Exhibit 2(v)
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT made as of August 31, 1999, between Xxxx Xxxxxxxx, an
individual residing at ___________________ San Antonio, Texas 78____
("Xxxxxxxx") 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, Xxxxxxxx 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 Xxxxxxxx as Vice President of
the Company and the Company desires to ensure the continued availability to
the Company of Xxxxxxxx'x services in such capacity, and Xxxxxxxx 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
----------
The Company hereby employs Xxxxxxxx as the Company's Vice President on the
terms and conditions contained herein and Xxxxxxxx agrees to such terms and
conditions of employment.
2. Term of Employment
------------------
Xxxxxxxx hereby agrees to work as Vice 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 Xxxxxxxx for such additional period and on
such additional terms as the parties may agree at a future date.
3. Duties
------
Xxxxxxxx shall serve the Company as Vice President. Xxxxxxxx shall at all
times comply with the employment policies established by the Company. During his
employment by the Company, Xxxxxxxx shall devote his full time and efforts to
the Company.
The duties of the Vice 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 responsibilities
shall at all times be reasonable and appropriate and shall be consistent with
the duties
1
normally performed by the vice president of a company in similar circumstances.
4. Compensation and Benefits
-------------------------
As full compensation to Xxxxxxxx for the performance of his services and
his acceptance of the responsibilities described herein, the Company agrees to
pay Xxxxxxxx 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, Xxxxxxxx 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.
---------------------------------------------------
In order to induce the Company to enter into this Agreement, Xxxxxxxx
hereby agrees as follows:
(a) Xxxxxxxx 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) Xxxxxxxx hereby agrees to preserve and protect as property of the
Company the confidential, proprietary, technical and business information of the
Company. Xxxxxxxx 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.
Xxxxxxxx agrees prior to termination of his employment by the Company to turn
over to the Company all such documents which may be in Xxxxxxxx'x possession or
under his control.
(d) During the term of this Agreement and for a period beginning on the
date that Xxxxxxxx'x employment is terminated, regardless of the reason for the
termination, and ending twenty-four (24) months after the date on which
Xxxxxxxx'x employment is terminated, Xxxxxxxx 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 Xxxxxxxx is terminated by the
Company without cause (as 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 Xxxxxxxx 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
2
manufactured by such company.
(e) During the term of this Agreement and for a period beginning on the
date that Xxxxxxxx'x employment is terminated, regardless of the reason for the
termination, and ending twenty-four (24) months after the date on which
Xxxxxxxx'x employment is terminated, Xxxxxxxx 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 Xxxxxxxx is
terminated by the Company without cause (as defined in Section 6(b) below) then
Xxxxxxxx shall not be subject to any noncompetition obligations and the terms of
this paragraph shall not apply.
(f) Xxxxxxxx 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
(a) Xxxxxxxx'x Voluntary Termination
In the event that Xxxxxxxx voluntarily terminates his employment with
the Company during the term of this Agreement, Xxxxxxxx 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 Section 6(a) shall be construed to limit Xxxxxxxx'x rights to
any compensation earned prior to the date of such termination.
(b) Termination For Cause
The Company may terminate Xxxxxxxx'x employment pursuant to the terms
of this Agreement at any time for cause by giving written notice to Xxxxxxxx, 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,
Xxxxxxxx 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 Xxxxxxxx'x rights to
any compensation earned prior to the date of such termination.
For purpose of this Agreement, "cause" shall mean that (i) Xxxxxxxx is
convicted with respect to the commission of a crime involving moral turpitude;
(ii) Xxxxxxxx has been guilty of gross or willful misconduct in connection with
his duties hereunder or (iii) Xxxxxxxx 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 Vice President
of a company in similar circumstances and Xxxxxxxx has not cured such failure
during the two week period following receipt of written notice from the Board of
such failure.
3
(c) Termination Without Cause
Throughout the term of his employment with the Company, Xxxxxxxx shall
remain an employee at will, and his employment may be terminated for any reason
by the Company at any time. If Xxxxxxxx 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 Xxxxxxxx'x voluntary termination under Section 6(a) above, or
his termination for cause under Section 6(b) above, Xxxxxxxx shall be entitled
to no Minimum Severance. Xxxxxxxx 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, Xxxxxxxx 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
This Agreement and the obligations of the Company hereunder will
terminate upon the death of Xxxxxxxx.
In the event of Xxxxxxxx'x 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
Xxxxxxxx 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
Xxxxxxxx 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 Xxxxxxxx'x 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
Xxxxxxxx'x voluntary departure under Section 6(a) or for cause under Section
6(b), then Xxxxxxxx agrees that the Company would suffer a degradation in
executive performance (since any replacement executive would necessarily lack
Xxxxxxxx'x intimate knowledge of the Company's clients, business and operations)
and a resulting loss of revenues. Xxxxxxxx further agrees that the damages
resulting from such degradation of executive performance and loss of revenues
would be difficult to ascertain,
4
estimate, quantify and/or measure. The parties further agree that Enviro-Clean's
right to be compensated for such damages should diminish proportionately as
Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx, to withhold from any payment
otherwise to be made to or for the benefit of Xxxxxxxx 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
Xxxxxxxx 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.
Xxxxxxxx hereby agrees to indemnify the Company for any losses, costs or
other expenses or damages incurred by the Company in the event that Xxxxxxxx has
breached this representation.
8. Assignment
----------
This Agreement and any rights (including compensation) hereunder shall not
be assigned or transferred by Xxxxxxxx to any other person. The Company,
however, shall have the right to assign its rights hereunder to any affiliate of
the Company.
9. Miscellaneous
-------------
(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.
5
(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.
(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, Vice President
with a copy to: Xxxxx X. Xxxxx, Esq.
Xxxxx Law Offices
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
If to Xxxxxxxx: Xxxxxxx Xxxxxxxx
__________________
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.
6
(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
Xxxxxxxx, 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: _______________________________
Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx
Vice President Vice President
_____________________________________
Xxxxxxx Xxxxxxxx, Individually
7
