EXHIBIT 10.31
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
effective May 1, 1998, by and among Packaged Ice, Inc., a Texas corporation (the
"Company"), and Xxxxx X.
Xxxxxx (the "Employee").
PRELIMINARY STATEMENTS
The Company desires to employ Employee as executive vice president and
chief operating officer; and
The Employee desires to be so employed by the Company upon the terms and
conditions herein below set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual premises herein set forth,
and for other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto mutually agree as follows:
1. EMPLOYMENT. The Company hereby employs Employee, and Employee hereby
agrees to such employment on the terms and conditions hereinafter set forth.
2. DUTIES AND RESPONSIBILITIES OF EMPLOYEE. Employee shall serve as
Executive Vice President and Chief Operating Officer and shall properly perform
such duties as may be assigned to him from time to time by the Chief Executive
Officer or President of the Company. Employee shall devote all of his business
time to the performance of his duties hereunder unless otherwise authorized by
the Chief Executive Officer, the President or either of their respective
representatives. Notwithstanding the foregoing, Employee may also be assigned
such other duties as may be reasonably assigned from time to time by the Board
of Directors.
3. TERM. The initial term of this Agreement commenced effective May 1,
1998 and shall continue until April 30, 2000. At the Company's option, this
Agreement may be renewed for a third year. In the event that the Company desires
to renew this Agreement, it shall so advise Employee at least sixty (60) days
prior to the expiration of the initial term.
4. COMPENSATION OF EMPLOYEE.
4.1 BASE SALARY. Commencing upon the date hereof, the Company shall
pay to Employee a base salary at the rate of $185,000 per annum. Such
compensation shall be paid to Employee in bi-weekly installments.
4.2 EXPENSES. In addition to those expenses that may be expressly
set forth herein, the Company shall, in accordance with the established policies
and
1
procedures of the Company, pay or reimburse Employee for all ordinary and
necessary out-of-pocket expenses which are documented and are reasonably
incurred by Employee in connection with performing his duties hereunder.
4.3 BENEFITS. Employee shall be entitled to the same benefits that
other similarly situated employees of the Company are entitled to receive to the
extent such plans are established by the Company and to the extent that Employee
is eligible to participate in such plans.
4.4 STOCK OPTIONS. The Company shall grant to Employee stock options
for 40,000 shares of common stock under the Company's 1994 Stock Option Plan at
an exercise price of $14.00 per share, in accordance with a stock option
agreement dated as of the date hereof.
4.5 AUTOMOBILE ALLOWANCE. Employee shall receive an automobile
allowance of $1,000.00 per month.
4.6 CLUB DUES. Employee shall receive $185.00 per month as
reimbursement for country club dues.
5. TERMINATION.
5.1 TERMINATION. Either party shall have the right to terminate this
Employment Agreement with no less than fifteen days written notice to the other
party.
5.2 SEVERANCE PAY. Except for the termination of Employee "For
Cause," in the event that the Company elects to terminate Employee during the
term hereof, Employee's exclusive termination renumeration shall be continuation
of Employee's base salary and health and welfare benefits through the end of the
initial term of this Agreement or if this Agreement has been renewed, through
the end of the renewal term, but in no event shall such continuation period be
less than six (6) months. If the Company does not renew this Agreement at the
end of the initial term or any renewal term, Employee will be entitled to
receive base salary and health and welfare benefits for a period of six (6)
months following the termination of this Agreement as severance.
5.3 "FOR CAUSE" TERMINATION; DEATH AND DISABILITY. As used herein,
the term "For Cause" shall mean (i) Employee's theft, fraud or other
defalcation, (ii) Employee's conviction of a felony, or any crime of moral
turpitude, (iii) Employee's violation of any covenant herein contained after ten
(10) days notice and opportunity to cure, (iv) Employee's failure to comply with
all reasonable policies, standards and regulations of the Company, as determined
by the officers of the Company after ten (10) days notice and opportunity to
cure, or (v) Employee's willful or grossly negligent misconduct which is
injurious to the Company, its business and affairs. If the Company elects to
terminate Employee "For Cause," or upon Employee's death or disability, then
this Agreement shall terminate and there shall be no severance pay owed by the
Company to Employee.
2
6. DISCLOSURE OF CONFIDENTIAL INFORMATION, COVENANT NOT TO COMPETE.
Employee acknowledges that certain information whether written or oral,
concerning the Company, including but not limited to general business
operations, or any other ideas and similar items relating to the business of the
Company (referred to herein as "Confidential Information") whether prepared or
generated by Employee or the Company pursuant to this Agreement or otherwise
coming into the possession or knowledge of Employee shall remain the exclusive,
confidential property of the Company except to the extent expressly authorized
in writing by the Company for dissemination. Employee further acknowledges and
agrees that all such Confidential Information constitutes trade secrets of the
Company.
During the term of this Agreement and the Restricted Period (hereinafter
defined), Employee shall not disclose any of such Confidential Information to
any third party without the prior written consent of the Company and shall take
all reasonable steps and actions necessary to maintain the confidentiality of
such Confidential Information. Employee shall not use any of such Confidential
Information in any manner whatsoever during the Restricted Period, without the
Company's express prior written consent. In consideration of the obligations
undertaken by the Company herein, Employee will not, at any time, during or
after his employment hereunder, reveal, divulge or make known to any person, any
Confidential Information acquired by Employee during the course of his
employment.
During the term of this Agreement and the Restricted Period, Employee
shall not within 200 miles of any ice manufacturing facility owned or operated
by the Company or any of its subsidiaries be employed by (as an officer,
director, employee, consultant or independent contractor) engage in, or have any
interest in any person, firm, corporation or business (whether as a shareholder,
creditor, partner, consultant, holder of any beneficial interest or otherwise
other than as a beneficial holder of not more than 1% percent of the outstanding
voting stock of a company having at least 500 holders of voting stock) that
engages in the business of manufacturing, producing, storing, selling or
distributing ice.
During the Restricted Period, Employee shall not solicit or attempt to
solicit any employee of the Company in attempt to encourage the employee to
leave the employ of the Company.
The provisions of this SECTION 6 shall survive the expiration or
termination of Employee's employment hereunder and until the end of the
Restricted Period. The term "Restricted Period," as used in this Section shall
mean the period commencing on the date hereof and ending two years after the
date Employee's employment is terminated for any reason. The provisions of this
Section shall survive the expiration or termination of Employee's employment
hereunder and until the end of the Restricted Period as provided herein. The
Employee acknowledges and agrees that the restrictions imposed herein are
reasonable as to scope, duration and area, are necessary for the protection of
the Company's and its affiliates' business, and that but for the Employee's
agreement to the restrictions herein imposed the Company would not have entered
into this Agreement.
3
7. MISCELLANEOUS.
7.1. ASSIGNMENT. Neither Employee nor the Company may assign or
delegate any of their rights or duties under this Agreement without the express
written consent of the other except that in the event that the Company elects to
sell all or substantially all of its ice manufacturing assets that it acquired,
in part, from Employee to any third party, then the Company shall have the right
to terminate this Agreement with no further obligation being owed hereunder by
either party to the other.
7.2 INJUNCTIVE RELIEF. Employee acknowledges that the services to be
rendered under the provisions of this Agreement are of a special, unique and
extraordinary character and that it would be difficult or impossible to replace
such services. Accordingly, Employee agrees that any breach or threatened breach
by him/her of SECTION 6 of this Agreement may cause irreparable harm to the
Company for which monetary damages may not be adequate and accordingly, any such
breach or threatened breach of SECTION 6 of this Agreement shall entitle
Company, in addition to all other legal remedies available to it at law or in
equity, to seek a temporary or permanent injunction to enjoin such breach or
threatened breach. Such injunction shall be available without the posting of any
bond or other security, and the Employee hereby consents to the issuance of such
injunction.
7.3 BINDING EFFECT. This Agreement shall inure to the benefit of, be
binding upon and enforceable against, the parties hereto and their permitted,
respective successor, heirs, beneficiaries and permitted assigns.
7.4 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.5 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, sent by registered or
certified mail, return receipt requested, postage prepaid, by facsimile with
facsimile generated confirmation of receipt, or by private overnight mail
service (e.g. Federal Express) to the party at the address set forth as follows:
If to the Company, to: Packaged Ice, Inc.
0000 Xxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx, Chief Executive Officer
With a copy to: Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 XxxxxxxXxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxxx
4
If to Employee, to: Xxxxx X. Xxxxxx
[address]
or to such other address as either party or the Company may hereafter give
notice of in accordance with the provisions hereof. Notices shall be deemed
given on the sooner of the date actually received or the third business day
after sending.
7.6 WAIVER. The waiver by either party of a breach of any provision
of this Agreement shall not operate or be construed as a continuing waiver of
any subsequent breach by either party. No waiver by either party of any
provision or condition to be performed shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same time or any prior or subsequent
time. No waiver by either party of any provisions or condition to be performed
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same time or any prior or subsequent time.
7.7 GOVERNING LAW. Regardless of the place of execution or
performance, this Agreement shall be governed by and construed in accordance
with the laws of the State of Texas without giving effect to such State's
conflicts of laws provisions.
7.8 ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by binding
arbitration in accordance with the Commercial Rules of the American Arbitration
Association by a single arbitrator to be located in Dallas County, Texas, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof, and shall not be appealable.
7.9 SEVERABILITY. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not affect any other provision
of this Agreement not held so invalid, and each such other provision shall to
the full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision not held so invalid, and the rest of
such provision, together with all other provisions of this Agreement, shall to
the full extent consistent with law continue in full force and effect.
7.10 COUNTERPARTS. This Agreement may be executed simultaneously in
one or more original or facsimile counterparts, each of which shall be deemed an
original, but all of which together shall constitute one of the same instrument.
[XXXXXX EMPLOYMENT AGREEMENT
SIGNATURE PAGE FOLLOWS]
5
[XXXXXX EMPLOYMENT AGREEMENT SIGNATURE PAGE]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
EMPLOYEE:
_____________________________________
Xxxxx X. Xxxxxx
PACKAGED ICE, INC.
By:__________________________________
Xxxxx X. Xxxxxx, Chief Executive Officer
6
