of the Company
then held by Employee shall become immediately vested and exercisable. In
addition, the Company shall be obligated to continue to pay Employee's
salary as set forth in Section 3(a) above for the remainder of the
Employment Period.
(c) Upon termination of Employee's employment for cause,
Employee shall resign from the Board of Directors of the Company if he is
then a director, and from the Board of Directors of any affiliates of the
Company of which he is then a director. Such resignation shall be
effective no later than the effective date of termination of his
employment.
(d) This Agreement shall terminate upon death of Employee and
all payments due under this Agreement shall cease at such time.
Section 5. Confidentiality and Trade Secrets. Employee's work for
the Company will involve confidential information and/or trade secrets of
the Company, including matters of a technical nature, such as scientific,
trade and engineering secrets, formulae, processes, machines, inventions,
and research projects; matters of business nature, such as information
about costs, profits, markets, sales, lists of customers and vendors,
databases, computer programs, and models; and other information of a
similar nature, including plans for future products and services.
Employee agrees to keep secret all confidential information and trade
secrets of the Company and agrees not to disclose, either directly or
indirectly, such information to anyone outside the Company, during or
after Employee's employment with the Company except upon written consent
of the Board of Directors. Employee shall keep such matters confidential
after leaving the employment of the Company, regardless of the reason for
the separation of employment.
Section 6. Agreement Not to Compete.
(a) Employee covenants and agrees that during his employment
with the Company and (a) for a period of two (2) years following the
termination of this Agreement if terminated by the Company for cause or if
terminated by Employee or (b) for a period of six (6) months following
termination of the payment of salary due under Section 4(b) of this
Agreement if terminated by the Company other than for cause, or for such
foregoing period as applicable following the Company obtaining injunctive
relief to prevent Employee's violation of this covenant, Employee shall
not, either directly or indirectly, engage in the following activities, or
assist others in such activities in any location where the Company
conducts its business at the time of the termination of Employee's
employment with the Company:
(i) Hiring, recruiting, or attempting to recruit for any
person or business entity which is a competitor, or a
Related Entity (as hereafter defined) of such
competitor, with the Company, any person employed by
the Company; or
(ii) Soliciting any business for a competitor, or a Related
Entity of such competitor, from any of the Company's
current or prospective customers, a prospective
customer being defined as a person or entity the
Company has actively solicited, planned to solicit (as
known to Employee), or provided services to during the
twelve (12) months prior to termination of the
Employee's employment with the Company.
(b) Employee acknowledges that the Company does business
distributing corrugated boxes and packaging products in various locations
in the United States and that, with respect to such business, the Company
engages in active and substantial competition. For purposes of this
Agreement, the term "Related Entity" means any corporation, partnership or
other business entity:
(i) controlling, controlled by, or under common control or
ownership with a competitor of the Company's business;
or
(ii) in which a competitor of the Company's business has
substantial equity interest.
(c) Employee will provide the Company with such information as
the Company may from time to time request to determine Employee's
compliance with the terms of this Agreement. Employee authorizes the
Company to contact Employee's future employers and other entities with
whom Employee has any sort of business relationship to determine
Employee's compliance with this Agreement or to communicate the contents
of this Agreement to such employers and entities.
(d) Employee acknowledges that the restrictions set forth in
this Section 6 are necessary to prevent the use and disclosure of the
Company's confidential information as described in Section 5 and to
otherwise protect the legitimate business interests of the Company.
Employee further acknowledges that if Employee's employment with the
Company terminates for any reason, he will be able to earn a livelihood
without violating the foregoing restrictions and that Employee's ability
to earn a livelihood without violating such restrictions is a material
condition to Employee's employment or continued employment with the
Company. Employee agrees that this covenant is reasonable and shall apply
both during the term of Employee's employment under this Agreement and
there as described above, regardless of how said employment is terminated.
Section 7. Remedies.
(a) The Company and Employee agree that irreparable injury
would result from any breach by Employee of the provisions in this
Agreement, specifically including the Agreement Not To Compete set forth
in Section 6, and that monetary damages would not provide adequate relief
for any such breach. Accordingly, in addition to other remedies which may
be available to the Company, if Employee breaches Section 6 of this
Agreement, Employee agrees that injunctive relief in favor of the Company
is proper and that an injunction restraining Employee from violating the
terms of the Agreement Not To Compete Section will not be contrary to the
public health, safety or welfare. Further, Employee acknowledges that the
covenants contained in the Agreement Not To Compete Section are
reasonable, and Employee agrees that neither he nor any other person on
his behalf shall contest any injunctive relief sought or obtained by the
Company to enforce such covenants.
(b) If a court of competent jurisdiction determines that any of
the restrictions in this Agreement are overbroad or unreasonable, Employee
agrees to modification of the affected restriction(s) to permit
enforcement to the maximum extent allowed by law.
(c) With the exception of the availability of injunctive relief
with respect to the Agreement Not to Compete set forth in Section 6, in
the event that the parties are unable to resolve a dispute, including but
not limited to a dispute relating to a conflict-of-interest issue, both
parties agree to binding arbitration to resolve the dispute, with each
party designating one arbitrator and the two designated arbitrators
choosing a neutral third arbitrator whose name appears on the list of
neutral arbitrators maintained by the American Arbitration Association.
Each party shall designate its arbitrator within twenty (20) days of
written notice being given by either party and the third arbitrator shall
be designated within ten (10) days of the designation of the two parties'
arbitrators. If feasible, the arbitration shall be completed within
thirty (30) days of designation of the arbitrators. Arbitration fees
shall be paid jointly by the parties. If a party fails to comply with
provisions of this paragraph, the other party may seek and obtain
injunctive relief or any appropriate decree of specific performance
against the breach of this paragraph, and the party which failed to comply
with the paragraph shall reimburse the other party for any costs
associated with enforcing this paragraph.
Section 8. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be in writing and
personally delivered by hand or sent by registered or certified mail, if
to Employee, to him at the last address he has filed in writing with the
Company or, if to the Company, to its corporate secretary at its principal
executive offices.
Section 9. Non-Alienation. Employee shall not have any right to
pledge, hypothecate, anticipate, or in any way create a lien upon any
amounts provided under this Agreement, and no payments or benefits due
hereunder shall be assignable in anticipation of payment either by
voluntary or involuntary acts or by operation of law. So long as Employee
lives, no person, other than the parties hereto, shall have any rights
under or interest in this Agreement or the subject matter hereof.
Section 10. Entire Agreement; Amendment. This Agreement
constitutes the entire agreement of the parties in respect to the subject
matter hereof, and supersedes that certain Agreement between Employee and
the Company dated ___________. No provision of this Agreement may be
amended, waived or discharged except by the mutual written agreement of
the parties. The consent of any other person to any such amendment,
waiver or discharge shall not be required.
Section 11. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Company, its successors or
assigns, by operation of law or otherwise, including without limitation
any corporation or other entity or person which shall succeed (whether
directly or indirectly, by purchase, merger, consolidation, or otherwise)
to all or substantially all of the business and/or assets of the Company.
Except as otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of Employee and his legal representatives, heirs,
and assigns.
Section 12. Withholding of Taxes. The Company may withhold from
any benefits payable under this Agreement all federal, state, city or
other taxes as shall be required pursuant to any law or governmental
regulation or ruling.
Section 13. Governing Law. The validity, interpretation, and
enforcement of this Agreement shall be governed by the laws of the State
of Florida.
Section 14. Severability. In the event that any provision or
portion of this Agreement shall be determined to be invalid or
unenforceable for any reason, the remaining provisions of this Agreement
shall be unaffected thereby and shall remain in full force and effect.
Section 15. Miscellaneous. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original but
all of which together constitute one and the same instrument. The parties
have read and fully understand the meaning of this Agreement, have had an
opportunity to consider its provisions, and are in full agreement with all
of the provisions.
IN WITNESS WHEREOF, Employee has hereunto set his hand and, pursuant
to the authorization from its Board of Directors, the Company has caused
these presents to be executed in its name on its behalf, and its corporate
seal to be hereunto affixed and attested by its Secretary or Assistant
Secretary, all as of the day and year first shown above written.
ATTEST: JOTAN, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxx Xxxxx
Xxxxx Xxxxxxxx Xxxx Xxxxx
/s/ Xxxx Xxxxx
Employee
