Exhibit 10.29
SENIOR MANAGEMENT EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement") is made as of December 17, 2000, between
COINMACH CORPORATION, a Delaware corporation (together with its subsidiaries and
affiliates, the "Company"), and Xxxxx Xxxxxxxxx, with an address at 0000 Xxxxxxx
Xxxxx, Xxxxx, Xxxxx 00000 ("Employee").
RECITALS
A. The Company is engaged in the business of (a) leasing and renting laundry
equipment and other household appliances and electronic items to (i)
individuals, (ii) property owners or managers of multi-family dwellings,
including apartment complexes and other similar properties, and (iii) corporate
relocation entities (collectively, "Rental Customers"), (b) supplying
coin-operated laundry equipment services to multi-family properties including,
without limitation, owners, managers, proprietors or operators of rental
buildings, apartments, condominium and cooperative associations, hotels, motels,
extended stay corporate facilities, trailer parks, universities, military and
other institutional housing and other parties (collectively, "Route Customers,"
and together with Rental Customers, "Customers") and (c) (i) engaging in
laundromat construction and laundromat equipment distribution which consists of
constructing complete turnkey laundromat retail stores, retrofitting existing
laundromat retail stores, distributing exclusive lines of commercial coin and
non-coin machines and selling service contracts; (ii) operating, maintaining and
servicing laundromat retail stores; and (iii) selling parts and equipment for
coin-operated and non coin-operated washing machines and dryers, soap machines,
card operated equipment, video or other interactive vending machines, change
makers and any other vending or similar equipment (each of the foregoing
businesses, together with any other business of the Company, the "Business"). As
part of its Business, the Company (a) solicits Rental Customers to rent laundry
equipment and other household appliances and electronic items, (b) solicits
Route Customers to lease laundry room locations to the Company or lease or sell
the Company's coin-metered washers, dryers and laundry equipment for the use of
their tenants and (c) installs and services laundry equipment and, in the case
of coin-operated equipment, collects the revenues generated therefrom.
B. The Company has a proprietary interest in the Company's good will and its
Confidential Information (as hereinafter defined), all of which information is
not publicly available and is considered by the Company to be confidential trade
secrets. The Company imparts to its employees, and said employees require during
the course of their employment, access to Confidential Information.
C. Employee during the course of Employee's employment with the Company: (i)
will obtain material knowledge and information regarding the Company's
Customers, including without limitation Customers' specialized requirements,
preferences and financial condition, all of which are materially important in
the Company's business relationship with such Customers; (ii) may perform
management, servicing, sales, collection or secretarial duties for the Company,
which duties themselves are of a highly confidential nature; (iii) is encouraged
by the Company to develop personal relationships with the Company's suppliers,
Customers and prospective Customers; and (iv) generally has access to
Confidential Information.
D. The Company is vulnerable to unfair post-employment competition by Employee,
since Employee has access to Confidential Information and has personal
relationships with the Company's suppliers, Customers and prospective Customers.
E. Employee acknowledges the vulnerability of the Company to post-employment
competition by Employee and is willing to enter into this Agreement with the
Company, pursuant to which Employee agrees not to disclose any of the Company's
Confidential Information and not to compete against the Company following
termination of employment for the time periods and to the limited extent set
forth in this Agreement.
F. The Company desires to employ Employee and Employee desires to accept such
employment, pursuant to the terms set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and agreements
contained in this Agreement, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Employment.
(a) Term. The Company agrees to employ Employee, and Employee
accepts such employment, for the period commencing on the date hereof
through and including December 31, 2001 (the "Initial Term"), unless
sooner terminated as herein provided. At the end of the Initial Term, this
Agreement shall automatically renew for additional one (1) year terms, on
substantially the same terms and provisions as contained herein, unless
the Company provides Employee with written notice of its intent to
terminate this Agreement at the will of the Board of Directors (the
"Board"), or at the will of the Chief Executive Officer (the "CEO") and
either the Chief Operating Officer (the "COO") or the Chief Financial
Officer (the "CFO") of the Company (the CEO and the COO, or the CEO and
CFO hereinafter, collectively, referred to as the "Executive Officers")
within 30 days prior to termination. The period from the commencement of
the term of this Agreement to the date of its termination, after giving
effect to any renewal, shall be considered the "Employment Period"
hereunder.
(b) Duties. During the Employment Period, Employee shall serve as an
executive officer of the Company and shall have the duties,
responsibilities and authority consistent with such position as are
assigned to him by the Board or the Executive Officers. Employee shall
devote Employee's full time and effort, energies and abilities as are
reasonably required in the discretion of the Executive Officers for the
proper and efficient performance of such duties and responsibilities.
(c) Salary, Bonus and Benefits.
(i) Salary. During the Employment Period, the Company will pay
Employee a base salary (the "Annual Base Salary") as the Board or
any of the Executive Officers may designate from time to time, at
the rate of 120,000 per annum, which amount shall be reviewed
annually by the Board or any of the Executive Officers in their sole
and absolute discretion. Employee's Annual Base Salary for any
partial year will be prorated based upon the number of days elapsed
in such year.
(ii) Bonus. Employee shall be entitled to receive a bonus
pursuant to the terms of the Company's executive bonus plan then in
effect, which plan may be amended from time to time by the Board or
the Executive Officers in their sole and absolute discretion.
(iii) Benefits. During the Employment Period, Employee shall
be entitled to the benefits approved by the Board or any of the
Executive Officers, as such benefits may be adjusted by the Board or
any of the Executive Officers from time to time in their sole and
absolute discretion. Upon termination of the Employment Period,
benefits for periods subsequent to such termination shall cease,
except as provided in Section 2 below.
(iv) Expenses. The Company shall reimburse Employee for all
reasonable out-of-pocket expenses actually incurred by Employee and
accounted for and evidenced in accordance with the standard
policies, practices or procedures regarding expense reimbursement
that the Company may establish from time to time.
(v) Deductions and Withholding. All amounts payable or which
become payable hereunder shall be subject to any deductions
authorized by Employee, any set-off or reimbursement deemed
appropriate by the Company and permitted by law and any deductions
or set-offs permitted by this Agreement and all deductions and
withholding authorized by law.
2. Termination.
(a) Termination Without Just Cause. Except as provided in Sections
2(c) and 2(d) hereunder, upon termination of the Employment Period at any
time by the Company without Just Cause (as hereinafter defined), Employee
shall be entitled to receive only (i) an amount equal to the Employee's
Annual Base Salary then in effect, payable in twelve (12) equal monthly
installments (the "Severance Period"), subject to applicable withholding
tax requirements, commencing upon the execution by the Company and
Employee of a mutual release of the parties' respective rights, duties,
privileges and obligations hereunder other than those rights, duties,
privileges and obligations which are contemplated to continue beyond the
Employment Period, which release the parties hereby agree to use their
reasonable good faith efforts to secure and (ii) any other
compensation, benefits or other payments payable to Employee, which
compensation, benefits or other payments shall continue through the
Severance Period and shall cease thereafter.
(b) Termination for Just Cause. The Company may, upon a good faith
determination made by the Board or any of the Executive Officers,
terminate Employee's employment pursuant to this Agreement for Just Cause.
Notwithstanding anything to the contrary in this Agreement, upon
termination by the Company of Employee for Just Cause, (i) the Company
shall only be obligated to pay Employee such portion of Employee's Annual
Base Salary payable to him up to the date of termination and (ii) any
other compensation, benefits or other payments payable to Employee up to
the date of termination, and all rights of Employee hereunder to any other
compensation, benefits or other payments for periods subsequent to such
termination shall cease.
(c) Termination Upon Death. This Agreement shall automatically
terminate upon the last day of the month of the death of Employee, but the
Company shall continue to make Annual Base Salary payments to the estate
of Employee pursuant to Section 1(c) hereof for the shorter of (i) the
three (3) month period following such death and (ii) the period remaining
until the date this Agreement is scheduled to expire.
(d) Termination Upon Disability. If, during the Employment Period,
Employee should fail to perform Employee's duties hereunder on account of
illness or other physical or mental disability or infirmity (i) for 90
days in any twelve-month period, or (ii) at such earlier time as Employee
submits to the Company medical evidence reasonably satisfactory to the
Board or any of the Executive Officers, that he has a physical or mental
disability or infirmity that will prevent him from returning to the
performance of Employee's duties and responsibilities for 90 days or
longer in any twelve-month period, the Company shall have the right upon
not less than 30 days written notice to terminate Employee's employment
under this Agreement. In this event, the Company shall only be obligated
to maintain the Employee's benefits and to pay Employee such portion of
Employee's Annual Base Salary payable to him up to the date of termination
pursuant to such written notice and, thereafter, the Company shall pay to
Employee a total sum, payable in equal monthly installments, equal to 50%
of the Annual Base Salary to which Employee would have been entitled had
Employee performed Employee's duties to the Company, for the lesser of (x)
six months after the date of termination and (y) the period remaining
until the date this Agreement is scheduled to expire; provided, however,
the Annual Base Salary otherwise due Employee under this Agreement for
periods when he is unable to work shall be reduced by any insurance or
other disability benefits paid or payable to Employee under policies of
insurance or other disability benefit agreements provided by the Company.
(e) Notice. Employee shall provide the Company with 30 days prior
written notice of such Employee's intent to terminate this Agreement.
(f) Right of Offset. The Company may offset the amounts of any
outstanding loans, advances or other disbursements made to or on behalf of
the Employee by the
Company against any amounts the Company owes Employee hereunder for
severance pay, Annual Base Salary, bonuses, benefits or other items of
compensation hereunder.
(g) Release and Waiver. As a condition to the receipt of payments,
compensation or other benefits under this Agreement, Employee shall be
required to execute and deliver to the Company a general release and
waiver, in form and substance acceptable to the Company.
3. Confidential Information. Employee acknowledges that the information,
observations and data obtained by or available to Employee during the course of
employment with the Company concerning the business and affairs of the Company
are and will be the property of the Company. Therefore, Employee agrees, during
the Employment Period and following the termination of Employee's employment for
any reason whatsoever, not to disclose or induce or assist in the use or
disclosure, to any person or entity, or use for the account of any person or
entity other than the Company, any such information, observations or data
including, without limitation, any business secrets or methods, processes,
formulas, designs, inventories, techniques, marketing plans, strategies,
forecasts, new products, blueprints, specifications, maps, computer software
programs, promotional ideas, unpublished financial statements, budget
projections, licenses, prices, costs, policies, manuals or instructions,
reports, lists of names and/or addresses of Customers, prospective Customers or
suppliers, other Customer or prospective Customer information or requirements,
personnel information, the terms of any Company contract, lease or other
arrangement with any Customer or leasing information (including without
limitation, expiration dates, renewal dates, pricing information, other data
used by the Company in connection with coin-operated washers, dryers or other
laundry equipment, special requirements, referral lists or other data setting
forth names and addresses of Customers) or any other confidential or proprietary
information, records, observations or data of the Company (whether or not
patented, copyrighted or otherwise protected under applicable law) or
information created, discovered, developed, or made known to the Company
(including, without limitation, information created, discovered, developed, or
made known by Employee to the Company during Employee's period of employment by
the Company) along with any reports, analyses, compilations, memoranda, notes
and other writings or recordings prepared by Employee or any other employee,
agent or representative of the Company, which contain, reflect or are based upon
such information, observations or data (collectively, "Confidential
Information") without the Company's prior written consent, unless and to the
extent that the aforementioned matters become generally known to and available
for use by the public other than as a result of Employee's acts or omissions to
act, and except as required by law or legal process. In the event Employee's
employment with the Company is terminated for any reason whatsoever, Employee
will promptly return and surrender to the Company any and all Confidential
Information made available to Employee by the Company or otherwise in the
possession of Employee in the course of employment with the Company.
4. Noncompetition and Nonsolicitation.
(a) Noncompetition. Employee acknowledges that Employee's services will be
of special, unique and extraordinary value to the Company. Therefore, Employee
agrees that, during the Employment Period and for a period of two years
following any Company-initiated or
Employee-initiated termination of Employee's employment for any reason
whatsoever, Employee will not, directly or indirectly (whether as a sole
proprietor, partner, stockholder, member, director, officer, employee,
consultant or in any other capacity as principal, agent, broker or manager),
without the Company's prior written consent, own, manage, operate, join, control
or participate in the ownership, management, operation or control of, or be
connected as a director, officer, employee, partner, representative, agent,
consultant or otherwise with, or take any direct or indirect action to set up or
engage in any of the foregoing with any business or organization which directly
or indirectly, competes with the Company's Business as such Business exists or
is in process on the date of the termination of Employee's employment, (i)
within the geographical area included in the 50-mile radius around each location
of a customer of the Company or any business which the Company is actively
considering acquiring at the time of the Employee's termination or has actively
considered acquiring in the last 12 months, or (ii) within any State in the
United States or any Province in Canada in which Employee has spent a
significant amount of time on behalf of the Company at any time during the
12-month period prior to the date of Employee's termination.
(b) Nonsolicitation. Employee further agrees that, for a period of two
years following any Company-initiated or Employee-initiated termination of
employment for any reason whatsoever, Employee will not, directly or indirectly,
either for Employee or for any other person, firm, company or corporation, in
any capacity, induce or attempt to induce or call upon or solicit any of the
Company's employees, consultants, Customers, prospective Customers, suppliers,
landlords or other business relations of the Company to leave or cease doing
business with the Company or in any way interfere with the relationship between
the Company and any of the Company's employees, Customers, prospective
Customers, suppliers, landlords or other business relations thereof or hire or
solicit for employment any employee of the Company.
(c) Enforcement. If, at the time of enforcement of this Section 4, a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the parties hereto agree that the maximum duration, scope and
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope and area and that the court shall be allowed to reduce
the restrictions contained herein to cover the maximum duration, scope and area
permitted by law.
(d) Employee's Experience. Employee represents and warrants that, in the
event of the voluntary or involuntary termination of Employee's employment with
the Company for any reason whatsoever, Employee's experience and capabilities
are such that Employee can obtain employment in other lines and of a different
nature from the Business, and that the enforcement of this Agreement will in no
way prevent Employee from earning a livelihood. Employee acknowledges and agrees
that, if for any reason Employee does not successfully obtain other employment,
such fact shall not relieve Employee from Employee's obligations hereunder.
(e) Irreparable Harm. Employee acknowledges that a violation by Employee
of the provisions of this Agreement will cause irreparable harm to the Business,
the exact amount of which will be difficult to ascertain, and that the remedies
at law for any such breach will be inadequate. Accordingly, Employee agrees
that, in the event of such violation or threatened violation by Employee, the
Company shall be entitled, in addition to any other remedy which
may be available at law or in equity, to specific performance and injunctive
relief, without posting bond or other security.
(f) Delivery of Documents. Employee agrees that, in the event of the
voluntary or involuntary termination of Employee's employment with the Company
for any reason whatsoever, Employee shall promptly deliver to the Company all
documents, photocopies, notes, drawings, data and other materials of any nature
pertaining to Employee's employment with the Company, and Employee shall not
take with Employee, or allow any third party to take, any of the foregoing or
any reproduction of any of the foregoing.
5. Definitions.
"Just Cause" means (i) a material breach of this Agreement by
Employee (after notice and a 30-day cure period); (ii) a breach of Employee's
duty of loyalty to the Company or any act of dishonesty with respect to the
Company or its stockholders, customers or suppliers; (iii) Employee's continued
failure or refusal to perform, in any material respect, any duty or
responsibility to the Company which is normally attached to Employee's position
(after notice and a 30-day cure period), provided, however, any subsequent
failure or refusal to perform such duty or responsibility shall entitle the
Company to terminate employment for Just Cause without notice or an opportunity
to cure; (iv) Employee's gross negligence or willful misconduct in performing
those duties which are normally attached to Employee's position (after notice
and a 30-day cure period); (v) the commission by Employee of an act of fraud,
conversion, misappropriation (including the unauthorized use or disclosure of
confidential or proprietary information of the Company) or embezzlement or crime
of moral turpitude; (vi) a conviction of or guilty plea or confession by
Employee to any fraud, conversion, misappropriation, embezzlement or felony;
(vii) the exposure of the Company to any criminal liability substantially caused
by the conduct of Employee which results in a material adverse effect upon the
Company's business, operations, financial condition or results of operations or
the exposure of the Company to any civil liability caused by Employee's unlawful
harassment in employment; or (viii) the repeated taking of any action prohibited
(a) by the Board or any of the Executive Officers, provided that Employee has
received at least one written notice of having taken an action so prohibited, or
(b) by this Agreement. For purposes of this Agreement, "Employee's duty of
loyalty to the Company" shall include Employee's fiduciary obligation to place
the interests of the Company ahead of Employee's personal interests and thereby
not knowingly profit personally at the expense of the Company, and shall also
include specifically the affirmative obligation to disclose promptly to the
Board any known conflicts of interest Employee may have with respect to the
Company, and the negative obligations not to usurp corporate opportunities of
the Company, not to engage in any "conflict-of-interest" transactions with the
Company (without the approval of the Board), and not to compete directly with
the Company (without the approval of the Board).
6. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to each person at the address set forth below:
If to the Company:
Coinmach Corporation
Xxxxxxxx Place, Suite 590
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chief Executive Officer
With a copy (which will constitute notice to the Company) to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
If to Employee:
See address set forth in the preamble of this Agreement
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
7. General Provisions.
(a) Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement and those documents expressly
referred to herein (i) embody the complete agreement and understanding between
the parties, (ii) supersede and preempt any prior summaries of terms and
conditions, understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter hereof in
any way, and (iii) terminate and cancel any employment, severance, stock option,
bonus or other employee benefit, loan, tax or other indemnity agreement between
Employee and Employee's affiliates, on one hand, and the Company and its
affiliates, on the other hand.
(c) Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind Employee and the Company and their respective successors
and permitted assigns and inure to the benefit of and be enforceable by Employee
and the Company and their respective successors and permitted assigns. This
Agreement will not be assignable by Employee, but will be assignable by the
Company to its affiliates, and will inure to the benefit of its successors and
assigns.
(e) Arbitration. If any dispute arises under this Agreement, then the
Company and Employee shall endeavor in good faith to resolve such dispute. In
the event that the Company and Employee are unable to resolve any such dispute
within thirty (30) days, the Company and Employee shall, within ten (10) days
thereafter, appoint an arbitrator ("Arbitrator") who is licensed by the American
Arbitration Association ("AAA") to arbitrate such dispute. In the event the
Company and Employee cannot agree on the selection of the Arbitrator, the
Company shall select one arbitrator and Employee shall select one arbitrator who
shall together select the Arbitrator who shall arbitrate the matter. The Company
and Employee shall, within twenty (20) days thereafter, present their positions
with respect to the dispute to the Arbitrator, together with such other
materials as the Arbitrator deems appropriate. The Arbitrator shall, after the
submission of the evidentiary materials, submit a written decision on each
dispute to the Company and Employee. Any determination by the Arbitrator with
respect to any dispute shall be final and binding on each party to this
Agreement. The Arbitrator shall comply and the arbitration shall be conducted in
the State of New York or any other jurisdiction as the parties may agree in
accordance with the commercial arbitration rules of the AAA as in effect for
commercial arbitrations conducted in the State of New York or such other
jurisdiction by the AAA. The Company and Employee agree that the costs of the
Arbitrator shall be borne equally by the Company and Employee. Resolution of
disputes under this Agreement by arbitration pursuant to this Section 7(e) shall
be the exclusive remedy of the parties hereunder (it being understood that the
Arbitrator shall have authority to enforce all provisions of this Agreement,
including the granting of injunctive or other relief).
(f) CHOICE OF LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT SHALL BE
CONSTRUED AND THE OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY
CONFLICT OF LAWS PROVISIONS THEREOF) AND APPLICABLE FEDERAL LAW.
(g) Remedies. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement, specifically, to recover damages and
costs (including attorney's fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement, and, except as otherwise
provided in Section 7(e), that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any bond or
deposit) for specific performance
and/or other injunctive relief in order to enforce or prevent any violations of
the provisions of this Agreement.
(h) Amendment and Waiver. Except as otherwise expressly provided herein,
the provisions of this Agreement may be amended or modified only by written
agreement of the Company and Employee. No other course of dealing between the
parties or third-party beneficiaries hereof or any delay in exercising any
rights hereunder shall operate as a waiver of any rights of any such holders.
(i) Survival of Representations and Warranties. All representations and
warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by Employee or on Employee's behalf or by the Company or on
its behalf.
(j) Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or holiday in the State
of New York, the time period shall be automatically extended to the business day
immediately following such Saturday, Sunday or holiday.
(k) Descriptive Headings, Interpretation. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a Section of
this Agreement. The use of the word "including" in this Agreement shall be by
way of example rather than by limitation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
COINMACH CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: CEO
/s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Xxxxx Xxxxxxxxx
